Don't Get Me Started: August 2006

Thursday, August 31, 2006

Guilty Pleasures in Movies

When it comes to movies, do you have any guilty pleasures? I'd have to say the old SciFi probably falls into that category for me. Although most of those old movies were originally intended to awe and inspire, some were very funny in ways that would probably only embarrass the producers now.

You can tell that the producers, directors and actors were very earnest in their intent, but yet there they were with the actors wearing cheesy space suits that look like pajamas made out of aluminum foil, dealing with aliens that were obviously just people dressed up in rubber costumes, holding ray guns that looked like a child's water squirt-gun, and they showed spaceships where the best ones looked obviously like models, and the worse ones looked like bathtub toys and sounded like an electric razor, while shooting sparks like a broken toaster. Many of the spaceships seemed obviously suspended on a string, judging by the ways they moved, as they sometimes bounced and swung. Some of these movies looked, in some ways, like a project that teenagers might come up with today. The worst of them, by reputation, was "Plan 9 From Outer Space", a famously bad movie. Known for being the absolute worst movie ever made. I must admit, that one is NOT a guilty pleasure for me. It was just TOO trashy for my taste.

On the other hand, although some had less impressive technology and special effects than today's movies, still they had good stories, or decent acting, or a good message, or imaginative approaches to things. They had value, even if the props didn't. Some of those movies are still enjoyable on more levels than just the kitch or nostalgia factor.

These were movies like Forbidden Planet (shown here with Robbie the Robot, Anne Francis, and the alien power center and the "invisible creature from the ID" where the Krell used a massive power source to bring to life a creature invented out of the fears of men), and "The Day The Earth Stood Still" (where mankind's greed, and fear were being tested by Klaatu, seen here exiting the ship accompanied by his robot Gort) and Fantastic Voyage (where they shrunk the ship to the microscopic level and injected it into the body of a man. So they navigated around inside his body) and "The Fly" (Starring Vincent Price as a scientist trying to develop a transporter and got his DNA mixed with a fly and became a hybrid creature. Who can forget the final scene where there is a tiny fly caught in a spider's web that has Vincent price's head and he is calling out, "Help Me! Help me!"), and "War of the Worlds" (HG Wells story of Martian invasion) and The Time Machine(HG Wells' classic book), and Journey To The Center of the Earth, etc.
For TV series, there was Twilight Zone and The Outer Limits. I love both those shows and have collections on DVD of both series. Twilight Zone had a sophisticated, literary feel. The episodes were are very well written and had excellent ideas at the time, but now have been copied so much that they have become actual cliches. Nevertheless, they are still great fun to watch. What was once novel and erudite, became cliche and predictable, then was forgotten for a time, then became kitch, and now has become classic and nostalgic.

The Outer Limits was one that actually scared me as a child. The images they showed, and the ideas of what they portrayed just spoke directly to the fears and imagination of my young brain. I remember some of those ideas that haunted me. And that music haunts me even to this day. In fact, I am spending some time each night at the moment, watching these old episodes on DVD just before bed. I am happy to report that there are no nightmares.
And The Time Tunnel was a fun series. That was a great creative medium to be able to have any kind of adventure in any place in the world, in any perdiod of history. It was probably responsible for sparking all my thoughts about time travel that I have had most of my life. Barely a day goes by that I don't have some sort of thought, or musing about that. Think about introducing french fries and hamburgers to the king of England in the 1500's, or inventing the automobile or the airplane a hundred years earlier.
Also Lost In Space was a tongue-in-cheek one that was fun too. A family on a mission to establish a base on Alpha Centauri to allow Earth to branch out and colonize to the nearest star. That one started out serious, but ended up being deliberately funny. Who can forget the robot in that series: "DANGER Will Robinson. DANGER!" With the evil, conniving, cowardly Dr. Smith who sometimes called the robot "You bubble-headed booby!" There were some REALLY ridiculous aliens in that one. It was just so FUNNY.

Those movies perhaps lacked some of the technical sophistication of modern day SciFi movies to give them the authority and authenticity of at least looking realistic, even if the subject matter might be implausible. Perhaps the old ones expose the naivete of people in general at that time - but that is part of the charm they have for me. This is because those old movies also tell me something about the innocence and optimism of that era. That innocence of youth of an entire culture is something I can look back on with nostalgia now.

Let's take a look at cars and guitars for some more examples of the sense of that era.

In 1958, there was no doubt in anyone's mind that scientific progress was making life better and better, and that every year things would be better than the last year. People were caught up in the idea of "The Space Age" and being ultra modern. Because to be modern, meant to be enlightened, intelligent, forward-thinking, and part of a bright future.
It was a time of great hope and optimism.
In the spirit of that sense of hope and optimism, people made cars with big fins to make them look like rocketships on the ground, and tailights that looked like afterburners for the rockets. That was the style of the time. Think of the cartoon "The Jetsons". That post-modern style was all the rage at the time.

Just look at these cars from the late 50's. From top to bottom, here you are looking at a 1959 Cadillac Eldorado tailfin and taillight. In pink, of course! Pastel and light colors were also a big favorite at that time, because it seemed more modern and enlightened than the previous decades of all black cars. Next is a 1959 Cadillac Cyclone, A 56 Firebird III, a 59 Corvette Stingray, d, a 59 Cadillac DeVille, and a 54 Firebird I. Some of these are road cars, some were concept cars at the time, but it's easy to see where the styling cues came from. This was where people's tastes were at that point. This was American culture for the era of the 1950's and 1960's. It was all about space and rockets, and progress and science, and a better and better world.

Also, in that same spirit of optimism, in the world of electric guitars, Gibson came up with the "Moderne" series of guitars in 1958. There were 3 models: The Flying V, The Explorer, and the Moderne. They made 82 Flying V's, 18 Explorers, and 5 Modernes, (these last were not made commercially available).
These guitars were wild-shaped, and angular. Ultra modern-looking. Something right out of the future. They were a dramatic divergence in direction from traditional guitars. One looked like a rocket ship, the other looked like perhaps a stylized supernova explosion.
I bought one of each for my guitar collection, and these pictures are of my own guitars, which I took and posed this way for my guitar calendar I create d earlier this year called "Guitart: The Guitar Calendar, with a picture of each of my 19 guitars at the time(although I now have 20). Since I name all my guitars, and since it is relevent here, I will tell you their names. The Flying V you see here is called "Flash" after Flash Gordon, the old 1940's SciFi superhero in a silver suit. And my Explorer is called "The Jetsons" because, not only does the style match the general stylistic theme of that TV series, but also, I remember some episode of it when I was a kid where Judy falls in love with a futuristic rock star ("Sky High" maybe?) and this guy would zoom around on a flying surfboard, and played a guitar with all these angular fins much like this.
I also wanted to call this guitar "Cadillac" because of it's likeness to the old late 1950's Cadillacs with the big angular fins. Just like the big fin on this guitar. When I hold this guitar while playing, I feel that big fin sticking out behind me and have to be careful turning around suddenly, that I don't knock on anything or anyone.

In 1958, these guitar designs were all about looking forward with great optimism to a bright future of high expectations.
Surprisingly, these guitars are not just about the wild looks, either. They both play and sound fantastic. I use Flash as one of 7 guitars in my current performance set. And I use it, not because of the flashy, showy looks, but purely because it has the exact aggressive rock sound I need for one particular song. Also, without the normal upper and lower bouts, it is very easy to see and access the high fret areas on the guitar. It's actually a very playable design.

So - guilty pleasures? Yes. The whole 1950's/1960's SciFi scene would be my secret guilty pleasure. But if that is so terrible - then sue me.

Wednesday, August 23, 2006

Index of all Articles - The First 100

Real Estate Scams

Not all real estate scams are illegal.
Some people have simply discovered all kinds of ways to legally steal money from other people using real state. So it's a good idea to enter into any kind of real estate transaction with both eyes wide open and one hand on your wallet, and double-check everything before you make a move.
The real estate boom that happened in the recent economic recovery was not spawned by need, but by greed.
The only need-based reason that millions of homes should have been in such a huge desperate demand would have been if we suddenly had, say 10 million more people that needed housing.
But we didn't. There was no huge new influx of immigration. Therefore, the demand was created by people who already have homes here looking to make money by investing in extra real estate and flipping it over to someone else to make a huge profit.
That next person is doing the same thing and flipping it over AGAIN to someone else to also make a huge profit. Each time it flips, the profits made are more than the average person can save from an average job in a couple of decades. So it seems like winning a lottery. Except that at the end of the chain, someone is always left holding the bag. And you never know if you're the one at the end of the chain.

In the end, that person has some hugely overpriced house they can't hope to sell at the price they paid and so they take a loss - or they are forced to carry the payments for it for years until the market values finally rise to meet what they paid.

