Monday, February 27, 2017

Fussy Kitty, Revistied

Everyone is something of a fussy kitty, but it really is an annoying way to live for everyone involved, including yourself.

Fussy Kitty-ism I have discussed before.  The question is, why are people fussy kitties and why, to some extent, do we all do it?  And why does it matter?

Being a fussy kitty is just plain annoying.  It is a passive-aggressive way that powerless people use to try to assert control in their lives by controlling others.   It is a good way to end up not getting invited anywhere, and to end up old and lonely.

What sort of things am I talking about?  Well, when you go to a friend's house and they offer you a lite beer, you don't say, "gee, what else you got, because I don't like that!" - that's fussy kitty-ism.   Worse yet is to reject one brand of lite beer or soda pop, claiming that you only prefer the other brand.  Liking Miller Lite over Bud Lite does not make you a gourmand any more than asserting a preference for Coke over Pepsi.  Yes, they are all dreck, but when your host offers you this, you either say "no thanks" or accept - there is no third option.

The Fussy Kitty says, "Well, I like to have everything just so, right?" as if that excuses rude behavior.  Moreover, their "just so" isn't really a real choice, but a made-up one, used primarily to demand special treatment or favors.   Fussy Kitties are the kind of people who go to chain restaurants than then try to order off the menu.  They will bore you for hours about how they got a Big Mac with a chicken patty in it, as they are "in the know".

Sadly, women are more prone to fussy kitty-ism than men, and I think it is because of how they are raised in our society - to be powerless and passive, only able to assert themselves through passive aggression.  So you have lots of women who freely call themselves "Princess" and expect men to bow and scrape before them and cater to their hysterical whims, because they are.... well, a Princess.   I am not blaming women here, but our society which at an early age sends signals to women as to how they are to behave.

When a child gets their first bicycle, the boy's bike is camouflaged, has off-road tires, a BMX handlebar, and a G.I. Joe gun mounted to the front of it.  The message is clear - the boys are expected to be rugged and rough and actually do things on their bicycle.   The "girls" bike is the powder-puff Barbie model in pink, with chrome fenders, a flowered basket on the front, and tassels on the handlebars.  The message here is clear, too:  Girls are not expected to ride their bike except on the sidewalk, and even then, only occasionally.

In some cultures, men go along with this idea - draping their wives in furs and diamonds as a sign of wealth and prosperity.   It is a way of showing status.  In fact, some call their spouses "trophy wives" - mere talismans of their wealth and success.  The wife is only expected to look good and consume products all day long by "shopping".

So what's the harm in Fussy Kitty-ism?   If the husband is willing to go along with this torturous lifestyle, who is it harming?   Well, everyone involved, plus innocent bystanders.   Passive-aggression never makes anyone happy, especially the person doing it.   And defining who you are by what brand of soda you drink is a shallow lifestyle at best.   At worst, it is a sure way to bankrupt yourself, trying to define yourself through purchases.

Will Fussy Kitty-ism every change?  I doubt it.  As I noted in my previous posting on the subject, it is a powerful marketing tool.  By getting people to swear allegiance to Coke over Pepsi, Chevy over Ford, or Miller over Bud, you've locked them in as consumers for life.   Never mind the fact that their "choice" is largely illusory and also idiotic - selecting one slightly different product over another.

Now, there are, of course, real gourmands out there who can tell one fine wine from another.  But it is an interesting thing, when they visit your home, they are the least likely to be fussy kitties, as they don't expect you to carry their favorite bottle of $250 wine.   In most cases, they accept whatever dreck you offer, because they realize that not everyone is sophisticated as they are.   It's called being polite.

Fussy Kitty-ism gets in the way of life or more precisely gets in the way of enjoyment of life, as you will miss out on so much by having idiotic "preferences" that mean nothing.

For example, I used to not like seafood.  This probably stems from the fact that the only seafood I had a child were freezer-burned Mrs. Pauls fish sticks that probably had survived a power outage in Mom's freezer.   But one day, I realized I was missing out on so much in life by having idiotic "preferences" like that.  My friends were going to Bertha's Mussels in Baltimore and I said I would like to try them.  I realized that I was 40 years old and hadn't even tried half the things thre were in life, due to fussy kitty-ism.

Since then, I have learned to enjoy many forms of seafood, including lobster autopsy.   And I've learned that there are better mussels than Bertha's as well!   I learned that being a Fussy Kitty means only that you miss out on life and annoy other people.   Fussy Kitty-ism is a form of FEAR, and fear is never an emotion to be trusted.

Stop being a Fussy Kitty and LIVE!

Friday, February 24, 2017

Stockholm Syndrome and Finances - People Defending Their Abusers


Stockholm Syndrome is a fascinating aspect of human nature.


The tendency to identify with your abuser is not some abnormal aspect of human psychology.  If you look throughout history, there are myriad examples of people who were horrifically abused but later became allies of their abusers.   You read about the early history of Europe, where marauding invaders would wipe out a village, killing every man and boy - but take the women and children with them, who would later become wives to the very men who murdered their husbands.

And you see it in the history of slavery, not only in America, but in ancient Rome, where although most slaves resented their treatment and conditions of servitude, others, particularly favored slaves, identified more with their masters that their fellow indentured servants.   Some would even defend their masters against uprising or rebellion.

Still others are able to reconcile with abusers from years past or not so many years past.  Atrocities in South America, Cambodia, and even from World War II seem unforgivable, but yet many people reconcile with former enemies or allow for "reconciliation commissions" to grant amnesty to abusers.   And often the reason for this is that holding grudges forever ends up hurting the victim more than the abuser.   Forgiveness often provides release for the abused and punishes the abuser.

But getting back to finances, why do we see the same behavior here?   One of the loudest arguments I get against my blog is not from the finance companies, banks, used car dealers, or payday loan operators, but from their customers.   People have gotten very angry with me when I tell them that leasing a car is a pretty shitty deal, because they just leased a car.   Folks have gotten outright nasty when I tell them what all the financial advisors in the world all agree on - that co-signing a loan is a really horrifically bad idea.

To some extent, it is a matter of a self-defense mechanism.   If I attack leasing as an expensive way to own a car (and you do own it, not "rent" it) with a lot of hidden charges, you may take that as a personal attack, subconsciously, if you just leased a car.   But also, you may want to deny that you made a shitty deal.  Admitting our own mistakes is the hardest thing to do, of course.  Again this is normal human nature and nothing to be ashamed of - we all do it, including and especially me.

So they lash out.  They feel threatened as if attacked personally, even though I am attacking their abuser and not them.  They make themselves feel better about a poor financial decision by attacking me personally.  After all, if I am wrong about payday loans, then they must be freaking geniuses for getting one, right?

And of course, I must be wrong, otherwise these things would be illegal and they wouldn't be so popular, right?

Ahhhhh... therein lies the rub.  So many people bite on shitty deals these days, and thanks to a new "hands off" administration, we can expect America's businesses to offer up more shitty deals in the future.  And it isn't just me or some consumer agency or advocate saying these are shitty deals.  Bill Ford, who owns a small car company in Detroit (disclaimer, I am a shareholder) says he is alarmed about seven year car loans as not only do they hurt consumers, but make it harder to sell cars in the long run.

