Paper Millionaries

 

Are our houses worth more than their weight in gold?  I don't think so.

I logged on to my bank account today and just for laughs, clicked on their "net worth calculator."  It is an interesting thing to look at, but in recent months, kind of useless, as the market value calculated for my home (by Zillow) is off the charts crazy.   According to Zillow, my house is now worth twice what it was three years ago.  And that's not plausible.

Across the country, housing prices are taking a breather in many markets.  In the "hot" markets, prices are still high, but I think that is only because reality has yet to set in. We are in one of those markets.  And it is frustrating, trying to explain to people that this is a bubble - but they don't want to hear it.  I feel like that guy on the Titanic, saying, "the ship is sinking!" while passengers shout back, "Balderdash!  The lights are still on and the champagne is cold! We'll be underway in no time!"

Similarly, back in 2005, I called the bubble as being ready to burst.  But it took another three years - until 2008/9 for it to finally fail.  Funny-money mortgages kept the game going for a few years more. Instead of people pulling back and saying, "That house is over-priced!" they decided instead to use a payment-optional balloon note which was predicated on housing prices going up and up indefinitely.

They didn't.  And many a millionaire-on-paper fell back to earth.  Many declared bankruptcy.  When property values skyrocket, people who own property feel "rich" and at least on paper, some are.  Others "cash out" this phantom equity with home equity loans or refinancing and then spend the money on things like credit card bills and cars.  It is akin to financing the hamburger you shat out last week or the car that will be sold in three years, over a 30-year period.

And a lot of people did just that.  I did - on a smaller scale, of course.  But over time, I had to sell off properties and eventually, downsized to just one, which, once again, is skyrocketing in value.  This time around, however, I don't feel "rich" because I know the score. And what's worse is I have a premonition that when this blows, it will be worse than 2008, just as 2008 was far worse than 1989.  It is an unstable pattern that is getting progressively wilder in its swings with each iteration.  On the upside, homeowners spend spectacular amounts of money on housing.  On the downside, investors snap up the houses for pennies on the dollar.  With each iteration, the rich get richer and the poor get poorer.

And right now - this very minute - someone out there is saying to themselves, "Well, housing prices are crazy, but I'd better buy now before I'm priced out of the market forever!"  That latter phrase was told to him by a real estate agent, and it is a phrase I heard in 1989 and again in 2008.   For some reason, people never seem to get "priced out of the market forever!" but instead end up in foreclosure when they overpay for a house.

The price tag on a house is only a part of the cost.  In addition to the monthly Principle and Interest (P&I) are the increasingly staggering property taxes and insurance payments - as well as a host of ancillary fees, such as a fire fee, trash fee, water, sewer, electric, and gas.  These other fees can sometimes exceed the mortgage payment.  And as we saw in Florida in the 2000's, the property taxes are "reset" a year after you bought, based on the overblown price you paid for the property.  So you buy a house with a $2500 annual property tax and pay $800,000 for it.  The next year, your taxes are $7000 as the price you paid is now the "fair market value" for your home, even if you homestead it (and if you don't, well, it just keeps going up).

And let's not even talk about maintenance.  Condo owners (such as here on the island) are shocked to discover they owe $50,000 "special assessments" when balconies started to fall off (as also recently happened to an older hotel here as well).  Homeowners are discovering that a new roof can cost tens of thousands of dollars to install.  And appliances that once sold for hundreds are now asking for thousands - and often for a basic, no-frills appliance!

A friend of ours is renting a house from the church.  It was a "thing" back in the day that old widows would leave their house to the church, to be used as a parsonage or something.  But since church attendance is dwindling, the parson comes here part-time, often on an off day or after doing services on a mainland church.  So the donated house is either used as a party hut (as the Baptists do) or is rented out to offset the maintenance and utility costs of the church building.

For years, such houses rented out for $1500 to $2000 a month here on the island.  If they weren't on the beach, they were not considered desirable as vacation rentals.  Some "winter residents" would rent a house year-round and occupy it for less than six months!  It was cheap living on what was then, "Georgia's abandoned island" as I called it.  Well, we've been discovered, and a new generation of 50-somethings with bags of money are moving here - often paying cash for houses and then gutting them to rebuild.  It is a major paradigm shift, to be sure.

So my friend faces the first of several rent hikes.  She has been renting for below market value for years, and the church isn't really making any money on it.  The property taxes are going up (it is not exempt from taxes as it is not a place of worship and thus subject to the UBIT).  But a new roof one year, and new appliances the next and, well, you have an operating loss for several years in a row.  What's more, if the church needs a new roof and the rental property is now worth crazy dollars, do you ask parishioners for money for a new roof, or do you sell the house you have that is losing money every year, and pay for church maintenance?