But these are not the people I feel most sorry for. These at least are people who did this with both eyes open, just looking for a free-ride by getting rich flipping real estate. They weren't cheated by anybody necessarily, they were just unwise enough to misjudge the boom trend and buy a property at it's peak. That's the chance they took, and it didn't pan out that time. So be it.

The people I really feel sorry for are the ones that are deliberately scammed by unscrupulous types trying to make money by misleading innocent people and taking their hard-earned money, or their homes. Let's look at some examples of how some of the scams work so you can learn and avoid these situations yourself. Remember, people in every position can get burned one way or another. Sometimes it's the seller getting burned. Sometimes the buyer. Sometimes the mortgage lender, the mortgage buyer, the mortgagee, the real estate salesperson, everybody involved has the opportunity to be cheated at some point by someone.

Buyer Scams
The Chinese Tease
Back in the late 1980's when I was in the real estate business myself, I used to see a lot of tricks that people were using to get some advantage over others. One trick I saw a few times I called the Chinese Tease, and was not uncommon among buyers coming in from Hong Kong to buy real estate in the Toronto area. Obviously, it's not restricted to only Chinese, it just happened that most of the ones I saw doing this at that time were Chinese from Hong Kong.

Here's how it worked: First, the people buying the house are not just a couple, but rather a large group of people. They pool their income and their money and assets in order to buy a series of properties as investments and to qualify for mortgage financing beyond what they normally would. And that is ironic, because that is contrary to the trick they used. The trick is this: They would offer to buy a house and pay a fair price, but with a relatively close closing date, perhaps in 30 days, explaining that they were coming in from Hong Kong and needed a place to live very quickly. The sellers would sell them the house with the normal 'conditional upon financing' clause in it, and allowing the buyers three weeks to arrange financing because they needed extra time to arrange the mortgage. But the buyers have no intention of getting a mortgage. Instead, they simply wait the three weeks and then rescind their offer - legally.

They simply claim that they did not qualify for the mortgage. However, since they thought they had sold their house already, the sellers had already gone to buy their next house with a firm offer. Now, they are stuck with two houses. They have to come up with another down payment for the new one without having the money from the sale of the old one, AND they have to arrange bridge financing to cover two homes at once. Something that is very very difficult - or impossible in an expensive housing city like that.

The alternative is to default on the new purchase and let that seller now sue them for hundreds of thousands of dollars, or sue for 'specific performance' to force them to buy the property anyway. After a few days, when the full depth of their problem sinks in, suddenly another Chinese buyer comes along. The sellers don't know it, but he is actually a member of the same buying group that did the original deal. He offers to buy the house at a drastically reduced price, but he can close on the original date - which is now only 5 or 6 days away.

This allows the seller to escape a lawsuit or having to carry both houses, but it is usually such a low offer that it strips away most of his equity in his house. Then, the buying group has acquired another house - and at bargain basement prices. They may get a $500,000 house for $300,000 this way, which they could simply turn around and resell again immediately and pull $200,000 profit out of. Cute trick, huh? If they do this 5 or 6 times, they could make over a million dollars per year this way.

The Brother From Barona
Another trick I saw many times was where someone would sign an offer to purchase a property, but they would put the words "(in trust)" beside their name. They said this was because they were actually buying the property for a brother coming from Italy (or wherever) and he would be there before closing, but he is not here now to do the offer. The idea is that just before closing, they transfer the agreement over to the brother who actually intends to buy and live in the house. Usually this is accompanied by a rather low deposit.

Then when closing time comes along, the buyer does not wish to close and instead uses the (in trust) clause, transfers the agreement to a numbered company that he owns which has no assets and so is unsuable and untraceable. This places the seller in the same position as the Chinese Tease described above, but it's worse because by then, the damage is done already. The seller is already stuck with two properties, and must dump one. He can then go in with a cheap offer to pick up one of them and then flip it for a profit. Or his brother does.

Straw Buyers
In some cases, a person will sell their land to an accomplice for an inflated price.
Then the mortgage company loans money to the buyer for the property to complete the transaction. Then the buyer defaults and the seller and buyer split the proceeds.

Seller Scams
I was once stung very badly by an unscrupulous seller. I bought a house with a long lot that was ideally situated for being subdivided and sold as three lots for a potential upcoming infill subdivision. I paid a premium price because it had that potential. More than it would sell for without it, but less than I would get for subdividing the other two lots and selling those. I bought the house in good faith from a seller who sold it in good faith. In fact he bought it in good faith years before from an honest man too. In fact, the real crook was the man who sold it 17 years before that in 1972. The house had changed hands 7 times since then.

When the subdivision plan was finally coming along, I had been living in the house for several years, but in 1991, suddenly one day there was a notice in the mailbox to say that a previous owner from 19 year prior to that was exercising his option to buy back the land behind my house for one dollar.

He was trying to STEAL my land!

Apparently, the way he did it was to have his daughter, who was a title searcher, go to the registrar's office and ask for the 40-year search. She then took the stack of original documents (not copies, mind you) over to a desk where she works unobserved. I assume it was here that she inserted a replacement page into the original Agreement of Purchase and Sale from 19 years previously when her father sold the land, and the new page includes the clause that allows him to buy back the rear 400 feet of land for one dollar anytime up until 20 years had passed. I had no idea who this guy was, but he had a reputation for unscrupulous and illegal activity in that town.

We refused. He sued. The civil court does not have jurisdiction over criminal issues such as fraud, so they had to take the documents at face value, despite the fact that the page headers and trailers did not match, despite the fact that it was written by a different typewriter than the other pages in the same document, and despite the fact that none of the other lawyers, including mine, had ever seen the clause or
noted it in all 7 transactions over 19 years.

Nevertheless, the court decided in his favor, and I lost my land, and my house. I lost everything I owned in that transaction. The legal fees alone were enough to bankrupt me. I managed to stay out of bankruptcy, but I had to sell my house to pay for them. I lost 8 years of my life in that debacle. I just had to walk away and start again with nothing. Which I did.

Mortgage Scams
Mortgage Flipping
Many mortgage lenders encourage you to keep refinancing your mortgage to get extra cash by taking it out of your equity, or to take advantage of a lower rate. The problem is that there are usually about $5,000 in fees to set up a mortgage. These fees may be added on to the principal so they are not as obvious when you do the original paperwork, but every time you change, you increase the overall debt by another $5,000.
In the long run, with compound interest rates over 30 years, each renewal costs you
3.5 times the original amount. In other words, if you renew your mortgage twice, that's about $10,000 is mortgage setup fees, which, amortized over thirty years comes to about $30,000 extra to pay off on TOP of the amount for the house. Just for the FEES for renewal.

Interest Only
Some interest only loans have a balloon payment of principal due at the end of a short term. Suddenly you find you need a huge amount of money which you don't have and cannot afford on top of your mortgage payments so you lose your house.

The Handyman Special
Some people ask a contractor for a quote for an addition or renovation on their home.
The contractor comes back with a quote but it's much higher than they thought. However he says he will arrange financing for them.

He starts the work and then comes back with paperwork for permission for him to get a homeowner's loan against their house that they have to pay. He will walk out and leave the job in a mess if they don't sign.
But the terms are bad. High interest rates, extra fees, penalties, etc. and the contractor was in a deal with the lender to get kickbacks on the loan. Once the loan is set up and he gets his money there is little incentive to ever come back and finish the job. But the homeowner is stuck with the new home improvement loan to pay
and they and the contractor already have their money.

Loan To Own
Here is another trick. This is one that my brother told me about. He has spent many years in the commercial real estate business and has been exposed to a lot of business dealings both clever and crooked and has probably seen it all by now. Or at least most of it. Here is one secret: if you want to own a shopping mall, you don't need to go to all the trouble of designing it, buying the land, doing the land studies, the market research, deal with the planning board for the zoning changes and planning permissions, hiring the builder to build it, dealing with all the cost overruns and construction problems, water problems, etc. etc. etc.

Instead, you can simply give a mortgage to a shopping mall that someone else is building, and then wait for a major tenant, or a few smaller tenants, to leave, then use a mortgage call to take over the whole mall. Of course he has never done this, but he's seen it happen several times.

It works like this: The mortgage, like a home mortgage, is based upon loaning an amount up to but not exceeding a certain percentage of the value of the property.
So, if the mall is worth say, 32 million dollars, and the mortgage is for 75% of the value, then the mortgage is for 24 million, and the developer that built the mall has to invest 8 million dollars into it.

However, unlike a house, the mall's value is not based merely on it's land value or the value of it's construction. It is also based in a large part on the signed leases it has with the retail tenants. If they leave, then the income potential of the mall is severely damaged and the mall is worth a LOT less money to investors. If the value drops to say 25 million because a large tenant has left or shut down, then the mortgage is now at more than the agreed upon 75% of the overall value, and so the developer has to give the mortgage company enough money to make up the difference.
In this case, the call might be for the difference of 18 million to 24 million, which is of course, 6 million dollars. It is unlikely that the developer has 6 million dollars to hand over just like that. Especially when there is no return for the investment, and ESPECIALLY since their income is drastically reduced due to the fact that their major tenant has shut down that store. So they are not in a position to pony up the cash, and they lose their mall, lock, stock and barrel.

