Well, I blogged about a month ago that I finally got my iPad. I am so loving this thing that it is a bit sick, really. I realized the gimmick of the thing. The accessories. I never really understood Malibu Barbie, but I understand Malibu iPad. First of all, I haven’t turned my MacBook on for anything other than the need to retrieve a file in over a month. Poor thing, kicked to the curb.

Since I bought the iPad, I have spent over $100 dollars on accessories. My compass iPad stand arrived the other night just before a small dinner party I was hosting got started. I can’t really use the word that one my friends used when it arrived. But I can say my friends think Ive gone a bit overboard. I am typing this post using a bluetooth QWERTY keyboard. Now in my defense, I happen to have two of these things lying around the house. One for the iMac and the other for the MacMini. Okay that doesn’t even sound right but I will persevere and turn this into a what works and what doesn’t for the iPad. First the case. I got a beautiful red Case Crown leather case for my iPad. As far as cases go I should have stopped there. When I was traveling in November, I thought I could use a hard shell, so I bought the speck, black hard candy case. The thing is a royal pain to use and does not protect the front the way I would like. So it is back to the Case Crown as my primary case, but because I paid for the speck, I feel the need to carry it around…and use it when I feel my iPad needs an outfit change. In April a reviewer wrote that the dock was a waste of money. It is. I found that out only after buying it! It is a good idea in that it allows the iPad to charge while vertical so you can still type on it while it is charging. But here is the rub: most iPad users, and I am no exception, like to keep their investment in its case. You cannot park the iPad on a dock and leave it in its case. You have to take it out of its case to use the dock…what a waste! While I was traveling,I decided to use my laptop case to lug the iPad, keyboard and leather case around. Way too much luggage to carry such a small item around. I now have a case crown iPad bag. I carries the keyboard, compass, both cases and charger. Apple asks that we iPad uses don’t use cleaning cloths containing solvent on our screens so I got a lens cloth. Okay soooooo total accessories:
CC red leather case
Speck black hard candy case
iPad bag
Compass iPad stand
iPad dock
lens cloth
Bluetooth keyboard which I don’t count because I already had some.

The hard candy case, sexy though it is,is a waste of money as is the dock. If Apple redesigned it so that it could be used while the iPad is still in a protective case, the dock would be more useful. Total moolah wasted???? $60 dollars.

Now what about apps? The NY Times just ran an article: 10 Magical iPad apps. Through that article I found Flipboard. This great app turns my Facebook and Twitter updates into a magazine. I can literally flip through updates in a manner of minutes. Awesome app. I have Kindle. OMG! iBook is a great way to handle PDF files, but for books, the Kindle app rocks and it’s free. I have the ABC news and NY Times apps (they are just okay). I also have pages and numbers on my iPad. Those items are the word-processing and spreadsheet applications. The cost is 9.95 each and they are worth every penny. I have a mobile me account so I can save documents as Microsoft word files and upload them to my idisk (in the techno cloud) download the same file onto another computer and keep working even while traveling and even if I choose to leave my hardware behind. For printing, I use Printopia, another app costing 9.95 and worth every penny. Apple chose NOT to turn AirPrint on with the update to 4.2. It was a functionality they pulled at the last minute. There were 3 options to deal with this: 1) download just a few lines of code off the Internet that turned the functionality on and then download another program that allows you to print or 2) buy a new printer (you’ve seen them advertised on TV) or 3) buy a program that will allow you to print to a network printer. I bought Printopia. It got better reviews than Printcentral.
Cost? 9.95 for either program. Notice a pricing theme here? Downside to Printopia? Your computer won’t go to sleep. Printopia and Printcentral download to a computer on your home network and they are always on in the background and they constantly wake your computer up and tell it to check for network activity. There is a work around that is pretty easy. Through the system preferences pane, click energy saver, then uncheck the “wake for network access” box. Your network computer will remain asleep when you put it down for the night.

Finally I downloaded Handbrake, a free app that allows you to store your DVDs in a format that iTunes can read. That means that you can load your videos into your iPhone, iPad through iTunes. I was able to travel with the LOTR trilogy, Blade 2, HP 3 and Finding Nemo.

Well that’s it. Share your iPad stories.

While I was posting Deficit Unplugged, our President was compromising with Republican Leadership to create Deficit Ignored.  Should we have a payroll tax holiday?…yes we should.  Those tax cuts?  They should have gone the way of the DoDo.

Here is, honestly, why I am concerned about the deficit.  As a Nation we have promises to keep.  We have the promise to our citizenry that if you work hard and use your mind, you can have a better life than your parents, in other words, we have a promise of upward mobility, yet our middle class is shrinking.  For the last 75 years we have promised everyone who works that they, and in some cases their dependents, will have a safety net in old age and for the last 35 years we have promised elders some semblance of health care.

