Thursday, April 28, 2011

A Crucial Question

     It seems that how you answer the following question determines a lot about your political point of view, as well as your emotional make-up. The question is:

Is success simply . . .
      Is success basically due to luck?

      Or is success achieved primarily through personal effort?

      In the first view, the fat cat either inherited a fortune, or else benefited from some kind of rigged game where family ties or personal connections eased the person's way up in the world, until he reaps rewards all out of proportion to what he's worth.


 . . . a matter of luck?
     In the second view, the successful person achieved his or her position through hard work, personal sacrifice and self-discipline. They spent their youth hitting the books instead of hitting the party circuit, and much of their adult lives staying late at the office or working hard in the business, instead of taking off early to go shopping or attend a baseball game.

     According to the first view, the poor person happened to be born in the wrong neighborhood, perhaps with the wrong skin color, with down-on-their-luck parents, going to a bad school or no school at all. The person was probably abandoned as a child, and the only family he had was the local street gang, or the only father figure she could find was a violent pimp.

     According to the second view, the poor are guilty of their own poverty. They are out of work because they dropped out of school, never focused on a career, and think the world owes them a living despite the fact that even when they do have a job they rarely do much work. They drink too much, party too much, gamble too much, spend too much time having irresponsible sex and out-of-wedlock babies.

     People who believe success is achieved through luck are more likely to support redistributing income from the lucky rich to the unlucky poor. They are more likely to support increased government regulation, higher taxes, and more government involvement in the economy and in people's lives. They are also more likely to support abortion (because you get pregnant through bad luck), gay marriage (a throw of the gene dice) and national health care (because if you get sick you're just unlucky).

     But what makes you believe in the luck theory, or the effort theory? There are personal experiences, of course, and your own upbringing -- what your parents believed and taught you. But according to business journalist Eduardo Porter in his thought-provoking book The Price of Everything, Americans who experienced a deep economic recession between the ages of 18 and 25 (people entering the work force in the 1970s or the late 2000s) are more likely to believe that success is achieved through luck rather than effort. Paradoxically, they also have less trust in public institutions, so even as they demand more of government, they doubt government's ability to deliver services.

     Europeans in general come down on the luck side of the equation, and are skeptical of the idea that the wealthy deserve what they have, according to a World Values Survey of 2005-08. They believe the world is essentially unfair; they attribute success largely to "external social conditions"; and they therefore prefer high taxes and aggressive income redistribution. This European belief, according to Porter, is likely rooted in the feudal past, when prosperity had nothing to do with effort and very much to do with having the right parents. The belief in luck is even stronger in Eastern Europe, where decades of government control over the economy instilled a view that personal effort made little difference, and that government should provide for people's financial security.

     Despite the recent/current economic crisis, the vast majority of Americans still believe that honest hard work is the key to success. Surveys say up to 90 percent of Americans say hard work will lead to a better life, compared to the minority who believe success is merely a matter of luck. Most Americans believe our capitalist system is fundamentally fair and that the American dream is available to those who seek it.

     The belief that the world is essentially just is a positive force with concrete benefits. It motivates people to work, to take risks and invest in the future. It also prompts them to be honest themselves, to treat others fairly, and educate their children to scale the economic ladder. It helps if you believe. It helps even more if the belief is true.

     So what do you believe? Why do you believe it? And have your beliefs changed because of the recent insanity on Wall Street, the irresponsibility of the banks and the bankruptcy of the auto companies and the mortgage companies?

     It makes a difference.

Tuesday, April 26, 2011

My Computer Goes Kerplooey

     Remember the old Xerox machines? When they worked, they were fantastic. When they didn't, it was maddening. That's the way I feel about my computer today.

     My computer froze up on Sunday evening. I knew it was coming. For three days I kept getting these warnings popping up on my screen -- something like "Trojan horse generic v22.2 OVL" -- and no matter what I did, I couldn't get rid of them. Not for good anyway. I x'ed them out; they'd go away; and then they'd come back like the dandelions in the backyard.

Sucker punched by a Trojan horse
     I have the "avg" antivirus program on my computer, which is supposed to catch the viruses and worms and trojans and somehow destroy them and bury them in a bomb-proof vault, never again to see the light of day.

     But on Friday night I was home sitting in my office, watching an episode of "The Big C," the Showtime dramedy starring Laura Linney, about a woman who has terminal cancer. (Btw, I love this show. Laura Linney is an acting genius; Oliver Platt is perfect as her clueless husband; and Gabriel Basso does a superb job moping and eye-rolling around as her teenage son.) I don't get Showtime, but I found all the episodes on a website called magna-something.

