Saturday, February 18, 2017

The Workers

Trump calls the media "the enemy of the people" echoing Stalin.  NPR uses the term "The Workers" echoing Karl Marx.   Both are wrong.

In a recent NPR piece, president Trump is rightly criticized for rolling back Financial rules promulgated by the Obama Administration. These fiduciary duty rules would place the burden on financial advisers to act in the best interests of their clients, something most of their clients assumed these financial advisers did already.

This rule was a good idea, and should remain in force.  But that's not the point of this posting.

For some reason NPR posits that this fiduciary duty rule is one that favors "workers" rather than just ordinary citizens.  The headline read:

Trump Moving To Delay Rule That Protects Workers From Bad Financial Advice

This choice of language is interesting, and it is a word that NPR uses often. What is disturbing to me is it is also a word that Karl Marx enjoyed using, as in "Workers of the world unite!"  Sadly, the media tends to do this a lot.  We are referred to as "consumers" or "workers" but never is just ordinary people, employees, or citizens - or maybe just human beings.  The media defines us by what we do and how much we spend.

Words matter. When you can set the language of the debate, you can control the debate. Here, NPR is slipping one under-the-radar by referring to people affected by this rule as "workers" instead of just ordinary citizens.

The fiduciary duty standard for financial advisers applies to everyone, regardless of whether they are "workers" or not. It applies to retirees. It applies to housewives. It applies to unemployed persons.  Why does NPR insist on using this term "workers"?

The answer is quite simple.  This is another example of NPR subtly slanting the news in a particular direction.  In this case it is the workers versus management or the little people versus the big people - the 99% versus the 1%.

The term "the workers" implies people who are actually working for a living.  It also implies that the  opposite of this term is people who don't work for a living or who live off the labor of others.  The term Communists use is "parasite."  In short, it is divisive language designed to separate us for one another.

What the hell wast that?

The reality is, of course, that most of the investors in our economy are people like you and me. Mutual funds often drive companies to concentrate on quarterly profits and share price, sometimes to the detriment of the overall health of the company.  But the people who are pushing for higher rates of return on their mutual funds are not corporate fat cats or Wall Street 1%'ers, but rather ordinary citizens like you and me who want to see a better rate of return on our 401K plan.

In other words, instead of an "us versus them" scenario it is more of a "us versus us" scenario.  We all want to see higher rates of return.  We all want to see profits.  And we all want to see fewer regulations if it means that the companies that we invested will be more profitable.  We have met the enemy and he is us.

And we all want to have our financial advisers act in a manner which is in our best interests and not theirs, regardless of whether we are workers, management, retirees, or even unemployed persons. The use of the term "workers" is wholly inappropriate in this context as the law applies to everyone.

And this begs the question:  Why did NPR use this term?   It was not by accident, but purposeful.   I suggest three possible scenarios:
1.  The author of the piece has a communist bent and chose the word.

2.  An editor of the piece has a communist bent and chose the word.

3.  An editor of NPR news sent out a memo instructing reporters to use the term "workers" as often as possible, in a not-so-subtle attempt at agitprop.
There is a fourth possibility:  The people at NPR as so clueless as to think that financial advisers only advise people with jobs.   I don't discount this possibility.   However, given the frequency in recent months that "the workers" have taken over at NPR, I think #3 is a clear winner.

And this is why people call real news fake news.   When you slip in little shitty deals like this in to a straightforward reporting piece, you are sliding down a slippery slope towards Breitbart.  In fact, you could call NPR the Breitbart of the Left and they would probably be proud of that.

The fiduciary duty rule was a good one and did not place a "burden" on investment advisers or banks.   These are people who should be advising you in a neutral manner, and not merely act as salesmen for the financial institutions.   And that is what they were - mere salesmen, as I learned the hard way.

As I have learned over the years, financial advisers should be approached with caution in any event. While they often claim they are not being paid for their efforts, they usually make a commission from the sale of new mutual funds or other investments. There is a reason why they want you to transfer your funds from another account to their accounts, usually because they get 5% off the top. That's also the reason they don't want to talk to you if you don't have any money to invest, or are just starting out investing.

As I noted in my posting my 20 years with Northwestern Mutual, I discovered that my "best friend in the world" who was my Northwestern Mutual agent was really not so much my best friend has he was a salesman trying to sell me products. I made the mistake of assuming that he had my best interests at heart when he really had his own. He made a commission on each product he sold me and I should have been mature enough to understand and realize this.

This was my fault, not his.  I started to get an inkling about who he really was when I saw his Facebook page which listed "Fox News" as his favorite television program.  Even if you are a conservative, liking Fox News is idiotic.   I also started to catch on when he tried to sell me more and more policies - the breaking point being a nursing care policy that would have cost me $500 a month or more.   He was in it for the money, and I was naive to assume otherwise.   A car salesman may be friendly to you, but that doesn't make him your friend.  He is your financial adversary, period.   Similarly, an insurance or investment salesmen (and they are not "advisers" or "counselors" are just salesmen) are not your friend, but foe.
Every investment house I've dealt with seems to have one strategy in common, and that is to encourage me to move some or all of my investments to their organization.  As I noted in my posting about State Farm Bank, the only constructive advice the investment adviser could provide me was to cash in all of my investments - even my life insurance - and put it all into State Bar State Farm Bank funds. When I asked what the advantage of this would be, the agent could only say "convenience." Mark was smart enough to see this right away and walk out the door.  I followed shortly thereafter.

Our Fidelity adviser with somewhat better, although I never quite understood what the point of his advice was, or the confusing pie charts they sent me on a regular basis.  He moved money around from one fund to another, but it never seemed that the advice he gave us was really worthwhile in terms of how much money we would need to retire and whether we were on track to retirement - two questions he always eluded answering, and the two questions that every person investing really wants to know.

Sadly, there are lot of investment advisers out there, many with storefront operations. People feel confused and befuddled by the investment process when really it is not that difficult.  The problem, of course is that people want to see huge rates of return on their investment (greed) and don't know how to go about getting this themselves.  They are uncertain where to invest, because they are scared of losing money on poor investments (fear).  So, they think they can talk to an expert who will invest their money and make huge profits. They fail to realize that if the expert could really make huge profits from investing, he wouldn't need your money but would rather be making huge profits on his own.

Most investment advisers counsel you to invest your funds into a number of fairly safe mutual funds with moderate rates of return - which is probably the best bet for 90% of the population.  In return for selling you these funds, they get a commission, usually based on a percentage of the money invested. They will even tell you that they are not charging any fees.  In one instance, an investment adviser told me that I was in a "no load" fund when in fact it had a 5% load up-front.  Yes, they lie, and that was what the new fiduciary duty rule was designed to prevent.

Yes, Virginia, verbal promises of investment advisers are not enforceable under the law, mostly because you can't prove that they said them in the first place.  This goes for any verbal promise made by anyone including people selling you timeshares or used cars - which are about the same level of trustworthiness as an investment adviser.

