Friday, October 19, 2018

Gee, Thanks Bernie!

Progressives want to reform our economic system.   But in a system where everyone is paid the same, those who work hard are punished.

Amazon earned the plaudits of "Independent" Senator Bernie Sanders for raising its minimum wage to $15 an hour - the rallying cry of the far-left.   At first, this seemed like a good thing - Amazon was "sharing the wealth" with its employees.  But as it turns out, Amazon isn't stupid - they can't simply afford to raise wages across the board without raising prices.  So they cut some other benefits to pay for the $15 minimum wage, and this move illustrates why working in a union job or in a communist country (about the same deal, really) sucks.

Amazon paid an 8% bonus to workers if they didn't miss work too often and their department met certain production goals.  This was doubled to a 16% bonus around Christmastime.  It turns out, it is more important to Amazon to have people show up on time and do their jobs than anything else.   Amazon also gave stock options to productive workers, incentivizing them to do well for the company, so the company share price would go up.   This is plain old capitalism 101 at work, and by the way, how salary employees are usually paid.   You make the company do well, you do well.

The union way - or the communist way - is to pay everyone the same amount, regardless of whether they show up on time, whether they make productivity goals, or whether the company makes money.  This is how they paid workers at GM back in the day (and indeed, even today) and why the company went bankrupt.   When your income is not linked in any way to performance, there is no incentive to improve (or even maintain) performance.  When the most productive worker is paid the same as the biggest slacker, the productive worker loses his incentive and motivation.  Suddenly, everyone becomes a slacker.  And as I noted before, when I was at GM, one of the highest crimes an hourly employee could commit would be to work too hard and show up the other employees.   The union came down hard on eager beavers.

For productive Amazon employees, who have devoted years of service to the company, this new pay plan is a slap in the face.  Many were already making $15 an hour and thus the new pay plan amounts to a huge pay cut.  It also means that they are now making the same salary as the least productive people in the place, as well as the same salary as a new-hire or seasonal worker, who is likely to be less productive as well.   It is an idiotic pay scheme, and likely some Amazon workers may quit over this - although this remains to be seen.  One of Amazon's more draconian policies is that if you quit, you can never be re-hired again.   So people who have invested years in working for the company are caught between a rock and a hard place.   They either have to suck it up, or find another line of work,

Of course, you could blame Amazon for this idiotic pay policy - and you should.   But this type of pay scale is what progressives have been pushing for and what unions have always demanded.  If we allow so-called progressives to have their way, this could destroy productivity and incentive in America, entirely.   The problem for American industry over the last few decades wasn't globalization or cheap Chinese imports, but the fact that American labor costs were staggering - and that work rules and union demands meant that companies could not hire or fire based on merit - and that everyone was paid the same, regardless of work ethic.

And this is, of course, the same problem with government employees today - who often pack the local city council with union members and then vote themselves a raise.  Short of molesting a student, it is nearly impossible for a teacher to be fired.   As a result, we pay more per capita than any other country in the world to educate our students, and have the worst results, amount Western countries, in terms of literacy and test scores.    Our educational system is churning out poorly-made students, just as GM churned out poorly made Pontiacs back in the 1990's.   GM went bankrupt - can our schools go bust as well?

Amazon stepped in the dogshit on this one - trying to score a PR coup and pander to the progressives who make up a huge chunk of their consumer base (no doubt, among Trumpsters, buying from Amazon is a no-no).

But beyond this, I wonder if Amazon doesn't have other more systemic problems.   After coming back from Alaska, I had to order a number of parts for the camper - things tend to fall off and break there, and windshields get star cracks (which GEICO fixes for free, even if you don't have glass coverage).  I went online to find these parts, and found that in every case, eBay or the website of some parts maker was cheaper than Amazon by a significant amount.   What's more, when I went on Amazon, the prices kept changing from day to day, by significant amounts.   Amazon has an algorithm that monitors what you search for, and they change prices (raise them, of course) over time, in an effort to get you to click on "buy now" before the price goes higher.  To me, this strategy backfires, when I can just open a new tab for eBay and see the same item for many dollars less.

For me, Amazon has become the merchant of last resort, not the first option.  Yes, I know there are folks out there with more money than common sense, who have Amazon shopping habits and never bother to look elsewhere on the web, as they are "Prime" customers (USDA Prime Chump Meat!) and get free shipping or whatever.   But these are not people buying products based on price and value, but addicted shoppers, and I am not sure that is enough to sustain a retail empire - although it seems to work for the Home Shopping Network.

But Amazon made wild profits not by being politically correct, but by being a ruthless competitor in the marketplace.  This latest move may appease the far-left "progressives" who make up their customer base.  But will these same progressives tolerate higher prices when productivity tanks at Amazon fulfillment centers?   Why would any employee give it their all, when they get paid the same either way?  And in today's tight labor market, can Amazon afford to fire less productive employees?

All I can says is, I feel sorry for the guy or gal  who busted their ass to make $15 an hour before this - they just lost their bonus and stock options.  And now they are paid the same as some newbie who doesn't even know where the bathroom is!

Gee, thanks Bernie!  This progressive shit really is the bomb!

Wednesday, October 17, 2018

The Tyranny of the Smart Phone

Once you buy a smart phone, you are obligated to buy another one and another one, indefinitely.  Or at least that is what they want you to do.

If you have read my blog over the last decade (brave soul!) you realize I hate smart phones with a passion.  I was dragged, kicking and screaming, into the 21st Century and was finally forced - and I mean forced - to buy one, as so many transactions today require it, particularly if you travel a lot.  Dragging a laptop to an internet cafe gets really old, really fast, when you just want to check your bank account balance.

I don't like smart phones.  I don't like what they do to people. I don't like what they do to drivers, either.  And we all know you are texting, too, just from the way you drive (wandering in the lane, failing to maintain constant speed, failing to notice the light is green) so stop pretending you aren't by looking down at your lap all the time.  Hell, just the other day we saw a lady plow into the back of a pickup truck while texting.  She panicked and hit the gas, her tires smoking as she drove her Honda under the back bumper of the truck.   And all this time, she was holding that damn phone in her hand.

But most of all, I don't like what the smart phone (or even the old-fashioned cell phone) does to me.  I find myself looking at it more and more and reading books less and less.   I find myself going back like a monkey in a Skinner box, looking for that diminishing reward over and over again.  It is a brain-reprogramming tool, plain and simple.  It changes the way you think, and I know this because the people who created these tech nightmares have said so.  Facebook, in particular, has changed the very nature of humanity - almost unnoticed.   But I'll get back to those fuckers later on.

In a way, the way they sell smart phones is like leasing cars.  The car companies would rather you leased a brand-new car every 2-3 years, because they sell a lot of cars this way and make a lot of money.  It costs you a lot of money, though, but a surprising number of people do this.  And back in the day - before leasing was a thing for personal vehicles - a lot of people would "trade in" their cars on a similar time-line, squandering thousands of dollars in the process.

But if you are smart and astute, you can buy a secondhand car and take care of it and drive it forever.  You end up saving thousands of dollars and oddly enough, have fewer headaches, as you worry less about getting your fancy new car scratched or whatever. 

And with smart phones, a similar plan of action was also possible.  You can buy a cheap off-lease phone (and that is really all they are, is leased, if you trade them in every few years) on eBay for $99 or so (a lot less than a new phone for $1000!).   Put in your SIM chip and a memory card and you're off to the races.   Years ago we bought a pair of Samsung Galaxy S4 phones, used, on eBay.  They work fine.  Mark has a data plan on his, and I piggyback off it using the WiFi hotspot feature.  We pay about $40 a month, all told.   There are probably even cheaper ways to do this.  And of course, WiFi hotspots are still free in a lot of places - but getting harder and harder to find these days, as I noted before.

But trouble appears on the horizon.   The first inkling that I was going to be screwed was when Capital One updated its "app" for the phone.  It required me to update to continue, and when I clicked on "update" it took me to the Google Play store where I was informed that the new Capital One app was no longer compatible with my lame-ass old phone.

Oh, well, I can always check the balance by going to the website.  A pain in the ass, but it is a workaround.

