Monday, February 6, 2023

Playing God is No Fun!

It might seem like a good deal to be in a position of power, but it ain't all that fun.  It is just stress.

Suppose you wanted to rent out your house or condo.  You hire someone to screen tenants.  To avoid any accusations of discrimination, they provide you only with income, credit history, and background check data - and even that is sanitized.  How do you select a tenant?

Now, if you are a raging true-believer, well, you might use this as a chance to enact your social justice theories - helping out the "little guy" who is "down on his luck" because they had a bad break here and there.  Or maybe not.  Today's social justice warrior becomes tomorrow's Republican in a real hurry, once they have two nickels to rub together.

You own this asset - well, maybe you and the bank own it - and you are going to lend it out to someone and hope they don't destroy it and hope they pay enough in rent to cover your overhead costs.  Maybe -just maybe - you might make a few dollars in profit, if you are lucky.  As I noted in an earlier posting, our condo, even with no mortgage on it, loses money on every other year, if we have vacancy or have to do major repairs because of the tenant damaging things.

Now say you put the place up for rent, and you have five applicants to rent the place.  One wants to do "Section-8" housing, which involves signing a lot of paperwork with the government in exchange for a guaranteed check from Uncle Sugar and the County for about 75% of the rental cost.  Section-8 tenants have a reputation - deserved or not - of trashing properties because they don't pay for them.  When something is free, you don't value it.  Section-8 landlords have the reputation of being slumlords.

The other four applicants - who all had to pay an application fee of fifty bucks or so to apply (to cover the cost of background checks and credit checks) are as follows:

Application #1

Lease Start: 05/27/2022

Lease End: 05/31/2023

Summary of results

Rental History: Previous landlord reports some floor damage.

Credit: GOOD

Credit Score: LOW 700s

Income: DID NOT PASS

Background Check: PASS

Pets: NONE


Application #2

Lease Start: 06/15/2022

Lease End: 06/30/2023

Summary of results

Rental History: PENDING

Credit: GOOD

Credit Score: LOW 700s

Income: PASS, But works in a restaurant and it depends on the hours he works. I asked for additional proof of income back to February and there was only one pay stub that was lower due to him getting covid. This could be risky.

Background Check: PASS

Pets: NONE

Application #3

Lease Start: 06/07/2022

Lease End: 06/30/2023

Summary of results

Rental History: PENDING

Credit: FAIR w/ multiple accounts with late payments.

Credit Score: LOW 600s

Income: PASS

Background Check: charged guilty of Misdemeanor 13 years ago and There is a civil action for possession that was dismissed in the landlord tenant court records (2019)

Pets: NONE


Application #4

Lease Start: 06/09/2022

Lease End: 06/30/2023

Summary of results

Rental History: PENDING

Credit: GOOD

Credit Score: LOW 800s

Income: PASS - but one year temporary government job

Background Check: PASS

Pets: NONE
Interesting, no? And bear in mind, these are real people who have real emotions, wants and needs. They are all like you and me, with their faults and features. How do you decide which one to rent to?

Compounding that, the tenant with the best credit score and the best background result has only a one-year temporary job with the government - which may or may not lead to full-time employment.  I suspect that after the one year, if they are hired, they will move on up to a nicer apartment and are taking this one only to save money in the interim.  It is hard to tell, of course, without talking to them in person.

Dismissing the Section-8 applicant, that leaves four choices.  Applicant #1 has two red flags - first, they want to occupy before the end of the month and only days after applying.  This could means a number of things, but it speaks of poor planning at the least, or being booted out of another situation at worst.  The income doesn't qualify for the rent (1/3 of gross income, max) and while it would be nice to lower the rent to accommodate their income, as I noted, it is a dicey situation as it is - we are losing money on this deal most years - and on the years we make money, we'd be better off with a savings account, in terms of return on investment. (UPDATE:  Over ten years, we have basically broken even with this condo - with no mortgage to service!  So much for "greedy landlords!").

The "floor damage" thing is interesting - that could be anything from a leaky waterbed (not allowed) to cigarette burns (also not allowed) to who knows what?   So... pass.

Applicant #2 looks promising, but has unverified income and probably a lot of under-the-table income.  Also, restaurant work isn't always steady work.  But so far, #2 is looking promising.