So it is easy to say these "must be good deals" or no one would be taking them.   It is like those postcards I get from AT&T offering me free "bundles" of satellite television.  They must be good deals, right?  All my neighbors have satellite TeeVee and Cable.   The idea of not watching television just isn't possible, right?

I thought so, too, at one time.

The deal is, you can go through life taking all these shitty deals, living paycheck-to-paycheck, and having all the channels, a new leased Acura, and a mini-mansion with a sun nook.   Most Americans do this.  They live "paycheck to paycheck" on $100,000 a year or even $250,000 a year.  It is a game you can play at all income levels.

Or, you can spend less and accumulate wealth.  And one way to do this is to take fewer shitty deals in life.   And this is not an onerous burden, but actually something that makes your life better.  Owning a car outright with no payments to make is far better than leasing a new luxury car.  The reduced financial stress and the increase in your net worth are something that you can't show off to the neighbors, but is far more personally rewarding.

And I guess that is the beauty of the whole deal - it is not really all that hard to do, but few people choose to do it.  Most waste their energies defending their abusers and defending their poor financial decisions.  They complicate their lives with cash-back miles and home equity loans, thinking they are getting ahead by playing the bank's game.   It is Stockholm syndrome, plain and simple.

Stolen Car - Why Trolls Are Sad People

Trolls are people who want to get caught.

I'm driving a stolen car
Down on Eldridge Avenue
Each night I wait to get caught
But I never do
-Stolen Car, Bruce Springsteen 

The rapid rise and fall of one-man boy-band Yanni Yapalapalopalous wasn't hard to see, at least in retrospect.  He was a troll, first on the Internet and then in real life.  By saying provocative and outrageous things, often tongue-in-cheek, he sought attention.   But like Icarus, another famous Greek, he flew too close to the sun and got burnt.

But it begs the question - why do trolls troll as they do and what do they hope to accomplish?   It is an interesting question, and one that merits discussion since trolling has turned professional in recent years - used as a means of marketing as well as swaying political opinions.

Trolling has been around for eons, of course, in the pre-internet era.   Back in the day, anonymous pamphlets or leaflets were often distributed with outrageous political opinions or scandalous rumors.  Indeed, the founders of our Country were arguably trolls, as they used anonymous pamphleteering to advance their cause, at least initially.   Of course, the reason stated in the history books was that the British would persecute those who published treasonous thoughts.  But I think the idea was more to test the waters and prime the pump of public opinion, so that later on, these founders of our country could come out as leaders of a ready-made movement.

And maybe not much has changed since then.

But there are other kinds of trolls, including our friend Yanni, who seem to be more loose cannons, saying outlandish things in order to get attention.   I think they want, deep down, a good spanking, or at least to be called out on their outrageous statements.  But when they are ignored, they tend to get more and more outrageous in response.  They want feedback and aren't getting it, so they use a larger and larger megaphone.

In a way, it is like the proverbial kid at the checkout counter.  He whines to his Momma that he wants candy.  She tries the tactic of ignoring him.  It doesn't work.  He whines louder and louder until it morphs into a full-blown tantrum - which again Mom ignores, thinking this strategy of pretending not to notice will work.  It doesn't.   Pretty soon the kid is overturning magazine racks and throwing things and finally Mom hauls off and smacks him one good, to the applause of onlookers.   She ends up doing, too late, what she should have done at the first whine.

But today, the back-of-the-hand is viewed as child abuse and not merely correcting behavior.   And the real cruelty to the child is not a slap upside the head, but allowing him to carry on for so long.   Worse yet, the parent, feeling hemmed in by these restrictions, either resorts to yelling at the child (which is just a reverse tantrum) or giving in by buying them the candy.

We see the same thing today.   We let the Yannis of the world whine and whine and pretend not to notice as we feel this only validates them.   Finally, when they are fully out of control - advocating pedophilia, for example, we smack them down.  Of course, we had to wait for Dad to come home to give Yanni his well-deserved spanking, didn't we?

Worse yet, many times we merely gave in and let Yanni and his ilk have their way, as we felt it was easier and "everyone has a right to an opinion" even if their "opinion" is merely harassing some poor actress for being born Black and a woman and having the audacity to accept a job offer to appear in a major motion picture.

Attention is what trolls want.  And this attention is not necessarily in the form of feedback, but rather in just being noticed.   For example, when Hillary gave a speech castigating Breitbart and the odious articles that Yanni wrote, Yanni nearly had an orgasm.  Hillary noticed him!  Mommy put down her copy of The Enquirer and listened to his temper tantrum!  Of course, once Daddy got home, Yanni got a good spanking, so maybe he didn't "win" after all.

But just being noticed made him so happy - for a brief moment.  This goes back to learned helplessness.   He was pulling the levers in his Skinner box cage and nothing was happening in his life.   So he yanks harder and harder - saying more and more outrageous things, to get noticed.   And eventually, it works.

Trolls like to think they are being subtle or clever, when they are really neither.  They try to plant what they think are subtle postings or queries to get people to earnestly respond.  The entire point of the thing is to get them to respond to get noticed because in real life, they don't get noticed much at all - as if they were made of cellophane.

"Mr. Cellophane, coulda been my name, but it was Yanni instead!"

But trolling goes beyond being just noticed, trolls also want to be caught, and this is again, another facet of human nature.   They want to be punished and shown where the limits are, just as the boy whining for candy secretly desires punishment, not because he is a masochist, but because he wants the comfort and security of limits.  If he realizes he can control Mommy, then Mommy is no longer a powerful authority figure.  And if Mommy doesn't run the world, then who does?  Children seek and want limits and bounds, which is why not correcting bad behavior is more cruel than the occasional spanking or back-slap.

Sadly, today, there are folks who equate traditional corporal punishment with real child abuse.  And that is just sick, particularly to those who have experienced real abuse.   I've met young people who were so beaten by their parents that they were hospitalized.  To put that on the same plane as a spanking is an horrific insult to their real suffering.   We need to stop equating trivial things to serious ones.  We need to understand there is a difference between an "unwanted sexual advance" and brutal rape.   But that is a subject for another discussion.

But getting back to wanting to get caught, we see this behavior in people, particularly people in positions of power, all the time.  Famous politicians caught in sexual trysts that in retrospect, seem like cries for help more than a desire to get laid.   It is almost as if they wanted to be caught leading a double-life so they could stop living a lie.   Larry Craig, Mark Foley, Bill Clinton - the list goes on and on - all wanted to be caught, otherwise they would not have been so indiscreet.

I've met, for example, closeted married men who often behave outrageously gay in public, cheating on their wives in a manner that is very reckless, to say the least.  I think in part they want to get caught and stop living a lie, or be forced to change their behavior.   When they aren't caught, they act in a more and more reckless manner, just as the small child at the checkout counter escalates his tantrum until it is impossible anymore to pretend it isn't happening.

Trolls are sad people.  I doubt Yanni Yapalapalous is a happy guy, despite his smiling countenance.  I suspect that these days, he might be quite depressed.   If you read about his background, it really isn't much to speak of - a college dropout like myself, but who never went back to finish his degree.   One of those guys who became briefly popular and made a few dollars, mostly because they were in the right place at the right time more than they had any real talent.   He and Bill Gates are in the same company. Gates was also a dropout - but Gates made a ton more money when IBM dumped that lucrative license agreement in his lap.

