One Word

To the cherished life
there is but one word.
Peace.

-ndh

Scuttlebutt: Scuttleblog - Sailing News and Commentary: Forty Little Children

A new little ditty running on the Scuttlebutt Blog today.

Scuttlebutt: Scuttleblog - Sailing News and Commentary: Forty Little Children

Making weapons.

While making weapons may well be our core competency, using them to make peace certainly has proven to be a dismal failure. Let's move on to something good.

27,000 dollars and 27,000 days.

Why wallets and days feel thin, and what to do about it.

I recall waking one day in the middle 1980s and wondering how many more times I would get to do that. I ran some quick math.

I found that if I lived to be 74, about the average life expectancy of a male at the time, I would have a bit over 17 thousand more chances to open my eyes and greet another day. Given that I was a year from my 9 thousandth morning, I thought little of it.

But the notion popped back into my head on my next birthday, when instead of thinking in years, I began to find my halfway point. I was halfway to 50. That seemed old. Every birthday since, I've rerun the math. Last September I turned halfway to 96.

If you are male and lucky to live to 74 years old, as half of males will do, you will have enjoyed about 27 thousand days. If you are a woman, you might tack on another 2 thousand or so. What might that mean?

The old adage "a dollar a day" will work nicely as a metaphor.

Twenty-seven thousand dollars seems like a nice chunk of change, whether you earn that much in a year, 6 months, 3 months or one. It's a nice downpayment on an average home. It will pay for a decent new car or a loaded late model used one. And 27 thousand days seems like a nice block of time too. But one dollar and one day have starker, eerier similarities. A dollar seems to fly out of our hands, buying perhaps a small gas station coffee or a pack of gum. Likewise, imagine a normal Sunday in America, flying by. You might wake up, make coffee, troll around on Facebook. Unload the dishwasher. Watch a couple of NFL games. Toss a pizza in the oven. Iron a shirt and fold some socks. Play some X-box. Shower and hit the sack. Come on, be honest. You've done it too.

And if you're like me, you might now be stepping back to think in terms of years and considering that both 365 days and 365 dollars can speed by with not much gained. One more year until retirement. One more car payment.

So sometimes we try to hold on to our days and our dollars. The trend towards saving and away from debt in America that started in 2008 may be indicating a desire to slow down the flow of money, and perhaps even the flow of time, though the pressures against these things are gigantic. Try stopping time. Saving money might be just as hard for a while.

Consider the 600 billion dollars of so-called quantitative easing, or simply-put, the printing of money planned by the Federal Reserve coming in the next couple of years. I'm no expert, and I'm not advocating one monetary policy or another, just pointing out that the addition of new dollars into the economy may well spur spending, but for those trying to save, it will reduce the value of the dollars that they hold. Printing money may be good for an economy, but it won't be good for some individuals in it. The system is rigged against saving, it has been for decades, and it could be going forward.

Now let's think about this idea in terms of time.

I hope that you are lucky to awaken a full 27 thousand days on this earth or more. But if you do, then during your time, life expectancy will increase and the world's population will grow. The more people and the older their age, the more days are in play among all people, and the less it may feel like yours matter in the grand scheme. Theoretically, population and public health may be to our days, what printing money is to our dollars. In economic terms, they are both deflationary. The system seems rigged against a productive life.

Printing money is worrisome for many economists, because it is baseless, that is, not connected to a standard. Likewise, living among billions creates superficiality, the sense of being surrounded by things but void of meaning.

But this is where the metaphor must be deliberately disassembled, one person and one choice at a time. We may not be able to control the value of our dollars, but we can control the value of our days.

A dollar really isn't anything but a marker of energy or ideas. Its holder can't do anything with it except place bets and hope it grows. Beyond that, it sits there inanimate, like any other piece of paper, doing nothing.

But a day in the hands of a motivated holder is a maker of energy or ideas. When next Sunday comes along, we can choose to do something that counters the force of time deflation. We can share. We can learn. We can teach if we've learned. We can use our combined time to make something new, whether we're halfway to 50, 100 or 150. Imagine the good, if just a few of us choose this, starting today. Imagine the endless possibility if more than a few do.

Conspiracy done well

Conspiracy done well needs a cynical few and blind faith of many.

