Saturday, October 31, 2015

Social Justice Warriors?

On conservative websites and discussion groups, people complain about "Social Justice Warriors" or "SJWs" - what are these supposed to be and do they really exist?

One thing more annoying than a "Children of Narcissists" movement website is one of these new conservative "Men's Rights" websites and discussion groups.    They are part of an inter-linked web of folks in various conservative groups, all repeating the same sorts of political views, reinforcing each others beliefs, and basically shouting down anything that sounds even remotely threatening to their world view.

And like the Children of Narcissists folks, they use a litany of acronyms and code words when they communicate - as if knowing all this swell lingo somehow made it all make sense.

Some of them are the "red pill" people, for example, who subscribe to a fellow who wrote a book on "how to pick up women."   They spend a lot of time complaining about false rape allegations and feminism and whatnot, which tells you a lot about how good a guide to women this "pickup" book is.  Apparently the "red pill" is Rohypenol, not a reference to The Matrix.

And they all have universal disdain for the "SJW" and what they view as the feminization of men in our modern era.

Oh, and they are shocked - shocked I tell you - to discover that college campuses are hotbeds of liberal thought (as if this was not a trend dating back to the middle ages!).  Imagine that, college kids being liberal?  Whoda thunk it?  (Even at General Motors Institute, I can assure you the student population was more liberal than the norm).

But what are "Social Justice Warriors" and do they really exist?   The SJW is posited as a person willing to attack or pile-on in an attack on others, usually online, based on so-called "social justice" issues, but does so not because they actually believe in these issues but to heighten their own social standing and reputation.  It is a very odd definition, to say the least.  What sort of "social standing" do people have in anonymous discussion groups?

To me, the term might mean something else.    I do see a lot of young people today, who, like young people of all ages, tend to resort to knee-jerk liberalism.  They believe, for example, that being poor is a condition that occurs when you have bad luck or when evil capitalists take your money away - and that nothing the poor person does is responsible for their plight.   This is not to say people are not victims in this world, but very, very few of us are entirely innocent actors.   Believe it or not, what we do with our own lives tends to have a great effect on how our lives turn out.  Personal choices, in the end, outweigh social trends, on a personal level.

The  "SJW" type also views the homeless as beatified.   The homeless are noble and kind people who are also victims of circumstance (as opposed to say, mental illness or drug and alcohol abuse) and to even question their beatitude is to be a cruel heartless bastard who probably works for a big evil corporation.

Which leads to the next criterion:  Shaming and Damning.   The "SJW" loves to shame and damn others as being insensitive and "not caring" about people "less fortunate" than themselves.  According to the SJW, the real measure of a society is how it treats its "least fortunate" members, not in its real accomplishments.

But of course, this basically describes any 20-something who has been to college and hasn't had enough experience in life to see otherwise.  Once his bicycle is stolen by that noble homeless man, or one of the noble poor sticks a gun in his face to get crack money, his opinions may change.   Once he spends 60 hours a week to pay off his student loans and pay the rent - while others get subsidized housing for doing very little - he may change his mind.  He will change his mind.   Most folks do.
"If you’re not a socialist before you’re twenty-five, you have no heart; if you are a socialist after twenty-five, you have no head."
My brother and I illustrate how this works.   When he was in college, he would keep a copy of Chairman Mao's "little red book" in his back pocket and spout off college-age nonsense about how "the workers" were being exploited by the "big evil corporations" and "capitalism" which, of course, it goes without saying, should be abolished.

How I spent my college years.

Meanwhile, I was actually working in a factory, working on machines like the one above, sharing meals (and drinks) with "the workers" who all to a man thought people like my brother were commie hippie punks who should have their heads smashed in.   Yes, the average hard-hat "worker" back then voted for Nixon - twice.   They didn't want commie bullshit, then or now.

The contrast in theory and practice astounded me.   My brother with his academic theories formed in isolation, really had no clue what was going on, as he lacked experience in the real world outside of classroom exams and papers.

And if you think about it, most college-age kids are this way.  Their experience in the working world may be non-existent or very brief.   Even if they had some sort of summer job, chances are they didn't learn much about running a business from it.

So yea, college kids buy into weak thinking and self-indulgent fantasies like Socialism.   I met a nice young 25-year-old the other day, and he told me in all seriousness that we should switch to a socialist society and that everyone should be paid the same amount.   I didn't even try to argue with him, as there would be no point in doing so.   He will learn, over time, that such ideas sound swell when you are young and being paid squat.   But when you work harder, you want to earn more - at least more than the guy who clocks in and leans against the coffee machine all day long.

And to some extent, that was the problem we had at the factories I worked in.    Everyone was paid the same union wages, according to a scheme based on seniority, not your value to the company or how hard you worked.   And the real workers resented the slackers, and as a result, tended to slack off themselves.

But getting back to the "SJW", do such people really exist?  Or is it just a catch-all label that conservatives like to slap on anyone who disagrees with them?   I tend to think the latter, as in these "discussion groups" there really isn't much discussion other than - like the "SJW's" they revile - the shaming and damning of anyone with an even slightly liberal viewpoint.  Same shit, different day.

And that brings us to the point of this posting.   You can waste your life away being an "SJW" and spending countless hours devoted to "causes" and whatnot.   But you can also waste your life away being a "Men's Rights Advocate" or some other such silly nonsense.

Being a causista - be it liberal or conservative - is just a waste of your own personal energy.   You are not going to save the world and be the "hero" by fixing our political or social system, simply because this will not occur.    You are better off spending the energy on your own life and improving that.   If everyone did this, half the trouble in the world would evaporate overnight.
Q: How many PETA members does it take to change a lightbulb?
A: None, because PETA can't change anything.
It is fine to have opinions and all, but changing the world is a very hard thing to do - and to try to do it at the expense of your own personal welfare is not being noble or altruistic, but just stupid and annoying to the rest of us.

But sadly, these sort of folks will never see that.   They will continue to attack each other and dissipate their own personal energy fighting other people's battles (even if they perceive them to be their own).

Just a thought.  If you spend a lot of time on causista websites, tossing around acronyms like SJW or red pill, perhaps it may be time to re-think your priorities.

The Dent Man

Small dents can be taken out of a car without the need for painting.   It is a pretty lucrative business, yet few choose to get into it.