Here in sunny San Diego, I thought we would try to rent a convertible for a few days as a treat.   I looked online, and the big-3 rental agencies want astronomical prices.  So I thought I would try one of these peer-to-peer rental agencies, such as Turo.  I sign up and log in and rent a car - or so I thought.  We are all set to go (with a few glitches - Bank of America immediately flags the transaction as fraud, as Turo puts a $1 hold on the card first, mimicking the actions of real fraudsters).

But then when I log in again, it says, "you must install the Turo app in order to pick up the car".   So off again to the Google Play store and once again, I am informed that my old phone is not compatible with their new app.   I am locked out of commerce because I have an older phone.  It is a scary thought.

And this may extend to brick-and-mortar purchases.   While my old phone has one of the earliest Near Field Communication chips installed, like most Beta releases, it might not work right or at all with some of these "swipe and pay" applications coming to the fore, where you can use your phone to check out at the grocery store or the mall.   I will end up like that annoying little old lady who pays by check, and takes an hour to write it out - or counts out pennies from her change purse.   Yea, that's me, the old fart.  Upgrade or get old - those are your choices!

By the way, one of those "only in California" things - the homeless here beg while texting or talking on their smart phones.  Will Rodgers once said that only in America could you drive to the poorhouse.   And today, you can drive to the poorhouse while texting, apparently.  But seriously, many "homeless advocates" and advocates for the poor have argued that the increasing important of an online presence in commerce has made it harder for the poor to interact with society - and find job listings, perform financial transactions, and so on.  This may have once been the case, but apparently smart phone penetration has trickled down to even the homeless and beggars on the street corners.  And what do you bet, they have a newer phone than I do?

Now to be fair, I could go online and buy a newer phone (at least two generations newer) on eBay for the same $99 I paid years ago for my old one.   They are up to at least Galaxy 9 by now, so Galaxy 6's and maybe even 7's might be found cheap.  But what does the new phone do that my old one wouldn't?   Oh, right, run all those new apps.

I've seen this pattern before somewhere, but I just can't put my finger on it.  Oh, yes, that's right, the same game was played on us with personal computers.   The new software won't run very well (or at all) on your old PC - you have to upgrade to a new one!   I spent countless frustrating hours and dollars trying to upgrade older PCs or building my own new ones, just to run the latest version of Windows.  I realized later on that most of the programs I already owned were working just fine, thank you, and there was no reason to upgrade.   Good old Microsoft took note of this and created this new ".docx" format in an effort to force people to upgrade.

Today, they have Windows 10, and it basically is a subscription service.  You buy the computer and rent the software on a monthly basis - storing your data in their "cloud".   On the cruise we recently went on (Holland America) one of the "activities" offered onboard was training in Windows 10.  They had an entire room set up with computers and a computer geek would give lectures on how to upload photos to the cloud and how to rent programs like Microsoft Word that you used to own outright.  Just give us your credit card number..... it won't hurt a bit.  Or at least not too much.

And yes, I am typing this on one of my hoary old Toshiba laptops - which you can buy on eBay for less than a smart phone, even.  It is running Windows 7, and it works fine.  You can even play movies on it - but not likely video games.  Speaking of brain-reprogramming machines.... but I won't touch the video game controversy with a ten-foot pole.  I think the video game companies implant subliminal messages in the games that say, "Violent video games do not lead to real world violence, and you should kill anyone who thinks otherwise."   but I digress.

So, just as I was forced to buy a smart phone in the first place - to keep even a tangential connection to the rest of society - I am now forced to buy a newer one - and another one after that, and so on and so forth.  I guess it won't be all that bad or too expensive, but I intensely dislike being forced to throw away working technology, just because some company thinks I need to upgrade - at my expense and for their profit.

It also makes me less enthusiastic about trying these new apps and technology.  We tried Lyft in Alaska and it worked OK (it is not available, apparently, in Canada, or at least Vancouver).   But if they tell me their app won't work unless I buy a new phone.... well count me out, unless I decide to become one of their drivers.

But getting back to Facebook, that is even more insipid.   Turo exhorted me to add my Facebook page to my "profile" so people would feel comfortable renting to me.  And of course, they wanted me to sign up using Facebook or my Google profile.  A competing peer-to-peer rental company (in its infant stages) cuts to the chase and only allows you to sign up using Facebook.   That sort of floored me - a company relying entirely on one social media network as their platform for commerce.   How soon will it be before I can't even buy groceries or gasoline without owning the latest smartphone or a facebook page?  "Bob likes unleaded gasoline and pork rinds!"

Oh, yea, the other odious aspect of this - your every move and purchase logged and posted on your "wall" for others to read, or at the very least, sold off to marketing companies, to use to manipulate your brain.   Suddenly you are getting offers for products and services that seem so convenient and timely!   You might even think it was your idea to buy these things.   Just like you believe that Joe Biden is "Crazy Uncle Joe" who has a taste for underage girls - you read it enough times on social media sites - stated as an offhand fact - and it becomes the new truth.

Something is going awfully wrong here.  I can sort of see it - a monstrous thing - but only around the edges and only out of the corner of my eye.  If I look at it directly, it becomes invisible, or part of the landscape.  But it is there, it is evil, and it is growing.  And smart phones and facebook and online life in general are just some minor manifestations of this.   Sadly, in part, I am to blame for some of it.  I, too, worked for the dark side of data mining.

And it isn't just the Russian Internet Research Agency behind this - although they are very good at it, if not a wee bit too obvious (although most Americans can't spot a shill even at five paces).   It's not an organized thing, really.  It's just an amalgamation of researchers, entrepreneurs, marketers, corporations, governments, and other institutions, great and small, interested in getting inside your head and reading out what really is in there.   And if they are lucky, they hope to be able to put things inside your head as well - and they are pretty far along with this.

This is not a conspiracy theory - there is no grand conspiracy.   But go to some convention of tech companies sometime, and look at all the new products at the display booths and listen to the lectures by industry leaders - everyone is on the same page on this.   Buying and selling eyeballs was the name of the game for cable TV.   With the internet, the game is buying and selling minds.

And what is it they want to put into your mind?  That it is "normal" to be hopelessly in debt.  That it is "normal" to expect to own a fancy house, lease fancy cars, and spend enormous sums of money, over time, on coffee drinks and restaurant meals, as well as "adult toys" (not the sexual kind, the motorized kind) and other distractions (such as smartphones) from the goal of building real wealth and happiness.   And part of this is selling you the idea that you have to have the latest smart phone, and if you don't, well, you are somehow inadequate.

On our cruise I met a nice guy who was a truck driver.  Now truck drivers don't make a lot of money these days, but he's doing OK.   He had the latest Apple iPhone, and when he saw my battered old Samsung, well, he had to snicker and make comments that (a) anything not Apple is unworthy and (b) worse that not having an Apple, I had an obsolete "brand X" (which I think he derisively referred to as a "Turnip").

But of course, he's still working driving trucks - a job that literally kills you.  Ever seen a truck driver get out of his cab?  Most can barely walk.  Sitting all day and being stressed is bad for your physique - and lets not even talk about blood clots.   It is as bad as sitting in front of a computer all day, come to think of it.

But worst than that, he was older than me and had no real plan for retirement in his future.  He could afford to go on an fancy cruise (and rent the most expensive suite on the boat) and he could afford the latest smart phone.  But he could not afford to retire.  He owns a lot of "stuff" but doesn't own himself.

And we see this in the RV parks - people with fancy expensive RVs who have to pack up on Sunday night and rush back to the city so they can report for duty at their jobs bright and early on Monday morning, because they have to work to pay for the $500,000 motorhome, which they can only use a few weekends a year - and maybe a week or two of vacation.   They look down at us in our tiny, well-paid-for trailer (now 20 years old and about to be replaced) and laugh, as we are obviously poor.  But while they are fighting the traffic on Monday morning, we're sleeping in.  And we've been on the road since May.   Whose really the chump?

I guess this gets back to my last posting about Mr. Money Beard - who was vilified for suggesting that perhaps earning money has some other purpose than just buying a lot of expensive shit so you can live life on a treadmill.  The system, if you will, wants you to work forever, and they sell this idea of "never retiring" and "waiting until 70" to collect social security.   Both ideas would save the government a lot of money - and generate more tax revenue, gin up the GDP, and increase profits for companies, drive down wages, and so forth.