There is a risk now that all the promises will be as ashes.  In truth the giveaways that I talked about in Adult Conversation are part of the problem.  In order to make Social Security more appealing benefits increased and the retirement age was lowered even as the population began to see increases in  longevity.  In order to avoid fiscal responsibility, Social Security receipts were spent as part of the general budget.  When borrowing from ourselves wasn’t enough, we borrowed from other nations.

Engineering short term budget deficits will never allow us to attack the long term budgetary issues that affect our fiscal health.  We had a chance to let the tax cuts expire but now that ultimate decision has been kicked two years down the road.  Our tax code is a mess, to be sure: it is over 67,000 pages of nonsense and exceptions to nonsense. TAX prep is a 65 Billion dollar industry and roughly 61% of filers use a tax prep service.  Refund Anticipation Loans are a huge business in low income areas.  I have lost count of the number of articles I’ve read by economists over the past few weeks who advocate reforming the tax code, collapsing to two brackets, the top of which would be lower than the top bracket under the beloved Bush cuts, and adding a value added tax.  Taxing both production and consumption rather than production as we solely do now.  Some of the logic for not doing these things boggles the mind:  A value added tax would cause the poor to save rather than spend so we shouldn’t do it…huh???  We should preferentially tax the rich because the rich would save rather than spend….huh???  We should extend unemployment benefits because the unemployed will spend them….huh???

Since the 1970s the roots of our economy changed from a manufacturing base to a consumer base, an economy driven by spending.  What did George W. Bush urge us to do after 911? He urged us to remember our patriotic duty and shop.  But there is a problem with jobs based on retail and consumer spending and that problem was summed up by Lee Scott, CEO of Wal Mart:  “Some well-meaning critics believe that Wal-Mart stores today, because of our size, should, in fact, play the role that it is believed  General Motors played after  World War II.  And this is to establish this post-world war middle class that the country is so proud of.  The facts are that retail does not perform that role in this economy.”

Our economy has become dependent on people spending and when they run out of their own money to spend, borrowing to spend more.  No wonder we are in the mess we are in.  We have become a nation of “business as usual” trying to hang on to what it has rather than pave the way forward  with programs and incentives that will restore our middle class.  I actually believed that there would be a push for updated infrastructure and a new power grid.  It kills me that a chunk of my money every month is recycled back to the very extremist groups responsible for 911.

What do I think the President should have done?  How about lock everyone in a room with the camera’s rolling rather than hammer out an agreement after hours behind closed doors?  Make people responsible for their positions in public, not when surrounded by the safety of the herd as most politicians are when they make statements about the economy.  He should be in my face all day every day articulating his views.  That 70 minute internet only version of Mr. Obama’s 60 Minute interview was a revelation.  He has sound positions but is not doing a great job of communicating them.

I am not someone that my mother would call liberal; my mother occasionally calls me Neal (for Neal Bortz and she has even called me a selfish capitalist on my own blog)…I don’t believe in using the tax code to redistribute wealth, and I believe that everyone must pay.  I believe in term limits to certain safety nets like unemployment insurance coupled with sound public policy like a jobs bank and retraining.  By jobs bank, I don’t mean a jobs bank that the automakers had in which laid off workers were paid substantial incomes while at home waiting to be called back to automotive jobs.  No, what I mean is a database of jobs and industry trends so that people don’t have to guess what industries are fading and which ones are emerging, they don’t have to guess what the qualifications for any given job are, opening and closing dates for applications are posted and adhered to, resources for retraining are promulgated and there is funding for retraining. I believe in a national infrastructure bank with national priorities that are updated and funded and I don’t believe that public works projects should be awarded to  certain companies without the benefit of competitive bidding.

What we have now is a mess.  And political will only to posture rather than fix our problems.

I am afraid that the scenario that I outlined in Adult Conversation will take place.  I believe that Americans will ultimately have to forgive the intra-governmental debt Social Security now holds and Americans will have to accept less.  You avoid the iceberg when the tip is just a speck on the horizon, not when the berg is looming  off the bow.

By kicking the can down the road as our leaders just did this week we are surely headed for tougher choices down the road.

Please comment.

I started this blog because of my interest in personal finance and financial freedom.  Gosh, that phrase financial freedom is sooooo trite.  I started blogging just before it became clear there was going to be a financial meltdown.  I’ve been wondering exactly what my role in the overall economy is.  I make money, I save money, I invest money and I spend it.  But lately, it seems as though we are in a free-for all economy.  Everyone is worried and out to get theirs.

It seems to be okay that some thrive while others suffer.  Some intimate that the thriving of one group causes the suffering of another.  (Certainly the financial meltdown has shown that a few thrivers have caused many to suffer) but are we really going to fall into a society so polarized that we argue that the thrivers must pay their fair share to ameliorate the suffering of others?