Applicant #3 has issues - you'd like to help this person out after they clearly made a lot of bad decisions in life. I mean, everyone deserves a second chance, right?  But there is a history of not paying the rent and a previous landlord having to go to court to evict.  Do you want to be next?  Pass.  Nevertheless I feel bad they had to pay a $50 application fee.  I hope it is refundable.

Applicant #4 looks promising - an over 800 credit score and a good paying job with an unnamed "government agency" (secret squirrel?), but only a one-year probationary period guaranteed.   Tenants with security clearances are excellent tenants - they stop paying the rent, they lose their security clearance, their job, and career.  Also, they generally are paid well enough to afford the rent.  That is the nice thing about renting in the DC area - lots of good tenants with steady jobs.

All that being said, this isn't fun.  You are playing with people's lives here - folks who have needs and wants just like anyone else.  Maybe applicant #3 is trying to turn their life around and needs a break.  I'll never know as I never meet these tenants - the property manager handles all that, and applications go through real estate agents.

While I would like to enact "social justice" by renting to the downtrodden, it makes no sense when you have better applicants to choose from.  It isn't that  you are turning away the lesser qualified applicant, but accepting the better qualified one.  People complain they can't find an apartment because of their bad financial history.  The problem is, these apartments are not going un-rented, but are rather being rented to be best qualified applicant - and that isn't them.

On the flip side, I spent nearly two weeks doing backbreaking labor, cleaning up some of the worst messes in my life and spending thousands of dollars putting the place back into shape for renting.  I don't want to do that again.  I would like to find a nice tenant who doesn't smoke and doesn't have pets that piss all over the brand-new carpet, and hopefully doesn't like to deep-fry foods in the kitchen.  Someone who is neat and tidy and returns the property in the condition it was found in.  Is that too much to ask?

And I say this knowing full well that in the past, I myself have been both a good tenant and a bad one - particularly during my bachelor days when every day was a beer-soaked orgy.  It is a sad fact, but renting to young, single men is always problematic.  But again, I have no idea of the gender or marital status or age or race of any of the applicants, just income, background, and credit rating.

Some argue that these rating agencies are often an unfair way of judging the worth of people - and I would agree. But of course, "back in the day" before credit scores and computerized background checks, there was the "good old boy" network, and if you pissed-off one landlord, well, it got around town, particularly a small town, and you'd find yourself on the street in no time.  Not only that, things like age, gender, and race were considered, and often the only criteria used.  Worse yet, the rent might be set based on these criteria.

So yes, these scores and whatnot can be unfair, but on the other hand, are not subject to prejudices.

If you can avoid stepping into these bear traps and maintain a half-way decent credit score and pay your rent on time, it avoids a lot of problems.  Bear in mind that credit score is based on debt, and debt is voluntarily taken on in most instances.

But no, it isn't "fun" to be placed in a  situation where you have to evaluate people.  And I suggest that if you think it is fun, maybe it is a sign of mental illness - some sort of sociopath or psychopath tendencies.  To me, it was nothing but stress.

But most of all, it is serious business - and you have to be hard-hearted about these things when you have a major asset of your life at stake.

Playing God isn't fun.  Never.

Sunday, February 5, 2023

The Tragedy of Meth

It will kill you, eventually, but bankrupt you and cause misery for you and your loved ones, first.

Spoiler alert: Most meth heads don't look like this!

I recounted before how we met a couple of guys who tried to convince us that it was possible to have "a responsible meth habit."  We kind of noped out of that and never saw them again.  It is a funny thing, but you can hang out with a pot smoker even if you don't smoke pot.  But you can't hang out with a cocaine user, a opiate user, or a meth user, unless you are as well.  It isn't that you reject them but they reject you.

I found this out years decades ago when some friends got into cocaine which was hella expensive back then - and still today.  Cocaine people quickly divide their lives into fellow coke fiends and "others" and I was happy to be in the second category.  My friends ended up in a bad place. One dumped his girlfriend and started dating underage girls and ended up losing his job, his house, as well as his girlfriend.  Some others tried to entice me with this newfangled "rock" cocaine (later called "crack") and I kind of edged away from that.  Broken marriages, depression, and pointless lives ensued.

My meth acquaintances also lost it all, but again, it happens so slowly they don't realize it is happening.  You do coke or meth and you feel like a new man - and as Steve Martin once quipped, "the first thing a new man wants, is another hit of coke!"  You know what happened to Steven Martin - and Richard Pryor.  Both were fortunate to survive, but had to go through rehab and lost so much in the process.  But at the time you are a coke-head, you still have your life - your job, your house, your spouse, your car - so everything seems OK - in fact everything seems super-OK.  It is only when these things slip away, little by little, that you realize that the drugs have taken their toll.  Many people never have this realization.

