Boo! Scary Economic Policy October 31, 2001February 20, 2017 From the time I fell out of the back of Mrs. Oestricher’s station wagon dressed as a ghost, aged 6, I have never liked Halloween. I like it even less this year, thinking there might be some nasty ‘event’ right about now, as the warnings suggest. So let’s start with a few good thoughts. One obvious one is that we might at least have a better relationship with Russia and China, as a result of this mess, gradually bringing them ever closer to the kind of free, prosperous societies that make such good planetary neighbors. It may not happen, but who would have imagined the Iron Curtain falling in our lifetime, either? Another hopeful sign, as explained by Michael Ledeen writing in the Wall Street Journal, are the largely-ignored riots now ongoing in Iran. They may have significance far beyond soccer. In case you missed it, click here. And then there’s always the possibility of a cutback in junk mail. Oh, happy day. (I don’t see how it would do much good in terms of the crisis, but I am hoping for an Executive Order nonetheless.) I can come up with some bad thoughts as well – the gloomy economic scenarios are as easy to conjure as the scary life-threatening ones – but I am an optimist and, in any event, there is little to be gained by dwelling on our fears. Yes, you think through scenarios and do what you can to prepare – a two- or three-week supply of everything you might need in the unlikely event of some temporary disruption, just as with a hurricane or an earthquake or a flood. (I love my solar-or-crank-powered radio-flashlight!) But beyond that, what are you going to do? It seems to me we almost have an obligation not to let this get to us – to count our blessings rather than our losses or our fears, considering how much better off most of us are than just about anyone in the history of the world. (You want nightmare? How about the Battle of Somme in 1916, when the Earth’s population was less than a third what it is today. It lasted for months, and when it was finally over, the British, I’ve read, were still three-miles short of their first-day objective. In the meantime, they had lost 419,654 men; the Germans, perhaps 600,000.) Where I do get just a tad frustrated, though, is in what we seem to be doing to ourselves. Given our dependence on foreign oil and our truly massive balance of trade deficits, you might think we’d triple our spending on alternative energy research – yet we’ve halved it. (Hint: this was not done at the behest of the minority Party.) Given the extraordinary gains the wealthiest few made – after tax – in the previous eight years, handily outpacing the percentage improvement in income experienced at every lower level, you might think we would have directed our “massive surpluses” (you know, the ones some quite confidently assured us would stretch as far as the eye can see) to paying down the debt, to cutting taxes for those struggling to get by, to improving our schools, to providing health insurance to those of our fellow citizens without it. Instead, we decided to shave the top rate of the estate tax – a tax paid exclusively by the best off – from 55% to 53% . . . no, wait, to 48% . . . no, wait, to . . . to . . . zero. I assume this will be repealed before it fully phases in at the end of the decade, but that’s how the law now reads: zero. (Sure, let’s raise the exemption from $675,00 to $2.5 million or $5 million and link it to inflation. That would eliminate the tax on almost everyone. But on Warren Buffett, whose estate will total tens of billions? He’s the first to argue that this is terrible social policy.) Given, finally, what could be a doozey of an economic slowdown, you might think Republican leaders in the House would have come up with a package of nicely focused temporary economic stimulus. Instead, it has come up with permanent tax cuts for corporate America. Paul Krugman wrote it far better last week than I ever could. Forget falling out of the back of a station wagon. What really scares me is the relentless drive – already highly successful after barely 10 months – to tilt the balance of hardship and good fortune even more heavily in favor of those in the First Class cabin. Or, often as not, in the private jet.
