15 November 2010

The 2010 Maine Conference on Wealth

The envied wealth of America is an illusion, according to a panel of economics experts meeting this fall in a conference at a scenic resort on a remote lake in northern Maine.  Actually, the conference consisted of myself, some assorted shoreline refuse, and the geese winging southward overhead, (OK, don't count them; they didn't even look down), but the setting is authentic.  I was really just there to soak up some frosty wind, watch the sun set, and think.

Nor did this conference actually conclude that America's wealth is an illusion. That was the premise on which the conference opened, and it was neither proven nor refuted. Perhaps the illusory property of America's wealth will be the topic of next year's get-together.

As the ranking conference member present at this year's event, I set the agenda. First I imagined a slate of conference participants.  The lake shore was littered with rough, rounded granite stones, so I arranged a dozen or so of these into a few orderly rows at the water's edge.  Since it was possible to forgo registration and introductions, the first order of business was to assess America's wealth. We weren't looking for a dollar figure here.  Since there is no longer any such thing as a unit of value, there is no way (and no point) to assign a value to this nation's wealth. (When the dollar was essentially an ounce of silver, up until 1964, there was a unit of value that the federal government could not control: an ounce of silver.)

We actually found ourselves defining wealth, in a way, as we brainstormed a list of what constitutes America's wealth.  As at any conference, latecomers drifted in and tried to appear inconspicuous. We were joined by an occasional piece of driftwood, some flotsam such as a candy wrapper, and a couple of mallards that seemed not to realize that they were at the wrong conference.

Those of us participating, though, concentrated on our work. We imagined a large flip-chart of Post-it sheets and began listing what we could include that represented America's wealth.

We immediately rattled off broad categories, such as land and natural resources.  We included all the gold at Fort Knox, if that's where it is still hidden.  (Later, during the analysis and refinement sessions, we decided to exclude all the gold at Fort Knox.  This will never again find its way into the hands of the citizens, and so it's essentially as unavailable as all the gold that has never been found.  Only the federal government will ever have access to it, and it's safe to predict that it will only ever be used in some corrupt way to pay off a foreign dictator or to fund some idiotic project such buying carbon offsets from -- or for -- the Chinese.)  We agreed that gold in the hands of individuals is a component of each individual's wealth.  And we agreed that silver is abundant enough for industrial and private use that it can be counted in America's wealth.  But government gold effectively doesn't exist.

We thought of the things that are bought and sold on the stock market.  Shares, we call them, shares of ownership in large ventures, which many individuals regard as wealth.  But we had to separate these into different categories too.

We decided that some businesses own real assets -- forested land, for instance.  Oil shale.  Tooled-up manufacturing facilities, such as tractor factories.  A large agri-business.  A string of resort hotels, even. These businesses are in one category because they truly own something tangible.

We began to have trouble with some other categories of shares in the stock market, though, even though a lot of Americans (and foreign investors, too, we suspect) have much of their money tied up in such investments: For-profit health care facilities, banks, and retailers came most quickly to mind. Since I was doing most of the thinking at this conference, we stopped with those three, since our light was fading, we were distracted by the brilliant colors reflected in the rippling water, and the chill was increasing, meaning that it was time to move along to the next step.

We analyzed these three examples more deeply. Health-care conglomerates don't really own much, except for expensive buildings and expensive equipment.  Their ability to return profits to investors depends on sick people's ability to coerce someone to pay.  We couldn't guess how many billions of pretend dollars are invested in banks, but what do they own besides debt?  Well, they own shares of all manner of other stock, but we kind of guess that their portfolios are offset by their debt ownership.  And retailers: If they even own the inventory in their stores, it isn't much to brag about -- next year's outdated fashions, next year's obsolete consumer electronics, perishable and mostly useless food such as potato chips.  But their inventories are also often not their own.  Their stock has pretend value only in the promise that they will continue to have customers day after day who will leave behind more dollars than the store needs to operate.

Those of us at this splendidly-illuminated fall conference -- myself and a bunch of rocks -- realized that if we had any money to invest, we'd be reluctant to give it to retailers handling junk merchandise for other people, banks juggling debt, and places that hope government programs will pay them for providing sick care.  We think those are very risky places to lay our money down.  No one at our conference knew whether accounting firms and law firms are bought and sold on the stock market.  If not, why not?  (We may be experts, but even economics experts don't know everything.)

We don't know what proportion of the stock market is composed of shaky enterprises and what proportion includes those with true assets.  We just think that, if there is another stock market collapse, we'd rather own the ability to make tractors than the option to join a lawsuit against a bankrupt bank.

We also realize that the public value of a company is not just its assets but is comprised also of some anticipation of its ability to find customers and return a profit to its investors. We aren't naïve. And some companies with impressive assets have lousy money-handling habits, or they goof around with unrelated ventures that drag them down, such as GE dabbling in insurance.

In assessing America's wealth, we considered its luxury features, in spite of who owns them.  This means its golf courses and resorts, vacation meccas and parks, sporting arenas and museums. We were divided on these things. They do not detract from the nation's wealth, but since there are few investors in these things, neither do they represent functional wealth.

A nation has an easier time remaining wealthy and productive if its citizens share access to the ability to move things around, so we counted its coastal access and navigable waterways and its vast highway system unimpeded by regional boundaries. The nation's railroads were a grand asset fifty to eighty years ago when they were privately-owned and the government wasn't yet taxing them out of existence in order to fund a highway system, so in their decaying state they are a secondary consideration in terms of America's wealth. They could come back, but only if government were to get out of the way, which it won't.

We gave some thought to other institutions that contribute to, if they don't comprise the wealth of, a nation.  Colleges, for instance.  We have lots of those, and their physical and intellectual resources are splendid (except in the arena of ideas, where they are decidedly fungal and Marxist-leaning).  Colleges aren't bought and sold on the stock market. Citizens don't own them.  But we weren't trying to quantify America's wealth, in order to compare it with Germany's wealth, for instance.  We were trying to assess its assets but also to figure out, concomitantly, what makes this country strong and resilient -- what it has which secures its wealth, in other words. Colleges, in spite of their determination to destroy the founding principles, are a positive force in securing America's wealth.

At the break, someone was heard to remark that, of all the thoughts listed so far, federal, state, and local governments had not appeared on any list of what contributes to the wealth of the country.

When we re-assembled after a light snack, our optimism began to wane.  Maybe it was the remark about government.  It comes through as the villain in the equation, because it has the option to bleed the wealth from anything, as it did in the last century when it gave promises to pay in exchange for the nation's circulating gold and silver coinage.  (And what does it pay in?  More promises to pay.)

We began to think of the individual citizens who, together make the nation.

One "average" citizen would have a paid-for house on a half acre of land, a paid-for vehicle that would serve if fuel distribution systems remained intact, also a few judiciously-selected implements to assist in gardening and harvesting wildlife for food as well as the skills to use them.  This same person might have a few pieces of silver set aside, some way of illuminating the interior of a darkened home on long winter evenings without electricity, a shelf containing books to while away the quieter hours, and the mental discipline to wait out a period of uncertainty lasting from a year to a generation. All of this might comprise the keys to survival.  He might also have an investment portfolio strong in manufacturers and natural resources that retains a remnant of value in catastrophic circumstances.

Another citizen, this one a "gadget guru", might share an apartment with a couple of parasitic "friends" in a megalopolis that extends across six states.  He might have a collection of gadgets for status and entertainment and the skills to use them when not using his skills at locating restaurants and social settings.  He might also have some fading martial arts skills and a vast knowledge of television history. He might have a half-finished collection of tattoos and a couple of days' worth of cigarettes.  He might have an investment portfolio strong in pharmaceuticals and bonds.  He might have a few select pieces of avant-garde artwork as an illusion of tangible wealth.

When our little conference compared these two citizens and then tried to add them to the formula that includes national parks and oil wells, we had an apples-and-oranges problem.  That's when we realized that the wealth of an individual is distinctly different from the wealth of a nation.