Fortunately, my friend found a reasonably-priced house to buy on the mainland, for less than the cost of monthly rent.  It was also a chance to downsize, which as you get older, starts to make more and more sense.  You want to enjoy your final decades on the planet and not spend them doing home maintenance.   And of course, living on an island where it takes a half-hour just to get to the mainland, gets tiring.  She now lives across the street from a grocery store.  Gee, I may move there myself.

But even with the rent hikes on her old home, it was still cheaper to rent that house than to own it.  According to Zillow, the house is worth a cool $800,000 and even with an $80,000 (!!) down payment, the Principle and Interest at 6% would be over $4200.   Add in another $1000 a month for utilities, taxes, and insurance (not counting maintenance!) and you can see, the house is far cheaper to rent, even at $3000 a month or more.

The people buying these houses and then throwing another $200,000 in remodeling expenses must be confident they will be million-dollar homes someday.  And maybe they will, someday, if they are not wiped off the face of the Earth by a hurricane in the meantime.

So we see a pattern here - one that I saw back in 2005 in Ft. Lauderdale.  It was far cheaper to rent than it was to buy.  You had to invest in the "greater fool theory" - that down the road, some idiot even dumber than you will pay even more for the house.  It is the same theory used to sell gold, crypto, and "stonks" - enriching a few, and impoverishing the many.

So, could this bubble go on for years? Or is it ready to burst?  The article cited above noted that many houses in "hot" markets like California are dropping in value.  Oakland has seen drops of 16% or $174,500.  Think about that - if 16% of the average housing price is $174,500, then the average housing price was over a million bucks.  No wonder people are coming to our island and thinking housing prices are "cheap" and paying cash!

But that is a mistake I made twice in my lifetime.  When we left Alexandria - with a wad of cash, as we had been "bought out" by a developer who paid twice market value just for our lots - we decided to buy a house in the Finger Lakes, where land was cheaper, as I was "working from home" two decades before it became fashionable.   Funny thing, the local real estate agents saw us coming, and knew we would think houses were "cheap" in the area.  We probably overpaid for that house, but we enjoyed it for nearly a decade.  Today it is finally worth a lot more - but the property taxes are well into the five figures.

Similarly, when we moved to Jekyll back in 2006, we probably overpaid for this house.  And the neighbors scratched there heads (as I am today) wondering who these "new people" were and why they paid so much for a freaking house.  We were probably even-Steven for the first decade we owned here.  It has only been in the last few years that prices have gone up - in the last three, dramatically.

So, having ridden this roller-coaster several times now - and gotten off at the top and the bottom. I don't get exuberant when prices are up, up, up - but rather, I get nervous.  You can't create wealth from thin air, without work.  So it is nice to see paper millions, but don't confuse them with real wealth.

Right now, there are few properties on the market, and prices are staying high.  But the few on the market have been lingering longer and longer - months instead of weeks.  Seems like there are fewer showings and fewer buyers.  The shortage of listings is propping up prices.  People like me who have been here are reluctant to sell, as where would we go?  Since other properties are over-priced, nationwide, we would be just trading one over-priced property for another - and restarting our homestead exemption at a higher number.  We are sort of trapped in the house - particularly when I turn 66 and my property taxes will drop by 2/3 (unless they repeal the law, as they are talking about).

Unless you can downsize to a cheaper neighborhood, or go back to renting, you can't "cash out" of your own home, until you die.   It take courage and foresight to say, "This bubble will burst on such-and-such a date, I'll sell now and rent for a year and then buy it back for half price!"   Like I said, I thought the last one would burst in 2005, but it went on until 2008.  And sometimes, you call it too late, and then you are screwed.  Timing markets is hard to do, except in retrospect.  And it is often more a factor of luck than skill.

So, unless I was willing to live in my RV for a year, it isn't a great idea.  Compounding this is how people get attached to houses and want to have their "things" with them.   I have another friend who moves quite frequently, often making money on each strategic move, much to the dismay of his wife.  "We're moving again?" she says.  "I've got a great deal lined up on a house across the country - we can re-hab it and flip in three years and make money, tax-free!"  And so far, he's done well, but like with musical chairs, you want to be sitting down when the music stops.

And in 2008, there weren't many chairs left.  My friend's last house was in California.  Ouch.  But I am guessing that even with the prices dropping there, he still made out (and for all I know, he already sold at the peak!).