Sadly, the media seems to think that lucky people have some special insight into life and living or whatever.  People routinely ask Gates for his opinion on technology and the future, forgetting that his entire career is nothing more than an accident.   A lucky contract with IBM and taking the idea for Windows from Xerox PARC.   This is, after all, the guy who once said the Internet was a fad and would go away.   The guy who blew it with the Zune - and pretty much every other product Microsoft sells, other than Windows.  Talked on a Windows phone lately?   How could they miss that boat?

Never confuse being lucky with being brilliant - and that applies to all of us.  We often think, after making a few dollars in a real estate deal or an advantageous stock trade that somehow we too, have an insight into how the world works.   But the reality is, we just got lucky.   The real insight, if there is one to be had, is to realize this and not let hubris take over.

Is there a future for Yanni?  Well, conservative columnist Andriania Huffington used to appear on the Bill Maher show and ended up becoming even more famous as a liberal commentator.   So maybe Yanni will have a road-to-Damascus kind of moment and re-emerge in the media.

But I kind of doubt it.  He was a lucky kid who had no real insight, other than to be clever at trolling.  He wanted to be caught, be exposed, and be chastised - to put an end to the merry-go-round life of a troll.   And in the end he got what he wanted.

And I think he did this because he realized that being a troll was no way to live - trolls are miserable and unhappy people who have nothing original or new to say.  They don't create, but try to tear down.  And that never makes anyone happy deep inside.

So, if there is a moral here is it this:  Don't be a troll.   Trolls never win in the end, and you'll just be an unhappy person in the long run.   Creating and building things is always a far more profitable venture than tearing down.
 


Thursday, February 23, 2017

Logging Every Purchase and Bill

Using Quickbooks to log every purchase and bill has been a pain in the butt, but fundamental to getting my finances in order.

When I went off to college and lived on my own, I had no formal training on how to manage my finances.  I think my Mother took all of ten minutes to show me how to write checks and put the amounts in the register, and then made vague noises about balancing her checkbook once a month, "but it never balances out" she said - an indication of how sloppy my parents were with money.

My Dad was no better, letting bills pile up until the end of the month and then sitting down and writing checks, usually getting angrier and angrier at how much his spendthrift family was taking out of his paycheck - or spending more in fact that he was making.

And so, I set out in life with no clue on how to handle money other than to spend it.  And for the next decade or so, I bounced checks, was regularly short on funds, and used my wallet as a means of monitoring my spending.   If I had cash in my wallet, I spend it.  When it was empty, I had to wait until payday.

It was a pretty shitty way to live.

When I graduated from college and law school, I got better jobs and made more money.   But my financial habits remained largely the same - just on a larger scale.   Credit cards became my new friend - always happy to loan me money until payday, with interest of course.  And like most Americans, I "managed" my finances with credit cards, slowly building up debt over time until one day you "suddenly" wake up and discover you have this credit card debt that no matter how hard you try you cannot pay off.

70% of Americans with credit cards carry a balance every month, according to the credit card industry.  If you look at the ads for credit cards and banking services, you realize this is true - so many ads are aimed at people with perpetual credit card debts or other debt problems.   It is so pervasive we all assume it is "normal".

What saved me was starting my own business.   I loathed the idea of learning how to balance the books, and many other lawyers and businessmen do as well.  Often, they hire an accountant or clerk to do this for them, and then act shocked as this poorly-paid individual is found to be skimming off the top for decades.  You cannot run a business without understanding basic accounting.

So I took an adult education class on how to use Quickbooks and learned what "accounts receivable" and "accounts payable" meant.  Some classes in law school on tax law helped me understand what accrual and cash basis meant as well.   I started to log all of our purchases on Quickbooks, which was made easier by using a check printer attached to my accounting computer (this in the days before online payments).   Suddenly, I realized I was spending a lot more money on my business that I should have been, and moreover had no real "business plan" in place when hiring people other than "we are busy, we need to hire more people" rather than, "we can afford to hire X number of people for Y dollars" which is how it really should be done.

I started using the program in my personal life, at first for major bills and purchases, but eventually for everything we spent money on.   It was a revelation.   To begin with, if you don't enter every single credit card transaction and check purchase and ACH debit and whatnot, you don't even know if you are spending money.

Negative-option merchants rely on the fact that most people simply glance at their monthly credit card statement and then pay the bill without looking or thinking about individual transactions.   When you log each purchase daily, you realize how much you are spending, and also realize when a fraudulent transaction is taking place.

Online solutions and bank websites help, of course, but they can be a trap.  For example, Bank of America sends me e-mails every day alerting me to any credit card charge, check, debit, bill payment, or deposit.  They also send a daily update of my balances.   So it is easy to detect if a charge comes through that looks funny.   But to rely only on this or using the online site to "balance" your account is dangerous.   In order to "balance" your account, you have to reconcile it with a separate record independent of the bank's records. 

Merely looking at and checking off items online isn't "balancing" anything at all, any more than looking at your monthly credit card bill and making a payment is "balancing" your credit card bill.

Moreover, when you balance your books on your own computer or device, using your own software, you know not only the current balance but also what your available balance is or will be with outstanding obligations.   Your bank's website can't tell you about a check you've written until someone cashes it.  It can't tell you about a credit card charge sometimes until days after it was made.   With your own software and own accounting books, you can tell in advance whether there is enough money in your account to cover the check or debit you just made. 

Thus, bouncing a check becomes nearly impossible.

There are other advantages as well.  If you log each purchase and categorize it (which is easy to do in Quickbooks or other programs, which "remember" what category you used for a merchant the last time) you can run reports at the end of the year and see how much you are spending on cars, food, restaurant meals, liquor, hobbies, electric bill, and so on.   It often is a startling amount.

We all like to lie to ourselves about money and other things.  As I have noted before, men lie about two things primarily - their gas mileage and penis size.  I see men with gas-guzzling motorhomes tell me they are getting 15-20 miles per gallon.  The size of the lie about that tells me their penis must be particularly small.

But we all do it - we round down on expenses and round up on income.   We don't want to really think about how much our hobby car is costing us, because we'd just weep at the waste of it all.   I recently bought a $299 golf cart "buggy" and so far we have nearly $1500 into it with a new controller.   I talk to other people with fancier carts and they say they spent $5000, when clearly they have closer to $8000 or more into it.   For what they could have spent buying a secondhand car, they bought a golf cart.  And no one wants to think about that!

I use Quickbooks as an example, only because I have a "paid-for" copy of the software from many, many years back (No, you don't need to "subscribe" to software or update it every year).  There are other programs out there you could use.  The main point is to reconcile your accounts and to categorize spending.  When you do this, you understand "where all the money went" and you realize how small expenses can add up.

For example, restaurant spending can be considerable.   I log this and am chagrined to see we spend as much on restaurant meals as we do on groceries.  And we do not eat out very much, either.   Some folks eat out five times a week or more - folks I know.   As a result of this awakening, I try to eat out far less often than I used to, and when I do, it had better be more than a refueling stop.  I also try to look at the cost of menu items and split an entree when possible (also better for your health as well) as so many restaurants today have huge portions, and it makes no sense to spend $15 on an entree and leave half of it behind, or worse yet, take it home in a clamshell.

Logging spending made me realize how much I was squandering on cars as well.   But that category illustrates where logging your spending might not give you a complete picture of overall costs.   Depreciation is not shown on your Quickbooks accounts, so you don't realize that you are losing thousands of dollars a year on a car that is just sitting in your garage and depreciating - costing you money even if it is doing nothing.

