What Do Snow Birds, Humpbacks, and Cruiseships Have in Common?

Ah, winter. Love those change of seasons!

Living here in Hawai'i for the past 8 1/2 years has given me a different perspective on "seasons" and on what it means for them to "change." My wife and I lived for 30+ years in southern Ohio, near Cincinnati before coming here. Fall and spring were very nice. In the fall the color of changing leaves could be spectacular. In the spring the sudden reawakening of the land and the flowering plants, trees, and shrubs were deeply invigorating. But the weather for the rest of the year was varying degrees of yuck. Summers were hot and muggy, with violent thunderstorms and tornadoes. Winters were gloomy, clammy, and grey, with the occasionally blizzard or ice storm thrown in for good measure. Generally speaking about 3-4 months of the year were pretty nice, 3-4 were just tolerable, and the remaining 3-4 months were miserable.

Visitors from Ohio and other parts of the mainland U.S. are usually curious about what it is like to live in Hawai'i, and often they will ask, "Don't you miss the change of seasons?" Given what I just said about the weather in Ohio, you can probably guess my answer ("are you kidding?"). I understand the basis for the question, though, because the weather here varies so little compared to most other places. Our average shift from summer to winter daily high temperature is only about 10 degrees. In my particular location that means daily highs from upper 70's during the winter to upper 80's during the summer. The year round difference between daily high and low temperatures is only 10-12 degrees. It is rare to have a whole day without sunshine -- no dark and dreary periods. The humidity can vary considerably but averages around 50-60% and is usually moderated by constant breezes (dew is infrequent). It is relentlessly nice, in my opinion.

Actually, though, we DO have seasons here, but (a) they are obvious only if you have lived here a while, and (b) they don't involve changes from grey and lifeless to colorful and vibrant or the reverse.

For example, we know it's Fall when the number of cruise ships visiting our bay increases as they reposition from summers in Alaska to winters in the South Pacific. About the same time the snow birds from the mainland begin to arrive, and so do the humpback whales who migrate each year from Alaskan waters to winter here (smart animals). Various plants and trees that don't bloom during the rest of the year start to do so, like the poinsettias people plant in their yards. The African Tulip Trees and Jacaranda provide a refreshing change of color from...all the other color that we see all year around. The beans on coffee trees mature to a bright red color before they are picked during the fall and winter. A few plants do kind of go dormant, like the plumeria that lose their leaves during the winter (though they often continue blooming).

So, you see, we didn't have to give up changes of seasons when we moved here. We just gave up the cold, grey, nasty part.

It is also the case that we really feel the changes even though the difference might be only a few degrees. One of the downsides of living where the weather is so constant is that after acclimatizing for a few years, our comfort zone seems to shrink. Anything below 70 degrees seems downright cold. One way you can tell the locals from the tourists in the winter is to look for the ones wearing sweatshirts and jackets instead of shorts and t-shirts. Likewise, a degree or two above normal results in locals complaining about the "heat wave."

Yeah, right.

Who IS S. Larson?

My wife and I just canceled our CitiCard credit card. We did this because CitiCard very badly mishandled a dispute over a hotel charge. The whole saga of the dispute, however, is not the subject of this blog (though maybe I'll write about it later).

Instead, the focus is on the CitiCard mystery person who corresponded with us during the dispute process and whom I'd like to blame for screwing things up -- except that I suspect the person doesn't really exist.

As the dispute progressed we received several letters from "S. Larson" at CitiCard. Despite attempts to make the letters seem like they were personally addressed to us, their disjointed obliqueness and lack of specifics unique to our case made us begin to suspect they were composed of chunks of boilerplate. I began to envision S. Larson as some overworked lackey in a CitiCard bullpen cutting and pasting letters to us from a standardized set of approved responses.

We also noticed that the signatures on the letters were always exactly the same. And since they didn't smudge, we decided S. Larson was using a graphic signature file rather than taking the time to actually sign the letters.

At one point in the dispute I became frustrated with the lack of progress and called one of the merchants involved myself. The person I spoke with informed me that a CitiCard representative named Debbie had been in contact with him, not "S. Larson." At this point I began to suspect that S. Larson was a cover name to shield CitiCard's customer service workers from being contacted directly. This might explain why the name is genderless, making it very difficult to even address a letter to S. in personal terms.

For the heck of it I Googled the name S. Larson. Go ahead, I'll wait while you try it yourself. It turns out S. Larson is quite the continuing hot topic and nearly all of it very negative. One of the Google hits I found particularly interesting was the long-term discussion going on for several years regarding the existence of S. Larson on Daggle, the Blog of Danny Sullivan, who has had a CitiCard for about 20 years.