     I'd watched ten episodes of "The Big C" on my computer with no problems. But as I sat there innocently watching episode 11, this trojan horse message popped up on my screen. I x'ed it out and finished watching the program. Then, after I was done, I erased my history and went to my control panel and deleted whatever it is that it deletes.

     On Saturday morning, the message came back. I x'ed it out again and deleted it from my history, and even ran an old antivirus program called Spybots that I have on my desktop. Spybots reassuringly reported: "No problems found."

     But this thing kept coming back, in several different forms. I'd beat them all down like a Whack-a-mole, but they kept popping up again. Until my computer completely froze up on Sunday night.

     So Monday morning I called my computer store. The guy on the phone didn't seem unduly worried, but he said I had to bring in my computer. He'd fix it up in a few hours. Probably cost around $120. He'd call me.

     I brought in the computer, and went about my business, but when I didn't hear anything by 4 p.m., I called him. "Gee,  this thing is a little more complicated than I thought," he said. "I might get it done before the end of the day. We're open until 7 p.m. I'll call you."

     Then this morning I got a call. "This thing is worse than I thought. I'll have to take all your files off, save them, and reinstall everything. I'll call you."

     Finally, around 3 p.m. he called and told me he'd cleared everything out, and the computer was running fine. What's the damage? I wanted to know. It'll be $200.

     If there's any consolation, the guy told me I should bring in my computer once a year anyway to have it serviced and debugged, to keep it running fast and smooth.

     So I'm marking my calendar for next April:  Bring in my computer for a servicing. As B told me (when I was cussing and spitting and stomping around on Saturday morning): "Don't get your knickers in a twist. These things happen. Not a big deal." She says a computer's like a car. You bring it in for a servicing every once in a while. You're without it for a day. It'll cost a little money. But you don't expect your car to keep working forever without new brakes and an oil change. A computer is no different. Get used to it.

     But I know why she's not upset. Two days without my computer. I painted the garage. Built a rock garden in the back yard. Did two loads of laundry. Cleaned out my closet. Called my sister and two friends I've been meaning to call for at least two weeks. And returned three overdue books to the library.

     Maybe it's a good thing my computer went kerplooey, after all. I caught up on my life. The yard looks more respectable. The computer is running faster; and my word program looks better (he must have updated it), and the only downside is that I can't risk watching "The Big C" for free on the computer anymore. Guess I'm going to have to sign up for Showtime.

 

Sunday, April 24, 2011

Do We Work Too Much?

     I saw a recent reference to the movie God Grew Tired of Us, an award winner at the Sundance Film Festival. The movie follows three boys who escape from Sudan and settle in the United States, and observes: "Sudanese people live in unspeakable poverty, yet they come to the United States and remark on how miserable Americans' lives are. All we do is work. No time for family, friends, or social gatherings."

     Do you really think we work too hard? One of my favorite quotes comes from John Bogle, founder of the investment company Vanguard, who evidently was not born with a silver spoon in his mouth. In an obvious dig at his fellow Wall Streeters, many of whom came from well-heeled families, he remarked, "I grew up with the priceless advantage of having to work for what I got."

     A hear a lot of Americans make fun of the French -- and by extension other Europeans -- saying all they do is sit around and not work, and then take the entire month of August for vacation. And yet others probably envy the French, their relaxed lifestyle and superior attitude.

     The following chart shows how long people work in different countries, and interestingly enough, includes unpaid work in the figures. Unpaid work includes cooking, housework, child care and volunteer work. (The survey did not include Sudan or any other African countries.)



    
     What I see from the graph is that Americans definitely work more than Europeans. But they engage in less "paid work or study" than Asians, including people in India and Korea, who do less housework but more paid work. Also ... who knew? Those Mexicans are industrious people!

     So what would those three Sudanese boys think if they'd gone to China or Japan, rather than the U.S.? Or Mexico? They'd really be flabbergasted!

     As far as unpaid work goes, I'm with the Koreans. The less you do, the better. Or, as B's pillow --  displayed prominently on the couch in our living room -- says: "My idea of housework is to sweep the room with a glance."

     Although there is one kind of unpaid work I heartily endorse, something the OECD (Organization of Economic Cooperation and Development) says Americans are good at -- "the United States leads the OECD in citizens volunteering time, giving money, and helping strangers." Some 60 percent of Americans regularly engage in charitable activities, compared to an OECD average of 40 percent.

     But do we labor too much at the office? I think back on my own working days, when I spent 8 - 10 hours a day in the office, and put in more hours on weekends. I'm sure I neglected my wife and family at times, trying to get ahead (like most Americans) while logging extra hours at work, putting myself at the beck and call of my boss. But I wanted to support my family and also achieve a certain level of success -- recognition, prestige, the respect of my colleagues. I did fine in supporting my family. I fell a little short, at least in my own mind, in achieving the success and recognition I wanted. Maybe, in that sense, I didn't work hard enough? I guess I'll never know.