We live in a port city, where automobile carriers come into port every day, loaded with foreign cars - and leave loaded with American-made cars.   For a year, anyway, we were the largest port (in terms of number of cars imported) on the East Coast.

The marshaling yards are enormous, and it is amazing to see the rows and rows of cars parked outside one day - and see them gone the next.  It is a pretty healthy business.

During transport, cars can get damaged.  Door dings and small dents and scratches are not uncommon, and sometimes cars even fall off the truck transporter - or the truck driver lowers one car (hydraulically) right into the roof of another.   With so many cars being moved around, well, shit happens.

A local fellow I met runs a business out of his pickup truck - for the last 30 years - taking small dents out of cars.   For $300, he spent the morning at my house taking at least 20 small door dents out of the roadster, as well as two larger dents out of the hood.   For the most part, you can't even tell the dents were there anymore, his work is that good.  Since I am selling the car, I wanted it to look its best, so it fetches the best possible price.

And he is a busy guy who loves his work.   I didn't want to interrupt him, but he said he liked to talk with people while he worked, so I spend a few hours listening to his life story while he "tink, tink, tink" made dents magically disappear in front of my eyes.

He said it was steady work - he has a contract with the importers at the port to remove small dents, and every day he goes there and has more work than he knows what to do with.   In an era where people claim "there are no jobs" he has his plate overflowing.

And yet, he said, no one was stepping up to the plate to compete with him, or even work for him.   He has a partner in the business, and has tried to hire people in the past, with little success.   Granted, it takes a modicum of talent to do this kind of work - and keen eyesight.   Bodymen can spot a dent or ripple that you and I would never see, from 20 feet away.

And it takes training.  They actually have a "dent school" you can go to, to learn the trade.   And as he put it, at his first assignment, he spent an entire eight hours taking out a dent that today, he would have done in ten minutes.   Learning a skill takes time.

And you can make mistakes, too.   He recounted one early job, where he was instructed to drill a hole in the end of the door (some paintless dent repair techs will drill a hole in the end of the door, rather than try to work through the window crack or remove the interior door panel - and then cover the hole with a plastic plug when done - it is sort of cheating and the better techs don't do it).   Anyway, he drilled right through the door jam - and the drill came through the outside door panel, ruining the door.  The learning curve is very steep!

But it struck me that here was a guy making a good living, simply by providing a service people needed.   And since he was self-employed, he could call his own shots and work when and where he wanted to.   If someone was a jerk, he could just pack up his tools and leave - because few others have his skills.  It is a pretty good place to be in.

In my field, the same is true.  There are few Patent Attorneys out there and with the decline in the law business, even fewer are joining the field, which according to one JPTOS article, means that there is a shortage in the field.   So, over the years, I have never felt beholden to anyone.  If someone says, "jump" I don't have say, "how high" but "go fuck yourself with your jumping."

And that is a nice place to be.   And yes, it does require years of experience and an expensive education to get to a place like this.   Or, you could go to "dent school" for a lot less money and make about as much as I do - if not more.  At $600 a day, this guy could clear $150,000 a year, if he decided to keep busy.

I am not saying you should go to dent school.   It takes talent, a feel for how metal works, and good eyesight.  And you'd have to find someone to mentor you and teach you the business as well.   But it strikes me as odd in an era of "high unemployment" (supposedly) that even simple "blue collar" jobs go unfilled, because no one wants to learn the trade.

The fellow I talked to has tried to hire people and train them.  Some of them just didn't have the touch.  Others couldn't be bothered to spend the time to learn.   They were impatient for "money now" and wanted to cut to the chase of making big bucks, but not spending the time to do a quality job.

And even if you did want to get into this field, well, be cautious, as there appears to be a lot of people selling training programs and tools, and I don't think it is a skill you can learn online or by watching a video.

But it illustrates that you can make a good living by learning a skill - and not necessarily skills you would learn in college (indeed, few colleges actually teach skills, but instead teach information or ways of thinking).

And it makes me less sympathetic for those who claim there are no jobs out there - when jobs are going unfilled.

An Interesting Take on Addiction

This is a pretty stupid video that really over-simplifies what addiction is.  It also pushes a socialist agenda.

There is a video (above) being bandied about these days as describing the cure for addiction and the solution to the "war on drugs".   I watched it, and although it presents some interesting arguments, it is hardly a compelling answer to anything.

NOTE: This video keeps getting removed from YouTube for some reason.  It is one of a series of dubious click-bait videos in a series entitled "In A Nutshell by Kurzgesagt" which sounds like a British name, right?  I think the narration may be a robot and the source of this is Russian dis-information.  If you read the comments, there is an awful lot of "let's feel sorry for ourselves" nonsense, one comment by a user named "let's suffer together" even (!!).  You see where this is going - people in the richest country in the world have it so hard they have to become junkies.  His videos promote all sorts of crapola, including Homeopathy which is just junk science and fraud.  YouTube - what's not to like?

The basic premise they make is that people become addicted to drugs (or smart phones or reddit!) because they are unhappy.   In a way this is sort of like a "well, duh, anyone knows that" kind of thing, but also a "gee, isn't that over-simplifying things a bit?" kind of deal.

The "proof" of this in the video is some very poor animation comparing two studies on heroin addiction, using rats.   In the first study, rats in a cage, given a choice of water or water and heroin, will drink the heroin-laced water all day long until they die of an overdose.  The first researchers concluded that heroin is addictive.   And indeed it is, having physical withdrawal symptoms.   It is highly addictive.  And it is sort of irresponsible to imply that it is not.

In the second study, the researcher set out to prove the first one wrong (observational bias).  He believed that the environment lead to addiction - that if the rats had nicer cages and female rats to bang all day long, they would eschew heroin, and according to his study they did.   The conclusion, therefore, was if we made everyone's cage a lot nicer, no one would do drugs.

But I am not sure that is a valid conclusion.   A lot of people who do drugs come from middle-class and even upper-class backgrounds - people with very nice cages indeed!   Drug use is not just rampant among the poor, but with the middle class.  In fact, I suspect the middle class drug use rates are a lot higher than the poor, as they have more money to spend on drugs.

In fact, a real study - involving humans and not rats in cages, shows this.  While cigarette use was higher among the poor (likely due to the perceived lower social status of smoking by the middle class) alcohol and drug use rates were higher in the middle and upper classes than with the poor.  This sort of shoots the "nicer cage theory" in the ass.   People who should be the happiest in America are the ones who most often end up abusing drugs.   This negates the major thrust of their argument.