It’s Not Just ADRs! October 30, 2001December 29, 2016 Jack Kouloheris: ‘We just learned a hard lesson twice! Never, but never enter market orders for thinly traded ADRs [American Depositary Receipts] created by the Bank of New York. [ADRs, frequently traded on the New York Stock Exchange, are a popular way for Americans to buy shares in foreign companies without having actually to buy shares abroad.] Twice now we have sold issues which trade heavily in their local markets (Singapore and Hong Kong) and received a price which was almost 4% lower than the ordinary traded the same day. I guess the Bank of NY figures if you are the only guy selling that day, they don’t have to give you a price anywhere close to the price of the ordinary…they’ll just make a huge profit on the spread. You may pay your favorite discount broker only $14.95, but BNY will pocket hundreds. This doesn’t sound like a very savory business practice in these days of automated trading and low commissions. From now on we will check the price of the ordinary and use a limit order before trading thinly traded ADRs.’ ☞ It sounds as if you may have been selling ‘unsponsored ADRs.’ I touched on these a couple of years ago. For more on ADR’s, click, also, here. But it’s an expensive lesson that applies way beyond ADRs, let alone just those handled by Bank of New York. Whether it be stocks or bonds or funds or wrap accounts or annuities or any other financial product, spreads and fees and commissions are what keep the financial industry robust and the rest of us struggling. You surely know the famous old line, and book title, ‘Where Are the Customers Yachts?’ The newcomer to Wall Street is being shown around, back in the Twenties or whenever (the book, by Fred Schwed, came out in 1940), and he is told to regard the beautiful vessels to his left – ‘they are the brokers’ yachts’ – and the elegant craft to his right – ‘the bankers’ yachts.’ He cocks his head quizzically and asks, ‘Where are the customers’ yachts?’ A couple of years ago, 4% may not have seemed like much. It got lost in 20% and 30% annual gains. But in normal years, when you might be lucky to earn 5% or 6% after tax and inflation – or in years following a long unsustainable run-up, when things are coming back down to earth and you might expect to earn even less – a 4% spread, or even ‘just’ a 1% or 2% nick is huge. So never buy something without knowing what you’d net if you turned right around and sold it a year later. And almost never place a ‘market order,’ even though it may save you $5 on your commission, except in truly liquid stocks. If you’re buying 500 shares of Microsoft or Ford, fine. But on stocks that don’t trade a hundreds of thousands of shares a day? Use limit orders. Now, as to yesterday’s column on the article in Worth (‘MR. BUFFETT, YOUR TIME IS UP: Buy-and-hold investing was never as smart as Warren Buffett made it look. Today the strategy may even prove dangerous to your portfolio’) . . . Mark Roulo: ‘Several of the things that I really don’t like about the article: ‘1. It is attacking a straw man. Warren has never claimed that you should buy stocks and not sell them (and he has sold lots of holdings in the past). He claims that you shouldn’t buy a stock unless, at the time of purchase, you are comfortable holding it indefinitely. The two are very different. ‘2. Even if taxes are not a factor, trading is a negative-sum game (commissions and spread). We all can’t make money by trading. The article doesn’t even try to explain how reading the article puts you in the top, say, 30% of the population in trading skill. I like index funds even for my 401(k) because of this. ‘3. His ‘You can’t lead a buy and hold life‘ item (3) nicely picks a few examples out of thousands to support his claim. Well, heck, give me 15 years of market data on thousands of stocks and I can find a few examples to illustrate anything I want. This is really bad statistics. ‘4. Item (8) from the article, ‘The experts bailed out of long term investing years ago,’ seems to be both (a) wrong, as I believe that large institutions are doing more indexing rather than less than, say, 10 years ago, and (b) almost irrelevant as Warren has beaten the vast majority of “experts”. If the examples in the article have done worse than Warren, then the fact that they aren’t doing what Warren does doesn’t seem to be a point in their favor (of course, Warren doesn’t index, but that is another issue). ‘5. Item (9), ‘We inhabit a culture of impatience,’ is just totally irrelevant to what works when investing … ‘6. The article talks about index recomposition as if this makes buying an index fund non-buy-and-hold. Pardon? The negative sum argument still holds, and the Wilshire 5000 recomposition is almost totally irrelevant…’ ‘Grrr. I *really* hated this article when I read it about one month ago. The reasoning is very weak, the empirical evidence doesn’t support his position, and some of the points, like item (9), are totally irrelevant.’ Ron Heller: ‘Wasn’t it Warren Buffett who said, ‘Whenever I sell Stock A in order to buy Stock B, I have two chances to be wrong?’