Our meth acquaintances were once wealthy - owning a chain of grocery stores as well as an elaborate mansion on a lake.  At one time, they had a leather business that was the largest in the United States - running leather contests nationwide.  But one by one, these things slipped away, first the grocery business, then the leather business, and eventually they had to get regular jobs to make ends meet - at an age when Mark and I were already retired.  They didn't get the connection between that and the meth, though.   I strongly suspect that the feel-good narcissistic nature of methamphetamine made them feel they could do no wrong and thus ended up making bad business decisions.  Sometimes, selling out when you can is the best decision.  But some folks see that as "giving up."

Well, a few years after we met these fellows, one died during the pandemic and it was tragic.  His partner was overwhelmed with grief.  We felt bad for him, but since we were not "responsible meth users" (or any other kind) we had kind of been shut out of their lives.  It is funny, but you talk to straight people and they seem to think that being Gay is like a club - that you know all the other members.  But it ain't like that.  People will ask, "Oh, you must know so-and-so, they're Gay!" and then they are mystified when we tell them that we don't go to the meetings anymore.

Anyway, I felt bad for them, particularly the surviving partner.  But I was shocked to hear he died as well.  A friend told me they found him at his lake house and implied it was perhaps suicide.  Is this the happy ending to methamphetamine?

I mentioned before my theory about drugs (and alcohol, which is a drug).  That God doles out only so much happiness in your life and like borrowing money for fun today - which you pay for double tomorrow - you can "borrow" on tomorrow's happiness today through drug and alcohol use.  LSD is particularly this way.  When you take it, you have this sense of euphoria and pleasure that washes over you.  The next day, however, everything seems stultifyingly boring (the fact that the next day is usually a Sunday probably enhances this effect).  You just sit around being bored for a day - nothing seem interesting, everything seems "flat" - as if the euphoria of the night before sucked all the happiness out of the next day.  The scales of happiness must be balanced.

Alcohol works the same way - you drink a lot and you feel like the life of the party.  The next day you are hung over and feel like shit.  Worst of all, if you really drink too much, you end up barfing your brains out and promising God that you will never drink again.  Of course, those promises are quickly broken - usually the next day.

Marijuana doesn't seem, at first, to follow this pattern.  You get high, you feel mellow and perhaps a little confused as well.  But long-term, the effects of the drug, for "chronic" users are well-known.  You end up living in your Mother's basement and grousing about how the world has been so unfair to you.  I've seen this pattern go down many a time in my lifetime.   I almost fell into the trap, myself.

Harder drugs have harder consequences, which is why they should be avoided at all costs.  Sure, maybe it is possible to be a "responsible" social drinker or a "responsible" marijuana user.  You can still go off the deep end, of course.  But with methamphetamine, cocaine, and opiates, well, you could end up dead - or just losing everything you cherish in life.   They are powerful drugs and very seductive, as well.  You can only drink so much until you barf.  You can only smoke so much pot until you fall asleep.  But cocaine?  People can snort that crap all day long and "feel great" - the body doesn't rebel right away.  Same for methamphetamine - you feel like a superman, so there is no immediate negative feedback.

I was sorry to hear about those fellows, dying so young (late 50's, early 60's) as it seemed to needlessly tragic.

The funny thing is, they didn't look or act like meth heads.  They appeared to be healthy (if not a bit skinny) and didn't engage in "tweaking" behavior.  I knew another couple who fell down that rabbit hole. We went to their house one day and they had a nice setup in their living room with a vintage stereo system and we hung out and listened to music.  When we came back a week later, everything the room was upended and the stereo system was disassembled - the head tweaker was going to modify it to improve its performance (he said) even though he had no background in electronics or repair.  He did a lot of things like that - scattering valuable things to the wind after taking them apart.

Come to think of it - that reminds me hoarding behavior!  Could it be the same damn thing?  Curious thought.

The point is, not every drug user looks like the stereotype photo shown above, just as every alcoholic isn't like the "Bowery bums" they used to show on Dragnet - wearing dirty and torn overcoats and drinking out of paper sacks in some dirty back alley.  No, most have jobs and houses and families and just annoy the snot out of everyone they know.   Similarly, not every stoner looks like a refugee from a Cheech and Chong or Harold and Kumar movie.  People are quite good at hiding these things.

