Is China "taking all our jobs"?

Assembly of a car in the 1970's took twice as many people as it does today, even though cars today are far more complex.  Are the Chinese "taking our jobs away" or are we losing them to automation?

Watching the video above, I was amazed how many people worked at union plants back in the 1970's, many of them sort of just standing around.   It is the way I remembered it during my days at GM.   Just the painting scenes give pause, as about a half-dozen workers are involved in painting each car, even with some primitive automated painting systems in place.

Today, cars are painted robotically using a number of robots but very few actual workers.  The end result is not just a better paintjob, but a car that lasts far longer and rusts less.  Also, less paint is wasted to the atmosphere, improving plant emissions.

American factories today look like ghost towns compared to the past.   Fewer people are needed to assemble cars than in the past - less than half as many.

So, where did the jobs go?   Well, there are still jobs to be had, of course, assembling cars.  But the wages aren't what they used to be.   Foreign car makers - nearly all of them - have factories in the US, but pay non-union wages.   Nissan pays as little as $15.50 an hour in Mississippi for part-time labor.   Before you howl in anger, bear in mind that is about $31,000 a year annualized, and that's a pretty damn good wage in Mississippi these days.

It is, of course, what we were paying UAW workers at GM back in 1978 when I worked there.

The reality is, the idea you could graduate from high school and then go down to the factory and get a "good paying job" and then be set for life is no longer the case.   And in  fact, that sort of lifestyle was present only for a brief blip in our nation's history.

Unions, using extortion, were able to blackmail companies into paying wages that were anywhere from 3X to 10X the local labor rates for unskilled labor.   And by padding the payroll with excess workers, they raked in millions in union dues and pension funds.   It was organized crime basically, and this is the "good old days" that some folks want to go back to.   Crappy overpriced goods were the only choice for most Americans back in the "good old days" where buying a television set was a big a deal as buying a car - and often cost as much.

Think carefully before you pine for the good old days.

And those union jobs were not for everyone, either.   In most cases, you had to have a friend, a relative, or some other connection down at the Union Hall in order to get a cushy union job.   If you had no connections, well then, go fuck yourself.

Still pining for the "good old days"?

There is a lot of ink spilled about the "disappearing American Middle Class" and maybe to some extent this is true.  Then again, a lot of this hand-wringing is based on our definition of "Middle Class" which has been distorted lately.   If you drive through America, you still see our cities ringed with hundreds of miles of suburbs, all nice houses which apparently someone is buying as they are building even more of them as we speak.

The problem is, I think, we define "middle class" in terms of a median between the very rich and the very poor, and there are a helluva lot more very rich these days, or at least the very rich have a helluva lot more, or at least according to some people, they do.   This tends to skew our perception of what "middle class" means.

Most Americans, I think, would define "Middle Class" as having a nice 4-bedroom house with a two-car garage, at least 3-4 cars in the driveway, a smart phone for every member of the family, all the cable channels, and of course, the vaunted six-figure income.   And there are a lot of folks out there who are living this lifestyle, along with a mountain of debt, and then wondering "where it all went" and then blaming the politicians for their woes.

Simply stated, we live a better lifestyle today than in the past.   A "poor person" today arguably has a better lifestyle or at least better crap than a middle-class person did back in the day.   My Father bought his first color television in 1975 - long after my "poor" friends had them (color television was largely the norm by the mid-1960's).   Today, even folks in the ghetto have a nicer flat-screen television than my parents could have dreamed of in the 1970's.

The man at the Trump rally holding the sign saying "Make America Great Again!" and whining about how awful he has things likely drove there in a $50,000+ pickup truck that seats six people.   Irony is lost on these folks.

Did his job go to China though?   Maybe, maybe not.   Automation took a lot of these brain-dead jobs away long ago.   Unionism took away the rest of them.   Companies forced to spend all of their capital on wages cannot compete long in the marketplace before failing.   And that is what happened to a lot of those old-line companies.

And factories are not forever, either.   Drive through New England and you will see thousands of old factories dating back to the 1800's, now converted to lofts or offices for high-tech firms.   The idea that you can bring back the old looms and water-wheels of that era is, of course, laughable.   Their time in the sun came - and went.   And that is a natural part of business.

The idea that we can "go back" to an earlier era is not only flawed, but dangerous.    We cannot simply revert to earlier times and values - it is impossible to do.   But even if we could, it would not be desirable to do so.   What the "Make America Great" again folks fail to remember is the stag-flation and failing economy of the 1970's and 1980's (yes, even during the Reagan wonder years).   And part of this problem was that union workers were holding American industry hostage.