He's been getting letters from S. Larson the entire time, always signed the same way, and always impersonal. Beginning to suspect S. wasn't real, Sullivan went to great lengths to investigate, and his sleuthing efforts are documented in the blog -- really fun reading. Bottom line to his probing is that even if S. Larson does exist, it is quite likely that he or she is NOT the author of each letter and instead underlings send them out with the signature file attached. Most of the posts responding to Sullivan's blog give similar stories and similar frustrations in attempting to communicate with CitiCard. A couple of posts are from people who say they were employees of CitiCard and knew S. Larson (referred to as Sue, Sandy or Sandi, depending on the post) personally. However, aside from identifying her as female, not much information is given that might put this to rest.

The idea of signing all letters regarding customer relations issues with a genderless, computerized signature (even if the signer exists) is just plain bad business practice. And if the signer does not exist at all, or actually doesn't have any personal involvement in the issues addressed in the letter, this is deceptive and insulting to customers. But I guess we've now come not to expect much more than this from the financial industry.

I wonder if S. Larson got his/her bailout bonus this year?

Hanging Out, Messing Around, and Geeking Out

Many adults have a rather negative view of the younger generation's involvement with technology. We puzzle over groups of teenagers in malls walking and talking as much to their cell phones as to each other. They twitter, text, and surf the net constantly, to the point where we fear they spend as much time online as in "real" interactions. We regard most of this activity as wasted time devoid of any positive value. We blame the dependence of youth on technology for their lack of social skills, their resentment of authoritative structure, and their difficulty staying with just one task.

For adults with this dim view of youth's reliance on technology a recent British study seems to support the adults' conviction: A survey of 16 to 24 year olds found that 75% of them feel they "couldn't live" without the internet. The author of the study, Professor Michael Hulme of Lancaster University, concluded that "For young people the internet is part of the fabric of their world and does not exist in isolation from the physical world." A good part of negative adult thinking may stem from not really appreciating this integration of online and offline worlds -- to many of us they are separate, distinct, and unequal in legitimacy.

Over the past ten years or so considerable research has investigated the impact of new technology on young people's development. Most of it doesn't support the strong negative view outlined above. Some of the earliest findings were those of Don Tapscott, which he presented in a book titled Growing Up Digital: The Rise of the Net Generation. About ten years ago some of my students carefully evaluated Tapscott's data and created a Web tutorial (still available online) to present their findings. My students' conclusion, which I agreed with, was that although Tapscott was perhaps overly optimistic in his interpretations, there were indeed both positive and negative aspects of the net's influence.

More recent research has tended to confirm this balanced assessment. An important example of this is a 2008 study funded by the MacArthur Foundation as part of a large scale Digital Youth Project, which attempts to determine "... how digital technologies are changing the way young people learn, play, socialize, and participate in civic life." The report's lead author, Mizuko Ito at University of California, Irvine, summarized the findings by saying, “It might surprise parents to learn that it is not a waste of time for their teens to hang out online ... we found that spending time online is essential for young people to pick up the social and technical skills they need to be competent citizens in the digital age.”

The research revealed that today's youth uses the new technology to enhance and maintain social networks of friends and acquaintances, and also to gain knowledge and skills in self-directed learning activities. "Hanging out" with friends, for example, is an activity that all generations have participated in, but young people have simultaneously incorporated face to face interaction with various forms of electronic interaction. As the researchers noted, there are additional implications to hanging out for the younger generation because of the merging of online and offline social worlds: "Through participation in social network sites such as MySpace, Facebook, and Bebo (among others) as well as instant and text messaging, young people are constructing new social norms and forms of media literacy in networked public culture that reflect the enhanced role of media in their lives. The networked and public nature of these practices makes the “lessons” about social life (both the failures and successes) more consequential and persistent."

Another type of activity identified in the study is "messing around" with new technology. "When messing around, young people begin to take an interest in and focus on the workings and content of the technology and media themselves, tinkering, exploring, and extending their understanding. Some activities that we identify as messing around include looking around, searching for information online, and experimentation and play with gaming and digital media production."

Although adults often see this as haphazard and lacking in commitment, there are important positive outcomes identified by the study. "Whether it is creating a MySpace profile, a blog, or an online avatar, messing around involves tinkering with and exploration of new spaces of possibilities. Most of these activities are abandoned or only occasionally revisited in a lightweight way. Although some view these activities as dead-ends or a waste of time, we see them as a necessary part of self-directed exploration in order to experiment with something that might eventually become a longer-term, abiding interest in creative production. One side effect of this exploration is that youth also learn computer skills they might not have developed otherwise."

For some youth, a third activity can be extremely important because it is often ostracized by peer groups in face-to-face worlds. "Geeking out" is "...an intense commitment to or engagement with media or technology, often one particular media property, genre, or type of technology. Geeking out involves learning to navigate esoteric domains of knowledge and practice and participating in communities that traffic in these forms of expertise." It is important to note that although this activity often involves social interaction in online communities, the peer groups are often different from those in more friendship-oriented situations, and this can allow a young person to develop knowledge and skills that might not be highly valued by face-to-face peer groups.