Anyway, despite what Zillow says, I don't feel "rich" because they say my house is worth a lot of dough.  I still need to pay the taxes and the insurance and maybe next year it will need a new roof and the appliances are 18 years old.  It is just a thing - a machine for living that needs a lot of care and costs a lot to maintain.

After owning nine properties, well, I don't get so excited about Real Estate anymore.  Sure, I made money on almost all of them (damn you, New York!) but on the other hand, I spent a lot of money maintaining them.  It all ends up being a wash - if you're lucky.  If not, it gets even more expensive!

That right there is why the IRS doesn't tax Capital Gains on most personal residences.  Houses are simply not money-makers - if you live in them.

UPDATE:  When housing prices crash, the most over-valued homes crash first.   So the mini-mansion takes a big hit, as in a recessionary economy, no one wants a maintenance and utility bill and property tax nightmare, particularly if it is older and everything needs replacing or soon will.

Condos also take a hit as they tend to rise even faster than houses.  As houses become "unaffordable" real estate agents push buyers to condos and townhouses, which they argue are a bargain at 2/3rds the price of a free-standing home.  However, with special assessments and skyrocketing condo fees, the value of a condo can fluctuate far more than free-standing real estate.

Vacation homes are also subject to wild swings.  When the shit hits the fan, the first thing on the chopping block are luxury items.  We have folks still working, buying houses here on the island and staying in them one weekend a month.  It would be cheaper to stay in the Presidential Suite at the Club Hotel.   If one of the couple loses their job, the vacation home will go on the market - they can't afford to even visit there, and they are struggling to make payments on their primary residence as it is.

So while our market is running-on compared to the rest of the country, it will likely crash harder when the time comes.

Small, free-standing homes in places where taxes aren't too high and there is steady work to be found, probably won't fluctuate in price - as much.

Just my experience, as a homeowner since 1982.

Maintaining Mental Hygiene - The Company You Keep!

Mental hygiene is like personal hygiene - you have to work at it!

Crazy is the new sane.  You see it all over, particularly with a famous ex-President who TYPES IN ALL CAPS. that "Mutants" are after him. The Zombie apocalypse is upon us! Worse yet, there are literally hundreds of people who believe in his bullshit.  Well, maybe more than hundreds, like I said, crazy is the new sane.

So, how do we keep your sanity in this crazy world we live in?  Well, one has to, first, not be crazy - which is harder to do these days in the world of social media, 24-hour news, and wild conspiracy theories online.  So many people start out sane and then drive themselves insane by obsessing about the "news" and politics, or by believing in stupid nonsense like conspiracy theories and bigfoot.

And let me be clear about this: If you believe in conspiracy theories, you are, by definition, insane.  Seek medical help.  But one way to help yourself is to realize there is no personal profit to you by believing in conspiracy theories or raging about politics, so just let it go.  You go down the rabbit-hole of the Internet, you will end up a Qanonsense believer or a Bride of ISIS and be very, very unhappy and very, very insane.  And there are no insane happy people.  Maybe that is the definition of insanity - perpetual unhappiness.

If you have your shit half together and are a happy-go-lucky kind of person, you will find that crazy people are attracted to you like a magnet - and stick like Velcro.  Why is this?  Well, the crazy person can't get their shit together and being around happy, normal people makes them happy.  And the normal person is likely to be kind and decent and try to "help" the crazy person - which works out great for crazy, as they get something out of the relationship.

But hanging out with crazy people isn't good for your mental health - and it may cause strain on your marriage as well.  Worst case scenario?   They might drive you crazy as well.

We are all susceptible to suggestion and influence - whether we like to admit it or not.  We get our normative cues from our surroundings.  So if you grew up Catholic, you are likely to be Catholic - not because it is something you came to by yourself, but were indoctrinated into since birth. But no Catholic will ever admit to that.  And I am not taking a piss on the Catholic church, just using it as an example.  Other religions and belief systems work the same way.

You grow up redneck, you are going to be redneck. You hang out with people who believe in Poverty Stories, for example, you tend to start to believe them as well.  You are the company you keep and you should choose your friends wisely.

I see all the time, online, complaints from young people who whine that they don't have any friends or that they want to be like the "popular" kids.  Two things to consider here.  First, sometimes having fewer friends is a blessing, particularly when friends are crazy or not fun to be around.  Second, if you are really that ostracized, maybe it is time to look inwardly and figure out if maybe you are the crazy friend no one wants to hang out with.  Complaining about having no friends is one "tell" in this instance.