And perhaps this is part of some master plan.   Like Japan, our country is aging, and more and more of us are retiring - in droves - many of us early by plan or circumstance.   How can a country maintain productivity if half the population is sitting on a park bench feeding the pigeons?  We have to sell the idea that people need to keep working, forever.   And maybe the latest offerings from the GOP are along these lines - Mitch "Myrtle the Turtle" McConnell says outright that he wants to cut social security benefits and medicare and medicaid to "balance the budget" after they cut corporate income taxes and taxes for the rich, and approved the largest defense budget in history.

Does anyone out there still not get it?  That "trickle down" economics means being pissed on.  It seems odd to me, but the folks who chant the mantra of "I'll never retire" are the ones most likely to vote Republican - and Republicans seem hell-bent on making sure that mantra comes true.

I know this is a long way to diverge from forced cell phone upgrades, but I think they are one and the same thing.  There are two forces at work here - one which says work is a means of accumulating personal wealth, and another which whispers in your ear, "just give up, live paycheck to paycheck, and buy nice things - you'll be the envy of your neighbors!"  They are like Ying and Yang - opposing forces at work, but no longer in balance today, as it seems most Americans are heavily invested in the latter and not the former.

I'll buy the damn cell phone - maybe next year or the year after.   But I'll put it off as long as possible.  It isn't the actual cost, it is the idea that we are being forced to consume, that irks me.

And worries me.

UPDATE: I went to the GEICO site to get a free glass repair (Alaska, again) which you can get, even if you don't have glass coverage.   I noted that my contact information was out of date and updated it to include text notification.  GEICO suggests I load the "app" on my phone, so I go ahead and do this and guess what?  Yea, the app is "not compatible" with my phone.

By the way, we did buy a pad device (Samsung again) which is newer ($85 at the wholesale club) and it may run some of these apps that the old phones do not.  Again, we piggyback off the phone, which runs as a hotspot.  Perhaps a workaround.

UPDATE 2:  Well, the cheap "pad device" from BJ's wholesale is "not optimized for this app" but loaded the GEICO app and it seems to run OK - even showing "virtual" insurance ID cards.  The Capital One app seems to work the same - warning me it is "not optimized" for this cheap-ass Samsung Galaxy Pad, but working nevertheless.  Maybe I'll try the Turo app next.

But why can't these apps be backward compatible?  What are they changing in the tech that makes them no longer work?   Don't bother answering - I'm not really interested and the correct answer is, of course, "to make you buy a new phone".

The System Calls...

You can't buck the system, Mr. Money Beard!

In a recent article on MSN Money, Mr. Money Beard makes the big time by attacking Sooze Orman. Actually, his comments aren't directly attacking the Sooze - the MSN people really tacked that on as a headline in order to generate clicks.

The issue at hand was apparently Ms. Orman claims you need five million dollars in the bank if you want to retire before age 60, which is, of course, preposterous.   That level of wealth would put you in the top 1% of the country, and yet people retire all the time with far less - often less than two million dollars - if you can believe that!

Apparently this set off a shitstorm on something called the "FIRE" subreddit on Reddit, which I don't follow, because (a) I don't follow acronym nonsense ideas, (b) stupid formulas for retirement rarely work, and (c) Reddit blows chunks - it is just a haven for shills and con-artists trying to warp your opinion to their own advantage.   Stay off social media of all sorts - that is the best "advice" anyone can give you, financial or otherwise.

Today, a follow-up article claims that Ms. Orman is right - and another financial expert (Mr. Financial Kung-Fu) says that the $5M figure is about right, as you'd need $200,000 in after-tax income to live in places like New York, San Francisco, Boston, etc. with a mortgage and a family to support.

What fucking planet are these people from?  Oh, right, planet media, where a "normal" life includes a multi-million dollar home in posh suburb in a major city, a string of lease payments on a $100,000 SUV, and private schools for the kiddies.   Isn't that how everyone lives these days?

Perhaps not.  Since I am childless, that knocks down how much I need to retire on.  But even if I had kids, by this point in my life, they would be at least 30 years old and hopefully not living in my basement (my parents didn't permit it - neither would I).  So I am not sure what these "experts" are talking about there.   And as for living expenses, well, having a "paid for" house means my monthly carrying costs are about $1000 a month or so - on par with the cheapest apartments to rent these days.

And let's not forget the equity in the house.  Yes, I know, financial "experts" claim you shouldn't include that in your net worth.  But I disagree, as it is real wealth, and you can tap into it.  My plan is particularly simple.  We still own a Condominium in Alexandria, Virginia, worth about $170,000.  We paid $38,000 for it decades ago and depreciated it on our taxes (just like Jared Kushner, only on a much smaller scale - and yes, this is legal) so our gain on the sale of the condo would be the full $170,000.  Big tax problem, right?

Um, no.  You see we plan on selling it (and will be forced to do so when the complex is torn down to make way for a new high-rise).   We will use the proceeds in a Starker Deferred Exchange to transfer our "basis" to a new property in a retirement community in Florida.  We've identified several in that price range in over-55 communities that would allow us to fix up (sweat equity) and rent out (retirement income) the property for several years.

When the time comes to downsize, we can sell our current house for about a half-million, tax-free, as it is our personal residence.   We can then move to the rental property and live there, using the half-mil from the sale of our current property to live on (along with other investments, social security, etc.).    We avoid paying taxes on the rental property entirely as it becomes our new personal residence, and if we sell that later on, it is also tax-free.

Pretty sweet deal, no?   And yes, all perfectly legal.  I know this, as I have done it before.

But getting back to the issue at hand, why is the financial press always selling this idea that (a) you can never retire, (b) you need to save a staggering sum of money to retire, and (c) get back to work you lazy sod!    The reality is, of course, that people retire every day, and what they retire with is what they ended up with - often less than a million dollars, often far less than this.

Mr. Money Beard makes the rather rational and dangerous argument that working for a living should be something you do in order to achieve a goal. And enjoying life is more important than accumulating wealth. He points out accurately that many of the financial news sites are full of paranoia and fear - promoting the idea that no matter how much you save for retirement, it will  never will be enough.

And by doing this he is going against the system, and the system will come knocking on his door and make him an offer he can't refuse.  "Nice website ya got here, Mr. Money Beard.  Shame if something happened to it, right?"  They already got to Sooze Orman - it's only a matter of time before they get to Mr. Money Beard.

If you peruse the articles on MSN Money on any given day, they are chock-full of fear and paranoia. It seems every day there's another article as to why you should work until 70 and not claim Social Security early.  You never know when you might need that money in retirement so you should just keep working until you drop dead.  And no matter how much you managed to save for retirement, there's an article questioning whether it really is enough.

And then again there's a list article telling you about the 10 biggest mistakes to make in retirement or other articles telling you about the 10 best cities to retire - most of which have a cost-of-living which is astronomical.  New York City or Paris are often cited in these articles - practical choices, no?

The financial press never promotes articles about people living simple lives and enjoying themselves. And this perhaps is by design.

As I noted in an ealrier post, our capitalist system has a certain amount of insane genius to it.  People willingly sign themselves into debt for a new Camaro so they have a shiny car to drive to work.  Then they're obligated to work for another five years to pay for the Camaro.  Most people assume this is a perfectly normal thing and never question the validity of it.

And thanks to this system, millions upon millions of people are obligated to go to work everyday in order to pay for shiny things in their lives.  If we had people suddenly deciding to reject materialism and live their lives wholly and fully, the entire system would fall apart.  What motivation does the waiter serving you your food at a restaurant have to do his job if he isn't tied down with a bundle of debt and student loans and mortgages and car payments?

Like I said, I think eventually they'll get to Mr. Money Beard, just as they got the Sooze.  She started out giving sound financial advice to people - telling them to keep their cars for 10 years or longer and to spend less money and save more.  Then Buick offered her a gig as a spokesman for their overpriced automobiles. And then Sea-Ray - one of the makers the most overpriced boats possible - hired her as a spokesperson to sell luxury boats as a rational lifestyle choice for frugal people.

