Tuesday, October 15, 2013

Business Math + Banker's Math III: Flying High

Airlines are having a tough time these days.  For example, the recent merger between United and Continental apparently didn't go as smoothly as hoped and the company lost $723 million last year.  Poor Jeff Smisek, United's CEO, suffered from his mistakes in handling the merger -- his total compensation for the year dropped a whopping 41% leaving him with a mere $7.9 million, down from $13 million the year before.  Barely enough to make ends meet, I'm sure. Though Jeff's compensation is still extravagant (IMHO) at least this is one case where it appears to have been influenced by the company's financial performance.  This is rare, however -- industry-wide studies of the connection between CEO income and company profits have repeatedly shown that overall there is very little correlation between the two.

As airlines have struggled to cut costs and increase revenue it has more often been the passengers, not the CEO's who have borne the brunt -- more crowded planes, charges for food, baggage fees, extra fees for booking over the phone, no blankets or pillows or snacks, charges for reserving seats in advance, higher change fees, greatly diminished rewards for miles flown (see my blog, "Flying the (Un)Friendly Skies"), etc., etc.

These are the obvious ways of raising income, but there are a number of costs that are hidden in the price of the ticket itself.  One I came across for the first time recently was a KLM ticket my wife and I purchased online for a European trip. When it came time to pay for the ticket we were stuck with a 15 euro fee (about $20) for paying with a credit card.  The only way to avoid the extra charge was to purchase the ticket via a direct debit transfer from our bank. The 15 euros is a flat fee, the same regardless of the cost of the ticket.  In our specific case it amounted to a rather stiff 5% of the total that goes to KLM, not to the credit card company.  I'm sure U.S. carriers are watching public reaction to this very carefully and would love to do the same thing if they can get away with it.

Extra charges and fees can add up to a substantial portion of the total cost of a ticket.  In the case of our KLM ticket (Amsterdam to Nice, France) these add-ons comprised a stunning 61% of the total!  Don't think this is just true of European carriers, either -- for our ticket on United Airlines from the U.S to Amsterdam the extra charges were less, but still a hefty 44% of the total price. Note, both of these are international tickets but differ in two ways:  KLM is a European carrier and the flight is within Europe. United is a U.S. carrier and the flight is from the U.S. to Europe.

So what are these add-ons, exactly and are they different for the two tickets?  A close look at the ticket cost breakdowns suggests the following categories, along with the %  for each category in the case of the two tickets described above:
  • Extra Airline Charges: booking fees, international surcharges, credit card fee (26% KLM, 33% United)
  • Airport Fees: airport service charges, airport international airport service charges (16% KLM, 2.3% United)
  • Security Fees: "Security Charge" (8.4% KLM), "September 11th Security Fee" (3.4%United)
  • Taxes and Government Fees:  "French Aiport Tax, Soilidarity Tax, Netherlands Noise Isolation Charge" (11% KLM),  "U.S Customs User Fee, U.S. Immigration Fee, U.S. APHIS Fee, U.S. Federal Transportation Tax, U.S. Flight Segment Tax" (5% United)
There are a few things I find interesting about the breakdown.  First, most of the extras don't go to the airlines themselves but to other entities.  Second, the KLM add-ons are greater in every category except for the portion going to the airline itself.  Perhaps we shouldn't blame KLM for the credit card fee -- they're just trying to bring their portion of the ticket to the same level as other major carriers based in the U.S.

Third, it is interesting to note that the biggest difference by far is the portion going to the airports (16%% for KLM versus 2.3% for United). I don't know if this is true of other countries and carriers, but at least in this case it seems that some the funds for building and maintaining airports are coming from the users of those facilities.   We have found a general superiority around the world in foreign airports compared to those in the U.S.  -- perhaps this might be a good idea for us to consider as a way to upgrade U.S. facilities.

Fourth, the next biggest difference is that our concern with security in the U.S. isn't reflected in the portion of our tickets that supports security efforts -- KLM adds more than twice as much to a ticket as United does, 8.4% versus 3.4%.  Of course, this might be due to the way security is funded -- in the U.S. it is through general income taxes to fund the TSA's budget ($7.6 billion in 2012), whereas in Europe it may again be supported more by user fees assessed through ticket charges.

Finally, the amount added specifically for government taxes and fees is greater for the progressive European countries of Holland and France than for the U.S., but the absolute levels (11%, 5%) don't seem to me to give much support to the "damn taxes for big guvment!" folks.

