A Look Back At the IPO Decade

Facebook Share Price, from May 18, 2012 to present - a 489% gain.

DJIA, from May 18, 2012 to present a 216% gain.

The last decade or so has been an interesting time in America. It seems that in the last few years, more than ever, we have been continually grasping for success. One after another, things were presented the average American as a means of getting rich very quickly and with little or no effort. We were exhorted to buy houses or gold or Bitcoin or stocks.

And each time, we were told this was a sure thing that would make us rich.  And each time, after an initial period of success, it all came falling apart. And each time, we went right back to the well, convinced that this time, for sure, we would make it big - unlike the last three or four times where we were suckered into investing in something we didn't really understand.

And one of these things over the last decade was the Initial Public Offering or IPO - when stocks are first sold to the public.  I think many young people today think that IPOs are regular part of the financial landscape.  But when I was a youth, we never heard about such things.  The number of new companies starting up in America was very small, the average citizen didn't invest in start-up companies. We all bought Blue Chip stocks if we bought stocks at all, because most of us had pension plans in our old age.  The IPO, as we know it today, basically didn't exist 20 or 30 years ago.

IPOs were touted as "The Next Big Thing!" and the chance for Joe Littleguy to get in "on the ground floor of the next Microsoft!"   But was it?   Or was it really just, at best, an average deal, and at worst, throwing your money away?  It has been a while and the dust has settled on many of these IPOs, and we can tell now in retrospect which were winners and which were losers - something we could not tell back in the day.

And let's just stop for a moment and remember that we don't own time machines nor do we have crystal balls to see into the future.   Sure, in retrospect, we can say that one stock was a winner and another was a loser - and that if you selected the winner you'd win.   This is idiotic.   It is like going to the race track the day after the races and then "spotting the winner" from yesterday's race.  I can also tell you the winning lottery numbers - from last night's drawing.

My take on these speculative deals is this: Since we can't afford to gamble, it is best to walk away from all of them, rather than bet "just a little bit" on some of them.  Because just like the racetrack, yes, someone always wins and it could be you.  But the majority of people who play the ponies, lose.  And that is far more likely to be you.  Quantum investing is looking at the overall odds, and not taking wild bets on long-shots - even if some of them will win.

And the winner here, in the IPO race, is Facebook.   And I was skeptical of the Facebook IPO and still am skeptical of the long-term staying power of that website.   Why?  Because we've seen similar things that looked pretty damn permanent that turned out to be ether.  And the granddaddy of them all was AOL - a website and ISP that became so wildly overvalued that they bought Time-Warner, which was a real company making real profits.  Years later, Time-Warner managed to extricate itself from the deal.  AOL still exists, but really isn't much to write home about.  And the Internet is littered with the carcasses of formerly "hot" websites that went to "Not".

Now maybe Facebook will escape this fate.  Maybe, like Google (and its panoply of related sites) it will have long-term staying power.   Or maybe Google will screw the pooch.  It is hard to say - we use sites and software and then one day switch and forget about the old sites.   Surfing MySpace on Netscape Navigator was once "a thing" and just as suddenly wasn't.   Again, we can't predict the future.  Maybe this "fake news" Russian Troll business could kill off Facebook - or worse, Facebook's attempts to filter out viral media, fake news, and rumors will backfire.   It seems to me that the very things they are trying to get rid of is what Facebookers like the most!

As the above chart shows, Facebook has done well - but in part because people are overpaying for it.  It's P/E ratio isn't staggeringly high - just about double of where it should be for a profit-making company.  And not surprisingly, its stock price is about double what the DJIA did in the same time period.  So if you bought the Facebook IPO stock, and hung on during the initial crash, you did pretty well.  Well, provided you sold it sometime - as you never have received a dividend from your investment.   Your gains are all on paper, so far.

And that is one reason why, when a stock goes up in value to double what I paid for it, I sell half of it. That way, I am assured I at least made my money back.   Rapid rises make me nervous, so I tend to sell when I see them.   A reader chides me for being so conservative - but this is my life and livelihood we are talking about, not Monopoly money.   If the stock goes up still, I make more.  If it crashes down to nothing, I don't have to eat cat food.   It is nice to think about all the profit you could have made, but money you did make is more tangible.

Tesla is another "winner" IPO, starting at $19 a share and trading today for about $350.  But the company has yet to make dollar one, and is hemorrhaging cash.  If they can't push those Model-3's out the door pretty quickly (before depositors change their minds) it could all come crashing down in short order.  The rapid-fire new product announcements, as well as the taking of deposits on vehicles that don't yet exist, remind me too much of the Elio fiasco.

Don't get me wrong, I want to see Elon Musk succeed, even if he looks a bit like a creepy Bond villain.   A world with electric cars charged by solar shingles and rockets to the moon sounds like a wonderful fantasy.  Well, the rockets are at least doing well, although Space-X, as a private company, doesn't have to report financials, so we don't know if they are stealing launches away from Boeing by selling for below cost or not (given Musk's business model, I suspect that is the case).   Let's hope he doesn't run out of money before he starts to turn a profit.

But as an investment?  For my retirement?  To support me in comfort for the rest of my life?  Uh, no thanks, way too risky.  I will leave this to the private equity people and Billionaires to bite on.   They can afford to lose Billions, I can't even afford to lose a hundred bucks.

But what about the other IPOs?  It is hard to find data that isn't cheerleading for tech IPOs.  Even this "geek" review of 100 IPOs is startlingly positive.   They claim that 2/3rds of IPO stocks are selling for more than their IPO price.  This sounds great, but selling for a penny more after five years isn't making money, it's losing it.  I would be interested to see how many of these stocks did better than the DJIA or the NASDAQ or even Grandma's Christmas Club account at the Credit Union over the same time period.  I suspect the percentage would be less than 2/3.   You have to have something to compare these things to, and the fact that the "geek" people don't tell us this is, in itself, telling.

