Thursday, July 29, 2010

Home Ownership

“Our houses are such unwieldy property that we are often imprisoned rather than housed in them…I know one or two families, at least, in this town, who, for nearly a generation, have been wanting to sell their houses in the outskirts and move into the village, but have not been able to accomplish it, and only death will set them free.” – Henry David Thoreau

I think about this quote when I take my daily walk in our neighborhood and see homes that have had “For Sale” signs up since we moved back here in December 2007. I don’t know who owns the homes now, but they aren’t lived in anymore. Maybe a bank owns them, maybe a corporation bought them when they transferred an employee – either way, what a burden.

Saturday, July 24, 2010

Done at 55?

“If they’re over age 55, it’s unlikely they’ll ever be back in the work force.” – Former Secretary of Labor Robert Reich

I’m not 55 yet, but I’m awfully close. If my entrepreneurial efforts fail, I will probably be looking for work at 55. I know I’ll have a huge challenge re-entering the employed work force, but I refuse to believe that I’ll never find a job again. This is not just a financial consideration. I’ve realized that I’ll never be ready for retirement. The downtime I incur in my current activities is hard to bear. Once the novelty of not going to an office each day wore off, I realized that “retirement” may not be as appealing as advertised. In fact, the prospect of not doing anything meaningful or useful the rest of my life is very scary and very depressing. I know there are volunteer activities; I’ve tried a number of them. They aren’t engaging enough to replace paid work, even part time work. I miss being involved with others in an effort to build a business. Money is the scorecard and volunteer work doesn’t provide the same satisfaction. Plus, I now realize I will need more money – the market downturns and subsequent flat stock market returns have dimmed my financial future. 

If Mr. Reich is right (and I don’t think he is), the waste of human talent will be immense. It will be both a psychological and financial catastrophe for the United States.

Sunday, July 11, 2010

Chicago Artwork: Eye “Sculpture” (Not sure what to call it)

eye

Buy More Junk on Credit! – We’re Doomed

The front page of today’s Chicago Tribune business section has a headline:

“Bailing on debt… Consumers are carrying smaller balances on credit cards, so issuers are ratcheting up reward programs to boost use.”

I hope we’re, collectively, not so stupid to buy into the credit industry’s pitches and buy more crap we don’t need and pile up debt all over again.

Surely we’re not that stupid. Of course today’s Tribune also reported 10 million people watched “The Decision” regarding LeBron James. We’re doomed.

Friday, July 9, 2010

Travel Agents and Self Checkout

I miss travel agents. Once upon a time I was able to pick up a phone and tell someone (usually a woman, but not always) that I want to go to Boston on Thursday after 4 PM and return home on Friday after 5 PM. That is all I would have to say. Magically, tickets would appear on my desk, car rental arrangements would have been made and a hotel reservation would be all ready for me. And, my trip would be on my favorite airline; I would have my aisle seat, and all my frequent traveler numbers would be there. Now, my wife and I pore over various websites searching for the best deals – it can take hours of our time and we’re still not sure we got the best deal.

I was at Jewel recently, buying avocados among other things. I chose to use the self checkout aisle, since it appeared the shortest. Of course, that is just an illusion – I’ll get back to that. I put my avocado on the scale and did the lookup thing (there was no little sticker on my avocado with the little code number). Who knew there were 4 different kinds of avocado? Which one do I pick? There were no prices on the screen, so I couldn’t pick the cheapest (the logical choice). So, I just picked one. Probably paid too much. It used to be that you could save time in the self checkout aisle, but that was when it was new, novel. Now, lots of people use it and, like me that day, stare at the screen trying to figure stuff out. And, it gets worse when something doesn’t work right – scanning coupons being the most common problem I’ve observed.  The whole process is slower than the paid checkout folks and it’s no longer the time saver it used to be.

It seems that we are doing more and more of the work in business transactions. They have shifted work to us. The corporations save on labor costs, and supposedly we benefit from lower prices, but I do wonder. Corporate profits have been very robust, even during this downturn. Perhaps some of that is because we now do work, for free, that they used to have to pay someone to do.

Thursday, July 8, 2010

We’re Doomed

A couple of items crossed my path Tuesday that reinforces my feeling that politics is a waste of my time.

First, I read an editorial in Barron’s about the financial services bill. In their opinion, it’s 2,300 pages of rules that will increase reporting requirements, but not solve any real problems. They compare it to the Sarbanes-Oxley bill that was passed right after Enron. Sarbanes-Oxley was a gold mine for IT consultants – it made me a lot of money for a while. But, did it really solve any problems?

Second, my friend Darrin commented on my previous post. In it he asked a very important question: do I trust Congress to write appropriate, effective laws? Well, based on my experience – no. I get enraged when I hear that they vote without even reading them. Of course, who would want to read them? I downloaded the health care bill (another poorly conceived 2000+ page group of new laws) and I couldn’t read it either.

So, I still believe that industry cannot regulate themselves, or control their instinct to make bad decisions to serve short-term profit motives. And, I now acknowledge that Congress (this Congress, at least) is not competent to write effective regulations. Where does that leave us? Doomed.

Monday, July 5, 2010

I Want to Be a Pure Economic Libertarian, but…

There are some who say they want a totally deregulated business environment. I don’t see how that is possible. I say that because some business decisions (cut corners on underwater oil drilling, create derivative financial products around probable bad mortgages) create collateral damage that the business has not, and cannot, account for. The accounting system (GAAP) has huge holes in it. The cost of an environmental disaster such as we’re encountering in the Gulf could not have been costed when that drilling platform was sent to do its work. The economic fallout (frozen credit markets, bankruptcies, unemployment) could not have been costed when CDOs and CDSs were created. How do you value such calamities?  If you could give it a wild-ass-guess, you’d never drill for oil or create new financial products – innovation would grind to a halt. However, when things do go wrong, somebody has to pay to clean up the mess. And the only “somebody” that can is the taxpayers, through the proxy of government. And, because the taxpayers generally foot the bill when things go really wrong, the taxpayers have a right, an obligation really, to create regulations to try and avoid those disasters from happening again. That is the reason I think a truly, fully deregulated business environment will never be practical. And that is the reason I can’t subscribe to pure laissez-faire free market economic theories, as much as it appeals to me for other reasons.