Now for some disclaimers.  My analysis is not very general and different results might be obtained using different airlines and different countries.  I invite you to do your own research.  Also, my analysis is limited to international travel in which a sizable portion of the add-ons were those assessed because of this.  Indeed, when I did a quick check using domestic travel the add-ons dropped to 48% for KLM and just 12% for United.

The lesson I got from this analysis is that increases in airfare are not necessarily under the control of the airlines.  To maintain profitability and competitiveness they have turned to those things they can control, like baggage fees, configuration of seating, charging for food, etc. I can't blame them for that, though it has made air travel particularly unpleasant these days.

However I'd feel a whole lot better if airlines would show frugality in another area they can control -- CEO compensation.  Or, if you are still going to pay someone like Jeff Smisek nearly $8 million in a year the company lost $723 million, at least make him fly to Europe in the middle seat of the last row of the plane, with the video of him breathlessly touting all the wonderful changes coming to United looping over and over on the screen.


Wednesday, September 4, 2013

Why I Hate Liver

I have something in common with the late and great comedian Johnny Carson.  No, it's not his sense of humor, multiple divorces, or his bags of money.  It's our dislike of liver.

I discovered this years ago during one of his monologs on the Tonight Show, which he hosted brilliantly for nearly 30 years.  I forget the exact context of his revelation, but its impact was immediate and liberating.  Liver-haters like me could now come out of the closet!

The Beginning

My dislike for liver goes way, way back to when I was a child.  I have a vivid memory (possibly fabricated) of the first time I tasted it.  My parents were big fans of fried liver and onions, but seldom prepared it, perhaps because one or more of my older sisters wasn't too fond of it either.  On this particular night I remember the delicious smell of the liver cooking in the pan (probably the onions were the source of the good smell, but I didn't know that).  The raw liver looked kind of nice, too -- all smooth, shiny and deep red.  So I was prepared to enjoy what I recall as my first experience with liver as a food.

I chewed the first bite a couple of times and then tried to swallow.  You know about the "GAG REFLEX?" Well mine kicked in big time and my body refused to accept the taste and texture of this foreign substance in my mouth as something edible.  Our dog Rowdy was under the table (his usual dinner time position) and he had no such qualms, however.

Testing The Limits

As I grew older I encountered many friends and acquaintances who objected to my blanket rejection of what they regarded as a delicious, nutritious, and downright wonderful culinary treat.  "Oh, well, you just haven't had it prepared the right way!  You should try X, Y, Z...."  For X, Y, and Z just substitute any one of dozens of ways of cooking liver or preparing it -- braised, sauteed, ground into pates, stuffed into sausages, baked in a pixie oven, etc. etc..  Or they said "Oh, but have you tried Type A, Type B, Type C....I bet you'd really like that kind."  For Type A, B, and C just substitute any of the usual -- calve liver, pork liver, chicken liver, turkey liver, goose liver, moose liver, mongoose liver, humming bird liver.

Not wanting to seem closed-minded I tried most of their suggestions, always with the same result:  GAG.  After years of trying to correct my aberrant dislike I finally decided it was hopeless -- I do not now nor will I ever like liver in any way, shape or form.

Living With Liver

You'd think that would be the end of it -- having once committed to a liver-free life I'd just get on with it. But if you travel a lot, as my wife and I have done for many years, it's not that simple.

Traveling exposes you to many things, including the fact that most of the world doesn't speak English.  Menus are particularly problematic when they are in another language. Learning the word for "liver" helps somewhat (and I now know it in at least five languages) but chefs have a sneaky way of disguising its presence in their flowery descriptions of dishes or in idiomatic references like "Uncle Nickolai's Special Sausage."  This problem has lessened somewhat as English has become more widespread as a universal travel-language, but it still is present in many of the more exotic places we like to visit.

The solution has been to have my wife taste suspicious food that might be harboring liver in pure or sneakily adulterated ways.  She isn't a real liver fan either, but her aversion is much milder than mine.  This technique isn't perfect, though because she isn't as sensitive to the taste as I am.  It also makes me vulnerable to her joking around just to see me react when I dig into something she has declared liver safe and in fact is contaminated. Think Lucy holding the football for Charley Brown.

You might be critical of this procedure because it is exploitative of my wife's good nature.  However, we have a trade-off.  I do things that make her gag, like scrubbing toilets and cleaning up cat barf.

A Rational Conclusion (not)

As a psychological scientist I know that food preferences are largely learned and heavily determined by culture.  Texture, taste, and nutritional value do not by themselves drive the acceptance of certain items as food -- these qualities are interpreted within specific cultural frameworks and tempered by individual experiences and expectations. For example, insects are consumed readily by many people around the world, but not in our country.  This is despite the fact that insects are an excellent sustainable source of protein that is easily and safely produced with minimal input and very little environmental degradation.