From the study cited above:
"Findings based on three indicators of family background SES [SocioEconomic Status]—income, wealth, and parental education—converged in describing unique patterns for smoking and for alcohol and marijuana use among young adults, although functional relationships across SES measures varied.  Young adults with the highest family background SES were most prone to alcohol and marijuana use."  (emphasis added)
This video also makes some pretty astounding bald-ass statements which are not really supported by the numbers. They claim that people "in hospital" given opiates for pain, will leave the hospital with no addiction problems.  The reality is, at least in the USA, that a lot of people legally given OxyContin or other opiates for pain, often end up in rehab for their addiction problem.  Ask Rush Limbaugh!

Ditto for their assertion that less than 5% of Heroin users in Vietnam came back home and just magically stopped using the drug - or had no side-effects.   In fact, it is kind of insulting that they show cartoon soldiers coming back from Vietnam and settling down with happy, happy families.  But then again, I guess they are British (at least from their accent) - or maybe Russian - and never saw what really happened over here.

(Speaking of accent, this video illustrates how, if you want to sell something to Americans, to do it with a British accent - whether it is drug videos or overpriced vacuum cleaners.   For some reason, we have a knee-jerk reaction to that accent as a voice of authority).

But the real selling point of the video is socialism.  We are told that "if only" we just were nicer to people and made them nicer cages (e.g., redistributing the wealth) then addiction and drug use would just magically disappear.  Nice try, but as the NIH article illustrates, some of the wealthiest people in this country are the ones with the biggest drug problems - not the poorest.

It also negates the other observation from the first rat experiment - that the rat with no heroin in his cage did not become addicted to it.   But sadly, we cannot seem to control the flow of drugs, such is the demand.  But if you do not have access to drugs, you will not become addicted, that is a basic axiom.

The ideas put forth in the YouTube video are classic weak thinking. Why?  Well, it hits all the hallmarks of weak thinking:
1.  Telling People Something They Want to Hear:   That socialism is not only a good idea, but a cure for society's ills such as drug addiction.  And I get to have more of someone else's money!  How convenient - for me!

2.  Externalizing:  You are not a junkie or whatnot because you like to abuse drugs, but because of  socioeconomic conditions.  If only they would make your cage nicer, you would not need to do drugs!

3.  Easy Solutions to Complex Problems:   If we can change ONE THING (give money to everyone so they are happier) it would solve a complex problem that has stymied people for decades or even centuries.

4.  Lack of Substantive Analysis:  There is no real analysis of opposing viewpoints, other than to say that anything that disagrees with them is wrong. No discussion of the real problem of chemical addiction (which is a physical, as well as emotional problem).  In a way, this is insulting to addicts, as it implies that they are just weak people for not kicking the habit.

5.  Outright Lies:  Again, the hospital example is just bullshit.   Prescription opiates are an epidemic in this country.  To say that no one ever leaves the hospital with an addiction problem is just making shit up.
And this is the sort of nonsense I would have believed back when I was doing drugs.  Convenient thinking.  My drug problem is society's fault for not providing me with a better cage to live in.

We are engaged in an interesting experiment in the USA, by legalizing marijuana.  And I think it will be interesting to see how this plays out.  Of course other drugs will still be illegal, and I suspect that the "war on drugs" won't end as a result.   Marijuana is not hard to come by, even when illegal.   Yet people choose to do Meth and Coke and Heroin - often goaded on by poor normative cues our society provides (the most popular television show in recent history was about a science teacher who turned into a meth dealer, and was the hero of the show!).   I am not sure that "better cages" will put a stop to these highly addictive and life-destroying drugs.

But like I said, it will be interesting to see how this experiment plays out.   However, I am not sure that socialism is the cure for drug addiction.

UPDATE:  Another example of these poor middle-class rats in their dingy cages, becoming addicts:

"While heroin use has climbed among all demographic groups, it has skyrocketed among whites; nearly 90 percent of those who tried heroin for the first time in the last decade were white."

So, I guess Phillip Seymour Hoffman wasn't an anomaly. And no matter how nice your cage is, addictive drugs are still addictive.

And maybe YouTube cartoons are not a good source of information about addiction.  Or homeopathy.  Or anything!

Tuesday, October 27, 2015

If You Could Make A Dollar From Everyone In America....

If you could make a dollar from everyone in America, you'd have 1/3 of a billion dollars.

Many large companies and successful businessmen didn't become successful by reaping huge profits from individual transactions.   Rather, they managed to upsell a customer here and there and add a dollar or two per transaction, to their bottom line.  If you can do this, and sell to a lot of people, you can make a lot of money.

Most folks take the alternative route.   The local car dealer, being in a small town, wants to make the maximum profit from each sale.   So he charges obscene prices and tries to snare unwary and unsophisticated buyers, and then slam them with inflated trade gags, financing tricks, and hidden fees and charges.   He sells few cars, and his dealership is rarely profitable.

The big-city volume dealer, on the other hand, has a lot full of cars, and wants them all to go away as quickly as possible.   If he can shave his prices and sell cars, he makes more money selling more cars than he would by trying to maximize profit on each sale.

Not surprisingly, the small-town dealer still has 2014 vehicles for sale on the lot - when the 2016 models are already coming out.  Unless he can get "his price" on a vehicle, he won't sell it.   And he goes bankrupt as a result. 

Not only that, in the time it takes for him to snooker one poor fool into signing these onerous deals, he could have sold three or four cars at a reasonable price to other people.   Those other people drove 20 miles to the "big city" dealer and got a better price.   He turns away business with his practices - and his reputation.

Smaller profits, in volume, can make you rich.  Filthy rich.

If you can get ten million or a hundred million people to pay $1 extra to see your new blockbuster movie, well, that's 10 to 100 million in your pocket.   Small transactions, added up over time, turn into big profits.

Cigarettes are a prime example.   Time was, a pack of cigarettes was pretty cheap - maybe a buck or less.   Not very profitable, but back then, nearly everyone smoked and as a result, well, you could make a lot of money, when everyone in the country bought your product on a daily basis.  Having an addictive product certainly helped as well.

The Subscription Model works on this same theory.   Cell phone companies don't make money selling cell phones - they make money on the service that you pay "only a few bucks for" month after month after month.   Over time - and over a large population - this adds up to an awful lot of dough.