And suddenly instead of pushing arguments for frugal living, the Sooze is running a television show called "you're approved" where people call in begging to buy consumer goods.  And she tells them, like Santa Claus, whether or not they're approved to purchase the particular bling in question. She even named her new boat - a Sea Ray of course - after the television show.

The only question that remains to be seen as well how much money they will have to throw at Mr. Money Beard before he changes his tune as well.  The system will come a-calling, with an offer he can't refuse!

My advice to him - take the money!

Tuesday, October 16, 2018

2020 Election Results

The 2020 election results are in - Trump wins again.  Ugh.

I finally got those time machine parts on backorder from Amazon, and once I got it working, I decided to go to the future and see who won the Presidential election in 2020.  Stupidly, I forgot to get the winning numbers for tonight's power ball!  Oh, well, better luck next time.

I regret to say that Donald Trump won re-election, and the reason was not that he excelled in campaigning or was popular with the people, but that he read the electoral map (once again) and calculated where he could use his limited resources to the best effect.  And this time around, he had more resources to use as well.

But the real reason he won was the Democratic party - they put up a roster of loser candidates that Trump picked apart, piece by piece (and the Democrats obliged him - as they did in 2016 by picking each other apart as well).  And good old Bernie Sanders got onto the game again, campaigning as a candidate for the party he refuses to join.   He joins Ross Perot and Ralph Nader in the pantheon of great spoilers throughout history, as his eventual lukewarm endorsement of the winning nominee only served to insure that his supporters stayed home in droves.

So, how did the Democrats lose this time around?   Well, it was in large part due to who they put up as candidates - and how easily Trump and his minions picked them apart.

Joe Biden seemed like an early front-runner, and indeed, today, he holds that status before even declaring his candidacy or even before the campaign season begins.   Biden clearly worries Trump, as he has the mantle of Obama (which resonates with the core Democrats) and is also a member in good standing of the "old white men's club" which typically is the source of Presidential timber.

So already, even today, the attacks are starting.  "Crazy Uncle Joe" they call him on social media and Reddit.   You post a picture of a cute cat, and five comments later, someone says, "Gee, he looks like Joe Biden!" and after that, the thread devolves into "Crazy Uncle Joe" who has "busy hands" and five comments later that he is, in fact, a child-molesting pedophile who likes little girls.   All of this is taken as routine fact and never challenged.  And this drumbeat of hostility has been going on for some time now.

All Trump has to do at a rally during the campaign is say "Crazy Uncle Joe" and it is a dog-whistle to all the conspiracy theorists out there in his audience.   It also helps that the moniker also tags him as being old and out-of-touch.

But of course, Joe Biden isn't a pedophile.   But you tell that to the legions of people on Reddit who already believe this, without one scintilla of evidence.  Heck, they already believe that pizza shops are clandestine child molestation rings.   What is it about the far-right and their obsession with child molestation conspiracy theories?  Over-compensating a bit, perhaps?  Hey, this is politics - a counter-theory and smear are just as valid.

Of course, it didn't help that Joe Biden does have a "busy hands" problem in this day and age of "Me Too" - and that the other Democratic candidates took turns tearing him down for inappropriate behavior.   When he does a photo op, he often puts his arm around attractive women and sometimes says inappropriate things.  The Republicans only needed to photoshop half the pictures they spread on the Internet to make this point - the rest were bona fide real.

So Biden was knocked out early in the primary season, the victim of an effective smear campaign and rumor mill, as well as the "Democratic Firing Squad" who lines up in a circle and shoots themselves.

That left Elizabeth Warren as the new front-runner, and Trump and his minions have been sharpening their knives for her for some time now.   It may be that her candidacy was over before it started.  Once again, Trump maligns an opponent with a moniker - "Pocahontas" - and it seems to stick.  Warren was foolishly drawn into the game by having her DNA tested, which proved, well, nothing, other than she, like anyone else on the planet, is distantly related to other people, including native Americans.  The real issue is that she claimed Native American ancestry on an application form for Harvard and may or may not have gotten special advantage from this (no doubt Harvard used her check-box to show it was meeting racial quotas, but then again there are no racial quotas at Harvard, or maybe there are, as we'll find out in the upcoming trial).

Warren wasn't a bad candidate, but too far to the Left for most Americans.  Her heart is in the right place, but America isn't ready for far-left Socialism.

Of course, it didn't help matters any that the entire Democratic Primary system was distracted by bogus candidacies such as that of Michael Avenatti, whose only claim to fame (quite literally) was being Stormy Daniel's lawyer (and apparently not even very good at that, if today's decision throwing out her suit is any indication).   Apparently, in the post-Trump world, anyone can be President of the United States, regardless of experience or qualifications - the two things that sunk Hillary's campaign.  Being an "outsider" is seen by the ignorant masses as a sign of honor, not a sign of idiocy.

Eventually, Avenatti fell by the wayside during the primaries, when it became clear that he had no other platform other than to play a "villain" role in Trump's reality-television Presidency.  What puzzled so many of us is why the media even took his candidacy seriously for a moment.  Yet even today, the Post and the Times, report on Avenatti's moves to run for President as if he were a serious contender, instead of a punchline to a bad joke.

The rest of the pack wasn't much to write home about.  Julian Castro, the former mayor of San Antonio and a mid-level Obama official, didn't have much in the way of credentials to tout.   Being mayor of crime-ridden San Antonio is about as much a resume-booster as being mayor of Chicago (let's not even go there!).   Yes, like so many other people, I got my car broken into in San Antonio.  It is what you do there.  You go down to the riverwalk, see the sights, ride the tour boat, and then call the glass company to replace the window on your car.   People even told me in advance this is exactly what would happen.  And I was parked behind the courthouse - beneath a security camera (that of course, was broken, like the government in San Antonio).   Julian Castro?  Please!  Don't insult our intelligence.

Of course, the name of Alexandria Ocasio-Cortez was bandied about, but she is only 28 years old today, and would be five years shy of the minimum age needed to be President, according to the constitution.   Democrats were foaming at the mouth over her, convinced that "Democratic Socialists" would carry the day - which they might for the primaries, but the general election is won by the independent voters - middle-of-the-road middle-class people whose one major goal in life isn't radical change of the government, but don't rock the boat - not while they're paying down a mortgage and funding their 401(k).  Promises of a socialist utopia simply didn't resonate in suburbia.

And that, in short, is why Bernie Sanders fizzled out.  A man who won't commit to joining the party whose nomination he seeks, isn't fit for office.  His far-out socialist politics simply didn't carry the day.  Forced to choose between an unhinged Twitter addict whose policies are, for the most part, pretty standard Republican fare, and an uncertain future with draconian tax increases, big government, and socialize medicine, the independents either stayed home or held their nose and voted Republican.

New Jersey Senator Cory Booker tried to recapture some of that Obama magic - and hoped he could get out the black vote.  But being senator from a failed part of a failed State is about as toxic as being mayor of Chicago.  Next!

One would think the "Me too" movement would favor women candidates, such as Elizabeth Warren or Kamala Harris.  But as the Hillary experience proved, a substantial number of women are not prepared to vote for another woman just because of their gender.  Political positions and views are more paramount.  Warren failed in her attempt to counteract the "Pocahontas" nonsense - playing right into Trump's hands with a DNA test.  Harris, on the other hand was just too inexperienced, having only been elected to office in 2017.   It was all-too-easy to play her off as untested and unready.

New York Mayor Micheal Bloomberg might seem like a good choice - a member in good standing of the "old white men's club" and a conservative Democrat - being elected mayor initially as a Republican.  His experience and more centrist views would have won the votes of the independent voters.   And unlike Trump, he is a real multi-billionaire, estimated to have over $50 Billion in wealth.  But this very fact made him fodder for attacks from the Sanders crowd, and he was shouted down before he could even speak, early on in the primaries.

I won't be a spoiler by telling you who actually won the Democratic nomination, but if I did, you'd gasp and say, "really?  that was the best they could do?" and you'd understand why Trump won yet again.

Life Coach Gets Schooled by Hoarder

You can't fix hoarding.  And the whole "life coach" concept is flawed.