They do admit, however, that a lot of these IPOs were real stinkers.  What is interesting to me, however, is that of both the "winners" and "losers" they profile, most are for companies I never heard of.   Yea, I heard all about Tesla and Groupon.  The others?   Didn't make it to the financial channels.  The hyped IPOs, like Snapchat IPO, haven't done so well.  And it is interesting that if you google "top 10 IPOs" or whatever, most of the articles are talking about previous IPOs in relation to Snapchat.   Snapchat has lost about half its value since the IPO, is losing money and subscribers, and appears to be overtaken by Facebook's own applications.

That is the problem for a lot of this so-called "tech" - anyone can copy it, as most of its has no Intellectual Property to protect it (and keeping others out of the market with IP is damn hard to do!).  And the barriers to entry are often pretty low - and the big-pocket competitors, if you don't sell out to them at the get-go, will just copy your business model and take every last penny you have.

Which brings us to Groupon.  Groupon is now trading for about five bucks a share, down from a high of about twenty.  The idea was not protectable.  The founders could have sold out early on for a lot of money and decided not to do so.  It was a fad that wore off as consumers got bored with it and retailers got frustrated with it. And the big players created their own knock-off "me too" coupon deals, diluting the market and basically killing it off.

But at the time the IPO came out?   Well, it was the cat's ass - and if you were skeptical about it, you were shouted down in financial discussion groups.

And yes, a few got rich on these IPOs, but most of those were the insiders who founded the company or were pre-IPO early investors.   The majority of people who bought IPO sticks either broke even or lost money.  There was no "Next Big Thing!" for them - at best a thing.

But Bob!  How can you get rich if you don't take wild risks?   That is the conundrum,  ain't it?   And the  answer is, you might not get wildly rich by merely investing for the long haul, but you won't go broke, either.  And we can't afford to go broke. 

Again, quantum investing.  What is most likely to happen to you if you consistently seek out long-shot deals?  The odds are stacked against you.  Odds are, you lose, big time.

But what about gambling "just a little bit? "  People tell me they can afford to lose a few hundred or a few thousand dollars on some risky investment that might pay off.  Gamblers tell me the same thing. 

But over time you realize that you wished you saved that money instead.  Even small amounts of money invested over time add up.  And it is sad that young people in particular get caught up in these get-rich-quick schemes, as they could really clean up on compound interest over time.  The bulk of my wealth did not come from long-shot investments or getting lucky on specific stocks, but from investing consistently over 30 years and re-investing the profits from those investments.  Compound interest is a bitch - when you're paying it.  It's a beaut - when you're earning it.   And if you are young, time is on your side.

The other problem with gambling is that it leads to more gambling.  One you are hooked on deals like this,  it is hard to quit.   They let you win just enough to keep you in the game - enough to think that you might gamble your way out of trouble.  And when you lose?   Many folks double-down on their bets, and take the next wild risk to come along, hoping that "this time" it pays out and makes up for their previous losses.

And a lot of people today are doing just that - after jumping on gold at the peak, and losing money, are jumping on Bitcoin at the peak and losing money.   And this is after they lose money on IPOs, real estate, and, well, just about everything they touched.   It isn't bad luck - it's bad investing.

A Brief Tortured History of Political Correctness

When you control the language of the debate, you control the debate.

I have mentioned before how different political factions like to use specific words to label themselves or their ideas.  The abortion debate is typical.   No one wants to be "anti-" anything, so the anti-abortion side re-branded themselves as "Pro-Life" which sounds positive, and also implicitly brands the opposition as being anti-life or pro-death.   The pro-abortion side, having a horrible moniker to begin with, decided to use "Pro-Choice" as their weapon, but it pales compared to "Pro-Life" as it makes it appear that a mere whim is an alternative to a gruesome, ugly death, which is exactly what the anti-abortion groups wanted.   They won that round.

Language controls what we see, think, and believe.  How you interpret events and ideas often depends on language and how it is used.   As an Engineer, we see this all the time - new concepts and ideas boiled down to a word or two as a useful tool in describing whole concepts, so that time can be saved when two Engineers communicate with each other.   As a result, when you hear two Engineers deep in conversation, they often sound like they are talking in code (pardon the pun) which in effect, they are.  As an Engineer and Lawyer, and I have to straddle both worlds, and in a Patent Application, we cannot use these shorthand terms without defining them first and that's where it gets fun - two Engineers might have disparate ideas of what some shorthand term means.   For example, "cloud" as applied to the Internet - how would you define it?  Odds are, another Engineer has a slightly different meaning.

The classic example of this is the Urban Legend that Eskimos have twenty different words for "snow" while Pacific Islanders have none - or something along those lines.  It probably isn't true, but it was designed to demonstrate that language is affected by your environment and language affects how you interpret your environment.    When you have no word for "snow" it is pretty baffling the first time you see it (unless someone explains it to you ahead of time).

Democrats have been flummoxed by President Trump because he has a knack for using shorthand communication to express ideas.   And what flummoxes them is that he is not a very bright guy, but manages to turn a phrase or two, particularly on Twitter, that resonates with the news media, his supporters, and like an earworm - even with his opponents.  Who remembers the nicknames he gave all his opponents during the primaries?   You may remember "Little Marco" Rubio (which may have been a slightly racist spin on "Little Ricky" Ricardo), but odds are, you don't remember the platform Senator Rubio stood for.   Trump's use of labels has been remarkably effective, which is infuriating.

But the Left has had the field to themselves for so long, in terms of labeling things, that maybe the payback is what stings the most.  Political Correctness, or PC, has a number of forms, in both terms of policies, but also in language and labeling - the latter being really all PC adds up to.   And Political Correctness has a long history - overseas - but really only took off in America in the 1980's during the Reagan Administration, perhaps as a reaction to that Presidency.

In Communist countries, back in the day, Political Correctness was actually a thing.  Nearly every school, factory, military unit, ship, commune, or other institution or grouping of people would have a "political officer" whose job it was to insure that no one strayed too far from the party line.  Ry Cooder, when he went to Cuba to record the Buena Vista Social Club album, was followed around by a political officer, as part of his entourage, as illustrated in the documentary of the same name.