Consumers fail to notice this leakage in their wallets.  A dollar here, and a dollar there - it doesn't add up to much, does it?   Well, it does, over time.   And it adds up to huge profits for the business scarfing up these dollars.

On the flip side of the coin is the consumer.   If you could save a dollar on every financial transaction you made every day, you could end up saving a boatload of money over time.

Impossible to do?   Maybe.  Maybe not.  

When you fuel up the car with gas, can you save a dollar?   Maybe by buying a car that burns regular instead of premium.   Maybe driving more carefully and getting better gas mileage.   Maybe by buying a car that gets better gas mileage as well.

Note that I didn't say, "getting a 1% cashback rebate on your credit card rewards" or "shopping for gas that is a few pennies a gallon cheaper" as both end up saving a lot less money than the solutions set out above.

When you have lunch every day, can you save a dollar?   Well, if you bring your lunch to work, you can save a few dollars as it costs about 1/2 to 1/4 to make a meal at home than to buy one.

Note that I didn't say to use coupons or order the special at the restaurant, as these techniques really don't save as much.

And so on and so forth.   The marketers and businesses want you to spend more, of course.  And often, we do, without thinking.   Or we think, "Oh, it's just a dollar, right?"


Thinking Poor - And Making "Poor" Choices

Save the flames, I have asbestos underwear.

A "reader" recently chastised me for beating up on the poor.  I have noted time and time again that the poor make "poor" financial decisions - in every sense of the word - and that keeps them poor.

I say "reader" in quotes as she clearly never read through one of my postings, but skimmed a few sentences and then sent of a flame-o-gram.  She claims I am "lucky" to be wealthy and have a good-paying job, which of course, just fell into my lap one day.   Right?

But it is true, what I wrote, and all the things I write about are from experience - either my own, or that of family members, friends, and acquaintances.

The first "poor" decision a poor person makes is to not value education.   The kids who sit in the back of the class and throw spitballs and mock anyone who actually pays attention usually end up destitute later in life - or at least not very well off.

Similarly, the middle-class kid who tosses away a college education either by not taking it seriously or by majoring in advanced masturbatory techniques, throws away a great opportunity and ends up poorer as a result.

That was me, about 30 years ago, working at a job in the lab at Carrier and making enough money to keep me in beer, pot, and auto parts - and living in a sort of run-down part of town.   I had little ambition and was making a LOT of poor choices (beer and pot being two of them).

What happened?   How did I become "lucky" and end up wealthy - or at least wealthier?  (Sadly, my life is solidly middle-class, not even Donald Trump pretend rich).

Well, the first thing was to realize that luck has nothing to do with it.   People who are poor tend to believe that wealth is like the weather.  Some days it is blowing dollar bills all over the place, and other days, well, it is a drought.   So a payday loan will tide them over until "their ship comes in" but of course since they don't own a ship, it will never come in.

I am not "lucky" - I just chose to make different decisions.

The epiphany came to me one day in 1985 when I was 25 years old and had just come back from a horrendous Thanksgiving experience with my parents.   My parents were not very nice people, and they liked to drink a lot and run down their kids.   One reason myself and my siblings didn't do very well in life (up until that point) is that our parents were quick to run us down and call us losers and quitters and whatnot.   If we could not be the star quarterback on the football team and straight-A honor students at the same time, well, we must be abject failures.

And for the most part, myself and my siblings lived up to that expectation.   I am not blaming my parents - a lot of people have far crummier parents who beat them into a hospital.   But I realized that part of the blame rested on us, or at least myself with regard to my own life.   I was squandering opportunities in life so I could lay about and get high and have a good time in the present. 

So I started taking my education more seriously.  I realized that the only way out of the trap I had laid for myself was to get and education that would qualify me for a better job.   So I finished my EE degree and took a job with the Patent Office - and they paid me to go to law school at night.

14 years of night school while working full time (often at 2-3 jobs) was hard work - not "luck".

Of course, it doesn't end there.   Like most middle-class people (which I now was) I ended up spending as fast as I was making.   Yes, I made more money, but like most of the middle-class today, I felt I was working "paycheck to paycheck" and couldn't figure out why.   The reason why was I was making poor choices - in every sense of the word  "poor".

It wasn't until about a decade ago that I really started to think about what real wealth meant - money in the bank, not parked in your driveway or in your designer kitchen.   And I realized that I was still making a lot of "poor" choices in every sense of the word.  I decided to make better choices.

Since then, life has gotten a lot better.

But for the very poor in this country, life will never get much better.   Why?  Because they continue to make poor choices and defend such choices (often vigorously).    In every poor neighborhood is a check-cashing store, a rent-to-own furniture shop, a payday loan company, a series of shady high-interest car dealers, the rent-to-own rim store, and whatnot.  These places all offer poor deals.

The poor in the USA (who are really not very poor, by global standards and are often dangerously overweight not underfed) patronize these places.   That's why these sort of stores are in poor neighborhoods.  It is not that someone is forcing them to accept shoddy deals but that the poor fail to see they are shoddy deals and seek out these shoddy deals.

So Dad works three jobs so he can put a set of rental rims on his clapped-out Camaro, and make the rent-to-own payments on shoddy furniture for his double-wide trailer, which is in a trailer court where the rents are about to double or triple.  And he over-insures said Camaro, convinced it is the most valuable asset he has.  These are all poor financial choices.   And there are other alternatives available to them, which are not so onerous (for example, not putting bling rims on your Camaro, learning to live with the furniture you have and saving up for good furniture, instead of having it all now and paying later).

And if you think that is somehow harsh or unreasonable, bear in mind that I have slept on the floor, in a sleeping bag while saving up to buy a quality bed.   To me, financing a bed was just out of the question.   But again, that was a choice.

This blog isn't aimed at the poor.  They generally don't read very much (unless it is a text to a cell phone) and really aren't interesting in learning much - as illustrated by our flame-lady's message.   They want to lash out and blame others for their problems which as I have noted, is classic externalizing.   And this is why people like Donald Trump are popular with the poor white folks - he tells them they can all be as rich as he is, and that the reason they are poor is Mexicans.   It is more than a little odious.

No, what I realized is that there are a lot of smart people in this country who are making themselves poor through poor choices.   Eschewing education, acting a gansta or hippie, obsessing about politics (or conspiracy theories), over-spending, over-borrowing, and other "poor" choices in life.