And that's when a breakthrough occurred. A breakthrough is the dream result of any conference. We realized, suddenly, that there is wealth available for common use and actual, personal wealth. That enlightenment engendered the corollary that personal, individual wealth may include more than physical assets such as land, money, and belongings. It may also include knowledge, skills, and relationships.

The sum total of individual wealth is a portion of the nation's wealth, which then is extended to include that which we hold in common, our natural resources, transportation systems, museums, and secure communities.

When we pondered which of the two matters more -- our common wealth or that which each individual has to his name, it seemed to depend on the circumstances of the moment. When a community is secure and systems are functioning, our common wealth holds things together. What does an individual have at his disposal, though, when the chips are down -- if suddenly some global calamity interrupted everything?  If we all suddenly had to cash in our chips, survive without public assistance, and live by our skills and the implements in our toolboxes, what would we have?

We considered the multi-millionaire -- a Hollywood celebrity, maybe -- with a high-rise apartment in Mega City and a two-acre hot property on the inter-coastal waterway in Jupiter, Florida. Besides his two ex-wives and their children, his dependents include an accountant, a lawyer, and an agent.  We decided that this rich person is in deep trouble if all, or even half, the systems that support that "lifestyle" were to fail for any significant period (from one year to a full generation).  These would be systems such as a supply of potable water to either location, airports, servants, courts for divorces, and expensive restaurants.

We contrasted this rich guy with the poor farmer in rural Idaho or Vermont who has twenty cleared acres and a ten-acre woodlot, six or ten head of cattle, and a clean well.

The wealth of the nation is of about equal blessing to the "average" citizen and the poor farmer as it is to the "gadget guru" and the celebrity, but the first two are richer in skills and assets when the artificial systems fail that support the other two.

As with any conference, participants were found drifting out early. Some rocks were being reclaimed by the water as the wind shifted northeasterly and the chop engulfed the ones nearer the shoreline. The ducks had long since become bored. I realized, with little warning, that I had just taken part in a serious and unexpected awakening about wealth. I also realized that no one was left but me to record the proceedings and the discoveries of the event.

Just as the conference faded into silence, the last thin band of orange faded to gray on the western horizon. I left the lake shore behind my truck's headlight beams, as happens following most conferences. But, as with many that I have attended, this one left me so much to ponder that I didn't bother to play the radio on the way home.

25 August 2010

Over the Edge

We often hear about the quiet guy who snaps, goes over the edge, looses it; who explodes in unexpected rage and commits carnage of surprising intensity. No one who knew him saw any signs that he was distraught. No one saw it coming.

Well, I’m close to fury myself. When I snap, though, no one need fear being hurt. Rage expresses itself in bloodless ways as well. In my own situation, it may spew forth in a torrent of words, and then I’ll be fine. Or I may use what power I have in order to merely shut someone off who now has the legal means to rob me.

Let me lay it out for you.

When I was a child in the 1950s, eldest of six siblings, my family had nothing to start with. My parents came from self-sufficient Depression-era households. They were both college educated school teachers, and their gift to their children was a well-nurtured desire to learn. We didn’t know that we were living in poverty – abhorrent conditions by today’s standards – we just knew we didn’t have much. (We often didn’t have a telephone, or a car. Our father carried a bag lunch as he walked to work and we kids carried lunchboxes as we walked to school. We wore darned socks, patched or homemade garments, and re-soled shoes. We saved the bath water for the next kid in line. When I was in fourth grade, we lived in a house with an outdoor hand pump for water. We played outdoors, since only one household in three had a television. Today we have taxpayer-funded programs to prevent that kind of misery.)

To varying degrees we kids took advantage of our opportunity to learn. We were taught that if we earned good grades in public school, colleges would compete to give us scholarships, meaning discounted tuition rates. (That may have been true before the 1960s, but by the time I matriculated at a nearby municipal university in 1969, things had definitely changed.)

Our parents led us to believe that we would never be rich, though. For several of my crucial growing-up years we lived at 1165 West High Street in Lima, Ohio. Our back yard abutted the back yards of houses on West Market Street. The further west on that street, the more enviable the homes. We understood that we would never live like that – spacious brick homes with tree-lined meandering driveways and cultivated flower beds. We believed we would never, even as adults ourselves, know what it was like to go to the bank when we needed money and simply take $1000 out of a savings account. We knew we’d never know what $1000 looked like, but maybe $100 at best. We didn’t expect even to mix with that kind of people, although in school I often found myself among the children of those families. I was self-conscious to find myself accepted and included, but still I held myself apart socially. Rich kids made friends only with other rich kids, right? Kids of teachers became teachers. Kids of poor people grow up to remain poor.

Our house stood nearly on the edge of an all-black neighborhood. I now realize that, even though I had several friends among the kids in that neighborhood, including one who was my best friend for seven years there, the black kids must have looked on us the same way I looked on those on West Market Street. Kids of black people stay black.

Nevertheless, even though we knew our parents weren’t saving to put us through college – heck, our mom was sometimes heard to say she was still paying (hospital delivery charges) for our youngest sister after I had started college – we were taught thrift. I had a daily job (including weekends, as a paperboy) from the time I was 10. I had a savings account from the time I was 12. I bought a car at 15 – a 1939 Chrysler for $395 – and drove it 1000 miles from Ohio to Maine a year later when my family made the big move to my father’s stomping grounds in Farmington.

When I finished a three-year enlistment in the Army and five years of college I landed a low-level management job in manufacturing. I opened a retirement savings plan at work and started an IRA. I worked for that company for 23 years and benefited, slightly, from an employee-stock-ownership plan. I went on to another industry in a related management role, and that lasted nine years. Except for some modest self-indulgence along the way, I’ve been saving for retirement for 50 years. Oh, and I do not have a pension plan (automatic payments for life), only my retirement savings, to count on once I become, in my 60’s perhaps, unemployed. I’m now in what may be my final steady job, as a medical receptionist, entry-level, non-management, and I like it fine. (I already characterize myself as semi-retired: I now work only 40 hours a week in this job, which makes me eligible to buy group medical insurance for $10,000 a year. In my former life as a manager, 40 hours would have been part-time.)

I bought a home when I was young, moved up to a nicer one, and then a nicer one, rivaling the ones I envied on West Market Street. Given the economy of August 2010, I estimate that my home is worth about $180,000 (in rural northern Maine; it would be worth a million or more today in some metro areas), and my retirement funds, all told, are worth about $600,000. A couple of years ago both were worth about 50% more than today, probably about $270,000 and $900,000 respectively. I’m now 59½.

So, why am I close to snapping? I’ve been a fool, that’s why, and it’s too late to back off and rejoin the “poor”. Long ago I fell for the premise that no one else will take care of me (and my wife of several decades whom I pledged to support), so I accepted that I needed to save for my own future. And that may have been a safe assumption if I had earned, and saved, enough to be sitting on a couple of million dollars by now. That’s not a couple million to spend on a spree, but to draw from for support for decades to come in the absence of any other source. That’s to pay the several thousand dollars a year that I’ll need, once I’m no longer employable, to cover the premiums for my “free” Medicare and to buy supplemental medical insurance, to pay my property taxes, to pay for my heating fuel and other utilities, to feed and clothe myself and kin, to remain mobile – and to pay income taxes.

But there is a gap, and I fall within it. A little over half a million dollars is not enough to live on for the next 30 years. It would be if I also had taxpayer assistance. But, because I have “assets” I will evermore be ineligible for such charity. My Social Security, which I’ve paid into for 42 years, will be “offset”. I will be ineligible to have my Medicare premiums paid for me. The other charity that my neighbors enjoy I will continue to pay for: food stamps, unemployment compensation, Medicaid, Social Security disability income, property tax relief, heating fuel assistance, sliding-fee scales, WIC, community action programs, and punitive income tax schemes which assure that more than half the voters don't pay into the program.

I could have believed my parents’ culture lesson – we will never move in those circles and we will never know what it's like to have bank accounts. We will never own assets. I could have rented places to live all my life and could have spent every remaining dollar I made on better vacations, eating out, new cars, more booze, bigger televisions, all-inclusive cell phone plans, tobacco, fancier computers, name-brand clothes and groceries, and a garage full of motorized outdoor toys. Then I might not have ended up with retirement savings or a home of my own; I would have been eligible for hand-outs paid for by fools such as I have become.