     One thing I do know, however. I never resented the work I did -- paid or unpaid -- when I thought I was achieving something worthwhile, something I valued -- when I was working for what I wanted, rather than working, often reluctantly, to pursue someone else's agenda with no regard for my own interests.

     So maybe the real question is not how much we work. But why we work. Not when we get out of work, but what we get out of work
   
     One other interesting note: Those of us working from the 1960s through the 1990s did not work any harder or longer than our kids are working now. The average work week, according to the Bureau of Economic Research, has not measurably declined since 1950. However, the "tails of the hours distribution" reveal an interesting footnote. Today, workers with the least amount of schooling do work fewer hours than they did 40 years ago, while well-educated workers have increased their hours. To me this says, if you have interesting and fulfilling work, if you genuinely love what you do and are doing it for the right reasons, then you won't be watching the clock to go home, you'll be working more -- and be glad of it.
  

Thursday, April 21, 2011

The Boss

     When I was growing up, we had a playhouse in our backyard. I don't think my parents bought it, or built it, because they were Depression people and didn't believe in spending money on anything so frivolous as a playhouse, and my dad was all thumbs when it came to home improvement. Besides, it was old and beat up, so it must have come with the house when my parents bought the place in the 1940s, a few years before I was born. Nevertheless, my sister Nancy and I spent a lot of time out in the playhouse. We'd head out there in April, with our winter coats still on, and spend most of the summer using it as our base of operations.

     The playhouse was made of plywood, with slatted wooden swinging doors in the front -- like the bar room doors from western movies. Two windows peered out on either side of the door, just square holes with no glass in them. This was our hangout, or our hideout, for we were always pretending to be the bad guys, which seemed more interesting to us than thinking we were the law. Sometimes we were train robbers in the Wild West. Other times whiskey runners from Chicago, or Mafia big shots in New York City.

     I had another sister, six years older, who never played with us. But my older brother George joined in occasionally. He had a lot of friends and was very popular in the neighborhood, and could never resist the chance to socialize with anybody, even his little brother and sister. One Saturday afternoon Nancy and I were sitting in the playhouse, when George appeared at the door. He was too tall to fit in the door without ducking, so he just peered down inside, hands propped against the door frame, looking at us with the slightly disdainful attitude he had acquired when he got to junior high school. "What are you guys doing?" he asked.

     "Nothing. Just sitting here," we shrugged.

     "We’re hiding out from the police," Nancy explained. "They’re looking for us ‘cause we robbed a bank."

     "Oh? You robbed a bank?" George asked. "How much money did you get?"

     "Ummm. A million dollars," Nancy told him.

     "A million dollars? That’s a lot of money. What are you going to do with it?"

     "I don’t know," said Nancy.

     "Where is it?" asked Georgie.

     I didn't like the way he was smirking and making fun of us, so I chimed in, "We’re just pretending, stupid. We pretended top rob a bank, and we pretended to bury the money in back of our hideout."

     "But you know," Georgie said, ignoring me and looking at Nancy, "With all that money, and the cops after you, you need someone to help you out."

     Nancy took the bait. "Want to play?"

     "Yeah, I’ll play. But only if I can be the boss."

     "No. That’s not fair," I interrupted. "You can’t be the boss."

     "Well, who’s the boss now?"

     Nancy and I looked at each other. It hadn’t occurred to either of us that a boss was necessary. She was two years older than me, but we played together a lot and we had no problem sharing our playhouse. Sometimes we had other gang members from the neighborhood. My sister's best friend from down the street. My friend Danny from across the street. But often it was just the two of us, hiding out in our fort next to the bushes that grew up alongside the garage.

     "You guys need a boss," he pressed.

     "No, we don’t," I said, "’cause you know why?"

     "Why?"

     "I’m the boss," I said determinedly, standing up to face George.

     "Jeez," he said, rolling his eyes. He turned his back and stared out at the yard. I could see him gazing over toward the house, shaking his head a little. Then he looked around again. "The boss. Tommy’s the boss."

     "Yeah, I’m the boss."

     George looked at me and then at Nancy. "Is that right, Nancy?"

     "Well . . . umm . . ."

     "Nancy, are you going to let Tommy be your boss?"

     "No, I guess not. I think I should be the boss."

     Soon Nancy and I were arguing over who was boss. She gave me a push, and I stumbled a step or two backward and sat down hard on the bench that lined the back wall of the playhouse. George bent over and entered the playhouse, then folded himself down to sit on the bench next to me, his knees sticking up because the seat was too low for him. He looked at Nancy, then me, and said, "Listen, I have a plan." He leveled a look at the two of us, daring us not to want to hear what his plan was.

