Monday, June 30, 2008

Older Buildings, New Housing?

I live in a rather lovely suburb of Rochester, New York, but I travel into the inner city every week to work on a couple of my retirement "jobs". There's a lot that's not pretty in the inner city, including many vacant larger buildings that were once offices or used in light industry.

Housing is a real issue in the inner city, and energy costs are high in New York. So it seems to me that these older buildings might have promise as housing for lower income people. With efficient layouts, soundproofed interior walls, and a low percentage of exterior wall exposure to interior space, these buildings might provide decent apartments with reasonable utility costs. I wonder why they're not being gutted and converted?

The primary alternative for people with lesser means is much older housing with poor insulation, lead paint exposure, and inefficient utilities. Is this a decent alternative?

I think of younger people in Manhattan, living in relatively small spaces that have breathtaking rents. In the larger cities of Europe you see much the same, except that rents fall as the train rides get longer. Why are we so focused on single family housing? Habitat for Humanity houses are nice, but they are really expensive when all the costs are figured in.

Maybe we should renovate the solid older buildings into lower income apartments and tear down the blocks of decrepit older homes. The open space could be used for parks, transportation hubs, and schools.

My guess is that building codes, zoning requirements, and the interests of slumlords are taking precedence over common sense utilization of structures that were built to last a long, long time. Why is it that these buildings just sit, unused, year after year?

Wednesday, June 25, 2008

Can We Curb Oil Speculators? Perhaps Not.

Congress is currently holding hearings on the price of oil, and they are hearing testimony that speculation (purchase of oil futures contracts by investors betting on a price rise, rather than by those who actually take delivery of oil) is driving up prices.

Some legislators are pushing the idea that by increasing margin requirements for speculators at the Commodities Futures Trading Commission (in Chicago), and identifying purchases and sales by speculators rather than industrial buyers and sellers, speculative activity can be reduced. The hope is that this will cause oil prices to fall to about $65-80 per barrell.

I disagree. This idea is wrong for two reasons. First, there is more than one market for oil futures. If the CFTC is tightened, then another market in another country will become the market of choice for speculators and there will be no drop in oil speculation. Second, the current high price of oil is driven by two factors - threats to production/distribution by terrorists, natural disasters, or unstable nations, and by burgeoning consumption in developing nations, chiefly India and China. These factors are real, and some people are willing to risk huge sums betting on either higher demand or curtailed production in the future. And yes, we are grievously affected and will be until the oil market becomes less risky.

Congress can do a lot, but it cannot repeal the law of suppy and demand. Wishful thinking!

Tuesday, June 24, 2008

Golf and Life

The past three days have had their ups and downs. On Sunday afternoon I had a score of 37 on a tough par-36 nine holes - my best score ever on the back nine at my club. Today I played a match play match and got beat, 3 and 2. My much younger opponent (13 handicap to my 14) shot an 80 and kicked my butt. Kind of like day can be glorious, but don't expect it to last too long.

Last week my youngest son, the music therapist, apparently got a nasty virus and now has severe hearing loss. He's getting treatment, but we are worried. Sometimes the condition doesn't get better, or much better. It's times like this when I wish my belief that God doesn't intervene much in the world is dead wrong. Good Witch is praying like crazy, and I have to admit that I am, too. This thing is a triple bogey!

Good Witch and I are also well along in our latest Teaching Company course, which is "Questions of Value", an ethics course in the philosophy genre. What is "good"? What is "right"? Do we have ethical values that are baseless, in error, or even evil? Why do we care more about the well-off neighbor next door than the starving or sick neighbor across the sea or in the poor section of town? The professor is pretty dry, but the material does make one ponder some hard questions.

There are golf ethics, too. Rather petty in the big picture of life, but rather important in a match. Play the ball as it lies. Count all your strokes. Generally, the player who is "away" should hit first. Playing golf in an ethical way adds a lot to the game.