We live in a civil society…everyone must pay.  To extend the tax cuts for everyone will cost roughly 4 trillion dollars.  Extending them for the wealthiest 2% of Americans will make up $700 billion of that total.  That means that the lion’s share of the tax cuts belong to the middle class.  The grand total being roughly 3.7 trillion dollars.  It seems silly therefore that we talk about budget deficits without considering the totality of tax cuts.  We cannot target one group against the other and appear to be an intelligent nation.

I’ve been looking at the US budget since 2004.  The US income statement is so easy to find.  I discussed the budget in 3 previous posts : IOU America, IOU America Part 2 and Robin Hood.

In my previous posts I used a hypothetical college student as a micro example of the US Budget.  Now I am going to use something more personal, me.

It is not a state secret I had major debt troubles; 30 years ago I got my first credit card, my debt increased gradually through the years until I had 16K a month revolving credit card debt.  I had a house, a car, expenses and deferred student loan debt.  My expense situation could be divided into immediate needs + short term debt.  Lurking down the pike was the Ghost of Christmas future:  long term debt + immediate needs + short term debt.

My short-term debt payments + immediate expenses were about 90% of income. I made up any short falls by borrowing, i.e., using credit cards.  I knew that I had long term debt obligations that I would have to begin paying, but I was so busy being a rat on a wheel, I didn’t know how I was going to make that happen.  Something snapped…I saw the light.

I adopted an austerity program.  But I adopted a program that made sense.  First I eliminated every expenditure that I didn’t absolutely need, that meant canceling credit cards, pre-paid calling cards, meals out.  I only spent a dollar if it put food in my belly, kept clothes on my back, or put a roof over my head.  I prioritized purchases, everything that didn’t fit the above categories went on a list.  I needed some major help in the financial literacy department so I allowed myself to buy books on that topic…4 per month.  One thing that I did do was develop a spending plan.  I had to get to and from work and take call so I maintained my car.  I also continued routine maintenance on my home to make sure the roof was okay and the cooling and heating systems worked.  The spending plan helped me save and take care of the priorities around my home while I paid off my debts.  It is important to mention that my total debt was 123% of my annual take home pay. Ouch!

It is important to understand that even while I was digging myself out of my hole, I had to continue to spend. I had to spend on housing, I had to spend on food, I had to spend on clothing, I had to spend on maintenance.   When our lawmakers talk about all spending as a bad thing they are  really blowing smoke. What they really should be saying is that we know we are going to continue to spend during this recession, but we only want to spend on the things we want to spend on.  And there is the ideological rub.

There are the billions spent on unemployment insurance on the one hand or the trillions spent  to make tax cuts permanent.  The expenditure for unemployment insurance will stop at some point as the economy improves and the unemployment rate falls.  The 4 trillion dollars in lost revenue through a permanent tax cut extension is, well, permanent.  This debate is not about the budget it is about ideology.  We have two 800 pound gorillas in the wings, the dual apes of Social Security and Medicare.  The economy has forced us to talk about them at least a decade sooner than we’d like. We can’t kick the can down the road and everyone must be prepared to give something up.

I am tired of hearing that earmarks amount to a rounding error in the budget.  At one end of an earmark is a Congressman or Senator who lobbied for their district, at the other end is a consituency who benefited.  Everyone must pay, earmarks must stop.

It was wrong for Krugman to rail against the freeze in Federal pay.  Federal employees have the most generous benefits packages around and have been receiving COLAs when others have been receiving pay cuts.  Federal employee pay may be a rounding error in the budget but everyone must pay.  By the way, VA and Federal employee retirement benefits were a 4 trillion unmet obligation in the Federal budget.  A two-year COLA freeze will save money because it will affect retirement pay.  The freeze should be extended to the military not on active duty.

I realized long before Mr. Obama was elected that my taxes were going to go up.  Honestly, I’m really surprised they haven’t yet.  My taxes should go up, but living in a civil society isn’t free. They should go up for everybody.  We shouldn’t be discussing saving 700 billion, we should be discussing saving 4 trillion.  Everyone should pay.  To take the sting out of the tax increase, there should be a payroll tax holiday and reform of the tax code as Bowles and Simpson have proposed.  Everyone will benefit from that.

We are in a recession, but there are still necessary expenditures.   Just as I had to maintain my car and home when I was in my personal recession, we have to maintain our infrastructure and doing that requires spending money, a jobs bank requires spending money.  Just as my mechanic and my plumber benefited from my maintenance plan, our citizenry will benefit from a jobs bank and infrastructure projects.

Please comment.

I finally got one! An iPad. As I write this, I am sitting in a Starbucks in San Francisco. This town should be called iTown. The woman sitting next to me on my right is typing into her Macbook Pro while listening to music on her iPad. The woman on my immediate left is using a Windows-based PC. On her lap is an iPhone.