Is “Buy and Hold” Old Hat? (Really) October 29, 2001February 20, 2017 Catching up with some old issues of Worth, I was struck by this September cover line: Why Warren Buffett Is Wrong About Stocks. The article, by Adam Hanft, was entitled, Mr. Buffett, Your Time Is Up. Worth summarized it this way: ‘Buy-and-hold investing was never as smart as Warren Buffett made it look. Today the strategy may even prove dangerous to your portfolio.’ Some interesting points were made, but what struck me was the elephant in the room that was never even mentioned, unless I missed it – the principal motive for buying-and-holding: taxes. If you invest within the shelter of a tax-deferred account, and if you believe you have the analytical talent to identify and then switch from overvalued companies into the stocks of companies selling for less than they’re worth – more power to you. It’s a tough game, but highly rewarding if you can actually do it. And other than the frictional cost of what can now be very modest commissions, there’s no great handicap in trying. Likewise, if you invest through mutual funds within a tax-sheltered account and think you can ‘time’ the market, jumping out when it’s peaking, jumping back in when it’s dropped – more power still. It may be an even tougher game; but if you invest in no-load index funds, with no surrender fees, it could work. (The problem is that you run the risk of missing terrific, explosive rises in the market. The market seemed overvalued by many measures throughout most of its rise from 2000 to 11,000. Would you have wanted to sit it all out?) In a tax-deferred world of deep-discount commissions, Worth is right: buy-and-hold is no special virtue. If you can switch from a company whose stock has gotten ahead of itself into another whose stock represents fair (or even great) value, there’s no reason not to. But that’s not the world Buffett or many of the rest of us live in. The world we live in clips 20% of your profit if you hold a stock for a year and a day, perhaps as much as 40% or more, between federal and local income tax, if you take profits in under a year. So look at Warren Buffett, who has managed to compound his (and his shareholders’) money at something like 24% a year since 1965. A dollar compounding at that rate grows to $2,307 in 36 years. Should Worth have mentioned someplace that – had he earned the very same 24% each year but switched his holdings each year after they went long-term, subjecting his gains to, say, 23% tax (federal plus local) – that same dollar, with that same spectacular 24% pre-tax return, would have grown to ‘only’ $447? One way, $2,307,000 for each $1,000 invested; the other, $447,000. It’s not a trivial difference. You pay a high price to trade rather than buy and hold. I’m not saying it’s never smart to sell an overvalued stock. (And I’m not saying Warren Buffett’s return was as simple as buying and holding a few stocks that just went up 24% a year – he has had the advantage of ‘float’ from his insurance operations that, in effect, gave him a zero, or even sub-zero, cost of borrowing to invest ‘on margin,’ as it were, legally and prudently leveraging up his returns with other people’s money. The stocks he owned didn’t have to go up 24% a year to achieve that kind of return, because of the leverage he could employ.) Failing to sell when a stock gets swept up to irrational heights is a mistake I’ve made myself all too often, and the reason has always been the same: tax-phobia. Look at the people who couldn’t bear to sell Priceline at $150, or Amazon at $250, because of the tax bite. At $3.90 and $7.80 a year or so later, they don’t have to worry about the tax bite; only the self-recrimination. So you can’t buy and hold blindly. But so long as capital gains remain taxable, buying-and-holding gives you a tremendous leg up that the Worth piece, though thought-provoking, forgot to mention.