You can't control that which you don't measure, as one reader put it.  And measuring spending, on an item-by-item basis, is key to controlling spending and accumulating wealth.

Tuesday, February 21, 2017

The Rapid Rise and Fall of Yanni Yapalapalous


In retrospect, it was abundantly clear this guy's time in the sun would be short.

Yanni is gone, and we were just getting used to his particular brand of crazy.   In case you were late for class, one of the odder aspects of the Trump campaign was the rise of a young conservative star named Yanni Yapalapalous.  Well, that's not his real name, but it might as well be.   A British citizen born in Greece, he moved to America to tell us stupid Americans how our country should be run.  And like Europeans when we tell them how to run their countries, we certainly appreciated his input.

He rose to "fame" or more likely infamy, by trolling an actress who stared in the Ghostbusters franchise, starting a racist and misyognist flame war against this actress for no particular reason whatsoever, other than a perception that making an all-female Ghostbusters movie was somehow "politically correct". 

He then went on to further infamy by becoming an "editor" at the Breitbart blog site (which is all Breitbart is, a blog.  If it is a "news organization" then I'm the fucking New York Times).   He published such charming pieces as "Birth control makes women ugly and crazy" or some such misogynist shit.

And of course, he was gay.   Gee, that set the cause back a century or two.   But as I noted before, all the best Nazis were Gay - what with their snappy uniforms and their carefully choreographed rallies and whatnot.   Busby Berkley couldn't do better than Nuremberg!

Yanni joins the storied pantheon of odious gay right-wingers, such as Roy Cohn - who oddly enough was also an acolyte of Trump - or his mentor.  I wonder if Roy called Trump "Daddy" too?  No shit, Yanni really did this.   Again, in retrospect, all the signs were there.

But what was the cause of Yanni's downfall?   Well, it seems he made some comments "taken out of context" he claims, that seem to condone pedophilia and child sex abuse.   I am not sure what context makes these right, but he suggests that 13-year-old boys are sexual predators, seducing innocent gym teachers on a whim.   I am sure that is the argument Mark Foley used.  

But then again he's Greek.   That's that they do.   Right?   You live by the stereotype, you die by it.   He's just saying what everyone's thinking, right?  Uh, maybe not!

But Yanni should have realized that his time in the spotlight was destined to be short-lived.  In any Nazi movement, they embrace the fags early, only to stuff them in the oven later on, once their usefulness to the movement is no longer needed.   Google "the night of the long knives" and figure out what happened to Ernst Rohm - caught in bed with a bevy of boys, the night Hitler arrested him in person.

And that is why I didn't buy Trump's argument that he was going to "protect" gays from Islamic extremists.  It is a compelling argument until you think about it and wonder, "well, who will protect me from Trump's followers?" - because if you go to a Trump rally, you will see a lot of randomly directed hate, and it will come your way sooner or later.

Poor Yanni.  Put a fork in him, he's done.   I am sure Breitbart is going to let him go soon, and he probably didn't make much money from that gig.   His advance from Simon & Schuster was a lousy $250,000 - hardly the stuff of blockbuster books.   Speaking engagements at colleges will no doubt dry up as well.  And you can bet he lives in an over-mortgaged house in West Hollywood, with a lifestyle that while not quite at Johnny Depp levels, is sure to be hard to reconcile with his new income stream.

Speaking of which, what will his income stream be from now on?   Well, Yanni, I can only suggest you practice this line:

"Welcome to Wal-Mart, Can I help You?"

You'll need it!

Saturday, February 18, 2017

The Workers


Trump calls the media "the enemy of the people" echoing Stalin.  NPR uses the term "The Workers" echoing Karl Marx.   Both are wrong.

In a recent NPR piece, president Trump is rightly criticized for rolling back Financial rules promulgated by the Obama Administration. These fiduciary duty rules would place the burden on financial advisers to act in the best interests of their clients, something most of their clients assumed these financial advisers did already.

This rule was a good idea, and should remain in force.  But that's not the point of this posting.

For some reason NPR posits that this fiduciary duty rule is one that favors "workers" rather than just ordinary citizens.  The headline read:

Trump Moving To Delay Rule That Protects Workers From Bad Financial Advice

This choice of language is interesting, and it is a word that NPR uses often. What is disturbing to me is it is also a word that Karl Marx enjoyed using, as in "Workers of the world unite!"  Sadly, the media tends to do this a lot.  We are referred to as "consumers" or "workers" but never is just ordinary people, employees, or citizens - or maybe just human beings.  The media defines us by what we do and how much we spend.

Words matter. When you can set the language of the debate, you can control the debate. Here, NPR is slipping one under-the-radar by referring to people affected by this rule as "workers" instead of just ordinary citizens.

The fiduciary duty standard for financial advisers applies to everyone, regardless of whether they are "workers" or not. It applies to retirees. It applies to housewives. It applies to unemployed persons.  Why does NPR insist on using this term "workers"?

The answer is quite simple.  This is another example of NPR subtly slanting the news in a particular direction.  In this case it is the workers versus management or the little people versus the big people - the 99% versus the 1%.

The term "the workers" implies people who are actually working for a living.  It also implies that the  opposite of this term is people who don't work for a living or who live off the labor of others.  The term Communists use is "parasite."  In short, it is divisive language designed to separate us for one another.

What the hell wast that?

The reality is, of course, that most of the investors in our economy are people like you and me. Mutual funds often drive companies to concentrate on quarterly profits and share price, sometimes to the detriment of the overall health of the company.  But the people who are pushing for higher rates of return on their mutual funds are not corporate fat cats or Wall Street 1%'ers, but rather ordinary citizens like you and me who want to see a better rate of return on our 401K plan.

In other words, instead of an "us versus them" scenario it is more of a "us versus us" scenario.  We all want to see higher rates of return.  We all want to see profits.  And we all want to see fewer regulations if it means that the companies that we invested will be more profitable.  We have met the enemy and he is us.

And we all want to have our financial advisers act in a manner which is in our best interests and not theirs, regardless of whether we are workers, management, retirees, or even unemployed persons. The use of the term "workers" is wholly inappropriate in this context as the law applies to everyone.

And this begs the question:  Why did NPR use this term?   It was not by accident, but purposeful.   I suggest three possible scenarios:
1.  The author of the piece has a communist bent and chose the word.

2.  An editor of the piece has a communist bent and chose the word.

3.  An editor of NPR news sent out a memo instructing reporters to use the term "workers" as often as possible, in a not-so-subtle attempt at agitprop.
There is a fourth possibility:  The people at NPR as so clueless as to think that financial advisers only advise people with jobs.   I don't discount this possibility.   However, given the frequency in recent months that "the workers" have taken over at NPR, I think #3 is a clear winner.

And this is why people call real news fake news.   When you slip in little shitty deals like this in to a straightforward reporting piece, you are sliding down a slippery slope towards Breitbart.  In fact, you could call NPR the Breitbart of the Left and they would probably be proud of that.

The fiduciary duty rule was a good one and did not place a "burden" on investment advisers or banks.   These are people who should be advising you in a neutral manner, and not merely act as salesmen for the financial institutions.   And that is what they were - mere salesmen, as I learned the hard way.