There are other differences that are also important for understanding how some young people view traditional institutionalized learning. "Interest-based communities that support geeking out have important learning properties that are grounded in peer-based sharing and feedback. The mechanisms for getting input on one’s work and performance can vary from ongoing exchange on online chat and forums to more formal forms of rankings, critiques, and competition. Unlike what young people experience in school, where they are graded by a teacher in a position of authority, feedback in interest-driven groups is from peers and audiences who have a personal interest in their work and opinions. Among fellow creators and community members, the context is one of peer-based reciprocity, where participants can gain status and reputation but do not hold evaluative authority over one another."

There is much more to the findings of the MacArthur study, and I urge you to read the report. For example, I haven't dealt with the study's analysis of the negatives that face today's young people as they confront their technology-loaded lives. I'll just say that they may not be the negatives that many adults think .

2.4+112+26.2 = ?

No, this isn't going to be another installment in my "Banker's Math" series. The numbers above are the lengths of segments in the annual Ironman Triathlon held in Kona, Hawai'i each year. Imagine swimming in the ocean as fast as you can for 2.4 miles, then without a break hopping on your bike and riding 112 miles, then (again without stopping), dropping your bike and running a 26.2-mile marathon. That's the Ironman and you can see why its name is appropriate.

Of the roughly 1,800 athletes who compete all but about 150 are amateurs ranging in age from mid-20's to 80 (!). The older athletes aren't competing realistically against the young pro's, but rather within their own age group. Not just anyone can enter the Hawai'i Ironman. With only a few exceptions, all athletes must have finished in the top of their age group in at least one qualifying triathlon in the last year.

This is truly an endurance test. The professional triathletes complete the race in about 8-9 hours. Most of the amateurs take 12 to 14 hours, with some going right up to the cutoff of 17 hours. Imagine 17 hours of constant physical effort !

In case you're wondering, I haven't done the race and never will (but thanks for thinking I might be capable of it). However, since my wife and I live in Kona, we volunteer most years to help put on the event. It is really quite an experience, one that I find very inspiring and rewarding.

One reason I like it is that our normally sleepy little tourist town is transformed for about a week each October into an international festival. The athletes come from over 50 countries, and besides hearing them speaking different languages, they are easy to spot -- just look for the slender hardbodies zooming around on their hi-tech bikes and effortlessly jogging up the steep streets. Another reason is that some of our volunteer duties give us an opportunity to meet athletes and talk with them one on one. This can be particularly rewarding and inspirational, because we learn that in many respects they (not the pros, those in the older age categories) are fairly ordinary -- they have families, jobs, financial worries, etc., just like the rest of us. But they are also very different in their level of commitment to a goal where the main reward is deeply personal and the sacrifice to reach that goal is tremendous.

It would be very wrong to conclude that what these people are doing doesn't benefit anyone but themselves. They provide a positive model of dedication and effort in an age where positive models are in short supply. Inspiring others is a benefit to society we should recognize and appreciate.

Take Two Aspirin and a Dose of Vitriol

I grew up watching conservative William F. Buckley Jr.’s “Firing Line.” Even though I wasn’t conservative, I was impressed by Buckley’s intellect and depth of knowledge, and by how he brought these into play during his debates with guests on the show. At the other end of the political spectrum was Howard Higman, one of my instructors at the University of Colorado, a sociologist who was at least as far left as Buckley was to the right. Higman’s “Firing Line” was the annual campus wide event he organized called the Conference on World Affairs . The conference brought together politicians, writers, artists, and intellectuals representing the entire ideological spectrum for a week of panel debates and discussions on current topics. The atmosphere was one of spirited, yet informed debate, where the best minds grappled with complex and important issues in a productive way, despite their ideological differences.

In stark contrast is our national “debate” over health care reform, which seems strangely disconnected from reality and from rational, informed deliberation. There have been false and exaggerated claims from all sides (see www.Factcheck.org for examples), but it is the emotional and hyperbolic behavior of the most vocal conservatives that concerns me the most. The most recent example of this was the outburst by Representative Joe Wilson of South Carolina during President Obama’s address to congress concerning health care reform. Wilson yelled out “You lie!” when Obama stated that health care benefits would not be extended to illegal immigrants. Wilson quickly apologized, which is certainly to his credit. And it can be noted that other Presidents have also been heckled. But what concerns me is not only that Wilson was demonstrably wrong in his assertion (the current bill explicitly excludes illegal immigrants from receiving benefits), but that he was so vehement about it. Even more disturbing, many of his constituents in South Carolina endorsed both his behavior and his incorrect belief.