The middle class in America is evaporating for a number of reasons.   But one reason, I believe is that most of us have little in the way of a financial education, and very few of us have any sort of financial discipline or willpower.   The great American middle-class went broke one car payment at a time, one cell phone payment at a time, and one cable TV payment at a time.   

No one took our money away - we gave it away.

And that was a "poor" choice in every sense of the word.


Monday, October 26, 2015

When to Unload a Car, Part II.

There is a sweet spot of car ownership where the costs are the lowest, hassle factor is the least, and reliability is the highest.

A reader writes:
Regarding your argument that past a certain point that maintenance expenses will exceed the value of the car, while I agree for the most part, the question that dogs me is this: will it cost more to replace the car versus the cost of buying, for example, a new set of snow tires (a necessity up here in Ontario). In other words, when I consider the cost of buying another vehicle (cash, meaning that I lose the investment potential of that money*, or I have to sell something, or spend some of my dividends), would it be cheaper and more financially prudent to take the hit of the expense being greater than the value of the car?

When to get rid of a car, as I noted in a previous posting, is a complicated question and an individual one.
Read my article on the Weibull curve:

In any engineering system, there comes a point where maintenance costs exceed the cost of replacement. repair costs escalate quickly, to the point where replacement is a cheaper and more reliable option than repair.   And that is why 99% of automobiles ever made have gone to the crusher.

The problem for the car owner is that these costs come incrementally.   A new timing belt, for example.   A fairly simple repair, unless it took out the valves when it broke.  OK, it is cheaper to fix than to replace.  But then it needs new ball joints and struts.   And then tires and brakes.   And then the transmission.  Or some sort of major engine trouble, like variable valve timing issues.  Or just a string of small annoying repairs like batteries, oxygen sensors, fuel injectors, coils, spark plugs, and the numerous electronic sensors a fuel injected engine requires.   Individually, not expensive.  Cumulatively, more than the car is worth.

The problem is, many folks continue down the road of throwing a lot of money at an end-of-life car, AND THEN realize it is costing them a lot of money and throw in the towel and buy a newer car.

It is cheaper to realize when end-of-life is imminent, and then trade or sell before that point.

Why?  Because before the car is a broken-down piece of junk, you may realize some cash for it, and moreover find it easier to sell.  Once the engine is seized or it has a lot of major mechanical or electrical issues (or a host of minor issues), you either have to give it away or hope some chump comes along and buys it.

How can you tell this is happening?
1.  Resale value drops to nearly nothing or a pittance of the new car price (e.g., 1/10th).

2.  Not many of that year make and model seen on the road anymore.

3.  Ironically, many parts become very cheap, as parts makers try to unload their inventory on a shrinking market.
4.  You see a lot of the same year, make, and model being junked not for wrecks, but because some major component fails and they aren't worth fixing. 
5.  You don't feel comfortable driving long distances from home.

6.  Cost of repairs exceeds resale value.
7.  When the car no longer meets your needs.  Real needs, not imagined ones.

I saw this with my X5.  At 165,000 miles, the resale value was $5000 (from $50,000 new) and even a set of tires cost 1/4 this amount.

I had replaced the front axle shafts, struts, wheel bearings, and brakes.   Since I did this myself, it cost only $1000 or so in parts.  But if I had to go to a mechanic, it would have cost thousands.  I realized then that four-wheel-drive was just an annoying pain in the ass, really, and that SUVs were really impractical vehicles, in terms of "utility" - which is supposed to be their forte.  I also started to realize that "upscale" brand cars can be very expensive to own, both in terms of depreciation and repair costs.

It was on the original clutch.  A replacement clutch was an astounding $500 just for the parts.   Labor would been $2000 more.  And although I have done clutch jobs in the past, it is difficult and messy work, and I wasn't about to do it (bench-pressing transmissions is no longer my thing).

Every trip we took resulted in some breakdown and repair.   A coolant tank leak.  A blown ignition coil.  That sort of thing.   Although I could fix these myself, they became a little unnerving and annoying.

I looked around and saw that not many of these cars went over 200,000 miles.  Most went to the junkyard at about 180,000 to 200,000 miles, with every body panel intact, but with a blown transmission or engine problem whose cost would exceed resale value.  When I looked at the inventory at the local pick-n-pull, most were in pristine condition - outside.    And tellingly, I saw fewer and fewer going down the road.

It was not that they weren't reliable cars (indeed, the 3.0 inline six was indestructible) only that over time, they would need repairs, and since parts and particularly skilled labor was expensive, they became less and less desirable to own, and thus the resale vales plummeted.  People who aren't handy with tools get skinned by cars like these, as a friend of mine with a nice Boston Green example did (taking it to a mechanic for every small repair, and paying over $1000 every time).

As I noted in my article, the junker can be cost-effective (in an insane sort of way) if you can do your own repairs and use it only to drive around your locality (where being stranded is not a major issue).  But for most folks, it is not a viable option.  And even for the home shade-tree mechanic, it ends up being a real time-bandit.  As one friend of mine noted, when selling his BMW for a Japanese car, "I'm tired of owning a car that requires my constant intervention!"

The best bet is to own a car in the middle of the Weibull curve - after the warranty repairs are over, and the big depreciation is over, and before the big repairs kick in.

I am facing this decision again, with the M Roadster.   It will go on eBay shortly, once I put a new battery in it.   It is in good shape and should fetch $8000 to $12,000 (from its $44,000 list price, paid by the original owner!).   But at 16 years and 50,000 miles, it will need a few things down the road, including new tires ($1500 or more, for the staggered set) perhaps brakes, fluid changes (transmission, differential) and yet another brake flush and radiator flush. 

It does weird electrical things, like set off the airbag light if the connection to the seat switch are jarred in any way.   I replaced one seatbelt assembly and wire-tied the harness and the problem seems to have gone away - for now.

But item #7 is the big reason:  It simply doesn't fit our lifestyle anymore.   I drove it around the island yesterday.  Our speed limit is 35 mph.  I felt like I had a tiger on a leash.  The car wants to run, and corner, and go fast.  There is no where around here I can drive it the way it was intended to be driven.  It seats only two.  You can't put even a bag of groceries or a suitcase in the trunk.   It is a fun car for a younger person or as a hobby car.  But it is not practical for long trips (particularly with no spare tire!) or even for commuting to work.   It is loud and raw and a riot to drive.  But sometimes you just want a four-door with a hatch and air conditioned seats and a radio you can hear over the tire noise and exhaust note.   I am getting old, and it is time to move on.