Now, of course the mortgage company can go ahead and assume control and lease out the empty store and the value of the mall jumps back up to industry standard and they have just bought themselves a 32 million dollar mall for 24 million. No headaches of planning or construction.

Buyback Scams

Some people who are having troubles making the mortgage payments have been taken in by scams where a person offers to help them out by instead of giving a traditional mortgage, the owners actually sign over the deed to the property temporarily for the value of the mortgage. Then they have a reduced payment which is essentially rent they pay to continue living in the same house. They stay in this mode until they are financially on their feet again and then they buy the house back for the same price they sold it for.
However, there are usually fees, indexes to inflation, etc. that keep the house always just out of reach and they cannot afford to buy it back, of the mortgage company sells the property to someone else who now wants the house and has no such agreement with the people he considers 'renters'. Either way, they never get their house back.

Rent to Own Scams
Promises, Promises
Many people that rent have a decent income and some limited cash, but not quite enough to pay a full down payment and buy a house. There are those who prey upon these people too.
They offer a rent-to-own plan where they take a small down payment, such as $10,000, then charge $300 more than normal monthly rent, with the intention of having the renter buy the house after a couple of years.
Typically though, in 2 years, the financial situation for the renter has not changed much, and they still can't afford it. Part of that is because the value set in the contract is higher than what the place is worth at that time. Set high deliberately in order to get the down payment and extra rent every month. You can be sure that if the value of the house ever actually gets to where it's a fair deal and the renter is trying to exercise his option, the owner will be on the phone to his lawyer looking for a way to get out of it.

Renter Scams
Pacific Heights.
We are used to think that the owner is a scam artist and the poor person renting is the victim. But not always. Sometimes the renter is the scam artist. If you ever saw the movie Pacific Heights, you know how this can happen.

Well, that happened in real life to a couple I know very well. In fact, we're related.

They themselves rented a small, but clean and decent apartment in the city to live in while they put all their money into buying a farm. The farm was too far away to commute to everyday for work, so it was for an investment. But they put all their eggs into that one basket. The goal was to keep it for a few years and then sell it to a housing developer to subdivide and they should make their retirement nestegg.

Unfortunately, it didn't work out that way. They had to rent it out to cover the mortgage payments and other costs, and the woman they rented it to was a shyster. She ended up setting up a business for hosting exotic pets (Python snakes, large predator cats, etc.) and she found a way the trick the system so that she wouldn't ever have to pay rent, and could eventually even get the farm for free.

She started by taking a chicken and letting it go bad to develop some salmonella. Then she dunked that into some water and then took the water to some testing lab to be tested. The water came back with a lab report saying it was contaminated. She then opened up a lawsuit against the owners to say that this was the well water at the house, and she was refusing to pay the rent because of this issue. That meant that the rent was now formally considered 'in dispute' and so did not have to be paid until the court date. The court date was set 6 months in the future. Then she damaged an electrical panel and claimed it was a fire hazard and set up a separate law suit for that. Then she did the same with several other spurious lawsuits.

The judge decided that all the cases had to be heard at the same time, but it was going to be a large case now, and so would have to be rescheduled out to a more distant date. It was set out well after a year.

In the meantime, she was paying no rent. She continued to pile on lawsuit after lawsuit ridiculously, until it got to the point that she was suing for more than the property was worth. If they lost the lawsuits, then the older couple would lose their life savings. The case started to go her way because most people think that if there are that many claims - SOME of them have to be true! They can't ALL be made up can they??

As it happened, she had done this same trick in another city to several other people, and so they showed up to give evidence to the judge. They had been looking for her for some time.

When the judge saw that, the case turned around, and the people got their farm back, and the woman was charged. However, the whole nightmare took years to settle, and the chance to sell the property at a decent price had now passed. The recession had now begun and the property was worth less than they paid for it, so they sold it at a loss and got out.

Planning Scams
The Planner Who Plans Ahead
Another commercial one I once heard of was where a company bought a corner property in a major city. This is a commercial office building of perhaps 4 or 5 stories. They planned to use it as their headquarters, but because of a very specific zoning by-law, they had to apply for a slight zoning change to allow them to operate the business there. The change was minor. It was the equivalent of switching from
say a medical building to an insurance company. That type of thing.

Well, the planner looked at it and decided that they could have their zoning change but only if they could provide 12 more parking spaces than what were there already.
This was of course, impossible. The building was already built and had been standing for years. The only way to get more parking spaces would be to demolish the office building for which the parking spaces were ostensibly for. It was a huge problem. The company had paid millions of dollars for a building they could not use. So they asked for an alternative.

And, of course, there was one. The planner said that if they wished, they could instead donate $20,000 per parking space for each parking space that they didn't have (that he said they needed to have) into a local city fund that would be used to buy a local parking lot to be used for parking for the buildings in that area. So they did that. They paid the $240,000 into the fund.

Then, shortly thereafter, that planner himself had personally purchased an old abandoned gas station down the street and resold THAT to the city for the exact amount in the planning fund. Three million dollars. How nice.

Other Scams
The Boomerang Burger Bar
I saw this happen with pizza places before, but it's common all across the restaurant industry.

One guy has a small restaurant that he wants to sell. He put it together by going to buy up the remains of another restaurant that went broke, and buy his equipment and fixtures at 10 cents on the dollar as a liquidator.
For $250,000 worth of kitchen equipment and chairs, tables, etc. he pays maybe $25,000. Then he puts another $5K into signage, and strikes a deal with the owner of a small plaza with an empty store to sign a 6 year lease but with free leasehold improvements and the first 6 months rent-free to get the business started. He hires some local kids at minimum wage and opens the doors. He then IMMEDIATELY starts looking to sell it.

He wants to sell it before the rent payments kick in. So far, his total cost outlay is only less than $35k.

He finds some middle-aged corporate guy who is tired of the corporate rat race and dreams of owning his own business. Then he offers to sell him the business for $500K. The corporate guy thinks that he can make that up eventually because he doesn't know that more than 90 of all restaurant businesses go broke. Also, he doesn't really know how badly the books have been cooked to make it look like it was profitable when it was not. It's impossible to prove how much business was really going through a restaurant that has a large cash component of their sales, because you'll never get the credit card companies to give information about past years business, or suppliers, and even then, the supplies can be bought anywhere and multiple places at once.

The buyer tries to get a loan from a bank and they laugh at him for being so ridiculous. But the seller takes pity on him and gives him a mortgage on the business. "Give me $100K down, and put up your house and the business itself as collateral, and I'll give you the other $400K as a vendor mortgage." He KNOWS that the man is going to fail because he doesn't know the restaurant business, and because the books were faked, and usually the corporate guys never have enough money in the bankto keep paying the bills for month after month of running losses.

So the buyer quits his corporate job and starts working his little restaurant. Months go by.

The seller has his $100K - which itself was far more than what it cost him to set it up in the first place. And now he is also collecting the mortgage payments every month from the poor sap. Then, after 6 months of steady losses, the new owner starts to default on the loan. The seller gives him 2 months leeway and then forecloses.
Now he own the man's house, and his $100,000 in cash, and he took about 20,000 in mortgage payments, AND he got the original business back.

He just turns around, re-lists it on the market and waits for the next sucker to come along. He keeps selling it and it keeps coming back - just like a boomerang.

I bought a pizza place one time and saw this stuff happen. The money in the restaurant business is not in RUNNING the restaurant. It's in buying and selling them.

Tuesday, August 22, 2006

MTV visits my house

Well, it's been an interesting turn of events. I got a call on Sunday from a film producer for MTV who wanted to come over to my house to film my daughter and her friends as they chat.

It's for a reality show coming up about the kids in the high school marching band, called "Band Geeks". Unfortunately, it turned out that not enough parents at the school signed up for it, because they thought it would be a distraction and would affect the school's competitive ability, so it's not going to happen with our school. They may move on to try another school now. It will still have to be in Texas though, because MTV has checked around the rest of the country and the schools outside Texas don't take band and band competitions as seriously as they do here. Here, it is probably a bit over the top. Texas schools actually buy their band shows from professional companies. The music, the arrangements, the themes, the choregraphy, the whole works. You have to see them to believe it.

With our school, there are 300 kids in the band this year. They have their own tractor trailer with the School band logo on the side. When they arrive at an event, it's 6 large busloads plus the tractor trailor. There are elaborate props, gear, hydraulic lifts for solo platforms, etc. The drumline has won the national championships 10 years in a row, and so this year they are not allowed to compete anymore as a drumline. These kids practice from 7:15am to 7pm in 105 degree heat in the summer - for a month before school even starts. They play in heat, cold, and pouring rain of biblical proportions. The extreme absolute discipline they show in the performance and before and after the show is astounding and impressive. They're more like US Marines than teenagers. They are also respectful, polite, and all advanced level, first rate students academically. I was never a fan of high school band music, but this band gave me a sound appreciation for it. This is my daughter's 3rd year, and I have grown to really like it.