     "Yeah, okay, what?" Nancy said.

     "You can both be bosses."

     We looked at him. I wondered what he was getting at.

     "Nancy, you can be a boss," he pronounced. "But you'll be a little boss. And since there are two little bosses, Tommy, you can be a boss too.”

     I thought that one over for  a couple of seconds. I looked at George, then over at my sister. I decided that little boss was better than nothing. I knew my tough guy stance was a total bluff, and if I didn't agree, George would probably cut me out altogether. Both George and Nancy could beat me up – they'd done so on many occasions -- and so I wasn't in any position to object. Besides, at least this would put me on an even keel with Nancy. I looked at her. She seemed agreeable. I looked at George and shrugged, “Okay,” I told him.

     "Fine," said George. "So here’s the deal. You two are both boss when I'm not  around. But when I come by, then I'm the boss. Because I'm the big boss. Actually, I’ll be president. You two can be vice presidents."

     I wasn’t sure which was worse. Having George as the big boss, or being called a vice president. We were supposed to be a gang. Gangs don’t have vice presidents.

     But George wasn’t a gang sort of person. He was more the vice president type. He was tall and thin, and seemed confident about everything. When he'd started junior high he began to dress well. He didn't wear sneakers and dungarees like I did. He liked chinos and penny loafers, and he had a dark green pea coat that he was very proud of -- he was cultivating the preppie look, which he thought was cool and which also, I could see, attracted the girls.

     So George had been our leader for maybe two minutes, and already he’d put his own personal stamp on our game. I didn't like that, but there wasn't much I could do. Anyway, before I could object, George got up and ducked out the door, heading across the lawn. "Nancy, come on, follow me," he called.

     They were walking quickly up the driveway toward the street, maybe to meet some friends, maybe to play kickball. I didn't want to be left behind, so I scampered out of the playhouse and ran around the side of the house, trying to catch up, yelling, "Hey, wait for me! Don't forget, I'm the boss!"

Tuesday, April 19, 2011

Blogging Boomers Carnival

Midlife crisis queen hosts the baby boomer carnival this week, with links to items on springtime, Pilates, personal happiness and other topics. Stop over for a visit.
Sightings at 60: Should I Join AARP?

Sunday, April 17, 2011

Should I Join AARP?

     I remember when I received my first solicitation to join the American Association of Retired Persons. It came in the mail, shortly after I turned 50. And I was insulted. I was nowhere near retirement, and not the slightest bit interested in joining the club for old people.

     A few years later I was forced into early retirement, and after my COBRA ran out I was searching for medical insurance for myself and my family. I recalled those AARP mailings and thought maybe they could help me. I went online and found nothing. So I called them up and spoke to a very nice woman who told me AARP offers supplemental insurance for people 65 and over who are on Medicare. But they only offered Major Medical in certain select areas. Where did I live?

     New York.

     The woman clicked a few buttons, then informed me that AARP offers no regular medical insurance "in my area."

     In my area? New York? The third largest state in the country -- we're talking about nearly 20 million people.

     Sorry. Not New York. We do offer supplemental insurance in New York.

     But that's for people 65 and over. You say your organization is geared for people starting at age 50. One of the biggest issues for people in their 50s is how to get medical insurance. A lot of people have retired early, or they've been laid off, or they work for a company that doesn't offer medical insurance.

     Sorry. We offer Major Medical in some areas. But not New York.

     So you can't help me until I turn 65?

     When you're eligible for Medicare Parts A and B. But we have a lot of other benefits.

     But no medical insurance. So I hung up the phone and wrote AARP off my list. I went on to obtain medical insurance through an association I belong to through the work I do. And ever since then I have ignored all entreaties to join AARP. Honestly, I didn't get too many after that conversation. I must have sifted down to their B list, or their C list. But lately, I've been getting more offers by email. They must have a new list. And now that I'm 60, not 50, I'm wondering again if there's any reason to join AARP. They might be able to offer me some medical coverage in a few years, and in the meantime, maybe there are some benefits I could use.

     I knew they have a magazine -- I used to flip through it when I visited my mother-in-law, back in the 1980s. She always had a copy on her coffee table in her retirement complex in Florida. And every once in a while I'd see a copy at the library. Usually there'd be a picture of some middle-age movie star on the cover, someone like Susan Sarandon, Jessica Lange or Kevin Costner. And I'd think, the magazine is trying to appeal to 50 year olds. But the benefits they offer are geared to people over 65. What are they trying to pull?

     But now that I'm closer to 65 than I am to 50, I've looked at a few of those recent emails. The last one I got promised a 30 percent discount on glasses, and 25 percent off for various footwear products. Plus, 30 off certain "approved" medications. There was also an AARP credit card offering 3 percent cash back on "eligible" purchases.