Sure,  I could keep it, and then leave the truck parked outside.  We'd never drive it, as it would mean having to move one vehicle to get at the other.   No thanks.  And yes, the insurance would "only" cost $35 a month or so.   But there are real costs in keeping a car, and while it has held its value better than most cars, it still would depreciate further, the longer we decided to keep it.   Maybe in 30 years it will be a collectible.   I'll be dead then.

A similar thing happened to a friend of mine who bought a used Corvette.   At the time, he thought it would fit his needs, but he failed to take into account that he was getting older and that getting in and out of a car like that can take a winch.    And in addition, low-slung sports cars can be a pain to drive as you can't see where the car ends and the world begins.  Unfortunately, he didn't realize that until after he bought it, and it illustrates why you have to think carefully of your needs before pulling the trigger on a car purchase.

Note that this is different from the fact scenario that our young friend presented in my earlier posting.  He wanted to "upgrade" to an SUV or small pickup, as he felt that it was impossible to load a child into the back seat of a Camry.   No doubt this is aggravated by their perceived desire to own the world's largest stroller (I have to write about THAT someday!) as well as more paraphernalia and baby junk that somehow our parents managed to do without.

A four-wheel-drive SUV sounds like fun until you realize that it will never, ever go off-road, it has little usable interior room, and doubles your gasoline expenses.   And when it gets older and you need new CV joints, you start to appreciate why having only two driven wheels can be a blessing.

The sad fact is, of course, that most SUVs, with the rear seat folded up, have very little cargo space.   A Camry has more cargo room in the trunk than our X5 did with the back seat folded up.   An SUV really isn't an "upgrade" in terms of roominess.   And I learned that when the local car rental agency rented me an Expedition in place of the minivan I had requested.   Although far larger and getting horrific gas mileage, it was a poor choice for hauling four adults and two kids and all their gear.

But of course, our young friend wouldn't dream of buying a mini-van, would he?  His wife would be mocked by all the other soccer mommies when she pulls up at the Starbucks in a minivan, right?

You laugh, but people think like this - like cattle or sheep.  We once went to an antique mall in Atlanta, and nearby was an upscale pre-school (irony alert). Parked outside was a line of black Suburbans and Tahoe's, each with a number on it (for their parking spot).  It looked like the secret service was escorting Obama.  But behind the wheel of each lumbering SUV was a blond-dyed soccer mom, waiting to pick up their precious tots - each driving an identical vehicle (or as we say in Georgia, "VEE-HICK-EL").  None dared break away from the norm by purchasing a station wagon or mini-van.   It was kind of scary, and reminded me of the Stepford Wives.  Each had a Starbucks cup, of course.

But that's the thing, isn't it?  We all buy things because we perceive that others like us have similar things, and we want to fit on.   So a young couple happy three years ago with a Corolla, now sees a desperate need to "upgrade" now that they have kids and their social group has different values.  If they can endure the mockery of their peers for a few more years, and ride around in the Camry, they can save an awful lot of money.   But when the Camry hits 150,000 miles, well, it may be time to trade it in, even if the car will go on further under someone else's stewardship.

Sunday, October 25, 2015

Car Dealer Games (and the gullible young)

You can't win at his game, unless you refuse to play.

The games of car salesmen haven't changed much in 50 years or more.   But young folks still fall for their antics, on a regular basis.

On reddit "personal finance" (home of some of the worst financial advice on earth) this plea:
I bought a Toyota Coralla 2009 in 2012 for 13k. It now has 80k miles and is in very good shape and totally paid off. Only debts are mortgage and wife's car (Camry, almost paid off)

The dealership has called me a few times, which I finally answered last night and they are saying they're low on inventory and are willing to pay retail, as long as it's still in good condition.

We've been talking about upgrading to an SUV or mid size pick up truck, since we've started a family and are having a tough time fitting in the car. We were planning on waiting about a year to do this, but I feel tempted to make the jump if we can get a fair amount for the car.

Questions are: Is this a dealership style scam? Is it even worth checking into or would we be best just sticking to the plan?
Well, duh.   It is a scam - designed to get you into the showroom so they can bend you over a new Tacoma and then have the entire dealership staff gang-bang you.

No, they are not "short" on used cars to sell.  And no, no one is dying to get into a 2009 "Coralla" [sic] as it is a mass-produced car and they are available anywhere and hardly in short supply.

And no, the dealer is not going to take a loss on the deal by paying you more for the car than they can get selling it.   Frankly, a 2009 model Corolla would likely be wholesaled.  Dealers, particularly new car dealers, only want very good late-model (less than three years old) cars on their used-car lot.

No, what is really happening here is cold-calling.  A new salesman is going through old sales records to find a "lead" and he found you.  The goal is to get you into the dealership and sell you a new car.   And they will play all sorts of games, including the "inflated trade" game (where the new car price is padded to allow them to appear to be giving you more money for your old car).

I need the fucking leads!

These tactics are as old as the hills - some a Century old.  I am sure they were using them to sell horses and buggies back in the day.   "Say, I had a guy in  here looking for a 1898 Studebaker wagon, just like yours!  I can give you a good deal on a new one and a good trade price for your old one!"

Some salesmen are ballsy enough to do that - they will claim that "a guy" came into the dealership wanting a car just like yours, "uh, a 2009 Corolla, right?"    What are the odds?   A billion to one.  The "guy" doesn't exist.  It is just a gambit.  They know your buying habits and know you might be ready to trade, so they come up with a story and a bit of bait to get you in.

This Jam Handy video from the 1940's entitled "Hired!" illustrates how dealer games are played and how leads are "played" - although they don't tip their hand too obviously in the video:

We don't have many '39 Plymouths on the lot!  Say, I know a prospect who has one!   Sure you do...

Getting people to trade in their cars is hard.   It has been shown that psychologically, people tend to over-value what they own and under-value what others have.  So they think their old Hupmobile is worth tens of thousands of dollars, when at most it might fetch a few hundred at auction.   But if they can tell you they are paying you a lot for it you may be more inclined to part with the car - thinking you got "good value" for the vehicle.

This Ford video entitled "Trader Thorne" is even more illuminating.  "Bird Dogs" and of course the "I've got a buyer for a car just like yours" gag.  It also illustrates how cold-calling works.