Palpable irony

So yesterday, an old friend called me un-American for questioning the logic of a vote for Ron Johnson, who happens to be the the first far-right Wisconsin ideologue Senator from Appleton since Joe McCarthy. Palpable irony. Chuckle. Cry. Remember to chuckle again.

The Process

When you follow The Process, whatever it is, you are, of course, destined to follow.

Tea Puppets

 When rage and ideology usurps common interest and ground, only the puppeteers win.

Rebalancing

In all human history, resources perpetuated population.
For a human future, population will perpetuate resources.

-ndh

On Fathering

Long after, the only question will be how well did we parent?
Did we preserve the land and seas?
Did we raise honest and smart kids?
Did we care and give in our time?
-ndh

Hey Walmart

Purchasing power is not a value-add.

Nature's knack

Nature has a knack for leaving things in a better place than before. It's an art that humans have forgotten since the invention of money.

Why the lobby

The only thing worse than a monopoly is a deregulated one.

Unless, of course, it's yours.

Can we?

Life absent fact and idea is waste. Waste is failure.

But life fueled by fact and idea is enlightenment.

Can we only opine and eat? Or can we, like nature and other animals, be factual and ingenious?

Can we? Or will we just waste. Away.

Jindal's way of life

Jindal: “Let’s make no mistake that what is at threat here is our way of life.”


Sir, the culprit isn't this spill or one incompetent institution or another.... the culprit is an addiction. Your way of life is threatened because of our way of life.

http://www.nytimes.com/2010/05/25/science/earth/25spill.html?hp

And more on drilling.

DECONSTRUCTION: Using market forces to correct supply imbalance.

The consequences of the housing and toxic debt crises are still being felt and they reach us all. Years of cheap, easy credit enticed under-qualified borrowers and over-zealous developers to build unsustainable buildings, roads and neighborhoods all over the country (and we see now, in Greece, Spain and other places), and we have a supply and demand imbalance: too many units, too much borrowed to build them and too few people interested in borrowing again to live or work in them.

Still, mortgages can’t be re-written on upside down properties, a million or more construction workers are jobless and the rest of us wonder if our home values will ever recover. At the same time, large banks have weathered the storm at the expense of the American taxpayer: they are flush with capital, but not poised or inclined to lend because they can’t see a clear path away from high-risk collateral.

The mortgage recovery act in 2008 was proposed to stop the bleeding by restructuring mortgages to reflect realistic home values; in effect codifying all of our losses, and ensuring a long and deep downturn. So it didn’t take hold, and that’s a good thing. And the most visible provisions related to housing in the 2009 stimulus bill were energy upgrade tax credits, and first time home buyer tax credits; policies that  add to consumer debt (for qualified borrowers) and do nothing to remove excess supply, weakening the outlook for long term recovery.

It’s time to face facts. We overbuilt homes and commercial buildings for decades and unemployment has shrunk the pool of qualified buyers and interested lenders. Until units are removed from the market and real value-producing jobs are created we’ll never see a full scale, sustainable recovery.

Here is a way out. I’ll call it the deconstruction market. The objective is to free cash flows for higher value use, and to tap remaining stimulus funds to create jobs that remove excess, unused interior space from inventories that are standing idle and wasting energy and to employ people to do the vast amount of  work required for the task.

Homeowners in distant suburbs and depressed regions with upside down home values would have an option to trade up to smaller but smarter spaces closer to public infrastructure and with shorter commutes to schools and work, freeing up time and cash. The option would be available for 5 years, and stipulate a minimum 30% reduction in overall square feet, and 40% lower target operating costs with energy upgrades.

Their mortgages would be rewritten to up to 100% of the value of the new home based on current valuations and future energy upgrades, and extended to up to 50 years at a fixed low interest rate, significantly freeing up cash flows with lower debt service. They would be obliged to invest any down payment, tax credits and 50% of 10 years of future cash flow savings into the home immediately to pay for redesign and reconstruction to capture the best use of the smaller space using renewed materials and for energy efficiency upgrades like solar, insulation, on demand heat and water, radiant heating systems and windows.

The government (us) would take ownership of the vacated home temporarily. The original mortgage holder would write down the difference between the old mortgage and the new mortgage.