The directors of the band are first-rate as well. Highly professional and knowledgable, and from my experience, I would say they come across as true leaders in every respect. This is the school I wanted my daughter to attend. And this is the group within that school I wanted my daughter to belong to. These are the 'good' kids. The polite kids. The top achievers. The lessons she learns here and the standards she sets for herself here are absolutely invaluable for her for the rest of her life.

But now MTV will probably have to move on to another school because they didn't get the support and agreement they needed from this one.

Too bad, because they said some things to imply that my daughter and her friends, who all hang out at our place, would possibly be the 6 stars of the show, and some amount of the series would have been filmed at our house.
When they came in, they noticed my live band stage setup upstairs, with the large PA system, and the lighting stands, smoke machine, etc. And they noticed my recording studio, and they were asking me about that stuff, asking about my band and my music, etc.
Since the parents of the 6 would have been involved, I guess I would have been involved. I don't know if I would have been painted as the crazy dad with 20 guitars and a rock band and a recording studio, etc. or if they would have painted me as the cool dad. They could go either way and time would tell. But it's not going to happen now anyway, so the question has been rendered academic.

It did make for an interesting Sunday. Well, that and the fact that the airline lost my mother-in law at the airport last night - ah, but that's another story....

Tuesday, August 15, 2006

Humphrey Bogart - To Have and Have Not

I watched a movie last night that is a great old movie. I have a collection of classic Humphrey Bogart movies. I think I have them all, though most are only on tape instead of DVD.

Last night I watched "To Have and Have Not". The story was written by Earnest Hemingway, so it has an interesting plot, and interesting character development. It stars Humphrey Bogart, and it was the first movie for Lauren Bacall. She is very beautiful in a uniquely sultry way in this film. I think she was only 19 at the time, but it shows how different 19 was at that time vs now.

I like the dialog in those old classic movies like that. Usually it has two or more people talking in a sort of a dance. They each say clever things that express one thing on the surface, but suggest something else under the surface. Each person trying to maintain a certain dignity and a certain level of self-respect, but underneath, they have emotions raging. Bogart and Bacal can have a rapid-fire conversation in non-sexual double-entendres that expresses in a few sentences a complexity of feelings that would take half a film to express in modern films. If they bother to delve to that level. There is a cool, statuesque persona here in both male and female roles. I also enjoy the sophistication of the interpersonal dynamics when there are several people in the room and you can see that they don't all understand the subtextual conversation at the same level. You can see the masters in the room, and you can see those who are only capable of following the surface conversation. It establishes a hierarchy of power and control and influence among the personalities in the room that is purely based on merit and actual intelligence, not just on wealth or position.
The romance between Bogart and Bacall became a real-life one and they were married, of course. But they clicked on screen immediately and it shows here. I like how Bogart takes on a dangerous job because he needs the money so he can give it to Bacall so she can find her way back home to the US. (They are in French Martinique in the Carribean during 1940's wartime) He does a selfless act despite the fact that it gets rid of her - because it's just the 'right' thing to do.
I really like the way Bogart's character treats Walter Brennan's character. Brennan is a useless old drunk, limping and lost and driven by his needs - but Bogart treats him like a man. He does not deny him his dignity. And he gives him a fair consideration even when he says things or does things that are ill-thought out, or dangerous, risky, or childish and immature. It's as if he has taken him on as his child in some respects, with unconditional support, but yet still talks to him like he is an equal, and despite his drinking problem and the effects of it, he treats him like a good man.

There is a certain noblesse oblige to this. An old-world classiness that I admire. It's as if he can see and appreciate the value of a real human being underneath their disabling behaviors and afflictions and less than flattering circumstances. He doesn't see an old drunk. He sees a faithful and loyal friend who is hampered by an addiction to drinking.
I admire people who are fair-minded, and open-minded and willing to give someone a fair chance despite their shortcomings.

And I like that Bogart does try to help those in need and do the right thing even at personal risk, DESPITE all his self-deprecating comments that would make you think less of him. He tries to convince everyone that he is self-serving and small, but underneath the surface he is world-class.

Of course some people just look at it for 2 seconds and say "It's just an old black and white movie. What else have you got?" and want to move on to color movies and car chases and things blowing up.
And they miss the point entirely. But that's ok. Not everyone is supposed to get it. But as long as SOME of us do....

Don't get me wrong - I love modern movies too. It's just that I also appreciate these old classics for the things that they were great at. And I hope you can appreciate them and enjoy them too.

Sunday, August 06, 2006

The Civil War in Iraq

That's right, I said it. Iraq is currently in a state of civil war.

It is clear and demonstrable on a daily basis. The only people trying to deny it are those in Washington who have a vested interest in trying to avoid the issue and trying to color it differently. But they are kidding themselves. It is certainly clear enough to the troops in Iraq fighting in this war that it has become a civil war. Eventually it will become so painfully obvious to the entire world, that
politicians will seem dense and self-serving in retrospect if they don't acknowledge it for what it is and act accordingly.

It is a civil war and we are right in the middle of it. We need to pull out now. We have already been in this war for 40 months. That's longer than most other large wars we've been in in history. We did have some success early. We succeeded in bringing down the Iraqi armed forces and neutralizing any potential threat that they might have posed under the rule of Saddam Hussein. We also succeeded in bringing down Saddam Hussein and bringing him to an international court of justice. But we have failed to rebuild the country as a thriving intact nation under it's own democratic rule. Instead, by removing Saddam's iron fist that kept everything together through heavy-handed and cruel tactics, we have allowed the inner tensions and struggles for power to spin up and out of control. It is a full-force F5 tornado now. We cannot fight this by shooting our guns into the wind. We cannot fix this.

There is no longer any hope of overcoming the sectarian violence and hatred and mistrust, and struggles for power within the country. So any more time, energy, resources and money spent there is wasted. More importantly, any more lives spent there now are lives wasted since they do not contribute to the cause anymore. Also, the longer we stay, the more enemies we create, and the more reasons for them to mount terrorist attacks against us on our own soil. This war is simply not 'winnable'. And it's not 'endable' either. Time to go.

You don't agree that it is a civil war? Let's examine it from the position of the soldiers actually over there fighting this war right now.

According to various recent articles in various papers, army troops in and around the capital cite a long list of evidence that the nation is unravelling: Sunni villages have been abandoned after threats from Shiites, Shiite villages have been abandoned after threats from Sunnis. Sunni insurgents have killed thousands of Shiites in car bombings and assassinations; Shiite militia death squads have tortured and killed hundreds, if not thousands, of Sunnis; and when night falls, neighborhoods are lit up with gunfire as they become battlegrounds of one side against the other. One Shiite town was emptied in a day after a barrage of notes on small pieces of paper arrived telling them that their entire families would be killed if they stayed.

Brian Johnson is a 24 year old 4th Infantry Division platoon leader. "There's one street that's the dividing line. They shoot mortars across the line and abduct people back and forth," He was describing the nightly violence of Sunni gunmen from Baghdad's Ghazaliyah neighborhood against Shiite gunmen from the nearby Shula district.

And the Iraqi people themselves are now saying that this is a civil war. Col. Ahmed is an adviser to the commander of the Iraq Army's 6th division. "This is a civil war." he said. "The problem between Sunnis and Shiites is a religious one, and it gets worse every time they attack each other's mosques,"

This is no longer simply about the Iraqi people hating the Americans for interfering in their country and their lives. Their attention is now on each other. We need to get out 'while the gittin's good'.

Economically, America tends to go to war during a bad economic cycle because a recession is eased by the trickle-down effects of the massive government spending that accompanies a war. But that need is over now. The economy has recovered. We are now spending over 7 billion dollars per month wastefully, and we are spending our way deeper and deeper into a debt we may not ever earn ourselves out of.

So far, the war in Iraq has cost us $301,613,987,713

The above is a quote from a website at http://nationalpriorities.org/index.php?option=com_wrapper&Itemid=182.

This is a website dedicated to calculating the current cost of the war in Iraq. The number increases constantly. It was hard to get this copy image to paste because the number is changing so fast. $300 billion dollars so far. Well, that is pretty expensive. And it only goes up from there every second. We are definitely not getting our money's worth in any sense. Even if the goal was, as some cynics suggest, to capture and control the oil supply from Iraq in order to keep costs controllable back in the US, frankly the potential savings from doing that were long-ago wiped out by the direct costs of fighting this war. So even the most cynical of critics cannot fathom some true reason for going to war and maintaining it this long. None of the scenarios that anyone can think of can explain it. It's just become a bad idea on every possible level.