I’ve been puzzled over why this issue has been such fertile ground for emotional button-pushing tactics. After all, polls show that most Americans believe there is a real need for health care reform, and the issues of delivery, scope, and paying for it certainly could be approached calmly and rationally.

One suggestion offered recently by former President Jimmy Carter is that the vitriolic rejection of anything associated with President Obama is motivated by latent racism, by "an inherent feeling among many in this country that an African-American should not be president". The racism suggestion was quickly dismissed by President Obama himself , but I’m not so sure. It fits well with the view of Obama espoused by commentators like Sean Hannity and Rush Limbaugh as a tyrant leading the country to ruin with his insidious hidden agendas and policies. Facts are replaced by fear in this kind of thinking.

Another suggestion is related but a bit broader and more complex. The reason many have resonated to the outburst by Joe Wilson, according to columnist Tim Rutten is that immigration is related to a number of other concerns: “Health care reform may be this month’s battleground, but immigration, abortion, gun control, separation of church and state, and jingoism decked out as patriotism are the articles of faith from which the talk-show right’s catechism derives. Immigration remains a particularly resonant issue because it touches on so many of this tendency’s sensitive nerves: racial anxiety, gnawing questions of national identity and a generalized sense of traditions under threat.”

Whatever the reasons, I really hope that the country can move beyond the fear-mongering and hyperbole that pervades much of the social, political, and economic issues facing us. I’m sure William F. Buckley Jr. would agree with me.....

So, What Do You DO All Day??

I’ve been retired for about 8 years. When I meet new people and reveal that fact I often get the same reaction from those who haven’t yet retired themselves – they will often be curious about “how is it?” or “do you like being retired?” Over the years I’ve come to a couple of conclusions about how to answer those kinds of questions.

First, I’ve found that it is important to note carefully the tone and wording of the questioner. Some people are intrigued in a positive way, and their question is motivated by a sincere interest in knowing all the fun/relaxing/fulfilling activities that they, too may look forward to when they retire. Others, though, ask the question more like “but, what do you DO all day?” – these seem to be challenging you to demonstrate that retirement isn’t just a boring way to pass the time until you die. They can’t seem to imagine a life without a career and are looking for verification that without one a person is pretty much worthless.

Second, I’ve learned that any honest attempt to describe one’s daily activities is almost surely going to sound like life is a string of trivial and vacuous events. But this is true at any time of life – retirement doesn’t necessarily change the superficial nature of the list. Indeed, I’ve sometimes wanted to turn the tables and ask “but what do YOU do all day?” Thinking back to my own working days, I’d have to list a lot of things I didn’t enjoy or feel fulfilled doing – many things I recall “having” to do and yet really disliking them very much, even though as an academic I had a very rich and rewarding career. And really, that’s a major difference – 90% of the things I do now I want to do.

Bottom line. Whatever you do all day, try to make your experience of it enriching and rewarding in a personal way. Note that my emphasis is on your experience, not on the activity itself. Even the most seemingly trivial thing can be rewarding if you freely choose to engage in it and if your mind is open to fully experiencing it. My answer, then, to what I do in retirement, is “I live every moment as fully and completely as I can. What about you?”

The Power of Negative Thinking

In my field of Social Psychology one of the most central principles is that people’s beliefs about themselves and others often have strong impacts on behavior. This can be a straight forward relationship, as when a person modifies their interaction with someone based on beliefs about the other’s characteristics – for instance, being guarded and reserved with someone we believe is untrustworthy.

More interesting, however, are instances where our beliefs have influences that are more subtle and indirect yet the outcome has significant consequences for our well-being. An example of this kind of phenomenon was reported in a recent article by researchers at the Yale School of Public Health and the National Institute on Aging. It caught my attention because... well, “aging” is getting to be a very personal thing.

The Yale group looked at the stereotypes people have about getting older – beliefs such as “old people are helpless” or “old people can’t learn new things.” Stereotypic beliefs are conveyed in a variety of ways in any given culture, most often through depictions in films, books, news stories, and broadcast media. Different cultures have different views of aging, of course – in some societies the aged are revered as sources of cultural heritage and wisdom while in others (our own, certainly) the aged are seen in primarily negative terms that center on losing physical and mental abilities. It is important to remember that stereotypes are not accurate representations of a group of people, but rather are exaggerations of qualities or outright fabrications of qualities.

The researchers examined an interesting and important question: “Does a younger person’s belief in negative aging stereotypes influence that person’s health as they themselves get older?” It is easy to imagine at least two possibilities here. First, if somebody believes in a negative notion of what it means to get older, they might develop health habits (high fat diet and lack of exercise, for example) that in fact lead to poorer health. On the other hand, having a negative view of aging might motivate a person to adopt habits that are widely held to prolong youth – strenuous exercise, diet supplements, plastic surgery — at least some of which may actually contribute to a healthier life as the person ages.