It is a populist message, to be sure - and it is telling people what they want to hear.  And what a young white man with no more than a high school education wants to hear is that high-paying jobs are his for the asking and that unskilled labor has a high value in the marketplace.    The fact that he has no marketable skills or much economic value is not a message any politician wants to make.

So we blame the Chinese and the Muslims, and whoever "other" is a convenient whipping boy today.

But the reality is, there are a lot of high-paying jobs in this country  - or even just decent-paying jobs - going unfilled for lack of qualified candidates.   Maybe learning a skill is a better option than waiting for a political overhaul and a return to yesteryear that will never happen.

* * *

NOTE:  Some will be quick to point out that "skilled" jobs such as IT related jobs are being outsourced to India.  I would disagree that managing a bunch of PCs and servers is a "skilled job" and moreover, when you make a shitty product and charge too much, you encourage your customer (or bosses) to automate and outsource.    Consider the "IT professional" at your office.  A slovenly lad who spends all day long on Reddit or playing computer games, who uses his limited powers and knowledge to leverage himself into a position of indispensability to the company.   As with the union assembly-line worker, they are not being "outsourced" so much as they gave their jobs away.

Mental Health, Prosperity and Urban Legends

People who are losers in life tend to spend a lot of time and energy on conspiracy theories, urban legends, and belief - at the expense of reasoning, rationality, and analysis.  As a result, they tend to be unhappy people who fall down the economic ladder.

In an earlier posting, I noted that "Mental Hygiene is like Physical Hygiene - you have to work at it!"  And by this I meant that it is possible to drive yourself crazy by indulging in weak thinking.  Of course, this becomes one of those correlation/causation issues.   Does believing in crazy bullshit make you crazy, or does being crazy make you believe in crazy bullshit?

I think it is a matter of both answers being right.   Full-on batshit crazy people will believe in and propagate conspiracy theories, such as this poor fellow who killed himself last week after writing a dozen tomes attacking the Clintons, denying the holocaust, and claiming 9-11 was an inside job.   Clearly he was an unhappy person, but was that what drove him to far-right hate-speech, or did indulging in such theories drive him to be unhappy?   You decide.

But on a more mundane day-to-day level for the rest of us, I think the tendency to want to indulge in weak thinking can indeed drive you a bit batty and also cause you to fall down the economic ladder.

The other day, a friend of mine told me this story, which is a hoary old Urban Legend that has been long debunked on Snopes:

"A couple of guys from New York City came up here once to go deer hunting.  Those city folks are so dumb that they shot what they thought was a deer and then tied it to the fender of their car.   Only later on when they were stopped by the game warden did they find out they had show a farmer's cow!  Haw-haw!" 

I smiled nicely and changed the subject.  Did my friend really believe this story or was he just baiting me?  After all, it is so easy to debunk.   Even if you are a "city slicker" you no doubt saw the movie Bambi and know what a deer looks like.  Even in the suburbs, you see deer.  They are quite common.   You may have seen pictures of one in a book.   It is hard to imagine someone not knowing what a deer looks like, and yet at the same time wanting to go hunting.

Moreover, of course, a cow can weigh hundreds of pounds - over 1,000 in some instances - and it would be hard to lift or carry a dead cow without a crane or forklift.   And people stopped strapping deer to the hood of their cars years ago (now that we all drive pickup trucks).   And a cow would crush the fender of a modern car - and obscure all forward vision as well.   The story is more than improbable - it is impossible.

But the telling of the story is telling.   What the real message is, is one of lack of empowerment.   Those "city folks" with their six-figure salaries, fancy foreign cars, and expensive loafers are not smarter than us "country folks" but rather just plain idiots.   It is a way for people who are unempowered to feel better about themselves by running down folks who clearly are more successful than they are.   Those city folks may have lots of money, but when the economy breaks down, we country boys will survive by hunting deer!  Yesirree!

I guess it is harmless fun and a way of mentally making yourself feel better about your station in life.  Maybe so, but it also is harmful in that it allows you to indulge in weak thinking.   When you posit that your disadvantages in life are actually advantages then there is little reason to change your station in life, is there?

When I was younger and poorer and working as a technician, I engaged in such thinking - as did many of my peers.   Folks who made money, did well, got an education, got good jobs, well, they were "sell outs to the man" or whatever.   Not only was being poor and stoned all the time not so bad, it was actually better as we were morally superior to richer folks for some obscure reason I can't remember right now.