Is “Buy and Hold” Old Hat? October 26, 2001February 20, 2017 Let’s be honest: Kraft fat-free mayonnaise is pretty scary. It’s not just that it doesn’t taste quite right, it’s . . . well, have you ever seen what it looks like if left uneaten for a few minutes? It crusts up into a sort of cracked plaster, and you have to wonder what the rest of it, that you did eat, is doing. So it was with some amazement that I discovered Spectrum Naturals Lite Canola eggless mayonnaise. It has zero cholesterol and only 3 grams of fat per tablespoon compared with 11 grams for real (which is to say Hellman’s) mayonnaise, and about a third the calories. But it tastes an awful lot like mayonnaise. I claim no magical therapeutic properties for this one. (And yes, I know that neither the Kraft brand nor this one can technically call itself ‘mayonnaise,’ and neither one does.) But if there’s a health food store near you, you might stick a carrot in it and see what you think. And now I return you to the topic of the day: Is ‘Buy and Hold’ Old Hat? But first . . . Spencer Martin: ‘Re today’s column on shorting – yes, the kind of naked shorts you write about are pretty crazy. But you left out one group for whom shorting DIA’s is anything but crazy: people with 1) shorter horizons (e.g., near-retirees and above), who 2) are sitting on a portfolio that appreciated greatly over many years, and who 3) would incur big tax bites if they sold. For this group, shorting DIA’s in carefully measured quantities would be one relatively cheap form of insurance that would help to lock in those long-term gains. (Cheaper than puts today! have you seen the implied volatilities??) With ‘units’ of insurance so finely diced ($94 apiece), the truly nervous can insure themselves nearly fully, the partly nervous can insure partially, and so on.’ ☞ Good point. There is a difference between shorting stocks in hope of a profit and shorting them as a way to hedge bets you’ve already placed. If the market tanks, your holdings will tank, too; but you’ll make up some of the loss with your shorts. If the market zooms, you’ll lose money on your short sales but that’s OK – the long-held stock positions you didn’t want to part with are doubtless worth more, too. Nifty. The problem comes when this nice theory is tested in real life. Say you have $300,000 in the market and you short 3,000 shares of DIA, which is the rough equivalent dollar amount. And say there is a ‘flight to quality,’ meaning that the $300,000 of somewhat dicier stocks you own go down 20%, while the Dow Jones Industrial Average you have shorted goes up 10%. Now what do you do? Hang on? Take your loss on the short sale? Or say both go up 30%. Do you take your loss on the short position and hang on to your longs? What if the market then tanks? In theory, you’d just hold on; but in real life it could make you a little nervous. I’m not saying Spencer is wrong; he’s not. There is a place for this kind of hedging, much as he has described. But it’s still something to think through carefully before you pull the trigger. And now . . . Is ‘Buy and Hold‘ Old Hat? Or wait. Let’s do that Monday.
Is It Unpatriotic to Short the Dow? October 25, 2001February 20, 2017 But first: Chris Petersen: ‘If you’re going to fight electronic terrorism, it helps to know who the enemy is. Contrary to Dan Nachbar’s opinion, they are not ‘hackers‘ (see pcwebopaedia.com). Hackers are individuals that like to explore technology for the fun of it. Those who wish to perform criminal activities are called something else. The term has been subverted by those outside the hacker community. I would also disagree that the Internet is designed to withstand attacks. If that were true, people would not have to spend ‘many a sleepless night’ defending it.’ Randy Mahoney: ‘There is published, peer-reviewed evidence that Zicam DOES mitigate the effects of the common cold, especially in adults. But if it is sold as a HOMEOPATHIC remedy, it is not subject to the stringent, and very expensive, FDA approval process. The company just gives us the references, produces a great product, and claims ONLY that it works ‘homeopathically.” Gray Chang: ‘For a balanced view of homeopathy, try this link.’ (Isn’t homeopathy where your foot falls asleep? With other feet of the same sex?) Barry Basden: ‘Oscillococcinum, Schmillococcinum. Try Sambucol, an elderberry derivative, for flu symptoms. Available at vitaminshoppe.com and elsewhere, Sambucol was developed in Israel and has been found effective in clinical tests …you could look it up.’ L.J. Kutten: ‘Years ago when I was living in Coronado, CA, I rented a house with an OLD refrigerator. It was always cycling on and off. After about a year I went to the landlord to replace it with a new one. The electric bill was cut in HALF!!!!!!!’ And now: When tragedy struck September 11, I believe it would have been unpatriotic to short stocks, hoping they’d go down (and adding selling pressure to their fall). There are those who argue that, no, it’s not about patriotism . . . that, short-sellers or no, the market will find its level – like water – where greed (the hope of a gain) balances fear (of a loss) . . . and that most of those who shorted shares of stock would not long after be buying them back to cover their shorts and take their hoped-for profits (handing over 30% or 40% to Uncle Sam along the way – there’s no such thing as a long-term capital gain on a short sale) . . . so why not let people freely express, through their purchases and sales, their view of stocks’ value? Still, at times of true crisis and potential panic, the very act of concerted, massive short selling could cause panic and disruption that could do actual economic damage on top of whatever damage threatened to cause panic in the first place. But how now, down Dow? Now that the market’s moves no longer lead the Nightly News? While it may not be smart to short stocks, I think patriotism goes back to being a non-issue. In all but the most extraordinary circumstances, there’s nothing unpatriotic about shorting stocks. Short-sellers augment the market’s liquidity (the more people placing bets, the more liquid the markets) and they can be a force for rationality, leaning against the market when they perceive it to have gotten too high, propping it up when, its having fallen, they buy back shares to cover their positions. I’m not suggesting you do this. As I’ve written before, shorting stocks is a VERY dangerous game. Really, really, really. And as Peter Lynch has been pointing out in his sensible television ads for Fidelity Investments, over the long run, it’s never been a good idea to bet against America. Ever. Still, the Dow is at 9300 and change. Even pre-September 11, you could make the argument it was very richly priced. When Treasury Secretary Rubin and Fed Chairman Greenspan were worrying it was dangerous overvalued five years ago – Greenspan made his ‘irrational exuberance’ remarks December 5, 1996 – the Dow was around 6500. As I have also written here before, we’ve worked really hard in those five years, done lots of smart productive things, laid zillions of miles of fiber-optic cable, become richer as a nation. So maybe, pre-September 11, we had grown into that 6500 valuation. But up nearly 50% more? Seemed awfully rich to me. And then there was September 11. The market seems to be saying, ‘No biggie. Look what happened in the Gulf War. By the time the bombing started, the stock market recovery, anticipating our success, was underway. So here we go again . . . if you wait for victory, you’ll be too late.’ But this is not the Gulf War, and – while I would be very hesitant to say I know better than the market – I do wonder whether, whatever our projected productivity growth rate might have been on September 10, it is not know at least 1% a year lower for the foreseeable future, as we add security guards, slow down our mail delivery, beef up our inventories, hike our insurance costs . . . all prudent, sensible things to do, but not things that make us more productive or profitable. And isn’t there also more uncertainty in our economic forecasts than there was on September 10? And doesn’t uncertainty exact its toll from stocks? So if one were to short synthetic ‘shares’ in the Dow (called ‘Diamonds’ – symbol DIA – and trading at one-hundredth of the Dow), one might be foolish to bet against America, foolish to place a bet where 30% or 40% of any winnings would be taxed away, foolish to pay a commission to make the bet, foolish to be on the hook to pay, rather than receive, dividends. But in my view, one would not be unpatriotic. Or crazy. In the long run, such a bet would almost surely fail. Peter Lynch is right: we will come back. And there will be lots of new and profitable technologies developed to adapt to our new circumstances (who makes the machines that will read your identity from your iris?). What’s more, one can imagine this nightmare drawing us closer to Russia and China and others, opening their giant markets to further penetration by the Dow Jones blue chips. One can imagine its inspiring the First World to embark on a Marshall Plan for the Third World that could ultimately spark decades of economic growth. But six months or a year from now? Maybe the Dow will be higher for reasons that elude me. (I am a master of elusion.) But it could also be lower for reasons that are all too clear. Or maybe the robust Dow is just signaling that big blue chips will benefit as weaker hands fold.