To answer their question the researchers turned to a large data base that has been accumulating for many years, the Baltimore Longitudinal Study of Aging that was begun over forty years ago. In the 1960's a large group of young volunteers were given a battery of mental and physical tests, and these have been repeated at regular intervals as the individuals have gotten older. Included in the psychological measures was an assessment of the strength of each person’s belief in negative aging stereotypes. The physical measures of health included cardiovascular events such as angina attacks, congestive heart failures, myocardial infarctions, strokes, etc.

The results were clear and rather sobering. Younger individuals who held more negative age stereotypes were twice as likely (25%) to have a cardiovascular event over the next 30 years of their lives than those with more positive beliefs (13%). This relationship held even when the researchers controlled for other possible differences between the two groups when they were young. These included many things that are known risk factors for cardiovascular events: elevated blood pressure, family history of cardiovascular death, body mass index, depression, education, gender, marital status, number of chronic conditions, race, self-rated health, serum total cholesterol (milligrams per deciliter), and smoking history. These factors were not as good at predicting cardiovascular problems as the negative stereotypes people held.

The study raises a number of interesting questions that I’m sure the researchers are now trying to answer. For example, how do these individual differences in negative views of aging arise? Can the they be changed and if so, how? What behaviors did the negative beliefs engender that made the cardiovascular problems more likely? Can they be changed?

As we wait for the answers there is one thing that is a clear lesson from this study. Beware the power of negative thinking.


Reference: Age Stereotypes Held Earlier in Life Predict Cardiovascular Events in Later Life.
Becca R. Levy, Alan B. Zonderman, Martin D. Slade, and Luigi Ferrucci. Psychological Science, Volume 20, Issue 3, Pages 296-298.

Why I Need a New GPS

We all know the old adage about how men never ask for directions. It has something to do with the fragile male ego and being macho, and is probably rooted in some evolutionary trait left over from hunting mastedons. I recently experienced the modern version of this when my wife and I went hiking on some new trails near where we live.

I took along my trusty Garmin Etrax Topo GPS unit. GPS devices are part of the personal technology revolution, right in there with IPODs, cell phones, digital cameras, dvrs, and humongous flat screen tvs. In short, part of the golden age of guy toys. There are GPS devices for cars which make it possible for men not only to avoid asking for directions, but also to actually avoid getting lost. There are also the kind I took on my hike – small, hand-held units that show you the terrain, let you track your path, record your distance traveled, and find your way back to the starting point.

The trail we were following had been described to us but we had no map. We had to rely on rather vague explanations when we came to choice points because there were no signs indicating which way to go. And of course I had my trusty GPS. The route we were trying to follow was a loop that – theoretically – returned us to our car, which we had parked on a road at the trail head.

Things went smoothly for several miles, and my GPS indicated that we were indeed circling back toward the starting point. As we got closer and closer (and more and more tired), I was absolutely sure we were nearer and nearer our car and I knew exactly how to get there, based on the readings from the GPS. But then we came to a choice point where logic and common sense confronted male ego and male techno-worship. By this time we were on a road that was supposed to intersect the road on which we had parked the car. Going one way would take us to the car, according the GPS. However, going in the opposite direction seemed like the logical choice. I insisted on following the GPS. My wife opted for logic. After some increasingly heated exchanges I offered to let her stay while I walked to the car (my way) and then drove back to pick her up.

After I walked alone for another 1/4 mile it became clear from the GPS that the car was located in the middle of a large tree, making it somewhat difficult to drive. I backtracked and together my wife and I walked in the opposite direction, arriving in short order at the car, precisely where we had left it. The GPS was WRONG (the words stick in my throat).

There are probably good reasons why the unit was inaccurate in this situation. But the lesson isn’t simply that you should always trust your senses (common and otherwise) rather that technology – there are too many cases where people have been fooled by faulty perceptions and sensations, sometimes with disastrous results. But trusting technology too much can be problematic too, as my story illustrates. We need to temper our reliance on technology with careful, prudent analysis.

But most important, I need to buy a new GPS.

Banker's Math: Part Trois

I’ve written about this twice before in blogs about refinancing our mortgage and about bank charges for free services. A recent incident with my credit card (none other than Citibank) prompts yet another rant now.

My wife and I recently traveled to Australia. Some of the hotel arrangements were prepaid through Travelocity (prepaying is often cheaper, so it can be a good deal if you’re sure your plans won’t change). In going over my credit card statement after we returned, however, I noticed that one of the hotels charged us for the room even though it was prepaid. They must have caught their error, however, because a couple of weeks later the charge was reversed. No problem, right?

Wrong.