The irony is, of course, that the real stories about deer hunting mostly paint the "redneck" in a bad light, and that is mostly because "city slickers" have little interest in leaving the city to go shoot deer.  On our little island, some local fellows decided to go hunting, but failed to shoot any cows:

On 01/08/2013 at about 11:00pm, the State Patrol received a call about shots fired at the soccer complex on Jekyll Island and sent a Trooper to investigate. The trooper saw a vehicle in the area driving erratically. When he stopped the truck he immediately noticed several dead deer in the back of the truck. He then called RFC John Evans and Sgt. Chris Hodge to the scene to investigate the incident. After the investigation the driver and passenger were charged with hunting deer at night, hunting from a vehicle, and hunting from a public road. The driver was also charged by the trooper for driving on a suspended license and driving under the influence. The passenger was a convicted felon and was charged with possession of a firearm by a convicted felon. Both suspects were taken and booked into the Glynn County detention center. They had killed a total of 5 deer. The deer were turned over to a local processor who was willing to come out and clean them and then turn the meat over to a local food bank.

Sadly for these "country boys" hunting is not allowed in a State Park, and certainly taking five deer is more than the limit.  Unfortunately, this is not the only such incident to occur on our island. 

But getting back to urban legends and conspiracy theories, are they really harmful to your mental health?  Well, yes, they are.  I think once you go down the rabbit-hole of weak thinking and indulge in more and more in belief and not reason, the world becomes distorted.   Since your world-view is constantly skewed with regard to the real-world, you tend to indulge in more and more bizarre beliefs in order to square things up.  The reason the Federal Reserve is controlling your life is, well, Aliens, right?

It may start out as a simple urban legend, or even some religious belief, but it can quickly devolve into some sort of scary world conspiracy in short order.   After all, if one urban legend conflicts with reality, the only plausible explanation is that some even greater conspiracy is afoot to suppress the truth.

And I think this is how conspiracy nutters end up where they do - encompassing everything from Holocaust denial to aliens in area 51 to whatever, into one grand "Illuminati" scheme of one sort or another.  If someone points out the flaws in your thinking, well, they must be part of the conspiracy, too!

(And to all you conspiracy nutters, as I have freely admitted before, I am part of the conspiracy as well - the Illuminati, the inside circle, and so forth.  Buhaawahaha!)

Of course, that brings the question:  If there is some sort of "insider" Illuminati who are running everything and whatnot, why not simply join them and share in the riches of this grand scheme?   Well, it is possible to do so, of course, simply by engaging in real society.   You see, if there is an "secret inside" cabal of people running the world, it really isn't all that secret.  All you have to do to join is to get an education, get a good job, work hard, and put away some money.  Bingo!  You're in the Illuminati!

And it is a very egalitarian system, too.  Anyone can join, but how far you advance is based on your native intelligence and how hard you are willing to work.   Step 1 to membership is just denouncing conspiracy theories, weak thinking, urban legends, belief and other nonsense and instead engage in rationality, clear thinking and believing in yourself.

But you see how this works to the paranoid conspiracy theorist.   Since they refuse to engage in rational society, they feel they are being "excluded" by an inside cabal when in fact they are simply excluding themselves from society in general.

But beyond whack-job conspiracy theorists, the same theory also applies.  If you are protesting for Bernie and think that your student loans should be "forgiven" or that college should be free, maybe you are not living in a rational, real world.   Not only are these things not likely to happen, they aren't going to improve your lot in life.   If you let your student loans go into default, it will seriously harm your financial record, make it hard to get a job or an apartment or anything you may want out of life.   Blaming your student loans on someone else might make you feel good (just as the hunter/cow story makes folks feel better about themselves) but it does little to make your own life really better.   In fact, it makes it far worse.

Or if you think electing Trump is going to get you a good paying job when they "throw out all those Mexicans and Arabs" maybe you need to think again, unless you think a job as a day-laborer or landscaper is a "good paying job".   And all those tech jobs are not going to come your way without a tech degree.  Companies hire H8 visa techs simply because not enough Americans want to bother getting the proper education to take such jobs.   Xenophobia isn't going to get you a six-figure job.   And when Donald Trump collapses the economy, well what job you have today will likely go away.

And so on down the line.  Indulging in weak thinking rarely amounts to much.

Trade and Technology

Can Elon Musk change the way the world does business?

The rise of the British Empire can be traced to free trade.  Well, free trade for the British Empire, anyway.   They used a clever system to grow opium in India, then trade it with China in exchange for trade goods, and more importantly, silver, to fill their coffers in London.   It is no coincidence that the British currency is known as a "pound sterling" as it was based on silver.