I have noted time and again that I am not a big follower of religious leaders.  For some reason, we look up to religious leaders as having some sort of inside track to God, when their life experience is really not much more than our own.   The Pope has no more insight into what happens after you die than you or I do, yet we hang on his every word with reverence.   And the same is true for other religious leaders - all of whom cloak themselves in elaborate or archaic garments, as if to enshrine themselves and make them look noble and wise.   (I think if we saw them all naked, we might have a different view of their opinions!).

It is not that they have nothing to say, only that what they have to say is of no greater or lesser import than what the rest of us have to say.

In the USA in recent years, a new form of secular religious Imam has come to the forefront - the so-called "life coach".   Like other types of religious leaders, these folks have no real special credentials or training in what we call "life" - any more than the rest of us do.   What they are selling is pure pablum, plain and simple.   It doesn't take a rocket scientist to tell you to stop compulsive spending, gambling, drug use, or alcohol abuse.   It takes willpower and discipline - and you can't get that from a "coach", but that is perhaps, why people are attracted to charismatic leaders who promise to tell everyone what to do.   And that also is perhaps the attraction of religion - giving up your own impulses in favor of someone telling you what to do (and usually the first thing they tell you to do is give them a sizable portion of your wealth, if not all of it).

A reader writes to me that one of these "life coach" charlatans is about to be schooled by a hoarder.  It seems a local hoarder - replete with junked cars on his lawn and the de rigeur dead cat (what is up with the dead cats?  Usually in the freezer?  Is it some sort initiation rite into the hoarder club?) is about to be "fixed" by a life coach who is volunteering his time.

The scenario is pretty familiar - at least to me.   A house with broken appliances (stove used as furnace, other appliances "tweaked" and disassembled - check!).  The utilities turned off regularly (check!).  The house filled with garbage and junked cars on the lawn (check!).  The house in need of major structural repairs due to neglect of basic maintenance (e.g., letting the gutters fill with leaves until the roof rots through, then letting the water damage accumulate for years until the walls are full of mold and the foundation has shifted - that sort of thing).  Check, check, check!

But this "life coach" has jumped in with both feet, and boldly promises to do what no other person on planet Earth has managed to do to date - and that is to cure a hoarder.   Truly, this is a super-man!  But that is indeed the case - hoarding cannot be cured, at all, whatsoever.  There are no "former hoarders" out there - or damn few, if any.  Most die early and that in turn "cures" the hoarding, unless, of course, the heirs turn into hoarders themselves upon inheriting the hoarding house.  Yes, I have seen this happen - twice now.  Once with the hoarding house across the street from me, and another time with a friend of mine.  Either there is some sort of mold in the house that makes the new tenants into hoarders, or it is an inherited illness.  It is a sad situation to see hoarding passed down from generation to generation.

Our "life coach's" plan is simple: he will just take complete and utter control over the hoarder's life and re-arrange it so he no longer hoards.  And he plans on doing this for free and use donated materials and services to turn the hoarder's life around.

Neat plan.  It has a few flaws.

First of all, few of us want others to run our lives.  Yes, you could "intervene" in my life and argue that I should go back to work as a Patent Attorney - no more goofing off!   No more writing blog entries!  And you could argue that I should eat healthier foods, exercise more, and drink less.  No doubt I would be wealthier, healthier and live longer.   Problem is, I have other ideas on how to live my life - even if they are not optimal in your view.   We have this thing called "free choice" and most folks are reluctant to give up on it - without a fight.

Oh, sure, there are folks who will check themselves into "rehab" - but usually only when forced to do so because of legal troubles.  And in re-hab, someone takes control of your life, telling you what to eat and drink and do, and often you do get better.   But then they leave re-hab and go back to their old ways.   Change has to come from within, it can't be forced from outside.  Otherwise, it doesn't stick.  and change is a very rare thing.

Speaking of which, a few years back, I got angry e-mails from people saying that I was "telling them what to do" - as if I could reach through the computer screen and grab them by the neck and get them to stop taking out payday loans.    I am not telling anyone what to do - or even offering advice.  I merely make observations.   And as I have noted before, if you identify with the hypothetical, maybe that is telling you something.  Maybe.

But getting back to our narrative, the second problem with this battle-plan is how to implement it.  The hoarder in question has already stated that removing the junked cars is a non-starter.   Guess what happens when you start taking out the stacks of old newspapers and piles of broken lawnmowers?   A major battle is what.  The hoarder will argue that the "junk" you want to throw away is in fact, valuable antiquities.   After all, he's seen similar crap sell for millions on Antiques Roadshow or on Storage Wars.    Why make him part with his precious collectibles?

And again, these are not negotiable points.   And by the way, under the law, that "junk" you want to throw away is legally the property of the hoarder.   Start tossing his crap without permission, and you'll end up in the back of squad car.

Oh, and by the way, he will never give you permission to throw away any of his junk.

The third problem with this approach is why are you spending your own time and money to enrich someone else?  The "life coach" says his plan - which involves conning some "handyman" to live in the home and repair it - will "preserve the equity" that the hoarder has in the property.   In other words, after all of this time and effort, if you were successful, all you've done is made some other guy wealthier, at great cost to you and no cost to him.

If the hoarder has equity in the home, they have wealth.  And often hoarders do have some income, wealth, and equity - they just squander it by hoarding.  A friend of mine who inherited their parents' hoarding house also inherited several million dollars.  Mom and Dad were not destitute, they could have called someone and fixed the house in a matter of months - or simply bought a new house.  The hoarder across the street from me did just that - buying a new home once the old one was filled.  By the time he died, he owned at least four homes - all full of junk, with junked cars on the lawn.  He was not "poor" in any sense other than in his mind.  If hoarders really wanted to "change their lives" they could so do by selling off or throwing away their junk, repairing their homes or selling them, or doing other things to take charge of their own lives.

But the bottom line is, they don't want to, and you can't make them.   So don't bother.

Trying to "fix" other people is an enormous waste of time.  And oftentimes the people trying to "fix" other people's lives are in worse shape than the person they are trying to fix.  As I noted before, my late sister once tried to stage an "intervention" for my late Mother.   It was a nice gesture, but my sister had a boatload of issues of her own to deal with, and trying to "fix" Mother was, perhaps, a way of distracting herself from her own problems.

A massage therapist recently tried to convince me that I would live longer and be healthier if only I would convert to his vegan lifestyle.  I kept my own counsel, but I could not help but think that although he was a few years older than me, he was not in any position to retire anytime soon, and I strongly suspected that, like most people these days, he was hopelessly in debt and likely would never be able to afford to retire.  At that point, he might regret living such a healthy lifestyle - and living so long!   There are two sides to every coin.

It is all-too-easy (and kind of fun!) to pick apart other people's lives and think (or discuss) about how they are doing a shitty job of living, and "if only they would..." they could be happier or wealthier or healthier.   It is a game we all play.   But so long as it is limited to "dishing the dirt" about other people, you could argue it is a pretty harmless game to play - albeit one that leaves you with a bad feeling about yourself when all is said and done.  I am never happy after people start a "bitch session" about the one person not in attendance, even if I do join in the fun on occasion.  It leaves you with a hollow feeling inside.  And let's not even talk about how awkward it is the next time you see the person in question!

But bitching about someone's (perceived) poor life choices is nothing compared to trying to intervene in their lives.   In every situation I've seen this happen, it ends up badly for everyone involved.  The person intervened complains bitterly about the people who tried to "help" them, and the person who was trying to "help" ends up bitter than the person they wanted to rescue doesn't express their eternal gratitude.

This is why I say I am not an advice columnist.   People ask me for advice on "what to do" in their lives, or take what I write here as advice.  It is not!   The problem with the advice model, is that people love to take advice cafeteria style and then complain when it doesn't pan out.   If you want to become wealthy, for example, you have to save more and spend less.   If you do half of this - save more but still spend more - you will end up broke, as you cannot afford to "save" money unless you cut back on spending by at least the same amount.

And advice for one person might not work for another.   No advice is universal.

There is an upside to this whole sad story, though.   The "life coach" in question will eventually learn a valuable and humbling lesson in life - if he is receptive enough to learn from this.   From what I have read, though, I suspect he will just end up bitter and angry and convinced more than ever that he was "right" and that the hoarder was just not appreciative enough of his skills and efforts!