As I have learned over the years, financial advisers should be approached with caution in any event. While they often claim they are not being paid for their efforts, they usually make a commission from the sale of new mutual funds or other investments. There is a reason why they want you to transfer your funds from another account to their accounts, usually because they get 5% off the top. That's also the reason they don't want to talk to you if you don't have any money to invest, or are just starting out investing.

As I noted in my posting my 20 years with Northwestern Mutual, I discovered that my "best friend in the world" who was my Northwestern Mutual agent was really not so much my best friend has he was a salesman trying to sell me products. I made the mistake of assuming that he had my best interests at heart when he really had his own. He made a commission on each product he sold me and I should have been mature enough to understand and realize this.

This was my fault, not his.  I started to get an inkling about who he really was when I saw his Facebook page which listed "Fox News" as his favorite television program.  Even if you are a conservative, liking Fox News is idiotic.   I also started to catch on when he tried to sell me more and more policies - the breaking point being a nursing care policy that would have cost me $500 a month or more.   He was in it for the money, and I was naive to assume otherwise.   A car salesman may be friendly to you, but that doesn't make him your friend.  He is your financial adversary, period.   Similarly, an insurance or investment salesmen (and they are not "advisers" or "counselors" are just salesmen) are not your friend, but foe.
 
Every investment house I've dealt with seems to have one strategy in common, and that is to encourage me to move some or all of my investments to their organization.  As I noted in my posting about State Farm Bank, the only constructive advice the investment adviser could provide me was to cash in all of my investments - even my life insurance - and put it all into State Bar State Farm Bank funds. When I asked what the advantage of this would be, the agent could only say "convenience." Mark was smart enough to see this right away and walk out the door.  I followed shortly thereafter.

Our Fidelity adviser with somewhat better, although I never quite understood what the point of his advice was, or the confusing pie charts they sent me on a regular basis.  He moved money around from one fund to another, but it never seemed that the advice he gave us was really worthwhile in terms of how much money we would need to retire and whether we were on track to retirement - two questions he always eluded answering, and the two questions that every person investing really wants to know.

Sadly, there are lot of investment advisers out there, many with storefront operations. People feel confused and befuddled by the investment process when really it is not that difficult.  The problem, of course is that people want to see huge rates of return on their investment (greed) and don't know how to go about getting this themselves.  They are uncertain where to invest, because they are scared of losing money on poor investments (fear).  So, they think they can talk to an expert who will invest their money and make huge profits. They fail to realize that if the expert could really make huge profits from investing, he wouldn't need your money but would rather be making huge profits on his own.

Most investment advisers counsel you to invest your funds into a number of fairly safe mutual funds with moderate rates of return - which is probably the best bet for 90% of the population.  In return for selling you these funds, they get a commission, usually based on a percentage of the money invested. They will even tell you that they are not charging any fees.  In one instance, an investment adviser told me that I was in a "no load" fund when in fact it had a 5% load up-front.  Yes, they lie, and that was what the new fiduciary duty rule was designed to prevent.

Yes, Virginia, verbal promises of investment advisers are not enforceable under the law, mostly because you can't prove that they said them in the first place.  This goes for any verbal promise made by anyone including people selling you timeshares or used cars - which are about the same level of trustworthiness as an investment adviser.

The long and the short of it is that the new rule that forced investment advisers to act in the best interests of their clients will shortly be repealed.  Even if the rule was not repealed, I am skeptical that it would be easy to prove if an investment adviser gave you poor advice or did not act in your best interest.  The burden of proof would be very difficult, unless you got shitty advice in writing.

Thus, the only solution is to look out for your own interests. Take advice from anyone trying to sell you something with a grain of salt.  Investment advisers are not being friendly and nice to you because they are friendly and nice people. They were trying to make a living and a few so they have to sell you a product and earn a commission.

So we're going back to the era of Caveat Emptor.  Buyer beware.  I'm not sure we ever left it.

Friday, February 17, 2017

Drug Use - Living in the Present



People abuse drugs and alcohol to forget the past and future and try to live in the present.


After writing my last posting, it hit me why people do drugs or abuse alcohol.   And it all goes back to what I was talking about in past, present, and future.   It seems everyone is haunted by demons from the past - even those of us who never had any demons to deal with.   People will stay up nights castigating themselves for an inartful comment they made that might have hurt someone's feelings over a decade ago.  It is part of human nature and the human mind.

And we also worry about the future - will I have enough money to retire?  Will I lose my job? Will there be a war?  Is the President going insane?   We worry, but worry isn't doing anyone any good.  President Trump must be good for the alcohol and drug business, to be sure.

Living in the NOW, in the present, in the moment, is very hard to do.   Religions teach this.  Mystics teach it.   People meditate to screen out the past and future and concentrate on the now.   And people drink and smoke pot and do other drugs to experience the now and drown out the past and future.

The use of drugs of all kinds - including alcohol - have one thing in common - they are all an attempt to experience pleasure now, to forget the past and future, and often have a detrimental effect on the individual's future.  A glass of wine or a joint or hit of coke or whatever makes you feel euphoric for the moment.  Suddenly, everything seems fine, and the worries of a few minutes ago seem trivial and overblown.   We are living for the moment, literally, and not concerning ourselves with the future or past, much to our own detriment later on.

And it is why young people can do drugs and get away with it - with fewer responsibilities in life, they can concentrate on the now and not worry too much about the past and future.   A middle-aged person has too many memories of the past and worries about the future.

In fact, one way to ruin the drug experience is to concentrate on the past or future.   Angry drunks will get angry when they bring up old grievances from the past and start going on drunken tirades or starting fights to settle old scores.   Worrying about the future when high on pot is one sure way to end up paranoid.   One reason I gave up that drug as that as I got older, it just made me anxious.  And neither the past or future are things to think about when on LSD, lest you be on a bum trip.

And of course, drug use can damage that very future, as it can cause you to spend money, wreck your health, end up in jail, or just neglect the things you should be doing in the now to prepare for the future.   So ironically, we use drugs to evade the past and future, and they often make things worse in both regards, causing us to use more drugs.  This is the real pattern of addiction, not some physical ailment or psychological dependency.

Why is it so hard to live in the present and ignore the past and future worries?  This is a good question, and as I noted before, must be something programmed into our brains.   We worry about the past as a means of remembering past experiences and to learn from them.   If an animal puts its hand on a hot stove and gets burned, it should learn from that experience as a survival skill.  If it merely forgets the past, it cannot learn these skills, and it dies out before reproducing and goes extinct.

Similarly, worrying about the future is a survival instinct.   The monkey that puts aside coconuts for the future survives the subsequent famine.  The one that plays all day and lives in the moment starves to death (unless he learns how to steal coconuts).   Worrying about what other people might do, anticipating the next move of an adversary, and so forth, are survival skills.   Without them, our species would have died out long ago.

And the smarter you are, likely the more you worry about the past and future, as this worry is what made you smart in the first place.   Most mentally ill people are not stupid, but rather often have very high IQ's - they are too smart for their own good and let worry overwhelm their lives.  Not surprisingly, many resort to drug use to get as blitzed as possible for as long as possible, to avoid thinking about the past and future.

I can say from experience that I know a lot of very smart people who were too smart for their own good and let worry overtake their lives.   And I know a lot of other people who are dumb as stones and haven't a care in the world.   Smart people intellectualize worry too much, where as the dumber ones just let it go - but learn nothing in the process.