We all suffer from some form of social anxiety - some are just better at handling it than others.  There is this pressure when you are with people - pressure to be nice and not piss others off, at least if you are a decent person, that is.  Others are less concerned.

When the thought of spending time or visiting certain people fills you with anxiety, maybe the problem isn't you - it's them.  And it might not be that they are evil people, only that you just don't care for them.  People are like flavors of ice cream - some you like, some you tolerate, and others you spit out.  No sense torturing yourself ordering unflavored ice milk - unless that's your thing.

Passive-aggressive people can also drive you nuts.  Funny thing, though, they will be the first to dump you, once you establish boundaries and make it clear you are not going to put up with their nonsense.  Often, this is a blessing in disguise.

All you need is one good friend, and failing that, being your own best friend.  Yet I see "memes" online about how people hate themselves and are depressed all the time.  I know people who have gone through life for 70 years this way - and will go to their graves sad and miserable and lonely, only because they are convinced that "everything is bad" and "nothing is good" even if they are sitting on a pile of money and have everything they could want out of life.

I know multiple people who own two or three houses - paid for! - who regale me with how awful they have it and how their house is no good.  "Why not sell it and buy a house you like?" I say.  They don't reply - they give you that look your dog gives you when you hide the ball - along with a Scooby-doo "huh?"

"What do you mean change my life and be happy?" they say.  And when they do change their life, they don't sit down and figure out what it is they want and research that and figure out how to obtain it.  No, they lurch from one impulse to another - never, ever, happy, because you aren't suppose to be happy for some reason.  I don't get it - must be a scarred childhood or bad genes or something.

As I wind down the last 20 years or so of my life, I am a little scared of what is to come, but content with what I have.  I am happy, but even better, content, as happiness all the time is not necessarily a normal thing for humans, but overall contentment is a far more rewarding thing.  Seeking out "happiness" and then being miserable when it doesn't occur 24/7 is a sure way to be miserable.

Life is really, really short, and to go though it miserable - expecting happiness or contentment "later" or "some day" is just dumb.  I see people all the time on Old People Island, going to their graves, miserable as hell, and miserable their whole lives.  You talk to them (when they were alive, of course) and they have a litany of grievances about life, the government, the restaurant they went to - and so on and so forth.

It's obscene.  They are overpaid, over-fed, and over-stimulated and still unhappy.  You talk to a 20-something who is struggling to pay the rent and has given up on the idea of home ownership - and yet they are still cautiously optimistic.  Then you talk to a 65-year-old who has a paid-for house, a pension, and is collecting Social Security, and to hear them tell it, they got a raw deal.

Maybe they should trade places with the 20-something.  Or trade places with the elderly people I see working at low-wage jobs just to get by, as they fail to save for retirement.  They have it hard.

You can make yourself miserable if you choose to do so.  But it is a choice.  They have anti-depressant drugs out there, if you can't manage depression by yourself.  But just wallowing in it and enjoying it in some weird way  - or thinking that being miserable all the time is some sort of more "authentic" way of living?

Sorry, no sale!  Go sell crazy somewhere else!

The Innocence of The Children (Not!)

Children are, by nature, greedy little bastards who would knife you in a dark alley.  Polite behavior is learned, not innate, I think! 

I was lurking on a teacher's discussion group and boy, howdy, it is a tough profession these days.  Parents feel entitled as all hell and view school as little more than a baby-sitting service.  Parents crowd school board meetings and cry foul because a teacher used colored construction paper, which might be construed as a "rainbow" - only white and grays from now on!  Worse yet, students see no compunction in assaulting each other or a teacher - and then making a video of it for Tick-Tock.

And of course, there is always bring your gun to school day.

This is nothing new, of course.  Some teachers grouse that it is the parents' fault for not teaching their kids right from wrong, so they act out and punch some other kid when he won't share a toy or whatever.

This may be true, because the innate nature of children is selfishness and violence.  The book, Lord of the Flies could be a documentary about child psychology.  And if you think about it, the childish behavior of children is a survival skill.

When birds lay eggs, the chicks hatch and then compete for food from Mom and Dad.  Puppies fight for a prime teat on Momma's tummy.  The runt of the litter is pushed out and has to scramble to obtain sufficient calories.  Often the Momma bird will push the weaker chick right out of the nest - no sense wasting precious resources on a fledgling that won't make it, anyway.

So children are innately selfish, self-centered, and general pains-in-the-ass.  They are all narcissists.  The mythology of children is that they are all sainted innocents and only learn to be evil through their exposure to our tainted world.  But for "society" teaching them bad things, they would all be sweet little angels.