And who knows?   Maybe he will be the one in a millionth person to actually fix a hoarder.  But I am not holding my breath on that one.  I think I'll take the better odds on the powerball, quite frankly.

But the real lesson is this:  people are not like cars - you can't fix them.  I have never owned a car that said to me, "I prefer to be broken!  Leave me alone!" - although a Fiat I once had came awfully close.  It is tempting to want to be "helpful" and want to make the world a better place.  No one wants to see others suffer, even if they are suffering from their own malfeasance.  But the end result of intervening in others' lives is often there ends up two victims - the intervenor and the intervenee.  Both end up bitter, angry, and mad at each other.  Much time and money is wasted and nothing of substance is accomplished.

* * * 

By the way, this urge to "fix" things or people may appear often in your life.   I have been sucked into more than one crappy deal in life by wanting to "fix things".   Rednecks often sell broken cars, campers, boats, or whatever, with the premise that "you can fix that" - as in, "Well the motor done broke the crankshaft, but you can fix that!" - often in a Craigslist advert (which is one reason not to buy cars on Craigslist.  The other is, often the cars are not really for sale, but advertised by hoarders and other lonely people who want validation that their piece of junk is a priceless collectible).

It is if by saying "you can fix that" it is, in fact, already fixed.   As a car nut (or former one) I would often see such abused vehicles and want to adopt them, much as people adopt stray cats - to give them a good home.   But the bottom line is, of course, that the "fixer upper" car or house or whatever, is often a nightmare money pit.  You are almost better off starting over - buying a better car or tearing down the mold-infested house.

Don't fall into the trap of "you can fix that" - with houses, cars, or even people.   It is a dead-end!

Words Matter - But So Do Actions

When you talk about journalists as "enemy of the people" should you be surprised later on when one of them is murdered?

In recent years, we have seen a host of targeted assassinations by world powers.  Korea kills off a potential successor to the "supreme leader" by using a nerve agent.   Russia similarly poisons a former KGB officer in Great Britain.   Saudi Arabia murders a journalist critical of the royal family by luring him into a consulate - never to be seen again.

You can almost visualize the reaction in the royal palace in Riyadh to the world outcry over the last item.   "But Trump said they were the enemy of the people!  Why are they so upset when we take it to the next level?"

But that is exactly what is going on, sadly.  It is not much different from the rhetoric used in fascist regimes against minority groups.  You demonize and marginalize some scapegoat group and pretty soon, you've convinced a lot of people that the group in question is barely human - and thus worthy of only death.  Oftentimes, you don't have to do the deed yourself, you just energize others to do it for you.  It is not unlike the fatwas made by Islamic leaders - which also result in targeted assassinations as well.

But of course, there are other things going on here.   When it comes to targeted assassinations, well, the US has a pretty good track record of its own.  And of course, today, we use more sophisticated techniques than poisons (traditionally viewed as the passive weapon of choice of women - take that, Putin!), we have drones.    And of course, the people we are killing with drones, are, most of the time, enemy combatants or leaders of terrorist groups.   So it's OK for us to blow someone up in someone else's country, if they are a "bad guy."

The problem is, one person's bad guy is another person's good guy, or at least an innocent in their view.   We may view a traitor to the KGB as a "good guy" or at least someone who hasn't done anything wrong meriting death.  Vlad Putin may have other ideas.   Ditto for Kim Jung-un or the Crown Prince.  Their view of  good versus evil is not aligned with ours.

And this sort of thing is not new. During the Cold War, assassination of defectors was, if not commonplace, at least happened on occasion.  And while we may have raised concerns and made diplomatic noises, in the end, not much got done and the culprits ended up getting away.

So what's the point of this?  Perhaps nothing.   But I won't be surprised when nothing comes of this latest assassination, once the noise dies down and a few news cycles bury the story.  We are not about to give up lucrative arms sales to Saudi Arabia over some "journalist" are we?  And we certainly don't want to cut off the oil pipeline, just as oil is headed to $100 a barrel, now that sanctions are being imposed again on Iran, while the Venezuela oil industry self-destructs.

No, likely we'll make noises of outrage and then continue on, business as usual.  But I suspect as a result, you will see more incidents like this in the future - both here at home and abroad, by State actors and unhinged individuals.   We have given people license to kill, and be killed, through rhetoric and deeds.

Monday, October 15, 2018

And So It Begins - Not With a Bang, But a Whimper

Sears just quietly declared bankruptcy the other day - and no one seemed to notice.

Like so many other people who follow the market, I have been on Sears death watch for years now.  At one time - decades ago - I owned Sears stock, which I bought through the Money Paper one share at a time.  I made a little money and got out.   And it was a good thing.  How they stayed in business for as long as they did is an interesting question - it takes a long time to topple big companies.  You can survive a long time simply by cutting off your limbs and eating them.

The financial press has been predicting a recession for some time now - and that is not a prediction that is hard to get right.  Our economy is defined by successive booms and busts, since the dawn of time.  And with each boom, there is a bust, and in retrospect, we all look back and wonder why it took so long.

And maybe, well maybe, the time for a market correction has finally come.   I am sure that those in power today hoped it would be in 2020 or beyond, so they could blame it all on the Democrats.   President Trump (throw up in mouth a little) already is posturing that if the Democrats gain a few seats in the House next election, they will be responsible for the coming recession.   Pretty neat game plan - blaming in advance for the fiasco that will inevitably come.

Sears' problems are well documented, and go far beyond the "everyone is shopping online on Amazon" excuse.  Sears made many mistakes - well documented - from trying to promote it's "softer side" to axing the catalog just prior to the age of online shopping.   One could even argue that their mishandling of their online service Prodigy was partly to blame - in a pre-AOL era, Sears pretty much owned online access, and could have piggybacked this with online ordering via its catalog, and pre-empted eBay, Amazon, and a host of other online commerce sites.

But absent a working time machine, "coulda woulda" is a stupid game to play.  And in an era where Walmart and Target and a host of other "brick and mortar" retailers are still coining money, these Amazonian excuses are a little thin.   Sears was mismanaged to the point where it was so cheap to buy that a bankrupt Kmart ended up owning it - with a major shareholder and CEO who felt the real estate was worth more than the underlying business.  And who knows?  He may end up holding all the real estate - as well as other properties, real and intellectual - when the dust settles.

But one thing is for sure, a lot of retirees counting on their pension from Sears are going to have a rude surprise pretty soon - including some people I know personally.

Of course, the Sears bankruptcy will spook markets, and people will be less willing to lend to sketchy old-school brick-and-mortar stores.  J.C. Penny will be next in line - also having to service a huge debt load, while at the same time seeing its customer base age out.

Who's next after that?   Heavily leveraged companies, particularly money-losing tech companies, will find the well has dried up.  Even if they can get financing to stay in business, they will have to pay higher interest rates on that debt, due to rising rates at the Fed.   Why risk losing everything when the government is offering guaranteed bonds for not a lot less?   So Elon Musk has a very good reason to get high as a kite all the time.  Just pretend it isn't happening, Elon - it seems to work for Trump.

But rising interest rates will have other side-effects as well.  As mortgages push 5% these days (which they are) the cost of owning a home will increase - or the cost of homes will decrease.  As I keep harping on in this blog, the price of a home is based on the monthly carrying cost, as most plebes have "jobs" and thus can only afford to pay a certain percentage of their take-home pay to service a mortgage.  Raise the interest rates, insurance rates, or property tax rates, and the prices go down - just like a see-saw.  And no, this is not up for debate.  Homeowners simply can't just come up with the extra dough to pay skyrocketing interest payments, taxes, or insurance.  At some point, people stop buying - and prices go down.

Price go down, and the guy who bought a house last week shits his pants.  His house is now worth less than what he owes on the mortgage.   If this goes on long enough and severely enough, people end up walking away from houses and mortgages.  Why do I say this?   Well, I've lived through this twice in my lifetime already, in 1989 and 2009.   These things are happening more often and with more pronounced effect, as time goes on.

Jobs are no longer scarce, and in fact, everyone is hiring.  But despite Amazon raising wages to $15 an hour, wages have not really gone up in real terms, at least according to the labor department.  With wages stagnant for a decade or more, people don't have a lot of money to spend these days.  A few shocks - psychological or real - could cause people to spend less.   When you see your disposable income drop, due to increases in rate in your ARM mortgage, you spend less.  When you see your neighbor lose his home to foreclosure, you tend to spend less as well.   The thing feeds upon itself.