Prior to that time, the situation was reversed - British traders bought goods in China, paying in silver, while the Chinese failed to buy any foreign goods.   By altering the trade balance, the British altered the flow of wealth from outward to inward.

So long as that trade pattern continued, the British Empire remained an empire.  But eventually China became tired of playing this game - seeing its people turned into drug addicts and its coffers emptied.   And in a post-war era, new trade patterns emerged, and the UK became a debtor nation.   When trade patterns change, fortunes are made and lost.

Today we do business with some pretty odious people in the world, just to get oil to run our economy.   We are dependent on oil for almost everything, or so we think.   A lot of people are starting to wonder whether this is really true.   There are reports that Israel is trying to get to an oil-free economy or at least an economy less dependent on oil, as they must trade with hated neighbors (who hate them as well) in order to obtain this needed energy resource (recent discoveries of natural gas and the collapse of an electric car company seem to have put these plans on hold, however).

For years, people talked about solar and wind power as an alternative to an oil-based economy, and for years, this was largely a fantasy.  Solar panels were so expensive and cumbersome that they didn't make economic sense.  The same was true for wind power.  And since both depended on the weather to operate, they were not a complete answer for our energy needs.

Similarly, electric cars were mostly in the realm of hobbyists or experimenters or as show cars trotted out by the car companies to show their environmental credentials.   Reliant on lead-acid batteries, they were slow and had limited range.

But that has changed, and a lot more may change soon.  Lithium-Ion batteries have largely solved the problem of energy density, and as a result the range and power issues with electric cars.  Solar panels are now more efficient and cheaper, although not quite on a par with other energy sources.  For a while, with tax breaks and with the utility companies buying back solar power from homeowners at retail rates, they actually made a profit.   But tax breaks can expire and more and more States are dropping requirements that utility companies buy back solar power at retail rates (which makes sense, if you think about it) but instead at wholesale rates, which they pay for other energy sources.

But, suppose you could take the power company out of the equation?   Besides the oil companies and Arab oil States, the local utility companies are probably most hated by the average consumer.   Since we are dependent on electricity, we have to buy it from them, at standardized rates that guarantee them a profit.   Since their profit is guaranteed, they have little incentive to be efficient or cheap.  They have us over a barrel, just like the oil producers.

Musk's plan is simple:  Provide solar panels to consumers combined with home-based "energy banks" of Lithium-Ion (or even more advanced technology) batteries so that a homeowner could basically own his own utility company.   During the day, the power bank charges and at night it can be used to charge up your car or run home appliances.   Since you are not selling back excess power to the utility company, you are, in effect, getting "retail" value for your Kilowatt-hours.

Could it work?  Sure, from a technical standpoint, there is nothing blocking the way.  No new breakthrough in technology is required.   It simply is a matter of cost.   And that is the sticking point.  We live today in an era of cheap oil, and perhaps not by coincidence.   As I noted in another posting, the biggest enemy to the electric car or the hybrid car is cheap gas.   And if everyone goes to electric or hybrid cars, the cost of gas will drop as demand drops.    And as demand drops and prices drop, the economic value of electric or hybrid cars drops, creating a vicious circle.    Theoretically, electric cars will never be viable as a result, unless the world actually and truly runs out of oil.

And that may be a problem for Musk as well.   His energy system should work, but how many people can afford to buy it?  Solar City, which he recently acquired, leased panels to home owners and then reaped benefits from the energy sold back to utility companies at retail rates.   Once the utility commission re-set these rates, the entire business model was no longer viable.    A home-based energy bank may be a solution, but a costly one for most homeowners.   Even if sold on installments or leased, the cost may rival or exceed the monthly cost of a standard utility bill from the electric company.   Consumers may be simply trading one form of monthly payment for another.

There is also the issue of maintenance and repair of such a complicated system.   Granted, homeowners today typically own a fairly complicated HVAC system, hot water system, refrigerators, and other appliances.  Some even go nuts with hydronic heating and wood furnaces and whatnot, which require miles of piping, pumps, and controllers.  Arguably, a home energy system like Musk proposes might not be much more complicated and in fact may be simpler - merely a plug-and-play black box (albeit a large one) that is simply set in the garage or basement (or even outdoors in a weathertight enclosure).

Complexity and cost is one reason I haven't made the switch to solar.  I looked into buying a solar hot water heater, as hot water is one large part of our energy bill.  However, the number of pumps and controllers involved, plus the plumbing and panel (and drilling holes in the roof) made me pause.  The staggering cost didn't seem justifiable over time.   Finally, the prospect of a tree limb from the decaying pine trees surrounding my house shattering the expensive solar panel sealed the deal.  It just didn't make economic sense to me.