And of course, Communist countries used certain PC terms, such as calling everyone "Comrade" which implied a level of egalitarianism that really never existed.   But it is a telling use of words - if everyone is equal, Comrade, then you have nothing to bitch about, right?

Of course the Nazis and other fascists used similar PC words and techniques.  In pre-war Nazi Germany, people had to be careful of what they said in public. As in Communist countries, a neighbor could denounce you to the authorities and you'd be hauled away and that neighbor given some of your possessions as payment.   PC has an awful history and it really isn't getting much better.

I first caught wind of modern PC when I was President of the Gay Student Association at Syracuse University.   We had a house on fraternity row, and I put in a draft beer system and every Thursday night, we had a party.   It was not unlike other frat houses, and we really weren't too political or deadly serious about things.  Two decades later, I returned to find the building now houses the LBGTQ studies program, and there were a lot of deadly serious people in there discussing deadly serious issues and apparently majoring in LBGTQ studies.  No beer.  And I felt something was wrong about that, besides the lack of something to drink.

The first inkling of this was, back in 1985, when the Lesbians demanded we change the name of the group.  "We aren't Gay!" they said, "We're Lesbians!"   And so someone proposed changing the name of the group to the "Gay and Lesbian Student Association" to appease them.   "You men!  Always having to go first!" they replied, so the name became the "Lesbian Gay Student Alliance" which was ironic as the Lesbians never showed up at our events, but instead had a smaller group of their own.  But changing the name seemed like no big deal, so everyone let it slide.

One day, our Secretary, who was a nice fellow from Costa Rica, charged into the Office, and told me about this "new thing" called "political correctness" - we would all use non-offensive words and terms to describe one another in this new era of touchy-feeling friendliness.    I sensed then that something was wrong.  The name change thing one one deal, but this was, well, something wasn't right.

And since then, it has gone downhill - or uphill, depending on your perspective.  The biggie, of course was the movement to change "Black" to "African-American" as if we white folks called each other Irish-American, or French-America, or even Euro-America.   No, no, we were White, but Blacks were no longer Black but African-Americans.   And everyone went along with it, at least for a while.  It seems, decades later, to be a tempest in a teapot, and like most PC it accomplished nothing other than to create a false victory for a short period of time.  Today, it seems that Black is now back in vogue, although the two terms are used pretty interchangeably.

Then, someone decided that Midgets and Dwarfs should be called "little people" and this was bootstrapped by some television programs where a midget or dwarf character would feign to take offense at the terms midget or dwarf and proclaim, "We like to be called little people!" in response to which, the main character would hang his head in shame (cue canned laughter).   I never understood this one, as I never thought of Midget or Dwarf as derogatory names but just, names, just as "Black" is a name or the name of a color.   And both names describe two different things - what makes a person a midget is different than dwarfism.   I am not so sure that all the midget and dwarfs out there were clamoring for this change, or what indeed, it accomplished, if anything, other than to make them out to be PC asses - which I am sure they are not.

Meanwhile, back at the GLSA, they were adding more letters.   So today, we have LGBTQ whatever those stand for, and of course, like the GLSA or LGSA (the latter of which is some sort of ladies' golf tournament, I think) they really don't represent a homogeneous group, but rather a series of very small minorities who really have nothing in common and don't really interact or congregate together in a "Community" - which brings us to the next point.

The term "Community" really took off at about the same time as PC did.  Some call it "identity politics" and label it as divisive.   We are all pigeon-holed into different "groups" and then marketed to, respectively.   If you are in Group A, you are expected to hold a certain set of beliefs and values, and if you disagree with this, you will be schooled in short order.  It is nothing short of the oppression that people have been trying to fight for generations - but many willingly embrace it, and even worse, others idiotically follow it, thinking that "I am part of this group, ergo, these should be my beliefs!"

So instead of pandering to the beliefs of different groups, politicians and self-appointed "Community Leaders" (when did we have the election?  I never got to vote!) decide what is the group-think and everyone is expected to fall into line.

Take the case of Bradly Manning - who some describe as a "Transgender Hero" - a term so laughable, I have to wonder if someone at Bretibart didn't cook this up as a means of discrediting the Left.   I'm really sorry, but a soldier who betrays their country and gives secrets to our enemies is never a "hero" and it is shameful what he did.  But blindly, Democrats go along with this narrative than he/she is some sort of folk hero deserving of our praise, but in reality has accomplished nothing in life, other than to screw up the one thing he was charged with doing.   And now he is running for Senate.   Makes sense to me!  The world has gone crazy.

And you notice I am not going along with this pronoun nonsense.  Until Mr. Manning pulls off the neat trick of changing his chromosome makeup and growing a uterus, he is a man.   Now he might be transsexual, transvestite, a drag queen, or whatever, but he will never be a woman - that is physically and medically impossible.   And no, I don't buy this "I am trapped in the body of the wrong gender!" nonsense either.   If you want to mutilate your genitals, go right ahead (unless you live in sub-Saharan Africa, then it is an outrage).   But don't expect publicly-funded health insurance to pay for it, as it is elective surgery.

Now there has been a lot of heat and little light spread lately about men wearing dresses and so forth.   And again, these are not a homogenous group of people, but rather different sorts of folks who put on the clothing of the opposite gender for different reasons.   Drag Queens (and Kings) dress up as part of an act - often being paid to do so, or as part of a competition.    I have met and spoken with several drag queens, and surprisingly (to most folks) they have no desire to be women or to take on a submissive or passive role.  Once shed of their undergarments, they are men and while most are homosexual, many play an assertive role.

Transvestites, on the other hand, wear women's clothing for a sexual thrill.   And oddly enough, most transvestite men are in fact, heterosexual.   There are a LOT of "straight" men who get a thrill from wearing their wife's panties, either as part of some sexual act, or just on a daily basis.   I remember reading about this in "Dear Abby" in the 1970's, and in fact, I think it was a plot device on some television shows (a man admitted to the Emergency room is found to be wearing women's underwear) back around the same time.   The act of cross-dressing is more widespread than folks would like to admit.  It's not my thing, but I am not one to judge.