I can easily imagine that the current administration would think they will lose face if they give up and go home now. They might think they will look like failures. Too late. That ship has sailed. Perhaps they think that if they hold on long enough, eventually this will sort itself out and then they can claim credit for solving it. Sorry, this is a religious war that has it's roots in a conflict that started 3,000 years ago. The American military cannot solve it. They could possibly mask it for a temporary period by having the iron fist of totalitarianism and dictatorship - as Saddam did. But then we would become as bad as he was, and that is equally unacceptible.

So the only only reasonable, practical, and even politically acceptable path is to admit that the events in Iraq have grown beyond our ability to provide help and succor and then politely leave as quickly as humanly possible, covering our backside and smiling all the way out.

For a while, when the American people starting to demand that the troops be brought home, the president was making the point that if we stopped fighting them on their turf, then that would allow them to grow strong enough for them to build up a force and come and fight us on our turf.
Well, that may have had some validity at some point but not any longer. Our continued presence there is a sharp stick in the eye for the Iraqis and all Muslims in the middle east. By leaving, we can reduce the irritation and allow them to start to forget us and our interference. Besides, now they have another enemy to focus on. Each other. Our troops and Iraqi troops have both said repeated lately that this is now a civil war. The fighting is no longer terrorist attacks against Americans. It has coalesced into two sides fighting each other for control of the country and it's resources. The dividing line is the line between Sunni and Shiite.

In a civil war like this, what can the American role possibly be? Would we supply arms to both sides to fight each other? In helping them each fight the other would we then have Americans fighting Americans? Or would we back one side against the other? And which side would be back? And would that then encourage other countries to back the other side? Wouldn't that then threaten to extend the war into other areas and a larger, more international forum? Would this then intersect with the contours of the war happening right now between Israel and the Hezbollah in Lebanon? Can anyone besides me see the potential to exacerbate both conflicts into a potential World War III?

No. We must get out, and get out now. While the fog of war hangs over the battle between the two warring factions, it is time to fold our tents, pack up our weapons, hitch the trailers to the jeeps, load up the ships and sail home.

Besides, looking at North Korea, Iran, Syria, and a few others, it appears there may be other who would like to attack America or American interests, and we are going to need to save our strength and collect and replenish our resources for that possible battle.

Thursday, August 03, 2006

The Freedom Cycle - from chaos to dictatorship and back

I propose that in any organizational group whether it is small like a family, or medium-sized like a company, large like an industry, or huge like a whole country, there is usually a process where you start with a large amount of freedom, and that is gradually reduced as rules and controls are introduced and tightened over time until finally there is a breaking point. A point at which people are no longer willing to live within the high levels or restrictions, they simply can’t stand it anymore, and there is a sudden change which resets the balance and throws off the old bindings and harnesses and lives free for a time. This happens until gradually, they see the need to impose restrictions again and one by one the people again give up their freedoms until they just can’t stand it anymore. Again. Let’s look at a couple of examples.

Evolution of a City
When I was young, for a few years I lived near the Scarborough Bluffs. These are cliffs at the northern edge of Lake Ontario in an eastern suburb of Toronto, Canada. The cliffs are similar to the cliffs of Dover, England on the channel, but not made of white chalk. They are hundreds of feet high, and mostly steep drops, but there are places where I learned to climb up and down. I became quite a good climber in those days. I tried to conquer my natural fear of heights by forcing myself to stand on the edge and look out and down to the lake below. Whenever I needed to think, I would walk out to the edge of the bluffs and stand or sit and just look out and work through all my problems. I really connected to that place.

Years later, I went back to my old spot and saw that they had now built a fence all around, to prevent people from getting too close to the edge. Probably, someone had fallen off and decided to sue the government, so their lawyers decided to put up a fence to prevent further lawsuits.

On an emotional level, I saw this as an encroachment on my freedoms. I used to be free to go to my favorite place of meditation. Now it was fenced off, and my favorite way to commune with nature was cutoff. After all - what is the plan here? Are we going to go around and childproof the whole planet? No climbing on mountains. No swimming in rivers. No white water rafting. No walking across bridges – come to think of it, why not cancel all hiking period. Yes, that’s it! Just cancel it all because there is too much potential for lawsuits. While we’re at it, maybe we should cancel camping, too. Campfires are dangerous, aren’t they?
Speaking of dangerous, how about bicycles? And motorcycles? Skateboards, and rollerblades. Eliminate them all, right?! Let’s make everything that has any risk or possibility of litigation illegal. That’ll save us, won’t it? Hardly.

Let’s look at a couple more examples.

In Buffalo, NY, there is a by-law that prohibits anyone from painting a ladder. I thought to myself, how ridiculous! Someone must have gone rule-crazy." I thought, “These are how all our little freedoms are eroded away one by one just because someone wants to exert their authority over others.” But then I heard the reason. As it happens, the law was put in place to prevent people from selling old used ladders as new and covering up rotten wood with fresh paint. It was a safety issue. The steps might be rotten and fall apart when someone tries to climb it. Keeping the ladder unpainted would allow anyone to see the wood was rotting and the ladder was unsafe. It saved injuries and possibly lives. So the apparently crazy rule was actually reasonable and sensible.

Evolution of a Company
For a number of years, I worked in the consulting division of a large software company. It always amazed me when I looked at the terms of the contracts we forced our customers to sign. They seemed ridiculous on several fronts, and some customers simply refused to sign them and chose to go with smaller companies with less restrictive contracts, and ones that were more negotiable. At first, it seemed we were simply being stubborn and arrogant demanding these terms. One of the terms for instance, stated that when a customer pays us to develop some software solution for them, even though they pay for all the time of all the people involved, and for all the materials and travel costs, and everything, at the end of it, we still owned the code. They paid for it to be developed, but they only got the limited rights to use it, they didn't actually 'own' the code itself.

To them, that seemed like a form of robbery. At first, it also seemed to me to be unfair. But then, when I discussed it with a company lawyer, I heard a different perspective. He pointed out that when our developers/consultants perform programming exercises for a client, they usually have some templates or similar coding structures to start with. No one ever re-invents the wheel anymore. Common sense says you will use something you have that is similar and modify it to fit the case.

If the customer is given ownership of the code, Then they would take unfair ownership of code that was used as a template to begin their work. It's unfair because they didn't pay for that at all. It was used as a way to accelerate their development and give greater value.

Morover, later, when that consultant uses any piece of this code on another system for someone else as a template, if that template includes some piece of code written for this company, then this company would own a piece of the code that goes into those future systems, and they could demand royalties. In fact, they could claim ownership of the template used to start writing the code for their system, and then sue the software company for part of the royalties on thousands of other customer’s systems - both in the future AND retroactively. And each of those customers could also sue for royalties on every one else’s systems – what a mess! Civil courts would grind to a halt. Business itself in this country would grind to a halt based upon spurious claims of intellectual properties cross-ownership issues. Can you imagine the courts and legal system bogged down trying to sort out who owns which individual lines of code in programs that have hundreds of thousands of lines of code, and whose code is constantly being changed to fix bugs, etc? It's a nightmare. I believe it's not even possible.

So, essentially, when a software company starts out, they typically don’t have all those rules, because they haven’t yet learned the hard way to put them in place. They haven’t been sued yet. They start out very easy to get along with, but over the years, as they get stung in various ways and by various people, they tighten their rules and contract terms more and more, trying to protect themselves until they are losing business because of their rules and restrictions. They sometimes outsmart themselves right out of business. There is a trade-off between protecting yourself and losing to competitors who have not yet learned to be so demanding.

Evolution of a Country
Now let’s look at a country. America was a very free country at one point. It was formed by a group of men that wanted freedom from England. They felt that the taxes and laws and restrictions were too restrictive and so they rebelled and fought the war of independence, and upon winning the war, declared this a new country. The United States of America. United in freedom. But, of course that freedom carries with it a price. The price is anarchy and chaos. Think of how America was back in the beginning when the people still had almost unlimited freedom. It was the old west. And with the old west came the so-called 'Law of the Old West'. That meant that the man who was strongest and best-armed had all the power of the other people. Gangs of thugs ran rough-shod over the decent people and took whatever they wanted. The government law enforcement was too weak, too small, too thinly distributed to make any difference to keep the criminals at bay. So, if a man wanted to keep his family safe, he kept guns and taught his sons how to use them. In the chaos and anarchy of the time, the people tried to defend their homes with force, just like the criminals took what they wanted with force. It was freedom - but it was hard to live in that level of chaos.

The word freedom is extremely important to Americans. It’s written into the founding documents, even. Most Americans still believe this is a free country because they have been told it is since they were children. But honestly, that’s changed a bit over the years, and through ignorance and a declining education, they don’t know what to compare it against.