Similarly, putting solar electric panels on the roof might be problematic for me in terms of amount of light available and tree limb damage.   Solar power promises to be a boon for people in new developments in the suburbs who have large roofs and clear Southern views.   It will be less useful to city dwellers, condo or townhouse dwellers, or people who live in matured, treed neighborhoods.

Still, it is exciting technology, and I for one would like to see it work.   Sadly, there are people out there who not only think it won't work, but will go out of their way to insure it doesn't.

I wrote before about NEV - neighborhood electric vehicles.  I concluded that even though they are legal on our little island, they make no economic sense - for the price involved, I can drive my existing car an additional 1200 miles a year that the typical NEV travels.   But since I wrote that posting, the State of Georgia put the nail in the coffin of NEVs by adding a $200 registration fee.   They argued that since "electric cars" don't pay road taxes, they were getting a "free ride" on the backs of gas-burning cars.   Maybe this is true for a standard electric car, but these little golf-cart like NEVs hardly travel more than a thousand miles a year, and they hardly "wear" on the roadways.

However, like with anything else, there is a loophole.  We are still allowed to drive modified golf carts - and even NEVs  - on our island, and avoid paying the fee provided you don't bother to register them as motor vehicles.   I am sure the oil lobby will close that loophole soon enough.

Like I said, it would be neat if the technology worked.   But by "worked" I mean to the point where the decision to buy an electric car is a no-brainer - that the cost is so much lower than a gas-burning car that only a fool would pay extra to burn gas.  Sadly, that might not happen in my lifetime, but we are getting closer than ever before - almost every major automaker today has an electric car in their showrooms right now, for you to buy if you want one.  This is a far cry from days gone by when electric cars for largely for experimenters, hobbyists, and kooks.

But an argument could be made, and a sound one, that subsidies for solar panels and electric cars might be a good thing.   If our demand for oil was substantially or even marginally curtailed through the use of electric cars and solar panels, our reliance on oil from odious sources (those damn Canadians!) would decline.  Like with the British and their trade with China, we could reverse the flow of money or at least attenuate it somewhat.   More importantly, we would not have to intervene in Middle East politics as we frankly would no longer care about their internal matters.

So good luck, Mr. Musk.  You might end up changing the world.

Election 2016 - Emotional Thinking versus Rational Thinking

Our political system today isn't divided into Republicans versus Democrats, or Liberals versus Conservatives, but rather emotional thinkers versus rational thinkers.   Sadly, the latter are in short supply.  Pictured here, a tea party rally.

In Quebec it is interesting to hear how French Canadians view the election in the US.  Given all the press Donald Trump gets (and he gets a lot of press, but it seems that as of a month ago, the press "turned" on him and the love-fest is over) many Canadians assume he will win the election and that all Americans are infatuated with the Donald.

This reflects a nightmare most of the rest of the world has.   America by accident or design, is the only world superpower.   We spend more on our military than the next ten largest countries combined (or eight, depending on which source you cite).   We have fleets of aircraft carriers, while Russia has one, China is trying to finish its first (a rusty Russian hand-me-down) and the UK has none.

And despite all the hoopla you hear about China, their economy is not doing as well as ours is - in fact, our economy is the most robust on the planet, which is why investors worldwide flock to invest in things as lame as Treasury bills.  China doesn't "hold" a lot of our debt to blackmail us, they hold our debt because they perceive it as a safe harbor to invest in - safer than their own markets.

So America is the 600-lb gorilla, and the rest of the world simply hopes that we have some rationality and common sense not to wreck things more than we ordinarily do.   Some have called the post-war years the Pax Americana although during this Pax a lot of regional wars have been fought and millions have died.   But we've avoided a nuclear conflagration, so I guess that is something.

But in Donald Trump, the world sees trouble.   America might be abandoning what little rational thinking and intellectualism it had left.   We would no longer be the good guys in the white hats - to the extent we ever were - but rather self-interested take-all-you-can conquerors who would just look out for their own self-interest rather than the global interest.   And you see this attitude at Trump rallies, with supporters saying things like we should nuke the middle east and take all the oil that "rightfully belongs to us".

