Baby Boom, Baby Bust!

Good news for Millennials - your grandparents are dying!

A recent article in the Wall Street Journal - a Murdock publication and prone to clickbait journalism these days - argues that enormous homes are sitting on the market for a long, long time because aging baby boomers build them as retirement homes and are now forced to sell them as they reach their 70's and 80's.  Young Millennials can't afford to buy them, moreover they are in locations where younger people don't want to live, such as retirement communities.

I've said before that when the baby boomers die out, you'll see a plethora of used motorhomes, yachts, and whatnot for sale for cheap.  Once you get to be a certain age, you can't use these things and maintaining them gets harder and harder to do, so you end up getting rid of them.  And the same goes for monster houses.

But if you read the article carefully, I think something else is also at work here.  Many of the people profiled in the article are selling their houses only a few scant years after building them.  It's not so much that these people are getting old and can't keep up a large house, as they built or bought more house than they can afford and it takes several years for this effect to deteriorate your finances to the point where you realize you made a financial mistake.

It is possible to buy more house than you can afford, and yet it may take years, or even a decade, before you realize you can't afford it.   Your credit card debt slowly increases over time, as you don't have enough cash to cover your daily living expenses.   And with the credit industry the way it is, they will increase your credit limits again and again - or offer you 0% interest balance transfers to new cards - provided you are current on your bills.   This can go on for years until one day, you are late on a bill, and the whole thing caves in.

For this reason, building a monster home in retirement - and getting a mortgage to do it - is just madness.   For our generation, it just isn't in the cards.  Since we don't have pensions, we have no income stream to qualify for a mortgage anyway.   It's pay cash or do without, for us.   And that's one reason why my generation (the tail-end of the baby boom and the beginning of whatever) simply cannot afford to buy these monster homes.

It is true that when you get older it gets harder and harder to keep up a house, even if you can afford to hire a yard service and a maid.  Too many rooms becomes too much to clean and multi-level houses can be particularly problematic if you are no longer ambulatory.  And living on retirement island, I see this firsthand.  In the early years of retirement, the couple obsess about "house polishing" - doing chores around the house until the lawn is perfect and every room is tidy and neat.  You remember Grandma's house - not a thing out of place.   Whereas your house has laundry on the floor.

The problem is exacerbated, as I can personally attest to, by the fact that when you get older your abilities don't taper off in a linear manner, but rather suffer from a number of abrupt shifts. You go along for a while feeling fine and everything's great.  Then, you have some sort of what will be many small health crisis, which you likely recover from (except the last one, of course) but now your abilities have taken noticeable hit, rather suddenly.

One day you're mowing three acres of lawn and keeping a five bedroom house clean, and the next day it's all too much to do, particularly after something like a stroke, heart attack, or major operation. And this is why it's important to plan in advance, and reduce maintenance chores as you age.   It's better to plan in advance, than to try to be selling off your monster home once you've already had your stroke.  The latter is far more common, however.

In a typical scenario, the husband (who is generally older and doesn't live as long) has some sort of medical issue.   It could be a knee or hip problem, stroke, heart condition, dementia, or whatever.   He loses his energy and doesn't keep up the house as before.   Little things start to deteriorate, over time.  In a few years, the house starts to look ratty.  The wife, having to care for the husband more (and having issues of her own) starts to neglect the house as well.

Another medical crises is at hand.  They overcome this, but when they arrive home, they realize there is a stack of magazines in the living room, laundry spread out in the laundry, and floors that need vacuuming.  And the shrubs are now growing over the house, the sprinkler system is broken, and the trim needs painting - again.

They decide now to sell the house, but of course, it is now in poor condition for resale.   It doesn't show well, even after many small problems are repaired, and as "motivated sellers" they have to accept a lower price as a result.

And in some instances, if they wait too long, these choices of having to move and where to move to, are made for them by others, either their relatives (e.g., children) or by the authorities.

It is tempting, in retirement, to buy the "look at me!" house or "look at me!" motorhome or yacht.  After all, you have all this money and it is time you are "rewarded" for a lifetime of hard work, right?  The problem is, these are toys of much richer people than you and I, even if we can "afford" the monthly payments (for a while, anyway).   The really rich have a crew on their yachts, who wash and wax it daily.  The upper-middle-class pretend rich have to do all that work themselves, which might be possible when you are in your 50's, but gets progressively harder as you age.

Look around any marina, and see what happens to boats owned by older people.  I mentioned before an older man on oxygen watching the repowering of his older boat - which had sat in storage for at least five years without going into the water.   He wasn't repowering it to sell it, either.  When I asked him why he bothered keeping a boat in storage and never using it, he replied, "Pride of ownership!"

At age 45, I decided that "pride of ownership" wasn't worth $600 a month in storage fees, plus insurance, taxes, maintenance, and fuel.    And I was actually using my boat, too.   But I realized that I was using it less and less, and I didn't want to end up like that guy, going back to the marina and realizing that I hadn't used the boat in over a year, but had paid $7000 in storage fees in the interim.   We sold the boat.   Maybe someday we'll get another - probably not likely, unless it is a runabout or a party barge or something that could be more easily maintained by an oldster.

The same is true for motorhomes.  You see a lot of nice coaches "driven into the ground" or more precisely, parked and abandoned, with the owners making payments as the tires sink into the mud.   They can't afford to keep it up.   They can't afford to get rid of it.