Instead, I’m penalized for my thrift and planning. I will continue to be envied by those who remained (as some of my siblings did) in the "poorhouse" as I might have chosen to, while their elected representatives will continue to have hands on my wallet. Their representatives will always promote this class envy – (theirs, not mine – I can’t get my representatives elected because they don’t buy votes by pretending to a false charity which consists of spending other people’s money in order to appear generous themselves).

I do have a choice. It's a bitter choice, and that's what infuriates me. I can spend down my retirement savings as quickly as the Internal Revenue Code allows, being careful not to accumulate assets that can disqualify me from all the assistance schemes. I could – revenuers plug your ears – “spend” my retirement savings as quickly as possible while actually stashing it as cash. I could do the reverse mortgage thing on my house and maybe remove that asset.

Then I could appear, on paper, as poor as those whose elected thieves have their hands in my pockets. What a fool I’ve been!

I’m thinking about it. I'm thinking about it...

09 August 2010

Investing Advice

You can ask: Who am I to give advice? Compared to investment insiders, I know next to nothing about the stock market, and I have under a million dollars invested in my portfolio. I had hoped to be “retired” by age 60, which is now about two months away. But retired isn’t going to happen.

Nevertheless, I have some advice for those picking stocks for secure long-term growth and for quicker gains, say in a year or two. (More on all that in a moment.)

I have been able to follow my own advice with only small amounts of money. Why is that? Well, for much of my career, say, the first 25 years I was working, I did not pay attention to where my 401(k) and IRA money was invested. I left the decisions to my older relatives and their advisors and assumed that I would never understand it. Then, when I did have the confidence to experiment a little, I faced several obstacles: the relatives and advisors were watching; a substantial portion of my portfolio was in my employer’s company stock; I changed jobs and joined a 403(b) plan, which does not allow for individual stock trading; and the overall chaos in the market since the early 1990s has left me reluctant to play with much of my available funds.

But I have formed some solid opinions about what to buy in the stock market and what to avoid.

From 2005 to 2008, for instance, I had been watching a group of stocks on Yahoo! Finance – essentially my own portfolio of traded equities and funds. In September of 2005 that group of stocks was worth $365,000. In January 2008 it had grown to $495,000. (My overall worth also contains annuities and some property that is not reflected in these numbers.)

But in the past two and a half years I have forfeited $150,000 of that half million. My sacrifice of market value helped bail out the banks and helped support the cash-for-klunkers pogrom in which the USA borrowed money from China to help Americans buy Japanese cars which would somehow save Detroit. Anyway, I was clobbered, such that my group of traded stocks is worth about $345,000 today – a 30% loss since 2008 and still 5% down from 2005, assuming a flat value of the so-called dollar.

So, what is my thinking on the market?

1.Consider avoiding the stock market altogether from now on. The federal government is so determined to prevent fraud and corruption in the markets – (Why? Could it be because there is so much corruption in Congress that they assume it’s as bad everywhere else? If it is, do they really believe that more employment for lawyers will really wipe out financial crime?) – that Congress is setting out in 2010 to create a web of utterly insane rules for trading and profiting. The objective of anyone who gets into the market is to make money. To get rich, even. The only people who will get rich any longer will be those paid to make and enforce the rules, because they will be the insiders able to make best use of their high-priest status; ergo more corruption. If you expect always to be a lifelong little guy, like me, then maybe don’t even bother to have a 401(k) or IRA. Instead…

2.Buy property. This means different things for different people, and it depends a lot on where you live. Property means real estate, but it also means goods and businesses. Buy open land, or houses, or commercial buildings. Buy woodlots, development property on lakes and rivers. Buy into a small business. Buy small items that you can store securely yourself and sell and trade inconspicuously, (but learn a lot about them first, whether it is antiques, guns, coins, classic cars, and so on).

3.If you do buy stocks, either as your chief investment or to round out your financial security, then consider the following opinions. Starting with the negatives, these would be my rules if I had a lot of money to throw into it:

a. Stay away from banks and lenders. What do they really have that you can profit from? They lend money. That’s all they can do. Yes, they buy and sell each other, but that’s only to the benefit of the executives at the top of each company involved in the trade, so they and their corporate lawyers can all make a bundle and walk away much richer. What do they have for assets? Rented space and obsolete computers. And one another's debt “portfolio.” And where are you in the line of people to be paid, from the interest they make on their loans? Last.

b. Stay away from retailers. Yes, Walmart has made huge profits for many years. Is there a fund out there that does not include it? But its bubble is going to burst, and because everyone owns some of it, few will be spared the ache. Nowadays, when I go into a big store like that, I am shopping for something to help me finish a project or something to replace a worn-out appliance. Sam Walton has died, and so Walmart has little to distinguish it from Rite Aid and the old K-Mart and all the rest. Our local Walmart is really just Super Rite Aid. When Sam was alive, Walmart at least retained some of his personality, and he was a fellow who also needed to go into a store when he wanted something to finish a project. These stores today are all happy to tell you that they carry the four most-popular items in each category. Well, I usually need the nineteenth most-popular item, or the hundred and thirteenth most popular. But the item I need exists somewhere, and lots of them are needed and bought by people like me – somewhere; my problem is that the stores that happily stock the four most popular items have also run everyone else out of business. Since Walmart and Target and the rest have driven the small retailers out, there is no one, particularly in a rural area, who sells anything past the four most popular items. Large retailers are also brutal on their employees. Perhaps they have to be, in order to remain fiercely competitive. But employers with unhappy staff are constantly facing passive resistance if not outright malicious obedience, and that makes their stock a risk, in my eyes. By the way, I have some experience selling my own product to one of these huge retailers. I paid $7 each to produce the item, which carried a “suggested retail price” of $15, tax and shipping included. The retailer was willing to pay me $6.75 each and then sold them for $12 – 20% off, you see. Treating suppliers that way must certainly eventually have a backlash. (In my own case, I quit making something I couldn’t break even on.)

c. Stay away from manufacturers with heavily-unionized work forces. These are the companies whose lines of products, more and more, are being manufactured overseas. If the bail-out of the car companies isn’t evidence enough that they can’t compete, then what will it take to convince you?

d. Don’t fear investing in foreign companies or funds. Choose carefully, but don’t fear that some foreign economy is going to collapse without affecting our own. Consider, for instance, a fund that holds a lot of Pacific rim stocks. If there is an economic debacle in Asia and the fund is shaken badly, the same debacle will shake almost anything else you are invested in as well. No foreign country can go belly-up without far-ranging and long-lasting ripple effects. I accept that it is a global economy, like it or not.

e. Don’t buy a stock after someone has already published an article saying now is the time to buy. The people who have lots of money to play with have already bought it, and are going to profit well, if the prediction comes true, but you’re not going to. It’s too late to buy when you see those predictions come out. I've had a financial advisor for years who steered me toward buying stock in this or that company within my IRA, but I am convinced by their performance that he bought into them days and days before he called me (but after he had read some alluring article). I'm still climbing back up to the purchase price on several of these, but I bet he isn't.

f. Avoid companies whose executives are treated like royalty. Poor Walt Disney – how he has been exploited! About a decade ago, when the Disney company fired a CEO after less than a year in the job and gave him a ninety-million-dollar severance bonus, I quit buying anything Disney – toys, clothes, videos. Why? Because we’re obviously paying too much for the products in order to make an individual like him as rich as a small country. I had only been to a Disney theme park once in my life by then, and I will never go again. I won’t buy stock in an outfit that bilks not only the consumer but also the investors that way.