Trump supporters are like that - classic externalizer who view their personal problems as being the fault of unseen or vaguely defined "others" who are a threat to them.   And not surprisingly, most of these supporters are younger white men with no college education.   Their options in life are limited, as in a technological society you need to have a technical education to succeed.    As unskilled laborers, their value in the economy is not very high.    Unless they can acquire technical skills, they will not be able to climb the economic ladder.   And of course, this has to be someone else's fault.   

The fact they didn't pay attention in school or try to at least learn a trade is not their own fault, but the fault of "Liberals" or terrorists or the gays or whatever target-du-jour is being bashed.   "If only..." we could eliminate those bad people, the world would be a paradise-on-earth.   It is a message that resonates throughout the ages, with demagogues rallying the young, the dumb, and the poor with their message of "if only..."   Huey Long, Adolf Hitler, or Rodrigo Duterte, the message is the same.

And it is not a conservative message or a liberal one, a Republican one or a Democratic one.  Indeed, every aspect of the political spectrum has employed this form of emotional thinking to try to get into power.   Venezuela is using this sort of nonsense to prop up their failed government.   Communism would work, they argue, "if only" we could get rid of those rightists and profiteers.    Same old shit, different day.

Or take Bernie.   Both Trump and Bernie supporters are alike in that they are emotionally engaged with their candidate.  They fill rallies, they shout slogans, they are passionate about their candidate.   And both candidates promised a heaven-on-earth to downtrodden people who made bad decisions in their personal lives "if only" we could get rid of Muslim immigrants or the big banks or whatever.

Hillary, on the other hand, doesn't generate much excitement.   People don't put bumper stickers on their cars or get really emotionally engaged with her.   She represents the establishment and a continuation of the policies of the last eight years - policies which have resulted in steady economic growth and stable economy in an era where most countries are melting down.   Sure, she will change some things.  I hope she can fix the problems with Obamacare (instead of just abolishing it and leaving us all with nothing).  But no one really gets emotionally involved with a person who is the ultimate policy wonk.

This is a good thing,  trust me.

Every four years, the press plays to our emotional side and tries to portray the candidates in terms of emotional factors - kissing babies and whatnot.  Which candidate would we want to have a beer with?  That sort of bullshit.    I am not sure I want to have a beer with Hillary Clinton, although I would be fascinated to sit down and listen to her talk about policy issues.   Which is more important?

The election of 2016 will go down in history as one of the strangest of all time.   Unless Hillary has a nervous breakdown, it doesn't appear Donald Trump has a snowball's chance in hell of winning.  Even Georgia seems to be in play for Hillary (and you can bet I will be back in the State by November to vote!).

The Republican party, hopefully, will look at this debacle as an opportunity to re-think its strategy.  And many in the party are trying to do just that, but getting it all wrong.   They continue to seek out emotional issues as the backbone of their platform.   They fail to realize that being the party of "Just say No to everything" like some petulant child hasn't accomplished much in the eyes of the voters.   Rather than being against everything, they need to stand for something.

In the past, this was the case.  In the past, the GOP was the party of rationality, in terms of standing for sound government, balanced budgets, and limited government.   These were rational factors to argue, even if you didn't personally agree with some of them.  The Democrats, on the other hand, were more of the emotional thinking party, making arguments (as Bernie did) about how awful it was that the other fellows bank account was bigger than yours.

Somewhere along the way, the positions of the two parties changed.   It started with Nixon's "Southern Strategy" and his "Law and Order" campaign.   It matured with Reagan's "morning in America" and his appeal to evangelical voters.   No longer was the party about balanced budgets and limited government.  Instead, the GOP became the party of social issues - abortion, gay rights, women's rights, voting rights, and so forth - all in the "NO" column, of course.   Rather than a liasssez-faire approach to government, Republicans started campaigning on being "job creators".   And instead of balancing budgets, Republicans started running up deficits - even in times of economic prosperity, such as the Bush years.

As a result, the party started to splinter.   And the "big tent" of the GOP was suddenly full of people shouting "RINO" - and trying to force out anyone who didn't subscribe to their form of emotional thinking - failing to make the rational argument that forcing people out of the party isn't how one wins elections.

But it got worse.  The entire "Tea Party" movement was more like the Mad Hatter's tea party - a movement without purpose or direct, other than to wreck, delay, destroy, and usurp.   Nothing much was accomplished by the tea party candidates - many lost their re-election bids or failed to stand for re-election (that whole promise of one-term kind of backfired in a big way, as most emotional arguments do).   While ostensibly about taxes ("Taxed Enough Already" was their mantra) they were really a haven for anti-Obama and racist thinking, as evidenced by the signs and slogans at their rallies.   Taxes, it turns out, were just a cover story for what was really an emotional social agenda.   They were more interested in transgender bathroom issues than in tax policy wonking - as evidenced by their insane and unworkable tax proposals, most of which would have been a sop to the very rich.