Transvestites are a different thing from Drag Queens, although there is some overlap.   But your neighbor next door might be wearing women's panties right now, sitting on the couch next to you, as you watch the game and as his wife makes snacks. You would never know.

Now trans-sexuals, that is a different thing.   There are some folks who claim they want to be the opposite gender, or claim they are "trapped" in the wrong body, or that they always identified as the opposite gender.  These are folks who dress in opposite clothing not for some sexual thrill, but because they identify as that gender.   This last group has raised the ire of many people on the Right, and like I said, the Bradley Manning thing certainly didn't help matters any.   And I am sure there are some transgender people out there who are outraged that Manning was chosen as a poster-boy for the "movement" when his actions were disgraceful.

Folks on the Right raise all sorts of idiotic issues with regard to transgender people.   "They are going to go in the opposite bathroom and rape people!" they say, which is a very odd argument.   Despite Bradly Manning's many faults, I don't think rapist is one of them.   And a transgender person is not going to be that easily detectable - in fact, you may have seen or met some and not even known it.

In response to this cooked-up "controversy" some righteous self-appointed bathroom monitors have actually dragged women out of restrooms, claiming they were transgender men.   Turns out they were just butch Lesbians looking to go pee.   And in another manufactured "controversy" some guy on the "alt-right" went into a woman's changing room at the local pool, claiming he had a "right" to change clothes there as he "identified as a woman" (when clearly he did not).  It is a tempest in a teapot, with both sides trying to make the other look more and more ridiculous.

And in that regard, I have to wonder if trolls are not behind some of this - even the Internet Research Agency in Russia.   After all, dividing Americans against each other acts in Russia's favor.   A weak America is their goal.   So when I read things online about parents whose five-year-old son is "deciding" his gender, I have to wonder if it isn't a put-up job designed to get us all outraged, like these stories about Kindergarten teachers who are men-in-a-dress, complete with hairy legs.

But apparently it is true - and if so, it is disturbing.   Kids do weird things - that's why they are kids.  And often kids do things for attention or just to be creepy.   But kids also "grow out of" phases in their lives.   You may have been a "goth" in Junior High School, but that doesn't define you for life.  At the very least, I think you should wait until you are of legal age before attempting any sort of medical treatment than can affect you for the rest of your life.   After all, what happens if you change your mind later on?  And again, I have no trouble with adults doing whatever they want to do, provided it doesn't harm someone else (directly or indirectly) and I don't have to pay for it.   And elective surgery doesn't become "reassignment surgery" just because some doctor needs a new Porsche.

The problem with popularizing this sort of thing is that some parents - particularly on the Left - start looking for it.   How trendy, after all, to announce at the cocktail party that your son has decided to change genders?   Now you are the topic du jour and a trendy one at that.    It is what I have said all along - most gay people just want to be left the hell alone, but instead, an entire industry has arisen to sell sexuality like soap.   I mean, it's bad enough that some Mothers secretly want their sons to be gay.  And apparently, in Japan and Korea, this is a thing.

I mentioned before how in Pompano, we somehow were put on a subscription list for Out! magazine or some such periodical.  I was horrified by it.   On the cover of the first issue we received was an article, "Methamphetamine, the new gay drug?" as if this life-destroying deadly drug was some kicky new hobby.   And inside the pages, corporate America was vying for the spending dollars of gay Americans - to buy new Jeeps, or Coors beer or Levis jeans, whatever.   Spend all your money!  You'll look fabulous!

The problem with this, is that if you make gay trendy there are some who will jump on the bandwagon just for the hell of it.  Doubt me?  Check out these "Tide Pod Challenge" videos on YouTube.    People will do things just because you suggest it to them.   And I am sure there are more than one or two people who decided to "come out" as gay in high school or college, only to later on decide that it wasn't something that fit them, but was a trendy thing to do at the time.

And when you stoop down to a five-year-old boy or girl and ask them, "what gender do you want to be?" they will not realize that it was up for discussion or a matter of choice.   But what the heck, let the kid make a life-changing choice at an age before he can even read or write.  It's the new thing today - like saddling some 18-year-old with a hundred grand in student loans.

We didn't get a lot of choices at age five when I was a kid.  You did what you were told or got the back of a hand.   And it really wasn't so bad, because quite frankly, at that age, we were spastic little monsters, running around screaming at the top of our lungs - like most kids do.   Indeed, "maturity" in America, begins at age 30, if even then.  We don't expect people to get a job, a career, or married until then, or have children until age 40.  But hey, age eight - good time to choose your gender, before you've even had a chance to test-drive the standard equipment!

But I digress - but not by much.   I guess the problem I have with all of this is that none of it is up for discussion.   And what little discussion there is, just is knee-jerk hate-filled religious bullshit from the far-right - things like these "bathroom wars" which are really irrelevant in the greater scheme of things.  The right wants to create hot-button issues (much as they have done with immigration) rather than try to solve problems.  And on the Left - how dare you question any of this?

And sadly, both sides of the political spectrum act this way.   Neither Democrats or Republicans want to see the abortion issue decided one way or another, as this festering wound gets out the vote for the political base on both sides.   So rather than solve problems, come to a compromise, and hash things out, they want to have an issue that will never be resolved, as it keeps them in power.   In a way, it is like the Palestinian thing.  If a peace plan were figured out tomorrow, it would be hijacked by the radicals on both sides of the issue, as this festering wound is essential for them to keep their jobs.

And the last is another example of the use of language in debate.   Some Israelis claim that there are no such thing as Palestinians but rather the people living in the West Bank and Gaza Strip are just a collection of various Arabs, and not a nationality or indeed, even a country.   This is an interesting argument, although it seems like a non-starter.   No one seems to have taken up this banner, and indeed, when a group of people decide to call themselves something, it is kind of hard to stop them from doing so.   After all, before May 14, 1948, there was "no such thing" as an Israeli, right?