"But Bob," you say, "who are you to judge?  Maybe these folks were happy being responsible meth heads?"   And maybe there is a nugget of truth here - although I don't think I am "judging" so much as reporting.   Funny thing that, if you even talk about something or somebody, you are accused of "judging" by some folks.   Sounds pretty passive-aggressive to me.  If you say something I don't like, I'll just accuse you of being Judgmental.

But maybe there is a nugget of truth to that thought.  Some folks might prefer to "borrow" against future happiness, even if it means misery tomorrow, simply because they don't plan on being around tomorrow.  Years ago, some dude commented here that blowing all your money on "bling" was a solid move, as life in the ghetto was brutal and short - so why save for tomorrow?   There are people who do bad things in this world and fully expect to get caught - at which point, they just check out.  People claim that Jeffrey Epstein was secretly murdered in Riker's prison.  I think the opposite - he knew what he was doing was horrendously wrong, and just figured he would try to get away with it for a long as possible - and if caught, well, lights out.

Maybe there is a perverse logic to that - the last decade or so of life isn't exactly a Swiss picnic - stumbling around in a walker, changing your adult diaper, taking trays of pills to stay alive, everything hurting - it isn't pleasant.   But I am not sure that being a drug addict and killing yourself is some sort of upgrade to business class, either.

I think, rather, it is a classic example of people willing to trade misery tomorrow for pleasure today - to screw "Uncle Tomorrow" so they can put a fast-food meal on a credit card today (delivered, of course!).  I think such Faustian bargains are short-sighted.  Tomorrow will come and you won't fell like doing an Epstein at that point - you'll have to live with the misery you created.

Contentment is better than happiness.  Being content is to suckle at the teat of life and take as much nourishment as you need for the time.  Rather than seek gross excess, enjoy having "just enough" instead.  Drug use is fun and all - that's why people do it.  This narrative that drug addicts are unhappy or unhealthy people who are "hooked" on drugs and constantly going through painful withdrawal symptoms the minute they aren't high is a television trope.  They are, in fact, having a ball, and eventually the piper will have to be paid, but not today.  That's why it is hard to "kick the habit" - not because going "cold turkey" will give you the "DT's" but because drugs are so much fun and who wants to stop the party when you are having so much fun?

I feel bad for my friends - acquaintances, really, I guess.  They were nice guys and decent human beings.  They weren't evil, to my knowledge.  They never hurt anyone that I know of - other than themselves.  It just makes me sad, though, to hear about what happened to them.  They had it all - fame, fortune, fancy houses, and whatnot.  And over time, they lost it all as well.  Contentment wasn't good enough, I guess.

Rest in Peace - I hope they find contentment in the next life.

Saturday, February 4, 2023

Iced Coffee

 

Who the hell orders pancakes delivered?  Crazy!

Ordering food for delivery makes very little sense, even during a pandemic, particularly now that the pandemic is effectively over (Ha!) and infection and death rates are almost down to nothing (UPDATE: I just got Covid!).  Ordering breakfast delivered is even more ridiculous. From an economic point of view, it is just stupid - the cheapest meal of the day, pancakes, toast, fried eggs, delivered to your home at a cost ten twenty times more than you'd pay to make them at home.  And let's not even address the environmental cost - people driving all over the place delivering what is less than four bucks worth of food (but charging $25).  It just makes no sense.

And from an aesthetic point of view, even less so.  They call them "hotcakes" for a reason - they are best served right off the stove, piping hot with real butter on top and real maple syrup - not fake butter and corn syrup.  Not ice cold and soggy.

But I've ranted about this before - a couple leaves the island to drive 20 miles (at least) round-trip to get breakfast.  Economically it makes no sense.  From a time-management point of view it makes no sense.  Environmentally it makes no sense. From a health perspective, it makes no sense - starving yourself for another hour or so as you shower, shave and get dressed to go drive to a meal you can make at home for under a buck in ten minutes.  By the time you get there, you are so famished you over-eat.  It is just bad, bad, bad, all around.  The delivery factor makes it even worse.