Perhaps we should view the world as a large golf course where everyone is a member. Wouldn't it be great if everyone played by the same set of rules, an ethical set? The savings in war-making expenses alone would transform the planet. Yes, I'm a dreamer, but it's a beautiful dream.

Saturday, June 21, 2008

Too Many People!

I met a man and his wife tonight. They were sitting on benches in front of our church as I mowed a section of the two acre churchyard. They were enjoying the cool evening in a lovely setting. After I finished I stopped to talk with them.

They were an elderly couple who lived in Bombay, India, but were visiting their daughter and her family here in upstate New York. The wife was here to consult with pain specialists who had recommended a non-surgical approach to the chronic leg pain she suffered. They had lived in New Jersey for some years before moving back to India.

The lovely lady, in her sixties, said she was lonely for company. "Where I live," she said, "you walk out of your house and people are everywhere. But not here." The gentleman chimed in, "But there are far too many people in India, and so much corruption, and not too many opportunities for work." He loved he opportunity to walk out of his daughter's home and enjoy a relatively benign setting with beauty and quiet.

I read recently that China has 1.3 billion people, and I know India has at least a billion. Populations in the third world are booming despite chaos and poor living conditions. In the United States, birth rates in the immigrant and lower classes are still high. Forecasts show a dramatic increase in world population by 2050. This must not happen.

Some futurists believe humans will solve their population problem by creating the engine of their own demise. Global warming, bird flu, and nuclear war all have the potential to reduce our population dramatically, and other major killers probably lurk outside our imagination. Any of these would be a poor way to solve the population problem. We can do better.

First world countries are currently growing their populations at the lowest rate. Educated people marry later and have fewer children for a variety of good reasons. Second and third world countries have higher growth rates for a variety of reasons, such as children being the substitute for Social Security in many places. But the growth must be stopped.

At the risk of being accused of racism or "ethnism", I think it's time for world leaders to speak out about uncontrolled population growth in countries that do not have the resources to support their current populations. I feel badly about youngsters who grow up in pitiable circumstances, and I even support one of them in Uganda, but I'm ambivalent about the efforts to provide relief, medical care, and food to groups who simply view their improved circumstances as an opportunity to grow their families. Birth control should be part of the deal.

The lady from Bombay missed her many friends, but her husband was dismayed over the teeming population in his city and the disfunctionality that it caused. For the sake of the human race, we need to find the right balance and find it before nature does it for us.

Wednesday, June 18, 2008

Obama's Tax Plan

Some news came out today about Obama's tax plan. It's a populist approach that should knock the socks off the republican's "He'll raise your taxes" argument. Obama basically said that if you make less than $250,000, you don't have anything to worry about. That idea is going to appeal to many folks that like him but worry about their wallets and are tempted to stay with the republicans. It's going to upset those who are high earners, but that doesn't bother me at all. I'll tell you why.

The first reason is that for the past 30 years, income tax progressivity has been eroded significantly. The income tax rates paid by high earners have come down, the capital gains tax rates have come down, and the estate tax rates have come down. At the same time, rates for the middle class have not come down at anywhere near the scale experienced by the high earners. The underclass, which never paid much in taxes, has benefitted from credits (refunds of tax not paid), but this new income has not done much in terms of offsetting the higher cost of living for them. While it's true that a large percentage of the total tax is paid by high earners, they still have a lot more left over for themselves than they once had. They can clearly "afford" to pay more.

The second reason is that many of these high earners have benefitted from the huge increase in executive salaries compared to salaries in general. A professor in my MBA school once said, "Don't ever forget that, these days, the main purpose of the corporation is to benefit senior management." As a financial executive in a major corporation I witnessed rampant profiteering by the top people. In my view, they are simply employees like any others and often do not earn the huge salaries and bonuses they collect. They are not "owners" with their own skin in the game. If they had to pay 45-50% of all earned income over a very high number (say $1 million), it would not bother me at all. They'll still have plenty left over.