We also saw this word game being played in the 1980's, when the words "handicapped" or "disabled" were deemed offensive rather than merely descriptive.   Cheerful folks, who were not handicapped in most cases, decided that "differently-abled" was a better moniker, although not necessarily descriptive.  If you can't walk, for whatever reason, you don't have "different" abilities, just one less than most people and there is no shame in that - it just describes reality.  Changing names around doesn't accomplish much - a handicapped parking place and a wheelchair cutout ramp are far more concrete changes to society that allow the handicapped to live and work among the rest of us - something that was almost unheard of, back in the 1960's when I was a kid, Ironside notwithstanding.

Of course, like anything else, people take a good thing too far.   People who want to bring their pets on the plane or to the store are now buying harnesses and vests online and claiming they are "service animals" even though you can see from 1,000 yards away they are just unruly, untrained pets.   We once joked with our blind friend in college that we should get a harness for my brother's dog, so we could take it into restaurants and whatnot.  And my blind friend told us that back then, they made it hard to get those harnesses simply because they were worried people would do just that.  Today, well, we have the Internet.   And your "service chicken" keeps you calm on that scary airplane flight, even as it shits in my box lunch.

There are signs that this is starting to swing the other way. Good intentions - helping the handicapped - have backfired in a big way.   People have abused the "service animal" thing for far too long.  And allowing lawyers to play "litigation lottery" with handicapped access hasn't resulted in improved lives for the handicapped, just increased costs of doing business for everyone.  And don't get me started on people who put handicapped placards on their cars even though they aren't handicapped - just to get a better parking space.   Do people really do that?   YOU BETCHA!  My own Dad did it, when my Mother was dying, using her handicapped placard to get a better parking space at the hardware store when mother wasn't in the car.   I made him move the car.

But you can't even say these things in America, lest you be accuse of being "mean" to handicapped people, even if you are pointing out that non-handicapped people are abusing the rules.  In Crystal City, Arlington Virginia, they allowed anyone with a handicapped placard to park at a meter all day long, without having to pay.   Within a year, every parking space in Crystal City had a car with a handicapped placard parked at it.  Parking revenue went down to zero.   They changed the law - that handicapped people had to pay for parking like everyone else - and overnight, the handicapped placards disappeared and parking spaces opened up.  It was a poorly-kept secret that a friendly doctor would sign the forms you needed to get a placard or a handicap tag.  Hell, the same "friendly doctor" will sign a 'script for some oxycontin while you're at it!

The name game, of course, is also in the news lately as some folks on the Left have taken this gender pronoun thing to extremes.  Again, I have to wonder who is behind this, as it seems odd that it would spontaneously erupt.  Are we being trolled yet again?  It is like the "Little People" thing - who decided, when and where, that what midgets and dwarfs wanted to be called was "Little People"?  Was there a convention of some sort?  Was it put to a vote?   It seems to me that these things come from the top-down and not from the bottom-up.   Someone puts the idea out there and others take it up. "Yea, the word "midget" is an insult!  I want to be called a little person!" and so MG has to rename their car the "MG Little Person" in order to sell in the States.

The fact is, I doubt there was ever such a vote, but in fact, these things spread virally.  And today, with social media, even the smallest "movement" can gain a lot of attention, in a very short period of time.   And so today, there is this mythology that a huge number of people are demanding we invent new pronouns for them, or that all of us use gender-neutral pronouns - such as "they" - lest we offend someone's sensibilities.   Because as we all know, having our sensibilities offended is worse that having third-degree burns over 90% of your body.  Those lucky burn victims - they don't feel a thing!  But we cry every time our feelings are hurt.    You don't know how hard I have it!

Most of these "movements" however are limited to college campuses.

So what is the solution to all of this?   I am not sure, but blind hatred, prejudice, and racism are not the answer.   And so far, that seems to be the only answer the far-right has to offer.   This in turn bootstraps the Left, and nothing changes.

Changing the names of things has been proven to accomplish nothing.  The whole "African-American" thing turned out to do absolutely nothing.   And in fact, the "BLM" movement explicitly rejected that moniker in favor of "Black".   And I for one am glad that Black is back, because, baby, Black is beautiful and it is not an insult or a slur, but merely a color of the rainbow - a color we should embrace and not be ashamed of.

We need to stop re-arranging the deck chairs on the Titanic with these name games.  They accomplish nothing while at the same time appearing to accomplish things while at the same time, blocking real accomplishment.   Because when you shame people for not being "PC" all you do is drive them into a corner.  And cornered animals are always dangerous.

But then again, our friends at the Russian Internet Research Agency are well aware of this - and are playing us like a cheap violin.


UPDATE:  The big problem with PC and identity politics is that the groups we are lumped into are not homogeneous.   For example, we tend to lump all Spanish-speaking people into groups like "Latin" or "Hispanic" when in fact they are a collection of discrete individuals.   Folks from Cuba and Puerto Rico are more Caribbean than Latin American, and even among Latin American countries, there are contested rivalries.   And within countries, well skin color raises its ugly head as I have noted before.   If asked, everyone from Panama to Mexico is of 100% Spanish heritage, because discrimination based on skin color is still a thing there.  Ask you lawn guy why he wears a white scarf over his face when mowing your lawn on a sunny day - it isn't skin cancer concerns, but skin color.

And so on down the line.   We can't be pigeon-holed based on color, race, sexual orientation, or whatever, because we all have different opinions on things.   Democrats are courting the "Hispanic Vote" but are also pro-choice.   But many Hispanics are devout Catholics - you can't just assume they will all vote the same way.  This entire DACA thing is, of course, an attempt to pander to what they perceive as a voting block.

Both parties are guilty of this, of course - viewing us as blocks of voters rather than individuals with opinions.   So they toss each block they think they can snag, some sort of political bone, often at odds with what they promised another group.   Republicans, for example, promise "Free Trade" in the boardroom, but "Fair Trade" on the factory floor.

Maybe the parties should  actually stand for something other than strategies to get elected?