The long and the short of it is that the new rule that forced investment advisers to act in the best interests of their clients will shortly be repealed.  Even if the rule was not repealed, I am skeptical that it would be easy to prove if an investment adviser gave you poor advice or did not act in your best interest.  The burden of proof would be very difficult, unless you got shitty advice in writing.

Thus, the only solution is to look out for your own interests. Take advice from anyone trying to sell you something with a grain of salt.  Investment advisers are not being friendly and nice to you because they are friendly and nice people. They were trying to make a living and a few so they have to sell you a product and earn a commission.

So we're going back to the era of Caveat Emptor.  Buyer beware.  I'm not sure we ever left it.

Friday, February 17, 2017

Drug Use - Living in the Present

People abuse drugs and alcohol to forget the past and future and try to live in the present.

After writing my last posting, it hit me why people do drugs or abuse alcohol.   And it all goes back to what I was talking about in past, present, and future.   It seems everyone is haunted by demons from the past - even those of us who never had any demons to deal with.   People will stay up nights castigating themselves for an inartful comment they made that might have hurt someone's feelings over a decade ago.  It is part of human nature and the human mind.

And we also worry about the future - will I have enough money to retire?  Will I lose my job? Will there be a war?  Is the President going insane?   We worry, but worry isn't doing anyone any good.  President Trump must be good for the alcohol and drug business, to be sure.

Living in the NOW, in the present, in the moment, is very hard to do.   Religions teach this.  Mystics teach it.   People meditate to screen out the past and future and concentrate on the now.   And people drink and smoke pot and do other drugs to experience the now and drown out the past and future.

The use of drugs of all kinds - including alcohol - have one thing in common - they are all an attempt to experience pleasure now, to forget the past and future, and often have a detrimental effect on the individual's future.  A glass of wine or a joint or hit of coke or whatever makes you feel euphoric for the moment.  Suddenly, everything seems fine, and the worries of a few minutes ago seem trivial and overblown.   We are living for the moment, literally, and not concerning ourselves with the future or past, much to our own detriment later on.

And it is why young people can do drugs and get away with it - with fewer responsibilities in life, they can concentrate on the now and not worry too much about the past and future.   A middle-aged person has too many memories of the past and worries about the future.

In fact, one way to ruin the drug experience is to concentrate on the past or future.   Angry drunks will get angry when they bring up old grievances from the past and start going on drunken tirades or starting fights to settle old scores.   Worrying about the future when high on pot is one sure way to end up paranoid.   One reason I gave up that drug as that as I got older, it just made me anxious.  And neither the past or future are things to think about when on LSD, lest you be on a bum trip.

And of course, drug use can damage that very future, as it can cause you to spend money, wreck your health, end up in jail, or just neglect the things you should be doing in the now to prepare for the future.   So ironically, we use drugs to evade the past and future, and they often make things worse in both regards, causing us to use more drugs.  This is the real pattern of addiction, not some physical ailment or psychological dependency.

Why is it so hard to live in the present and ignore the past and future worries?  This is a good question, and as I noted before, must be something programmed into our brains.   We worry about the past as a means of remembering past experiences and to learn from them.   If an animal puts its hand on a hot stove and gets burned, it should learn from that experience as a survival skill.  If it merely forgets the past, it cannot learn these skills, and it dies out before reproducing and goes extinct.

Similarly, worrying about the future is a survival instinct.   The monkey that puts aside coconuts for the future survives the subsequent famine.  The one that plays all day and lives in the moment starves to death (unless he learns how to steal coconuts).   Worrying about what other people might do, anticipating the next move of an adversary, and so forth, are survival skills.   Without them, our species would have died out long ago.

And the smarter you are, likely the more you worry about the past and future, as this worry is what made you smart in the first place.   Most mentally ill people are not stupid, but rather often have very high IQ's - they are too smart for their own good and let worry overwhelm their lives.  Not surprisingly, many resort to drug use to get as blitzed as possible for as long as possible, to avoid thinking about the past and future.

I can say from experience that I know a lot of very smart people who were too smart for their own good and let worry overtake their lives.   And I know a lot of other people who are dumb as stones and haven't a care in the world.   Smart people intellectualize worry too much, where as the dumber ones just let it go - but learn nothing in the process.

Maybe this is why in Alcoholics Anonymous, two of the tenets of that faith are first, to let go of the past (for example by writing apology letters to people you have wronged in the past) and second, to stop worrying about the future by surrendering control to a higher power - summed up neatly in their "serenity prayer" - God, grant me the Serenity, to accept the things I can not change, Courage to change the things I can, and Wisdom to know the difference.

I am not sure where this is going, but it just struck me that this ties together some disparate ideas I have had in this blog regarding anxiety, worry, drug use, and human nature.   A lot of very smart people destroy their own lives over worry - resorting to drug use or driving themselves insane with anxiety.   And this is a shame, too, as these are talented people who should succeed in life.

And it explains why a lot of people who succeed in life, or at least appear to, are really not very bright folks.   They take things one day at a time and get ahead, without worrying or overthinking things.   And while I commend their more carefree attitude about life, it does seem unfair to some that some odious people get ahead in the world, while smarter people end up suffering.

Maybe - and this is just a wild thought - we should take a lesson from the successful idiots of the world and not let stress and anxiety overwhelm us.   Because that really is the demarcation between successful people and unsuccessful people in this world - not how smart they are, but how they deal with stress and adversity.

Just a thought.

When the World Makes Less and Less Sense

One frightening and yet also calming aspect of getting older is how you become less and less engaged with the world.  Sometimes the world seems to be a scary and different place than as a youth, and thus we tend to engage with it less and less.

Today, when I read the news, I see references to trends and fads that I have never heard of.  Moreover, most of these trends and fads come and go without ever making it onto my radar. When I was younger, I was always up on the latest things going on. Working in an office environment, I guess I tended to hear more about these sort of things during water-cooler chat sessions.  Maybe working alone, I miss out on what the latest outrage du jour is, or what embarrassing thing happened to a celebrity.

I guess social media fills in this void for a lot of people - things "trend" and are upvoted and go viral.   But it seems very superficial and trite - and also commercial.  Nothing floats to the top of the Reddit front page by accident, which is why I lost interest in that site as well as Facebook.   It is just a bunch of ads for stuff - movies, video games, kick-boxing, or whatever.  We are supposed to care because everyone else does - or they make it appear everyone else does.   I mean, really, do you give a rat's ass about the "competition" between two brands of comic books?

I guess now that I'm older, I realize that missing out on some fad that lasts for two or three weeks or a month or even a year it's really not missing out on much at all.  And the same is true of music. When I hear about an awards program, none of the names, or least very few of them, resonate with me. I am sure my parents probably feel the same way about the musical acts that were popular back in the 1970s. Back then, as a young man, I knew the names of all the popular artists, even the ones I despised.

Today, I know a few of the more popular names that are mentioned frequently in the press, but I couldn't identify their music if I was forced to.  Moreover, and I know this sounds like a something an old man would say, it seems like all the music sounds the same. We've reached a new era of the solo vocalist who tends to sound like someone from one of these reality singing shows, warbling their voice up and down the scale is if that were proof of proficiency in the art.