And the same is true for houses.  The very rich can afford a mansion and servants to keep it clean and maintained.  The pretend rich buy a poorly made mini-mansion and exhaust themselves keeping it up, or exhaust their checking account paying someone else to keep it up.

In the Journal article, it was mentioned that several of the homes were approaching 15 years old.   That is a problem time for any home - the time when all the appliances will shortly fail, the roof will need replacing, and the entire thing is outdated in terms of style and colors.   And yes, we see this a lot here on retirement island - houses for sale by owners looking to downsize, but the houses are horribly outdated and needing work.

Our own house was gutted and remodeled about 15 years ago, and we are seeing the appliances slowly going downhill (the microwave and dishwasher are in a race to see who goes to the curb first!).   As a relatively "young" person at age 59, I can handle some of this stuff.  But it gets harder every freaking day.   If we plan on staying here, it is not too big an issue - we can keep up the place.  But I don't want to be, again, that guy, trying to sell a run-down and outdated house at a time not of my choosing, as a "motivated seller".

So we are already planning and looking for "the next place" which hopefully is on one level, is smaller, and has a lot less maintenance involved.  An apartment or condo where someone else mows the lawn, and trims the shrubs, or whatever.   We haven't found it yet, although there is a "condo hotel" here on the island which offers some interesting possibilities.   Since we leave for part of the year, the unit could be rented out when we are not around.   Since our condo in Virginia is slated for demolition, it may make a convenient Starker deferred exchange, which would avoid those pesky capital gains taxes (which would kick us out of Obamacare).    Since it is maintained by the hotel, we would have less hassle in administering it (finding tenants, etc.).

We'll see.   I think the Journal article makes some good points - the monster retirement homes built in the last decade were "affordable" to a baby-boomer generation with generous retirement pensions in an era of low-cost mortgages.  But our generation - except for the very, very rich - aren't going to shell out $3M on a retirement home, if indeed they have even half that amount saved up for their retirement.

It just isn't in the cards.

UPDATE:  A reader (who regularly trolls me) opines that there is "no point" in saving money and living in a smaller house, only to retire and.... live in a smaller house!   Might as well kill yourself!  (no really, he said this).

Here's the deal:  There is a whole lot more to life than OWNING SHIT.   And I say this as someone who has owned his fair share of shit in life - houses, cars, boats, RVs, motorcycles and whatnot.   In every instance, it turns out that what you do in life is far, far more important than what you do it with.  Going on a motorcycle trip in a brand-new $20,000 Harley might be fun, but doing the same thing in an older bike you fixed up yourself is just as fun - maybe more.  Less stress about finances or scratching that new paint, to be sure!    Doing things takes talent.  Buying things does not.

We had more fun with our first boat (which we polished and worked on and fixed up) that we paid $6000 for.   A decade later, we pay ten times that amount for a "new" boat that was nothing but trouble.  It is a lesson I've learned again and again in life.  Oftentimes, less is more.

The couple who built a "look at me!" mansion in the Blue Ridge are now in financial difficulty.  If they had built a more simple and rustic (and more comfortable) cabin, they likely would still be living there and having fun - and not scrubbing floors or looking at a bleak financial future.  Expensive stuff costs a lot to buy - and maintain.  The taxes alone can force you to sell a fancy house.

Ironically, the folks who do kill themselves tend not to be the ones who lead simple lives, but the ones who "want it all" and then give up on life when they lose it.  Which is stupid.  When you judge your life in terms of money, it will always come up short, because a life judged by dollar signs is a shallow life.

"Having it all" often means having nothing.   Living better on less - well, that's the point of this blog!

Boeing and the Trump Economy

When you're in a stall, pulling back on the stick might gain you a few feet of altitude but inevitably causes the plane to crash.

Boeing is in a lot of hot water lately because of a system they installed on the new 737 Max to prevent the plane from crashing ended up causing the plane to do just that.

Angle of attack sensors and indicators are well-known in the experimental aviation community. There's a company selling them in the back pages of EAA's Experimenter, lauding them as the latest advances in aviation safety.  Aircraft such as the Icon A5 incorporated the angle-of- attack sensor into the instrument panel - that didn't prevent the plane from crashing, however.  Simply stated, the angle-of-attack sensor measures the plane's angle of attack relative to the airstream.  They can do this using a weather vane type of indicator or by measuring the differential pressure from the top and bottom of the wing.

An angle of attack indicator instrument can be very useful to a pilot in determining whether a stall is imminent and thus helping them prevent a stall.  Boeing's problem was that they tied this indicator into the aircraft control system so that it would automatically push the nose down if it felt the stall was imminent.  Of course, if the sensor goes berserk, it could drive the plane right into the ground, as apparently happened in the two recent crashes.

The situation is even more complex than that.  Boeing didn't want to have to retrain pilots for the new generation 737.  Unfortunately the new high-efficiency engines changed the center of gravity of the plane and thus the plane's handling characteristics - which under ordinary circumstances would require a retraining of pilots, which is expensive for airlines.  So they installed the sensor and claimed the plane was identical in handling characteristics to its prior generation cousins.  However they didn't tell the pilots about the presence of this new control system and some of the optional safety features - which would have indicated when the system was running amok  - were offered as extra cost options.  Pilots should have been retrained on the new system even if it cost airlines more.   And the safety indicators should have been made standard.