What inspired this blog post? A Washington Post article of a few weeks ago called The Republicans Prepare Their Agenda of Less. In the article, a member of the Tea Party spoke of the need to address the looming issues of Social Security and Medicare and have an “adult conversation” with the American People.

Several months ago, I wrote a series of articles about why Medicare sucks. I am still getting comments about those articles. I wrote about the budget in those articles and that Medicare, in all its many parts, and Social Security represent represent tens of trillions of unmet obligations in the Federal budget. I also said that any attempts to address long term deficits would have to take into account those two programs and restructure them significantly if they are to remain solvent and if the American people are to continue to be able to afford them.

There are three things to remember about what I wrote:
1) Social Security and Medicare are paid for through payroll taxes. Every working individual, from the very old to the very young both rich and poor, pays into these programs. This is something that appeals to my sense of social justice, that is that everyone should pay for programs that everyone benefits from.
2) for the past 30 years the government has used receipts in excess of pay outs to fund general government operations. The excess receipts have been traded for government bonds. the interest payments alone are crippling. When people, ie, officials, talk about a trust fund, they are talking about money held in trust, except there isn’t money held in trust. There is money held in bonds, bonds that we don’t have the ability to repay, not at current income levels.
3) all discussions about Social Security are discussions about current income or current receipts, as example by the year 2037 to 2041 we will only take in enough income to pay out 75% of obligations. On the bright side this means that the government will stop misappropriating the people’s retirement funds to fund general government operations on the down side we will all wake up to the reality that that is what has been going on and there will likely be a significant public outcry.

The history of Social Security is outline well at http://www.ssa.gov/history It is worth a read fascinating, really. These documents hold the key to why we are in such trouble. Truthfully, everyone is to blame for the Social Security and Medicare mess. When the money was flowing and it wasn’t being borrowed against, it was too big a pile of cash not to spend. By 1950 cost of living adjustments and disability payments and survivor benefits were added. Health care was originally envisioned to be part of Social Security. It was not part of the original law, but along came Medicare in 1965. Politicians voted for the expansion of Social Security and Medicare at the urging of their constituents and no one thought about the long term consequences. Well, those consequences are here.

It is important to understand what Social Security was meant to do. It was originally called Social Insurance and it was intended to provide economic security against abject poverty. It was intended to keep people out of Alms or Poor Houses. The Great Depression was the third great economic dislocation this country experienced in about a century. It brought with it 25% unemployment and extreme poverty for many, savings were decimated and pensions were rare. Alms houses were funded by state governments to care for people in poverty, but state implementation of these programs was spotty, there was a significant stigma associated with accepting assistance from Alms houses, there was means testing and people were reluctant to receive help from what amounted to state-run welfare programs. When Social Security was enacted, it was not a popular program. The benefits, set at roughly 30 dollars, the amount intended to keep someone from becoming destitute, did not change for the first decade or so of the program. People felt that they could and would get more benefits from the state-run welfare programs. Social Security provided direct payments to states to bolster those programs. In the beginning, Social Security was simply another tax people paid that they perceived little benefit from. In order to increase the popularity of the program, payments began to increase and the retirement age was lowered from 65 in 1935 to 62 in 1950. Thirty dollars in 1935 has the same purchasing power of 470 dollars today, yet a recipient retiring at age 62 who has enough credits to qualify for full benefits will receive 1750 dollars, an amount more than 3 times greater than what Social Security was ever intended to pay our per individual. The machinations that took place in the 1950’s were successful; for a program that was intended to keep its eldest citizens from becoming destitute has become one of our largest entitlements. It is a program that has not kept pace with the realities of demography. In 1935 the life expectancy was 59 years today it is roughly 78. In 1935 people were only expected to spend a handful of years collecting Social Security. Today a recipient, retiring at age 62, may collect Social Security for 20 years or more.  The truth about the payroll tax is that it  has become a stealth income tax because income in excess of payments has been rolled into the general budget. Given that almost half of our citizenry pays no income taxes, yet everyone pays payroll tax, this is a form of tax justice I can live with.

What is the adult conversation our government needs to have with us? First we have to understand that it won’t be a conversation. This is what our government will have to say:
1) The party’s over
2) There is no trust fund and the trillions of dollars in IOUs the government has promised to pay Social Security will have to be forgiven.  What is a trust fund?  You can find the definition here.  I am sure you will agree when you read this that what is going on with Social Security does not meet the definition of “trust fund.” When I first wrote this, I went back to the Social Security site and went to the program solvency link FAQ’s.  When I read the FAQ section I was genuinely shocked.  See the solvency issue is really about what to do with stretching the current income being paid into Social Security.  No one wants to have the program redeem its bonds in large quantity to meet obligations because no one knows what would happen if Federal Bonds were redeemed.  Our government is already printing money at historic numbers to prop up the economy, how would it fare if investors showed up to say redeem 1 trillion dollars in bonds to fund Social Security obligations?  Where would the money come from to pay those bonds?  Right now the money that comes in is sufficient to allow the US government to roll over its debt as it relates to Social Security.
3) The retirement age will have to be between 70 and 72
4) Benefits will have to be reduced

I wonder if Americans are ready?