You'll hear arguments that high tax rates on the wealthy will harm our economy by reducing investment. Baloney! Investments follow risk-adjusted rates of return, and there is plenty of money in corporations and in other countries. The reduced-investment argument violates the principles of economics. Secondly, the economies of many European countries and Japan do very well dispite lower executive salaries and higher tax rates, which shows the fallacy of this argument.

In closing, I want to reiterate my position on the major redistribution of wealth that has taken place in the U.S. over the past 30 years. Reductions in income and estate taxation on the wealthy have created a large new class of super-rich that resemble the aristocracy of old time Europe. People like Warren Buffet have warned that this is a major problem. We don't need a class of people who are permanently wealthy regardless of their ability or contribution to society. Obama's tax plan is one way to put the brakes on this dangerous trend. Go, Obama!

Friday, June 13, 2008

"Your Ever Well-Wisher"

That would be ThomasLB, of course! He even made you feel good by reading his by-line. One of the joys of my internet life has been to stay in contact with Thomas, the bearded one who retreated from corporate life to living at home and doing who knows what.

We are so different, yet so similar. It's strange how the outward details of one's life mask the inner truth. We treasured so many of the same things, but he showed a sense of humor that I covet. I'd probably lecture him about sharing his great talents with the world, but he'd probably lecture me about not spending enough time smelling the roses.

I'm astonished when someone like Thomas decides to disappear. It's something like having a friend who takes their own life. "Why?", you ask. Who knows? Thomas can afford a new or used computer, but it's his own time that he's decided to conserve. He's walked away...

I admit to being a little angry. I miss ThomasLB. But, I also admit that each person has to walk their own path, and Thomas so much more than most. All the best, Mr. "Your Ever Well-Wisher".

Sunday, June 08, 2008

Gas at $4.00 and Rising!

Who would have thunk it? Oil at $138 per barrel and gasoline at $4.00 per gallon and rising fast. Apparently our government and our automobile and energy industries had no idea such a thing could happen, since none of them planned for it. Too bad for those of us who don't have so much money that we can be indifferent to the price of anything.

Don't think for one minute that our government and our automobile and energy industries should get a free pass on this. They are all responsible for the pain we are feeling, because they have acted in concert for many years to ensure the U.S. had a huge appetite for energy and did little to encourage conservation or find alternative energy sources. We should be outraged.

The fact is that other countries in our world have been much more prepared for the very predictable tightening of energy supplies. Europe and Japan lead in producing fuel-efficient vehicles, using nuclear power and alternative energy sources, and in conservation. They adjusted to the obvious, but we did not. We wallowed in cheap energy for many years, and now we are going to burn in the fire of very expensive energy until we can get our act together. "Smart" America has been really stupid when it comes to energy.

It is going to be really expensive to fix our energy-related problems. Our homes and cars are too big and inefficient. Our laws favor the industries that have failed to act on our behalf. Developing and installing the new technologies needed to save us will take a long time, during which we will suffer financially and in our standard of living. All of this is due largely to poor planning by those we have trusted to act on our behalf.

Will we learn from this sad experience? Will we ask our government to anticipate problems and give us strong advice about what we need to do, even if it is painful? The next year or two will be telling in that respect, because we have other big problems to solve. The war, Medicare, Social Security, education. Each of these can impact us as hard as gas prices do now. Will the next president and congress take these on or bury their heads in the sand, waiting for a crisis and not doing anything until it's too late? We'll see.

Friday, June 06, 2008

"Conservatives" Always Lose - In the Long Run

If you pay attention to the media, you know that there are many newspapers, radio stations, and TV networks that identify themselves as "conservative" either overtly or by their content. They tend to kowtow toward the predominant religion, glorify patriotism (which they define as their own views on the current government), and stand for an economic policy which ensures that the current "haves" grow their fortunes. In short, conservatives like the world to stay pretty much like it is (when they are in power), or like it was (before they lost power). They abhor change, whether it be in religion, social mores, politics, science or economics. But they always lose, in the long run, because change happens.