This is not an engineering problem for Boeing, but a public relations one.  So far it, seems Boeing has remained silent on the matter, although it is taking steps to improve the planes by adding the safety fault indicators.  They also need to retrain the pilots and also publicly apologize for the error.  It seems instead of addressing the problem and taking responsibility for it, they were trying to stonewall the matter and use their political connections to have the plane declared safe.  Of course, that  horribly backfired.  And now I'm really glad I sold all my airline stocks and my Boeing stock last year.  Boeing was on a tear for a while there, and when a stock is on a tear, it has only one direction to go - down.

Despite all the safety systems that are present in aircraft today, pilot error is still the number one cause of accidents. What usually ends up happening is the aircraft is stalled by the pilot.  So aircraft manufacturers, including Boeing and Airbus, have tried to install the systems to prevent aircraft stalls. You may recall an Air France flight from South America to Europe which crashed in the Atlantic and wasn't found for at least a year.  When the black boxes were finally dug up it was found that the pilot had stalled the airplane, pulling back on the stick instead of pushing forward to gain airspeed.

In the movies, you see all the time when the airplane is about to crash, the hero grabs the control yoke and pulls back on it saying  "climb, baby, climb!"   Of course, in real life this is the opposite of what you want to do if an airplane to stalling.  What an airplane needs most is both altitude and speed.  The higher you are and the faster you're going, up to a point, the better off you are.  When the plane slows down, it stops flying and stalls.  If you push the nose over you'll gain speed and the wings will once again provide lift.

Yet, even experienced pilots fail to realize this, or they instinctively pull back on the stick or the control yoke hoping that the plane will climb.  And that's one reason why Boeing and Airbus have put these elaborate systems in airplanes to protect pilots from their own instincts.

The problem is, if you pull back on the stick, the airplane might nose up a few degrees and even climb a few feet, at least initially.  But you do this at the expense of air speed and once you lose more air speed, the plane then goes into an unrecoverable stall and crashes.

The Trump Administration seems to be doing the same thing with our economy - goosing it a little bit here and there to try to prime the pump and make it appear as we are more prosperous than we are. Warning signs are all over the place that a recession is imminent, yet at the same time our economy is going gangbusters, interest rates and inflation are at record lows, and unemployment is also at a record-low.

Things are going great, right?  Well they were going great on that Air France flight, right before the pilot stalled it, too.   I think what we are seeing today is that Donald Trump is trying to goose the economy to keep it going for another year or two, so he can get re-elected.  Once that happens he doesn't really care - as he has noted before, he'll be out of office by the time everything blows up.  No, really, he actually said this.

First it was the tax overhaul bill, which boosted the economy over the last year.  Of course, the one-time boost to the economy wore off rather quickly, just as those little white pills keep you awake for only so long.  In 2018, we saw a huge gain in the stock market and in the waning days of that year, a huge loss.  I don't know about you, but my portfolio ended up ending in 2018 almost equal to what it was when it started.  Some big boost, that tax bill.

So these one-time effects goose the economy, but only last for so long, and the long-term effects are arguably very harmful.  We got a one-time shot in the arm, but the long-term effect is cutting off that very same arm.  The tax bill ended up increasing the deficit and long-term debt of the country.  These things will come back to haunt us in a few years.  But in the meantime, we can continue to pretend the party is still going on.

The latest gag Trump is using to try to goose the economy is to lower interest rates by going back to the treasury's practice of buying back bonds.  Mortgage rates once again dropped and this makes housing more affordable, which will keep the housing game going a few months or maybe a year longer.   A few more saps are buying at the height of the market, only to find their dreams dashed maybe a year or two from now.

And that's the key to this goosing technique. Trump wants to keep the economy going at least until the fall of 2020 so he can get re-elected.  What happens after 2020 he really doesn't care about.  And again, the short-term boost from lowering interest rates will come back to hurt us in the long run.

As our economy enters a stall, instead of pushing down on the stick and gaining airspeed to keep our nation from crashing, Trump is instead pulling back on the stick, just to get a few hundred more feet of altitude for a short period of time, before the inevitable crash.

This is nothing short of stunt financing and stunt economics - tricks and gags which are used to make it appear we are becoming wealthier, when fact we are not.   And if you look at the history of Trump's personal finances, we see what the same pattern - robbing Peter to pay Paul, getting one enterprise or to fund another, or defaulting on loans and letting others take the fall.

Unfortunately, in this case, the others taking the fall this time around are the citizens of the United  States.

A Nation of Weaklings

When did our country become so weak?

It is hard to believe, sometimes, that we fought in two world wars, lived through the depression, and landed a man on the moon.   I mean, this is the same country that is now hand-wringing over every little piece of bullshit that comes down the pike?   The same country full of unfit people who are so nervous they need to be medicated or have "service ferrets" calm them down?

The stereotype of the American today isn't the manly GI fighting in the Battle of the Bulge, or Rosie the Riveter rolling up her sleeves to get the job done on the B-24 assembly line.   No, it is the overweight man in the electric scooter, on oxygen, buying candy-corn Oreos at Wal-Mart.   This is how far we have sunk.

People are so weak in this country.  They don't want to work for a living, but rather want a "guaranteed minimum income" because that sounds great when you are high all the time - high on drugs that you need to quell your anxieties about life.   Drugs that end up killing you, too.