It would be rational to eat insects.  It would be rational to eat liver.  See what I mean?

Please pass the pate d'cockroach.....
______________________________________________
Related Posts:
Microbes For Breakfast!
Taste Buds Are Wasted On The Young

Sunday, August 4, 2013

My Favorite Cemeteries

[Note:  Special thanks to CH for giving me the idea for this blog ]

When my wife and I travel there are three kinds of places we always try to see besides the usual tourist sites:  community markets, hardware stores, and cemeteries.  You can learn a lot about a culture from these places -- the quality and variety of people's food, the gizmos and gadgets in their homes, their attitudes and beliefs about life and death.  And besides being interesting and informative we've found these places are enjoyable because people in them are almost always friendly and welcoming (or at least very quiet).

Cemeteries have always been fascinating to me, even when I was a child. My early interest was no doubt fueled in part by ghost stories and the allure of mysterious and possibly dangerous realms, captured brilliantly by the graveyard in the Disney attraction "Haunted Mansion."  As I've gotten older I've come to appreciate that cemeteries are much more than the repositories of dead bodies, however.  They are places where history is tangible and personal, cultural values and beliefs are embodied in architectural style, and social structure is clearly and sometimes poignantly discernible in stone.  Here are a few of my favorites.

Cemeteries: A Walk Through Both Personal and Monumental History

Death figures prominently in the history of all communities, and cemeteries offer a poignant look at historical events and the role of death in individual families. For example, in many cemeteries we have seen gravestones of several very young children in one family all dying within a short time of each other, probably from some epidemic for which there was no defense at the time. The angst of these families as they revisited the grave site to bury yet another of their children is almost palpable.

One of my favorites in this category is a Louisiana cemetery we came across while driving between New Orleans and Baton Rouge.  We saw the expected prevalence of local sons who perished in the Civil War, a vivid reminder of the horrors of that conflict.  A history lesson less prominent in the history books was portrayed by one plot where the family patriarch was buried alongside his several wives who successively died during childbirth, a common risk for women in those times. The same cemetery revealed that women often died at a younger age than men but the few who did survive wound up living longer than the oldest men.  Evolution in action?

For monumental burial sites there is one that stands out for me, though around the world I have a number of other favorites.  By "monumental" I mean containing the remains of many influential and prominent people in western history.  Although it is not technically a cemetery, Westminster Abbey in London is the final resting place of an astonishing number of historical figures, marked by gravestones set in the cathedral floor:  Isaac Newton, Charles Darwin, Geoffrey Chaucer, Charles Dickens, George Frederic Handel, Henry Irving, David Livingstone, etc., etc.  These legendary names seemed almost mythical until I stood on top of the spot where they were buried -- the tangible evidence of their deaths made their lives seem more real for me.

Somber and Vast

Two cemeteries are tied in this category:  The American Military Cemetery in Normandy, France and Arlington National Cemetery in Virginia.

The American Cemetery in Normandy contains the remains of more than 9,000 soldiers who died in
World War II, many during the invasion of France in 1944.  The emotional impact of standing in the center of thousands of identical white crosses stretching in perfect alignment as far as you can see is difficult to describe.  Arlington National Cemetery in Virginia is also vast and has the added somber quality of covering conflicts dating from the Civil War to the present day.  Both of these places are vivid reminders of warfare's deadly effects but Arlington's historical perspective suggests that war is a continuing and perhaps inevitable force in human societies. Wars do not prevent wars.

Spooky

I have two favorites that stand out in my memory. The first was a small cemetery my wife and I came across while visiting Vermont during the fall.  It was set on a hill not far from a small picturesque New England town.  Huge old hardwood trees were scattered among the tombstones, many of which were tilting helter-skelter from lack of attention.  We visited the cemetery one morning when the fog made the scene gauzy and out of focus.  It was eerily quiet, except for the sound of dew dropping from the trees onto the leaves.  Like I said, spooky.

Another spooky place is St. Louis No. 1 Cemetery in New Orleans.  Established in 1789, this was New Orleans' first cemetery and resembles a small city, with the house-like whitewashed tombs laid out along streets.  Many of the crypts mimic the French urban architecture style in vogue at the time, adding to the city-of-the-dead visual effect.  Among the residents here is the famous Voodoo priestess Marie Laveau, whose tomb always has a strange assortment of offerings outside, and has many "X's" marked on it by devotees who use this to ask Marie to grant them a wish.  There are other Voodoo practitioners buried in the cemetery as well, and if you wander around in here long enough you're guaranteed to get goose-bumps.