So they take some totalitarian regimes and compare America against them in order to feel free by comparison. They compare it against Communist China or Communist North Korea. But they don't necessarily compare it against Canada, Australia, New Zealand, Sweden, Netherlands, England, France, Greece, Brazil, etc. So this is perhaps an unfair and inappropriate comparison. At the least, it is less than useful. To say we are more free here than we would be in North Korea, doesn't really mean that much.

We started out as the kind of a free country where any man could say what he wanted when he wanted. He could buy land and do whatever he wanted on that land. He could start any kind of business he wanted, join any kind of religion or any kind of club he liked. And he could do these things with no one looking over his shoulder and watching everything, or restricting him in any way.

But over the 230 years since the country was founded, inevitably, problems have come up. And to solve each problem, new legislation was formed to restrict the actions of people in various ways in order to avoid having that problem in the future. So restrictions tighten naturally, and with each new restriction or law or rule, a little bit of freedom is necessarily lost.

Recently, on September 11, 2001, we had a major terrorist attack in New York on the World Trade towers and at the Pentagon in washington, D.C. We were shown to be vulnerable to terrorist attack. That was a major problem. So the president announced a war on terrorism, and started putting in place legislation to try to catch any terrorists and stop them from doing this again. The measure put in place dramatically changed our concepts of freedom. Due to the Patriot Act, and the Homeland Security Act, we no longer enjoy freedoms that we used to. In fact, because of this legislation and our much more aggressive stance and policies overseas in war and in other situations, our whole reputation and demeanor has changed in the eyes of the world.

This has recently become a vastly different country than what the founders had intended. With the increased security challenges, and the resulting increases in control and power for the administration, our behavior as a country has generally become more aggressive. We are more likely to go to war. And when we do, we engage vigorously and aggressively. We now are known to torture our prisoners of war and even kill them. As other people elsewhere see it, we topple governments, invade sovereign nations, and assassinate leaders and key people in various countries all over the world in order to promote our business interests and military interests around the globe. Therefore we are now generally disliked or even hated by virtually all other countries in the world. Arab leaders call the President “The Great Satan” and vow his demise and the destruction of our country and our way of life.

Let’s get back to the internal picture and take a look at where our freedoms really stand in America today.

American Freedoms Today
Because of legislation in place today, and legal precedents already established in court of law, it is now possible for the government to take possession of your house and give it to another person or company, if they think that will “serve the public good better” than letting you do whatever you are currently doing with it. This is a remarkable setback in terms of freedoms. We have criticized China and other countries for this, and now we do it to ourselves. If buying property means that the government can still take away your property and give it to another person - then that says that we don't really have ownership of property here any longer. That is a huge lapse in freedom.

In schools, they are slowly changing the school curriculum to remove science and replace it with religious doctrine of the religion they choose, in order to train your children to think in terms of Christian explanations and Christian understandings of the origin of species and of the world and the universe, rather than the established scientific ones used here and around the world for hundreds of years. In a previous article I have pointed out the states already converted or in the process of converting to “Intelligent Design”(religious doctrine) and ignoring or subverting the teaching of evolution as the explanation for how species came to be the way they are today.

The FDA is currently trying to ward off the advances of the current government to restrict the use of any drugs or treatments for birth control, because the current administration has a religious/ideological problem with birth control and abortion. Regardless of what the population of the country wants or needs, and regardless of what science regards as safe or advisable, they seem determined to pursue their far right religious agenda. A spokesperson for the FDA said yesterday "If we allow the current administration to dictate this, then what's next? They might decide that obesity is immoral and a sin, and therefore they can simply force the FDA to outlaw any kind of food or drug or treatment that helps in controlling obesity?"

As a result of the terrorist attacks on 9/11/01, and the resulting increase in security and governmental control that came from that, the government needed extraordinary rights to be able to find, chase and apprehend potential terrorists. And they cannot afford to be hampered in this effort by bureaucracy or paperwork, or civilian rights. So now they have the right to enter your home at any time without a warrant, and search your premises to find whatever evidence they like – and they can do this without your knowledge. They can intercept your email and search all your computer systems for any information they like, and they can listen to any of your phone conversations, and they can intercept and read your mail coming and going. They monitor your library activities, and church activities, looking for anything they feel is counter to the current governments’ interests. They track your bank accounts and financial activity and trace any transactions. They can do all this without your knowledge.

People are afraid that if they decide they don’t like you based on anything they ‘find’ using these techniques, then they can abduct you and place you in prison for up to 5 years without a court case, hearing, or even a phone call based only of the strength of an officer’s suspicions or opinion. No actual evidence is necessary. Your family and employer would not even know where you were. They would simply assume you are dead. If any federal officer feels you might be considered subversive in some way, then without actual proof, many constitutional rights are immediately and easily removed.

We must hope and trust that they use these powers only to pursue terrorists and not to pursue any political agenda of say undermining their political competitors, or anyone else who speaks out against them. That would run exactly contrary to the whole intention of the founders of this country, and in fact the very tenets this country was based upon. So we hope that our government agents act responsibly and selflessly.

In times of national security threats such as the terrorist threats we have seen over the past 5 years, it is expected that our freedoms would be impinged upon, or mitigated. In this case, most of the freedoms that we felt defined us as a country and a people and a culture have now been legislated away to serve to higher purpose of keeping us alive in a world full of people who hate us.

Where Does This Lead?
Rights and freedoms, once taken away, are never given back by the same people. Once they have the power, they don’t give it up easily. Inevitably, there is a major change brought upon by either a war with another country, or by an insurrection/revolution within that country which puts a new government in place and all the rules reset to zero and are re-thought again.

This just happened in Iraq. They used to have very very restrictive laws and rules, and then there was a massive change and now businessmen and people in general are wondering what the new rules are. There are no rules to govern business transactions, etc., until the brand new government can start to make them. So there is freedom – but there is also chaos. Some see it as an opportunity to do business, others see it as anarchy and cannot protect their business interests in that kind of volatile and uncontrolled environment.

The Freedom Cycle
Predictably, at the beginning of any system cycle, where there are no rules, and there is much freedom, there is also chaos. And as the system matures, rules are created and refined by those in power to bring order and reduce chaos, but then eventually they begin to introduce rules and laws that benefit themselves at the expense of those of less power. And so it build up tighter and tighter again until it reaches a point where the people cannot stand it anymore – and the cycle starts all over again.

I suspect that no matter where you are in the cycle, there are aspects of that time that you might dislike, but the alternatives have their trade-offs as well.

With freedom comes chaos. With order, comes stifling restrictions and lack of freedom. Perhaps the best, most comfortable place is some mix in the middle. We must work to understand the things we cannot change. And in understanding them, see the cycles and work within the system the best we can. It is the world. If you don't like how things are, don't worry - it will probably change again before too long.

Tuesday, August 01, 2006

Life and Leaving the Nest

The other day a young man we'll call Charles posted a question to a forum that I belong to and I gave him a couple of answers. I thought this was a useful exchange, so I'm posting it here for the potential benefit of others.

Here is Charles' original post (in blue)
~~~

Imagine that you are in your mid-20s. You still live with your parents. You have a full time job that doesn't pay much. And with your parents covering the basic necessities such as food, gas, taxes, heat, shelter, internet and the like, you are free to live a life of luxury. You can play guitar as much as you want. You are free to save money. And you thus have enough money to buy tickets to Eric Johnson concerts, buy new gear, and take vacations.

But then you are coming to the realization that this life of luxury is only temporary. Eventually, it has to end. And you are afraid. When you have to pay for the basic needs of life, how are you going to find the time to play guitar? If your guitar needs a repair, how will you be able to pay for it? How will you be able to afford new gear? Will you have to miss the next Eric Johnson concert? Will you have to quit the things you love altogether to make time for the basic needs of life?

And you also wonder, how will you be able to get a decent paying job? You are obviously still young and naive. Is entry level work the best you can do? You have met many people who have been doing the same thing you are doing, making the same amount of money, for almost 20 years. How will I make the transition from being an entry level worker to a leader? That is, someone who can handle more responsibilities, make more money, and feel more secure? And how will you handle the real world when your parents are no longer around to assist you?

What you have just read is my life today in a nutshell. Anybody here share or have shared a similar experience? How did you cope with it?

The real world is a scary place, no doubt.
~~~~

And that was what Charles said. There were two answers back before mine. A sort of good cop/bad cop combination of one that was nurturing him forward, and the other that was kicking his but to get with it and take control of his life, move out of his parents house and start supporting himself.

My answer to him follows:

First, thank you so much for your intellectual honesty in revealing this, and discussing it so openly. The unexamined life is not worth living. This is where the real lessons of life begin. Soon, you will feel that everything up until now was childs-play. From here on out, life will start to feel REAL. REAL scary, REAL dangerous, REAL tedious, REAL challenging, REAL disappointing, REAL thrilling, REAL heavy, REAL important - but REAL. You have chosen to take the blue pill Mr. Anderson.