On National People's Radio this morning, a promotion for a new book about the airline industry.  In the closing comments, the author, who once worked for American, uses this "Service Animal" nonsense as an example of how we have gone too far in this country.   Airlines made headlines recently by refusing a service peacock on the plane.  These are not animals for the blind, deaf, or physically handicapped, but for nervous people who claim they cannot fly on a plane without a pet.

Here's an idea:  If you can't fly on a plane without your pet, take a car, take a bus, take a train, take a Valium, but don't argue that the rest of us should be inconvenienced for your sake.  Maybe if flying makes you that nervous, you shouldn't be flying.

But like clockwork, the News Nerd at NPR chimes in that some people need these animals to calm their nerves when flying.   I need my "service cow" Bessie on the plane.   Please clear three rows of seats and provide straw for her, because under the law, I'm entitled!

Dogs can bite.  One woman was recently mauled to death by her own dogs - convinced she needed not one, but two pit bulls, while living with her parents.  Pit Bulls - vicious dogs that were bred to kill.  They ate her flesh.   How long before someone brings one of these treats on the plane?  

Some said that the dogs were "nervous" after she left home, which is why they killed her.  Maybe the dogs needed a service animal of their own.  Teacup poodle, perhaps?   Or maybe they should have been put down long ago.   Dogs like that are not pets - they are wild animals.

And why do people feel they need to own vicious dogs in the first place?  Oh right, the culture of belligerence.

The culture of belligerence and the culture of victimization - are they related?  You bet!   Next time you are in Wal-Mart, look to see who is the most arrogant, rude, and pushy person in the store.   Yup - the asshole in the electric scooter, whose only "disability" is being fat.

 They can walk from their car to the store to get in the scooter, but for some reason, walking in the store is too hard for them.   They cut you off, block the aisle, ram your ankles, and say rude things to you.   "Victim here!  Coming through!  I'm entitled to all of this - and you have to accommodate me!"

It is bullying of the first order - and something really handicapped people don't do.  The guy who had his leg blown off in Iraq doesn't do shit like this - it is only the self-identified "victims" with their "special needs" who throw this in your face.

We are a nation of weaklings, it seems.  Half the country is in electric scooters or wishing they had one.  The other half is claiming to be allergic or intolerant of a litany of foodstuffs.  "I need my special meal!"  they declare, because they want special treatment.  "A gluten-free airline meal for me, and another one for my service ferret!  I demand it!"

But this sort of belligerence isn't strength, it is weakness.  And indeed the entire culture of belligerence is based on weakness.  The "badass" guy gunning the straight-pipes on his Harley next to you at the light isn't strong, he's weak as a baby.  His painted on a patina of toughness that is not even skin deep, and the strap-on balls of the noisy bike are his version of the service ferret.  Odds are, he is losing much of the time in life, so his only outlet is to intimidate other people with his toughness persona.   He may be fucked over by his boss, the banks, his ex-wife, and the legal system, but he can compensate for all of that (and his small penis) with one trip to the motorcycle store!

There was a time in this country where strong people were actually strong, and this meant that they didn't have to engage in these rituals of bravado or ask for special treatment.  You never saw John Wayne showing off or asking for a wheat-free meal.   How did we get from Point A to Point B?

In part, I think, it is because we are a compassionate country and want to help people. Laws designed to help the really handicapped participate more fully in public life resulted in wheelchair cutouts and handicapped parking.   These were good ideas.  The sad thing is, the non-handicapped viewed that as "special privileges" - as if being handicapped was some sort of treat and that preferred parking made up for being disabled.   It didn't - it just made it easier for those who couldn't walk, to get out.

I noted before how in Crystal City, Arlington, everyone became handicapped overnight when they announced that anyone with a handicap placard didn't have to pay for meter parking. And overnight again, they became able-bodied, once the rule was changed back.  Time was, it would be viewed as shameful to pretend a handicap to seek advantage in life.  People would be tarred and feathered for that!  Today, it is commonplace - and my own Father (and several friends) crow over their handicap placards that "allow them to park close in!" even though the placard has long expired or was issued for another family member.

We are so used to special treatment, that we take it in stride and expect it.   The other day, at a county park, the ranger asked if I was over 55 - and offered me a discount based on my age.   I never thought being over 55 was some sort of handicap, but of course, I took the discount.   Others expect it, and badger park rangers for discounts they are not entitled to.   I've seen it happen - and I've seen them hold up the line while they marshal their legal arguments why an old-age pass for a Federal Park should give them discounted admission to the county water slide - or whatever.

This compassion is also why we've crippled ourselves with language.  We cannot say anything today, lest we offend some group or another.   Labels are oh-so-important and if anyone slips up - even once - it's curtains for them!   A friend of mine once remarked that when he was in France, he saw people wearing "those faggoty little hats" (berets, I think he meant) and he was instantly horrified he used this phrase in front of us.  I told him it was no big deal and tried to put him at ease.  But from then on, he was always nervous around us - fearful he would step into some PC dogshit and offend us in some way.  And it made me think how PC talk has indeed separated us into groups - groups that are afraid to talk to one another for fear of offense.

We are so weak today, we are offended by words.   And by words, I mean these phrases that the PC-people claim are inappropriate.   Meanwhile, people can profess admiration for Adolf Hitler or white supremacy and that's protected speech.  It seems the really offensive stuff offends no one, and the stupid labels are more important.   Call someone by the wrong label, and they wilt like a hothouse flower.