Maybe this is why in Alcoholics Anonymous, two of the tenets of that faith are first, to let go of the past (for example by writing apology letters to people you have wronged in the past) and second, to stop worrying about the future by surrendering control to a higher power - summed up neatly in their "serenity prayer" - God, grant me the Serenity, to accept the things I can not change, Courage to change the things I can, and Wisdom to know the difference.

I am not sure where this is going, but it just struck me that this ties together some disparate ideas I have had in this blog regarding anxiety, worry, drug use, and human nature.   A lot of very smart people destroy their own lives over worry - resorting to drug use or driving themselves insane with anxiety.   And this is a shame, too, as these are talented people who should succeed in life.

And it explains why a lot of people who succeed in life, or at least appear to, are really not very bright folks.   They take things one day at a time and get ahead, without worrying or overthinking things.   And while I commend their more carefree attitude about life, it does seem unfair to some that some odious people get ahead in the world, while smarter people end up suffering.

Maybe - and this is just a wild thought - we should take a lesson from the successful idiots of the world and not let stress and anxiety overwhelm us.   Because that really is the demarcation between successful people and unsuccessful people in this world - not how smart they are, but how they deal with stress and adversity.

Just a thought.

When the World Makes Less and Less Sense

 
One frightening and yet also calming aspect of getting older is how you become less and less engaged with the world.  Sometimes the world seems to be a scary and different place than as a youth, and thus we tend to engage with it less and less.

Today, when I read the news, I see references to trends and fads that I have never heard of.  Moreover, most of these trends and fads come and go without ever making it onto my radar. When I was younger, I was always up on the latest things going on. Working in an office environment, I guess I tended to hear more about these sort of things during water-cooler chat sessions.  Maybe working alone, I miss out on what the latest outrage du jour is, or what embarrassing thing happened to a celebrity.

I guess social media fills in this void for a lot of people - things "trend" and are upvoted and go viral.   But it seems very superficial and trite - and also commercial.  Nothing floats to the top of the Reddit front page by accident, which is why I lost interest in that site as well as Facebook.   It is just a bunch of ads for stuff - movies, video games, kick-boxing, or whatever.  We are supposed to care because everyone else does - or they make it appear everyone else does.   I mean, really, do you give a rat's ass about the "competition" between two brands of comic books?

I guess now that I'm older, I realize that missing out on some fad that lasts for two or three weeks or a month or even a year it's really not missing out on much at all.  And the same is true of music. When I hear about an awards program, none of the names, or least very few of them, resonate with me. I am sure my parents probably feel the same way about the musical acts that were popular back in the 1970s. Back then, as a young man, I knew the names of all the popular artists, even the ones I despised.

Today, I know a few of the more popular names that are mentioned frequently in the press, but I couldn't identify their music if I was forced to.  Moreover, and I know this sounds like a something an old man would say, it seems like all the music sounds the same. We've reached a new era of the solo vocalist who tends to sound like someone from one of these reality singing shows, warbling their voice up and down the scale is if that were proof of proficiency in the art.

I guess Adele feels that she owes a debt of gratitude to Beyonce as they both sound the same to me.  Ironic, after nearly a half a century, white people are still making money off black people's music - and getting all the awards as well.  So I guess not much has changed, and I'm not missing out on too much.

Again, this is both oddly calming and frightening at the same time.  It is frightening because I feel that I am turning into an old person or turning into my parents. And it is somewhat disconcerting to be disconnected from society at large and unaware of popular trends in culture.

But it is also calming in that when you reach a certain age realize that none of these things really matter.  Being up on the latest trend of dabbing really doesn't do much for your personal life.  Knowing the names of all the popular musical artists or even the obscure ones really doesn't make you a better person, more well-informed, or happier for that matter.

In fact, you realize that this stage in life that a lot of what you thought was important and relevant and pressing really was just noise.  As I noted in a very early post in this blog, people love to drown out the deafening silence in their lives with meaningless noise.   Or worse yet, the powers-that-be want us to be deafened by distractions in our lives.  We all want to feel that our lives have some sort of deep inner meeting and that there is a point to our existence on this Earth. This is a normal human thing.

The sad reality is that even the most famous of humans is largely irrelevant in the long scale of time. Human history spans only a few thousand years, and in that time only a few dozen names resonate for any length of time. And even then those names resonate only because they are infamous and not famous.

But compared to the history of our planet, human history is a mere blip on the time scale. The rocks and magma care little for our scrambling activities on the surface of the orb.  For ordinary humans, our significance is even less. None of us will be remembered for more than a few years at best, and few of our accomplishments will be recognized for any significant length of time or scope in the greater scheme of things.

Again, you can view this as depressing or frightening or liberating. Once you realize that your life doesn't have a dramatic meaning, you are free to actually enjoy it on a day-to-day basis. And maybe that is the real meaning of life, to savor every moment rather then to seek some higher meaning through achievement, accomplishments, religion, or politics.

It seems that many people go through life concentrating on the latter, obsessed with things like religion or politics and making them the centerpiece of their lives - providing meaning for their lives. The media would have us think that what the president is doing is the most important thing in our daily existence. They would have us believe that we should put off the enjoyment and experience of our lives in favor of pining for a future that may never exist

I mentioned this in an earlier posting about past, present, and future. It seems that many either pine for a long ago rosy past or wait in eager anticipation for a future that never seems to arrive. In the interim, we seem to miss out on the experiences going on around us.

So maybe it's not a bad thing that I feel a disconnect from the latest trends or popular artists or movies playing in the theater. It seems they come and go with regularity. By the time I hear about a movie I'm interested in seeing, it has left the theaters months ago. And that's okay. Young people want to see the latest releases, have the newest albums, and the latest video game. At my age it seems like, "what's the hurry?"  They'll be plenty of time for all of that and for the most part it isn't much different than what you already experienced in the past.

And that is a very calming thing.

Thursday, February 16, 2017

The Delusional Left


Trump's cabinet nominee did not "fall" because of labor protesting his right-wing views.  He was axed for being too Left-wing.   But the Left spins the story to make themselves look effective when they are in reality, ineffectual.  

Once again, I have to throw the clock radio against the wall this morning.  The only news program on the radio anymore is NPR, unless you want to listen to Jesus radio.   Actually, there were two reasons I had to wreck yet another radio, this story about Andrew Puzder and a recording they played, apparently sung by Barney, chanting, "Books are fun!" which nearly made me throw up.

The real reason Puzder had to withdraw wasn't that labor protests made his candidacy nonviable, but his earlier statements about immigrant amnesty.  This was an unforgivable sin among Republicans, who believe that political heresy should be punished in all instances.
"As CEO, and later as a Trump campaign adviser, Puzder has been outspoken about his views on labor policy, contributing to newspaper opinion pages and on television, discussing issues such as immigration. During the Republican presidential primaries, Puzder advocated creating a path to legal status for unauthorized workers living in the U.S. He endorsed a more moderate "comprehensive immigration reform," similar to what candidates Jeb Bush and Marco Rubio were proposing at the time."
But to hear NPR tell it, it was labor protests and concerns about raising the minimum wage that spiked his nomination.   This is narcissism of the first order.  The sad truth is, labor has little or no influence in politics these days, as the last election illustrated.   It is not that people don't want unions, but that they want jobs more.   Blue collar workers - as well as white collar ones - realize that while it is nice to go out on strike and make more money, having a steady job even at lower pay is probably a better bet.  They realize that when you price yourself out of the labor market by a factor of 2X or 3X, your job is not secure.  They also realize that working conditions today are far from the sweatshops or dangerous mills of the 19th Century.