Architectural Delights

My hands-down favorite in this category is La Recoleta Cemetery in Buenos Aires, Argentina.  It was founded in 1822 on the grounds of a former monastery and was Buenos Aires' first public cemetery.  Some of the buildings of the old religious order are still there, notably the beautiful little church built in 1732.  Buenos Aires was a very prosperous and sophisticated place during the 1800's and early 1900's, and the wealth of many of its citizens shows in the magnificence of their tombs. Many of them were built in the Neo-Gothic style of the 19th century using marble and granite imported from France and Italy, and look like small European cathedrals.

But the real stars for me are the tombs in the Art Nouveau and Art Deco styles, and I think La Recoleta must have one of the highest concentrations of them in the world.  Art Nouveau was popular around the turn of the 19th century, 1890-1910 and was characterized by soft, organic lines and flowery designs.  An absolute gem of this style is the tomb of a young woman named Rufina Cambaceres who died in 1902, and even includes an Art Nouveau casket.  Rufina was 19 years old when she died and there are some who believe she may have been accidentally buried alive after having a seizure, awoke in her coffin and then died of exhaustion trying to escape.  Regardless, the tomb is a masterpiece of Art Nouveau, one of several in the cemetery.

Art Deco flourished in the late 20's and 30's.  It is characterized by bold, blocky lines and simple yet powerful designs.  Recoleta tombs in this style are more prevalent than those in Art Nouveau which I think reflects the growth in the numbers of wealthy Argentinians.  In fact, several of the tombs even look a bit like banks, including that of Eva Peron, one of its most famous residents.  Hers pales in comparison though to many, many others.

Closing the Lid


There are quite a few more cemeteries I could mention in other categories, like "Humorous Headstones" (Valparaiso, Chile) and "Culturally Distinctive" (Cairo, Egypt), but I'll stop here.  Please feel free to share your own favorites.
 
One final observation is that cemeteries are the ultimate equalizers. The
most elaborate and grand tombs and headstones, meant to convey status, social superiority, and religious piety crumble and decay the same as the most humble monuments -- it may take more time but eventually entropy will win.  And though people fervently believe otherwise, this is equally true for all religions and creeds, including non-believers.  Maybe that's the ultimate lesson that cemeteries can teach us.


Thursday, July 4, 2013

A Ray of Sunshine in Myanmar

It's been quite a long time since I offered an entry in my "Ray of Sunshine" series. To refresh your memory, the earlier stories were about Greg Mortenson, who helps rural communities build schools for girls in Afghanistan and Pakistan, and Dr. Sanduk Ruit, an eye surgeon who brings the gift of sight to thousands of poor people in Nepal.

If you're like me you're probably getting very tired of the daily gloom and doom that dominates the news these days. Conflict and strife, death and destruction, stalemate and stagnation, calamity and chaos -- these seem to be the media's focus most of the time. Something positive and uplifting would be a welcome relief.

Here's a possible candidate. And it's one from a very unlikely arena -- politics.

Her name is Aung San Suu Kyi,  a dynamic and altogether admirable populist leader in Burma (Myanmar) recently elected to Parliament after being held under house arrest by the military-run government for 15 of the last 21 years. She is pro-democracy, committed to peaceful means of bringing about social change, a proponent of compromise and reaching out to opponents, and so far as anyone can tell she is a person of the highest personal integrity, conscience and intelligence.  In short, a rather unusual politician -- particularly by current American standards.

I first became aware of Aung San Suu Kyi when my wife and I traveled to Myanmar early in 2012 (see "Mini-Monks in Myanmar").  Our visit happened to be during the campaigning for open seats in Parliament and Suu Kyi's popularity was evident everywhere we went.  The Burmese people often refer to her as "The Lady," a term of great respect and affection.  They clearly hold her in very high esteem and reverence for her years of sacrifice for the cause of bringing democracy to her country.

Myanmar gained independence from Britain in 1948. Suu Kyi's father was instrumental in that struggle and likely would have been a very prominent leader in the new government if he had not been assassinated by political rivals in 1947 when Suu Kyi was 2 years old. The fledgling government was democratic and representative, but had great difficulty dealing with conflicts between competing political and ethnic groups. The military took over in 1958 to stabilize the country and establish central control, but peace imposed from the barrel of a gun is notoriously unstable and when hostile factions are forced to coexist lethal pressure explodes when the force is removed.  Several attempts over the years to return to elected government resulted in chaos and the reimposition of military rule with an increasingly corrupt, cruel, and authoritarian leadership that has shown itself to be insensitive to the plight of the average citizen.  By the way, it was the military government that changed the name of the country to Myanmar.  For this reason Aung San Suu Kyi prefers to use the older name Burma.