The erroneous charge was made in Australian dollars. Citibank graciously converted this to U.S. dollars — for a 3% “foreign transaction fee.” The 3% was calculated on the U.S. dollar amount. This is irritating enough, but it gets much worse. During the several weeks after the erroneous charge the Australian dollar became stronger against the U.S. dollar so that when the hotel reversed the charge for the same # of Australian dollars, the refund in U.S. currency was less than the original amount. Let me emphasize this – the reversed charge after conversion was less than the original charge, and we are out the difference. In other words, WE paid for the HOTEL’S mistake. Now for the kicker – Citibank refunded the foreign transaction fee, but recalculated it on the new U.S. dollar amount. Got it? Citibank PROFITED from the hotel’s mistake and we got screwed twice!

To be fair, I guess this whole thing might have worked to our advantage if the U.S. dollar had gotten stronger during the interim between the erroneous charge and the refund. But I just bet that buried somewhere in the fine print of the 30+ page contract with Citibank there is a clause that says if the exchange goes in the client’s favor then the excess will be nullified. The real point, though, is that the refunds for both the hotel’s error and Citibank’s conversion fee should be the same in U.S. dollars as the amount initially charged, regardless of whether the exchange rate goes up or down.

Anything else is Banker’s Math.

Banker's Math: Part Deux

In an earlier blog I described the delightful process of refinancing our mortgage. A few days ago we received an offer from our bank that prompts me to offer a follow up.

The offer was for us to pay the mortgage every two weeks instead of the usual once per month, with each payment being ½ the usual monthly amount. Why, you ask would this be to our benefit? The enticement was that over the course of a year this would amount to 26 payments, the equivalent of 13 monthly payments. That extra payment over the course of the loan would save a considerable amount in interest and result in paying off the loan more quickly.

Now for the fine print. For helping us save all this money, the bank would assess a service charge for each payment, and a one-time start up fee of $299. Cha-ching! Plus, of course, the bank receives more money sooner, which allows it to invest, loan out, pay executive bonuses, etc., etc. Keep in mind, the terms of our mortgage allow additional principal payments at any time for free – if you pay them an additional amount each month it will accomplish the same thing without incurring any charges at all.

The bank’s offer is now confetti at the bottom of my shredder.

New Meaning to “The Economy is in the Dumper”

I’ve written in a couple of previous blogs that one of the revelations of the current economic meltdown is that we have created an economy that depends on ever greater spending and borrowing by consumers. Specifically, if we don’t buy more and more goods – and borrow the money to do so – the system collapses. A recent Associated Press report by James Hannah shows that we must also throw away the stuff we buy.

It seems that an unexpected negative (yes, negative) consequence of the downturn is that people are throwing away less trash, with dire economic consequences: “With consumers cutting back on new purchases, there is less packaging to throw away. The downturn in new housing means less waste from construction materials such as insulation and from discarded drywall and lumber. Restaurant waste is down because people are eating out less...Landfills in Ohio received 15 percent less waste from August to January than they did for the same period a year earlier. The waste stream at Miramar Landfill near San Diego has dropped 35 percent over the past year. Waste at Puente Hills Landfill near Los Angeles is down from 12,500 tons of trash a day to about 8,500.”

Although this might be a good thing for the environment it turns out that in our waste-based economy it’s downright tragic: “To deal with the drop-off in dropoffs, landfills are laying off workers, reducing hours of operation and hiking disposal fees, with the increases passed along to cities, businesses and consumers...About 82 temporary workers have been laid off at Puente Hills and its two sister landfills, shrinking the work force to about 280 and forcing permanent employees to take over traffic control, windy-day litter pickup and landscaping. Several landfills operated by Waste Management Inc. - which runs about 270 active landfills in 47 states - have gone from operating six days a week to five or have reduced hours of operation, said spokeswoman Lisa Kardell.”

Clearly, this may mean we will need a government bailout of the trash industry. “Waste Management's fourth-quarter profit slid 29 percent on declines in its recycling business and one-time charges. But in its earnings report, the Houston-based company also mentioned declines in the collection of industrial waste.” Companies such as Waste Management are bravely coping with this problem in a good old capitalistic way – raise prices. As Hannah explains, “Landfill operators rely on disposal fees to fund operations. If the amount of waste decreases, operators have to cut costs, dip into reserve funds or increase the fees, which are passed along to consumers. In the Columbus suburb of Grove City, the Solid Waste Authority of Central Ohio landfill- with 10 percent less waste - has raised disposal fees by $2 a ton to $35.50 and dipped into its reserve fund. The landfill also is considering accepting trash from out of the district.”

There you have it. We have economy based on consuming, borrowing, and disposing. Can this really be sustainable?

Domains of Pirates: High Seas, Cyberspace, and Boardrooms

I think there is a connection between three recent world developments – the activities of Somali Pirates (particularly the hijacking of the American freighter Maersk Alabama and the rescue of its Captain by the U.S. Navy), the spread of the sophisticated Internet Worm Conficker, and the subprime lending practices of financial institutions that led to economic chaos (and to the invention of the catchy term, “toxic asset”).