And maybe the other reason why our country has become so weak is that we can afford it.   During the depression and World War II, the country had to gird itself for adversity and warfare.  People were suffering - and dying - and it was no time for mamby-pamby talk or victim culture.   Get in shape and get going!  Feeling sorry for yourself isn't going to accomplish anything!

But today, we are relatively conflict-free, and despite all the whining in the media, we are a very wealthy country - we have the fattest poor people in the world (and the richest).   So we gaze inwardly and try to find new things to obsess about - it is natural, like Boyle's law about gas expanding to fill a container.   Until something more important comes along, transgender restrooms seems like a burning issue.

We saw this after 9/11 and again during the market crash in 2009.   People realized there were more important things than political maneuvering and trivial injustices in the world.   But this feeling of unity lasted only months, before we went right back to political squabbling and the selfishness of the victim culture.

Maybe something will happen - a recession, for example - that will put all this trivial bullshit into proper perspective.   Maybe, but I wonder.  The roster of Democratic candidates for President seem to be falling all over themselves to see who can be the most politically correct.   Apparently they haven't figured out that the political incorrectness of our current President is what got him elected - and what endears him to his supporters.

America needs discipline, not more touchy-feely.

Influencing The Influencers

The use of Influencers is an attempt to co-opt word-of-mouth.

NOTE:  I started this post before I wrote the last posting on passives and actives.  In retrospect, this is a better follow-on to my last posting.

Advertising has changed so much since I was a kid.  Back then, advertisements were quite obvious. On the radio and television, they were loud and jarring and quite clearly labeled as advertisements. Sometimes they would try to be funny or clever to attract your attention, but for the most part people found them to be annoying.

Print advertisements were clearly demarcated from the rest of a publication.  Today, this is, of course, less so.   Nevertheless, most publications will place the word "advertisement" above or below and ad that may be disguised to appear as content.

Of course, these traditional forms of advertising still exist today, but I believe they are a dying breed. A new, insidious form of advertising is taking over, particularly aimed at the younger generation. Rather than buying ad time on the radio or television or space in print media, or even ads on social networking sites, advertisers are buying people, instead.

I noted before that not a day goes by that I don't get some email from someone suggesting that they will pay me a few dollars or give me a free product if I endorse their company or link to their website in my blog. They're hoping that I will sell my credibility for a few dollars in order to attract customers for them.

But that is small potatoes.   Influencers, as they are called, can earn hundreds of thousands of dollars a year - or even millions - by promoting products on their social media pages.

For the most part, these influencers are younger people and the products they are pitching are aimed at a young audience.  Gamers in particular are targeted, using influencers who are themselves popular Gamers who have their own YouTube channels, blogs, and social media accounts where they discuss gaming techniques and the like.  A positive word buy one of these superstar gamers can make or break the release of a new video game.

The fashion world is another area where influencers are used to promote products, particularly to young people. Young starlets, or in some cases, the children of movie stars and celebrities, will promote products on their social media pages and the like. They are paid directly for these product endorsements and can earn a nice living at it.

But even on a small scale, influencers exist.  You are a young college student, and are surprised to get an invite from one of the popular kids on campus to a party at a local bar, introducing a new trendy liquor that you've seen advertised in the "alternative paper".   You think maybe your social circle is finally improving - but you'd be wrong.   Liquor merchants and other people selling crap to college kids use "micro-influencers" to try to rope in more customers.  And often, all they have to do to achieve this is to offer the micro-influencer a few dollars, a few free drinks, or a case of crappy liquor.

At first, this sort of below-the-radar advertising seems somewhat insidious. It is somewhat like product placement in movies these days - where the product label for a beverage is placed squarely facing the camera. Whenever you see a brand name of a product appear in a movie or television show, you know money has changed hands.  If one of the main stars of the program uses the product, comments on it, or even mentions it by name, you know that major money has changed hands.

I was watching an episode of Jay Leno's garage (The YouTube channel version, not the crappy "TeeVee" show with fast cuts and shitty overdubs) which featured one of the Back to the Future DeLorean cars.  Jay was interviewing one of the writers for that movie, and he mentioned that one of the network movie studio executives wanted to change to a different make of car because the manufacturer would have paid them $75,000 to include the car in the movie.  In the greater scheme of things, $75,000 isn't a lot of money, but it does help pay for the cost of making a movie.   Throw in enough product placements, you might be able to cover an awful lot of your costs.

The funny thing is, when we watch a movie and see a product used by name, most of us figure out that product placement has taken place.  In a similar manner, most people who follow these influencers are well aware that they are paid shills for various industries.  In fact, the fact that these people are being paid to promote products is usually mentioned in the press.  It is hard to "follow" an influencer and not realize you are basically following a living advertisement.

What got me started on this was an article recently appeared about a young gamer who was paid a million dollars to promote a new video game.  He's considered a major influencer in the video game arena, and his endorsement of the game - even at the cost of a million bucks - was deemed a worthwhile investment.   Hey, if a million kids out there buy a copy of the game, it is worthwhile, right?   Beats advertising on television!

In another recent article, two of the children of a famous celebrity - who was arrested as part of the college admissions bribery scandal - were noted as being paid influencers online.  Keen, young attractive people are idolized and "followed" by other kids online.  Whatever the influencer says to do or buy - they do.  Or buy.