But a lot of people claim they can afford this, which is the siren song of the employed living in the suburbs with other people under 50.  They secretly believe they will live forever and that there is always another paycheck down the road, so why not splurge on yourself?   Both propositions are wrong, of course, but it took moving to a retirement island to realize this.  A friend of ours came to visit and said, "All you talk about is money and death!" which might be true, when all your friends are in their 80's and dying or running out of money or both.  It is topic du jour amongst the retirement set.

Of course, the problem is, the two mindsets never meet.  When I was living in the suburbs of DC and commuting to work, my primary concerns were getting a good parking space and getting ahead of the asshole in the car ahead of me.  Money was something to be spent, preferably on things to show off my apparent wealth.  But what I didn't realize was that real wealth wasn't something you showed to other people.  All they see is apparent wealth, and any idiot can sign himself up into debt forever to have that.  Believe me, I know.

So, I get it.  People are "too busy" to cook, and working at home on that new report due tomorrow, they figure they can "send out" for breakfast as they can "afford it" when in reality, they are just pissing away money.  Even if you are making a six-figure salary (which even the Doordash driver probably makes these days) it is a huge chunk of your wealth you are pissing away, a little bit at a time.  As I noted before, if you make $100,000 a year, maybe 10% of that is "discretionary spending" as taxes, mortgage, and other payments suck up the rest (hopefully, funding your 401(k) is part of that).  So if you blow $1000 a year on delivery food or take-out (not hard to do, either), you've blown 10% of that discretionary income.  How'd you like a 10% effective raise?  Look in your wallet.

People - middle-class people - claim to be living "paycheck to paycheck" and they tell you this in a text message from their new smart phone while waiting for their food to be delivered, or waiting for their entree at some forgettable fast-casual eatery.   Someone took my money away!  That must be it, because everyone else lives like I do, so my spending can't be the problem, or can it?

The secret to wealth isn't a secret - it is right out in the open.  Spend less, save more, borrow less, or better yet, borrow nothing.   People hate that - it sounds too simple.  There has to be a trick or a special inside knowledge.  The tax code!  Chase that!  Deduct your way to wealth!  But what ends up happening is you end up chasing your tail.  Sure, take a deduction you are entitled to, and factor those in, when buying a house or an investment property.  But don't think that taking on more and more debt is creating wealth or that spending $20 on breakfast "makes sense" because you can spend all that time you "wasted" preparing your own food (all ten minutes of it!) making more money behind a computer screen.

It is a funny thing, but we as humans tend to complicate our lives and make them more expensive than they have to be.  People buy $100 coffee machines and spend a buck for a "cartridge" to make coffee and then argue it is "convenient" to do so - as if the "hassle" of everyday living has just overwhelmed them.   We are "conveniencing" ourselves to death, quite literally. We no longer do any physical work, like walking even.

People also make the argument that they like to have things "just their way" - so they go to a restaurant for breakfast, so he can have pancakes and she can have the omelette.  Never mind that each serving is more than enough food for three people - sharing the same food item is out of the question (and they call that a marriage?).   The cartridge coffee maker "makes sense" to them as she can have Chai Tea and he can have Cappuccino.  Such a commitment!

We make a big pot of coffee every morning - or tea - and share it.  We aren't afraid to commit to that - or to compromise on choices.  It isn't that hard to do, and the illusion of "free choice" is just an excuse to spend tons of money.  In the afternoon, if there is still coffee in the coffee maker, I put it in a tall tumbler, add some ice from the ice machine, and pour a little cream over it.  Take that, Starbucks!  Actual cost - nearly zero.   Yet others will get in their car, wait in line at the drive-through, to order a "coffee drink" to break up their afternoon.   I am in wonderment that their job allows them to do this, even.  We seem to have a lot of spare time in this country.  Or do they get their iced latte delivered?  Must be a pretty lukewarm latte by then!

The recession is coming and it is no joke.  Companies are laying off tens of thousands of employees, sometimes even abandoning entire product lines as well.   They know something we don't - or something we do know, but chose to ignore.  Meanwhile, on "Social Media" you see Suzie posting a Tick-Tock complaining about the $20 delivery fee for her Big Mac and how it went to the wrong house in Foreclosure Mews Estates subdivision.

These are the same folks who will be whining when the shit hits the fan - as it did back in 2008.  People lost jobs, lost their houses, their cars, even marriages.  And for what?  So they could have status.  This time around it will be even dumber - people broke and unemployed, because all their money went toward having a cheeseburger delivered.

It would be a "bring popcorn" moment if it wasn't so sad!