You just got some good advice from both Paige and John. It was kind of a good-cop/bad-cop routine, but both said some valuable insightful things. Listen and learn from them.

My 16 year old daughter has friends who have just been given new cars. One 16 yr old boy just got a 2006 Mazda RX8, and one 16 yr old girl (who I have known since she was 11) was just given a 2005 Corvette. How are these kids ever going to learn about the real world when they are living in a fantasy world like that? For most people who do well in life, it takes till about age 40 or more to be able to afford cars like that. To have them given to you at 16 means that the real world is going to be such an incredible letdown when they get there. That's a hard, hard lesson. Unless of course, it is the parent's plan to keep subsidizing their child's lifestyle for life.

Most don't. Usually, there is a day of reckoning where we all figure out that it is up to us to make our own way in the world. It sounds like you are at the cusp of that very epiphany now.

So first the good news - you are finally waking up from the dream of adolescence! Some people don't ever wake up. They stay in that cocoon state with their parents paying the way and shouldering all the responsibilities for them their whole lives. At least you will be able to start growing up in your 20's/30's.

There are a couple of things I'd like to mention here. You know how teenagers typically look down on anyone over 30 as being old and boring, and not with it? Not current with the latest music or the latest social trend or whatever?

Well, that's because they are struggling to spend all their time making a living, bucko. That's right. And soon you too will find that you are falling behind on the latest trends or coolest bands or whatever. Sixteen year olds will no longer be impressed with your savvy take on the current scene.
But oddly, this will no longer matter to you because you will have moved on to bigger things. Better things. More important things. You will have simply outgrown that teenage phase of your life and the opinions of 16 year olds will no longer matter to you, just like the opinions of 8 year olds probably don't influence your life decisions now.

There is no going back, from here on. Life is always moving forward. And it will do so with alarming and accelerating speed.

Once you wake up to the reality that YOU are responsible for supplying yourself with a place to live and furniture to sit on, and food to eat and clothes to wear, and a way to get where you need to be, then you start working like a machine. You give up the more trivial aspects of life and sink your teeth into real adult life. You actually become a part of the machinery of the economy. A useful member of society, as opposed to an end-consumer and a parasite living off the work and planning and efforts of your parents.

But get this - once you're up to speed, you might find that you actually enjoy the position of responsibility of being one of the ones who are actually helping to row this boat.

You are NOT the first to come to this point, trust me. Almost ALL of us do.

If your experience is like most of ours, here is what is going to happen next:
1) You may or may not have already learned that an entry level job does NOT pay enough money for a person to support themselves on, no matter how many hours or how hard you work. It's not intended to. That's why it's an entry-level job.
It's intended for kids too young to be supporting themselves, or for retired people who own their homes and things, and they have pensions, etc. and just need money for basic essentials like food, or for a person who works part time while a spouse does the real heavy-lifting to support the household.

2) You are going to start to realize how much the lifestyle you currently enjoy actually costs to maintain. From your comments, I'm thinking you're not really there yet. Not by a LOOOOONG way, my friend. But that's okay. It will come. And it will come in phases.
The funny thing is that when you start to figure it out, you'll THINK you've figured it out, but you won't have. It's a delusion we all have. Then LATER you will figure it out for real. But that comes much later. I will tell you right now, but I know you won't believe it, because you're not ready for it yet. You will think I am exaggerating. But I'm not. Eventually, you will know this yourself.

3) You are going to start to realize that you need a REAL job if you are going to support yourself. Then you have to start thinking about what REAL job you think you can get.

4) Then, it will hit you that you need to work your way up to that REAL job. In fact, even if someone just handed it to you right now, you couldn't really pull it off yet. You have to earn it. You need the education and experience combined with the talent to be able to do it properly. It takes a college degree to begin with. And not just any old BA. You'll need one in the specific area that the job you want requires. You make sacrifices of your time and money and lifestyle to get the degree.

5) Then, after you get the degree, and do the work and work up to the job, which takes years, during this process at some point you will move out of your parents house. Then you will discover how much it costs to support yourself, and you will probably discover that the job you have still might not actually pay for everything.

6) So you work harder to get higher up, to make more money. Again, you make sacrifices to do this. You work days and nights and weekends. Hell, I worked over 80 hours per week almost all through the entire 1990's. You take on extra responsibilities which takes up more time. You slowly move up. MAYBE. It depends. Moving up is DEFINITELY NOT automatic with time. You have to be smart about it. You have to strategize and plan. And you have to stay true to the plan. But all this work and planning hopefully eventually gets you into a position where you are more self-reliant.

7) Then you get married and have kids. And the whole gameboard changes. Now you are responsible for someone besides yourself. Welcome to adulthood. Now your decisions about where to live and what house to buy, and everything else in life are now based upon the child(ren).

8 ) Then it starts to slowly dawn on you that the extra food, clothing, insurance, school supplies, vacations, college tuition, etc. that it takes to raise children all costs far more than you earn. You make sacrifices. But now you are making them for your kids. And then they laugh at you behind your back for not knowing who the latest band is playing on their favorite radio station. Now you know you are a grown up. Finally.

There are many more lessons after that, but we'll stop there.

How Much Does It Cost to Live???
So how much DOES it really cost to live and support yourself? People give various guesses, and everyone's mileage differs, but I think we can get a rough idea across here. Let's work it out, shall we?

a) You'll need a place, right? I don't know what city you're in, but let's say you live in a cheap city. Not San Francisco or New York. Let's say you don't buy a house just yet. Let's say you're just going to rent an apartment for a while. Average rent is about $1500/month + utilities. It's possible to find cheaper if you look around, but you might not want to live in high crime areas. And you'll need first and last month's rent up front, so that's $3,000 in cash first, before you start paying $1500 every 30 days. You've got that, right? $4,500 in cash right now? Good. Because you'll need a lot more than that.

b) Then you'll need to pay those utilities. Let's itemize:
Home Phone: $90
Cell Phone: $90
Cable TV: $85
Internet: $35
Heating: $100
Electric: $150
Water: $50
Renters Insurance: $100
Total: $700/month. This varies. I pay well over $1,000 per month for the utilities, but then I have a house. For example, my electric bill alone averages about $400/month. We're talking an apartment here, so these numbers are closer for someone in that situation.

c) Then, you'll be wanting some furniture to put in those empty rooms. Chairs, tables, etc. The cheapest way to go is not to rent, but to buy a 3-room type of deal, put it on a credit card and pay it off. Let's say you get 3 rooms of medium level furniture (most of which you will make last you for years and years) for about $4000. Payments on that are probably about $400 per month. They'll be paid off in about a year and a half that way. (don't forget interest). You're lucky - as a renter, the fridge and stove and appliances are probably included at this point.

d) You've got a place, but you'll need a car, right? Well most new cars are $20,000 to $40,000. Even a pickup truck is $30K to $60 these days. So let's say you find a 3 yr old used car with a few miles on it for about $15K. And maybe you get about 3 more years out of that. That will run you probably about $400/month for the payment. Less per month if you lease - but that's a whole other discussion. See my blog for that duscussion.

e) By the way, will you be needing gas for that car, sir? Alrighty then. Lets see, average person drives about 20,000 miles per year. That's about 1000 gallons of gas for the average car. In a month then, that's about 83 gallons. At the current price of $3 per gallon, That's about $250/month in gas. And in a year, on a $15,000 car, you'll probably see about $1200 in repairs and maintenance. Tires, brakes, batteries, whatever. That's $100 per month. That works out to about $350/month for gas and maint on the car.

f) It's illegal to drive without insurance, so you'll need car insurance, too. That's what, $1800, per year? For a young guy, it can be thousands, For me it's 2400, but that's 3 vehicles. And two drivers. But then, the two drivers are both over 40, and married, and there is a $500 discount because my house insurance is with the same company, so the rate is lower. You won't have those big deductions, either. $1800 sounds about right for you, maybe a little low. So that's 150/month.

g) You'll need clothes to wear, right? Let's say, since you're a guy, you get away with the minimum. $150 per month to cover everything to do with clothes. Buying them, cleaning them, etc. It's also your shoes, socks, underwear, etc. That wouldn't do for a girl, but for a guy, if he is not gay, and not too fussy about his appearance or clothes, that might cover the basics. For now. Be aware that this will change later. This budget couldn't stay this way long term.

h) Were you planning on eating? Have you clocked the price of the food you consume on your parents' nickel? Count on about $200/week here. Remember, this is food + condiments, + garbage bags, every cleanser you need, shampoo, toothpaste, and anything else you've ever seen for sale in a supermarket. People don't buy this stuff for fun. It's there because people need it. Every household needs it. You probably got used to all this stuff just somehow BEING there in your parents house. Now YOU will need it. So that's $800 per month for food + consumables.

i) You WILL get sick at various points. You WILL need medical insurance, and you WILL have to pay for things beyond that. I currently pay about $1400 per month for healthcare. That's a family of 3 in good health. Last year I paid $16,000 for health care costs. My employer pays for 25% of my health insurance premium, which is $1000/month. So I pay $750 of that, then I pay for all the deductibles and the co-pays, and all the items that the insurance doesn't cover at ALL.
But let's say you are luckier than the rest of us. Since you are a young healthy guy, somehow, you manage to get a healthcare plan that than only runs you $500/month in total costs. That's say, $300 for the premiums, and $200 in stuff besides that. Of course, if you have a $2500 deductible, you might pay a lot more than that. But for now, lets leave it at $500/month

Let's just stop right there.
So far, we have:
1500
700
400
400
350
150
150
800
500
____
5250/month
On an annual basis, that is $63,000 per year. Of AFTER TAX dollars. To have that much to spend, you have to earn enough so that after 30% is taken off for taxes, etc. you have $63K left over to pay for this. Which means you'll need a gross annual salary of about $90,000 per year to support yourself.