This whole influencer thing is sort of like professional wrestling.  If you go and ask the people at the professional wrestling association whether the wrestling is faked, they would be right up front that it is.  Who wins and who loses each match is determined in advance - as evidenced by their own scheduling which shows the expected winners of each show.  And while there is a lot of athletic ability and real chance of injury that can occur during each match, much of the violence is actually staged stunts and carefully performed to avoid serious injury.  You really can't hit somebody over the head with a steel folding chair - in real life - and not give them a major concussion.

So it is somewhat ironic that these influencers have any influence at all.  Why would anyone follow a celebrity or star or famous gamer and follow their advice when they know this advice is bought and paid for?

Perhaps there are number of reasons, some of them being psychological.  I noted before that people seem to be sheep most of the time and want to be told what to do.  People seek out direction in situations where there are unfamiliar.  You go to a party or a conference and a bunch of people are milling around who don't know each other.  No one knows quite what to do, but if you make it clear there is some sort of procedure or processes to be followed, people will fall into line rather quickly as it makes them feel more comfortable.

I noted before in an earlier posting that in terms of vacationing, many resort owners know about this effect. They create a series of activities for the guests, so the guests have a comfort level of knowing what's expected of them.  And what's expected of them is they take their wallet out and pay money for something - over and over again.  Disney is genius at this.

So maybe comfort level is part of this effect.  People will follow an influencer even though they know the influencer is really a shill for some advertiser.  They want to be told what to do, what product to consume, what style or fashion to wear or what video game to play.  No one wants to be that lamer who bought the wrong video game or the ugly girl who wore the wrong dress or used the wrong makeup.  And given that these insecurities are the highest among young people, it's no surprise that these influencers are used mostly to target youth audiences.

Of course, the influencers know that their credibility is their livelihood. So if they accept a huge amount of money to promote something that is a dud, it could end up killing their career.  Thus, for example, if the gamer recommends a really horrible game and everyone hates it (e.g. a modern version of the ET video game), no one will listen to him in the future.  Similarly, if the fashion Diva recommends a line of clothing or accessories that end up wildly unpopular, no one will listen to her advice in the future.

So perhaps even though these people are being paid, and often well paid, the consumers who are following them still follow their advice because they realize that the influencer has to preserve their credibility and would not likely accept payment to promote a product they knew was inferior or would be unpopular.  The influencer has influence so long as he has influence.  Once he loses influence, he is, by definition, no longer an influencer.

It is a very interesting new form of advertisement to be sure.  Certainly, in the past, we had celebrities endorsing products, but that was not quite the same thing. When Groucho Marx interrupted his television show You Bet Your Life to exhort us to go visit our local DeSoto dealer, we didn't really believe that Groucho was doing this out of the kindness of his heart but because the DeSoto people were paying him.  We also didn't believe that a comedian had a special insight as to what car we should buy.  Nevertheless, in the past, we gave great credence to the endorsements by celebrities, actors, and professional athletes.

But therein lies the difference.  In the past, these paid endorsements were quite clearly endorsements much as the advertisements in the past were clearly demarcated as advertisements. Today, influencers are often celebrities not based on athletic achievement or acting ability, but merely celebrities by dint of being influencers.  The influencer becomes a celebrity by dint of being an influencer, which in turns bootstraps his celebrity.

Today, you could become a professional influencer, where your only qualification is your ability to endorse things. 

Of course, it is not always clear whether someone is being paid as an influencer or not.  And increasingly, the line is being blurred, particularly on the internet, where the mere mention of a product in a major news article or popular video can drive up sales.  We're never certain as to whether we are being shilled or not.

The classic example is the card game Cards Against Humanity.  Back when I was reading Reddit on a regular basis - a very bad habit that you should absolve yourself of - I saw references to the card game Cards Against Humanity.  The references were not direct pitches to buy the game.  Rather, they were inferences about the game, talking about it as if everybody already knew about it.  Only someone who is completely out of the loop or a lamer would not know about this game, so everyone pretended to go along with it.

It was one of those crowdfunded deals, I believe, and they were successful in selling it, at least initially.  And of course, I fell for the entire thing and went out and bought a copy of the game online. We played it a few times and it was kind of fun - for a while.  But then it ended up on a shelf and was never played again - which is probably the fate of most board games and card games or the like.

And while I enjoyed playing the game a few times with friends, I can't help but feel that I was influenced by those postings on Reddit, which were probably carefully placed to induce me to get me to buy that card game.  And that is one of the many reasons I no longer peruse Reddit, as I feel that most of the postings on there are designed to manipulate me or manipulate my opinions, by making subtle - or not-so-subtle - product placements or mentions.

Of course, you could argue that that's the point of all communications - to manipulate people - get them to act, get them to change their mind.  Indeed, my very blog here expounding my own hot air philosophies could be construed as an attempt to  change people's minds about things.  It is, of course. not very effective, which is why I'm only offered $15 to be an influencer.

But I think it's more than that.  I think our society has changed to some extent, in part because of the internet, in part because of social networking, in part because of the smartphone, and in part because of how we have changed as people.   Modern electronic communications have made us more and more skeptical of the world.  Blatant advertising appeals to fewer and fewer people these days, and subliminal advertising perhaps is it more effective way of getting into our heads.