g. Avoid companies that can’t seem to decide what business they are in. I think of General Electric in this regard. Several years ago I had life insurance through one company, and then I began getting bills for the same insurance from GE. They eventually called it Genworth, and I think it has been sucked up by some other company since then – sold off by GE so that some executives could retire in obscene leisure. Meanwhile, I have noticed that GE products are often crap. I have a coffeemaker at home with the built-in timer. The clock on that coffeemaker loses two minutes a day. A Black & Decker coffeemaker in another room has kept perfect time for months. GE makes (or should I say, sells its name to) a lot of little products, such as night lights. These are often crap. Yes, they make huge 500 megawatt generators, too. Maybe those aren’t crap, but I’m not reassured when they can’t even make an electric clock. Anyway, over 35 years ago someone gave us newlyweds, my wife and me, a $10,000 stake in GE stock. We have left it alone, and it has grown to an astonishing $12,000+ in 35 years. Aren’t you impressed?

h. Be cautious of companies that are a little too proprietary or quirky about their products. Don’t shun them altogether, but beware of their idiosyncrasies. Kodak is a company that I always wanted to love but never invested in. They made very good roll film and dominated the market for almost the entire 150-year history of film cameras, even though their market share was challenged a bit by Fuji before digital photography won out. I think Kodak responded well and quickly to the digital revolution and decided to be the camera supplier for the mass market. And yet, before the change to digital, Kodak made only a light stab at marketing film cameras: some very early folding cameras when roll film first came out and a couple of weak 35mm models, such as the Pony, which imitated the Zeiss Ikon products of the same era. And I like Kodak in general, because they’ve stuck to one business and have not branched out into insurance. But I’m cautious about Kodak because it is quirky. It wants its cameras to do the thinking for you and resists letting you do it yourself. When I was forced to go digital, I gave up a wonderful Ricoh XR-P film camera on which I had expertly managed the exposure and focus manually to switch to a Kodak P850, on which I supposedly can take manual control, but I have not found out how in the four years I’ve owned it. And Kodak’s digital cameras are tied too tightly to Kodak’s software and Internet sites. Still, it’s probably a good, solid company for a long term, safe investment. Just beware when you hear that Kodak has begun selling food or baby fashions or has a started a branch engaged in financial services.

i. Now for the positives. Look at the products that impress you. A few years ago I bought an Apple computer, after twenty years of loyalty to Microsoft Windows. I couldn’t believe the difference. At the time, Apple still had less than 10% of the PC market, but the iPod was becoming popular, the iPhone was coming, and I saw VALUE. I bought several hundred shares of Apple at $90 around November 2007 and sold it less than a year later for $180. It was the product that sold me on the stock. Look around at what your neighbors and friends consider essential. What do they complain about (even though it may be essential)? Don’t buy that. What do ordinary people that you know find irresistible and also have praise for?

j. Get in, stay a while, get out. My best example of this has been my Apple stock. Sure, it has continued to rise, (after falling from $193 back to $82 since I sold mine), but I doubled my money and left. If you make a serious profit, sell and put your dollars somewhere else.

k. What’s the wave of the future? Don’t trust government to tell you, by the way. Use your own sense. Could you have anticipated the total conversion to digital photography? Sure, once we were able to get 640x480 digital images by the early 1990s. The technology could not help but improve. Here’s one: How about home security? A couple of years ago I seriously wanted to invest some money in Brinks or ADT (Tyco) or some such company. As more people become desperate for cash, thanks to our expert money handlers in the federal government, I reasoned, more homes and small businesses are going to buy products or systems to protect their properties from petty and not-so-petty thieves. I was right. I didn’t invest in Tyco or Brinks, but I can see now that I should have. So what else can you see coming? And incidentally, the less it attracts the interest of federal regulators the better. So, how about alternative energy? Well, the government will probably pander to some companies engaged in research and exploration, but it will also require tight regulations in exchange for government caresses. How about… water? What companies are working diligently to make a modest financial gain by making water accessible first in developed countries, such as the USA, (before exporting the technology to undeveloped regions with unstable governments)?

l. Pay attention to who has the ear of the federal government. Investors will make gains in some technologies that are favored by the prevailing political force, but only so long as that political force retains power. The socialist power that has been in control for the past 14+ years, (which is to say, Congress – the President being of little substantial influence), favors voodoo science such as stopping the cycle between ice ages. If you can find a company that is inventing a solar-powered bicycle, think about getting in. Get out early if the political winds seem to favor rational thinking over feel-good socialism.

m. What industries or technologies are saying to themselves: “Oh, damn!”? What companies are afraid for their future because of technology? Would you have invested in a steam locomotive factory after World War II if that factory weren't spearheading the conversion to diesel locomotives? Would you have invested in Polaroid 20 years ago as its instant photography was being replaced by digital photography (to belabor an industry that at least provides a good example)? So who fears for the future of its own existence, and why? Invest in the companies that are striking fear in the established way of doing things.

n. Trust your instincts! If something stinks about everyone else's favorite stock, let others embrace it. If you have a really good feeling about a company or about an industry, you embrace it. That is, if you choose to violate Rule #1 above.

And I have – violated Rule #1, for the reasons I have already given. I own stock. I own funds and annuities.

And, as I publish this, (Aug. 9, 2010), I am hearing that Congress is about to approve Stim II. This time, people who mortgaged $800,000 McMansions are going to get them for free. I realize that they signed for the three-quarter-million loans at a time when that's what the properties were supposedly worth, and now they're worth only a third of that, while their loans remain at over half a million. But I'm getting nothing from Congress. Instead, I'm still paying on my $150,000 home loan, and getting a tax hike to pay for their palaces that have double bowl sinks in the master bathrooms and all-stainless appliances. I expect to be further diminished as the market reels from this next wave of largesse* from the public treasury. Oh, well; my mistake in choosing to be responsible in the first place when I might just as well have chosen the route of owning nothing and relaxing on the dole.

Even so, for those who still remain invested, I hope you find this advice useful.

-=David A. Woodbury=-

*For those who have not encountered the wisdom of the ages, let me add some context: George Bernard Shaw wrote that a government which robs Peter to pay Paul can always count on the support of Paul. That’s obvious, of course, and cute. But it’s also sinister. A Scottish professor alive around the time of the American Revolution, Alexander Fraser Tytler, gave voice to the sinister side of Shaw’s equation:

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.

The average age of the world’s great civilizations has been two hundred years. These nations have progressed through the following sequence: from bondage to spiritual faith, from spiritual faith to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependency, from dependency back to bondage.

Amazing that Tytler could have teased this assessment from the history of the world up to his own time.

28 July 2010

Better Than Insurance

I have a great idea.

Are you tired of trying to figure out your medical insurance, overly-managed care, privacy policies, Medicaid, Medicare, and all that? As an alternative to patronizing commercial insurance (for as long as Congress allows it to function), and especially to frustrate government control of your body mass index and your bedtime, how about this:

A large number of people would voluntarily contribute some money each month to a fund of their choice – the money they might otherwise spend for insurance premiums. The fund would want to be endowed with enough money from its participants that it can maintain a cash flow sufficient to cover its purposes. And its chief purpose would be to cover the cost of its members’ medical expenses as they occur. Maybe the people who contribute to a certain fund would have a common interest – it could be they belong to the same church or maybe they’re all farmers – or maybe their fund invites anyone to join.

Each fund would be managed according to rules that the contributors mutually determine. Maybe one fund encourages healing by unconventional approaches such as meditation and acupuncture and would cover these services at 100% of charges but would offer little or no coverage for prescriptions or surgery. Maybe another fund caters to members who have risky pastimes and who expect to undergo more frequent orthopedic intervention. Skydivers and people who race motorcycles would be attracted to this group, which would have complete coverage for fractures and lacerations but might not cover healing-by-meditation at all.

People who see no health benefit from inhaling smoke could choose a fund that has a low level of coverage for lung cancer and which might also provide no coverage for smoke-as-therapy (cannabis).

So – this being America and citizens having the unfettered right to associate with whomever they choose – the idea, so far, raises no issues. On the face of it, it does not even qualify for any notice by the government. People pool their money in lots of ways and distribute it as they see fit. Lawyers, for instance, send astonishing amounts of money to private organizations such as the American Bar Association, in exchange for a list of promised benefits, and that’s not regulated by the government.