Friday, February 3, 2023

Why We All Lack Financial Acumen (Emotional Thinking)

Image result for man struggling with bills
Why is it we all fail at managing our own finances?

I received some mail from two readers on different subjects which neatly dovetail with one another. The first reader questions to why people with a good education are often incapable of managing their own finances. People making six-figure salaries with advanced degrees are living paycheck-to-paycheck and can't seem to balance their own budgets.  They run their credit cards past their limits and bounce checks.  And I know this because I used to do that while making a six figure salary.  It was idiotic - and quite common.

And the funny thing is, oftentimes people like this can make very rational decisions at work, particularly when dealing with other people's finances.  If you were spending the company's money, you may be more astute about the bottom line, as you ain't spending your own money.  But of course, there are exceptions to this rule.  Some folks are spendthrifts at work, or with other people's money entrusted to them.

These exceptions do point out why we lose our financial acumen.  I related before a story about my friend at Detroit Gear and Axle who was assigned to build an office for a foreman.  To save money on plastering and painting, he decided to use an inexpensive paneling from a home improvement store.  But upper management was appalled when he finished the project, as a foreman was not at the manager level qualified to have paneling in his office.  So they spent hundreds of dollars having union painters paint over the paneling, which drove the project over budget.  They wasted money to follow some silly in-house rule based on emotional criteria.

It may be right there is what the problem is.  We get caught up in things like status and emotion when it comes to money.  In our personal lives, we want to have a fancy car and a fancy house and we're willing to go into debt in order to have these things.  We do it for status or perceived status.  We want to show off to our friends that we have nice things and can afford nice things.  Or we think we can afford them anyway.

And of course, we fail to realize that the owning nice things takes little more than signing one's life away in debt. There's no real talent in buying a fancy new car. It's not like you actually went out there and made the car with your own hands. You just went and paid somebody.  And yet, people show off a new car like it was something they built!

Another reader writes about the demise of Sears, after going to a store closing sale.  Again, the example of Sears illustrates that even when it comes to business and industry, managers can make really boneheaded decisions.  Like so many others, I keep wondering what was going through Eddie Lampert's mind in the last decade with regard to Sears. I keep thinking that maybe there's some secret plan he's going to pull out of his pocket at the end where he ends up owning all the real estate in making out like a bandit while screwing all the creditors, shareholders, and pensioners.

But it's beginning to look a lot more and more like he's just a really bad manager and screwed up big time with his operation of Sears. He ran the company into the ground and wasted the shareholders money, the bondholders money, and his own money in the process. And a lot of people, from employees to pensioners, are going to get hurt in this deal.

And again, emotion and status factor into this. He considered himself the boy wonder of hedge fund financing. And he claimed to have a secret plan to turn around Sears using something called "Shop-your-way!" which seems like a desperate last-ditch attempt to salvage the company. A last-ditch attempt that was clearly doomed to fail.

But people often believe what they want to believe, rather than harsh realities. Again emotion trumps logic. People on the Titanic felt the ship could not be sinking even as it was taking on water. And watching Sears go under was like watching the Titanic sink over a period of a decade.

The reader noticed that at the close-out sale there were not very many bargains to be had. Some of the appliances up for sale are the same price as appliances at other retail outlets. Again, emotion raises its ugly head. Store Liquidators are professionals that go from location to location to liquidate various retail outlets. Usually, they start off offering everything at list price at least for the first week or so. Then the next week they lower prices by 10%, and the week after that 20%, and so on until everything is gone.  Oftentimes the liquidators will bring their own merchandise to sell as well.

This creates a conundrum for the consumer. If you wait 2 or 3 weeks for prices to go down, somebody else may purchase the item before you get a chance to. So do you pay more and get a mediocre bargain or wait and hope to snag a real bargain?  It is a fascinating formula that relies more on emotions (FOMO) than on mathematics.

The problem is, you are bidding against people who think that anything at a store closing sale is bargain, without checking prices. They let their emotions get the best of them. So they buy stuff that is being liquidated that really isn't that much of a bargain. If you decide to wait until something is 30 or 40% off, chances are one of these idiots already bought it at the higher price, before you.

Again, emotion is trumping logic. And perhaps that's one reason why I stay away from these liquidation sales. Usually I find there are no real screaming bargains there, in fact usually it's just a lot of broken down crap.