A pensioner in upstate New York, who sees their modest pension from Sears drop from $250 a month to $75 a month, will start spending less.   Thank God her husband still has his pension from J.C. Penny, right?   These are real people and real situations.   When the shit hits the fan, they will start spending less.  Now multiply this by 330 million people.   You see how it plays out.

Hey, throw in $100-a-barrel oil, just for funsies.  Oh, boy, will this be a bad one!

Does this mean the end times are coming?  Of course not.   It means a lot of us will lose a little money.  A few will lose houses and jobs.   Eventually we all go back to work, for a lot less that what we were making before.  Hopefully, when that happens, we will be able to spend our meager paychecks on cheap crap made in China.

Oh, wait.  Tariffs.

President Hoover, what have you wrought?

The Bag Tax - Does it Really Alter Behavior?

Will charging five or ten cents for plastic bags save the whales?  Perhaps not.

In British Columbia, we were charged five cents a bag for plastic grocery bags.  The idea behind this law is that it will encourage people to use "reusable" bags (or carry their groceries in their arms) and thus save the oceans from yet more plastic.   California has an even more severe law - ten cents a bag, and the bags must be "reusable" at least ten times.   The net result seems to be that we finally get decent heavy-duty plastic bags for a change, instead of these flimsy thin plastic deals.   But in both cases, however, I didn't see my personal behavior changing one iota.

Simply stated, when buying $150 of groceries - which isn't hard to do these days - spending an additional fifty cents on bags doesn't seem like that big a deal.  It is like deposit laws.  When we travel from State to State, we don't really take notice of the cost of deposit on cans or whatever, and carefully catalog the containers and return them to the store for a refund.   Even when we lived in New York, we found it to be a useless waste of time - you keep stinky, smelly used beer cans in your garage for a month or two, and then cash them in for a whopping $5.50 later on.  That was worth it, wasn't it?

Or was it just a big hassle over nothing?

The idea behind the "bag ban" is that plastics are filling the oceans - causing a "garbage patch" and getting ground up and into the food chain.  Chunks of plastic are in the flesh of fish!  And maybe in our own flesh as well!  This may be the case, but I am not sure how the grocery bag enters into this more than any other source of plastic.  I throw my bags in the trash, where they end up in a landfill.  I am not sure how so many bags end up in the ocean this way.

But of course, they do.  We are camping on a cliff in Malibu, enjoying the dry Santa Ana winds and hoping the whole place doesn't go up in flames.   You can see the ocean below and feel the crashing of the surf right through the ground under your feet.   And on occasion, I have seen a plastic grocery bag, looking like a giant jellyfish, slowly make its way out to sea, after getting away from some beach-goer or camper.  But again, this is in a State where we have a "bag tax" and such things are not supposed to happen!   Yet, happen they do.  Short of an outright ban on bags, (please, no!) I am not sure charging five or ten cents for bag - or for deposit bottles - is going to make much of a difference.

And a lot of ink has been spilled about soda straws.   And again, here in politically correct California, I was somewhat surprised to go to a restaurant and be offered plastic soda straws with our waters - without being asked (even though a sign on the wait station clearly says "soda straws only on request!).   And yes, I picked up a plastic soda straw at our campsite - discarded by another camper.  I never understood America's fascination with straws - they sort of suck the fun out (pardon the pun) of drinking just about anything, other than things you probably shouldn't drink anyway, like big gulps and frozen slurpees.

But as it turns out, plastic garbage bags and soda straws are not the largest source of marine plastic trash - or at least not as much as postulated by the anti-bag folks.   And there are anti-bag folks out there, too - they have detested disposable plastic bags for years, and these "bag bans" and bag taxes have been on their agenda for a long time.   It turns out that a lot of the plastic trash in the "Great Pacific Garbage Patch" isn't from you tossing grocery bags in the ocean (which you do, a lot, right?) but from discarded fishing gear - nets and things that end up in the water when they are caught on underwater obstructions or whatever.   Unlike old-fashioned nets made from hemp rope, the new modern plastic netting never disintegrates - or takes a long time to do so - and when it does, it makes small chunks of plastic, rather than decomposing into nothing.

So these "bag taxes" - which is really all they are - will not change the composition of the garbage patch in the ocean very much.  In fact, they likely won't change much, in terms of behaviors of consumers, other than to perhaps nudge a few people already inclined to use re-usable bags, to remember to bring them next time.   But I suspect a vast majority will simply pay for the bags and move on with life - at least based on what I am seeing in the grocery stores.

But what about the landfills?  Our precious natural resources?  Surely the thin plastic grocery bags are destroying the environment and over-filling our nation's landfills, right?   We went through this decades ago, when alarmists posited that disposable diapers (another target of the far-Left) were "overflowing landfills" - with alarmist statistics being batted about to support this argument.   But then some folks pointed out that the Bureau of Specious Statistics was at it again - that in order for these numbers to work, every American would have to be disposing of 100 diapers a day.

I think a similar thing is going on here with the plastic bags.   Sure, throwing anything away has some social and environmental cost.  But why plastic bags are singled out, and not the plastic containers and other packaging that is used for various products, is beyond me.   One plastic bottle has enough plastic to make dozens of plastic bags.  And yes, even with deposit laws and "recycling" a vast majority of this type of packaging ends up in landfills - or by the side of the road, or in the ocean.

I am not sure what the answer is.  Maybe technology can fix the problems technology created.  There are already biodegradable plastic bags out there, as well as bags made with corn starch or some such stuff.  And of course, there is the good old reliable brown paper sack, which was in use since before I was born - but costs more and weighs more than the thin plastic kind.   No doubt retailers will not be happy with bags that biodegrade while in storage, or that dump customer's groceries in the parking lot halfway to the car.

Whatever the solution is, however, I doubt a "bag tax" will really do the trick.  Because everywhere we have shopped so far on this trip, we've merely paid the fee and ended up using the plastic bags, just as before (they make great garbage bags in the camper).   It hasn't changed my behavior one iota, and from what I see at the grocery store, I don't think it is changing others' as well.

Monday, October 8, 2018

Carnival Cruise Lines - How IPOs Were Supposed to Work

What were IPOs originally designed to do?

As I noted in an earlier posting, the modern IPO is nothing more than a vehicle for company founders to "cash out" by creating a marketable equity in their company.   They create hype, sell 5% or so of the company to chumps like you and me at the IPO (which doubles in price, enriching their friends who assisted with all the hype) and then later on, they can sell their own shares to more suckers and make a fortune.

'Twas not always the case!

Once upon a time, companies did IPOs to raise cash to build a factory, expand operations, or other legitimate business goals.  And the Carnival IPO of the 1980's is a case in point.   Back in 1987, before the market crashed, the founder of Carnival Cruise lines sold of a whopping 20% of the company in an IPO, and raised an awful lot of cash.   When the stock market receded in the late 1980's, he was the only guy in town with cash on hand, and he went on a buying spree, snapping up other, struggling cruise lines, to become the world's largest cruise company with nearly 50% of the market.

That's how the game is supposed to be played.   And yea, he made a lot of money doing it - for himself, but also for the other shareholders.  The IPO raised real capital which was invested by buying other companies, creating economies of scale and increasing profitability and also the worth of the company.

Contrast this to the modern-day IPO, which is often for some money-losing "dot com" company which is little more than a website, an app, and an idea of how to sell people some sort of service or product like a meal kit, or whatever.   These types of IPOs don't raise a lot of capital - and indeed, most of these companies don't really need the capital.  What they need is a profitable business model, more customers, less customer churn, a lower "burn rate" and a real plan to make profits.

But that isn't the point.  The point is to sell-out and cash-in.   And such was always the case.  I noted before a fellow Patent Attorney friend of mine set up a "dot com" company back in the early 2000's, with an atrocious "burn rate".  He hoped to sell out the company early on and make a tidy profit.  But unfortunately for him, he was still standing up when the music stopped, and he lost it all.