      Hmmmm. I could use a new pair of glasses. But these seemed like pretty common discounts. Meanwhile, my medical insurance offers a discount eye program. I have a Visa card that gives me 5 percent cash back on certain purchases and 1 percent cash back on everything else. As for the medications, my current medical insurance requires me to pay only a modest amount for drugs. I have no idea if the AARP drug plan is any better. But it doesn't matter much for me anyway because, fortunately, I don't use many drugs.

      AARP also offers me the "opportunity" to contribute to the AARP Foundation, which helps low-income people meet their basic needs. I'm sure this is a valuable foundation. But I already have plenty of other opportunities to support worthy causes.

     I checked out another email, then followed a link to the AARP website to search out more benefits. Discounts at Border's and Tanger Outlet stores. Discounts at various hotels and car-rental companies. These discounts seem to parallel the discounts I get as a member of AAA -- 5 percent here, 10 percent there.

     AARP does offer auto insurance and homeowner's insurance. But after the medical insurance episode, I wondered if you have to be over 65 to take advantage of these offers, or if you have to live in certain states. And since the other AARP discounts seem about the same as AAA discounts, I can't see why they'd be anything special.

     I also noticed that AARP offers a legal service, with a 20 percent discount on lawyers' fees. I'm not going to sue anyone in the near future, but this might come in handy next time we sell our house, or if we want to update our wills or write a DNR order.

     So I conclude that there's nothing "wrong" with AARP. It might offer some people some modest benefits, if you don't belong to AAA or any other similar organization. But if you do belong to AAA, the financial benefits seem redundant.

     Otherwise, it seems, there's no point until you turn 65 and start looking for supplemental health insurance. So, I'll give them a call in a couple of years.

     But I'd love to know -- am I missing something? Is there an AARP benefit I might need? What does AARP do for you? And would you recommend it to a Baby Boomer like me?

  

Friday, April 15, 2011

Eat Your Flavonoids

     Flavonoids are good for us. I found this out when I saw a recent study showing that people who eat a lot of fruit -- particularly berries such as blueberries, raspberries, strawberries -- have a lower risk of developing Parkinson's disease, a malady that most often develops after age 50. (The wife of a friend of mine just got diagnosed, so I've become more aware of the problem.)

     Parkinson's is the most common neurodegenerative disease after Alzheimer's. It affects approximately 1 percent of the population over 60, and 4 percent over 80. Famous sufferers include Muhammad Ali and Michael J. Fox. There is no known cause of Parkinson's, and no cure, although several drugs have been developed to ameliorate symptoms.

     In Parkinson's, the nerve cells in the brain that make a chemical called dopamine are slowly destroyed. Without dopamine, nerve cells cannot send messages, leading to a loss of muscle function. Symptoms include tremor or shaking, impaired balance and walking, rigid or stiff muscles, and eventually cognitive problems.

     The secret ingredient in fruit is ... flavonoids. That's why I'm talking about them. They are organic chemicals found in plants that inhibit the oxidation of molecules that can ultimately damage cells. I was a poor chemistry student, so I will not try to explain the chemical qualities of flavonoids -- suffice it to say they are the ingredient that gives plants and fruits their vibrant colors, and play a role in protecting plants from insect attacks as well.

     The Parkinson's study evaluated some 80,000 women and 50,000 men, reporting on the relationship between the consumption of flavonoids and the onset of Parkinson's. A little over 800 of the people studied came down with Parkinson's. Men who ate more fruit -- berries, apples, oranges -- were 40 percent less likely to develop Parkinson's disease. For women in the study, there was no benefit in consuming non-berry fruits. But scientists found that the subclasses of flavonoids in berries did seem to protect women against the disease.

     Study author Xiang Gao of the Harvard School of Public Health concluded that a diet "high in fruits and vegetables could be protective against Parkinson's disease risk."

     What else can flavonoids do for us?

     There's some evidence they protect against other neurodegenerative diseases such as Alzheimer's and dementia. One Dutch study found that the risk of contracting Alzheimer’s disease among smokers decreased as daily flavonoid intake increased. A study of the elderly in France found that people with the highest flavonoid intake had a 50-percent lower risk of developing dementia than those with the lowest intake. Another study of 1,640 elderly men and women found that those who consumed a lot of flavonoids had better cognitive performance in general, and experienced significantly less age-related decline over a ten-year period than those who ate fewer flavonoids.

     Some (not all) studies have shown that high flavonoid intake is associated with reductions in coronary heart disease. Foods that seem to have the most impact are black tea, apples, onions and, in one study, cocoa.