I guess Adele feels that she owes a debt of gratitude to Beyonce as they both sound the same to me.  Ironic, after nearly a half a century, white people are still making money off black people's music - and getting all the awards as well.  So I guess not much has changed, and I'm not missing out on too much.

Again, this is both oddly calming and frightening at the same time.  It is frightening because I feel that I am turning into an old person or turning into my parents. And it is somewhat disconcerting to be disconnected from society at large and unaware of popular trends in culture.

But it is also calming in that when you reach a certain age realize that none of these things really matter.  Being up on the latest trend of dabbing really doesn't do much for your personal life.  Knowing the names of all the popular musical artists or even the obscure ones really doesn't make you a better person, more well-informed, or happier for that matter.

In fact, you realize that this stage in life that a lot of what you thought was important and relevant and pressing really was just noise.  As I noted in a very early post in this blog, people love to drown out the deafening silence in their lives with meaningless noise.   Or worse yet, the powers-that-be want us to be deafened by distractions in our lives.  We all want to feel that our lives have some sort of deep inner meeting and that there is a point to our existence on this Earth. This is a normal human thing.

The sad reality is that even the most famous of humans is largely irrelevant in the long scale of time. Human history spans only a few thousand years, and in that time only a few dozen names resonate for any length of time. And even then those names resonate only because they are infamous and not famous.

But compared to the history of our planet, human history is a mere blip on the time scale. The rocks and magma care little for our scrambling activities on the surface of the orb.  For ordinary humans, our significance is even less. None of us will be remembered for more than a few years at best, and few of our accomplishments will be recognized for any significant length of time or scope in the greater scheme of things.

Again, you can view this as depressing or frightening or liberating. Once you realize that your life doesn't have a dramatic meaning, you are free to actually enjoy it on a day-to-day basis. And maybe that is the real meaning of life, to savor every moment rather then to seek some higher meaning through achievement, accomplishments, religion, or politics.

It seems that many people go through life concentrating on the latter, obsessed with things like religion or politics and making them the centerpiece of their lives - providing meaning for their lives. The media would have us think that what the president is doing is the most important thing in our daily existence. They would have us believe that we should put off the enjoyment and experience of our lives in favor of pining for a future that may never exist

I mentioned this in an earlier posting about past, present, and future. It seems that many either pine for a long ago rosy past or wait in eager anticipation for a future that never seems to arrive. In the interim, we seem to miss out on the experiences going on around us.

So maybe it's not a bad thing that I feel a disconnect from the latest trends or popular artists or movies playing in the theater. It seems they come and go with regularity. By the time I hear about a movie I'm interested in seeing, it has left the theaters months ago. And that's okay. Young people want to see the latest releases, have the newest albums, and the latest video game. At my age it seems like, "what's the hurry?"  They'll be plenty of time for all of that and for the most part it isn't much different than what you already experienced in the past.

And that is a very calming thing.

Thursday, February 16, 2017

The Delusional Left

Trump's cabinet nominee did not "fall" because of labor protesting his right-wing views.  He was axed for being too Left-wing.   But the Left spins the story to make themselves look effective when they are in reality, ineffectual.  

Once again, I have to throw the clock radio against the wall this morning.  The only news program on the radio anymore is NPR, unless you want to listen to Jesus radio.   Actually, there were two reasons I had to wreck yet another radio, this story about Andrew Puzder and a recording they played, apparently sung by Barney, chanting, "Books are fun!" which nearly made me throw up.

The real reason Puzder had to withdraw wasn't that labor protests made his candidacy nonviable, but his earlier statements about immigrant amnesty.  This was an unforgivable sin among Republicans, who believe that political heresy should be punished in all instances.
"As CEO, and later as a Trump campaign adviser, Puzder has been outspoken about his views on labor policy, contributing to newspaper opinion pages and on television, discussing issues such as immigration. During the Republican presidential primaries, Puzder advocated creating a path to legal status for unauthorized workers living in the U.S. He endorsed a more moderate "comprehensive immigration reform," similar to what candidates Jeb Bush and Marco Rubio were proposing at the time."
But to hear NPR tell it, it was labor protests and concerns about raising the minimum wage that spiked his nomination.   This is sort of narcissism of the first order.  The sad truth is, labor has little or no influence in politics these days, as the last election illustrated.   It is not that people don't want unions, but that they want jobs more.   Blue collar workers - as well as white collar ones - realize that while it is nice to go our on strike and make more money, having a steady job even at lower pay is probably a better bet.  They realize that when you price yourself out of the labor market by a factor of 2X or 3X, your job is not secure.  They also realize that working conditions today are far from the sweatshops or dangerous mills of the 19th Century.

And that is bookended by another story they reported, but in a muted fashion.  Boeing workers in South Carolina decided not to unionize after a long drawn-out battle and vote.   Why this is so is not reported by NPR, who seems to have a decided lack of interest in the subject.  I mean, after all, the "workers" always want to unionize, right?  They must have been intimidated by company lackeys or something!  Or they are just too dumb to understand that maybe giving over a portion of their paycheck to organizations that are run like the mafia (and in the past, many had connections to the mafia) is a good deal!   What they need are more liberals (who have never spent a day working in a factory) to help them see the light!

Maybe.  Maybe not.  As a former Teamster, I can understand why they don't want to let union thuggery into their lives.  Like I said before, my hippie brother who never worked a day in his life in a factory, had wild ideas about the "workers" and how they should unionize and whatnot.   He was a hypothetical liberal - with lots of great ideas about how other people should run their lives, but few about his own.

I think the Boeing employees in South Carolina - 74% of them in fact - decided they didn't like what they saw going on in Seattle, with more and more labor unrest causing disruption in the workplace, higher costs, and threats to the company's security.  They also saw that as a result, Boeing wasn't investing more in Seattle, but rather in other places, such as South Carolina.   And I think they also realized that they make a good living at Boeing - with good benefits as well - in an era where getting a good job with a big company isn't easy to do.   And I think they realize that their future is tied directly to Boeing's future, which is anything but assured. 

Go on strike, get higher wages, but for how long?   The example of GM weighs heavily on everyone's mind.   Boeing might look like a wildly profitable company, but many of their product lines are in trouble, including the venerated 747.   Airbus is constantly nipping at their heels - and getting huge subsidies from European governments.  Landing overseas contracts means sending production overseas as well - making Boeing a true international company (Airbus has done the same, opening a plant in Mobile, Alabama, where I am sure labor rates are lower and labor rules are more relaxed than in France!).

America's love affair with big labor has been in a steady state of decline for decades.   And it is not hard to figure out why, given the state of the economy from the 1970's onward.   If you ever worked in a union factory, you got pretty tired of having to pick up the slack for the layabouts and complainers and the do-nothings.   That is, unless you were one of those slackers.  And that was the problem with unionism - it promoted the slackers and do-nothings to the top of the heap.  Those were the sort of folks who became shop stewards and union officials.  The net result was, everyone worked down to the level of the laziest worker, and what were once proud companies with decades of storied history, became shells of their former selves, as they could not afford to invest in new machinery, equipment, or technologies - as every last penny and then some, went out the door in the form of inflated union wages.