In 1990 the military held the country's first election in 30 years, and although it tried to squelch the pro-democratic party of which Aung San Suu Kyi was a member by placing her and several other party leaders under house arrest, the vote was overwhelmingly in favor of the party candidates.  The military was of course displeased with the results and barred the winners from taking office.  After five years of continued suppression Suu Kyi was released from house arrest but not allowed to travel outside of Yangon.  Even with this restriction her popularity grew, threatening the regime's control.  In 2000 she was detained again and spent the next decade, except for a brief period in 2002-2003, under house arrest.

In 2010 the military held a referendum on a new constitution -- this one carefully crafted to contain provisions ensuring their continued power even in an elected government.  The referendum was held in the terrible aftermath of Cyclone Nargis in which the military barred foreign relief workers or even foreign planes to deliver aid.  At the time voting took place nearly 2.5 million people were still either homeless or in need of food and medical assistance.  Despite this the government claimed that 98% of the electorate voted and -- surprise -- the constitution was approved by 92%.  Feeling confident their power was secured,  Aung San Suu Kyi was finally released from custody and allowed to run for office, which she won by an overwhelming margin.  It remains to be seen how effective she can be in the restrictive governmental structure, but at least her voice can now be heard and she can exert legitimate influence on shaping Myanmar's future.

Her new freedom has also allowed her to travel internationally and to address audiences world-wide. And to hear her speak about her political and personal philosophy is a delight. She is articulate, rational, soft-spoken, compassionate even toward her opponents, and willing to admit when she is wrong.  Quite a contrast to the rancorous, sloganistic, dogmatic and mean-spirited political dialogue that characterizes most of our current crop of politicians and faux-news commentary. We would do well in the U.S. to follow her example. (If you want a quick taste of Aung San Suu Kyi's views and her personality, I recommend a recent 30-minute interview on our local PBS station show, Long Story Short with Leslie Wilcox.)

I'll close with a few quotes that I think illustrate why I think she is indeed a ray of sunshine:
"Often the other side of the coin of intolerance is insecurity. Insecure people tend to be intolerant, and their intolerance unleashes forces that threaten the security of others. And where there is no security there can be no lasting peace. "  (Opening Keynote Address at NGO Forum on Women, Beijing 1991) 

"A most insidious form of fear is that which masquerades as common sense or even wisdom, condemning as foolish, reckless, insignificant or futile the small, daily acts of courage which help to preserve man's self-respect and inherent human dignity."   (Acceptance message for the 1990 Sakharov Prize for Freedom of Thought)

"To be kind is to respond with sensitivity and human warmth to the hopes and needs of others. Even the briefest touch of kindness can lighten a heavy heart. Kindness can change the lives of people."  (Nobel Peace Prize Acceptance Speech, 2012)

Wednesday, June 5, 2013

TechnoWoes

Tech'no'woe, n.
1. a term invented by the author of Snow Crash to denote grievous distress, affliction, or trouble arising from difficulties with information technology devices.
2. a state of frustration and exasperation from trying to deal with too many @#%$! electronic gizmos and gadgets
3. a glitch, problem or failure of software or hardware that results in much wasted time, effort and emotional energy to solve or remedy.

I am not a Luddite.  I am not a technophobe.  I do not shun modern technology, as evidenced by my cell phone, Ipod Nano, two Ipod Touches, one Ipad, one laptop, two desktop computers, a wireless home network, two GPSr's, a flatscreen HD tv interfaced with a home theater sound system and dvr, wireless home alarm system, even a battery-operated corkscrew. And I'm pretty savvy at maintaining my tech arsenal and keeping its software and hardware up to date.

I enjoy using these devices -- they're useful, entertaining, informative, and they generally enrich my life. Indeed, it is hard to imagine doing without them.  My life would be much more difficult and tasks would be much more time-consuming.  No "Googling" a topic to get instant answers to almost any question, no mobile access to the thousands of tunes in my music collection, no online banking or computer-assisted financial record keeping and financial planning, no watching t.v. shows at my convenience and without commercials, no quick exchanges of messages with friends and family, no talking on a cell phone at the beach, an airport bathroom or a supermarket queue!  How primitive life was in the ancient past of  20-30 years ago, before we had these devices!  How did we do it?