Not only that, they usually don't have what I want. You go to a liquidation sale and you buy things because you think they are perceived bargain. "At a price is like this you can't afford not to buy!" So you buy stuff that you don't really need because you think it's a bargain, even though you have no use for it. It is shopping at its worst.  And yes, I have done this, more than once.

At first, I thought these were all disparate things, but the more I thought about it I realize they're all part parcel of the same. We all tend to use emotions when making financial decisions. And often this clouds are judgment. And it matters not whether the decision is to buy a new SUV, or build a new wing on the factory, or two leverage your company heavily in debt, or to buy a dented stove at a store closing sale.

We let emotions get the better of us, to our own detriment.

Thursday, February 2, 2023

The Nature of Complexity

Early auto engines were primitive to say the least.  This didn't mean they were more dependable!

I mentioned in an older posting that eventually, even the most recalcitrant redneck embraces technology and change - in fact, they sometimes seem to be on the leading edge of it.  Recall back in the 1970's and 1980's, the big, 8-foot "C-band" satellite dishes became a fixture in the countryside - usually mounted next to a trailer home. Satellite signals were un-encrypted, and you could get "free" cable television, even the pay channels, with only a few thousand dollars worth of electronics.

So perhaps all this nonsense talk about hating electric cars will also go away - once people realize they can generate monster horsepower - and scalding acceleration.  If only they would make vroom-vroom noises!  And black smoke!  That would seal the deal!'

But decrying advances in technology is nothing new - it has been going on for ages.  People have decried "newfangled" things since newfangled things were invented.  And just as quickly, they jumped on the bandwagon, too - usually plowing their meager savings into some ill-conceived investment scheme that latches onto the latest technology as a selling point.  Railroad stocks in the 1800's or "tech" stocks in the 2000's - it is pretty much the same thing.  A few are real deals, many more are "me too!" cons.  There is Tesla, and then again, there is Nikolai.  One actually makes cars.  Both may end up broke in the long run - first to market is last in the marketplace.

During the dawn of the automotive era, cars were pretty simple but difficult to use.  You had to crank them by hand, just to start them, and if the engine backfired, it could break your arm.  Driving wasn't just a matter of steering and changing gears, but you had to set the spark advance as you accelerated, using a lever on the steering wheel.   Fancy new advances such as the foot throttle, were years away.  Brakes were simple bands attached to drums on the rear wheels, activated by a cable - that you hoped wouldn't break.

Cooling?  Early cars were air-cooled, but later models with water cooling relied on "thermo-siphon" cooling instead of a water pump.  Overheating was the norm, and a frozen cracked block the norm, if you didn't change your antifreeze every fall.   Most engines were flat-heads - valve-in-block - and the valves needed to be reground every 20,000 miles or so.  And maybe during the second valve job, you'd have the rings replaced and the cylinders honed - because you were losing compression by that point.

Over time, things like overhead valves became common - by the early 1960's nearly ever car had them.  The electric starter meant that anyone could drive a car.  And the automatic transmission - which had a tortured history of its own (google "Roto-Hydromatic" and "slim jim" sometime) meant that you didn't even have to know how to shift gears and clutch.   Centrifugal and vacuum advance distributors meant you didn't have to adjust your car's timing while you drove.  And sealed-for-life ball joints and wheel bearings put an end to the "annual chassis lube".  Sounds like a trivial thing, until you realize that well into the 1950's, car makers offered built-in lubricators, that, with the pump of a handle or the push of a button, would send "Alemite" grease to all the "zerk" fittings on your car.

Cars got more and more complex over time, and at each stage, some folks would decry each level of improvement.  Automatic transmissions?  That's for sissies who don't know how to clutch! Air conditioning?  Who the heck needs that?  Power windows?  Power locks?  Expensive junk that is just going to break!   People actually said these things, in my lifetime.

Today, you can't buy a car in America without air conditioning, and most have power locks and power windows.  Manual transmissions are harder and harder to come by.  And every car has a plethora of air bags in it as well.  When I was a kid, seat belts were optional - dealer installed!  And no, we didn't have shoulder harnesses.