Sorry, go sell crazy somewhere else.  My experience with kids (including myself and my peers growing up) has been the opposite - their parents have to instill morality and proper behavior into them.  If not, well, they run wild, that is, until they butt heads with society, which gives them the spanking they should have had, at age eight.

They are, basically, unfinished neural networks, and like any other neural network, what they "learn" may be diametrically opposed to what you taught them.  Billy the Bully pounds the crap out of Little Jimmy, and when the altercation is discovered, Billy plays the victim.  He is always so nice to Mrs. Beasley, the teacher - he can't be the trouble-maker here!  After all, he always says "Yes Ma'am" and "No Ma'am" and brings an apple for the teacher.  So off to the office for Little Jimmy, who gets detention - and the crap beat out of him later, by Billy.  What lesson does Jimmy get out of this?

I knew kids like this in school.  A friend of my brother's was always so polite and formal with parents and other adults.  But his shit-eating grin gave the game away - my Mother sensed he was "trouble" and he was.  He was always up to something, but never got caught - he made sure others took the rap for his antics.  He was like Eddie Haskell on Leave it to Beaver - and June wasn't fooled for a minute!

Kids are evil, period.

Of course, most change over time. They give up their selfish ways as they realize that in the long run, it isn't getting them anywhere, but instead chasing people away and causing them to miss out on greater opportunities.  There is a sizable group, however, that never gets this message.  We call them Sociopaths or some such - the greedy people of the world who would sell humanity down the drain for a nickel, provided they get to keep the nickel.

It is like these folks who are constantly defending Russia as some sort of Libertarian paradise.  We only find out later on they are being paid by Russia.  Selling out their own country for a few thousand dollars.  It makes no sense to you and me, but maybe because we realize that short-term gains mean long-term losses, not only for us personally, but for society at large.

As people get older, too, they become more invested in the system.  A 20-something "antifa" protester shouts "defund the police!" until his bicycle gets stolen, and then it is "put those lousy crooks in jail for life!"  It is funny how your priorities change as you get older and even a small investment in "the system" makes you more conservative.

And by the way, I am not kidding about this bicycle thing.  For some reason, young liberals are very open to the idea of letting everyone out of jail - even murderers and rapists.  But bicycle thieves? They should be hanged like cattle rustlers!   I guess that is too close to home for them.

But I digress.

What got me started on this?  I dunno - maybe one too many glurges online about "our little angels" by toxic Moms, who posit their little crotch goblins are somehow better than the rest of us - sweet and innocent and pure as the driven snow.  Also, I guess, this idea on teacher's forums that somehow the unruly children in their classrooms are unruly because they were taught bad things by their parents.  I think the opposite is true - children are, by nature, born selfish and evil and civilization has to be taught to them.

If you think about this, it is true.  Two-year-olds throw down a tantrum at the slightest provocation and will fight to the death over a toy they really don't even want to play with - only that another toddler has the toy and appears to be having fun.  It is only when an authority figure intervenes and exhorts them to "share" that they learn sweetness and light.  Otherwise, it ain't gonna happen.

Humans have to learn that actions have consequences and one failure of liberalism in the last 50 years is the flawed idea that somehow letting people "do their own thing" is a good idea, and that punishing criminals for criminal acts is a bad idea.  We no longer spank children, as we consider that child abuse - putting it on a par with beating a child into the hospital.   There are few options left in a parent's arsenal, other then sitting in the corner, or denying screen time.  Even these things are called out as abusive.

Much has been written about how we have the highest incarceration rate in the world - implying that we are too strict as a county.  But maybe the opposite is true.  Filtering out the stupid convictions for pot possession, I wonder if the remaining criminals in jail for burglary, assault, robbery, and other violent and property crimes are there because our justice system is, to some extent, too fair.

Think about it.  You go to Japan, you don't mess around with their legal system, which has a 99% conviction rate and a notoriously horrific prison system.   In Singapore, you can be caned for spitting on the sidewalk (Well, not really, but you get the idea).  Do you think you'd flout the laws in Singapore?  In America, more than half of all crimes - even murder - go unsolved, and even if "solved" half of the accused are not convicted.  And half of those convicted are given probation or suspended sentences.

Given all that, criminality isn't a bad option.  Maybe being selfish and stupid makes sense, in a weird way.

Maybe, but then again, probably not.  But maybe all the people in jail are there because they never learned civilization and being nice to other people.  And if you think about your typical criminal or gang member, this is often the case - these are not nice people who often view the rest of the citizenry as mere wallpaper - not real people, but something to be exploited for personal gain and profit.