These developments aren’t directly related, of course. To my knowledge the Somali Pirates aren’t hackers, and although bank executives may have boats, they’re more likely to be found sailing near cushy resorts than on the high seas. Still, all three share some common qualities that are fun to ponder.

First, all three are motivated by greed. The Somali Pirates are collecting millions of dollars by holding ships and crews for ransom. The authors of Conficker seem to be positioning themselves to sell certain services, like computer system sabotage and spamming, to the highest bidder. Financiers at companies like AIG, Citicorp and Goldman-Sachs collect huge salaries and bonuses for enticing people with questionable creditworthiness to take out loans.

Second, all three have arisen from environments that lack normal restraints against unethical behavior. Somalia is essentially a country without a government, where the rule of law is in the hands of local warlords. The internet by design lacks centralized control and makes detection and enforcement very difficult. The de-regulation of financial markets is blamed by many analysts to be a major cause of today’s economic melt-down by allowing questionable activities to go unchecked.

Third, all three require victims that are vulnerable because of ignorance, impotence, self-interest, or some combination of these. Somali Pirates have been successful because the ships they have preyed upon are undefended and therefore impotent to withstand even a small force of attackers. The spread of the Conficker worm was possible only because computer users lack the knowledge and motivation to update their computer systems, and infected machines at first show no visible signs of being host to the Conficker program. Homebuyers with less than adequate means were ignorant of the long-term consequences of over-extending themselves, and were eager to take advantage of high-risk loans promoted by lenders.

Finally, all three of these developments contribute to the general feeling that things are out of control and that our old beliefs just don’t seem to apply any more. It is very uncomfortable to face the possibility that an economy based on “the American Dream” may not be sustainable, or that unethical behavior can’t be punished without hurting even further the victims of that behavior, or that lawlessness can’t be stopped. This is a feeling that makes people very vulnerable to political and religious leaders who offer simple fixes. Simple fixes can’t really work in this complicated environment, but believing that they will solve our problems will certainly make us feel better. On the other hand, if the current crises can somehow lead to a more realistic assessment of the true nature of our economy and its impact on society as whole, then perhaps all this will have been worth it.

Banker’s Math: 29=31=$

My wife and I refinanced our mortgage a few weeks ago. We were fortunate to be among the few who qualify these days, given that the banks have now decided to be more responsible in their lending practices. To their credit, they scrutinized us oh-so-carefully, despite the fact that our loan to value ratio was less than 50%, we have no other debts, we have credit scores over 800, and we have a record of over 35 years of never missing or being late with a payment on anything, including mortgages.

For those of you who haven’t been through this process, be prepared to see just how it is that banks and others involved in the loan business make money for doing essentially nothing, and how everything is set up to favor the lender, not the borrower. For example, even though the new loan is with the same bank as the original loan we took out five years ago, we had to pay for them to do another title search and issue a new title insurance policy (note, there had been no change of ownership to the house and they knew it). Then we have all the fees – a fee to close the old loan, a fee to prepare the documents, a fee to record the documents, a fee to check our credit scores, a fee to calculate the fees, etc., etc.

The coupe de grace came when we received the figure needed to pay off the old loan. The day of reckoning, when the old loan was paid and the new one began, was March 2nd. Our last payment on the old loan had been for interest to February 1st. Since 29 days had gone by (28 in February, plus 1 in March) I expected to pay 29 days’ worth of interest. Wrong. According to bankers’ math, a standard month (30 days) had gone by, plus one more day for a total of 31 Bankers’ days of interest required for the payoff. Seriously – to our bank, February has 30 days, not 28, and we had to pay for those 2 extra days as well as the 29 that had actually gone by. I called the bank about this and of course got nowhere. Banker’s math trumps the borrower’s math every time. Cha ching!

Ah, Love Those Changes of Seasons!

My wife and I lived in Ohio for over thirty years. A friend who still lives there recently forwarded the following parody of a Yuppy Diary that seems to capture part of the reason we left after retirement. You non-Ohioans just substitute whatever is appropriate given your locale for “Ohio” “fall color,” “snow,” “deer,” and “rust.”

“Dear Diary: Ohio Winters:

Aug. 12 - Moved into our new home in Ohio. It is so beautiful here.
The hills and river valleys are so picturesque. I have a beautiful
old oak tree in my front yard. Can hardly wait to see the change in
the seasons. This is truly God's Country.


Oct. 14 - Ohio is such a gorgeous place to live, one of the
real special places on Earth. The leaves are turning a
multitude of different colors. I love all of the shades of
reds, oranges and yellows, they are so bright. I want to walk
through all of the beautiful hills and spot some white tail deer.
They are so graceful; certainly they must be the most peaceful
creatures on Earth. This must be paradise.