Under this funding idea of mine, for a medical office visit, the patient would either pay the total cost at the time of the visit or else would wait for a bill from the doctor, which the patient would then submit for payment or reimbursement. Or maybe the doctor or clinic or hospital would agree to send the bill directly to the fund. The patient would ultimately be responsible for the expenses incurred if the fund is not organized to cover the incurred expense. The fund would not be dictating the medical care, as happens with insurance and government.

Now, I fiercely defend anyone, individual or corporation, who has found a way to make a ridiculous profit from a business, provided there are customers willing to pay too much for a product or service in order to support that ridiculous profit. In America, it’s a private matter.* While I defend anyone’s right to become absurdly wealthy, I don’t personally volunteer to help make someone absurdly wealthy unless I think they deserve it. Each of us can probably think of a product that is so good we’re willing to pay far more than it costs to make and distribute it. Some people feel that way about Post-Its, for example. It also happens when a new product comes along and everyone has to have it no matter the cost – Cabbage Patch dolls, iPods, Avatar. You get the picture. Sometimes a guy simply deserves to capitalize in a grand way on a terrific idea. I don’t begrudge Bill Gates one cent of his fortune, even though his product, Windows, is full of flaws and has lousy, over-priced service. Had I been around a hundred years ago, I would not have begrudged Henry Ford all the money he could make from me.

I don’t feel that way about health insurance. No individual leader in the insurance industry inspires my gratitude or admiration as does Bill Gates or Henry Ford. They didn’t invent the product, and there is nothing so special about any particular company that makes me want to cheer and recommend it to my neighbors over the “competition.” (In fact, insurance is so regulated that, like banks, they essentially have an enforced monopoly.)

If I could, I would buy my coverage from a not-for-profit cooperative, much as I can choose to do my banking at a credit union. You see, there is nothing about health insurance that is so new or unique or hard-to-manage that anyone can possibly earn millions a year heading it up.**

I fail to comprehend how it improves the service I receive from my insurance company, or how it reduces my cost of insurance, when there are stockholders who must be paid, executives who must be pampered, and buyout deals that must be propped up, all at my cost as the payer of the premiums. That’s why I would like to participate in a not-for-profit fund beyond the interest of the government. (Beyond these wastes, my premiums also support the waste of compliance with government interference, such as privacy notice mailings, and the scandal of cost-shifting.)

Insurance-for-profit is not a pretty industry. It’s all about people being paid to push money around. The people being paid the most to manipulate my money under an insurance policy are accountants and lawyers. When we let Congress get its nose into things, it passes acts to create more government agencies – the unconstitutional fourth branch of government – to create more jobs for accountants and lawyers, who become the high priests of more inscrutable rules.

The only alternative proposed, so far, to commercial insurance is a government program. This needs to be abjured by a citizen outcry simply because it places more of our business into the hands of an incompetent government. It is not corruption in the ranks of benefits administrators that is insidious. It is corruption in the manner in which Congress conducts its business and abdicates its responsibility to a lawyering class of its own creation. There is nothing so complicated about insuring people that more than a handful lawyers nationwide should find themselves employed in its concern.***

Ergo, I seek a way of insuring the unexpected costs of maintaining my own health by circumventing commercial insurance and government narcissism. I realize that I will be taxed unto death and beyond to support those who have come to expect their free stuff from government, but I seek an alternative to the many thousands a year I will otherwise have to cough up soon for Medicare and all its parts and supplements.

Is there anyone out there interested in joining me in creating a fund, managed by ourselves, from which we may each draw for certain pre-arranged and mostly unexpected medical needs?

Wait a moment… I have just been informed that my idea is not new. In fact, that is how commercial insurance came into existence in the first place. And I’ve just been shown that government became interested in it because money was changing hands without passing the sieve of government extortion. And to attempt such a cooperative on such a simplistic level now thwarts the purpose of insurance regulation, which is to create jobs for business school and law school graduates, salaries for CEOs, and revenue for government.

I’ve missed something, I guess. Strike those phrases above about freedom to associate, it’s my money, et cetera. (There once was such an America. I swear it. I grew up in it, but that was many years ago. Sorry to trouble you, everyone…)

*If I could make great-smelling soap, for instance, and market it for $28 a bar under some fancy name and millions of people would buy it and give me $26 profit on each bar, why, that’s between my customers and me (and the IRS – I don’t propose cheating on taxes**).

**It’s not the stockholders’ profits that are hard to swallow – in fact I’m starving for a little stockholder profit myself these days. And the obscene CEO salaries leave me only a mildly bitter taste; I try not to invest in companies that treat their executives like royalty. The hidden game that I most despise is the corporate buyout. Companies of all sorts are being bought and sold all the time, and that is what really hurts us all. As soon as Prince Hotshot becomes CEO of Neighborly Mechanical Chicken Separator, Inc., he expects to make a name for himself through cost-cutting, then expects to sell the company within a year or two so that he and those closest to him – whether on the Board or in the ranks of management – can each make a huge personal gain. I do not suggest that this should be illegal! I suggest only that rational investors would protest this culture of greed by putting their money into companies that have a different culture. It so happens that we little investors, who could have effective influence if we all understood what we are supporting, have made the self-enrichment of the executive class the prevailing culture by failing to examine closely enough – and thereby accepting – what goes on at levels we think are beyond our reach.

***What I DO propose is 100% turnover each time we send people to Congress until the ones who are sworn in every other January get the message that the IRS needs to be abolished and that the federal government needs to be funded by a simple flat tax that everyone pays at the same rate, such as a consumption (sales) tax. The “rich” might spend more and thus contribute more revenue, but the “poor” would contribute something in rough proportion to their overall wealth. Such a tax scheme would remove redistribution by reverse taxation, and those truly in need would receive assistance through welfare schemes separate from the tax process.

26 July 2010

Biker Rules

As we sometimes do when waiting in line among complete strangers, I complimented a T-shirt worn by someone queued ahead of me. Bright and well-designed, the shirt commemorated a bikers’ rally somewhere. The rather elderly woman wearing it asked me: “Do you ride?” I told her I did not – that I have trouble enough staying upright when I’m merely walking. (Well, when crossing a trout stream on slippery stones, for instance, but that’s not pertinent here.)

A rambling conversation about motorcycles followed, which quickly came around to helmets for bikers. I told this presumably-veteran biker about a woman I knew, passenger with her husband out for a casual ride, who was killed recently for lack of a helmet when their bike rear-ended a stopped car.

This biker lady told me that my dead friend was probably safer without the helmet, because what’s the first thing that happens at an accident? Good Samaritans try to pull the helmet off, and that will either kill you or paralyze you. “Let those who ride decide,” she said, in the manner of quoting a rule or proverb. Then she asked whether I knew the eleventh commandment, (I did not): “Thou shalt not stick thy nose in thy neighbor’s business.”

Hardly had she said this when the lady with the shirt was called to the front, ending her wait in line, and stealing my opportunity to respond effectively. So, for her, and for all the rest of you bikers out there, here’s my take on the bikers’ proverb and the 11th commandment.

If bikers were the only ones affected by their helmet decision, then I would have no interest in the subject. But those who ride without basic protection do affect me no matter how their medical care is covered. Those with commercial insurance are members of my medical insurance pool. Sure, they pay premiums (or an employer does), if they have a commercial insurance plan, but my premiums are affected by the insurer’s “experience rating.” The experience rating includes the costs of treating catastrophic trauma and of heroic interventions to save lives. An employer's cost of such benefits is passed on to me in the price of a product, so it affects me there as well.

Those without commercial insurance are dependent on my “voluntary” payment of income taxes for their government coverage such as Medicaid, or, if totally uninsured, they are dependent on charity care at the facilities that treat their medical issues, which then affects me because the cost of providing charity care is shifted to my commercial insurer and raises the premiums I must pay.

So if I am going to let those who ride decide, then let those who ride live with my rule which is “Let those who pay say ‘Nay.’” And my eleventh commandment is, “Thou shalt not stick thy hand into thy neighbor’s pocket.”

Of course, my rules have already been trampled by the audacious stampede of the acquisitive masses under the joke of "representative" government. The have-nots can vote themselves largesse from the public treasury, which is funded by those who pay the bulk of the taxes but who are overwhelmed at the voting booth. But if those of us who pay were to organize ourselves as well as a few (I stress: a few) bikers and others have done who have their hands in our pockets, perhaps those who pay could say “Nay” and make it stick. Then I’d be happy to let those who ride decide.