Now the big HOWEVER.  As wonderful as all this technology is, my experiences with it are sometimes frustrating, exasperating, and a huge waste of time. This is partly due to the sheer number of devices, so that one or more of them always seems to have a problem at any given time. Another reason is that their underlying workings have become increasingly complex and opaque, making the causes and cures of glitches much more difficult to figure out.  I've nicknamed these technical failures "technowoes."  Here are a few recent examples:

The Forced Upgrade That Shortened My Life By Two Days

For many years I've relied on a certain well-known financial program to keep track of my money and to help me plan for retirement spending.  The great thing about this software is that with a touch of a button it will update the value of my portfolio, give me a current net worth value, and project my financial balances into the future given current spending levels.  As a retiree I find this is really helpful for budgeting and financial decision-making.

The software company upgrades the program every year or so but the newer versions generally don't have a huge advantage over the current one so I don't automatically purchase the upgrade.  However, after a few revisions the company withdraws support of the one feature I find essential -- the portfolio update -- and makes it available only in the newest edition.  Cha-ching! Forced upgrade.

I recently shelled out the money for the new version and installed it on one of my computers.  The installation seemed to go smoothly enough at first, with no cryptic error messages or system crashes. But then... technowoe.  As part of the upgrading process my old data file was converted to a new format.  When I ran the new program my balances were now wrong for several investments, obviously a major snafu.  Puzzled, I proceeded to spend many hours comparing the old and new data to see where the problem was, re-installed the new program several times, and in general pulled every trick I had in my Geek-wannabe repertoire.  I finally solved the problem in a way I'll talk about later.  But in the meantime this piece of technology that I relied heavily on was a major pain in the rear.

The "Free" Security Program That Actually Cost a Lot of Antacid

My old employer, Miami University, wisely furnished students and faculty with a fairly good anti-virus program that included regular updates provided at no cost through its site license.  As a retiree I was able to continue using the program and its update service.

Recently, however, university budget cuts led to the (unwise, imho) elimination of this service, with the somewhat lame recommendation that users switch instead to Microsoft Essentials -- a mediocre replacement that is free to anyone with a Windows PC.  Being the paranoid fellow that I am, I searched for a better (but still free) program by going to several authoritative sources that compare and evaluate software. I settled on one and installed it without major problems.

For a couple of weeks everything seemed to be fine, including the automatic updating feature (a crucial aspect for any anti-virus software).  Then the problems started.  One of my computers would suddenly freeze and it wasn't apparent why.  This of course required rebooting the system, a time-consuming procedure akin to watching paint dry or grass grow. A day or two would go by and then this would happen again, always without warning and without any obvious cause.  Since the last change to the computer was installing the anti-virus program I began to suspect it was the culprit, though why it would crash my system was a mystery.  I finally determined that the software was indeed the likely problem in a way I'll discuss later.  I selected another anti-virus program that so far has worked fine.  Difficulty solved, but with a lot of wasted time and frustration...and technowoe.

The Acceleration of Obsolescence

Back in the good old days (maybe 5-10 years ago) if you bought a new techno-toy you could expect several years of service before (1) it physically crapped out, (2) its lack of features compared to newer models made it either embarrassingly inferior or (3) the increased demands of new software outstripped the device's resources.

Not now.

Case in point is the blindingly fast obsolescence of my Apple products.  When the IPOD Touch first came out I was very intrigued with it but didn't buy one right away.  I'm not what the marketing gurus call a "First Adopter" -- I wait to see what the final verdict on new techno-toys will be and for the bugs to be worked out of the first round of devices. When the 2nd generation Touches came out I was ready, and bought one in March of '09.  This was my second Apple product and it won me over immediately, especially because of its usefulness during the considerable traveling that my wife and I do -- maps, email, destination info, itinerary details, etc.

Less than three years passed before its features and performance were so inferior to the newest version that in January of '12 I shelled out for a 4th generation model.  Among the must-have features were a front and rear-facing camera capable of stills and movies, and the ability to sync information with our other Apple product, an Ipad.  But my original 2nd generation Itouch is too decrepit and old to allow syncing -- in less than three years it went from wondrous techno-toy to techno-brick. The late Steve Jobs was truly a marketing genius.....

The Recursive Cure for Some TechnoWoes

I mentioned above that I was eventually able to solve my problems with the financial program update and the new anti-virus software.  I did this by using technology to overcome technological problems, namely by Googling or Binging my symptoms.  (The obsolescence of my Apple product was solved more crassly -- by spending money.)

Using a search engine to look for solutions to technowoes almost always leads to the revelation that no matter how unusual or odd you think your difficultly is there are others who have had the same or similar problems.  It also reveals something that has been true of the internet since it began -- there are many very smart people out there who are willing to share their knowledge and help you solve your problem. This sense of community and mutual support was at one time the hallmark of the "net," and it is very gratifying to find that there is a remnant of it in today's commercialized, socialized and politicized cyberspace.