Nov. 11 - Deer season opens this week. I can't imagine why
anyone would want to shoot these elegant animals. They are the
very symbol of peace and tranquility here in Ohio.
I hope it snows soon. I love it here!

Dec. 2 - It snowed last night. I woke to the usual wonderful sight:
everything covered in a beautiful blanket of white.
The oak tree is magnificent. It looks like a postcard.
We went out and swept the snow from the steps and driveway.
The air is so crisp, clean and refreshing. We had a snowball fight.
I won, and the snowplow came down the street. He must have gotten too
close to the driveway because we had to go out and
shovel the end of the driveway again. What a beautiful place.
Nature in harmony. I love it here!


Dec. 12 - More snow last night. I love it!
The plow did his cute little trick again. What a
rascal. A winter wonderland. I love it here!


Dec. 19 - More snow - couldn't get out of the driveway
to get to work in time. I'm exhausted from all of the
shoveling. And that snowplow!


Dec. 21 - More of that white shit coming down. I've got
blisters on my hands and a kink in my back. I think that the
snowplow driver waits around the corner until I'm done
shoveling the driveway. Asshole.


Dec. 25 - White Christmas? More freakin’ snow.
If I ever get my hands on the sonofabitch who drives that
snowplow, I swear I'll castrate him. And why don't
they use more salt on these roads to melt this crap??


Dec. 28 - It hasn't stopped snowing since Christmas. I
have been inside since then, except of course when that SOB
"Snowplow Harry" comes by. Can't go anywhere, cars are
buried up to the windows. Weather man says to
expect another 10 inches. Do you have any idea how many
shovelfuls 10 inches is??


Jan. 1 - Happy New Year? The way it’s coming down it
won't melt until the 4th of > July! The snowplow got stuck
down the road and the shithead actually had the balls to
come and ask to borrow a shovel! > I told him I'd broken 6
already this season.


Jan. 4 - Finally got out of the house. We went to the store
to get some food and a goddamn deer ran out in front of my
car and I hit the bastard. It did $3,000 in damage to the
car. Those beasts ought to be killed. The hunters should
have a longer season if you ask me.


Jan. 27 - Warmed up a little and rained today. The rain
turned the snow into ice and the weight of it broke
the main limb of the oak tree in the front yard and
it went through the roof. I should have cut that
old piece of shit into fireplace wood when I had the
chance.


March 23 - Took my car to the local garage. Would you
believe the whole underside of the car is rusted away from all of
that damn salt they dump on the road? Car looks like a
bashed up heap of rusted cow shit.


May 10 - Sold the car, the house, and moved to Florida.
I can't imagine why anyone in their freakin' mind
would ever want to live in the God forsaken State of Ohio”

There are a number of lessons in this parody, one of which is that it is not so much the world around us that changes over time, but our perception of it. As we begin to take the positive qualities of things for granted, the negative qualities (which were there all the time) begin to emerge more prominently. I’ll bet the writer of this diary was just as negative about Florida a year later.

Christmas in January?

When I was young I got very excited at Christmas time. I remember that some years I could hardly sleep Christmas Eve and I would lie awake all night, impatiently waiting until it was late enough in the morning to rush to the tree and open my presents. Generally I got a good portion of what I had asked for, but it was still exciting to rip open the packages and fondle the toys I had been yearning for and building up in my mind as the greatest things since pizza.

A few hours after this initial emotional high, though, the whole thing lost its luster – the toys weren’t as wonderful I had believed they would be, and they generally didn’t perform as well as they had in the advertisements (or maybe in my interpretation of the advertisements). My excitement turned to a vague disappointment and disillusionment – wasn’t there supposed to be more to it than this??

Of course, I now realize I was right – Christmas wasn’t about the toys, it is about the spirit of the season and the joy of being with family and friends. The only trouble is, the expectation of warm and fuzzy family get-togethers often leads to disappointment. In my own experience, and in my observations of other people’s experience, the reality turns out far less wonderful than we want.

The difficulty, I think, is that we expect far more than can be delivered, and we are bound to be disappointed with the real situation or else we have to delude ourselves mightily to maintain the belief that we have attained our wish. A realistic expectation need not be negativistic – just an appreciation for the factors that may limit the degree to which our expectations can be met.

I wonder if the upcoming inauguration isn’t akin to Christmas in January for many people. Such great hopes and expectations have been placed on Obama that it will be almost impossible to meet them. Just like Christmas, the constraints of reality will make it unlikely he can truly fulfill these expectations. Perhaps it would be better to be open to a range of outcomes and to realize that he isn’t a Christmas present. It might make us more likely to appreciate his actual achievements and accomplishments, which are likely to be considerable, even if they aren’t miraculous.