We Don't Get Fooled Again! (The Art of the Deal)

The Democrats got utterly fucked in the shutdown.  Will they go back the well of abuse one more time?  You can bank on it.

A weird thing is happening in Washington.  President Trump is turning out to be a better negotiator than anyone expected.  But in Washington, trust is a currency than can quickly devaluate, and whether the Democrats are ready to put their hand on the hot stove once again, is anyone's guess.

Oh, right, Democrats.  They think Oprah is Presidential timber and Bradley Manning is ready for the august body of the Senate - after all, a criminal conviction is all you need in the way of credentials, right?

Oh boy.   Will it be the year 2100 before the Democratic party gets it's shit together?   Perhaps.

Trump lured the Democrats into a corner and then stomped on them.  And now he is holding out bait - the DACA act - in return for the Trump wall, new restrictions on immigration, and God knows what else.   And of course, the far-right will never sign on to the DACA act, so Trump has cover - "they made me do it!" he can cry.

But the Democrats are foolish if they even bother to negotiate on this.   They will only end up approving the billion-dollar wall, without getting much in return, other than postcards from deported "dreamers" from their new homes.

Trump has truly played them this time.   The question remains, how many times the Democrats will go back to the well of abuse.

Fool me one time, shame on you.   Fool me a second time, shame on me!

Let The Trade Wars Begin!

I was ambivalent about buying these fancy washing machines.   Now that they cost 50% more, I may just take a pass.

We are still working on the new laundry room, and I may make a video of the effort.   One thing I have had trepidation about is getting a new washer and dryer.   It seemed that since our existing machines are about 12 years old, and near the end of their design life, it might be a good idea to replace them while we overhauled the plumbing and be done with it - donating the old machines to a charity one of our island Police officers runs.

We thought about replacing them eventually with the same kind of top-loader washer and front-loading dryer - you know the cheap kind that you used to be able to buy from GE for $250.  Today, they are made by Roper, don't have great reviews, and cost $299.  Most other "top-loaders" are over $400 now and some are pushing $500.   Meanwhile the front-loaders are dropping in price to the mid-$500's, making them at least more affordable, if not a pain-in-the-ass with special laundry soap.

But now that Trump has slapped an astounding 50% duty on these washers, they may just be priced out of my reach.   Or maybe I should buy one this afternoon, before they raise the prices.  Which?

"But Bob!  You could buy an American-Made Whirlpool and avoid the tariff!"   That may be true, but likely not.  When Obama slapped a hefty duty on Chinese-made tires, US companies didn't take market share away from them - they merely raised prices themselves, and suddenly overnight, tires were pricey.   And when you need tires, well, you can't just wait for the tariff to go away in a few years.

The problem is, of course, that tariffs don't solve anything, and at this point in time, could be disastrous.  They are not "saving jobs" as American manufacturers will just raise prices to the level of the Korean-made products with tariffs - creating nothing more than a windfall profit for Whirlpool and others.   The Koreans might build a factory here - much as Hyundai/KIA has in Georgia to assemble high-margin SUVs (while low-margin compacts remain imported), but don't expect that to create a lot of jobs - or high-paying jobs.   Likely they would locate in the South where Unions are not popular.  Hey, $15 an hour is a king's ransom in Alabama!

And we're not talking about a lot of jobs here - the entire appliance industry might employ a few thousand at most.   And we are in an era of ultra-low unemployment.   All this trade-war nonsense will do with regard to jobs is drive up the cost of labor, which in turn will lead to more inflation - wipe out the windfall profits Whirlpool might make and wipe out any gains for labor, as their cost of living will be higher.   When your $1000 washer is now $1500, I am not sure a few dollars raise puts you in the driver's seat.

We saw this in the 1970's.   The UAW went out on strike in 1972 and got huge wage concessions.   The cost of labor went up, and the price of cars went up.   The auto workers really didn't come out ahead, as their inflated wages drove up prices, and their cost of living ratcheted up to erase any gains they made.   And then the plants started closing and everyone lost their jobs.   And eventually - decades later - these inflated costs bankrupted GM and Chrysler.   The Union won a Pyrrhic victory only.

The funny thing is, many Republicans - the traditional kind - have spoken out against Trump's trade war - pointing out correctly that this will not end well.   But the really funny thing is, if you go back a few more decades, the really traditional Republicans, like from the Teddy Roosevelt/Howard Taft era stood for "God, Country and the Tariff!"

Yes, you read that right.  The "Free Trade" Republicans of today were the trade-war Republicans of yesteryear - a trend that dates to the early days of our republic when Northern manufacturing interests wanted protection from foreign imports, so they would not have to compete with the efficient and well-established factories of England.   The British were importing our cotton and exporting finished goods - and Southerners (Democrats all) enjoyed swapping their bales of cotton for British manufactured goods.

Of course today, Southerners are largely Republican and Democrats represent - or used to represent - the Union laborers of the North.   But a funny thing happened in 100 years - more and more factories are opening up in the South, without unions, and the North has become the rustbelt.   Donald Trump promises "jobs" to the few folks left in the North - hanging on and hoping the big-buck union jobs will come back, so they can pay their sky-high property taxes, so the local DPW can buy over-priced snow plow bolts from the local Mafia-linked supplier.

But the jobs ain't a-coming back.   The factories today are more automated than ever.   Watch some youtube videos of auto factories back in the day, and you see dozens of people standing around, many of them apparently with their hands in their pockets.   The paint booth at AMC needed a dozen people to paint a 1972 Gremlin.   Today, one guy with a clipboard pushes a button and the car moves into the sealed paint booth on a robotic platform, and three painting arms apply the precise amount of paint to each area of the car in exactly the same manner each time.  No runs, no drips, no errors!

Republicans changed their mind on the Tariff and got behind Free Trade because industry - which they represent - wanted it that way.   Free trade meant that companies could buy parts cheaply overseas - or outsource entire products overseas - and also sell their products overseas without trade barriers.   In theory, it is a great idea.  In practice, it doesn't work out so well, if you were one of those forklift drivers I knew back in 1979 who was making a whopping $42,000 a year at GM - more than many Doctors made at the time (and more than many lawyers make today!).