Then again, maybe not.  In the era of highest crime rates in America (which is not today!) back in the 1970's, corporal punishment - at home or at school - was all the vogue.  In fact, many a career criminal came from an abusive home.  When you get the crap beaten out of you over nothing, I guess the only thing you learn is to hate humanity - or learned helplessness.

So, maybe all this touchy-feely crapola has resulted in the lower crime rates today.  Maybe, but I still don't think that means "let everyone out of jail, man!" is a good idea.  Once criminals find out there are no consequences for their actions, crime will increase - as it has in recent years.

Many States used to have "three strikes" laws which were enacted during the high-crime era of the 1970s.  You have people going in and out of the system, again and again, and after a while, it makes more sense just to leave them in.  They commit some crime, go to jail, and then get out and commit another crime.  They've become institutionalized and can't function in society anymore.  Or, they are just plain evil.  Locking them up for good was the easiest way to deal with them.

We decided to get rid of those laws, particularly after slanted articles appeared in the press, claiming that Joe Blow was "sent to jail for life!" for "stealing a loaf of bread to feed his family!"  But the reality is, Joe has a "rap sheet" a mile long, has spent more than 50% of his life behind bars, and while technically he did steal a loaf of bread, it was because he hijacked a bread truck at gunpoint.  And the "family?"  Just a bunch of fellow drug users.

Folks like that have declared war on society and basically have thrown down the gauntlet.  "OK, try to catch me, try to convict me, put me in jail even, I don't care - I'm just going to keep breaking the law!"  And such people exist, as we are seeing firsthand as "hooligans" invade an all-night convenience store, steal things, trash the place, and threaten the poor (and poorly paid) clerk and then record it all on their cell phones for imaginary Tick-Tock influencer points.

These are people who never grew up and were never instilled with any sense of empathy for the lives of others.  Other people are just wallpaper to them, and the only thing that matters in life is getting the most stuff with the least effort.  It is no different from the evil toddler who clocks a another kid in daycare over the head, just because he wants a toy the other one has.

So what's the point?  Beats me.  But this "innocence of children" meme is - and has always been - bullshit.

Civilization has to be taught, first at home, and then in school, and as a back-stop, by society and our criminal justice system, if necessary.  Actions have to have consequences and children have to learn this, as well as empathy for others.   The toddler who beats another child in order to get a toy doesn't put himself in the other child's position and realize what he is doing is blatantly unfair and selfish.   Sometimes punishment is the only way to make him see that, I think.

Another Day, Another Click-Bait Story

Don't believe everything you read in the newspapers.

A screaming headline announces every conservative's wet dream, Starbucks forced to pay $25M to manager fired for being white!  Finally, this racial equality thing turns around for the conservative side.  Take that, PC!  Take that, Woke!  Take that, BLM!   White folks have rights!

The startling amount seems staggering at first, unless you are a lawyer and realize, right off the bat, it is pretty specious.  Time was, juries could award staggering amounts of money, not for damages, but for "punitive damages" - in other words, amounts of money to punish wrongdoers so they wouldn't do it again!  It wasn't that the plaintiff was damaged by that amount or deserved that money, only that the jury wanted to "send a message" about an issue and get people (which includes corporations) to take notice.

It was a fun game for litigation attorneys - they would usually take half the proceeds as a result.  But a more conservative Supreme Court has put a damper on the deal.  Basically, any award of "punies" which are more than four times the actual damage amount is suspect, and anything over ten times, well, probably violates the 14th Amendment.

One of the cases involved a guy who bought a BMW that was damaged in transit.  The dealer repaired the damage and repainted the vehicle and when the owner found out, sued for damages and was awarded $4000 and a staggering $4M in punitives.  It made no sense and was an example of "litigation lottery" where wily lawyers would try to find a sympathetic jury and maybe win big - or not.  Of course, this spurred a lot of copycat litigation which clogged up our courts with trivial cases like this.

(Incidentally, such repairs are part and parcel of the car business.  A "brand-new" car may have been repaired at the factory, in transit, or at the dealership - and most probably are.  BMW's standard was that if repairs exceeded 3% of the car's value, it would be sold as used.  It seems like a reasonable standard.  We live near a car port, and we know a fellow who makes a living with "paintless dent repair" by taking out dings and nicks from brand-new cars that are damaged in transit (they are parked very close together in the ships and door dents are common).  Some car makers like Audi wrap their cars in blankets and put little plastic discs over the wheels.  For their lesser Volkswagens, no such protection is available.  I guess the upper-crust buyer demands more perfection - but then again, after 100 miles, you'll have rock chips anyway.  Expecting a car to be "perfect" is just stupid.)