Please comment.

I think that most folks who have read my blog understand that I am not a fan of the 401K.  The market crash of 2000 and each market crash after that have lead me to believe that the vehicle of tax-deferred savings with the majority of those savings going into the stock market is simply not going to help the average worker reach any sort of secure retirement.  A couple of years ago, I wrote and and published an article outlining what a scam I thought the stock market was and is.  I also put the article on my blog.  Recently I have posted to my Facebook page links to articles I have found around the web about Social Security.  These articles are not so much about the need to overhaul the program, they are about what financial planners are telling their clients in anticipation of changes to the program.  I have posted these articles for one reason only:  The people getting the financial advice are 6-figure income earners.

Throughout the Bush era, the median household income was $43, 000.  That income threshold is now slightly above $50,000.  Only 25% of US households earn above $66,000 dollars.  In other words when financial planners are talking about building a secure retirement future, they are not talking to the majority of working Americans.

CNN posted an article, Secrets of Extreme Savers, that I also posted to my Facebook page.  Many of these savers were six-figure income earners but not all were, some were single, some were not, some had children, some did not.  The one thing that they all had in common?  They all saved 30-40% of their after-tax income.  The one who saved the least, 25% actually started a side-business to make up the difference.

This turns the whole concept of living within your means on its ear.  Living within your means will land you in the poorhouse, the truth is that you have to live well below your means.  Unfortunately this concept is entirely at odds with an economy that has consistently outsourced its manufacturing to cheaper labor markets and has become increasingly dependent on a spending consumer.

The mantra of save 10%, get a 50% match then invest in the stock market for 15-16% long term returns and a secure retirement is simply a financial myth.  Every financial book written in the 1990’s had some version of this formula in it and retirement savers adopted the strategy en masse.  Simply “googling” the search terms, history of the 401K, leads one to the inescapable conclusion:  that the proliferation of 401K plans led to the very stock rally that culminated in 1999 and that retirement savers hope will occur again today.  It won’t.  In 1982 the DOW sat at roughly 800 by January 2000 it was at roughly 11,700. The last decade has been classified as a bear market.  The demographic trend, the baby boomer generation, that created the bull market run of more than a decade ago has passed.  Those boomers are no longer saving for retirement and driving the markets, they are collecting Social Security.

The truth is that we have to save more and investing for appreciation in the hopes that that strategy will lead to a secure retirement is probably a fools game.  The crazy thing, though, is that the 401K was never intended to get anyone rich.  It was intended to supplement Social Security.  From Teresa Ghilarducci professor at The New School for Social Research, “In a perfect world, an average worker could amass something like $400,000 in a 401K by retirement.  After nearly three decades of 401K contributions, though, the average account balance for people nearing retirement age is about $60,000.  Far less than what’s needed.  So it’s no surprise that when a recent Gallup poll asked what Americans want most from government, more chose guaranteed pensions than guaranteed jobs or health care.  Most people save less than 5% of their income for retirement, and many start withdrawing funds early because of layoffs, divorces , and other unexpected events.  The consequence of these 401K leaks is that workers retiring in 15 years will do worse than their parents and grandparents, according to the Center for retirement Research at Boston College.  Almost two-thirds of households will probably face declining living standards in retirement.”

In short, the 401K was intended to be a base hit, not a home run and saving 10% was the least a worker could do to prepare for the future, but not the only thing.

I used a retirement calculator to calculate the payout over 30 years for a given retirement fund balance.  Then I went to the Social Security website to find the benefit of a person born in 1948 and retiring at age 62.  An individual with a $400,000 nest egg in retirement + Social Security will yield an initial retirement income retiring at age 62 of $2000 per month.  Assuming 3.5 % investment return and 3.5% inflation that worker will be able to give himself additional modest increases in income throughout retirement.  This retirement calculator at hugh’s calculators is a handy tool.

As I plan my retirement now, I look at what I have today and what I can buy today that will give me cashflow in retirement.  Buying buckets of bonds and dividend-yielding stocks will give cashflow in retirement.  Buying stocks for appreciation won’t.  Buying rental property will, buying a house won’t.  Starting or investing in a business will, looking for a job unless, I intend to save a third of my income so that I can engage in one of the other strategies I just mentioned won’t.

Am I saying that a person who is unemployed with the wolves at the door shouldn’t look for a job?  I will answer that question by paraphrasing author, Robert Allen.  In 2002 I attended a Robert Allen seminar and he basically said this:  Some of you are here today because you are hurting financially.  Many of the opportunities we will discuss here are not going to be for you.  I urge you instead to do what you need to do to get stable.