22 June 2010

Message to 2010 Candidates for Congress

While I happily anticipate this fall’s 100% turnover in the U.S. House of Representatives and 33% turnover in the Senate, here is my advice for those candidates aspiring to get in there and clean up the mess:

Restore respect for Congress

Don’t promise it. Don’t proclaim that you’ve done it. Just do the right things, and (after a long time) respect will follow. Here are some things that Congress must generate the will to do if respect is ever to be achieved. If you just sit when you’re told to sit, speak only when spoken to, and vote the way you’re told to vote, you will dishonor yourself and merely join the gallery of rogues and fools that you think you’re replacing.

Start with the House and Senate rules

Dump the current House and Senate rules. All of them. Term limits have been needed mainly because the current rules invest far more power in some members than is justified by mere representation of a district. Absolute power in a committee chair diminishes fair representation. And try this: Give every member the option to introduce, and require a roll-call vote on, an issue (bill) of his own choosing (even of his own authorship) at least once during a legislative term.

Give no thought to image, impressions, and re-election

I’ve seen it in business but many times but more intensely in government: Those in power try to manage what everyone thinks of them by manipulating words and timing and audience. Well, those efforts are somewhat like General Eisenhower’s example of the difference between pushing a string and pulling it. What’s attached to the other end of a string is going to follow the pulled string but will be oblivious to the suggestion in a pushed string. Most of us can distinguish between authentic information and a line of bull. Don’t insult us with manure marketed as a dietary supplement. If you’re doing it right, we’ll know it.

Make it nearly impossible to attach an unrelated rider to a bill

Call them riders, earmarks, or pork – attaching them to legislation is probably the sleaziest, most insidious thing that Congress does. If it’s a bill to set up a national photo archive, then don’t attach riders to add a veterans’ hospital in a certain member’s district or change the rules of baseball.(1) If a rider doesn’t pertain to a bill, then bring it to a vote on its own merits. If riders are somehow the only way Congress can function at times, then at worst, let every member have only one chance to propose one in a two-year term.

Take a serious look at the fourth branch of government

Lawyers and accountants elected to Congress over the past 50 or so years have evidently created and nurtured the regulatory branch to further their own professions; there is no other rational explanation for its existence! This entire branch of government deserves to be challenged under the Constitution.(2) Let lawyers and accountants be the LAST people whose interests are considered when writing a bill – and don’t let them be the ones to write a bill either.

Name the beast

The Internal Revenue Code is just the best-known example, but we small people realize that nearly all federal regulation is equally absurd. Not complicated. Not merely arcane. It is insane. But it is the irresponsible tinkering of every act passed by Congress that has made it insane. Name it for what it is – America’s shame – and as a dramatic first step, demolish the Code.(3) Then begin a systematic hunt for comparable cancers throughout the remaining legislative refuse of the past half century. This means exposing other dens of cockroaches, such as the Department of Labor and a hundred more like it.

Take control of the beast

Perhaps only a few of us know the dirty little secret of all legislatures. While lobbyists for corporate interests and the shrill, indignant hucksters for so-called “citizens’ groups” are the annoying vermin making it hard to breathe in Congress, the big leaches are the “permanent” government agencies that present periodic demands for money (budgets) as if they are the first line of entitlement in the country. Every one of these agencies needs to learn that the elected representatives (who make us a republic) are in charge of them, not the other way around. Every bureau, department, and commission needs to experience some healthy fear for its very existence, and some (in my opinion, most) of them need to be abolished.

Don’t be my cradle-to-grave problem solver

Congress needs to stop trying to identify all my problems and especially needs to stop trying to solve problems I didn’t even know I had. I realize that Congress gets led around like a bull with a ring in its nose, but who put the ring there? Oh, wait, there’s no ring at all! It's just posturing! Quit enacting lawyers’ and accountants’ full-employment acts with cutesy titles like “An Act to Improve Music Appreciation in Public Education (IMAPE)” which serve only to funnel my money to undeserving recipients involved in causes that I abhor. Stop saving us from ourselves.

Get real about money

For 5000 years, likely longer, people worldwide have used something of intrinsic value as a medium of exchange. A couple of pen strokes by Franklin Roosevelt and Richard Nixon do not erase this history, and can no more than temporarily disrupt the use of real substances as money. John Maynard Keynes promised us that we could live high on the hog and send the bill to our grandchildren, who would send it on to their grandchildren indefinitely, but the bill has come due in the first generation – we have stuck it to ourselves! It’s “experts” like Paul Krugman who now need to be ignored rather than consulted.

Understand what government is for

The Constitution was not written in secret language available only to a class of high priests.(4) Read it, act within its scope, resist the temptation to mollycoddle the able-bodies, and get out of the way. Understand, too, that every state legislature is likely to write its own parody of every act of Congress, especially those that purport to benefit us small people. Thus we have a federal OSHA and a state version, a federal FMLA and a state version, a federal EPA and a state counterpart, and on and on it goes. Who benefits? Attorneys. Who reels in confusion? Those who would start a small business or teach a kid to fish or contribute to a symphony orchestra.

Get out of the businesses that don’t properly belong under government

This includes getting out of health care, insurance, manufacturing automobiles, broadcasting, and on it goes. Support free enterprise by cheering it on, not by jeering it, punishing it, and preventing it with regulations. And get out of subsidizing every state and local undertaking with “matching funds” with strings attached – do we still use President Nixon’s term, “revenue sharing”? Most urgently, make capitalism legal again. De-regulate business. We’ve sent too much manufacturing to China. We CAN have robust industry in this country that is safe and non-polluting. We need to police our industries, but when they are tied up with proving in advance that they haven’t done anything wrong, as they now must do in order to satisfy bureaucratic zeal, we have essentially made it illegal to manufacture, distribute, or sell anything in this country without first paying a host of lawyers for protection.

Accept the responsibility by taking on the job, but you may not be re-elected

You personally didn’t create this mess. But don’t perpetuate it. Be honest in the campaign: What you have to do will require a reality check by each and every one of us. The vultures of our self-indulgence have come home to roost. You don’t want to preside over a catastrophic economic collapse. The next Congress needs to rein in the entitlements, make it legal to hire people and manufacture goods. Pare entitlement programs to benefit those who are truly in need.(5) The able-bodies need to fend for themselves, and once free enterprise is again unfettered enough to operate freely, the able-bodied will find jobs, because there will be jobs. If the lot of you who are sworn in in January 2011 cannot act in concert, swiftly, honestly, and decisively, you may not be sent back to Congress in two years, but your conscience will be your friend if you tried.

Repeal, repeal, repeal

It’s too late to repeal the bail-outs. I forfeited about half of my retirement fund so that the banks could be bailed out and so that young people with $800,000 mortgages could keep their McMansions. In the wisdom of the current Congress, they were more deserving of my savings than I. Maybe I should be happy that my sacrifice was no greater than that. But as soon as you get in there, get rid of the so-called health care reform, financial reform, jobs bill, cap-and-trade if it has gone through, and as much of that sort of garbage as you can rapidly undo.

I grew up in the Midwest and in New England in the 1950s and 1960s. I believed in America and I understood freedom – freedom to act as I wished as long as I acted responsibly, not freedom from want and wishing. I volunteered for the Army during the Vietnam war. I understood that I could be prosperous if I chose to be, but I didn’t expect to become prosperous with other people’s money; I planned to earn it myself. I planned and ran my life around that code. I have no respect for those who have stolen the dream. The only real power I have against those who have stolen it is my vote. If you are running for Congress in 2010, this message is what I expect my power – my vote – to accomplish.

(1) – And get Congress out of baseball. It makes me apoplectic to see Congressional hearings on baseball, (a completely private enterprise requiring no government intervention), when there are real problems, like border security, to be solved.