Note that in most foreign countries, you do not have the right to a jury trial for civil matters.  The US Constitution wasn't clear on this and the Supreme Court, in an early decision basically punted and said since the Constitution was not specific on the matter, civil trials must also be included in the right to a jury trial.

Even before these cases, though, spectacular punitive awards were routinely reduced on appeal - or cases were settled, post-verdict, for lesser amounts, as litigating attorneys knew their large awards would be whittled down.  Moreover, they didn't want to go to the trouble of appealing the case anyway.

So, for example, the famous McDonald's Cup 'o Coffee Case was reduced on appeal, and eventually settled for a mere $600,000.  Still an expensive cup of coffee, but then again, skin grafts on your vagina are no Swiss picnic, either.  Ladies,  your crotch is not a cup-holder!

Oddly enough, $600,000 is the damage award in this "They Fired Me For Being White" case as well. But given all of the above, even if the "damages" are shown to be $600,000 (and that calculation will likely be reduced on appeal as well), $25M in punitives is way out of the ballpark.  Using the 4:1 standard, the most the Jury could have awarded would be $2.4M in punitive damages.  Still a lot of money, but a helluva lot less than $25M.  And even with the staggering legal fees at a "White Shoe" law firm, it is worthwhile for Starbucks to appeal a case like this - as the punitives are a no-brainer.  Knock down the "actual" damages or get a new trial - and well, they will settle for far less. Given that the plaintiff's attorney takes half, I suspect this lady will end up with $500,000 or less.  A lot of money, sure, but not enough to retire on.

But that's not the point. Very few of the outlets reporting this story analyzed this in detail and made the obvious comment that a jury award of punitive damages isn't a real award.  The Judge at trial may even reduce these, knowing that the award will not withstand appeal.  It isn't a real number and Starbucks will never be on the hook for that amount.  Yet one outlet claims "Starbucks ordered to pay $25.6M" when in fact they haven't been forced to pay anything just yet.

But hey, big numbers make for big clickbait.  And the plebes don't know the law or indeed understand the first thing about our legal system.  But they hate Starbucks and they hate political correctness, and this click-bait title panders to their preconceived notions.  Finally, the white man gets a break!  That's what they think, anyway.

Of course others will click on the premise that "This is an OUTRAGE!" - either because they are against large jury awards, or because they think that only black people can be discriminated against. 

So you see how this is a win-win for the media.

As I noted in a very early posting, Howard Stern figured this out long ago - people who HATED him would listen twice as long, just to fuel their outrage.  Today, this is a business model - harvesting outrage like it was electricity and we are in sleep pods in The Matrix.  No doubt, the "Metaverse" will make this a perfect closed-loop.

Don't be baited.  Don't believe every click-bait headline you see!

Fire Your Mechanic!

There are a lot of mechanics out there who just just retire.

A friend of mine was having trouble with his truck, and much of the trouble was self-induced.  He had tried to "mod" the truck and that was half the problem.  Sometimes it is best to leave well enough alone.

His wasn't happy with the power output of the truck, so he went down to see old Billy-Bob who has a collection of old muscle cars and pickup trucks from the 1960's and early 1970's.  Billy-Bob loves working on older cars, tinkering with carburetors (which means, essentially, replacing them with a rebuilt one) and hopping them up for more power.  It was possible to do that back in the day by changing a cam or playing with the induction, but newer cars are pretty maxed-out in terms of headroom.  Better to leave well enough alone.

So, my friend installed a cone filter and then never cleaned it.  The truck wasn't fast enough for him, so Billy-Bob suggested a pair of headers for it.  Headers are basically thin-wall steel exhaust manifolds that are "tuned" by having each pipe exiting the engine the same length - thus the tangle of tubes involved.  The problem with headers is that the steel tubing is far thinner than the cast-iron manifolds used on production cars, and tends to rust out.  Cheaper headers may leak where they attach to the cylinder head as the mounting plate warps.

For a racing car, where the engine is rebuilt on a monthly basis, headers are not an issue.  For your daily driver, which you want to keep running for 15 years, it is.  Anyway, the headers started to leak and he went to a second mechanic to have stock cast iron manifolds re-installed.

Now the fun begins.  You see, that particular motor used an AIR system - Air Injection Reaction or Secondary Air Injection as it is sometimes known, to control pollution. A small air pump is driven by a pulley and pumps air at about 30 psi into the exhaust manifold, to oxidize (burn) unburnt hydrocarbons.  It has fallen from favor in recent years, as you might imagine, unburnt hydrocarbons are wasteful if burned in the exhaust manifold.  Modern mutli-port fuel injection systems - and direct injection - do a better job and, as a result, AIR systems are less common.