(And don't get me started on government unions.  The public service unions in Wisconsin made a major miscalculation in their recall vote of the governor, failing to realize that the number of taxpayers in the State outnumbered the number of union members.   We all got tired of five-figure property tax bills, which are the norm in "blue" States like California, New York, and New Jersey.   The problem with unionism, is that somewhere, someone has to foot the bill, and often this "someone" is us.   For some reason, the Democratic party failed to notice what happened in Wisconsin - Hillary never even bothered to campaign there.   Hubris.)

But again, management was also to blame for going along with this.  But maybe they didn't have a choice in an era where you had to negotiate with strikers and couldn't even close the plant if it was losing money.   Today in Germany, the same is still true.  GM is trying to sell its money-losing Opel division to Peugeot, as the high wages and strict union rules (and government regulations) prevent the company from closing a money-losing factory.

And the attitude of the union reps there is reprehensible:
"I have no intention of allowing GM to walk away from our plants and workers - so my message to the workers at Luton, Ellesmere Port and the tens of thousands in the wider supply chain is this, remain strong and stay united.

"The UK and the EU are among GM's biggest markets - if they think that they can walk away from dedicated workers and loyal consumers without a care, they need to think again."
Frankly, this floored me.  The union whose high wages and restrictive work rules are killing the plant is dictating to the company how it should be run, making thinly veiled threats, and arguing that GM has an obligation to run a money-losing enterprise indefinitely, because, well, just because.
They even argue that GM has to stay in the market for its loyal customers.   This is just insanity, and why more German companies, such as BASF, are opening plants in the United States and not in Germany.  It is why BMW is expanding operations overseas (including the US) and less so in its home country.  It is why America now exports cars among other things, which I can watch every day from my front porch as the car carriers leave Brunswick, GA, loaded with American-made Mercedes, BMWs, KIAs, Huyndais, as well as construction equipment.

But again, the Left is delusional.   The German unions believe they have a right to run the company and force a company to lose money.   And this is the sort of twisted thinking that American workers are rejecting - that a job is a "right" and that profits are not important, so long as people have jobs.   Labor in Britain tried this with the coal industry, but Margaret Thatcher shut that nonsense down.  Who the hell wants coal anymore, anyway?

So what's the point of all of this?  Only that the Left is losing credibility - has lost credibility - and they are still pushing an agenda that is far past its sell-by date.  Republicans haven't been successful in getting elected at all levels of government because of their platform and agenda but in spite of it.   The Left or "Progressives" as they like to be called, have hijacked the Democratic Party and thrown out anyone who disagrees with a neo-Communist, Socialist agenda.  If you aren't in favor of "free" college, health care, jobs, houses, or food, than you are no longer welcome as a Democrat.

And so long as the party panders to the far-Left, they will continue to lose elections - and lose the electorate.

And sadly, this is not even allowed to be discussed.   As one journalist discovered, after doing an interview with one-man boy-band Yanni Yopalopalus, people on the Left these days have stopped thinking entirely in favor of chanting slogans.   Everyone is suspect of thought crime these days, and if you don't like someone's political positions, you shout them down, boo them, demonstrate, riot, or just refuse to listen to them.

And this is sad - people on both the Left and Right having no idea what the other side really believes but rather believes in a caricature of their actual beliefs.   Each side points to the most radical of the other as an "example" of that narrative.   Republicans are all fundamentalist Christians with guns, Democrats are all radical transgender Islamic radicals.   Neither perception is true.

But of the two parties or wings, one is clearly being more successful in winning elections and they are doing this by snagging more of the moderate vote, not because of their rightist positions but in spite of them.  The Democrats could take a lesson from this playbook.   It is time to shed the ineffectual far-Left and embrace the center.   Centrists can get elected and they can get things done.   Maybe not everything the Leftists want, but more than is getting done today.

Wednesday, February 15, 2017

Negative Option Revisited

Legitimate companies use negative option techniques to snare customers.  But in the long run, negative option leaves such a bad taste in everyone's mouth that it damages your company's reputation.   Is there another way?  

Negative option is a means of selling people on services - usually content or other subscription-type services - by offering a come-on price (or free)  for the first six months, six weeks, or whatever, and then charging your credit card the "full subscription amount" once the "trial" period elapses.  Or they just keep your credit card on file and keep re-charging you for services or subscriptions, until you say "stop" or even thereafter.

What these marketers hope, of course, is that you are just too tired and distracted to bother canceling the service before the trial period has ended.  Or they count on the fact that most people don't reconcile their credit card accounts on a daily, weekly, or even monthly basis, so they just don't notice they are being charged by AOL ten years after they stopped using the service.

Or they count on people thinking "Oh, $29.99 isn't a lot of money, I'll just pay it" even thought the website in question is one they stopped visiting years ago.  And yes, people do this, even people of modest middle-class means who cannot afford to squander money like that.

So sadly, negative-option seems like it will be here to stay.

What brought up this issue yet again, was a subscription to Cook's Country, which is a magazine and public television show that also publishes America's Test Kitchen.   This is a great magazine and I really liked it.   It methodically attacks different recipes and food items from a scientific trial-and-error point of view, without preconceived notions, and then publishes the results.

They are great folks, and even did a movie about Fanny Farmer and re-created one of her signature menus from back in the day.  If you have Netflix, it is a good watch.   Sadly, their food empire is based on using negative-option, and this sort of is a buzz-kill.   I no longer feel warm and fuzzy about them.  I feel about them the way I would about a cable company and that says a lot.

Mark decided he didn't want the magazine anymore, so we let the subscription lapse.   The first thing we noticed was a credit card charge after the subscription lapsed.  What's up with that?   And a while later, a cookbook arrives in the mail.   Turns out, you get this cookbook as a separate subscription, and when you cancel the magazine subscription, they send you the cookbook, claiming that you didn't cancel that as it was separate.

So more phone calls and waiting on hold and we get the cookbooks cancelled.   A year goes by.   All is well until....

A charge for $34.95 appears on my credit card.   I call the company and they claim we still had an online subscription from January of last year, even though we cancelled the magazine and cookbook before then.   This is very odd, as my credit card was replaced with a new one with a different credit card number back in September.   How did they get the new credit card number?

When I call them, they promise to cancel the subscription and issue a credit.   To be on the safe side, I call Bank of America and ask them to dispute the charge.   The credit is never forthcoming, and Bank of America never hears a word from Cook's Country, so they cancel the charge and issue a credit.

In the meantime, I googled "Cook's Country bills my credit card" and get page after page of complaints.  This one is typical.  The complaints are all about the same.  People thought they cancelled the service only to find new charges.  Cookbooks arrive without being ordered.  It seems no matter what you do, they keep charging your credit card, without your authorization.