     There is "less than convincing evidence" that consumption of flavonoids is associated with lower incidence of cancer. However, several European studies suggested that a high intake of flavonoids, especially tea, was associated with lower rectal cancer in women. And a high intake of flavonoids, especially apples, seemed to lower the risk of lung cancer in men.

     Common dietary sources of flavonoids include both black and green tea, dark chocolate, red wine, and many fruits, vegetables and legumes, particularly apricots, apples and all kinds of berries. And perhaps best of all, no adverse effects have been associated with high dietary intakes of flavonoids from plant-based foods.

     So I don't know about you, but you know what they say -- an apple a day ...
   

Tuesday, April 12, 2011

Building a Case for the Next Housing Boom

     I'm guessing that most of us Baby Boomers, and people who are older, own our own homes, and have watched with dismay as their value plummeted over the last few years -- forgetting, of course, that before 2007 we were benefiting from the generation-long increase in prices. I bought my first house in 1977 for $79,000, and sold it five years later for more than twice the price. And for many years after that I would joke (but it was true) that because I got in "early" I lived in a house that I could never afford on the salary I was making.

Housing prices went up from 1990 (and long before that) until 2006; since then they have fallen to 2004 levels
 
     That's cold comfort to anyone who bought at the top in 2006 or 2007. But as the above graph shows, anyone who bought before 2004 is still "in the money."

     That's just to remind you that despite the recent decline, for most of our lives owning a house has been a good investment, and has allowed us to enjoy better living accommodations than if we'd been renting, and at a much lower price. Okay, renting has been a "good deal" for the past few years ... but if you think about it, how could renting possibly cost less in the long run? A landlord is not going to rent a place to you for less than what it costs him or her -- and it's the landlord who gets all the tax breaks on top of that.

     So I'm making my bold prediction -- the real estate market is bottoming, either this year or next, and then we will see the market get back on its inflationary track, and prices will improve for ... literally, the rest of our lives.

     Why?

     For one thing, as shown in the graph below, affordability has improved dramatically. Mortgage rates (if you can get the loan) are low. Real estate taxes have leveled off after many years of increases. And of course prices have come down by 20 to 50 percent. It's like the stock market in March 2009 -- the future looks murky, but prices are so low that if you have any faith that America will grow and prosper, even at a modest pace, then it's got to be a good deal.


A value of 100 in this chart means the average family has exactly enough income to qualify for a mortgage on the average home. Current value is 191, meaning the average family has almost twice what it needs to qualify for the mortgage

     A second reason is demographics. The prime age for first-time home buyers is 30 - 35 years old. And recently, there's been a paucity of people in that age group. But soon there will be a lot more.

     Brief history lesson. During the Baby Boom, the number of births peaked in 1957. A little more than 4.3 million Americans were born that year. Then births went down slowly until 1964, the last year births were over 4 million. It's no coincidence that there was a housing boom approximately 30 - 35 years later, when all these babies were grown up and ready to buy a house. But after 1964 births continued to go down, until they hit bottom from 1973 through 1976, when births in the U.S. were below 3.2 million. A million fewer prospective home buyers. And when you add 35 years to 1973, you get 2008, when the real estate market was falling out of bed.

     But after 1976 births started going up again, as the original Baby Boomers started having children. Births were up to 3.6 million by 1980, and back over 4 million starting in 1989. Add 35 years to 1980, and you get 2015 -- when all the "echo boomers" will be looking to get into the residential housing market for the first time. Of course, it's a long time between birth and home buying, so the correlation isn't perfect, but there's no denying, more births mean more future home buyers.

The rate of home ownership in the U.S. peaked at over 69 percent in 2004; since then it has declined and is currently at 66.5 percent -- the same as 1998



 
     Finally, we have to consider shifting attitudes about how, when and if people want to buy a house, as opposed to renting an apartment or living in their parents' attic, or their kid's basement. (Remember Arthur in the TV show "The King of Queens," Carrie's father who lived in the Heffernan basement? Makes for great comedy, but you don't want to be him in real life if you can help it.)

     The graph above clearly demonstrates that buying a house was the "thing to do" in the late 1990s and early 2000s, and it has been going out of fashion since 2004. And if there's one thing we know about fashion it's like what Mark Twain said about the weather in New England -- if you don't like it, just wait a few minutes and it will change.

      There's only one way all these graphs don't turn around, and that's if America is in a permanent state of economic and population decline. While that's possible -- and given recent news I wouldn't even blame anyone for believing that -- I don't think it's really true. So to me, the only question is not "if" the residential housing market will improve, but "when."
 

Thursday, April 7, 2011

Where's a Good Place to Retire?

     I'm just beginning to think about where my retirement home is going to be. I have a couple of friends who've already pulled the trigger. One bought a condo in Myrtle Beach, SC. The other got himself a house near Ft. Myers, Fla. I doubt either one plans to move full time. Maybe they do, I don't know. But I think they're figuring on keeping two places -- one up north, and the other in the Sunbelt.