(2) – Congress needs to avoid passing “enabling legislation” and all that goes with it: agency rule-making, letting the Secretary of the Department misinterpret, misrepresent, and override the intent of Congress, and permitting strong-armed enforcement that properly belongs - if strong-armed enforcement belongs anywhere - in the legislative branch.

(3) – Those high priests exist and are exceedingly impressed with themselves, not just in regard to the Constitution but associated with every federal department and every act of Congress as well. As an HR director I once asked our corporate attorney a tax question. He replied the next day, breathless with excitement because he had reached someone of stellar influence within the IRS. His joy was sickening to behold.

(4) – The tax code… Please, please ditch it all. Set up a flat tax with NO deductions and no extra forms to fill out, or a consumption tax (which is also a flat tax), or both. A flat income tax would exempt some amount – say $25,000 – per citizen, (so a couple with an income under $50,000 would be exempt from withholding and filing a tax return). A consumption tax would affect those who may fall below the filing line and give some incentive not to spend indiscriminately or irresponsibly.

(5) – In my semi-retirement (which means I’m now working only 40 hours a week for under $25,000 a year) I am a receptionist for a medical practice group. I’ve been in the work force steadily for 45 years. I’m still working so that I can provide health insurance for my family, but when I see a 20-something patient whose diagnosis is “anxiety” and who can’t pay his $3 Medicaid co-pay because he is still paying off his fifth tattoo bill, I deeply resent carrying him. I later learned that he just had his motorcycle tripped out with extra chrome, but he has a state-subsidized cell phone, gets to buy convenience groceries with food stamps so he can use his cash for cigarettes, and… and on it goes.

28 May 2010

White Noise

I’m sitting at my terminal in a two-doctor medical practice. I scan documents into the electronic medical record and I help answer the phones. My work space, roughly in the center of the building – a pleasant, spaciously-arranged area with a cathedral ceiling and skylights – is separated from the reception area by a partial wall. Further back in the north-facing building is a nurses’ station for the medical assistants. Three exam rooms on the east side and three on the west line each of the outside walls. Each doctor has an office in a back corner. Sliding windows on the receptionist’s countertop separate the reception desk from the waiting area, which lets the receptionist answer the phone without making all her conversations too public.

The practice management group that runs this office (and several others in this part of the state) has selected some sort of custom music service to provide “white noise.” This noise is apparently broadcast (nationwide?) via radio waves, for there is a receiver in the receptionist’s space. The noise service company provides a remote control and a list of channels, selectable through the remote.

The 50-plus channels include such scintilating choices as 924 for Hot FM, 958 for Strobe, 963 for Concrete Beats, oh, and 920 for Environmental. There are a few channels featuring, it appears, ethnic music, such as Mojito, Little Italy, and Hawaiian. There is one called Lucille, which means as much to me as if it were, say, Roberta or Hortense. There are plenty of channels presumably offering hits of some fan-base or era: Reflections, Expressions, Mo’ Soul, Cashmere, ‘80s Hits, Screen Door, Shag Beach, and Plaza.

The receiver has no display to indicate what channel has been selected. It does have a green LED to indicate that it is turned on. The receiver feeds a set of speakers mounted in the waiting area, and is also cabled to a separate console that was made some 20 years ago by Bose. This separate console, which has a defunct CD changer, feeds its own set of speakers arranged through the rest of the building, including three that immediately surround me at about eight feet above the floor. Right now a husky woman’s voice is coming through the speakers, berating her man, (I assume), with the repeating phrase: “I don’t care what you say/want/do,” something like that, and telling him in no uncertain terms what it is she is unwilling to do. If I were him, I’d be cowering near the exit. I feel as though I’m eavesdropping on a domestic dispute in the next apartment.

The Bose console can be turned off separately, and in fact, besides the white noise feed, can accept an alternate signal source, such as an iPod. But to run the back area of the building from a separate source would cause a jarring clash of sounds, sort of like standing in a shopping mall with Spencer’s on one side and Abercrombie & Fitch directly opposite.

But ordinarily the broadcast noise feeds both sets of speakers. Why? Well, there are several reasons. First, lawyers somewhere have persuaded medical practices everywhere that white noise helps protect privacy. This is borne out when one steps into almost any waiting area anywhere and sees two or three unrelated people, perhaps strangers to one another, who happened to find themselves unexpectedly thrown together for an hour’s wait, shouting at each other to be heard over the strains of “Don’t Let Me Go.” Second, lawyers everywhere have blessed the Health Insurance Portability and Accountability Act of 1996, which, as everyone knows is all about AIDS/HIV and secrecy. Medical practice management groups evidently believe that pumping white noise through their buildings contributes to health insurance portability and will prevent lawsuits. If it did indeed absolve the practice of any further liability for an overheard conversation, that would be great. We could all tolerate a stream of crappy music everywhere if it would force tort lawyers to find real work. But the volume of lawsuits reaching our courts are not a function of our mis-adherence to regulations, it is a function of the numbers of lawyers clamoring to fill their case loads. Third, and the main reason why it’s pumped through both sets of speakers: The lone full-time receptionist in this office, Mary, who controls the white noise equipment, has made it plain that she cannot work without some sort of continuous aural stimulation and she cannot hear the “music” unless the speakers in the back of the building are on, since the sliding windows in front of her make it hard to hear it coming from the waiting area.

And it’s Mary who gets to make the channel selection. Not long after I joined this office a year ago, I presumed to experiment with the channels. The other staff members might have warned me not to, but they didn’t. Mary, though, made it plain that I had violated some cardinal rule. Since there is no display on the receiver to remind her what channel she had previously selected, and therefore I couldn’t help her remember, she grumbled for most of a day while she tried to return to it.

Mary doesn’t want to listen to music; she’s not interested in the lyrics, and she is not moved by melody or voice or harmony or arrangement. Perhaps because she is essentially an urban person, she just wants background noise. (To which end, I don’t know why other random sounds wouldn’t be as soothing and “white”: trucks dumping gravel, catenaries sparking over streetcars with squealing wheels, sirens and horns, people shouting.)

The couple of times I messed with the system, when Mary was on her lunch break, I tried one channel that had some light classical pieces and another that had familiar old songs with melodies. Mary found these choices offensive.

Since it must be loud enough in the back of the building for Mary to hear in the front, we generally communicate in raised voices, even the doctors – and that’s when we have only lawyer-recommended white noise to contend with. When the scanner is running, the fax machine is dialing or spitting, the copier is beeping, the shredder is grinding, and a couple of phones are ringing, all of which are within ten feet of each other in the center of the building and all of which can be going at once, the “music” becomes inconsequential, and we often shout. It seems to me that a doctor who must shout at the person six feet away, in order to be understood, is in greater risk of violating privacy than one who can murmer in low tones in a quiet space.

When I read Musicophilia, by Oliver Sacks, I was thunderstruck to learn that there are people who do not like music at all, not even that which I (and Sacks) consider true music: a pleasing, even beautiful, combination of tones and rhythm that begs to be listened to and savored or hummed and danced to. Some classical music, particularly from the Romantic period, appeals both to Dr. Sacks and to me, but there is much in modern music that gives me great pleasure. (Limited comparisons abound associated with the other senses: favorite flavors can be consumed only as long as it is safe or comfortable to continue eating; favorite vistas can be viewed only until the sun sets or the fog moves in; and until the invention of sound recording, favorite sounds could be attended only until the source might choose to fall silent.) While I was prepared, on reading Sacks, to discover that there are many like Mary who are troubled by silence, I was not prepared to learn that there are many who find beautiful music irritating and who are deaf to its lure. (And are deaf to the lure of every other type of music as well.) This discovery is confounded by the corollary that, while a person doesn’t find music appealing, music that more resembles cacaphony fulfills their craving for background noise.