Overall, Free Trade has worked out well.   Yes, wages are depressed as a result.  But yes also, those depressed wages buy a whole lot more than they did in the hyper-inflationary era when wages ratcheted up barely a half-step ahead of prices.   Getting a 10% "raise" means nothing when inflation is running 10% per annum.   One problem with Free Trade is that other countries have different labor and environmental standards, which often means we are exporting sweatshop labor and hazardous waste dumping.   By moving "messy" industries to third world countries, we are making our country cleaner, at the expense of the health and welfare of people in developing countries.

Fair Trade might be a better approach - allowing tariff-free "free trade" between countries of similar social, political, and environmental values.     Allowing free trade with a third-world country might only exasperate their existing problems.   Although the opposite might also be true.   Since we have opened the doors to Chinese imports, the economy of China has taken off.   We talk about maybe getting 3-4% growth rate as though it were the holy grail, while China tries to keep its growth down to under 7% if possible, so their economy doesn't overheat.

Eventually, however, these things do reach an equilibrium.   As manufacturing and exporting grow in China, demand for labor rises.  Wages go up.  Domestic demand for products (such as cars) skyrocket.  Demand for labor rises even more.   The cost of manufacturing increases further.   It is already getting to the point where many manufacturers are wondering whether it is worthwhile to manufacture in China, given the low wages and low energy costs available in the US - as well as the cost of shipping things halfway across the globe.   As a result, many companies are relocating manufacturing to the US - in non-Union factories, of course.

All that could change, however, if labor rates ratchet up and inflation takes off.   The "living wage" of $15 sounds fine and all, until it means companies cut back on workers.   And of course, today, it may turn out to be a cruel joke anyway, as the high demand for labor has meant that many companies are paying more than that just to attract unskilled workers!

So this means a "win" for a few selected companies - but Republicans are not in the business of picking winners and donchuforgetit!   And I am sure that Whirlpool executives, when they come to visit Washington DC to lobby for their cause, always stay at the Trump Hotel.   I wonder what else they do to get the President's ear.

Tariffs and Trade wars were one factor recognized as causing the crash of 1929, as world markets and world trade basically shut down.  And that one event was probably the turning point in the GOP's move from "God, Country, and the Tariff" to "God, Country, and Free Trade."

But apparently Trump didn't get the memo.   But as a reader notes (and many others echo) Trump really isn't a Republican, which is one reason why many Republicans in Congress secretly are hoping the Democrats can impeach him, so they have a nice, reliable Republican President Pence.

In the meantime, either I buy a washer tomorrow, or keep using my old ones for another five years....

Why Banks Don't Want Your Business, Part II

Citibank doesn't really want your business if all you have in your account is $17.
By the way, why does SNL get away with these racist videos?   Is is OK for black performers to perpetuate black stereotypes still?

Bank of America is at it again - culling its customer base through the use of a new minimum monthly fee.  There are two uses for account fees, one is to drain dormant accounts, and the other is to chase away low-value customers.  I have written about both before.

Dormant accounts are a pain-in-the-ass for banks.   My friend at the Credit Union told me they had hundreds, if not thousands of such accounts, dating back decades.   People come and go and often leave behind accounts with small amounts of money - less than $100 in most cases - which the credit union has to maintain.   Back then, it meant sending out monthly statements by mail, which incurred printing and postage costs.  And of course, most statements were returned, "Addressee moved, no forwarding address on file" or some such notation.

The legal costs of closing such accounts could run into the thousands of dollars - each.   They would have to publish notices in the paper, and in some cases go to court.   And that in addition to all the time and effort on the part of the staff.

A small monthly fee - say $5 to $10 for accounts with a balance under a certain limit, would slowly drain those accounts dry and close them, automatically over time, and cost the bank little or nothing - and free up that money in the form of income.   Similar fees are assigned for "dormant accounts" and I have been charged them in the past when I let money sit in my account for too long without using it.   Usually, they reverse the fee once you explain that you aren't dead and haven't moved away.

But dormant accounts are small potatoes compared to marginal customers.   Free checking wasn't always free in this country, and in fact is a leftover artifact from the high-interest-rate late 1970's, when banks clamored for your deposits because the interest they earned was so lucrative - on the order of 10% or more.

At first, banks required a minimum deposit - $250 or more, for example.   But the competition heated up, and eventually, banks offered free checking - and sometimes free checks - if you opened an account and maintained any balance.

Well, that worked in an era of 10% interest.  But in the last decade, interest rates have been fractional, so banks make little money on deposits from customers.   And yet the costs of maintaining a checking account for a customer remain - particularly if the customer wants mailed printed statements and wants to use teller services - as so many older customers and poorer customers are inclined to do.

When we first moved to Georgia, I still went to the bank in person to deposit checks from clients, and it was interesting to me to see who was in the bank.   Most middle-class people had jobs that had direct deposit, so they were not in line.   And middle-class people used checks or credit cards, or if they needed cash (which increasingly they didn't) they used an ATM.   So the folks in line at the bank were mostly poor folks, depositing checks from low-wage jobs, and taking $20 out of their savings account.  The bank wasn't making money on these folks.

And eventually, my clients one by one went to electronic payment methods, and I had fewer and fewer checks to deposit.  And of course, today, we can deposit checks over the phone, so even the few checks we get require no trip to the bank.   The bank closed that branch about three years ago.  It was expensive real estate and there weren't that many customers at that branch, and the few they had were not doing large or profitable transactions.

Now of course, some folks are outraged by this.   The bank should provide free checking for everyone!   They are running a public service!   But they aren't.   They are running a business, and businesses have to show a profit, or they go bankrupt.  Whats more they have to not only show a profit, but a respectable profit - more money than you'd make in a savings account - or there is no point in running the business.   And over the last decade, Bank of America has made minimal profits until recently, as it dug its way out of the financial mistake of buying Countrywide Mortgage.