Unspent recovery act money would be invested to hire contractors to disassemble the vacant homes and recover the salvageable materials and made ready for resale. These materials would be put on the market to supply upgrades (consider how many modern windows could be moved from one home to another.) The land would be recovered and owned by a federal trust, which would in turn selectively lease it inexpensively to flex-farms, lease or sell it for renewable energy farms, or recover it to wetlands where water supply is at risk (and reduce redundant water infrastructure built to serve the exurbs). All proceeds from renewed materials or land leases or sales would be split equally between lenders to cover loan losses and the government to cover asset losses and program costs.

Of course there are also homes that are already near public infrastructure that can’t be traded up and are in or near default.

In this scenario, one half of the home would be refinanced if the home would be converted to a managed duplex or a townhouse. Renewed materials would be used and construction workers hired to convert the building. Similar mortgage and financing terms might apply and the homeowner would become the property manager. The vacant unit would be placed on the trade-up market and await either a tenant or a buyer.

And there are homes that were foreclosed, are empty and are now owned by banks. These would also await deconstruction by the same teams, but would be at the end of the queue. In this case, as land values recover, banks would see some of their asset values recover as well.

So who wins and who loses? There would be a quick round of losses felt mostly by lenders and a 10 year period of transition as people move around and infrastructure adjusts. Big-box retailers and exurb commercial developers would probably complain. But by long-viewed financial measures, banks, borrower's balance sheets, small, mid-sized and flexible businesses and communities would be strengthened. And it would be up to us to decide if the idea meets our aspirational needs. We’d have to live closer together, and we’d not have as much storage so we’d have to have less stuff. We’d drive fewer miles, and demand better, more flexible, more convenient and safer public transportation and education systems. Schools facing declining enrollment and budget crisis would be strengthened by an influx of active families taking an interest in their improvement. Water and electric systems would have to be modernized. We’d use less energy while at the same time, employ more people (that we know). We’d borrow less but longer, so we’d have to find a way to get along where we live.

And overall, our collective wealth would begin to matter on the world stage again. It would come from labor and smart design, not short-selling. Its basis would be assets and innovation, not depreciation. It would account for long term uses of land and resources. It would reflect a balanced supply of homes and buildings to the demands of the people in them. And finally, we would be reminded that we are neighbors, and that neighborhoods were once, and can again be, a good thing for America.

- N. Hayes, May 7, 2010


Note: But it appears we've elected to take a different path: http://www.nytimes.com/2010/05/16/business/16builder.html?hp

Immelt vs. Populism

Today Immelt said: “People need to tone down the rhetoric around financial services and stop the populism and be adults.” So, the CEO of GE is calling for an end to "political ideas and activities that are intended to represent ordinary people's needs and wishes." Hmmmm.

http://www.americanbankingnews.com/2010/05/07/g-e-nyse-ge-ceo-jeffrey-immelt-comments-on-dow-plunge/

On Oil Slicks

Energy is the #1 issue. It's why we're at war, and why we're mired in recession, and why the planet is heating. Obama, we don't need a fly-over (that's Bush-era mumbo-jumbo), we need a cogent, clear and common sense energy plan that ends trade deficits, risks to nature and health, and isn't a tax-payer funded subsidy for the global industrial complex.

Between the lines: On Jobs

Building on a previous post: On Jobs.


A Capitalist believes that profits make jobs. 

• (Leadership threatens capitalism, since capitalists follow trends and transactions, and don't want anyone to notice.)

An Entrepreneur believes that jobs make profits.

• (Entrepreneurship is leadership, since entrepreneurs create trends and transactions, and need people to help.)

We need more Entrepreneurs.

-ndh

Inspirational TV?

No one is inspired to get up off their ass, turn off the TV and go outside by sitting inside, on their ass, watching TV.
-ndh

On Jobs

A Capitalist believes that profits make jobs.

      An Entrepreneur believes that jobs make profits.

We need more Entrepreneurs.

-ndh

Toe-Tag Travesty

My kids call it my 11th toe. I have what’s called a “tag” between my big and middle toes on my left foot. It’s about the size of a raisin. The doctor calls it "nothing to worry about." But it bugs me when I walk barefoot, and over the years it has grown. It's kinda' gross.

So I asked my physician to remove it, and he said that a dermatologist should take a look. She recommended a podiatrist. And I made a third appointment to see one.