Mary can’t stand beautiful music. Nor can she abide silence. Apparently she needs to be surrounded by noise. I wouldn’t know, but I suspect Mary sleeps with a nightlight on, and, probably, with a radio or television playing. While I can’t comprehend her abhorence of beautifully-organized sound, she can’t comprehend my abhorence of cacaphony or my preference for the utter absence of auditory stimuli. Mary happily submits to a day-long drone that includes a guy whining “Oh, I----‘ll never fall in love [repeat ad nauseum]” – a group thrumbing “You might go to sleep on a good-good night [r.a.n.]” – another group that is “sending out an SOS [repeat x24]” – another guy whining that he doesn’t want to die, and, I assume, a compendium of second-string almost-hits from the last year or so. Not only are these “songs” stultifying and repetitive, they recur several times during a daily program. I still don’t know what channel she has chosen in order to secure this drivel. The broadcast does not include a word of information about the songs or performers like a normal radio station, so I have no way of knowing who is performing, nor would it matter. And most of the time the lyrics, save for a repeated chorus, are obscured by the accompanying guitar abuse or other electronic overnoise.

During a relatively quiet moment one day, when only the tune-of-the-moment interfered with the peace, I commented to no one in particular in the open area of the building that I wondered why such a song, which sounded like someone straining at stool, ever made it to the public airwaves. Another co-worker replied from around the corner of the wall: That’s So-and-so; meaning, I suppose that So-and-so’s performance of anything more musical than a fart should hold me spellbound. Just because So-and-so did it; like, whatever God creates is perfect because he did it. I’ve mostly kept my mouth shut since then.

Set aside, though, our difference in taste, if you can call it that. (It’s beyond taste. I must someday argue for a definition of the word ‘music’ that excludes such affronts as cell phone ring tones. I’m reminded, for instance, of other settings where I’ve spent a little time under the forced white noise, and I remember hating the repetitious drivel of “Su-su-sudio” and “Cisco Kid was a friend of mine.” It doesn’t matter how famous or creative the performers of these pieces were – I could crank out tuneless, mindless pieces like that all day long but I’d be embarassed to do so.) The greater question is this: Why is it OK for my employer, in the person of Mary the music Nazi, to subject me to an irritating, distracting, assault on my senses? What is it in her that not only assumes but insists that I will enjoy the noise she chooses? (It pleases her, so it must please everyone.) Consider the other senses. If I had the power that Mary has and I decided that she must endure a continuous daily light show of flashing blue LEDs over her head, would that be OK? (I know one person who has seizures when she sees flashing lights.) What if I decided that my co-workers all had to settle for a fifty-degree room because that’s my most comfortable working temperature? What if I brought in a plug-in air freshener in, say, ‘hot roofing tar’? What if I were in charge of the white noise and I chose Shastakovich, Stravinsky, and Prokofiev ad infinitum? (I like those composers, by the way – in moderation, but they grate on most everyone else I know.)

Why, oh why, is it ingrained in our culture that I must not subject another soul in the workplace to the odor of my aftershave but I must submit to an auditory assault by the office music dominatrix? If my co-workers must avoid offending anyone who can claim an allergy to the odor of flowers, then maybe I need to assert my own involuntary appoplectic response to white noise that is irritating by design.

28 March 2010

50 Books I Highly Recommend

These are my favorite books of all time, more than 50, actually, and growing. I wish there were time and space to explain each one. If you want to know why any are on this list, just ask. The numbers 1-8 are a sort of ranking by importance to me. Something in the 8th rank may be just as readable and captivating but for me, the content may not have had as much impact as a book with a higher ranking.

Yes, I've read them all, some more than once. And I can warmly recommend almost anything else written by any of the below authors; I just refrained from listing every work each one has written and which I have read. (There are exceptions. Nothing else by Joseph Heller rises to the inspired genius of Catch-22.) No other book glows with the beauty of the English language like Lolita by the Russian author Nabokov, even though the story shocks many readers. (And Nabokov's Russian roots conceal his early acquaintance with the English language. His command of both certainly contributed uniquely to his linguistic power.)

And, sadly, my favorite juvenile novel of all time, The Lion's Paw, is extraordinarily hard to come by. If you look for it, prepare for an arduous search. (The author fell out of favor with his family, who own the publishing rights.) I have a new copy which I obtained right after its very limited 50th-anniversary re-publication in 1996, but I originally read it in my youth.

If you are looking for a book to read, you can't go wrong if you choose from this list, although if you're not "into" non-fiction, then I will not be responsible if you don't enjoy, for instance, Big Bang. If you do enjoy non-fiction, I will be surprised if your reaction to Big Bang isn't similar to mine - the most engaging, suspenseful, and faith-restoring book I have read in a quarter century.

I am specific about the edition of Bartlett's Familiar Quotation, by the way. I fear that, over succeeding editions, important quotations will be deemed expendable to make space for later, and probably deserving, entries. So, if you do obtain a later edition, pair it with the fourteenth (or earlier), and if you have the fourteenth and you obtain a later one, keep them both.

I could add a thousand more books, (if I have read them). It pains me to leave some out, for instance William Bennett's compilations under the titles of The Moral Compass and The Book of Virtues. Perhaps, some day, I will compile a book of lists of books...

I am certain that I have forgotten to include a few titles which, if I were to think of them, I would be chagrined to realize I have omitted. When they come to mind I will edit this list.

1. Big Bang by Simon Singh
2. In the Empire of Genghis Khan by Stanley Stewart
3. The Great Evolution Mystery by Gordon Rattray Taylor
3. King Solomon's Ring by Konrad Lorenz
3. The Man Who Mistook His Wife for a Hat by Oliver Sacks
3. The Way of a Pilgrim by author unknown
4. Ken Purdy's Book of Automobiles by Ken Purdy
5. The Code Book by Simon Singh
6. The Devil's Dictionary by Ambrose Bierce
7. The Best-loved Poems of the American People compiled by Hazel Felleman
7. Cosmos by Carl Sagan
7. Economics in One Lesson by Henry Hazlitt
7. The Elements of Style by William Strunk, Jr. and E. B. White
7. Familiar Quotations, Fourteenth Edition compiled by John Bartlett
7. Free to Choose by Milton and Rose Friedman
7. The Life That Lives on Man by Michael Andrews
7. Game Management by Aldo Leopold
8. Quotations from Chairman Bill by William F. Buckley, Jr.
8. Small Is Beautiful by E. F. Schumacher

1. The True Believer by Eric Hoffer
1. Parliament of Whores by P. J. O'Rourke
2. One Man's Meat by E. B. White
3. The Whys of a Philosophical Scrivener by Martin Gardner

1. Memoirs of a Superfluous Man by Albert Jay Nock

1. Pogo by Walk Kelly
2. Asterix the Gaul by René Goscinny and Albert Uderzo

1. The Call of the Wild by Jack London
1. Captain Blood by Rafael Sabatini
1. Catch-22 by Joseph Heller
1. The Enormous Room by e. e. cummings
1. The Grapes of Wrath by John Steinbeck
1. The Lion's Paw by Robb White
1. Lolita by Vladimir Nabokov
1. Oliver Wiswell by Kenneth Roberts
1. The Oxbow Incident by Walter Van Tilburg Clarkson
1. Penrod by Booth Tarkington
1. Red Sky at Morning by Richard Bradford
1. The Screwtape Letters by C. S. Lewis
1. The Source by James A. Michener
1. To Kill a Mockingbird by Harper Lee
2. Follow the River by James Alexander Thom
2. The Mill on the Floss by George Eliot
2. Scaramouche by Rafael Sabatini
2. Tom Sawyer by Mark Twain
2. Bleak House by Charles Dickens
3. Halic: The Story of a Gray Seal by Ewan Clarkson
3. Henderson the Rain King by Saul Bellow
4. All Creatures Great and Small by James A. Herriot
4. Angela's Ashes by Frank McCourt
4. Come Spring by Ben Ames Williams
4. Riders of the Purple Sage by Zane Grey
4. Siddhartha by Hermann Hesse
5. A Fine and Pleasant Misery by Patrick F. McManus
6. Notes from the Underground by Fyodor Dostoyevsky
6. Pillars of the Earth by Ken Follett

Feel free to recommend more!

Addendum, 1 September 2010: How could I forget...?!
1. The Way of a Pilgrim by an unknown author
1. The Bronze Bow by Elizabeth George Speare
1. Nicholas and Alexandra by Robert K. Massie
2. Free to Choose by Milton and Rose Freeman