And that is bookended by another story they reported, but in a muted fashion.  Boeing workers in South Carolina decided not to unionize after a long drawn-out battle and vote.   Why this is so is not reported by NPR, who seems to have a decided lack of interest in the subject.  I mean, after all, the "workers" always want to unionize, right?  They must have been intimidated by company lackeys or something!  Or they are just too dumb to understand that maybe giving over a portion of their paycheck to organizations that are run like the mafia (and in the past, many had connections to the mafia) is a good deal!   What they need are more liberals (who have never spent a day working in a factory) to help them see the light!

Maybe.  Maybe not.  As a former Teamster, I can understand why they don't want to let union thuggery into their lives.  Like I said before, my hippie brother who never worked a day in his life in a factory, had wild ideas about the "workers" and how they should unionize and whatnot.   He was a hypothetical liberal - with lots of great ideas about how other people should run their lives, but few about his own.

I think the Boeing employees in South Carolina - 74% of them in fact - decided they didn't like what they saw going on in Seattle, with more and more labor unrest causing disruption in the workplace, higher costs, and threats to the company's security.  They also saw that as a result, Boeing wasn't investing more in Seattle, but rather in other places, such as South Carolina.   And I think they also realized that they make a good living at Boeing - with good benefits as well - in an era where getting a good job with a big company isn't easy to do.   And I think they realize that their future is tied directly to Boeing's future, which is anything but assured. 

Go on strike, get higher wages, but for how long?   The example of GM weighs heavily on everyone's mind.   Boeing might look like a wildly profitable company, but many of their product lines are in trouble, including the venerated 747.   Airbus is constantly nipping at their heels - and getting huge subsidies from European governments.  Landing overseas contracts means sending production overseas as well - making Boeing a true international company (Airbus has done the same, opening a plant in Mobile, Alabama, where I am sure labor rates are lower and labor rules are more relaxed than in France!).

America's love affair with big labor has been in a steady state of decline for decades.   And it is not hard to figure out why, given the state of the economy from the 1970's onward.   If you ever worked in a union factory, you got pretty tired of having to pick up the slack for the layabouts and complainers and the do-nothings.   That is, unless you were one of those slackers.  And that was the problem with unionism - it promoted the slackers and do-nothings to the top of the heap.  Those were the sort of folks who became shop stewards and union officials.  The net result was, everyone worked down to the level of the laziest worker, and what were once proud companies with decades of storied history, became shells of their former selves, as they could not afford to invest in new machinery, equipment, or technologies - as every last penny and then some, went out the door in the form of inflated union wages.

(And don't get me started on government unions.  The public service unions in Wisconsin made a major miscalculation in their recall vote of the governor, failing to realize that the number of taxpayers in the State outnumbered the number of union members.   We all got tired of five-figure property tax bills, which are the norm in "blue" States like California, New York, and New Jersey.   The problem with unionism, is that somewhere, someone has to foot the bill, and often this "someone" is us.   For some reason, the Democratic party failed to notice what happened in Wisconsin - Hillary never even bothered to campaign there.   Hubris.)

But again, management was also to blame for going along with this.  But maybe they didn't have a choice in an era where you had to negotiate with strikers and couldn't even close the plant if it was losing money.   Today in Germany, the same is still true.  GM is trying to sell its money-losing Opel division to Peugeot, as the high wages and strict union rules (and government regulations) prevent the company from closing a money-losing factory.

And the attitude of the union reps there is reprehensible:
"I have no intention of allowing GM to walk away from our plants and workers - so my message to the workers at Luton, Ellesmere Port and the tens of thousands in the wider supply chain is this, remain strong and stay united.

"The UK and the EU are among GM's biggest markets - if they think that they can walk away from dedicated workers and loyal consumers without a care, they need to think again."
Frankly, this floored me.  The union whose high wages and restrictive work rules are killing the plant is dictating to the company how it should be run, making thinly veiled threats, and arguing that GM has an obligation to run a money-losing enterprise indefinitely, because, well, just because.
 
They even argue that GM has to stay in the market for its loyal customers.   This is just insanity, and why more German companies, such as BASF, are opening plants in the United States and not in Germany.  It is why BMW is expanding operations overseas (including the US) and less so in its home country.  It is why America now exports cars among other things, which I can watch every day from my front porch as the car carriers leave Brunswick, GA, loaded with American-made Mercedes, BMWs, KIAs, Huyndais, as well as construction equipment.

But again, the Left is delusional.   The German unions believe they have a right to run the company and force a company to lose money.   And this is the sort of twisted thinking that American workers are rejecting - that a job is a "right" and that profits are not important, so long as people have jobs.   Labor in Britain tried this with the coal industry, but Margaret Thatcher shut that nonsense down.  Who the hell wants coal anymore, anyway?

So what's the point of all of this?  Only that the Left is losing credibility - has lost credibility - and they are still pushing an agenda that is far past its sell-by date.  Republicans haven't been successful in getting elected at all levels of government because of their platform and agenda but in spite of it.   The Left or "Progressives" as they like to be called, have hijacked the Democratic Party and thrown out anyone who disagrees with a neo-Communist, Socialist agenda.  If you aren't in favor of "free" college, health care, jobs, houses, or food, than you are no longer welcome as a Democrat.

And so long as the party panders to the far-Left, they will continue to lose elections - and lose the electorate.

And sadly, this is not even allowed to be discussed.   As one journalist discovered, after doing an interview with one-man boy-band Yanni Yopalopalus, people on the Left these days have stopped thinking entirely in favor of chanting slogans.   Everyone is suspect of thought crime these days, and if you don't like someone's political positions, you shout them down, boo them, demonstrate, riot, or just refuse to listen to them.

And this is sad - people on both the Left and Right having no idea what the other side really believes but rather believes in a caricature of their actual beliefs.   Each side points to the most radical of the other as an "example" of that narrative.   Republicans are all fundamentalist Christians with guns, Democrats are all radical transgender Islamic radicals.   Neither perception is true.

But of the two parties or wings, one is clearly being more successful in winning elections and they are doing this by snagging more of the moderate vote, not because of their rightist positions but in spite of them.  The Democrats could take a lesson from this playbook.   It is time to shed the ineffectual far-Left and embrace the center.   Centrists can get elected and they can get things done.   Maybe not everything the Leftists want, but more than is getting done today.

Wednesday, February 15, 2017

Negative Option Revisited



Legitimate companies use negative option techniques to snare customers.  But in the long run, negative option leaves such a bad taste in everyone's mouth that it damages your company's reputation.   Is there another way?  


Negative option is a means of selling people on services - usually content or other subscription-type services - by offering a come-on price (or free)  for the first six months, six weeks, or whatever, and then charging your credit card the "full subscription amount" once the "trial" period elapses.  Or they just keep your credit card on file and keep re-charging you for services or subscriptions, until you say "stop" or even thereafter.