------

I own a small business. We buy heath insurance. It’s our largest expense except payroll; more than we pay in rent, taxes, phones, internet, and office supplies, combined, and it gets more expensive each year. To hold costs down, we’ve raised deductibles and increased co-pays. So over the years, as our insurance premiums have climbed, the direct cost of health care to the family has also risen. I can estimate that combined annual health care costs during the last 11 years that I have owned the business have risen about 35% a year, and 600% compounded since we bought our first policy. We are a company of young, healthy people who exercise, eat well, don't smoke and we're not making babies. Our only defense has been to bounce back and forth between the two firms approved to sell insurance in the state. It hasn't worked.

------

While I waited in the lobby, a man limped in helped by a cane. He was disheveled and overweight, well worn shoes unlaced. He seemed to be favoring the insides of his feet, and I assumed that his arches were collapsing. The clerk asked him for a picture ID and an insurance card. A few minutes later, she said, “Sir, I’m sorry but this isn’t your insurance card.”

He tried a well-rehearsed lie, “Oh no, they must’ve given me the wrong card back. I was just at the clinic down the street, and the lady switched them. But it’s the same insurance. I can show you a letter....” Nope. He gathered his cane and the phony card and limped out of the office, looking hopeless.

------

“Mr Hayes?”, called the assistant, and the fleecing began. A nurse gathered the particulars of my visit and took my blood pressure and temperature. A bit later, the doctor came in, glanced at my toe, and said: “It’s benign. Nothing. We could do this in minutes, but I prefer to work at the surgical center. My assistant will explain what you can expect.”

She had five two-sided sheets of instructions to go over: “We’ll see you on a Friday at the surgical center. Our scheduler will call you with options. At least a week before, your primary physician will have to do a complete physical so that the anesthesiologist knows what to expect as they administer your medicines. The morning of, you'll need to shower with an antibacterial soap. We can help you with a prescription. For the surgery, you will be sedated, so you’ll need to have someone pick you up. For at least 3 days you’ll be wearing a special surgical boot that we will provide, because you won’t be able to fit the bandage in your regular shoe. And, although we know that these things are benign, we’ll be sending it to the lab for testing. We'll get back to you with the results.”

I began to connect the dots: 8 to 15 thousand dollars for a harmless raisin-sized soft fleshy mass, followed by big pressure to increase our insurance rates and our out-of-pocket-costs, affecting our ability to hire new employees or to offer competitively priced products and services to our customers. And the guy with the collapsing arches can't get care.

So I’ve told the podiatrist to pound sand starting with this message. If he calls, I'll use harsher language. And I’ve sent this message to my regular physician, my insurance company, the Governor, my senators and I’m sharing it with you.

Why do we need health care reform? Not all, but some doctors see unlimited opportunity to add and charge for ridiculous procedures. Like stealing from a baby. Not all, but many procedures are done to offset very small risks, but nobody is willing to size the procedure to the risk -- not the patient, the doctor, the clinic, the regulators or the insurance companies. Not all, but some insurance companies have no incentive or mechanism to control costs. Not all, but many of the uninsured have to steal to be treated. Almost all policymakers are either spineless or on the dole. Not all, but some employers won’t make it through this recession due to the waste created by a massive poorly regulated oligopoly that we call health care in the United States. And almost all people like me with insurance don’t say stand up and say no. Enough is enough.

I’ve got a tag between my toes. If there’s a doctor out there willing to hold his nose, pour on some alcohol and clip it off, I’ll pay cash. And it you're in Milwaukee and need a Podiatrist, email me and I'll tell you which one to avoid.

--------

Consumer prices fall = time to party!

Reports today that consumer prices (excluding food and energy) declined for the first time since 1982 have me wondering:

- Doesn't consumption = demand? And doesn't an abundance of demand = price increases? Arguably, the only thing we've produced in ample supply since 1982 is rampant consumption, given peak consumer debt, high unemployment and a shortage of talent on the world stage. It had to end, and when it did, prices had to fall. So what part of this surprises?

- Does the data suggest that this recession has been deep and long enough to influence the behavior of two generations of American consumers? Or is it anomalous? Will the debt cult recover, so that the relentless price climb can continue?

- Excluding food and energy seems to me to be like excluding oxygen as a life-force. Who has used credit at the grocery store or the gas station? It's the way of the household, and it's the way of the nation. 'Nuff said.

As long as consumption increases and resources are constrained, prices will climb. The question, then, is on what? Health and welfare? Basic needs? Debt service? Uhuh.

Banks and Governments

The lender has the power. Until the borrower changes.

-ndh