The online repositories of technical wisdom used to be in various "USENET Groups" which were topical forums where people posted questions and others offered answers. Although the information you needed was probably there in the forum somewhere, in the early days there was no easy way to search previous discussions -- you simply had to look through the old postings or consult a FAQ that tried to summarize the most common questions and answers. These open forums still exist, of course, as do company-sponsored support forums.  But now searching for key words or for the entire wording of an error message is almost absurdly easy with search engines like Google and Bing.  The value and usefulness of this information is dramatically increased by its retrievability.  In fact, try to imagine the internet/WWW without search engines -- I doubt very much that its growth and infiltration of our lives would have been nearly as dramatic as it has been.

I should add that using technology to fix technological problems may still require a bit of Geekiness.  The information provided online often requires translation into ordinary language and sometimes involves arcane actions, like issuing "command line commands," or using REGEDIT. Of course, an alternative is to use a company's  customer support service. However, I phone tech support only as a last resort because it usually involves even more wasted time waiting for the call to go through, then struggling though a long frustrating session trying to understand the guy on the other end with a thick accent who claims his name is "Bob" or "Eric."

Technowoe is probably with us to stay.  It's part the price we pay for living in a wondrously technological era, and overall probably worth it.

But there are times when I yearn for the days of fewer gadgets and fewer problems.  Pass me my slide rule and typewriter, please.




Tuesday, May 7, 2013

Bad Consequences of Doing Good

Most of us subscribe to a form of Karmic causality theory that boils down to the idea that doing "good" things will benefit ourselves and others, whereas "bad" deeds will not only hurt others but also will come back to bite us. Of course, defining what is good or bad is a bit tricky, as the mountain of philosophical treatises on the subject will attest.  But in day-to-day living we seldom analyze our potential actions and their consequences with philosophical rigor, and instead rely on the "I-know-it-when-I-see-it" approach.  This works pretty well most of the time, but there are occasions when doing "good" has unintended and unanticipated negative consequences.  Here are a couple of examples (please offer your own if you wish):

Hijacking on the Hybrid Highway

Driving a car that gets high gas mileage is good.  Using less fuel saves us money and also lowers the negative environmental impacts from producing and burning fossil fuel.  There are other benefits as well, from lessening health problems associated with air pollution to strengthening our geopolitical position through the reduction of our dependence on foreign oil.

Technology has steadily improved the gas mileage of the average internal combustion engine, and has led to the development of hybrid and all-electric cars that use much less gasoline or none at all. Hybrid cars in particular have become increasingly popular even though they tend to be more expensive than comparable gasoline-only models.  To many people's credit, they are willing to spend more to do the "right" thing.

So what could be bad about this?

Well, most states fund their highway construction and maintenance through taxes on gasoline.  As consumption drops, so does the revenue needed to fix old roads and build new ones. High mileage vehicles, particularly hybrids and all-electrics, use less gasoline but contribute as much wear and tear on highways as other vehicles. In a recent USA Today article, Virginia Transportation Secretary Sean Connaughton says of hybrid and electric vehicles: "The good news is they use less gas. The bad news is they have the same impact as a regular gasoline-powered car, yet provide little or no money for highway maintenance."

A number of states, including Virginia, are coping with this by assessing a yearly fee on hybrids and all-electrics.  In February, Washington joined Virginia and imposed a $100 registration fee for all-electric cars.  Similar legislation is pending in Texas, Massachusetts, New Jersey and Arizona.

It can be argued that this approach really isn't fair, because it seems to discourage "green" behavior, and the mileage gap between hybrids and regular cars has become smaller.  Regardless, states have to come up with some way of  funding highways, perhaps by moving to a usage tax that would apply equally to all vehicles -- you pay according to how many miles you drive, not how much gasoline you use.  Note that going to such a system would remove some of the incentive to own a high-mileage car unless the cost of fuel stays high.  Of course, the ultimate solution may be to reduce the reliance on automobiles altogether. Good luck with that in the USA.

Garbage is Good

Norway is one of the world's top ten exporters of oil and gas. It has abundant reserves of coal.  One thing it doesn't have though, is enough garbage.

Norway is like most northern European countries that are extremely serious about recycling and waste reduction and so the amount of garbage has fallen dramatically in recent years. This is definitely a good thing, right?  Less material going to landfills, reduced need for raw materials, less negative impact on the environment, etc., etc.  Also, these countries have highly developed methods of reducing their dependence on fossil fuels by burning garbage to produce energy -- definitely another good thing.  For example, in Oslo about half the city and most of the schools are heated with energy from garbage (NYT, 4/30/13).