I take that to mean find a job, sell your crap, sell your ideas, what ever you can to establish an income stream then save 30-40% so that you can buy things that generate cashflow.  The truth is that most folks generate income to pay the bills, but that is a pretty narrow view of money.  Each dollar generated has to pay the bills today and work to build a future.  It is a lot to ask of a dollar to do two and three jobs at once, but we have to do it.  Creating a situation where each dollar does more than one job versus only doing one job is the difference between taking a leisurely stroll in the park on a sunny day versus running an endless marathon in the mud.

Please comment.

Last week Bob Herbert, op ed columnist for the NY Times went on a rant about Shirley Sherrod.  Generally I believe Mr. Herbert to be a whiner, complaining about the world as he sees it without offering any clear solutions.  But how do you offer any credible solutions involving an incident in which edited video is taken as fact and lies as the truth?  Lies become actionable and not necessarily to punish the liar.

Now that we have a Black man in the White House, hurling the “R” word at someone causes even the most unlikely people to head for the exits, abandoning the supposed racist in the dust; and, sadly, no one fact checks.  President Obama gave an incredibly beautiful and on-point speech about racism during the 2008 campaign.  When I heard it, I could not believe my ears because he spoke honestly about the state of race-relations in America.  The mess surrounding Ms. Sherrod simply underscores that, racially speaking, things are worse than we thought.

The unedited speech is rife with irony.  At its beginning, she speaks of the pride she has serving in the administration of the first Black president. At its middle she speaks of the anniversary of the murder of her father, a Black farmer who was murdered at the hands of a white farmer who was never brought to justice even though there were witnesses to the crime.  The murder of Blacks in the South from the post Civil War days through the 1960’s was not uncommon.  Since the men who committed these crimes had no fear of prosecution, they often made no attempt to hide their identities.  Midway through her speech Ms. Sherrod mentions a white farmer who came to her for aid 24 years ago.  Did Ms. Sherrod really say what was depicted in the 2 and a half minute video posted on the Biggovernment.com website?  She sure did, that and so much more.  Her original speech was 43 minutes long.  Andrew Breitbart lifted 2 and a half minutes right out of the center of it.   When her father was murdered, Ms. Sherrod decided to remain in the South to work to change the status of Black people.  Her involvement with the Spooners, the white family who came to her for aid, taught her that she was there to help all people, people who lack access because of their socioeconomic status.  Ultimately for her, poverty became a larger issue than race. Ms. Sherrod talked about the need for unity among all races, she talked about the need for community development in Black communities and that our communities should foster education and economic empowerment through business ownership.  Ms. Sherrod helped the Spooners, now in their 80s, remain on their farm and they have all remained life-long friends.  Ms. Sherrod is not the most gifted speaker in the world, but her speech is lovely and worth a listen to;  although, sadly, the NAACP did not remember enough of the speech to avoid condemning Ms. Sherrod, they have graciously provided the unedited version on their website.

Did Ms Sherrod initially attempt to limit the assistance she provided to the Spooners because of race?  Yes she did.  Did she then give more than her all and help the Spooners remain on their farm?  Yes she did.

Was her initial attitude so surprising?  Not really; it was the mid 80s.  Three Black men, including 16 year old Yusef Hawkins had been murdered by white mobs in New York City, it would be a few years before Rodney King would be beaten before our very eyes on national television and I and my brown-skinned classmates heard the “N” word more times in Manhattan uttered by our supposedly well-educated white medical school classmates than I ever heard growing up in the South.

The Sherrod affair is sad.  We’ve come a long way since the wholesale murder of Blacks was condoned by society.  We’ve come a long way even from the 1980’s, but Shirley Sherrod reminds us that in a sound-bite society in which the “R” word has become the new “N” word, we still have a ways to go.

Please comment

Okay that is such a clumsy title for a post,  but there it is.  I am still reading Ellen Ruppel Shell’s Cheap:  The High Cost of Discount Culture.  Ms.  Ruppel Shell’s premise is simple, our quest for low prices is anything but harmless.  We pay for it in damage to the environment and the ultimate loss of craftsmanship and quality.  Cheap goods allow us to move toward a throw-away society.  Charles Fishman argues in The Walmart Effect that Walmart makes sells cheaply-made lawnmowers so cheaply that you’d never think of repairing one, you’d simply replace it when it breaks which it is likely to do each and every year.

The abundance of cheap goods has masked the very real problems of inflation and wage stagnation.