And that's the unsettling thing.  A lot of people are complaining about the antics of Facebook and Cambridge Analytica and what goes on on Twitter and Instagram and whatever.  People are alarmed by how the cell phone has changed our behavior - to the point where people literally walk into lamp posts because they're so engrossed in an alternative digital reality that they fail to appreciate the real world around them. Or worse yet, people are motivated to shoot up a mosque or join ISIS based on a  YouTube video or an 8chan posting.  We sense that something is off and that something is going wrong, but it's hard to put our finger on it.

Influencers are not the problem, merely a symptom of the problem.  They are merely a data point on a chart or graph showing a trend or a direction in which we are headed.  How to stop this trend, or at least divert it, is hard to say.   Should social media channels be regulated the way television stations were?  Should an influencer be required to divulge they are paid to influence (and would it make any difference?).   Or will people adapt to this new reality and take influencers with a grain of salt?

It is hard to say.

Perhaps, in the future, instead of our 15 minutes of fame as predicted by Andy Warhol, we each will have our 15 minutes of influence.

   

Maybe that is where we are headed.

Just bear in mind that the influencers are mere puppets - and that they themselves have influencers influencing them, usually with dollars.   That is where the real power lies.

People Want To Be Told What To Do.

Extremist religions are on the rise and liberalized religions are on the decline. Why is this?

I've said time and time again in this blog that I am not an advice columnist.  Yet people write to me regularly asking me for advice on what they should do with their financial matters.  I noticed this trend also online with various financial advice pages, where people put their fate in the hands of somebody they hardly know - and give them only a partial set of facts from which to draw conclusions as to what would be the best course of action for them.

People, it seems, crave direction.

Normative cues - I have harped on this concept a lot in this blog.  People are desperate for normative cues in their lives.  I realized this when attending a law conference.  During a break, people were gathered around nervously in the lobby wondering what it is they're supposed to do next.  Without someone showing the way, or some schedule, or some other form of organization, people feel uneasy and anxious.  Religion, with its easy answers to complex questions, assuages this anxiety in people.

It seems, sometimes, that humanity is divided into two groups. The first group are actives - people who take action their lives and know what they want to do or at least have an idea of what they like to do. Often these ideas are foolish and poorly thought-out.  Nevertheless, they are certain as to what they want to do with their lives and although they will consider advice of others, they use their own internal compass in making decisions about their own situation.

The second group is the passives. These are people who want advice and instruction on every aspect of their daily lives.  These are people who wouldn't know what to do in the morning if they didn't have to get up and go to a job.  They constantly seek advice from someone else, and won't do anything without first consulting an expert in the field. These are the sort of folks who consult with Consumer Reports before they even buy a toaster.

And the second group outnumbers the first group by about 10 to 1.  And this is why religions that tell people what to do in every aspect of their lives succeed, while liberalized religions fail.

Of course, sometimes people shouldn't have choices - or when choices are presented to them, they choose poorly.  The children's menu is an example where sometimes too many choices is not a good thing.  You no doubt have been to a restaurant where a well-meaning parent asks their child what they would like from the children's menu - the chicken nuggets or the cheeseburger. The child pouts and says, "I want a hot dog!" - which of course isn't on the menu.

As Mark has often noted, when we were children, parents made decisions for us - as to what to eat, what to wear, what to do - at least at that early age.  There was no discussion as to whether we had a choice in the matter. We were children and children really don't need to have choices in these sort of things, as given a choice, a child will typically choose poorly or be befuddled by the concept of choice.  It's not a cruelty to control young children at age 5.  It's a cruelty to offer them too many choices when they expect authority and control from their parents.   Yes, the child in all of us wants to be told what to do - it is in our makeup.

Arab Spring is another example where people, when given choices, choose poorly.  Many people in the West assumed once free elections were held in many Arab countries, they would choose democracy over totalitarianism.  However, in an almost a knee-jerk reaction, many Arab countries immediately voted for Islamic theocracy - effectively destroying the future possibility of the choice that they just had.  Their first election was, in fact, their last.   When given a chance to vote, they vote for no more voting!  Some people shouldn't have choices.

The Catholic church, over the years, has liberalized its theology.  Starting with Vatican II, the church has opened itself up more and more to new ideas.  For most of us who are actives, we consider this good news.  We bristle at the thought of the church telling us how to manage every aspect of our daily lives, based on teachings of sometimes crazy people from thousands of years ago. But for the passives in the world, liberalization is an anathema.

Without the church telling them what to do, their lives do not have a rudder or compass.  Where will they go, what will they do?

When a church revises or liberalizes its positions on issues, parishioners are not happier as a result. "What, you don't know what you're doing either?" they ask. People want their authorities to be confident and consistent and not self-doubting and questioning their own dogma.  When dogma can change at a whim, people realize that the rule-of-law handed down by the church doesn't come from God, but rather was crafted by mortal humans.   And we can't have that, can we?   That is to say, you can't expose the man-behind-the-curtain in any religion - it scares the plebes.   They might stop tithing!

So it comes as no surprise that during the 1960's when traditional mainline religions were liberalizing their theologies, that many new forms of religion and cults became popular. These cults often demanded absolute obedience to the authority of the cult leader, which is what people crave.  People of that generation felt lost and adrift in a crazy new world of "do your own thing" and no rules.  Suddenly here was this magnetic personality telling them exactly what to do, with no self-doubt or questioning of his own authority or righteousness.  And they all fall in line, even if being told exactly what to do means begging on the streets or being the guru's sex slave.