Of course, if you injected air into a "header" it would burn through the header in short order.  So Billy-Bob tore out the AIR pump, valves, and plumbing (but inexplicably left the intake silencer intact) and threw them away and didn't tell my friend.  So when the new mechanic put in the stock manifolds, he had to plug the AIR connectors with threaded plugs.  Again, he didn't tell my friend about this.

When I went to check this all out, it was a bit of automotive archaeology.  The AIR intake silencer was unbolted and dangling in the engine compartment.  When installing the headers, mechanic #2 had removed a vacuum accumulator and left it on top of the engine.  Ford has long favored vacuum actuators for HVAC controls, and they have this vacuum "accumulator" under the hood.  In older Fords, it literally looked like a coffee can.  Mechanic #2 unbolted this to get it out of the way to install the new manifolds and then forgot to re-install it.  And needless to say the fasteners were long gone as well.

There were other aberrations.  The #8 sparkplug wire was melted and someone had repaired it by wrapping the melted portion with duct tape (Ford Rotunda Part #F4PZ12259D).  The water pump had been replaced at one point, and someone didn't re-attach one of the nuts holding the A/C compressor mounting bracket in place.  There were a few other fubars as well - wiring harnesses moved to access parts of the engine, and then not re-attached.  The mounting bracket for the ignition coil dangling unattached (unattached when the headers were installed and then never re-attached when the OEM manifolds were installed).  It was a hot mess, but it was running, anyway.  Not well, though.

One problem with this scenario is that the exhaust gases will be a bit rich with the AIR system removed, so there is a possibility that the catalytic converter may clog over time (maybe why the owner is complaining about low power).

Now granted, much of these problems started with the owner trying to "monkey" with the truck, falling victim to the siren song of the aftermarket promising to "unlock hidden power!" in the vehicle, when in fact, most of these bolt-on add-ons don't add much.  Compounding the problem was his redneck mechanic who didn't understand modern fuel injection and emissions systems - and didn't want to learn, either.  My friend's truck was pretty old, but even back then, it was hard to remove one component of an integrated fuel injection/engine management/exhaust emissions system without affecting another part of it.  Many systems go into a "limp home" mode when there is a problem, and I suspect my friend's truck has been in that mode for some time, now.

With more modern vehicles - forgetaboutit!  Rather than trying to out-Engineer people who have spent their lives designing and building these systems, a better approach is to try to maintain the system as best you can.  And one thing I have learned, the hard way, is that some part or bracket or fastener that seems to make no sense, was put there for a reason, as without it, some sort of problem will develop over time - maybe not right away, but over time.

I was riding in the back seat of the hamster and noticed that the seat belt bracket - where it bolts to the floor, has a small piece of velcro-like cloth glued to the side of it. Why?  Well, when the belt is buckled, this bracket rubs against the side of the seat.  A tiny thing, but without this velcro, you'd have torn upholstery in a year or two.  Everything on a car has a reason for being there and before you rip out stuff, think about why it was put there in the first place.

And again, racing stuff is fine and all, but race cars are torn apart and rebuilt after each race.  Your daily driver, isn't.

UPDATE:  This AM the truck won't go into gear.  I look and the brake lights are not working. Turns out the same mechanic put in a new master cylinder but screwed up the installation where it attaches to the brake pedal - and brake light switch.  We bought a new switch and installed it according to the mannual.

He returns an hour later, the truck misfiring and making no power. We replace the spark plug wires and cap and rotor.  Two of the wires were melted, one was not conducting (the one wrapped in duct tape).  I put on a new cap and rotor as they seemed pretty arc'ed up.

So, cross our fingers it is fixed, but if it was my truck, I would find all the missing parts at a junkyard and put it back to stock!  I advised him to sell the truck and buy something newer.....

UPDATE:  Still broken, no word why.  It is melting the new spark plug wires. We also noticed that the oxygen sensor is missing - removed by Billy-Bob!  This puts the truck into "limp home" mode, which is why it is running so poorly.  At this point, you would have to go through the whole engine and un-do all the "fixin's" they did to it - and find all those emissions parts in a junkyard.  I suspect the "power loss" is something else - low compression or a burnt valve, which is how this whole mess got started.

Sadly, the owner just wants the magic bullet - replace one part and it's fixed!  That is how he got into this pickle in the first place!