I love getting a good deal, but I love getting a good deal for a quality item.  The problem is that much of what we buy is low on quality.  The most enlightening chapter of Ruppel Schell’s book is the chapter entitled, “The Outlet Gambit.”  Premium outlets are designed to  get you to part with your money while connoting value.  The problem is that the reference prices on which the discounts are based are fiction and many brand leaders manufacture lower quality products specifically to sell in “premium outlet” malls.  Ruppel Schell and Dr. Gillian Naylor, marketing professor at the University of Nevada, Las Vegas College of Business, travel Las Vegas malls with Dr. Naylor distinguishing between quality and garbage merchandise and, more importantly, whether or not suggested retail price is truly reflective of a product’s quality.  More often than not the answer was no.  Rupel Schell writes, “Given this assiduous attention to value, Naylor’s opinion of outlets is worth noting:  She uses them, but sparingly. She prefers department stores which she said generally carry better quality merchandise at prices that are frequently lower than outlet levels.”

This book has merely confirmed something that I began to suspect long ago:  That manufacturers use the allure of outlets to unload inferior merchandise that they make specifically for the outlet. The Coach belt that I bought at the Premium Outlets mall outside Santa Fe, pulled apart within months of purchase and the Coach leather coat, that I paid a pretty penny for has loose stitching and the beautiful rich brown color that I found so attractive on the day of purchase is coming off after only one season of use.  I have vowed to never return.  Coach Premium Outlets is selling junk and if they are doing it in Santa Fe, they are doing it in your neck of the woods.  The implication in Cheap is chilling:  by shopping at an outlet store, you could end up paying $300 dollars for a suit that is really only worth $200 dollars at full retail.

Even online super discounter Amazon.com practices the reference price shell game to lead you to believe you are getting a deal.  I began to suspect something was up when product reviewers suggested in very direct language that Amazon was outright lying about the suggested retail prices on some of its products.  A few months ago I was in the market for a new coffee maker.  Amazon lists the suggested retail price on the Cuisinart DCC-1200 as $145 dollars and they offer it on sale for $69.95 a savings of 52%.  But what does Cuisinart sell it for? $79.95 and there is no suggested MSRP.  Macy’s has the same item listed for $79.95 with an MSRP of $99.95.  We have to conclude that the Amazon MSRP is simply a fantasy used to bolster the value of the perceived deal.  Amazon is really selling the item at $10 dollars off, a savings of 8.7%.  A pretty thorough Internet search has lead me to believe that this item’s retail price is $79.95 and that even the Macy’s MSRP is made up.  This item is easy to compare because Cuisinart only makes one model of the DCC-1200, but what if there are different models of the same item? Take the Buck 110 folding hunting knife.  The Amazon price is $41.36 with a suggested retail price of $66 dollars.  The implied discount is 38%.  Would that it were true.  LLBean sells the same knife for $34.95 and there is no suggested retail price.  Bass Pro sells the same knife for $44.95 and does not list a MSRP on their site.  Hunting Blades does list the MSRP as $66 dollars while selling the knife for $47.95.  What does Buck sell this knife for?  $45 dollars.  Buck actually sells two versions of this knife.  The knife with brass fasteners is $66 dollars and the one with nickle fasteners is $45 dollars. The image on each site appears to be of the higher-end knife, but none of the sites uses the Buck model number so it is virtually impossible to make direct price comparisons.

Provided that all 4 sites are actually selling the same knife, this exercise illustrates several things:

1) Whether the MSRP is real or not retailers use that number to provide context for the deal you think you are getting.

2) Without accurate model numbers, it is impossible to truly compare prices from store to store

3) It pays,  literally,  to shop around.  Provided we are talking about the same item, LLBean clearly offers the best deal on this knife.

4) It makes sense to go directly to the manufacturer to verify the MSRP.

5) Price is clearly relative.  Clearly all for sites want to sell this knife yet only one site offers substantial savings over the other three.

Amazon’s pre-order price guarantee is a zero-sum game.  The  guaranty only applies to prices in effect on the day an item ships.  The guaranty does not apply to rock-bottom price fluctuations that may have occurred before the item shipped.  Price fluctuations that some buyers will be able to take advantage of, but not you if you pre-ordered the item and expected Amazon to monitor the price for you.  The best thing to do is not participate in the pre-order program and watch prices yourself.   The other thing to do is place the item in your cart then remove it to buy later.  If you do that Amazon will watch the price for you.

I am reminded of the Donna Summer song, “she works hard for the money”.  The fact is that we all do, yet I do believe that we want quality and value not junk as we plop down our hard-earned cash for the products we desire.

Please comment.

Recently I was sitting with two friends at dinner.  Both women are over age 60 and both found jobs in this economy.  The jobs are high-paying. One of my friends said that she thought the reason she had been able to find a job was her work ethic.  “We may be 60,” she chuckled, “but at least folks know we will show up.

At the time of the Great Depression, the number of self employed individuals was significantly higher than it is today. Since 1948 the percentage of self-employed individuals has declined steadily. Since the 1970’s the self-employment rate has ranged between 6 and 8 percent of total employment.  Has the work ethic in America changed as the rate of self-employment has fallen?