Will we ever see a return to the old days of the legitimate IPO?   I wonder, sometimes.  It seems today that whenever someone does have a legitimate product or idea, they resort to sketchy things like "crowd funding" instead of more traditional investment.   And it seems more and more than private equity is sucking all the air out of the room, leaving the stock market as the last resort investment for "retail" investors (chumps like you and me) who have the choice of either investing in old-line companies who have yet to go private (through private equity buyouts, where the company is sold off in chunks and pieces to chump investors in - you guessed it - new IPOs) or investing in these scam-job IPOs for "new technology" companies, whose "technology" consists of little more than selling shit on the Internet.

I think the old-school IPO will come back - someday.  But in the meantime, a reckoning will be on the horizon, as a lot of what is propping up the current market is merely euphoria.

Saturday, October 6, 2018


Do you have to be smarmy and cut corners to succeed?   No, in fact smarmyness often leads to failure.

On the way back from our cruise, we took a taxi back from the cruise terminal to the RV park (which stored the RV for us while we were gone).  The taxi driver was smarmy.   And by that, I don't mean swarthy, which he was also, but just greasy in an ethical sense.   Immediately, he asks if we want to pay cash and whether we want a receipt.  What he wants to do is have us pay him cash directly, so he can not only cheat his employer, the cab company, but also cheat the government by getting paid under the table.   This was a not a good way to start off the relationship.  As I noted before, any business relationship entered into, predicated on a lie, no matter how trivial a lie, will go downhill from there.

And it did.   It was an uncomfortable ride with a man of questionable integrity.  Maybe another trick up his sleeve was robbing his fares?  Or dropping us in a bad part of town where cohorts would clock us on the head and take our wallets?   That sort of thing is common in Mexico City.   I doubt it would happen in Vancouver, but nevertheless, riding with a cab driver of compromised ethics is not a relaxing experience.  He was also a shitty driver - slamming on the brakes of the Prius only when he got to the crosswalk, when he could clearly see the red light from a block away.

Instead of driving us directly to the RV park, he took a circuitious route through Vancouver's Chinatown, which is to say, Vancouver, as all of the city is now Chinatown, with bilingual signs everywhere.  And by that, I don't mean English/French as in Ontario (or just French as in Quebec).  In fact, many signs are just in Chinese, particularly adverts for real estate agents.  The message is none-too-subtle - we don't want your business, round-eye!  You have no money, anyway!

But I digress.   Vancouver, being on the Pacific Rim, has to look toward the West (or is it the far-East?) and China is a far more important trading partner than even the nearby US, to some extent.  Besides, all this influx of cash is propping up the Real Estate market, and no one wants the party to stop just yet, even if ordinary folks are finding it harder and harder to afford a place to live.

But getting back to our story, the smarmy cab driver gets us to our destination, eventually.  He turns off the GPS early into the trip, as he doesn't want us to see that he is deviating from the direct route.  We arrive and the fare is $52, which is odd because the far to the cruise terminal a week earlier, was only $38.   I guess they had a rate increase while we were gone.

I pay the bill and don't make a fuss about it.  It isn't worth it, for about $14, which is like eight dollars American.  But it makes me sad that this guy thinks the way to "get ahead" in life is to cut corners here and there.   And clearly it must be working for him, as he is still driving a cab.

I get a lot of inquiries regarding this blog, and many young people - and young men in particular - and in particular, young men from foreign countries - argue with me that saving money and spending less is only something a stupid chump would do.   To succeed, you have to act successful and spend a lot!  You need a scheme and a plan!  You have to cut corners, do scams and cons, and cheat the tax man and your customers!  In other words, you have to engage in what we used to call "sharp practice" to get ahead.

But for some odd reason, the people who do this never really seem to succeed in life, even as the theory takes hold more and more in America.  Today we have our Smarmy-In-Chief running the country - a guy who made his career by cutting corners and browbeating people into "deals" that often ended up with him in bankruptcy court.   By some accounts, Donald Trump would easily be two to five times as wealthy as he currently is, if he only took the money left to him by his Dad and simply invested it in Index funds.  Instead, he tried the "art of the deal" and most of these deals - the casinos, the housing projects, the airline, etc. - all blew up in his face.

On the flip side, you have people like Warren Buffet, who invests old-school dividend-paying companies and ends up one of the world's richest men.  Or the people who follow the "Boglehead" theory of investing, by putting their money into investment funds and simply leaving it alone.  They are not trying to skim a few dollars here and there to "get ahead" or cutting corners or cheating the IRS.   And the advantage to this philosophy is not only that you will make more money in the long run, but that you don't have to constantly be looking over your shoulder and wondering when the police, or the IRS, or a disgruntled customer are going to show up and exact their vengeance.   Ask any of the former associates of Donald Trump who are now facing jail time whether the "smarmy" model worked for them.   Trump himself is clearly nervous that the other shoe will drop at any given moment.   That is no way to live.

But that is the way the media portrays the rich - living in gated enclaves and engaging in nefarious schemes to get rich.   And maybe a few such people exist.  But you'd be surprised how many people get fabulously rich simply by running a company that makes a good product at a reasonable price and sells for a hefty profit.   It's been known to work on occasion.

But like with get-rich-quick schemes, the poor often believe that there are shortcuts to wealth, and that nicking a little bit here and there is the only way to succeed.   This is not to say that if you run a business you shouldn't cut expenses and cut overhead as much as possible - small savings here and there add up to the difference between a profit and a loss.  But that is far different than, say, trying to get ahead by systematically short-changing customers, or by cutting the quality of your products to the point where they are junk.   Both tactics usually end up with the company going bust - eventually, over time.

Smarmyness simply doesn't work.   And yet smarmyness is on the rise worldwide.   The cabdriver in question was from overseas - from an area of the world where sharp practice and shady dealing are a way of life.   And one reason he left there, no doubt, was that the smarmy economy of his home country is in perpetual depression (Gee, I wonder why?).   No doubt, he was of the opinion, being raised in that environment, that smarmy was the way to success - and how people in America (and Canada) became successful as well.  But such is not the case.  Smarmyness is not a cultural value in the West (for the most part) and engaging in smarmyness is a sure way to alienate yourself from western society, regardless of whether you are born into it or immigrate to it.

When I was a pizza delivery driver, I had co-workers who tried to cut corners.  Or, at the very least, they would complain bitterly if every delivery they made wasn't a huge profit for them with a big tip.   For example, one company I worked for would not pay us a percentage of delivery for salads - for whatever reason.   So a delivery to far-away South Campus, with only two salads (and no tip!) was a money-loser for the driver.   Some drivers would complain loud and long about this, or if they had such a delivery, put it off and deliver more high-margin pizza pies to the frat houses (with drunken tips!) first and end up delivering wilted, warm salads, late, thus insuring no tip (and creating a self-fulfilling prophesy).

Myself, I took the opposite approach.  Regardless of tip or profit, I delivered the product the same way - the way I was hired to do.   I figured that it would even out over time, and you can't make a killing on every delivery (like a 30-pie delivery to a convention at a hotel) nor should you expect to.  You can waste a lot of time and energy trying to optimize outcomes in what is, in effect, a small potatoes game.

Similarly, I am sure that my cab driver friend, no matter how much he tries to cheat in the margins, isn't going to get ahead any more than the other cab drivers who play by the rules.   Passengers will be turned off by his smarmyness and probably be inclined to tip less.  The cab company will eventually catch on to his cheating them of fare money and fire him - and he will suffer the ignominy of being fired from a job that, well, is pretty damn hard to get fired from.   And where do you go from there?

Yet the papers are full of articles about people who do similar things.  Folks with cushy jobs and government pensions, who feel they need to cheat on their expense reports or steal office supplies, to "get ahead" of their fellow cubicle dwellers.   After all, this is how it is done, right?  The President of GM didn't get to where she is today by not stealing paper clips from the office supply cabinet, right?   Wrong.

Cheaters may win in the short run, and indeed, a few even win in the long run.  But the large majority, even if they are not caught, never really end up getting very far ahead of those who don't cheat.  And by focusing their energies on cheating, they often forgo other opportunities offered to them, such as funding their 401(k) - because in their minds, that sort of thing is for chumps, right?


Don't be smarmy!  It just isn't worth it.