      I, myself, don't want two residences. Aside from the issue of carrying two houses financially, I don't want the responsibility of having to worry about two places. What if there's a break-in? What if a pipe bursts? What if there's a big storm?

     Besides, I can tell by the long list of fix-it jobs and home-improvement ideas sitting there on the counter by my refrigerator -- one house, by itself, is as much as I can handle.

     Of course, the first place I can think to retire is right here, at home, where I've been living for most of my life. I'm familiar with the area. This is where my friends are. And my kids are not too far away, either.

Gee, a place like this would be nice!
     But I live in New York. And New York makes it hard on retirees, mostly because it's just too damn expensive. We pay ridiculously high real-estate taxes where I live. The state offers a discount that saves seniors a few hundred dollars, but it's a fairly weak program ... and with the budget problems, who knows how long it's going to last. Now, we do get good schools for those high real-estate taxes. That was a major benefit when my kids were younger. As I used to say, "Yeah, my taxes are high, but I have two kids in the school system and they're getting the equivalent of a private-school education -- for less than half the price! Why would I complain about that?"

     But my younger child graduated from high school seven years ago. So why am I still paying for those wonderful schools? Do I want to keep on doing that into my dotage?

     And there are plenty of other expenses to bust the budget of anyone who is no longer working:  income taxes, sales taxes, insurance, electric bills, heating bills, restaurant prices; heck, even the price of gasoline is high around where I live, higher than pretty much anywhere else I go except for Connecticut.

     I do get a senior citizen discount at the multiplex, and also at the public golf course. It's nice, but saves me a negligible amount of money.

     Then there's the weather. It's nice that we get four seasons here in the north. Spring is beautiful; summer doesn't get too hot; fall is invigorating. But then there's winter. And this year, anyway, winter seemed to last forever. We got some snow and ice on April 1 ... a cruel April Fool's joke!

This is April!?!
     Plus, while my kids don't live that far away, it's not that they come by to visit very often. And they're young; in their 20s. At any moment they could get a job in Chicago or Houston or L.A., and relocate a thousand miles away. And if my friends' initial moves are any indication -- Myrtle Beach; Ft. Myers -- they won't be around for that much longer themselves. Then the only reason to stay here would be, because I'm familiar with the area. And maybe it's time to get out of my rut anyway, and go explore some other options.

     In future posts, I'll periodically update my search for my retirement paradise. Our search. For surely, B will have some of her own opinions. (Boy, is that an understatement!) And knowing us, it'll take a while to make a decision. (Like, several years). In the meantime, I'd welcome any suggestions or ideas, pros or cons, helpful hints or knowledgeable warnings.

Tuesday, April 5, 2011

Remember Him?

     I was reading about this guy the other day, and I wonder if you can guess who he is. (Don't scroll down and cheat!)

     He was born in 1894 in a poor, remote village. His father worked in the mines and the factories. He had only four years of formal schooling, and at age 14 became a metal fitter's apprentice.

     When World War I broke out, he was exempt from the draft because he held a crucial job as a skilled metal worker. He got married and had two children, and during this period was involved in several strikes demanding higher wages, better working conditions and an end to the war.

     After the war he was elected to a worker's council and soon became its chairman. Then civil war broke out. Europe was racked by devastation and famine, and his young wife died of typhus.

     He bided his time, until it was clear which way the political winds were blowing, then he worked his way into a job as assistant director for political affairs in the mines. He attended a training program for uneducated peasants, but was described by his teacher as a poor student.

     In 1922, he married his second wife, but the two soon separated, and not long after, he met his third wife, Nina, a well-educated party organizer. The couple had two children, and lived together for the rest of his life, but they did not officially register their marriage until 1965, the year after he was removed from office.

     He rose quickly through the party ranks, and in 1932 met his supreme leader, a ruthless dictator. The two of them started a friendship that lasted through the many purges of the 1930s. Our man arrested many of the people who worked for him, and ultimately sent thousands to prison camps or to their deaths.

     In 1937 he was appointed head of the party for the Ukraine, where he again replaced many officials, sending  them to their deaths as enemies of the people. During World War II he was at the battle for Stalingrad, although he played no military role; and he later accompanied troops at the battle for Kursk and the battle for Kiev.

     After the war, he returned to reconstruct the Ukraine and collectivize agricultural production, then he was called to the capital as a confidant to top political figures. In March 1953 the General Secretary suffered a heart attack and died. A vicious power struggle ensued, and our man came out on top.