There was a time in this country where we didn't view the government as the "enemy".   And we thought that government could be well-managed and well-run.   It was, after all, our government that managed to put a man on the moon within ten years of really starting a space program.   Back in those days, we thought that if proper scientific management techniques were applied to government, that government could be both efficient and effective.

We seem to have lost that thought somewhere down the line.   It became more convenient for us to blame our problems on the government rather than try to solve them.

Perhaps, once again, I digress.   What is the point of all this?   Well, the only real conclusion I can draw is that when there are two candidates up for office, and one tries to appeal to my emotional side by using emotional issues (greed, fear, externalizing) and the other candidate wants to talk policy until the whole audience is asleep, I have no trouble deciding which candidate is the better choice.

Emotional thinking is a dead-end.

Boatniks

Boating is like RVing, but some folks think it classier.

We are looking at boats with the idea of selling the RV and then living on the boat for the summer for a few years.  Boating is an interesting endeavor as there are all sorts of boaters, just as there are all sorts of RV'ers.   And like with RV's you can get into a lot of trouble with a boat very easily, and it can be hard to get out of it.

As I noted in the casino effect, there are a lot of financial transactions in this world that are easy to get into and very, very hard to get out of, just like a casino.   When we were in Las Vegas, the Caesar's Palace casino had a conveyor belt to haul people in from the sidewalk, just like a slaughter house.   Once inside, however, getting out required us to walk nearly a 1/4 mile through successive rooms of bright flashing lights, loud sounds, and noisy distractions.   The exits were not clearly marked - intentionally.

You can buy a boat, lease a car, sign a student loan, or get a 20-year note on an RV like falling off a log.  An hour in the "closing room" at the dealer or the registrar's office is all it takes.   Then it takes a lifetime to pay off the note - as often you are "upside down" on the car, RV, boat, or education, for decades.  Easy to get into, hard to get out of.  That is the casino effect.

One boat we looked at, a hoary old Sea Ray, was sitting on blocks at a marina.  The owner admitted that he hadn't had it in the water for over two years.   His ex-wife wanted it sold, but he "had to get" $35,000 for it as that is how much he owed the bank.   You see this all the time with boats, cars, jet-skis, or whatever - people thinking they are entitled to the balance on the bank loan, just because they owe that much.  You try to explain to them market values, and they are deaf.  You also try to explain to them that a boat that has high hours, shitty maintenance, and several major defects isn't worth squat, but don't bother.  The owner wants to pay off the note, and he thinks he is entitled to this, just as a millennial with $50,000 in student loans thinks he is entitled to a six-figure salary and a corner office.

And as I noted in the upside-down boat, there are millions of boats, RVs, cars, motorcycles, jet skis, and snowmobiles rotting in side yards across America, as their owners continue to pay on the loans on these items which are worth less than the balance on the note - and the owners have long since lost interest in them.  You can make expensive mistakes in life, very easily, in a matter of a few hours and a few signatures.  Leave your pen at home.

Boating is particularly weird in that many people own boats and rarely go boating.   We've visited several marinas where people have made encampments on the dock next to their boats, with barbecue grills, refrigerators, entertainment systems, and a "nest" of chairs.  They drive 2-3 hours every weekend to sit next to their boat and drink cocktails with the other boat owners, occasionally washing and waxing the boat, but rarely ever leaving the dock with it.   This struck me as rather absurd, but it is what a lot of boat owners do.

For example, one boat we looked at had 400 hours on the engines (gas engines, which are good for about 1500 hours before a rebuild) since it was built in 1993.  The owners drove from Rochester, New York to the 1000 Islands every weekend for 12 years to "hang out" on their boat, but they rarely left the dock with it.   I can't in my own mind, justify such an expense for something used so intermittently.  If I have a boat, I want to be using it, not every weekend, but nearly every day.

RV'ers are no different.   Many will keep an RV at a campground all "season" and then visit it on the weekends only, hanging out with friends and drinking, but rarely, if ever, traveling in the RV itself.   One wonders why they don't just buy a cabin or at least a park model.   Buying a motorhome and then never driving it anywhere seems kind of silly, but I guess I am the only one to think that way.

One problem with these sorts of purchases - or any sort of purchase - as that few of us think of them in terms of the "end game".   If you buy something, how do you get rid of it down the road?   You want that shiny new cell phone, but fail to think about the five or six old cell phones you bought in years past that are not rotting in a drawer or closet somewhere because you can bring yourself to throw them away.   Everything you buy has an "end game" associated with it, and planning this end game is essential.