What these marketers hope, of course, is that you are just too tired and distracted to bother canceling the service before the trial period has ended.  Or they count on the fact that most people don't reconcile their credit card accounts on a daily, weekly, or even monthly basis, so they just don't notice they are being charged by AOL ten years after they stopped using the service.

Or they count on people thinking "Oh, $29.99 isn't a lot of money, I'll just pay it" even thought the website in question is one they stopped visiting years ago.  And yes, people do this, even people of modest middle-class means who cannot afford to squander money like that.

So sadly, negative-option seems like it will be here to stay.

What brought up this issue yet again, was a subscription to Cook's Country, which is a magazine and public television show that also publishes America's Test Kitchen.   This is a great magazine and I really liked it.   It methodically attacks different recipes and food items from a scientific trial-and-error point of view, without preconceived notions, and then publishes the results.

They are great folks, and even did a movie about Fanny Farmer and re-created one of her signature menus from back in the day.  If you have Netflix, it is a good watch.   Sadly, their food empire is based on using negative-option, and this sort of is a buzz-kill.   I no longer feel warm and fuzzy about them.  I feel about them the way I would about a cable company and that says a lot.

Mark decided he didn't want the magazine anymore, so we let the subscription lapse.   The first thing we noticed was a credit card charge after the subscription lapsed.  What's up with that?   And a while later, a cookbook arrives in the mail.   Turns out, you get this cookbook as a separate subscription, and when you cancel the magazine subscription, they send you the cookbook, claiming that you didn't cancel that as it was separate.

So more phone calls and waiting on hold and we get the cookbooks cancelled.   A year goes by.   All is well until....

A charge for $34.95 appears on my credit card.   I call the company and they claim we still had an online subscription from January of last year, even though we cancelled the magazine and cookbook before then.   This is very odd, as my credit card was replaced with a new one with a different credit card number back in September.   How did they get the new credit card number?

When I call them, they promise to cancel the subscription and issue a credit.   To be on the safe side, I call Bank of America and ask them to dispute the charge.   The credit is never forthcoming, and Bank of America never hears a word from Cook's Country, so they cancel the charge and issue a credit.

In the meantime, I googled "Cook's Country bills my credit card" and get page after page of complaints.  This one is typical.  The complaints are all about the same.  People thought they cancelled the service only to find new charges.  Cookbooks arrive without being ordered.  It seems no matter what you do, they keep charging your credit card, without your authorization.

Of course, they claim you authorized the charge as a continuing charge for a subscription service.   That's their claim, anyway.   It is a shame, to me, that a legitimate organization resorts to this sort of thing.   But perhaps they farm out the billing to a company that works on commission, and you know how that sort of thing works out - like with Wells Fargo.

Commission sales, when unregulated, can lead to problems.  I recounted how a county paper decided to increase circulation by using a subscription company, who in turn offered commissions to sales people for signing people up.  The sales people went around to every apartment and just wrote down the names of people from their mailboxes, along with the address - cashed their commission checks and moved on.   Meanwhile, hapless "subscribers" find newspapers they didn't want on their doorstep, and ominous "final notices" in their mailboxes for subscriptions they never ordered.

Scale this up 100,000% and you have Wells Fargo, who offered commissions to sales people to sell credit cards and other accounts to customers.   When you incentivize people that way, they just resort to fraud to "make their numbers" and set up phony accounts.

Negative option works the same way.   When Webshots was sold and decided to revert back to a screen-saver company, many folks who paid for their premium service assumed that since the service was gone, they would no longer be charged.   But they found new charges on their credit cards for screen-saver services, and of course were outraged.   How does this equate into a sustainable business model?

Well, it can, for a while.   An article I read about AOL noted that half their income was from folks who still paid the monthly service fee, even though they didn't use AOL anymore.   Some, such as my late Mother-in-Law, thought you "needed" AOL to access the internet, and paid this fee on top of her DSL monthly charges.  Oddly enough, she was not alone.  I've know people that even today pay an AOL fee on top of their monthly internet access charges, even though the ISP provides a default e-mail address and you can set up free e-mail on gmail, hotmail, and yahoo, among others. 

So yes, you get the clueless demographic with this approach.  And I guess America's Test Kitchen, being a PBS show, gets a lot of clueless older people who subscribe to Smithsonian and don't check their credit card statements too closely.  But long-term, they are alienating subscribers, which does not bode well for their business model.

Reforming negative option is impossible, because the people using it know that reform would mean revenues would be cut in half - at the very least.

For example, if you forced the subscriber to "opt in" to renewals, it would force the subscriber to think about whether they are using the service, how much it costs, and whether it is worthwhile.  When all it takes is a click of a mouse to say "no" more people would say "no" and you'd lose business.

If you sent an e-mail or text alerting them to auto-renewal and giving a link to their website to opt-out, the same result occurs.  It is more hassle to go to the website, log in, and opt out, but the result is more people would do just that.

If you relied on people actively remembering to renew, you'd have no subscribers at all!  Sending renewal notices by mail is expensive and doesn't result in a high response rate, as people don't want to hassle with getting out a checkbook and stamps and mailing stuff in - even if that is the safest way of doing it.

The problem, of course, with even that approach is that marketers have screwed that up.   I was getting dozens of "renewal" notices for various magazines which were either not renewal notices at all (but rather offers for a new subscription) or were far in advance of the expiration date - sometimes by years.   You send in a check and find out you have renewed your subscription until the year 2035 by sending in responses to all these "renewal" notices.   Or you end up getting two or three or even four copies of the magazine in question.

They don't make it easy to know how many issues you are subscribed for, how many remain, how much you are paying, and when the actual renewal date is.   And newspapers are no better, using "negative option" subscription services in the same way as well as being opaque (intentionally) about your subscription, when it starts, ends, and renews.

They say print is dead - I wonder why?   It is just cheaper and easier to read free stuff online, even if the content isn't as good.   Paying for content is problematic because they play games with your payments.   Honesty is in short supply in the subscription business, which is why a lot of people are hesitant to subscribe to things.

Angie's list recently switched to a non-subscription model because of the negative publicity surrounding their negative option model.   No one wanted to sign up for a hassle, just to read about plumber recommendations.   Whether they will succeed with this new model remains to be seen.   Some argue they are now making their money from the tradesmen themselves, which creates an interesting conflict-of-interest.

So maybe people are realizing negative option is odious.  When you treat your customers like shit, in the long run, they will flee to the next available alternative.  The railroads and trollies found this out the hard way - people flocked to more expensive auto transportation, as it was less painful.   Cable companies are mystified as to why no one wants their "content" when they can stream on the Internet for far less.   There is a lesson here, for marketers, if they chose to learn it.

When you make doing business with your company a toxic relationship, people will flee eventually.  It may take a year, five years, or a decade, but eventually, you will be left with nothing.


UPDATE:   Cook's Country issues a refund, after Bank of America already canceled the charge.  So I guess I have to call the bank again to cancel the cancel.

Also, a reader alerts me to an article in the New York Times which illustrates why they may be using negative option so aggressively - there is a schism in the organization between one of the founders and others who want him to step aside.

It is very sad to read, as it illustrates how greed takes over once something becomes popular.   The media types want to turn it into some sort of monster empire, like Martha Stewart's failed "Omnimedia".  The founder just wants to do his thing - but a lawsuit may be preventing him from starting a new enterprise.

I guess his only consolation will be the tens of millions of dollars he made from this.  Boo-Hoo.