These car salesmen tactics are nothing new - they are decades old.   Car salesmen don't view them as deceptive, either!  Harmless lies used to get you to buy a car - something they think (probably correctly) you want to do anyway, are acceptable.   It is like persuading someone to have sex.  They want to, you just has to seduce them, first.   If they have regrets later, too bad for them!

Of course, once they have you in the dealership, well the real fun begins.   Here we have a young man who has only vague ideas of maybe trading in his car for an SUV or pickup truck (because low gas prices are here to stay forever, man!) and has no idea what his car is worth or what kind of car he'd like to get or what a reasonable price is for such a car.   In other words, he is ripe for the picking.

The "I'll go talk to my manager" gambit.

They keep you at the dealership for hours.  Why?  To wear you down.   You beg and plead and try to negotiate, but you really have no bargaining power, since you did no pricing research first, or thought about what make, model, and options you wanted, or even tried to use a pre-purchase plan, or shopped between multiple dealers.

Chevy Chase falls for the "stolen trade-in" gambit.

Even if you try to back out of the deal, they will say your trade-in was taken to a remote lot.  They will blame the car jockey, who will be brought in all contrite and say, "Oh, sorry, I thought you were trading it in, right?"   And they will tell you the car is locked up for the night, but why not put temp tags on this new SUV and take it home to show the neighbors?

Oh, and that "good faith deposit check" you gave them to have the deal considered by the manager?   That's locked up in the safe, overnight, as well.   We'll get that right back to you, first thing in the morning!  But of course, you have to go to work, and the check is locked up tight all right - in the night deposit box at the dealer's bank.   It has already been deposited, chump!

UPDATE:  A reader writes that he doesn't believe this is possible.  After all, it is illegal!  This reminds me of the law student who said my posting about inheritance rip-offs was untrue as the real-life scenarios would be "illegal"   Are young people that naive?  You betcha!  You cannot sue to collect damages for less than $20,000 or so, as the cost of the lawsuit would exceed the damages.   So anyone can rip you for for five grand and smile in your face, and there ain't much you can do about it.  This is reality - deal with it, or get burned!

Q:  How do you tell if a car salesman is lying?
A:   His lips are moving.
There have been articles galore on this stuff.   Books written about it.  The gags are old and well known.   Good salesmen are good psychologists, as the Ford video above illustrates.   They know how to manipulate people.  Keep someone around long enough, and low blood sugar and dehydration will make them sign.   If they have fussy, whiny kids, so much the better.   Separate the husband and wife so they can't compare notes.  Insinuate the husband is a "wuss" if he says he has to check with his spouse before signing.   Do whatever you have to do to get them to pay - far over what they should pay - for the car.

And yet, people still fall for these age-old gags, over and over again.   Young people in particular think that they can go in and "get a good deal" on a car simply by being a "tough negotiator."  I know this because it is what I thought when I was 25.    And many of them leave the dealership thinking they got a good deal, but in fact were screwed royally.

How can you avoid this?   Well, don't go to a dealer for starters.  If you can buy a car from an individual, you can save a lot of money - and your negotiation skill level is equal with his.   That is, of course, unless you have a "dreamer" who thinks he is some sort of sharp operator, or is really not interested in selling his car.  Just walk away from people like that, they are not hard to spot.

But what about dealers?   Well, you will pay a lot more money for the same car at any dealer - new or used - that you would from an individual.   But there are some "tips" if you want to buy a car from a dealer.

1.  Separate Transactions:   If you are "trading in" your existing car, expect to get hosed.   The more complicated you can make any financial transaction, the easier it is to fleece the consumer.   And when you have two car sales (the new car sale and the trade-in) tied together, they have double the opportunity to screw Joe Customer.    If you want to buy a car, make it a "clean" simple deal - just the purchase of the car.  Sell your old car separately - put it on eBay or whatever (I have had very good luck there myself).  But more about that, later.

2.  Do the Research:   We have so many tools and databases at our disposal today to research car prices.   Edmunds has a very good site which not only gives realistic used car prices, but also what you should expect to pay as a reasonable price on a new car.

3.  Pick the Car, First:   My neighbor went into a car dealer once to buy a Volvo convertible and came home - eight hours later - with a station wagon instead.  He didn't do any research first, didn't comparison shop, and when he went to make the deal, the salesman talked him into an entirely different car.   Not surprisingly, he went to a busy dealership on the weekend with his young children in tow.  Pick the make, model, and even trim level and options you want, up front.   If you try to compare different makes and models, you lose track of what is a fair value and end up at a data disadvantage.

4.  Negotiate the Price First:   I've been able to negotiate a price over the phone (which in the old days was nearly impossible to do) and then buy a car at the negotiated price, which was close to, or below the Edmunds TMV price.  This saves a lot of time and hassle, and gives you an "out" once you get to the dealer (if they raise the price, you simply leave).

5. Don't Be Afraid To Leave - Quickly:  You can't salvage a bad deal, and if the salesman lies to you even once, leave.   We went to a dealer once to look at a blue car.  He said he had it in stock.   We got there and he tried to sell us a black one, as he had lied to us - he didn't have the blue car at all.   We left - immediately.   Trying to "salvage" a bad deal or trying to deal with someone who has lied to your face is just idiotic.

6.  Be Old And White:   Seriously, car salesmen are the biggest misogynists and racists around.  As the Edmunds article illustrates, they have stereotypes about what certain age groups, genders, and races will buy, and how much they will pay.   It had been documented that African-Americans end up being offered higher prices on cars than white folks.    A young male coming into a dealership thinks he is "lucky" to get a loan - and to get a car.   A middle-aged white guy like me, with an 800 credit score and a checkbook to pay cash with is in a different negotiating position.   Salesman will try to screw the young guy, as they assume he is inexperienced (and in the scenario at the top of the this posting, he clearly is).   With older folks, they try less (but they still try!).  It is sad, and it begs the question as to why the Saturn "flat price" deal isn't the norm in the industry.

* * *

My advice for this young man?   Keep the Corolla.   Why?  A Toyota Corolla is a 150,000 mile car, and his is only about six years old.  They could easily keep it another five years, at which point its resale value would be de minimus.   It is a lot easier to sell a car at that point, as you don't feel you have a lot of equity in it and thus are not worried about "getting a good price" for it.  Hell, you could afford to give away the car at that point.