But a funny thing happened at the same time.  In Engineering, usually the more complicated you make a system, the less reliable it is - the more failure modes it presents.  But with cars, well, as they got more and more complex, they got more reliable as well.  New technologies and new materials meant that valves could last the life of the car.  Electronic fuel injection made cars run cleaner and last longer - the idea of doing a "ring job" fell by the wayside.  Gas stations across the country converted their service bays into convenience stores - that is, the ones that stayed in business.  Cars of the bygone era would hardly go 80,000 miles before going to the junkyard.  Today, it is expected they will go twice that far, if not more.  Pontiac, in the 1950's advertised its cars as "tested to 100,000 miles!" as if that was some sort of moon-shot kind of aspiration. 100,000 miles!  Who were they kidding!  Today, that is the recommended service interval for many automatic transmissions and cooling systems.

People adapted to these changes.  I recall a fellow technician at Carrier had his new Monte Carlo towed to the dealer once.  He got in the car one morning and the "check engine" light came on.  Frustrated, he opened the hood and "starting pulling wires" as he put it.  "I wanted to disconnect all those pollution controls!  That had to be the problem!"   But of course, he was doing things like disconnecting the fuel injection controller, or the vacuum advance for the distributor - or the cruise control wiring.   It was an expensive day for him and the boys at the Chevy dealer all had a good laugh at his expense.

Yes, early on, people resisted these changes.  Many decried - and still decry - "all those electronics" because they don't want to bother to learn about electricity.  But even the most stubborn redneck comes around, and while the "pollution controls" of the 1970s were indeed a nightmare (and easily removed as well), by the 1980's, electronic fuel injection and modern lambda feedback systems meant that not only do cars run as well as in "the good old days" they run better.  We never had 500, 600, or 700 HP cars available on the showroom floor back in the "glory days" of the late 1960's.   Not only do modern cars have more power, they handle better, stop faster, and are far more reliable. Oh, and they get double or triple the gas mileage and pollute one-tenth as much.

Maybe in 1950, things like overhead valves were esoteric features of expensive cars.  Today, dual overhead cams with variable valve timing, is pretty common even among the least expensive of automobiles.

Now granted maybe something was lost along the way.   Back in the "good old days" you could go to your Ford, Chevy, or MoPar dealer and buy a car with a V-8 engine, and by replacing the cam, the intake, the carburetor, and the exhaust system, increase the horsepower by 25-50%.   And you could do this with hand tools, in your garage at home.  Today?  Well, you can buy a fancy air filter or try to reprogram your ECU, but the results are not so dramatic - Engineers didn't leave horsepower on the drafting table this time around - it wasn't economical.  And today, well, you can get 300 HP out of a four-cylinder engine.  Think there is any headroom left in that?  Probably not.

So the home tinkerer finds that he can't tinker.  This doesn't mean all is lost - you can still do many repairs at home.  But increasingly, such repairs are unnecessary.  Changing spark plugs or engine fluids is something done so infrequently these days that is just isn't worth hassling over.

And that is the nature of complexity.  Early on, trying to make things "complex" was an exercise in frustration, as the more complex a machine can be made, the more failure modes are introduced.  In an era of 50,000-mile "ring jobs" and 20,000-mile "valve jobs" adding complexity to a car only insured more woes.  But once these sort of repairs became esoteric, due to increased reliability - we could pile on complexity without sacrificing reliability.  And indeed, as I noted, reliability is greater than ever, today.

Most other technology falls along the same lines.  Do you remember those old 40MB Seagate hard drives? Do you remember how we had to "run diagnostics" on our computers to test the memory and scan the hard drive for "bad sectors"?   Memory chips were removable back then, because sometimes they did go bad - and you had to replace them.  Computers today are 1,000 times (10,000? 100,000?) more complex than those old DOS machines - but oddly enough are far more reliable.

That being said, there is a "sweet spot" in technology between bleeding edge and "Dad-gum, they don't make 'em like they useta!"  Clinging to obsolete technology (as I am prone to do - typing this on one of my now three ancient Toshiba laptops!) can be more costly than upgrading, and eventually, technology becomes obsolete or unusable.  Sure, it would be romantic to drive around in a 1957 Chevy convertible, but the reality would be a very uncomfortable and unsafe ride, and oddly enough, less reliable that a more modern vehicle.  On the other hand, you don't want to be the first on the block with some weird esoteric technology that never worked right in the lab, much less in real life.

I noted before that I use the Walmart standard of technology - if some new tech has trickled down to the Walmart level, I assume they've worked the bugs out of it as it is now ready for the plebes to consume.   On the flip side, when parts are NLA and everybody stops making what you're using, well, the writing is on the wall - time to think about moving on in the world.

Too bad, too.  I just got used to Windows 7!