So, Bank of America - and other large banks - are chasing away the unprofitable customers and concentrating on the profitable ones.   If you ran the bank, you'd do the same thing.   Of course, this business strategy could backfire - today's unprofitable customer could become tomorrow's profitable one.   People grow up and make more money, and often bank brand loyalty is made early on and may last a lifetime.

Now, some of you might cry out, "Well, you don't know what it's like to be poor!  You've probably never bounced a check!" and that sort of talk pisses me off.   How do you know how I've lived?  As I have noted several times in this blog, from age 18 until nearly 28, I was pretty much a slacker - drinking beer and smoking pot and bouncing checks all over the place.   I was the kind of banking customer Bank of America - or indeed any bank - didn't want.

At that early age, I viewed a dollar in the bank as a dollar to be spent.  "Give me my $17 bitch!" is a refrain I might have actually said back then.   We used to do stupid things like go down to the local convenience store and buy beer, cashing a check in the process - for more money than we had in our account.   We'd go out and buy pot and have a good time and on Monday or Tuesday, I'd get a call from the bank.   At first, they were pleasant about it - offering to waive fees if I made a deposit.   But over time, they realized I was causing them more trouble than I was worth - even with the bounce fees.  I was not a good customer.

Even as I got older, I kept very little money in the bank - which irked the bank.   When the teller pulls up your account and sees nothing in it, they feel validated if they are rude to you.   On the other hand, if your account balance is in the five figures or more, well, they know that if you complain to their manager, there will be hell to pay.  I had an account at Riggs Bank in Washington, DC, and they treated me like a criminal every time I went in there.   Of course, the joke is on them - turns out they were actual criminals, laundering money for Pinochet and the 9/11 hijackers.   They are no longer in business.

Bank of America has taken a shit on me from time to time, most notably freezing my account while I was out of the country because of some computer spitting out a "background check" to determine what I did for a living and what my citizenship was.   It took only a phone call to clear it up, but making that phone call was tough, particularly since the division of the bank that froze the account mailed me a letter and I was at Lake Louise at the time.   After several days of frustration, I was finally able to get someone on the phone who gave me the direct number for their "account security" department or some such nonsense.

So yea, even if you have money in the bank, they still shit on you.  Welcome to the club.

As a customer of the bank, you have to make an informed decision as to whether the bank is right for your needs or not.   If I was being charged a monthly service fee, I would close my accounts with BoA, and in the past, they have tried to do just that.   The first time, they wanted a $5 a month fee for checking, but a helpful telephone agent told me that if I deposited $25 a month into savings, the fee was waived - even if I took the money right out again!  It was a simple matter to set this up for automatic deduction, and indeed, even today, my account is debited $25 every month to go into savings (I'm not taking any chances!).

They they wanted a $7.50 fee for using the teller - but again helpfully told me on the phone that if I agreed not to use the teller, they would waive this fee for an "electronic" account using the ATM only for deposits and withdrawals.   Since the ATM was easier to use and faster than the teller, I agreed.  The only fly in the ointment was when the guy managing my condo deposited the rent check into my account at the teller - triggering that fee on two occasions (since then, he has switched to electronic deposit as well).

I still run into old people who tell me they like to get paper statements in the mail and "look at them" once a month to "balance their account".  I think this is very dangerous for a number of reasons.  First of all, if something does go awry with your account, it could be thirty days before you notice the problem.  With credit card theft, this could mean dozens of charges to your card.  Since we have online banking - even over your phone - you can check your balance daily and reconcile it with your own accounting (I use Quickbooks 2002).  I do this daily and it was the first step in getting my financial house in order - to treat my personal accounts like I did my business accounts, by logging and monitoring every expense.

The second thing, of course, is that your mail can be intercepted or stolen, so you might not get a statement - but a thief would.   That alone isn't enough to have your identity stolen, but it might be an additional piece of information they need to do so.   It just isn't worth it.

The other thing to consider is that with Check-21, any check you write is just writing down a request for an electronic transfer.   You could just as easily put down your bank routing and account numbers and the amount on a post-it note and use that to transfer money.   Someone enters the data and then debits your account.   It is scary how little information is needed to drain your account - but again, another reason to check your balance daily.

And that right there is the key to having a happy, healthy relationship with your bank.  When I was poor, I was poor because I did poor things - like smoke pot and bounce checks.  Every month, I was $20 poorer because of a bounced-check charge - if not more.  And not only that, I wasted money on stupid things and didn't keep track of my finances.

"But Bob!  Poor people can't help it!   They are not financially literate!"  And there is a grain of truth to that - it is poor behavior that often makes us poor, or at least keeps us poor, or at least makes us poorer than we should be.   The man living on minimum wage who isn't bouncing checks and biting on raw financial deals is doing far better than his friend at the same job who is constantly going to check-cashing stores and getting payday loans.   The poor don't have a lot of money to begin with, but what little they have is quickly frittered away on raw financial deals.

If you are just starting out or struggling, and Bank of America has sent you this notice of a $12 fee, I would move my business elsewhere - to a Credit Union, for example.  But Credit Unions are not going to tolerate bounced checks, either.  So maybe this is a good time to get your financial house in order.   If you are bouncing checks or overdrawing your account on a regular basis, consider the cost of this and how much money that would equate in savings.   If you are paying ATM fees or monthly banking fees (or pre-paid debit card fees, etc.) think about how much this would add up over time in your savings account - hundreds of dollars a year.

Sadly, most poor folks don't think about this, which is why Wal-Mart and others make so much money off the unbanked - through prepaid debit card fees and the like.

For now, I am sticking with Bank of America as I don't have to pay a monthly fee, they have branches and ATMs all over the place (although branches are closing more and more) - other than the State of Vermont (no doubt, Comrade Sanders is to blame for that! - they probably charged him a bounce fee once).  They also offer decent interest rates, a rewards card, and free trades online.   But that sort of thing only happens once you have money and the snowball effect kicks in.