That is one reason some folks like leasing cars or "upgrading" to new cell phones every few years.   You get a new toy every so often and the old one goes away without fuss or bother.   Well, there is a fuss and bother, but it is in your bank account - you get dinged for "turn-in fees" on the car, or you pay far too much for the new cell phone.  But it illustrates how much people are willing to pay for convenience or perceived convenience.

Our plan in buying a boat is not to have one "forever" but for maybe 3-5 years.   And as such, we have to be cognizant of how to get rid of it later on.  After five years, you can expect the boat to depreciate by as much as half the price you paid for it.   Financing such things on 10-year notes is dangerous as your are likely to be upside-down on the note for at least 7 years.   Not only that, but you will pay as much in interest as you do in principal on the note.   And yet, that is how most people pay for things.

Paying cash avoids this problem, but many folks will make specious arguments that paying cash forgoes the "opportunity cost" to make money in the stock market.   Yet, if I borrow money at 4.5% on a boat loan (and pay almost 100% interest payments the first year) am I really coming out ahead?   What investment out there promises a guaranteed 4.5% rate of return on my money?   Moreover, if I decide I want to sell the boat, I don't have to worry about being "upside down" on it.

A boat like this can be had for about $30,000 with low hours and in good condition.   Since few people can pay cash for older boats, prices are low.

 In the age and price range we are looking at there are very good bargains to be had, as boats of this age are difficult to finance.   Joe Paycheck can get a loan on a brand-new boat at the dealer, who has a relationship with a local finance company.   But older boats are harder to finance and as such (like older cars) the price drops off accordingly. 

But as I have noted in the past, when you buy an older boat, car, RV or whatever, you really are just buying the repair rights.   Once you own the item in question, you have to pay for the upkeep.   And with larger boats, the upkeep can be expensive.  Just for docking, storage, winterizing, annual maintenance and the like, the costs can be $5000 to $8000 a year depending on the boat size, the marina in question, and the type of storage and docking.   Keeping a large boat clean is a major chore and many owners hire locals to wash and "detail" their boats on a weekly basis.   The actual cost of purchase will be quickly exceeded by the maintenance and fuel costs within a few years.  Add to that the cost of transient docking, if you want to travel at all - and don't want to anchor out every night.

And this is assuming you don't have any major repair problems such as a bent propeller or shaft, repowering, or whatnot.   Everything associated with boats is expensive, and often what would be a simple repair in a car is a major headache in a boat, particularly in some models which have engines located in remarkably inaccessible places.

So, are we going to buy a boat or what?   Maybe.  Maybe not.  Our timeline is the next two years, so we have plenty of time to do more research.  Since we can pay cash, we are in a position to make a deal when the time is right - for example in February when the boat is in storage and the owner needs to get out from under it in a hurry.

But it may turn out we don't want to own a boat at all.   You can rent boats in many places, and our immediate plan for next year is to rent a boat or houseboat on the Erie Canal and the Rideau Canal (in Canada) for a week or more and figure out whether owning a boat is worthwhile.   It may be that after a few weeks of renting a boat, we decide we've "been there done that" or that renting is a far better alternative than spending a pile of money on a rapidly depreciating asset and maintenance.

I also still like the idea of a boat I can maintain and haul myself.  One problem with larger boats is that it can cost $150 to $300 just to have it hauled out of the water.  And once out of the water, you are often at the mercy of the mechanic at the marina closest to where it broke down.   A trailerable boat may be smaller, but you have more choices in terms of storage, repair, and general maintenance.  The cost of "hauling out" a trailerable boat is often free.   And boats of 30 feet or more can still be trailered (although you'd better have a good trailer and truck to haul it with).

Traveling long distances by boat is often boring and sometimes dangerous, if the weather changes suddenly.   Our boats got maybe 1-2 miles per gallon and had a top speed of 30 miles per hour or so.   On the trailer, however, they were getting 10 miles per gallon and capable of 70 miles per hour.   Many States have free boat launch ramps (or ramps with modest fees) and free trailer/truck parking.   It may make more sense to buy a 28 foot cabin cruiser and trailer it than to own a 35 footer and never go anywhere.

But we have all the time in the world to decide, and we need a boat like we need a hole in the head.   Once you decide you "have to have" something, it is all over for you.   We are enjoying retirement and don't want to fuck it up with something as stupid as a boat purchase.