Of course, they claim you authorized the charge as a continuing charge for a subscription service.   That's their claim, anyway.   It is a shame, to me, that a legitimate organization resorts to this sort of thing.   But perhaps they farm out the billing to a company that works on commission, and you know how that sort of thing works out - like with Wells Fargo.

Commission sales, when unregulated, can lead to problems.  I recounted how a county paper decided to increase circulation by using a subscription company, who in turn offered commissions to sales people for signing people up.  The sales people went around to every apartment and just wrote down the names of people from their mailboxes, along with the address - cashed their commission checks and moved on.   Meanwhile, hapless "subscribers" find newspapers they didn't want on their doorstep, and ominous "final notices" in their mailboxes for subscriptions they never ordered.

Scale this up 100,000% and you have Wells Fargo, who offered commissions to sales people to sell credit cards and other accounts to customers.   When you incentivize people that way, they just resort to fraud to "make their numbers" and set up phony accounts.

Negative option works the same way.   When Webshots was sold and decided to revert back to a screen-saver company, many folks who paid for their premium service assumed that since the service was gone, they would no longer be charged.   But they found new charges on their credit cards for screen-saver services, and of course were outraged.   How does this equate into a sustainable business model?

Well, it can, for a while.   An article I read about AOL noted that half their income was from folks who still paid the monthly service fee, even though they didn't use AOL anymore.   Some, such as my late Mother-in-Law, thought you "needed" AOL to access the internet, and paid this fee on top of her DSL monthly charges.  Oddly enough, she was not alone.  I've know people that even today pay an AOL fee on top of their monthly internet access charges, even though the ISP provides a default e-mail address and you can set up free e-mail on gmail, hotmail, and yahoo, among others. 

So yes, you get the clueless demographic with this approach.  And I guess America's Test Kitchen, being a PBS show, gets a lot of clueless older people who subscribe to Smithsonian and don't check their credit card statements too closely.  But long-term, they are alienating subscribers, which does not bode well for their business model.

Reforming negative option is impossible, because the people using it know that reform would mean revenues would be cut in half - at the very least.

For example, if you forced the subscriber to "opt in" to renewals, it would force the subscriber to think about whether they are using the service, how much it costs, and whether it is worthwhile.  When all it takes is a click of a mouse to say "no" more people would say "no" and you'd lose business.

If you sent an e-mail or text alerting them to auto-renewal and giving a link to their website to opt-out, the same result occurs.  It is more hassle to go to the website, log in, and opt out, but the result is more people would do just that.

If you relied on people actively remembering to renew, you'd have no subscribers at all!  Sending renewal notices by mail is expensive and doesn't result in a high response rate, as people don't want to hassle with getting out a checkbook and stamps and mailing stuff in - even if that is the safest way of doing it.

The problem, of course, with even that approach is that marketers have screwed that up.   I was getting dozens of "renewal" notices for various magazines which were either not renewal notices at all (but rather offers for a new subscription) or were far in advance of the expiration date - sometimes by years.   You send in a check and find out you have renewed your subscription until the year 2035 by sending in responses to all these "renewal" notices.   Or you end up getting two or three or even four copies of the magazine in question.

They don't make it easy to know how many issues you are subscribed for, how many remain, how much you are paying, and when the actual renewal date is.   And newspapers are no better, using "negative option" subscription services in the same way as well as being opaque (intentionally) about your subscription, when it starts, ends, and renews.

They say print is dead - I wonder why?   It is just cheaper and easier to read free stuff online, even if the content isn't as good.   Paying for content is problematic because they play games with your payments.   Honesty is in short supply in the subscription business, which is why a lot of people are hesitant to subscribe to things.

Angie's list recently switched to a non-subscription model because of the negative publicity surrounding their negative option model.   No one wanted to sign up for a hassle, just to read about plumber recommendations.   Whether they will succeed with this new model remains to be seen.   Some argue they are now making their money from the tradesmen themselves, which creates an interesting conflict-of-interest.

So maybe people are realizing negative option is odious.  When you treat your customers like shit, in the long run, they will flee to the next available alternative.  The railroads and trollies found this out the hard way - people flocked to more expensive auto transportation, as it was less painful.   Cable companies are mystified as to why no one wants their "content" when they can stream on the Internet for far less.   There is a lesson here, for marketers, if they chose to learn it.

When you make doing business with your company a toxic relationship, people will flee eventually.  It may take a year, five years, or a decade, but eventually, you will be left with nothing.

UPDATE:   Cook's Country issues a refund, after Bank of America already canceled the charge.  So I guess I have to call the bank again to cancel the cancel.

Also, a reader alerts me to an article in the New York Times which illustrates why they may be using negative option so aggressively - there is a schism in the organization between one of the founders and others who want him to step aside.

It is very sad to read, as it illustrates how greed takes over once something becomes popular.   The media types want to turn it into some sort of monster empire, like Martha Stewart's failed "Omnimedia".  The founder just wants to do his thing - but a lawsuit may be preventing him from starting a new enterprise.

I guess his only consolation will be the tens of millions of dollars he made from this.  Boo-Hoo.

Trust Issues

Faye Dunaway refuses to talk about her performance in "Mommie Dearest" as she felt it was too "over the top".   Frankly, compared to my childhood, I thought it was subdued and restrained.

You may get the impression, reading this blog, that I have "trust issues" with regard to other people.  And this is true, but it is in part due to my upbringing, which was a classic Skinner-box learned helplessness experiment.  It is also due in part to the realization that the commercial enterprises in our country are not our friends and are basically out to screw you six ways from Sunday, if they feel they can get away with it.  I tend not to trust banks, credit card companies, or anyone trying to sell me anything.

When I saw the movie (and read the book) "Mommie Dearest" I felt like I was reading my autobiography.  It was so close to the truth of my childhood as to not be funny.   In that book, Christina Crawford talks about the "night raids" her Mother would conduct, while drunk, being completely irrational and violent.   Christina was lucky - she only had a Mother who did this and not a Father as well.

My Father's drunken tirades were nothing like my Mother's, at least in terms of frequency.  Since he wasn't home most of the time, we didn't have to deal with his anger control issues very often.  When he was home, we tried to leave or make ourselves scarce, lest he notice us and start something.

We used to call him "Mr. Ho-Ho" as he was always pretending to be jolly and friendly.  However, it was a thin veneer, and quite easily detectable as entirely false.   To be fair, his children were a complete puzzle to him.   None of us was a "chip off the old block" - wanting to join junior Calvary or go out for sports.  My oldest brother was subjected to a lot of pressure in this regard - forced to go out for football and other activities and earn his varsity "letter" in prep school.

Unfortunately, he was a rather thin and awkward and sensitive artistic type, ill-suited for the gridiron.   He bravely stuck it out, though, sitting on the bench most of the time, appeasing his father, lest he get yelled at or beaten.   Later on in life, he would reject my father's values of materialism and "getting ahead" in life, as being false.   And sadly, I think this had more to do with his difficult relationship with his Dad than any real political leanings.

When my other brother came of football age, my Dad forced him to sign up for "Pop" Warner Football, which he detested.   My Dad never "threw the ball around" with us kids or took a real interest in the game or even tried to explain it to us.  He didn't watch football every Sunday while the family gathered around the television.  As a result, we had no interest in the game.   He thought that for some reason, we would spontaneously become enthused of it as it was some sort of American rite of passage.

Anyway, my brother decided that "Pop" Warner football just wasn't his thing, my Dad berated him for hours, calling him a "quitter" and "Mr. Quitter" and saying idiotic things like, "Wherever you go in life, from now on, you'll be known as the guy who quit 'Pop' Warner football!"   He did this for over an hour, mentally castrating my poor brother, who was at that pubescent age where what your Dad thinks of you has a great affect on your brain.

When it was my turn for "Pop" Warner football, I told my Dad, "no thanks, not doing that!" which was a shame, as I was the only one in the family who really had the build for it.   But he had made it so toxic at that point that the idea of even trying it was scary.

My Dad would occasionally go into rages, and these were unpredictable and violent.   Like in Mommie Dearest, he would go through our bedrooms, complaining they were messy and dirty, and then do things like overturn bookcases and furniture and then tell us to "clean up this mess!" - a mess he largely created.   I am not sure if he learned this from a drill sergeant or what.  I am not sure what he wanted to teach us in this manner.  What we learned was that he was an asshole.

When we would start crying (as little kids are prone to do), he would scream at us to stop crying and then say, "Smile dammit!  I want to see you smile!   You should be happy!"   It was pretty sick stuff, in retrospect.

We also called him "Mr. Half-a-stick-of-chewing-gum" because about an hour after his fugue state had dissipated, he would realize what a shitty job of parenting he was doing and then try to apologize to us, offering us a stick of chewing gum as a present.  Unfortunately, since he had already eaten all the chewing gum, there was only one stick left, which he would divide in half and offer each of us a half-stick.   It was so fucking pathetic, I kind of felt sorry for him.

But that in short, is how learned helplessness occurs.  When you put an animal in a Skinner box, and none of their actions creates any kind of rational feedback - positive or negative - they just cower in a corner and whimper.   What we learned from him was avoidance as that was usually the best strategy for his fugue states and rages, which were unpredictable.

As I noted, my Mother was pretty much the same way, only more so.  And when my older siblings were old enough to leave home (or at least have a driver's license) and my Father had his mistress (and thus, blessedly, was rarely home) my Mother would go into her fugue states which were pretty much the same as my Father's, only without the half-stick of chewing gum.  Unfortunately, I was not able to escape these, as I noted before, but was left alone with a severely mentally ill woman.

Again, the antics portrayed in the film Mommie Dearest are not an example of "over the top" over-acting, but a realistic portrayal of a rage-aholic Mother, as I can attest to, from personal experience.  Although my Mom had no fetish about wire coat hangers.

It wouldn't have been so bad, had the four children stuck together through this and at least offered support to each other.   But maybe in a situation like this, it is "every man for himself" and people learn to look out for themselves and to hell with the other guy.  My sister had largely left home by the time I was 8 years old, so she was not so much a presence in my life.  She spent the rest of her life trying to "understand" her relationship with Mother, and of course, calling my Father periodically for infusions of cash.   Sadly, in her short life, she was never able to break free of the parental leash.  Many children don't and they don't because parents enjoy this sick form of control.  Well, some parents do, anyway.

When my Father re-married, he was ecstatic to have three new children to lord over and who were needy.  He was tired of the old ones anyway, who were no fun anymore, being resistant, dead, or mentally ill.

My older brother I remember only because he tended to mock me and belittle me, I guess in a way of making himself feel more important.   Like I said, my Father tended to belittle him, so maybe this was his way of coping - passing along the fun.   He left home early and never looked back and resisted their attempts to steer his career.

My other brother, well, he learned to take care of himself and to hell with everyone else.   Drugs, of course, were part of the problem, as was mental illness.   Mentally ill people tend to be selfish people - taking what they want from society and not thinking about consequences or outcomes.   He would do stupid things and get into legal trouble and act mystified as to why everyone was upset.  Once he adopted the role of "troubled child" it provided a set of normative cues and expectations to live up to.

At first, his antics seemed to only harm himself.   But as a kid, I had a paper route, and when I delivered the evening paper, I had to collect money and balance books and then pay the paper distributor.  It was arduous work, and when people didn't pay, I often ended up at the end of the week barely breaking even.   One day, I went to settle up with the distributor and found I was nearly $20 short.   The distributor yelled at me and called me an idiot and I could not figure out why I was short on money.   I later on found out that my brother had stolen money from my money pouch to buy drugs.   He felt that the money was his for the taking and whatever consequences I had to face were no concern of his.

While this was hurtful at the time, in retrospect, I realize this only made me stronger and made him weaker.   I know that sounds weird (particularly when you calculate the compound interest on $20 over 40 years) but his self-destructive actions ended up destroying him.   On the other hand, they merely made me resolute not to go down the same path.

I told my parents, of course, thinking that justice would be served.  They yelled at him, but they never asked him or forced him to give me my $20 back and to this day, I was never made whole.   I guess my way of coping and "looking out for myself" was to get a job and try to be independent as possible.   First I had the paper route and then the dishwashing job at the Olde Tyme Gas Light Restaurant which lasted until the cook shot himself in the kitchen.

The odd thing was, my parents were not happy with my initiative.   They felt that working was somehow beneath the children of someone in their station in life - even though they were one or two generations removed from poverty themselves.   I was told in no uncertain terms that they did not like the fact I was working and would not help me in any way whatsoever and that I was "on my own".   It was very odd.

When I went to General Motors Institute, my Mother would run that down as being "some sort of trade school" or whatever.   She felt that a useless liberal arts degree was the only education worth having as it had taken her so far in life (the sarcasm light is ON).  After seeing my older siblings flounder with liberal arts degrees (which even back then, were considered worthless in the job market), I kept to my own inclinations and ideas.   And besides, my parents, with their odd behavior, had largely squandered what little credibility they had in the advice department - career or otherwise.

In fact, the only time they seemed to be happy was when I flunked out.   As I noted in The Parent Trap there are a lot of parents who love to lord over the ruined lives of their children, and my parents were prime examples.   In the cocktail circuit, whining and bitching about your failed children was seen as some sort of perverse status.  As I noted before, my Dad once called me on the phone, ecstatic that his step-daughter qualified for full disability - he crowed as if she had graduated from Harvard.  I guess that is what qualifies as "success" in my family - going on the dole.  Real success is criticized as being flawed or "selling out" - you see how sick this is and how damaging it can be if you adopt those normative cues.

So what changed in my life?   I finally woke up one day and realized that clinging to "family" was going to kill me, quite literally.   It was not a healthy or loving family, but rather a twisted relationship where everyone was looking out for themselves and screw everyone else.  Where failure was success and success was failure.   Where being needy and weak meant you were loved.  The best thing to do was walk away and live my own life.   And the rest, as they say, is history.

But this is not to say I don't still have trust issues.  I think part of the experience of random rewards and punishments is that it programs your brain to be wary and skeptical.   Again, perhaps this is a good thing, to some extent, as it prepares you for the disappointments in life - when you realize that even friends and family and husbands and wives can have ulterior motives or perhaps no motives at all, but just random madness.

When something sounds too good to be true, I tend to be very skeptical.  I've been burned before, from the get-go.   And when someone seems irrational or crazy, I just walk away, as I learned the hard way, many times, that dealing with crazy people is an exercise in futility and a sure way to end up victimized in short order.

And when some company offers me a "great deal" I realize that they are not doing this out of the goodness of their hearts, but to make money, sometimes in odious ways.   And I walk away from that shit, too.

Tuesday, February 14, 2017

Theoretical Conservatives, Hypothetical Liberals

There are a lot of people who run the country who have never worked a day in their lives at a real job.
One interesting thing about politicians, is that today, many of them are professional politicians, and this is largely a mistake of our own creation.   In order to be elected to office these days, you have to live the life of a choir boy - preferably not molested by a priest, and preferably not Catholic (yes, even today).

You have to be a real boy-scout and have no "dirt" in your past that might even suggest some sort of impropriety.   So we really limit who can run for office to people whose lives are totally unreal or surreal, or just fake.  And when they run for office, we force them to adopt these artificial personas that are more caricature than reality.

And as a result, we have people who never did anything in their lives other than to run for office.   Bernie Sanders is an example of this, and one reason why I never understood the fascination with him.  He was against a lot of things - mostly people who actually do things - as being capitalists and evil, not realizing that a lot of people struggle to run small businesses and feel put-upon by the Bernie Sanders' of the world who don't realize what a struggle it can be to make payroll.

The same is true on the Right - there are a lot of politicians who have elaborate theories about how the economy should be run, but no real experience in running a business.  Sure, George Bush played at running an oil business - in the carefully minded playpen set up by his Dad.   But he really never ran the risk of real failure, even after he failed at it.

Other politicians "work" at think-tanks or law firms, in-between elections, but usually the "work" comprises trading on their names and goodwill.   Very few are people who start and run businesses, as working for the government would be a pay cut to them.

And few are working people - folks who punched a clock in the factory - and know what is like to work a job from 9 to 5 for 30 years on the hope they will get a pension and be able to retire after raising a family and putting the kids through school.

And unfortunately, we as citizens get whip-sawed between these two extremes - these professional politicians who have theories on how our lives should be lived but of course, no real experience.   They want to create a health care plan for us little people, secure in the knowledge that they will never have to use it themselves.  They have theories about our lives, but no real understanding of them.

They want to change our tax code, but likely never have had to sit down and fill out a form 1040 in their lives.  Their accountants handle all of that, of course.   And of course, they probably pay less in taxes - as a percentage of income - than we do.   At least we know Mitt Romney did.

One of the "selling points" of the Trump administration was that Trump was a "businessman" and would know how to run the country like a business.   This is sort of hard to parse, as in terms of business, his record is kind of spotty.  He built luxury high-rises using tax incentives designed for public housing.  He paid too much for Atlantic City casinos, over-mortgaged them, and then walked away when it all went to hell - leaving Atlantic City as a nightmare ghetto.

In the end, he basically had nothing left but his name, which he licensed to everything from condo projects to neckties and suits, to steaks, to a reality TeeVee show, which of course, was not real.   He is more celebrity that businessman.   And the Republicans castigate Hollywood types for even having political opinions but then elect one as President (Republicans seem strangely silent about Hollywood types having political opinions when it is someone like Charlton Heston having them, however.  Then it is "free speech" - right?).

The Left, of course, doesn't like the idea of business people in government.   Rex Tillerson was confirmed as Secretary of State, and Democrats, other than Virginia's John Warner denounced this pick.  The problem here is we have a businessman in government, but not some guy running a corner store or a haberdashery like Harry Truman, but one of the richest people in the world.

In fact, some folks have had to decline to work in the Trump administration as untangling themselves from their business interests would be close to impossible.

Of course, we have had business people in the White House before - most notably Robert McNamara - the guy who brought you the Edsel and the Vietnam war.   Again, a guy with a lot of business theories (one of the "whiz kids" at Ford who had no real experience in the car business, but a business degree) but no real experience about how average people live.

Sadly, it seems this trend will continue indefinitely.  Ordinary people simply cannot run for office, because they likely tweeted something wrong or posted something on their Facebook page that would come back to haunt them.  The media holds our political leaders to an almost puritan standard, acting shocked when they do human things like get drunk or have sex (two pastimes more popular than baseball and apple pie in America).

So we will continue to have these theorists, who don't live in reality, but instead live artificial lives, and study us regular folks as if we were specimens in a zoo - trying to discern our eating habits and whatnot and control the environment in our cages.   One side wants it too hot, the other side, too cold.   In the meantime, ordinary people suffer.

Maybe we need less theory and more reality.

The Jill Stein Trump Putin Connection

The media has been publishing a cropped version of this photo, showing former national security advisor Flynn next to Putin.  But who else's smug face is in this photo?  Yup, Jill Stein!

The Trump administration is quickly morphing from a bold new populist and conservative movement into a rolling dumpster fire chasing Trump down the street.  What is interesting about the situation is that Flynn was accused of chumming around with the Russians, in particular, old Vladimir Putin, who is shown in this photo having dinner with Flynn.

What is fascinating to me is that the media uses a cropped version of the photo above, which eliminates one member of this love-fest party - Jill Stein.   It is fascinating to me that she was present at this meeting.   During the campaign, it was noted that she was traveling to Russia, and many folks at the time said, "What the fuck?" but sort of forgot about it because she was not deemed to be relevant and it was assumed that Hillary would win.  So it kind of got swept under the rug.

What was Stein doing in Russia while running for President of the United States?   Or more precisely what was Stein doing in Russia while acting as a spoiler for Hillary?   Why was she seated at the same table as Trump people?   It is all very odd, and the kind of stuff that is fodder for conspiracy theories.

What is disappointing to me is twofold.  First, that she would travel to Russian and remain silent about human rights abuses in Russia as well as abuse of the political process.  The Russian foreign minister this morning tweeted that the dismissal of Flynn had overtones of "thought crimes" which is ironic as the Russians just upheld the conviction of a Putin opponent for criticizing Putin.   The country that invented thought crime and still practices it today - aggressively - calls us out on it.

The second thing that disappoints me is that anyone in their right mind could support Jill Stein, particularly after she was paling around with Putin.   If you are voting for a candidate on the Left, maybe you shouldn't be voting for someone who supports (and argues for better relations with) a brutal dictator.

Leftists are just idiots, plain and simple.

And how many people "protesting" and marching today either voted for Stein or didn't vote at all?

The real problem for the Democratic Party is the rise of these "Progressives" who want to turn America into a socialist paradise.   The problem is, very few people in America want a socialist paradise.  Socialism loses elections, time and time again.   Even the folks who would arguably benefit from such cradle-to-grave social programs tend to vote against it.   And maybe they realize that while it all sounds good on paper, when push comes to shove, turning your life over to government bureaucrats tends not to be the best solution to anything.

As for Flynn, from what I am hearing, he and his son are going to "self-investigate" Comet Ping-Pong Pizza and get to the bottom of this "Pizzagate" scandal.

Good Luck, Mr. Flynn!

P.S. - the big problem with Flynn was that before he lost his mind and started tweeting about Pizzagate, he was a die-hard Democrat.

Unfortunately, his shitty management skills got him fired by President Obama, and like a petulant child, he decided to go after Obama and the Democrats by supporting and spreading wild conspiracy theories.   I think the Republicans never trusted him, as he was not a right-wing ideologue, but rather a "useful idiot" whose rage they could employ against Hillary. 

Trump's mistake was to hire him (and Bannon) as part of his administration, instead of dumping that dead weight as he should have.  You use people like that in a campaign, and then get rid of them once you are in office.  Every President does it.   I am certain that Pence and Kushner will push him to dump Bannon before long as well, as Bannon's antisemitism isn't going to sit well with anyone for long.

The dumpster fire rolls on!

Monday, February 13, 2017

Used Parts Versus New

Are used auto parts a bargain?  Let's look at some numbers and find out.

As I noted in an earlier posting, used auto parts, like used tires, are one of those "bargains" that the poor seek out and end up even poorer for doing so.  As I noted in my tires posting, often used tires are sold as "bargains" for being half the price of new ones.  But since they have less than half the usable tread left and since the mounting costs are the same for less than half the mileage (effectively doubling your mounting costs or more) they are no real bargain, any more than a half-roll of toilet paper at half-price is a "bargain" compared to a new one - the cost per sheet is actually higher.

The same is often true for other car parts.  But unlike my tire posting, I did not run numbers on car parts in my previous posting on the subject. Suppose we use as an example, an alternator for a 2005 Chevy Silverado, which is a pretty popular truck.   What is the spread between new and used parts costs?

One junkyard site produces the following hits.

Description Part
Stock# US
Dealer Info
Chevy Truck Silverado 1500
w/o hybrid; 105 amp (opt K68),5.3LC6E0418$50Martin's Auto Salvage, Inc. USA-NC(Raleigh) Request_Quote 1-919-231-6416/1-888-325-3301 Request_Insurance_Quote
Chevy Truck Avalanche 1500
105 amp (opt K68),5.3LA6F0302$50Martin's Auto Salvage, Inc. USA-NC(Raleigh) Request_Quote 1-919-231-6416/1-888-325-3301 Request_Insurance_Quote

This site has both new and used parts:

Description Part
Stock# US
Dealer Info

03-04 CV CK PU 4.3L V6 4.8L 5.3L V8 (6S) ALT -Aftermarket List PriceAFTe4499 2-08291$292.56Ace Auto Parts USA-MN(Saint-Paul) Request_Quote 800-637-6752 / 651-224-9479 Request_Insurance_Quote

03-04 CV CK PU 4.3L V6 4.8L 5.3L V8 (6S) ALTAFTe9373 2-08291$111.15Ace Auto Parts USA-MN(Saint-Paul) Request_Quote 800-637-6752 / 651-224-9479 Request_Insurance_Quote
Chevy Truck Silverado 1500
4.8,A,10-01MATCHe1183 GB0206$45Ace Auto Parts USA-MN(Saint-Paul) Request_Quote 800-637-6752 / 651-224-9479 Request_Insurance_Quote
Chevy Truck Silverado 1500
5.3,A,2-04e1183 GI1342$45Ace Auto Parts USA-MN(Saint-Paul) Request_Quote 800-637-6752 / 651-224-9479 Request_Insurance_Quote
Chevy Truck Silverado 1500
5.3,Ae1183 HB0169$45Ace Auto Parts USA-MN(Saint-Paul) Request_Quote 800-637-6752 / 651-224-9479 Request_Insurance_Quote

Note the staggering cost of a new alternator - almost $300!   The used one for $45 sounds like a bargain, right?

But what about new parts?  Autozone wants $139.99 for a basic alternator for a 2005 Chevy truck.  Sounds like a lot more, until you realize the new alternator (or rebuilt) has a warranty and should last the remaining life of the truck.  The used alternator?  Anyone's guess, as it is from a truck as old as yours is, and thus may not last very long at all. 

If you don't mind waiting a few days for shipping, for $88 you can buy a rebuilt alternator on Amazon, with free shipping - $40 more than one from a junked car.  Plus, you don't have to drive to the junkyard and spend an hour removing a greasy old alternator.

The big deal is, the new or rebuilt alternator will likely outlast your use of the truck.  The used one might be something you replace next week, next month, or next year.   Parts wear out, and if the alternator on your truck is worn out, chances are, the one on a junked truck is pretty much worn out, too.

It isn't worth half of the cost of a new one, or even one-quarter.   But like with used tires, the retailers of these used parts use lower prices as a come-on to get you to buy.   But you are not buying half as much alternator for the money, you are buying maybe 1/4 or even 1/10th.   It just isn't worth the hassle to save $40.

But this illustrates how shitty deals are sold to the poor.  It is like the lady who bought recap tires thinking she was saving money because the upfront cost was less.  What she didn't realize was that the overall cost would be more, over time.

The poor have no access to capital, either through savings or lending, so they bite on poor deals like this.   They end up spending more than rich people do or certainly more than middle-class people.  The middle-class person has the cash or credit card to buy new or rebuilt parts and not have to dick around pulling nearly-worn-out parts from old cars.   He comes out ahead of the poor person, who not only gets shitty deals in car parts, but in banking, lending, renting, home ownership, and so on.

So, this begs the question:  Which came first, the chicken or the egg?  Are poor people poor because they bite on shitty deals, or does being poor force them to accept shitty deals?   Given the narrow spread between "poverty" and "middle class" in this country, it is an interesting question.

I can only say from personal experience that you can be "poor" on $30,000 a year or middle-class on $30,000 a year, depending on how you spend your money.

NOTE:  This is not to say that used car parts or recaps or used tires are NEVER a good deal.  If you run a trucking company, chances are you put recaps on your trailers.  But that doesn't make them a good deal for passenger cars, and in fact, they are darn hard to find these days for passenger cars, due to liability concerns.  Used tires CAN be a good deal if you find a set of brand-new "take-offs" with rims that some idiot removed from his car so he could have bling rims.  His loss, your gain.  Similarly, used BODY parts can be a good deal, although new stampings from China are certainly cost-competitive.  And used parts for rare and antique cars, suitably refurbished, are often the only source for those vehicles.  But the local junkyard doesn't usually have that sort of thing, but rather later model junked and wrecked cars that are being parted out before being crushed.

But those are exceptions to the rule, and I mention them only because some yahoo, like clockwork, will respond with "Well, used car parts can be a good deal in certain circumstances where......"

Don't be that yahoo.