I thought about what she said and filed it.  Back in the roaring 1990’s the labor market was so tight that all kinds of bad employee behavior was tolerated. Monday/Friday absenteeism was high and folks figured they could just get other jobs if they got fired.

I recently Tweeted an article that appeared on CNN Money about the success of Amish businesses.  Their long term survival rate  is over 90%.  By comparison, the 5-year business success rate is 65% for the general population.  They attribute their success to humility and extremely hard work.

The other day we got a call from a colleague.  Her car had broken down and she was calling to cancel her clinic scheduled for the next day.  She was told to rent a car if she had to but she needed to be present as scheduled.  She showed up.  A couple of years ago, I got a call from another colleague.  She was about to leave on vacation in a few days and noticed a spasm in her back.  She wanted to see a massage therapist to work the spasm out.   Trouble was, the only appointment she could get prior to the start of her vacation was right in the middle of one of her clinics.  She called and, explaining to me that she did not want to head off to her vacation with a spasm in her back, asked if I would excuse her from her scheduled clinic.  My answer was, as Madea would say, “hell to the no.”

Many years ago, I wasn’t much better.  I was chronically 10-15 minutes late for work.  My dogs were sick, my car was sick, I had a hot date the night before.  Silly, silly stuff.  My mama told me that as long as I needed the income, I had better prioritize the job.  My mother raised 2 kids alone and rarely missed a day of work. The truth is that as long as someone needs their income, they had better prioritize their job or business.

Is this behavior a function of age?  Meaning the younger you are the more likely you are to see the need to earn an income in conflict with other activities like getting the car fixed.  I don’t know. I do believe, however, that something has happened.  In the name of family values people shirk work.  Even in households where a parent is home full time, I have watched adult health care professionals walk off the job to take care of something at home.  “Family first” being the last words they utter as they walk out the door. How about “without an income, there is no family, so I’ll just stay on the job.”  It is a foregone conclusion that work comes second.

We might just find ourselves in a position in which we lose our competitive edge to nations in which their citizens are happy for work and for whom the job or the business comes first.

Please comment.  What are you seeing at work?

The old world will burn in the fires of industry. Forests will fall. A new order will rise.

“The Forest of Fangorn lies on our doorstep. Burn it.”

Saruman, LOTR: The Two Towers.

I planned this blog post several days ago before Thomas Friedman’s editorial in today’s Times.  Friedman’s editorial puts the blame for the BP oil spill where it truly belongs, with each and every one of us.  We have had so many opportunities to get our “oil situation” right, but we have squandered them.  The 1970’s oil shocks, runaway inflation and the recession of the early 1980’s did push us toward fuel efficient cars and thermostats set at 65 degrees but neither of those maneuvers is really an energy policy.  The 1990’s bull market, tech boom and cheap oil pushed us toward MacMansions, the suburbs and SUVs.  9/11 wasn’t really a time for introspection and personal responsibility as much as it was a time for anger and war making.  No energy policy again…just another missed opportunity.  From 1996 to 2006 I drove a 4-Runner everywhere I went and thought nothing about it.  I didn’t make the connection either until I saw Syriana in January 2006 and realized what my petrodollars were really doing.  I walked out of the theater and said, “I’m buying a Prius.”  By February 6th I was driving my new car off the lot.  A Prius isn’t an energy policy either and the truth is that we may never get one at least not from our government.  But we as individuals can make one.  We can drive fuel efficient cars.  I am sorry to say that a car that gets 25 miles per gallon is not a fuel efficient car.  One that gets at least 30 mpg is.  We can replace our drafty windows with energy efficient ones.  We can get digital thermostats.  CFU light bulbs.  We can walk, we can cycle, we can compost, we can garden, we can lose weight for the obesity epidemic adds about a billion gallons a year in additional fuel consumption.

What will it take for individuals to take action?  Waiting for the government is like waiting for Gadot.  We can remain on the park bench waiting for him to arrive, be we know he never will.  That is the point.

So what will it take?  Should the Earth take matters into its own hands and the ground open up and swallow each SUV that drives over the roads?  What would happen if oil-soaked oysters rose from the depths of the gulf, grew feet, came ashore and hurled themselves at BP executives instead of die quietly on the ocean floor?  Would we get the message then?

The image of the Forest of Fangorn is a powerful one;  a forest that literally rose up and moved to intercept and destroy the creatures who had desecrated it in order to create weapons of mass destruction.  Do we need walking trees and talking animals to get the point?

I know this, I am feeling increasingly hopeless about our ability to get this right.  We’ve had so many chances.  Cheap oil and the consumer destroyed the electric car in the 1990’s.  I would like to blame GM, but they are not entirely to blame, they made the SUVs but we bought them.

Where do we go from here?  Please comment.