This, in part, is why fundamentalist Islam has become more popular in recent years and why many people in the West have converted to Islam and even gone off to fight in Islamic Wars.  People are puzzled as to why ordinary folks would listen to a recruiting video on YouTube and suddenly find religion even though they were raised as Anglican or Catholic.

And the answer is simple. Fundamentalist Islam provides all the answers without any pesky questions. Other religions seem to be waffling or self-doubting.  Islam is the final authority in all matters and thus leaves followers with a feeling of security and that their religion is as immovable as a rock.

And in many religions the metaphor of the rock is often used to define the religion.  The belief system is fixed and doesn't vary with social fashions or changes.  The rules of a religion are inflexible and firm even if they are unfair or unjust.   That, in short, is what people want.

And in many religions, people are controlled to a great extent.  People are told what to do and when to do it. They were required to attend church several times a week or even pray several times a day. They may be forced to wear funny hats, funny underwear, or in case of Scientologists, ridiculous grins on their faces.

Controlling even the clothing you wear is the way of constantly reminding you of your obligations to the religion.  Some members of Opus Dei, the conservative Catholic sect, supposedly wear something called a "clinch" on their leg, which bites into the flesh so that the pain will constantly remind then of their obligations to the church.  Lesser Catholics would carry a rosary, wear a cross, or some other form of religious accessory.  More liberal religions generally don't require much in terms of regular attendance habits or special clothing, although Unitarians do require that you buy a Volvo or Subaru.

Please note that I'm not attacking religion per se.  The same effect is found in many people who consider themselves non-religious.  Rather than following Priests or Imams or Rabbis, they subscribe to the secular religion of materialism.  They look to the almighty TeeVee for instruction as to what to buy, what to do, and even what to say ("wassup!").  Many more make a belief system out of politics - if only "our guy" could get elected, the world would be a paradise!   Not much different than fundamentalist Islam, which pretty much promises the same thing.   Even atheists make a religion that of non-religion - conforming to another set of informal standards, but conforming nevertheless.   If you don't have a "Coexist" bumper sticker, you don't belong!

We see this throughout history.  People prefer to have an authoritarian government that is consistent over a democratic government that vacillates and changes its mind - even if the latter is more fair and just.   The Wiemar republic was liberal and democratic - and doomed.   Germans back then just didn't know what to do with Democracy, once it was handed to them.    But with fascism, once you know what the rules are, you can play the game - even if it is rigged.

We saw this play out in Afghanistan where the Taliban ended up ruling the country by default. The people of Afghanistan were desperate after the Soviet Union had left.  Various warlords vied for power and indiscriminately bombed their own people.  The Taliban promised to put an end to all of that and institute a new Islamic theocracy.  Maybe it wasn't what people wanted, but it was a consistent and reliable set of rules they could follow.  So long as your beard was of the proper length, you were okay.

Theocracies or dictatorships or other forms of totalitarianism are often preferred by many people to democracy.  Such absolute forms of government are far more powerful than vacillating democracies where people's opinions vary over time and laws are changed on a weekly basis.  People see this as weakness, instead of the strength that it is.   The idea that you should think things through and maybe change your mind if you were wrong isn't seen as an act of wisdom, but an act of feeble-mindedness.

Our democracy is under attack by these types of totalitarian forces, and has been since the dawn of our Republic.  Often it is the people within a country that cause it to fail, rather than those from without.   What people crave from Donald Trump is a firm set of rules and guidelines and not the vacillating hand-wringing questioning that the opposing party seems to present.  This is why Trump is so popular with the passives - such as the unemployed factory worker, who like a deer in the headlights, has no clue what to do, once the factory closes.

(It also illustrates how many actives like Trump as well, as his laissez-faire kleptocracy is ideal for the sort of folks who live by no rules at all, other than taking everything they can get their hands on.  Sadly, such folks are most likely to go for petty grabs, not grandiose ones).

America wants a Daddy, one with a leather belt who isn't afraid to take Junior out to the woodshed if he misbehaves.  As long as everyone knows the rules - and the consequences - they can live with that. What people don't like is uncertainty - vacillating positions, re-thinking of ideas, inconsistency of message.   Indeed, one reason why so many on the Left are enamored of Alex Occasional-Furniture, is that she presents a totalitarianism of the Left - a future where the government will tell us what is best for is, keep us from polluting, pay us a "guaranteed annual income" and provide medicare and free college for all.  Comforting thoughts for passives - an anathema for an active who wants to start their own business.

This, of course is a problem for you, if you are one of the actives and not a passive.  Of course, we all perceive ourselves to be active people who want to take control of our lives, but in reality, in many instances, we want other people to make decisions for us, because this is so much easier to do - and it avoids conflict.  So, we go along with a lot of bad ideas.

I'm not sure where this takes us, other than to explain why fundamentalist religions and cults are on rise in the world.  But, perhaps this also illustrates how all of us tend to gravitate toward authority and authoritarianism.  If we can resist this urge within ourselves, it can work our own personal advantage.  Act rationally in an irrational world - all you need to do to get ahead.

Of course, acting rationally quite often means going along with some of these religious doctrines or at least appearing to do so.   It doesn't pay to be a heretic or a revolutionary, if the end result is you are burned at the stake.  If you can't fly under the radar and avoid religious persecution, the other alternative is to become part of the religion and lead it.   Because, let's face it that's where the real money is.