As we move a bit further into the 21st century, we see change on every front. Genetic engineering, powerful new telescopes, nanotechnology, and climate change are providing new scientific information that must be acted upon. The world's political power structure is evolving eastward with a velocity that would have been scoffed at only 25 years ago. Many churches are reaching out to homosexuals and starting to focus more directly on religious "action" rather than dogmatic theology. The world's appetite for fossil fuels is driving up their prices and motivating accelerated research into new energy sources. Women are holding key positions in government and industry. The world is re-making itself, and conservatives are in a tizzy because they are not change-oriented.

We often mistakenly see conservatives as people with right wing capitalist leanings, but conservatives are simply those who dislike change. The communist USSR was as conservative a regime as there has ever been, simply because it singlemindedly pursued a political/economic model that proved faulty and eventually collapsed the country. Conservative management and unions in the American auto industry resisted change and are now watching their markets and their employee base shrink dramatically. Conservative Roman Catholic bishops looked the other way at priestly pedophiles for centuries, but their adherence to the old rules has cost their church much treasure and eroded its moral standing. These examples show that change can be successfully resisted for a time, but that time often ends with devastating consequences for those whose feet have been stuck in the status quo.

Conservatives have had a prominent or dominant position in U.S. politics for more than 20 years, and not long ago they looked forward to a century of such dominance. But they, like conservatives of all ages, refused to acknowledge that the world was changing all around them - in science, religion, social mores, and economics. They made decisions based on obsolete facts and beliefs, and Americans have watched as these decisions produced adverse consequences. Americans now see us mired in an unnecessary and costly war, unprepared for high fuel prices, pummelled by climate-change-induced storms, and ruled by layers of incompetents. The tide is turning, and the November election will turn out self-described conservatives in droves.

Does this mean that the liberals will lead us forever? No. They have their own constituencies, and these constituencies also resist change. Take the teacher's unions, for example. They talk liberal from a social perspective, but they are conservative as hell when it comes to economics or change in the education process. The best we can hope for, then, is that the liberal administration will attack and solve some of the obvious problems before they, too, get stuck by moving their focus toward consolidating their gains and hanging on to power. The conservatives will then return to restore order for a time.

It turns out that we need both liberals and conservatives to move the world along. But the liberals always win in the long run. Change is inexorable. It's time for change.

Wednesday, June 04, 2008

Golf Update

Did you know that walking 18 holes of golf at a reasonable pace is really good exercise, especially if you do it fairly regularly? Golf is also good for training your body to obey, since the golf ball goes in strange directions if your body can't follow your bidding when you swing. And, golf is great for developing concentration because you need to focus only on the task at hand (the stroke you are making) to avoid considerable embarassment and move the ball to its intended position. These are all the reasons I provide the Good Witch for my frequent disappearances from her life. She knows it's not another woman if the course is open.

Golf season in Rochester, NY, starts in mid-April for the most hardy souls, and by mid-May for most others. The warmer days, cool nights, and decent rainfall makes the grass grow green, thick, and beautiful. By early June the courses are lovely and difficult, and us players are starting to get our games tuned up. My game is on schedule, and I'm a happy guy.

Golf is the best game for men. It challenges our physical skill, provides a group environment for socializing, and takes four hours away from the routine of work. In my experience, only the army or other sports teams can compare with the benefits men get from playing golf with buddies on a regular basis. Women seem to enjoy it as well, but maybe for slightly different reasons.

So, where am I now? Lots of my drives are going 240-260 yards, with over 50% in the fairway. I'm able to hit greens about half the time in regulation. My short game of pitch shots, sand shots, and chips is getting pretty comfortable and productive. My putts are pretty decent, and I'm making a lot of six footer's. That means that I'm able to post a score of about 84-88 most days. The scores are usually hurt by a couple of poorly played holes, but I'm starting to minimize the big mistakes. That means that shooting 80 in June is likely. Hooray!

Next month I'll be 64. There's a good chance that this year will be my best ever for golf - I'll play the game more skillfully than I did when I was much younger and stronger. In what other sport could a man say that?