Now consider this: This did NOT include paying for the following:
Vacations, magazines, books, movies, CD's, going out with friends, alcohol, cigarettes, buying presents for birthdays, weddings, babies, etc., license, registration on the car, Membership fees, dues, replacing things as they wear out - furniture, appliances, etc., no guitars, or amps, or equipment, no life insurance. No 401K pension savings. No savings of any kind. Not even a haircut, or speeding ticket. There is no way this is enough money. Life is far far more than just those basics.

If you know somebody who makes $50K or $60K and they tell you, "Naw, that's not true, you can live a decent middle class lifestyle on less than 90K per year. I do it.", then look at their situation carefully. Either they have TWO incomes from a married couple, or they were given a whole lot of things for free, or they are not really living a middle class lifestyle like this in some major respects, OR (and this is most likely), if you look carefully, you'll find they are in debt, and going deeper every year. That is what is happening all across America. People are going into debt because the average income CAN'T afford the average lifestyle.
I did not cook the books here. This is what it really actually costs to live. If you doubt it, then go back and read it again. Try to remove the things you don't need. I just put in the very basic essentials. I pointed to a list of other needed things that aren't even included yet. Add up the numbers yourself. Do the math. This IS what it is. One person living alone in a slightly less than average lifestyle in an average city needs at LEAST $90,000 gross annual income to pay the way.

Also, this is not a typical middle-class lifestyle because this is a rental apartment instead of a house. If you go to a house, be prepared to spend a LOT more per month. Also, be prepared to come up with $50K to $100K as a down payment. If you take a typical house in a typical city, you are looking at $350K. Even with a cheaper one at $250K, with a minimum $25K down payment, you've got mortgage payments of roughly $2500/month then.
With property taxes, and property homeowners insurance, etc. It's a lot more. Then you have to buy appliances. The appliances for the average house are probably close to $8,000. The fridge alone is $2000 on average. Then you have repairs. What about replacing the air conditioning unit? Or the roof after a hailstorm? Or fixing windows, doors, stairs, replacing worn-out carpeting or other flooring, and on and on and on....

The fact is that the typical middle-class lifestyle you might be accustomed to probably requires easily more than $100k per year to support. In fact, well over that.

Obviously, working at Wal-Mart for $6.00 per hour (or even 10.00 per hour) is not going to get you there. Even if you find a nice girl and get married, and you BOTH work, you're still going to need two jobs that are better than entry-level jobs to make ends meet.

So start thinking about what jobs DO pay that kind of money.

But, you ask, how do other people do it? Well, many times nowadays, it DOES take two professional incomes to make one middle-class lifestyle. And many professional incomes are around or over the 100K point. I just read an economics article that said that the average income in the US among working people is about $78K.
This is higher than you might have read before because I think it only counted people working in actual salary-type jobs, not just general population including unemployed, and not just minimum wage counter-help type jobs. Anyway, it was a real number not the artificial numbers you usually see in government statistics.

Other than that, people make sacrifices to make ends meet. And they adjust their expectations. If you find a job somewhere, even with the right college degree and it pays say 50K or 60K per year, you take it and start to work your way up. Maybe you find a cheaper apartment than that. Maybe you get a roommate. People manage somehow. But don't expect to simply go out and get a job and pay the way to supporting the lifestyle you have now right away. This is a long hard battle, and it takes time.

That is where you really start to appreciate what your parents are doing right this minute to support you in this lifestyle. Do you suppose they wouldn't have wanted to stay in the teenager lifestyle longer? And have their parents pay for everything, so they could just use their job money to buy their music stuff and hobby stuff, go to concerts, etc. etc.? ....yeah. Go hug them and thank them for all the sacrifices. They might appreciate it.

And then you've got to steel yourself for the road ahead. You've got a job to do, dude.

For some people, they struggle with just trying to stay out of jail. But just deciding to make an honest living by working hard at an honest job is not enough. Not NEARLY enough, as you can see.

You had some specific questions. Let's see now.... You wondered how you were going to keep buying guitars, and going to EJ concerts, and where you were going to get the time to practice playing guitar. Is that right? Hopefully you can now see that these questions are so overwhelmed by the larger issues of supporting yourself and getting on with life, that they are not really worth answering.

But I will answer anyway. They come later. Once you build up some momentum. Once you accumulate a few things. Once you get ahead of the ball a little. But first things first. Get out there and get on the path to a real career and a real life where you take responsibility for feeding and clothing and housing yourself like any self-respecting adult does.

You asked the question about how much longer you could expect your parents to keep subsidizing your lifestyle. Dude, if you are in your mid-20's then that ship already sailed. They shouldn't be paying the frieght for you NOW, let alone "how much longer?"... I left home when I was 18 to go be a full-time professional musician. Sure, crappy job, living on the road, constant touring, playing cover tunes in clubs for drunks who don't care. No security. No benefits, no vacation, no consistency, no pension, no medical, no future. But I was out there doing it. Then by the time I was 21, I realized that I needed a real job, because I saw guys that were 50 still doing the same thing as me and making even less money than I was. So I stopped being a full-time musician and I got out there, got the education, got started and worked my way up, and I did ok. You can too.

You need a plan. This ain't no practice run - this is REAL life. This is adulthood. Welcome.

Someone said something that really resonated with me. He said "The age of 30 will be on you before you know it like an F-16 with the afterburners lit. "

So true. Attention passengers: Please keep arms and legs inside the vehicle and hold on tight, because from here on to the end, this ride picks up speed.

I sometimes count time in cars instead of years. Most people keep a car for 5 or 6 years. They get a 5 yr loan to buy it and then once they finish paying it off, they trade in and get the next one.

So Chuck, consider this: One car from now you'll be 30. Three cars from now you'll be 40. DG, you'll be 40 in about 2 cars after the one you're driving now. Now, you can't cheat the system, either, just by hanging on to your cars twice as long. In that case, DG you'll be 40 after your next car.

Life passes so alarmingly fast. I think it was John Lennon who said that life is what happens when you're busy making plans. That is very true.

And one thing most of us forget when we are young is that we age as we get older. Most 20 year olds not only think they will live forever, but they think they will be like they are at 20 forever. It's not like you have 40 or 50 years after childhood to do all the things you want to do, because your health and your strength and your energy all diminishes as you age. Every year you get a little slower and a little less energetic and a little less capable. Your years of young adulthood are the years of maximum potential as far as energy and stamina goes. You can prolong your energy a bit by taking vitamins and eating right and exercise - but aging is inevitable.

Also, you might die younger than you think. ev was 45. Anne was 36. And there may have been others on the list in our little group here that we didn't even realize have passed on because no one knew to tell us. As far as we know, they just simply stopped posting.

Also there are car accidents, violence, and other mishaps. I would bet that most people who are hurt or killed in an accident were thinking right up to that moment that accidents only happen to other people. Not them. The truth is that it happens to a large number of people every single day. And you never know when your ride is going to come to a sudden stop.

But don't be afraid of death. The ride ends for everyone. And I am pretty sure that there are other adventures beyond that. This is not about fear. This is simply about using your time wisely. You are here for a reason. Or possibly, for a number of reasons. It is up to each one of us to find out what the reasons are, then set our sights on them and work toward those goals.

Think of yourself at 60 looking back on this time in your life. What activities, choices will make you proud, happy and satisfied about this period? Were you brave and decisive? Did you take the steps to move forward into a better future for yourself? Did you form events, or did you simply let events form you? Did you help others where you could? Did you do enough? Is the world slightly better off for having you pass through it?

Or did you just sit and watch TV, play video games, drink beer, and listen to music during all your most energetic, strongest, best years? Did you use your potential to it's best purposes, or did you waste it in trivial self-indulgence?

What answers do you have for your 60 year old self?

I am not suggesting you are wasting time, and I am not even talking to anyone specifically here. This is just a general observation about us all.

For my part, I am doing everything I can to impress that old guy.

Val

Don't Get Me Started