Second, you've cut your transportation costs in half by keeping the old car.   The new SUV or pickup truck, in addition to getting much worse mileage (20 instead of 30) will also have a horrific depreciation curve.   If you trade every 3-5 years, you are just jumping from one high depreciation curve to the next.

It also means that you will have perpetual car payments.   Some folks think this is "normal" and that having a $500 a month car payment for their entire lives is just something you have to live with.   But with cars today lasting so much longer than before, there is no reason anyone should have to live that way.   And $500 a month in your retirement plan adds up very quickly!

There are also hidden costs, as I have noted before.  Here in Georgia, there is a one-time 7% title tax, which means if you trade every few years, you are paying $1000 to $2000 for every trade.   It makes sense, in the long haul, to keep the car you have.

Not only that, but trading in wasn't his idea.   So he is totally unprepared for the deal, which is ideal for the salesman, but not ideal for him.

This is, of course, not to say you should keep your car "forever".   Again, I hate it when people take a piece of advice and then turn it on its head with straw-man arguments.   When a car gets to a certain age, the cost of repairs exceed the value of the car.   Even putting new tires on some cars may exceed the resale value.  And no, not everyone is going to get 300,000 miles out of their car, unless they drive 30,000 miles a year.  There comes a point when it is time to sell.   But after three years and 50,000 miles, that seems a bit soon.

So yes, you will have to buy a new or newer car, eventually.   And over your lifetime, you will buy a few cars .   But it pays to do the research and make sure the car you buy is really the one you want, and not just what some salesman sold you.   Because you should keep a car a good long time, and if it isn't what works for you, it isn't a very good deal at any price.   And if you keep trading in, again and again, every few years, you can bankrupt yourself in short order.

The road to middle-class poverty is paved with new-car payments.

Saturday, October 24, 2015

Crank Magnetism

What is a crank magnet?  Not a car part!

The slightly biased (and misnamed) website rational wiki begins its definition of "crank magnetism" with a joke:
"A sovereign citizen, a creationist, an anti-vaxxer, and a conspiracy theorist walk into a bar.  He orders a drink."
It is a funny joke, because it is also true.  A lot of people who buy into one conspiracy theory often buy into others - or are members in the same sets of organizations or groups.

For example, the "Freak Captain" who freaked out while piloting a commercial airliner bought into a number of these deals:
"A recent article about the "Freak Captain" notes that in addition to being Right-Wing Republican and a Conservative Christian, he also was sucked into one of these MLM weight-loss "shakes" deals.

And people say he became delusional on the airplane.  Hate to say it, but his connection with reality was tenuous at best, before he left the ground."
Conservative politics, fundamentalist religions, perpetual motion schemes, conspiracy theories, tax denial, anti-vax theories, sovereign citizen theories - all come together in a shit-storm hurricane of crazy.

Of course, it isn't all just right-wing nuts.  People go so far left they end up right, and the same conspiracy theories levied against the left are often just recycled arguments previously used against the right.

For example, when George Bush was in office, the urban legend of a "Wal-Mart Truck" flipping over on the highway and spilling out a load of "Marshal Law Declared!" signs was bandied about by leftist loonies.   People I knew told me, in all seriousness, that Bush was going to declare marshal law, refuse to leave office, and then round up all liberals and put them in "detention camps".

No, they really thought this.  And as the link above shows, people thought the same thing about Clinton.

Fast forward nearly a decade, and the same urban legends are being recycled, often with the same videos being used.  But this time around, it isn't Bush and Cheney behind the nefarious goings-on, but that evil Obama (and of course, Hillary - that goes without saying).

I've met people who started out as liberals, and then got paranoid (thanks to pot) and started buying guns.  Then they became NRA members and "libertarians" before going full-on right-wing crackpot.   The political extremist is just an extremist - he really doesn't care one whit of what he is being extremist about - left or right.

What is disturbing about this trend is not that some low-IQ idiotic gibberish blathering homeless people are subscribing to it, but that folks you would think would know better fall for it.

Consider the sad case of Robert Beale, who ran a multi-million dollar computer company and ended up being jail for tax fraud, as he bought into "tax denial" theories and then decided to defend himself in court (his defense: The court had no jurisdiction over him.  Bad move).

Airline pilots, Engineers - even lawyers - get caught up in these schemes.   People who should be rational end up believing things that are irrational.  Moreover, their obsessions about these things cause them to become unhinged and they end up damaging their own lives.

What is the common denominator of all these types of theories and schemes?  Weak thinking.    You'll never go broke in America telling people what they want to hear.  And what people want to hear is that they owe no taxes, free energy is just around the corner, they are God's special chosen people (and are going to heaven), the government is out to get them, and the world is going to end soon.

While a lot of this weak thinking involves believing in something-for-nothing (MLM schemes, for example), much of it is very dark and negative.   Why, for example, would someone want to believe that the Federal Reserve is some hideous scheme by the Illuminati to take away their money (how, is never explained, of course).  Why would you want to believe that the world is going to end?

These are not happy thoughts.  The are depressing thoughts.  They are miserable thoughts.   Thinking them literally makes you miserable.  Why would anyone in their right mind wade through such a sewer?

The key word, of course, is "right mind" and people who fall for this sort of nonsense are often very mentally imbalanced.   And I think what makes them imbalanced is this sort of thinking.  It bootstraps itself - causing more and more cognitive dissonance and making the person crazier and crazier - and more susceptible to other damaging conspiracy theories and nonsense.

How do you avoid this trap?   Well, think happy thoughts.   If you go down the road of paranoid thinking, you'll end up miserable.   And I do believe that most everyone has some control in this regard.   Sure, there are full-on batshit-crazy people that need to be medicated (and locked up).   They can't help themselves.

But an airline pilot?   If he can figure out how to used complicated navigation and avionics systems, he should be able to see through the fallacy of an MLM scheme.   And an Engineer - and certainly a lawyer - should be able to figure out that tax denial is just a bunch of silly nonsense.

If you find yourself going down one of these paths - or raging about politics all the time - think carefully about where this is taking you.   Do you spend all day long listening to "talk radio" or far-left or far-right commentators?   Do you spend hours with your eyes glued to Fox News or Rachel Maddow?   Maybe getting away from such intense brain programming is a good first step.

Just a thought.  Because once you go down the rabbit-hole, there is really no return.