     Once he came into power, he released thousands of political prisoners, and in 1956 gave a "secret speech" denouncing the brutality of his predecessor. He allowed a modest amount of freedom in the arts, opened some inroads to the West, and made two visits to the U. S., the first one in 1959 and the second in 1960 when he famously banged his shoe at the United Nations. He held a "kitchen debate" with then vice president Richard Nixon. He also held a summit meeting with President Eisenhower in 1960 and another one with President Kennedy in 1961.

     But he was no friend to America. He competed with the U. S. in a race to space, humiliating the Americans by sending the first man into orbit in April 1961. He crushed a freedom movement in Hungary in 1956, authorized the East German leader to erect the Berlin Wall, and helped bring the world to the brink of nuclear extinction over the Cuban Missile Crisis in 1962.

     When he backed down during the Cuban Missile Crisis, he took the first step toward his own demise. Then in 1963 he negotiated a nuclear test ban treaty with the U. S., bringing his downfall that much closer. In 1964 a group of Central Committee members, led by Leonid Brezhnev, ousted him for his policy failures and erratic behavior.

The First Secretary Himself
     After losing power, Nikita Khrushchev collected a small pension and lived in a Moscow apartment where he dictated his memoirs, published in 1970 as Krushchev Remembers. When the former party leader died in 1971, he was denied a state funeral, and the official Soviet newspaper ran just one sentence announcing his death.

Recently, actor Paul Giamatti signed on to play Krushchev for an HBO special called K Blows His Top, focusing on his 1959 visit to the U.S. with stopovers in New York, Washington, Camp David, Los Angeles, but not Disneyland ... that visit was scheduled but then canceled for security reasons.

Sunday, April 3, 2011

What You Can Learn from Steve Jobs

     I've never owned an Apple computer. I don't have a iPod or an iPhone or an iPad. Yet Steve Jobs has changed my life immeasurably, simply because of his impact on the personal computer and the electronics revolution.

     Steve Jobs, at age 56, is one of the most influential Baby Boomers. I don't want to write his obituary prematurely, but apparently he's in real trouble. And I don't submit this post to give any credence to a sleazy newspaper that may sensationalize his health problems, but to pay homage to a brave and creative genius. And honestly, until I saw this item, Ten Unusual Things I Didn't Know About Steve Jobs, I didn't know much about him. But Steve Jobs is one fascinating guy.

     I didn't realize that he was adopted. His biological father's name was Abdulfattah Jandali, and his mother was an unmarried graduate student who felt too young and unprepared to raise a child. So she put him up for adoption, with the only proviso that his new parents be college graduates. But after the first adoptive parents fell through, the next in line was a couple -- one of whom didn't go to college; the other didn't even graduate from high school. This couple ended up getting the boy only after making the promise that they would make sure he would go to college.

     I did have a vague awareness that Steve Jobs was a college dropout. He spent a semester at Reed College, a good but not especially highly rated college in Portland, Oregon. The reason he dropped out? He felt he wasn't getting that much out of his experience, and he knew that paying the tuition was impoverishing his parents. So he dropped out, but stayed around campus auditing courses for a couple more semesters, sleeping on the floor of friends' apartments, picking up some knowledge and skills at little to no cost.

     Before he started Apple with partner Steve Wozniak, he worked briefly for Atari, creating those primitive shooting and "pong" type games we all remember from the '70s. He then co-founded Apple Computer in 1976, when he was just 21 years old.

     We all know about the success of Apple. But who remembers that Jobs was unceremoniously fired in 1985? He was the loser in a corporate power play, and found himself publicly humiliated and out of work at the age of 30. Some people thought he was washed up. But he quickly prove them wrong. He immediately founded another company, Next, followed by Pixar, the animation company eventually acquired by Disney. Jobs went back to Apple after Next was bought out by Apple in 1996.

     Jobs was first diagnosed with cancer in 2004, and underwent surgery to remove a tumor on his pancreas. In 2009 he had a liver transplant, and reportedly went to Switzerland to receive an experimental treatment for pancreatic cancer. In January 2011, Jobs took yet another medical leave of absence "so he could focus on his health." Since then he has been observed, according to Mail Online, looking "thin and frail," and he has been seen going in and out of Stanford University's state-of-the-art cancer center.

     People have written Steve Jobs' obituary before. Literally. Apparently Bloomberg news published a Jobs obit. in August 2008, much to their embarrassment. Let's hope he will defy the odds one more time.

     For a look at Steve Jobs, here is the graduation speech he made at Stanford University in 2005 (skip to 7:30 unless you want to hear the long-winded intro.), where he talks about the three pivotal moments in his life. When he dropped out of college. When he was fired. And when he was diagnosed with cancer and learned to ask himself:  If today were the last day of my life, would I want to do what I am about to do today?

    "Remembering  that you are going to die," he says in his speech, "is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart."