Sunday, October 16, 2016

Character versus Policies - Emotional Thinking versus Logical Thinking

When a politician doesn't want you to examine his policies too closely, he attacks his opponent's "character".

In the last few elections, one "issue" seems to have come to the forefront time and time again, and it really isn't an issue per se.   "Character" seems to be driving the political conversation and debates and both sides seem to enjoy wading in the mud to assassinate the other fellow's character.

And the media plays along, of course, because they love a good cock-fight and it is good for ratings, as CNN recently admitted.   And of course, we the consumers of media eat this crap up, so ultimately we are to blame for favoring flash over substance, appearances over reality, character over policy, emotional thinking over logic.

Does character matter?  To some extent, yes.   You don't want a convicted embezzler running for town clerk.   You don't want a convicted child molester on the school board.   And maybe someone who pledges allegiance to ISIS or some foreign power shouldn't be a US Congressman or President.

On the other hand, should elected officials be selected only from a pool of choir boys and nuns?   Does it make sense that we have some sort of character litmus test for public office that is so strict that none of us could ever pass it?

And that is the problem right there.   The Clintons are arguably the most investigated political couple in the history of the country.   Literally (and I mean literally) dozens of Benghazi investigations have turned up nothing - but a swell Hollywood movie begs to differ.  The decade-long Ken Starr investigation of everything the Clinton's ever did came up with nothing, other than Bill got a blowjob in the White House and then (like most honorable people) lied about it, because people with character don't brag about their sex lives in public - or in private for that matter.

And the sad thing is, there was a little meat on that bone.   I mean the perjury thing was kind of thin - expecting someone to admit an adulterous affair is kind of far-fetched.  Moreover what relevance does that have to the workings of government?   But he did apparently arrange a government job for Lewinsky after the fact, and that could have been (and should have been) the real "crime" if there was one, albeit minor in the scheme of things.

Sadly, Republicans decided to drop that line of inquiry and instead concentrate on the fact that the President had sex with someone not his wife as if that was some sort of major crime of the Century or something that never happens to the citizenry of the USA.

And this did this because it tested well.  As I recalled before, two friends of mine (who are now Hillary supporters) wanted to see Bill Clinton impeached.  They were conservative Democrats and supported Bill Clinton in the past, so their turnabout seemed odd to me.  They both explained that they had "ex'es" who had cheated on them, and they felt abused by their former spouses.  The Monica Lewinsky affair hit them right in the gut, which is exactly where the GOP hoped it would.   Go right past the logical brain and get the old emotional lizard brain to bite on some tasty tidbit.

And that is the main idea of the "character" argument.   Forget that I am selling trickle-down snake-oil or tax cuts for people who make three times as much as you do.   Forget that I am going to cut back on social programs that you benefit from - such as Social Security and Medicare - and think more about whether the other fellow slept around.  If I can distract you on the one hand, I can get away with murder with the other.   Every magician knows this.

But of course, those who live by the sword, die by it.  And in this election cycle we are seeing how Trump has been hoisted by his own petard.   Trump has been very sketchy on policies, other than to say things will be "brilliant" and "beautiful" and "great" and "huge" and the "best".   Instead, his entire platform consists on attacking the character of others - including people he beat in the primaries months ago.  He gives people derogatory nicknames and then repeats lies and half-truths about their character  as if that was enough to elect him President.

The problem with this approach is twofold.   First of all, when you don't stand for anything yourself, people get antsy - at least people who think.   The dumber set doesn't notice, as they project their own views onto your blank policy slate.   People attending Trump rallies think he is for their agenda, even if he hasn't said one word indicating so.   He is the Rorschach candidate.  He is whatever you think he looks like - white supremacist, anti-abortion crusader, pro-union trade warrior, fundamentalist Christian - even if he isn't really any of these things.

But the second and more important problem with this approach is that it leaves you vulnerable to the same kind of attack.   Hillary hasn't been asleep since the days of the Starr investigation.  She saw what they did to her Husband (and to her).  She saw how Swift-boating worked on Kerry and how Al Gore let George W. define him.   Once you let these character slurs go, the other side wins.

And often the only way to win the "character" battle is to attack your opponent, mercilessly.   Bush took what was potentially a liability - his lackluster war record - and turned it against his opponent who was a decorated veteran.  By election day, the tables were turned - Bush was the real hero, and Kerry was a draft-dodging medal-thrower.

"Bounces off me and sticks to you" is also a classic Trump move - and it worked, for a while at least.

So Trump tries to smear Hillary with Bill's alleged affairs and an entirely made-up story about how Hillary "laughed at a rape victim" (which is not true at all).   Rather than concentrate on real policy issues or real issues of character, he used these tangential claims because they involved sex and Americans are obsessed with sex.   Moreover, while Americans are very sexually liberated and our media (movies, television) depicts everyone actually having sex (a lot) - on our public stage we are still puritans, it seems, and we act shocked that anyone is actually doing it, even though we do it ourselves.

He opened the door for this sort of sleaze and Hillary drove a Mack Truck through it.   Well, we don't know if the Clinton campaign is behind the sleaze tapes and the numerous accusers (nine and counting) but they certainly aren't upset about this turn of events.

And it turns out that this - like the infidelity thing - is something that goes right to the gut and bypasses the brain.   A lot of women really don't like it when you grab their privates, it turns out.   Funny, I know, but they are that way.  Something to keep in mind, guys.  And I think these sort of revelations will help Clinton in terms of voter turnout and also in the number of "secret" Clinton voters in many swing States.   A lot of Fox-News-watching husbands will assume their dutiful wives will also be voting for Trump, but when the curtain closes on the voting booth, many a white, middle-class, middle-aged Republican woman may pull that lever (or push that button) for "one of our own."   Maybe it is time a woman ran things - after all, their pre-dementia husbands can't be trusted to even take out the trash, right?

But the sad thing about this situation is whether you root for one candidate or another, we don't really get to hear concrete answers (and criticisms) as to policy positions.  Trump is very vague on what he would do as President, other than build a wall, deport Muslims, and put Hillary in jail.  Hillary has detailed policy positions on her website (snooze!) but we never hear real concrete criticisms of them from Trump.

And perhaps this is by design.   If we actually discussed the candidate's positions on the issues, we might actually see through the smoke and fog more clearly.   Sadly, it seems many today still vote based on emotional thinking, and if you don't believe this, look at any Trump or Sanders rally footage.   People are voting for someone they think is a rock star, not a bundle of policy points.

I am not on Facebook, but Facebook is on me.

Facebook has created a web page for my now-defunct business, without my permission or authorization.  What the heck is this all about?  Click to enlarge.

About a year ago, some idiot put up a Facebook page about Fibromyalgia and started staying really hateful things about people who claim to have it.  He taunted them and tweaked them and tried to troll them.   He then linked to my entry on the topic, leaving the impression that I was somehow affiliated with his hateful actions or endorsed his bullying.

If you read my article, it only asks the question as to whether Fibromyalgia is a real disease (and indeed the guy who came up with the name for it says he no longer believes it is).  The guy on Facebook, on the other hand, was taunting people and calling them "fakers" just to get a response.  And sadly, Facebook allows (or allowed) people to anonymously set up "groups" like that with no accountability.

Well, it didn't take long for the pitchforks and torches to come out and people started sending me threatening e-mails and whatnot.  I tried to make clear that I am NOT on Facebook, and not only that, I think all "social media" is for idiots and morons.

I will not taunt or insult you for thinking you have Fibromyalgia.  I will however call you a fucking moron for even having a Facebook page or going on Twitter, Snapchat, or whatever.   Social Media has been one of the most evil and corrosive things to ever come out of the Internet, as it has turned into a haven for lies, mis-truths, misdirection, and addictive-compulsive behavior.  And let's not forget ISIS recruiting.  It has not liberated us as the Internet has promised to to, but enslaved us to checking our "smart phones" every ten seconds to see "updates" to our "feeds" so we can swallow marketing messages and lies (I am being redundant).

By the way, "feed" is something you feed cattle.

A lot of people think otherwise.  What is the harm in Facebook?  Putting up pictures of your kitten or the meal you just ate?   The problem is, it becomes a compulsion.   It also becomes a race to see how you can make your life look better than other peoples'.   The reality of course, is that like television, Facebook just causes you to get depressed as your "real life" cannot even come close to being as good as your online life appears.  So you try to make your Facebook life even more fabulous and the cycle continues - a downward spiral.

I got a weird solicitation phone call the other day from a 757 area code number, which turns out to be a source of a lot of telemarketers, including those IRS scammers.   It was to Mark's phone, though, and they asked for me by name.  So I searched online with my name and his number and I found that there is a Facebook page for "Robert Platt Bell & Associates" in "Alexandria Virginia" - a subchapter-S corporation I abolished over a decade ago.

I had never created such a page.  Again, I am not on Facebook.  What the fuck was going on?

It appears that Facebook will create pages based on what people are searching for and thus they created a Facebook page for me, without my knowledge or consent.   This is utterly fucked up.

A small disclaimer appears at the bottom:

"This Page is automatically generated based on what Facebook users are interested in, and not affiliated with or endorsed by anyone associated with the topic."
I mean, if you want to destroy your life through Facebook, knock yourself out.  But to drag other people into it?  That's just sick.

Not only that, people can create "pages" this way and then post all sorts of derogatory content on them without the person involved even being aware of it.   I only became aware of this page by accident.

If I was on Facebook, I could contact them to protest this page.  A lot good it would do.  If an individual tries to hijack your identity, they have a form to fill out, where you put in the offenders "ID" and a copy of your driver's license and they will remove the page.

But since this page was created by Facebook itself apparently I have no recourse.   Very odd.

Just once again, for those slow folks out there (who are on Social Media, and thus slow), I AM NOT ON FACEBOOK OR ANY OTHER SOCIAL MEDIA.

Any site that claims otherwise is lying.   And links to my blog are not endorsed by me, and since I don't go on Facebook, I have no idea who is linking to my blog.

Thank you.  Facebook sucks.  Get off it.  Social media is for dimwitted fools and narcissists.

Food Hoarding

Americans store too much food in their refrigerators.

We had just returned home when the hurricane struck.  So we had little food in the refrigerator to worry about.  We put that in the camper and left town.  No problems.

Going away for a couple of months every year, we empty the refrigerator and turn it off while we are gone.  Not only does this save electricity, it is probably better for the refrigerator.  Even "frost-free" models can accumulate ice after a while.  And it is always a good idea to clean and sanitize your refrigerator at least annually (if not twice a year) with a Chlorox wipe or a bleach/soap solution and paper towels.

Our European friends think we are quite insane about storing food.  American refrigerators are huge compared to those overseas, or even in adjacent countries.   A friend of ours who moved overseas actually had an American refrigerator shipped over at great expense.  "Their refrigerators are so small!" she complained.  I suggested that maybe they should live there a while and understand why they use smaller appliances.   The country has a sketchy electrical system, and most house wiring is pretty lame.   Electrical rates are also very high.   They also have a lot of good local fresh food at the local market every day, and local restaurants are so cheap as to be competitive with home-cooking.  There are reasons they have smaller refrigerators.   And they are pretty good reasons.
In America, we buy food in bulk and load up our refrigerators with it.  In other countries, shopping is done more often (sometimes daily) and very little food is kept in cold storage for any period of time.  As a result, we tend to be food-hoarders in this country, and it is somewhat disturbing and perhaps unhealthy.   At the very least, unappetizing.

Some folks are aware of what they are doing.  Others, less so.  One friend of ours admits she tends to store "fiddly bits" of food in the refrigerator - bits of cheese or vegetables that are little more than a bite or two.   These she wraps in cling-film and puts in the refrigerator until they turn into science projects.

Others are less self-aware.   We cleaned out a deceased relative's refrigerator recently and it was a mess.  She kept buying food and just shoving it in, pushing older food into the back where it was crushed.  It was like an archeological dig - layers of food from different eras.  In the back, eggs had been crushed against the wall and had dripped down and fossilized.   Pretty gross.

Still others just keep food around for months and even years.   When we go away, we unplug our refrigerator(s) and empty out all the contents and sanitize the cabinet.   We know others who leave for months and leave opened bottles of ketchup in the fridge for when they return.   The problem with this model is not only is the food stale, but a prolonged power outage could spoil food and make it dangerous to eat - and you may not be aware that such an outage has occurred.

Some modern fridges will post messages like "high temperature event, 36 hours" or have a power outage light.   But even if the the power doesn't go out, refrigeration is not some panacea that prevents food spoilage indefinitely.    And it seems to be an American thing to want to keep food for weeks or even months in the refrigerator.

Compounding this problem is supplemental refrigerators and/or freezers.   Many Americans have an old fridge in the garage for "beverages" with perhaps the freezer used to hold long-term storage of frozen meats or foods.   Others have larger freezers and buy food in bulk for storage.   We seem to be averse to the idea of shopping regularly or perhaps we just have food shortage anxieties.

The problem is, of course, that the only real emergencies that would require large quantities of stored food are the same emergencies where the power goes out.   So all that hoarded food goes bad when a natural disaster occurs.   You'd be better off with a small supply of canned goods, or just leaving the area.

Still others try to solve this problem by installing whole-house generators so their precious hoarded food stays frozen when the power goes out.  This raises costs by a factor of ten, of course.

The savings in "buying in bulk" are of course offset by the cost of a freezer and the cost of electricity to run it.   So I am not sure that buying 15 pounds of pork chops on sale is a good thing, if you end up paying for a years' worth of electricity to preserve them.

During the recent hurricane, we lost power for several days.   Many here on our island tried to "save" food that had come to room temperature.   No doubt there will be many visits to the doctor as a result of this.   It just isn't worth saving old food if the end result is you get sick or die.

Yes, it seems "a shame" to throw away "good food" but it isn't good and really isn't food once it is contaminated with listeria or salmonella.   But it begs the question, why do you have so much food in your refrigerator in the first place?   Maybe buying smaller quantities of food and hoarding less is a better idea than stuffing a refrigerator and freezer with a month's worth of meals.

And one way to avoid this trap is to simply plan, at least once or twice a year, a time when you empty out the refrigerator of everything and either consume the food or throw it away, and then unplug the refrigerator and clean it and let it sit empty for a while.   A vacation trip or other absence can be a good opportunity to do this - work through your food inventory in the weeks leading up to the trip and then clean out the fridge and unplug it while you are gone.   When you get back, you come back to a shiny clean and sanitized refrigerator, with no science experiments inside.

Just a thought.

UPDATE:   If your refrigerator doesn't have a "high temp" alarm, you can try this simple trick to see whether the power has gone out.   However, it is a lot simpler just not to have so much fucking food in the refrigerator and to empty it out when you leave for vacation or a storm.

Saturday, October 15, 2016

Can ObamaCare be fixed?

Obamacare has some structural issues that may not be easily fixed.

After a year on Obamacare, it is interesting to see how it plays out.   We've spent nearly $14,000 on premiums, which is a lot of money for someone who made hardly three times that amount the year before.   We have yet to file our tax returns and see how much we "get back" in terms of a tax credit, so we don't understand the real costs involved.   It may be that our actual cost, after the tax credit, is less than what we were paying before provided we don't go above the artificial cutoff of around $63,000.

Fix #1 for Obamacare - cutoff the cutoff.   As I noted before, the Obamacare subsidy tapers off with income until you hit about $63,000 and then it dies completely, leaving people in a situation where they end up paying thousands more in taxes than someone making a dollar less.   It makes no sense until you realize that no one thought premiums would go this high.   Rather than a "cliff" cutoff, the subsidy should taper off gradually so the middle-class doesn't get socked for making a dollar more than 63 grand.

Fix #2 for Obamacare - connect the disconnect.   The other problem with a tax credit is that most people in the USA have no idea what a tax credit is or how it works, as I have noted time and time again.   Taxes are a mystery to most people.   So when you get a huge health insurance hike and then are told "you'll get a tax credit" most people don't see the connection, but instead only the huge bill they cannot pay.   Rather than force people to apply for tax credits, the premiums should be based on your last year's Adjusted Gross Income and the subsidy then obtained directly from the government to the insurance company.  This way, citizens can see directly the actual cost (to them) of their plan.

(NOTE:  Some have pointed out that at the present time you can have your premiums reduced by the subsidy directly by estimating your income for next year and then, at the end of the year, correlating this with your tax returns.  The problem with this approach is that if you underestimate your income, you may end up with a HUGE tax bill, particularly if you go over the $63K subsidy limit.   For self-employed people - who are covered under Obamacare - estimating your next years' income is difficult at best.  Why not use last years' actual income instead?   It is a known quantity and there is no need to make corrections at the end of the year or have unexpected "gotchas" at tax time).

Of course, both of these "solutions" fail to address the high costs and the lost revenue to Uncle Sam.

One other problem with Obamacare is that people are making what in some instances is a rational choice to just pay the fine rather than get coverage.  If coverage costs $14,000 a year and you are healthy, and you can basically sign up for Obamacare almost anytime once you get sick, it make "sense" to just go without coverage and then sign up when you do become seriously ill.   Since "pre-existing conditions" are covered, your new illness will be covered by Obamacare.

So, for example, if you are like me and go to a doctor twice a year for a checkup and that's about it, it might make "sense" to drop Obamacare coverage and pay the tax fine.  If you become ill later on, well, you just sign up for Obamacare and you are covered.   Even though the sign-up "window" is only once a year, some "life changing events" such as moving to a different county, might allow you to sign up even outside this window.   A lot of people are making this rational choice.

I am not suggesting it, of course.   If you do have to wait until December to sign up, and you get sick in January, you can run up hundreds of thousands of dollars in bills in the interim.

Another option is to get the cheapest plan possible - a stripped down HMO plan from Humana for $800 a month (still a lot of money) and then if you get seriously ill, simply upgrade to a platinum plan at the annual window.   Obamacare is, as some wags have put is, akin to selling life insurance to dead people - or car insurance to folks after they got into an accident (and then paying out for that accident).

Fix #3 for Obamacare - make coverage mandatory.   Get rid of tax "fines" and just sign everyone up, period.   This of course, may be very hard to do, as we have something called a "Constitution" - mandatory coverage that we have to pay for directly might be a violation our freedom.

Fix #4 for Obamacare - eliminate the tiers.   Get rid of "Platinum", "Gold", "Silver" and "Bronze" plans and just have a single plan.   With tiering, only sick people will buy the more expensive plans, and those who are not sick will buy cheaper plans - and then upgrade if they become ill later on.   There really is no logic to having different levels of health care for different people - and that sort of defeats the idea of "universal" health care.  And by the way, most insurers have dumped "platinum" plans already as they are far too expensive.

Of course, none of these solutions address the fundamental problem - spiraling costs.   Drug companies have famously doubled, tripled, or quadrupled the "retail" prices of some drugs, knowing that Obamacare will pay whatever they decide to charge for their drugs.   When people cry out injustice, they offer "generic" versions or coupons for those who are poor.   Those versions are not sold to Obamacare, however.   

The insurance companies are not making money on Obamacare.  Doctors are not making money on Obamacare - except perhaps some specialists.   Drug companies are cleaning up as they can sell all the opioids they want to, and get the government to pay for it.   Uncle Sam is now the nation's largest drug dealer, and we are all paying for it - sometimes with our lives.

Fix #5 for Obamacare - set drug prices.   Medicare already does this, telling drug companies what they can charge for certain drugs.  Granted, this is a tricky "solution" as if we remove the profit incentive from the pharmaceutical business, the incentive to research and test new drugs may evaporate.

Fix #6 for Obamacare - stop drug dealing.   The opioid "epidemic" in the USA is a legal drug problem.   Doctors are writing prescriptions for various opioids and getting people - ordinary people - "hooked" on the drug.   They then graduate to heroin and then to overdosing and death.   We simply need to rein in prescriptions for these drugs - as we did in the past for medical cocaine and morphine.

But even with all of these "fixes" I am not sure the problem will be solved.   And if you implemented all of these "fixes" you would end up with, well, Medicare - a "single-payer" national health insurance system, like they have in Canada or Europe.

And therein lies the problem - is this what America wants?   Some have argued that Obamacare was designed to fail - but both sides of the political spectrum.   Republicans want it to fail so we can go back to the "good old days" of insuring only healthy people.   Democrats want it to fail so that a "single payer" national health insurance system looks more attractive.

Even if you could get this idea on the table, some powerful interests would fight tooth and nail to prevent it from being implemented.

Sadly, neither candidate seems to have articulated a concrete plan of action to fix or replace Obamacare, other than vague promises to make it work or come up with something "beautiful" and "excellent" to replace it with.

In the meantime, the "window" for Obamacare is coming up again this year, and we are hearing noises of 20% premium increases already.   I may have no choice but to make the logical decision to change to the cheapest HMO plan I can find and then change to a "gold" plan later on if I get ill.   Since my doctor died this year, there is little need to stick to the plan I have, since I will be forced to change doctors anyway.

Of course, plan B is to simply drop coverage entirely, although that sounds a bit extreme in my circumstances.   I will have to see how it plays out in the tax credit department first, before I make a decision, so I can understand the real costs (to me) and make a logical choice.

Friday, October 14, 2016

The Cohn Connection

"I have in my hand 57 cases of individuals who would appear to be either card-carrying members or certainly loyal to the Communist Party, but who nevertheless are still helping to shape our foreign policy."  McCarthy never produced this list.

 "I do want to say that I was just endorsed and more are coming next week, it will be over 200 admirals. Many of them are here, admirals and generals endorsed me to lead this country. That just happened."  Actually it didn't.  88 retired Generals and Admirals endorsed Trump.  Given the number of Admirals and Generals in the Pentagon, this is not a huge number.  Again, we never get to see the list.

Communist-hunter (and witch-hunter) Senator Joe McCarthy and Donald Trump have more than one thing in common.   They are (or were) bombastic and insulting.  And people stayed tune "just to see what thing he says next!"   They both ruined lives of many people through their machinations.   But the one thing that really underlies their similarities is that they had the same advisor and mentor, the infamous attorney Roy Cohn.

Cohn was a piece of work - a flamboyantly gay man who insisted until the day of his death (from AIDS) that he was not gay.   Yes, gays often make the best right-wing conservatives, particularly closeted gays.  They also make the best Nazis.

Cohn was famous for taking a "scorched earth" approach to everything in life.   When he was the acolyte to Senator McCarthy, he advised him to "go after" his opponents, a strategy which failed only "after at long last" it was shown that McCarthy had no shame.   McCarthy's time in the limelight was brief, and he flared out quickly and public opinion turned against him in a big way in a real hurry.   Once a popular Senator with a popular cause, today he is viewed as the epitome of evil.

McCarthy died shortly thereafter from his alcoholism.   Cohn lived on for a few more decades.   And in that time he took under his wing another bombastic figure - you guessed it - Donald Trump.   Trump's approach to business resulted from his tutelage with Cohn.   Go after your enemies, go after them hard, never concede, and never surrender.   And for a long time, this approach worked.

Cohn died in 1986, but the lessons he imparted to Trump seemed to stick.   Although I suspect his debacle in Atlantic City would not have occurred had Cohn had lived to advise him otherwise.

But like McCarthy, it seems that the public's fascination with bombast and insults has a very short shelf-life.   Overnight, it seems, people are abandoning Trump in droves.   It is not that the recent "revelations" about his behavior have tipped the scales, but rather, I think, that people are finally waking up to what kind of person he is, and realizing that the roller coaster ride, while fun, is actually quite dangerous.

It also turns out, guys, that chicks really don't dig it when you grab their vaginas, uninvited.   Yea, it is hard to understand, I know.   But there you have it.   Not only do they not like this, it appears to be a big issue with them.   So just a suggestion to all you dudes out there, before you grab, ask.

The parallel struck me during the debate.  One of McCarthy's favorite tactics was to pull numbers out of his ass.   So many "communists" in the State Department or the Army or whatever.   Lists he "had in his hand" but would not show to anyone.   Trump did the same thing, with 200 Admirals or 33,000 e-mails (which became 39,000 e-mails later on) or other things he "didn't have time" to show us, but were "beautiful", "huge", "excellent" or otherwise "the best".

Same old shit, different day, different asshole.   I only hope that America saw through this, unlike our counterparts in the rest of the world who have fallen for snake-oil salesmen like Trump.

Brexit, anyone?

Wednesday, October 12, 2016

Is the Cloud Safe? Probably Not.

Storing sensitive data on the cloud might not be a good idea.

I wrote before about "the cloud" and how the term got started from white-board drawings.   While the Internet has been a great boon to mankind, the powers-that-be are trying to use cloud computing to basically take away power from users of personal computers.

The Personal Computer was a revolution for mankind in that it allowed individuals to operate their own computers.  Prior to that time, the mainframe computer was an enormous beast, locked away in specially air-conditioned vaults and attended to by a small army of acolytes - much as today's server farms are.   If you wanted almighty data from the computer, you had to ask nicely of the computer nerds, or you wouldn't get anything.

The PC changed all that - allowing small companies and individuals to process their own data, at first just spreadsheets and documents.  With the Internet, this expanded to include data searching and online communication.   But the PC remained the center of power for the individual.

And we can't have that, can we?

Early on, "thin client" products were bandied about - stripped-down PCs which would operate off a central office server, often with no real storage (hard drive) in each PC.   I worked at an office who bought such a system.  It worked fine until the mirrored drives in the server crashed and it took a week to recover our data.   In the meantime, we had to run WordPerfect for DOS on floppy discs to get any work done.

Thin client puts all your eggs in one basket, which is fine, so long as someone is watching that basket.

Today, the same idea is being promulgate through "cloud computing" which is the same concept only using online servers to store all of your data or even run programs (which increasingly are referred to as "apps").   So instead of loading your word processing program on your computer and storing your files on your hard drive, they want you to subscribe to a word-processing app and then store all your documents in the cloud - on someone else's server somewhere out there.

And you can guess what happens if you stop paying the subscription fees.   Once again, we find corporations getting greedy, no longer content to just sell software but instead sell subscriptions.   And over time, the consumer will succumb to "subscription fatigue" as they pay more and more every month for everything from cable TV to XM radio to Pandora to online magazines, and now, for storage and software.  It starts to add up over time - to a lot of money.

The appeal to companies, such as Microsoft, is obvious.  You get a steady stream of income every month, even if you are not really doing anything.   Unlike the software upgrade, the consumer has no choice but to keep paying and paying every month, every year, for decades.

Older software that works doesn't need to be upgraded.  I run an older version of Quickbooks and it works just fine.  Since I have the installation DVD I can load it onto any machine I own.   The only downside is that I can't export files to other users, as Quickbooks makes sure to make older file types non-compatible with newer version.   And this is not by accident.

I wrote before about .DOCX documents and Microsoft's attempt to obsolete the very functional Word 2000 in favor of a newer version.   By making the documents incompatible with older versions of WORD, they force users to upgrade to the new version (or like I do, use the shareware OpenOffice suite to view and convert those documents to .DOC format).

Word 2000 works just fine, thank you.  And Windows 7 Ultimate beats the crap out of Windows 10, particularly on an older computer.   And that is the other part of the equation - many of us stopped upgrading our PCs ages ago as Internet speed turned out to be the real limiter of PC performance, not processor speed or hard drive access time.   So my old computer (and it is nearly a decade old, an eon in the computer business) will continue to soldier on for a few more years, well into my retirement.  It may in fact be the last computer I buy as a laptop or even phone might serve my needs in the future.

Of course, the smart phone is the ultimate cloud computing device, as they don't have a lot of memory to store data (even with a large SDRAM installed) or programs.   So much of what we do on smart phones is based on the cloud.   Although I found I could install 10,000+ songs on an SDRAM in high-resolution .wav format (MP3 sucks) with little difficulty.

The cloud won't go away anytime soon, as companies will continue to push and prod us into storing data there, arguing it is "safer" than a crash-prone hard drive.   And I know a lot of folks who have lost albums of data and their entire music collections as iPods or hard drives crashed and were unrecoverable.   Of course, they failed to back up their data redundantly, so part of the error is on their part.   Also, it is not a bad idea to just let data die sometimes.   Keeping lots of records and stuff might seem like a keen idea, but it can be awkward and difficult.   You really only need financial records back about 7 years or so.  Keeping your old paper-route ledgers is really kind of stupid at this point in your life.

But the question remains, is the cloud a safe place to store data?  And with recent "hacks" of e-mail accounts, you have to wonder if it is.  I recently read online about how Yahoo! had about 500 million accounts breached.  That's a lot of accounts.  And they took their sweet time telling people about it - like a couple of years.   I changed the password on my old dormant Yahoo! account immediately, of course.  There doesn't seem to be any indication of anyone tampering with my account.

Of course, others fall prey to common Yahoo! trolling e-mails, whose badly worded pleas scare consumers into thinking their account "will be closed by the security department!" unless they provide their username and password by return e-mail.   These clumsy attempts often work, and they get less clumsy over time.   Most of my friends who have Yahoo! accounts have fallen for this gambit at one time or another.

But getting back to my dormant account.  When I logged on, I was kind of shocked to see how much personal data I had put on the cloud.   Copies of my tax returns were stored in the e-mail account, as sent from my late accountant.  These included my address and Social Security number!  I also had uploaded backup copies of my Quickbooks files, which included a lot of financial data.   I quickly erased all of these e-mails, including responses in the "sent" files.   I also made sure to empty the TRASH file once the e-mails were deleted.

If someone had hacked into the account (through Yahoo!'s data breach) they might have been able to obtain a lot of financial information which could have been used for a tax refund hack (filing a false return in my name, using my social security number, to claim a refund) or some sort of bank account or credit card hack.

I also realized that there was no point in keeping this data in the cloud.   Old financial records are just that - old and obsolete.   I would not need them for anything in the future.   My current records on the hard drive were more than sufficient - and backed up onto two portable drives, two laptops, and three PC hard drives (a septuple redundancy) which is arguably more robust than the cloud (memory sticks or SDRAMs are another viable option).

The promise of the cloud is enticing.   You can keep all your data there and never have to worry about it.  You can access your data from any device, without having to load it onto each device and sync and update it.   But that promise is somewhat flawed on a number of fronts:
1.  Your data can be hacked or stolen, if the cloud server is not secure.   In the past, this seemed far-fetched.  But major companies such as Yahoo! are being hacked with regularity, so the idea that your data is "secure" with a big company is sort of flawed.  You may also be vulnerable to social engineering hacks if you are not careful.  Either way, your data can be compromised.

2.   The company can lose the data.  Servers crash and backup files can be corrupted.  I am sure if you read the Terms of Service for these cloud deals, the companies absolve themselves of any liability for your lost or stolen data.  If they didn't they'd be fools. 

3.  Companies go out of business.  As I found out the hard way with Webshots, companies can be sold and the new owners might decide to delete all your carefully manicured data.  Webshots took all my photo albums, stripped off the lengthy captions and comments, and then tossed them into a bucket in random order.   After a while, they deleted even that.  One reason I got off Facebook (and earlier, MySpace) was that they kept changing the user interface, which required reformatting and re-doing your page again and again with each "upgrade" - it simply wasn't worth it after a while.
So when you put all your eggs in the cloud basket, you are taking a risk that the data could be lost or stolen or simply abandoned.  While it may seem like a swell idea to back-up or sync data with the "cloud" it really ends up just being an enormous pain-in-the-ass to do.   Relying on the cloud exclusively seems rather foolish.

You may have documents stored in the "cloud" and not even know it.  Google's gmail seems particularly snarky in trying to get you to upload things to google drive.  If you click on an attachment, it offers this option and it is easy to click on it by mistake.   Also, things you delete from your e-mail account may end up in the "deleted files" section of google drive.  I was kind of shocked how much data I had stored on google drive - by accident - when I checked it out.

Over time, I am learning that the smaller footprint you have on the Internet, the better.   And for that reason, I may end up deleting my blog in the next year or so, once I am done writing it.  Of course, many posts will live on in perpetuity, thanks to 3rd-world click-bait artists who republish my content without permission.

Keeping a lot of data in the cloud, whether it is actual records and documents, or just a facebook page and e-mails, does have a risk attached to it.   Quite frankly, I am seeing less and less of a benefit to uploading data to the cloud.

Tuesday, October 11, 2016

Is Trump a Coke-Head?

The sniffling and narcissism would seem to indicate he is a coke-head.  His bloating body weight might indicate otherwise.   But then again, John Belushi.

In a recent article, Carrie Fisher, who apparently knows what it is to be a coke-head, opined that the sniffling of Trump at the debate indicates he is doing lines.   We listened to the debate rather than watching it, as we were trapped in Western Georgia during the hurricane (no damage, thanks) and had only NPR to listen to.  Like with the Kennedy-Nixon debates, those listening had a different experience than those viewing.

We heard a LOT of sniffles from the Trumpmeister.  After every sentence it was "SNIFF!" and we thought either he had wicked allergies or had done a few lines before the debate.

And in a way, it makes sense - the narcissism and the constant blathering about how "great" and "beautiful" and "huge" things will be are all part and parcel of the coke-head milieu.  I have had to deal with coke-heads in the past, and I can tell you they are fucking annoying.  They always have grand plans, but are very vague on details.

And when you press them for details, they get very angry.   In the business world, coke-heads get ahead by taking credit for the actions of others and then denigrating and attacking anyone who disagrees with them.   They succeed - for a while, sometimes a long while - until eventually they crash and burn as reality, long denied, comes crashing into their fantasy world and eventually even their most ardent supporters abandon them.

Is Trump a coke-head?   It would certainly appear so.  His penchant for coke-head styles and fashions (glitzy and glamorous and tacky) seem to fit the bill.   And while usually coke-heads are deathly thin, there are exceptions to the rule, such as the aforementioned John Belushi and his successor Chris Farley.  So chubby Trump could be a coke-head, even though he is fat.

But in the end analysis it makes no difference.   Because a Presidential candidate who acts like a coke-head is just as bad as one who is - perhaps worse.   If he acts the way he does without the influence of drugs it is all the more appalling.   After all, one can blame poor behavior on drugs, and then quit the drugs and end up a respectable citizen.

But if you are just an asshole normally, well, there is no cure or re-hab, is there?

Sunday, October 9, 2016

The FEAR election - emotional versus logical thinking

This election more than any in recent history, pits logical versus emotional thinking.   Trump is using FEAR to rally supporters.

A recent article tries to analyze what is going on in Trump supporters' brains.   The answer is really quite simple:  Trump is cranking up the FEAR lever, which causes people to think emotionally and not logically, which in turn allows them to support him, even though they may disagree or even be repulsed by his positions.

In a way, he is not unique in this regard.  Look around the world today at the new generation of dictators - Ergadon, Putin, Duterte, Maduro and others - all have the same characteristics.  They say and do outlandish things, like a Reality Television star, and their supporters are entranced by them.  Entranced is the right word - it is a form of hypnosis.  It is not dissimilar to the effect Hitler's speeches had on his followers, or even us today.  If you listen to this sort of right-wing bombast, part of you wants to say, "yes, he's right, it is all the Jews' fault" until you snap out of it and realize how utterly charming dictators can be.  Charming as in a snake charmer.

Fear is the common denominator.  If you are a weak leader, you can't run on your own record, so you run on fear.  Maybe it is fear of crime, Mexicans, Muslims, blacks, or terrorists.  Or drug dealers or capitalists or Yankee Imperialists.   Or maybe secularism and Western culture.  All you have to do is convince your supporters that (a) the problems their country is having are external, not internal, and (b) these outside forces are to blame for their problems.   Classic externalizing and fear-mongering.

Your opponent tries to run on common-sense and policy wonkism.   They will likely lose.   Because in addition to making people afraid of external forces, you make them afraid of your opponent.

And to do this, you use emotional thinking.   You tag your opponents with catch-phrases and nicknames and before long, people identify your opponent by those phrases.   Trump's genius - if you can call it that - is in tagging each of his opponents with a degrading nickname, whether it is "Low Energy" Bush or "Little Ricky" Rubio.  Once you slap the label on, it sticks.

I recently talked with an old friend about the election.  He is appalled by Trump but won't vote for "Crooked Hillary" (his words).   When I asked him why Hillary was "crooked" he hemmed and hawed for about ten minutes and then gave up.  It sort of sounded like one of Trump's run-on sentences - just a word salad of "e-mails, whitewater, Jennifer Flowers" and then a period at the end.   What he failed to articulate was any specific incidence of "crookedness" just maybe a few examples of bad judgment (being crooked has to be more than just doing something stupid, it has to be doing something illegal for a profit, and no, getting paid to give a speech doesn't qualify as "crooked").

The sad thing is, it seems that more and more of the planet, trained on reality television, facebook, and twitter, seem to fall for this sort of thing.  I mentioned before (I thought, anyway) that there seems to be a parallel between world events today and events of the 1930's.   Back then the new media was radio (and the newsreels) which allowed politicians to talk directly to voters for the first time.  Bear in mind that in the US, Presidential candidates rarely even gave speeches on their own behalf when running for office, at least not until the 20th Century.  Now, with mass-media, politicians could talk directly to voters without the filter of newspapers or print.   It was a powerful tool, and it is no wonder that we saw a rise in radical politics at the time.

Today it is the same deal, only with so-called "social media."   People can live in their own informational cubby-holes and never see or hear any opposing views.  Supporters at a Trump rally when asked say they they don't believe the polls as "no one every called them and ask for their opinion" and "no one I know on Facebook is supporting Hillary" - clearly they have no idea how Facebook or most Social Media works.

It will be interesting to see how the election pans out. While polls are promising right now - showing that intellectualism and rational thought are prevailing - there are still a lot of people out there willing to vote based on fear.  And as I have noted time and time again, when someone tries to instill fear into you, they are basically lying to you and trying to deceive you for their own profit.

The narrative being sold by Trump is rife with lies.  He claims that crime is rampant, when in fact it is at all-time lows, not only for our country but for human civilization in general.   He claims that American is in deep trouble economically but in fact our economy leads the world and inflation is low, unemployment is at record lows, and interest rates are flat.  He claims Ford is "moving production to Mexico" but the reality is they are only moving small-car production there so they can re-tool their US plants to build SUVS, including a new Bronco to compete with the Jeep Wrangler.  He claims that US manufacturing is all going to "Gina" when in fact our manufacturing capabilities are increasing, surpassing Germany last year and on track to surpass China by 2020.

But the core Trump supporters don't see this.  They see only that they are in debt and can't find a "good paying job" for someone with no education and no skills.   If only we could go back to the "good old days" of the 1970's when UAW workers were paid more than Doctors to put together half-assed overpriced cars!   The stag-flation of that era was so much better than today!

Logically, of course, none of this makes any sense.   But Trump isn't trying to sell logic, which is why his antics are working - for a certain subset of the population.   They want emotional drama, as delivered by the television.  Reality television has trained an entire generation to think that having a family means having family drama all the time, that going to work means having drama at work.  That everything in life should involve shouting, confrontation, scheming, and back-biting.   And Trump delivers all of this for them, in what in past years was a major snooze-fest of policy discussions.

It will be interesting to see how this plays out - whether America will go the way of so much of the world (including the UK with its Brexit vote) and succumb to emotional thinking.   Emotional thinking, of course, usually leads to disaster, whether it is the pound dropping to $1.20 or 3,600 (and counting) people murdered in a matter of months in the Philippines.

A Trump Presidency would result in economic disaster for the United States, which is why most real Republicans are against him.  Starting a trade and tariff war with the China, Mexico, and the rest of the world would not make life better for Americans, but would just make everything far more expensive.  We would be back in the same stag-flation mode we were in back in 1975.   If you lived back then, you understand that.  But sadly, fewer and fewer people seem to recall those days.  Fewer still were alive back then.

Tuesday, October 4, 2016

Finacial Illiteracy and Trump's Taxes

Most Americans know nothing about how taxes work, so if you say that someone or some company "doesn't pay taxes" they get all outraged.

Donald Trump is in the news again for two reasons.   One is pretty bad and the other is very neutral.  But oddly enough the press - and even the Democrats - are playing up the one that is neutral and ignoring the one that is potentially very bad.

Why?  Because Americans are ignorant about taxes and the law, and if you have to explain things in anything longer than a tweet, they lose interest and don't understand what you are getting at.

The New York Times reports that from a leaked 1995 tax return that Donald Trump reported a nearly billion-dollar loss.  The media gleefully reports that this means Trump "might not have had to pay taxes for a decade or more" as if this was some sort of criminal action.

The reality is, of course, that in the 1990's Trump's financial empire imploded.  He lost many of his properties (even if his name remained on them) and he lost his airline and his yacht (the Trump Princess once the world's largest private yacht).   He wasn't broke, as he "crammed down" his lenders and ended up with a cushy deal that kept his name on his buildings and a nice yearly fee as a "consultant" or manager of these properties.

But he indeed may have taken a billion-dollar loss that year.   And here's something funny - you don't pay taxes on losses.   Simple concept - it eludes most.    And if you lost a billion dollars one year and "made" a hundred grand the next, it doesn't mean you "made money" the next year, as you have a billion-dollar hole to dig yourself out of.   So you can "carry over" losses to the next year or even the year after, or even beyond, depending on whether the losses were active or passive.

Oh, wait, that doesn't fit into the 140-characters of a tweet, don't it?   So no one "gets" it and they just hear "he didn't pay taxes while I have to!" and think he did something illegal, which he may or may not have done, but the "leaked" tax return from 1995 doesn't indicate either way.

Emotional thinkers, however, latch onto the "he didn't pay taxes" mantra and assume it means he is a bad person.   Well, he is a bad person but not necessarily because of the taxes.

Meanwhile, another story breaks about the Trump Foundation which is really scary and no one notices because it is a complicated story and again, can't be explained in a tweet.

According to the New York Times, Trump started a Foundation to distribute his wealth to charity.   Problem is, he never distributed his wealth to charity, but instead solicited money from other people, who donated millions of bucks to his foundation.

Nothing wrong with that, but if you are going to raise money from others, you need to register as a charity, which Trump failed to do.   Well, OK, that's a technical violation perhaps.  But it gets worse.

Not only has Trump failed to donate any of this money to charities (to wounded veterans as promised) but it appears he used the money for his personal use and for political donations both of which are prohibited by law, not to mention sound pretty low for money ear-marked (by himself no less) for wounded soldiers.

Worse yet, the political donation was to the Attorney General of Florida, who subsequently dropped an investigation of "Trump University".   So one could argue that Trump used this charity money as a slush fund to pay political bribes, and that is pretty darn low.

If these allegations are true, then Trump has done something not only illegal, but immoral as well (using charity money earmarked for veterans to pay himself as well as pay political bribes).

But where is the outrage?   There isn't any because Americans are emotional thinkers and financially illiterate.  They understand the emotional argument of "didn't pay taxes" even if it doesn't indicate any wrongdoing or malfeasance on the part of Trump.   They don't understand the complex argument about not registering as a charity as it is too convoluted and complex.   Perhaps the dems should drop the tax argument and use the tweet "Trump steals from charity" instead.   People might actually get that.

Sadly, none of this will be thoroughly investigated until well after the election, so we likely won't know anything definitive about his taxes or the Trump foundation until well after November 8th.

Are Rewards Cards Worth It?

"They throw pennies at us, hoping we spend dollars"

A few years ago, I started this blog at the height of the recession, as it seemed the economy and my personal economy were coming unraveled.   I survived the meltdown of 2008 because I had largely exited the Real Estate market by then, and thus had a nest egg for retirement.   But I still had a bit of mortgage debt as well as credit card and even some student loan debt.   And when my accountant unexpectedly came down with brain cancer, I found I had a huge capital gains tax to pay to the State of Georgia - that was due in a matter of days.

Foolishly, I put the debt on a credit card.   That was bad enough.  But when I went on vacation, I sent my payment a day late, which back then would trigger "penalty" interest rates of 15% or more (sometimes as high as 20-25%) which meant that I had little or no hope of ever paying off that debt, as even a large payment of $1000 on the card went mostly to interest.

Once again, I had stumbled into a credit card debt crises - as most Americans do.

I say "once again" because I had done it once before, and you'd think I would have learned from the first time.

When I was in my 30's, we had credit cards - with account limits in the tens of thousands of dollars.   To a young man, this seemed like success, as after all, my Dad loved to flash his wallet full of credit cards as a sign of "success" in life.

Most of these cards had high interest rates and crappy "rewards" programs, such as frequent flyer miles, which are nearly impossible to use, unless you fly a LOT and use them to try to upgrade to business class.   The days of getting miles and flying the family to Hawaii are long gone.  And with lower fares, you'd be better off just shopping for a low-cost fare than trying to get a "free" flight by spending tens of thousands of dollars with a credit card.

Many of these cards also had annual fees.   I wasn't very astute about credit cards back then, as I was still in the mindset that I was "lucky" to get credit and when the bank sent a letter saying "congratulations! you qualify for a new Zinc card!" I was really naive enough to think that I was going somewhere.

But that somewhere was a financial hole.  We quickly ran up credit card debt by spending more than we made.  Not on big things, but on lots of little things.  Restaurant meals, delivery pizza, car parts for hobby cars, vacations, and whatnot.   We shopped back then for what we wanted and never bothered to think about prices of things, provided they were below that tantalizing "I'll just put that on the credit card" range of $99 to $499.

It wasn't long before we were no longer paying off the balance every month.  And within a couple of years, we were struggling to make the minimum payments on all the cards.   Bear in mind we had a combined income of well over $100,000 a year, and this was back in the 1990's when a hundred grand was a lot of money.

So I did what a lot of Americans did - refinance my house to pay off the debt.   It seemed the bank was throwing me a life-line, but in retrospect it was a life-line weighted with lead.   Once all that short-term high-interest debt was refinanced (of course, this after doing at least one or two "balance transfers") we congratulated ourselves on our financial acumen and ran up more credit card debt.

Wash.  Rinse.  Repeat.

And my experience is not unique.   A lot of Americans fall into this trap - a lot of middle-class Americans who have good educations and should know better.  The poor fall into worse traps - title pawn loans and payday advance places which take what little they have much more quickly.   A full-blown middle-class credit card crises can play out over a decade or more as the debtor refinances debts over and over again, not realizing their financial ship is taking on water.

The problem with credit cards is that they make it so easy to spend.   You buy stuff and swipe the card and don't think about the real money coming out of your account.   It is only when you get that huge credit card bill at the end of the month that you realize you've overspent.   And by then, it may be too late - you can't pay the full balance this month, so you let it ride and pay that high interest.

Compounding this was that I was self-employed and most of my clients were very irregular in paying - which is typical.   I could wait 30, 60, or even 90 days to get paid, particularly from overseas clients.  So often I had to use credit cards to pay Patent fees, or even to buy groceries, while waiting for payment from clients.

Foolishly, I had little in cash reserves to cover myself during these times of famine.

I decided to chuck high-interest "rewards" cards and other crappy deals in favor of simple, low-interest credit cards.   And I cut way back on spending.   We got rid of all our debts by selling off the vacation home, the hobby cars, the boats, etc. and learning to live on less.   We also found this was a better way to live as having too much stuff was physically exhausting.   Yes, it was fun for a decade or so, but by the time you turn 50, having to take care of "things" gets to be old.   And the older you get the less "things" you want to take care of.  Just keeping a house clean gets to be a chore after a while.

And it worked.   I started tracking all our expenses and kept things within our budget.   But of course, over time, the temptation is to spend more and more - and our banker friends know this.  In fact, they can track our habits pretty accurately from our spending.

And increasingly, the banks want us to use them for "one-stop shopping" for everything from investing, banking, credit cards, loans, and mortgages.   And to do this, they offer incentives if you are willing to move your money and business to their bank.

I prefer to have multiple accounts for savings, investment, credit cards, and banking, as it provides a back-up and flexibility for me.   If I don't like Bank A, I can just do more business with Bank B, where I also have an account.  If a credit card is compromised while traveling (yes, again, this time to Mr. See), I can simply switch to another credit card from another bank.   In fact, if you travel overseas with just one credit card, you may be asking for trouble.   Keep one card with you and another in your luggage or the safe at the hotel or with your spouse or wherever.   If one card is lost or stolen, you have options.

A reader wrote to me many months (years?) ago arguing that I was wrong to suggest using a low-interest simple credit card with a low balance limit.   He said that I could "steal the cheese" by getting a "cash-back" rewards card and then simply pay off the balance every month.    You could put all sorts of expenses on it - like your utilities, or indeed my Patent fees. It sounds nice in theory, but in practice, it is a dangerous high-wire act for many.   If you don't have a large balance in savings or your checking account to pay this balance every month, the "rewards" are quickly wiped out by the monthly interest expense.   Compound interest a bitch - when you're paying it.   It's a lot nicer to earn it.

And in the past I tried one such card - the sucky Discover card which no one takes anymore.   They offered a paltry 1% cash-back or so, which accumulated in your account until you had $50 in rewards and even then you had to ask them to pay it to you by check or apply it to your credit card balance.    $50 payable to an account balance in the thousands really doesn't make much of a dent.

Recently, Bank of America has been making a play to get more of my business.  They want more assets under their management as it makes their bottom line look good.  So if you transfer a couple hundred grand into a "Merrill Edge" account, you qualify as a "Platinum" customer, which doesn't mean much in terms of service (indeed, they closed my account while I was out of the country - so much for "platinum" service!) but does provide some "rewards" features, such as enhanced interest on savings (not much) and a cash-back rewards card that provides up to 3% cash-back depending on the purchase type.   And the cash-back is then amplified by 25% if you are a "platinum" customer.   They even have a calculator you can use here.   So if you spend $1000 on anything, you get $12.50 back.  If you spend it on groceries, you get $25 back.  If you spend it on gas, you get $37.50 back.

In addition to this are promotions that provide 10% back or so on hotel stays or hair cuts or starbucks coffee through Bank of America"AmeriDeals" which I discussed earlier.   These are OK if you plan on going to Autozone anyway to buy a new set of windshield wipers or staying at the Hampton Inn overnight.   But if you really want to "save" more than 10%, you could buy the wipers online (or at Wal-Mart) and stay in a cheaper hotel.   There is no real "savings" in these deals, only incentives to consume.

So, is any of this worthwhile?  Can you steal the cheese and come out ahead?   Yes and no.   And I decided to try, as an experiment, this rewards card and report back after a year and see what the results were.   Over a year, we were "rewarded" in both cash-back and "Amerideals" a total of $1544.62.   Each month Bank of America would deposit this money into my savings account and I tracked it on Quickbooks.  The best month was $268.30 while the worst was a mere $23.78. 

The average was about $128 a month, but this average was skewed by a $100 sign-up bonus the first month.   It helped that our $1098 a month Obamacare plan is charged to this card, as are our water and sewer bill and some Patent fees as well (which will go away once I retire).    Sadly, Georgia Power is no chump and will not allow you to pay your utilities with a credit card, unless you are willing to pay an extra fee for the service - which negates any real rewards savings.

At first, it may seem that we are coming out ahead in this deal.  After all, over $1500 a year!  That's real money!   And $128 a month certainly buys a nice dinner out, right?

Well, bear in mind that if we assume the average "reward" was about 2%, this means we charged well over $5000 a month on this card which is a pretty staggering about of money to spend in order to get a hundred bucks back.

In other words, they throw pennies at us, hoping we spend dollars.    And spend we did.   I think the use of this card encouraged spending - or at least it did this summer.   Yes, all that lobster was good, thank you.  But it wasn't cheap.  Even those little run-down shanties by the side of the road in Maine will charge $50 for two lobster rolls and some onion rings.

The system "worked" for us as we are spending money we have in the bank - and thus can pay the total bill every month.   But if we miss a payment for even one month - or fail to pay the full amount due by even a dollar - we will ring up far, far more in interest (at 15% or so) in one month than we would have made in "rewards".

The other problem with this card is that it has a whopping 3% foreign exchange fee.   While in Canada, I called Bank of America and a "platinum service adviser" told me he would refund these fees later on (he promised!) by manually entering a refund.   I found it simpler to use my low-interest Capital One card, which charges no foreign transaction fees, instead.   If you use the "rewards" card in Canada, the foreign transaction fees wipe out any "rewards" you may gain.

So.... what is the verdict on rewards cards?   After my year-long experiment, I have come to the conclusion that they really are no real bargain.   They are a loaded handgun pointed at your head, waiting to go off and bankrupt you or at least cause a painful credit card crises that could take years to pay off.

And the payback?  Pennies at best.   You won't get substantially richer with a rewards card, even assuming you play their game right and make all your payments on time and pay off the full amount.   And this is assuming you don't fall into the trap of spending more money when you get the card - a very easy trap to fall into.

Rewards are the bait in a trap.  As my reader noted, it may be possible to steal the cheese but bear in mind that the cheese he is referring to is indeed bait in a deadly trap.    Obsessing about stealing the cheese tends to obscure the fact that you are dealing with a trap.

All I can say is, use these "rewards" cards with extreme caution - and don't kid yourself that you'll get rich this way.