However, all this green behavior has resulted in a shortage of garbage for energy production.  According to a recent NYT article, northern Europeans generate only about 150 million tons of garbage per year, but the incinerating plants can handle more than 700 million tons.

The solution?  Import garbage.  Norway and other garbage-burning countries are shipping garbage from those with abundant supplies.  Sometimes this is a win-win situation.  For example, Naples paid towns in Germany and the Netherlands to accept garbage, helping to defuse a Neapolitan garbage crisis (NYT, 4/30/13.  However, note the problem here.  In the long run this may lower the incentive to reduce garbage production because communities can (a) turn it into energy or (b) sell it or give it to those who do.


The late author Michael Crichton was very fond of exploring the unintended and often very negative consequences of well-intentioned human behavior.  Usually these bad consequences occurred despite careful planning and analysis -- think Jurassic Park or The Andromeda Strain.  Crichton was very good at portraying humans as stunningly and fatally flawed yet arrogantly confident in their planning and in their assessment of the probability of bad things happening from doing good. 

The lesson here is certainly not that we shouldn't try to do the right thing as we understand it, given the facts we have at hand.  Maybe, though we should be a little more humble in touting our "good" deeds as not having a downside.



Wednesday, April 3, 2013

Business Math + Banker's Math II: The Shoe That Didn't Drop

In my first installment in this series I recounted how Budget Rental Car padded their CEO's bonus by adding 4% to my rental bill in Italy for a foreign currency conversion charge, even though I thought I was avoiding it by using my Capital One credit card.  Apparently I had agreed to this fee when I signed my contract in Italy, though I don't recall reading it there and unfortunately I've misplaced the contract and can't check the exact wording.

I contacted Budget's Customer Service and asked how I could avoid this in the future, particularly since I had reserved two more foreign rentals, this time in Chile.  I'll let you go to the first blog the read the email exchange that ensued in which I received confusing and contradictory advice, ending with the rather astonishing admission that there is no universal policy about this fee:
Budget: Thank you for contacting Budget. Budget locations in Italy and in Chile are independently owned franchise locations and may have different policies in place which deviates from standard policy. As advised, renters are to make their currency request [my emphasis] at the beginning of the rental. We apologize for any misunderstanding or inconvenience. If we can be of further assistance, please let us know.
As I pointed out previously the problem with "making a currency request" is that in one Budget email I was advised to request that the charge be in local currency, and in another email told to request that it be in U.S. dollars.

I gave it one last shot by contacting the Customer Service people in Chile directly:
Me:  My wife and I have reserved Budget cars in two locations for our upcoming trip to Chile:  Santiago (#xxx192US3) and Puerto Montt (#xxxxx5US1). I would like to avoid any currency conversion charges for these two rentals by Budget.  My credit card does not assess these and I would like to take advantage of this feature.

 How can I be certain that Budget will not assess me currency conversion charges?
 After considerable delay I received the following reply:
Budget Chile:  Dear Mr. Richard Sherman: According your request, inform you that is difficult for us confirm that you will not have any currency conversion charges, because we do not have any control over foreign banks, also our values and charges are systematized, maybe you could leave the guarantee with your credit card and pay of lease in cash.
 Everybody clear?

My interpretation of Budget Chile's email is that either (a) they were being deliberately unhelpful and if I wanted to avoid the Budget charge I would have to obtain wads of Chilean Pesos to pay the final bill, or (b) they had no idea what I was talking about because they never levied conversion fees themselves, unlike the Budget folks in Italy.

I went ahead with these rentals last month when we visited Chile, mainly because Budget's rates were very competitive and because I felt prepared to do battle over this.  Each time we picked up our car I asked the agent if there would be any additional charge for converting Pesos to Dollars, and I asked the same question again when we returned the cars.  All four times the answer was "no."

Of course, the proof is in the credit card statement, and so I have been waiting to see what the final charge amounts would be, as compared to the official exchange rates. The answer is now in, and to be "fair and balanced" (I can't believe I just said that), I have to report that Budget Chile did NOT add a conversion charge!

The lesson here is to travel to Chile and avoid Italy.  No, wait -- that's not it.  The lesson is that we consumers have to be constantly vigilant about business and banking practices in order to avoid unnecessary and unjustified charges.  And we can't become complacent just because we think we are prepared, like my use of a fee-free credit card. This becomes really difficult when you're in a foreign country and foggy from jet lag, but that's when you're most vulnerable.

Confusion, complacency and lack of information are a banker/businessman's best friends.