Homeopathy, Hackers and High Efficiency October 24, 2001February 20, 2017 HOMEOPATHY Gray Chang: ‘Sorry to spoil your faith in Oscillococcinum, but I hate to see people wasting their money on useless cures. I would suggest herbal teas instead, since at least there is some possible benefit from the ingredients, and you get some hot water and relaxation time with the tea, which is always beneficial.’ Doug Gary: ‘I’ve had great experience with Oscillococcinum. And here’s a little secret: You can use about 1/3 of each little container and it will work just as well. Think of the savings! Homeopathy only requires a small amount of the remedy to work. And work it does. It has transformed the physical and emotional well being of me and many people I know. I understand fellow readers’ skepticism about things they haven’t experienced — and this one is worth experiencing. Check out this link to some great info and books. David Jelinek: ‘With regard to homeopathic remedies: I’ve used Zicam for colds, and on the box it says that it’s homeopathic. Normally that would set off alarms in my head, but this stuff is amazing. Just as advertised, it knocks out colds in a day or two. One of my friends had the same experience. And there is clinical research to back this up (which is why I became interested in this in the first place). And I have no financial interest in Zicam. I just think it’s amazing that we’ve actually cured the common cold.’ ☞ And let’s not forget Cold-Eeze – zinc – that apparently also mitigates the severity and duration of colds. As for Oscillococcinum . . . you really think I’m going to let a little science fly in the face of my hard-won ability to pronounce it? Next you’ll be telling me there was never such a thing as antidisestablishmentarianism. HACKERS Dan Nachbar: ‘You said: ‘I’m actually more afraid of disruptions to the electric grid and/or our computer systems than I am of Anthrax.’ I don’t think you need to worry about the computer networks. There have been ‘computer terrorists’ for years – they are called ‘hackers.’ Folks in the networking business know what it is like to spend every day under constant attack. It’s annoying, but life goes on. ‘The good news is that the Internet, at its core, has been built with the assumption that it will be constantly under attack. The people who designed the guts of the Internet spent (and continue to spend) many a sleepless night puzzling out what tricks a perfectly informed and dedicated attacker might use and then designing mechanisms to thwart such attacks. The usual standard is to design a system that even the designer can’t break into. In many other businesses, security is not a central or well-rewarded part of the organization. As evidence, consider the poor quality of the folks doing the work. In contrast, computer security folks, particularly the core system designers, are some of the very brightest people in the business. (Microsoft’s failure to incorporate comparable safeguards in its software and their spectacular PR success in making this failure appear to be an ‘internet’ problem rather than a Microsoft specific problem is a topic for another day.) ‘So overall, for computer networking, nothing is changed by recent events. To my way of thinking, the recent change is that other ‘systems’ (air traffic, US Mail, and who knows what’s next) are now joining the ranks of the ‘hacked.’ These other systems have operated for years with few if any safeguards against bad behavior on the part of users. What surprises me is that it took the bad guys so long to think of it. In the end, the rest of the world’s systems will need to be redesigned and then operated with the same ‘paranoid’ design assumptions that computer network designers have used for decades. The result will be some user annoyance, but life will go on.’ HIGH EFFICIENCY Steve Meyer: ‘The refrigerator is another place where gobs of money can be saved. In my case, I bought a new energy-efficient fridge for $800. For doing this I got a $200 energy-saver rebate from the power company AND my electricity usage dropped so much that, in addition to buying fewer kilowatt hours, the power company reduced the rate I pay per KWH. Quite a nice payback (the money and feeling good about saving energy).’ ☞ Click here for a little more background and some efficient brands. Karen Tiede: ‘Last night, I went to BJ’s Warehouse Club. The car next to me was idling when I went in – thought someone must just have dashed in for a case of tuna ($0.45/can). I shopped every aisle, but that car (Blazer, natch!) was STILL IDLING when I came out!! Why shop at a warehouse club in the first place if you’re going to spend what you save on gas, not to mention wear and tear on the engine?!?’ ☞ Not to mention having your Blazer stolen. Marvin Dennis: ‘No mention of fuel cell technology? If I understand correctly busses in certain metropolitan regions are being fitted with these. Problem now is size and weight but very enviro-friendly. And fusion as a power source looks like it’s only 15-20 years out. After seeing some of what’s going on at Atomic General in La Jolla, it appears this may be a practical alternative. The waste from nuclear fusion has a life of decades not millennia; and the raw materials are cheap and plentiful. You can find out all about both at howstuffworks.com. Mike LeBoeuf: ‘Your three stated goals – Crush terrorism, Create a third-world Marshall Plan, Work toward energy independence – would be the major focus of my administration if I were President. It’s not enough to eliminate the terrorists. We have to fill the void that allows this cancer to grow through aid, education and opportunity. In my opinion, there never would have been a Third Reich had there been a Marshall Plan after World War I. As for energy independence, when will we ever learn? Let’s hope the horrors of the past month will cause us to get serious about this.’ ☞ Mike LeBoeuf for President.
Homeopathetic? 90 mpg? Your Geothermal Home? October 23, 2001February 20, 2017 OSCILLOCOCCINUM Gray Chang: ‘I expect that you are getting an avalanche of mail regarding your advice about taking Oscillococcinum, a homeopathic remedy. The good news is that it is absolutely harmless; the bad news is that it is absolutely useless. The basic principle of homeopathy is that you start with a substance that causes the same symptoms as the disease. Then you dilute it successively until there is none of it left (usually, not even one molecule). Then you consume this super-diluted medication to stimulate your body’s natural defenses to fight the disease. The main effect is on your brain, to fool it into thinking your recovery was due to the medicine, rather than just your body doing its normal job of fighting disease and getting well. There is no harm in taking the Oscillococcinum, except the hit to your pocketbook and possible distraction from doing something that might actually help, such as frequent hand-washing, avoiding crowds, and exercise.’ ☞ Hey! Placebos work! Stop ruining mine! MILEAGE Albert Fosha: ‘Unless you 1) Have to buy a new car because of compelling reasons such as your old one died, or 2) You’re an environmental nut and are willing to spend wildly to help Mother Earth, usually using better mileage as an excuse to buy a new car is financially illogical. For instance, I drive a 1997 Ford Contour, that gets a steady 32 mpg (as a retired engineer, with a computer and some time on my hands, every gallon of gas put in it has been recorded, and an accurate mileage record maintained; so I know that this mileage figure is correct). If it were driven 15,000 miles per year, it would consume 469 gallons of gas each year. A new car that gets 50 mpg would save 169 gallons – about $250 a year. To achieve this, I’ve spent $18,000. I’m not nearly enough of an environmental whacko to do that.’ ☞ It makes no sense for people to junk perfectly good cars to buy new ones they don’t need. But for the millions who will be buying new cars each year? They may as well get 50 or 60 miles to the gallon rather than 25. Russell Turpin: ‘I drive a car that gets 10 mpg. It’s a 1981 Olds 98. Yeah, I’d like to have a car with better gas mileage. But this car has proven terribly reliable, requiring little more than normal maintenance for years. Economically, I’m far better off keeping this car than buying another, even if I do spend a little more in gas. But yeah, when I do need to get my next car — not any time soon, I hope! — I think I’ll bite the bullet and buy one that gets at least 20 mpg. Even if I have to buy one that was built within the last ten years. I’ll do my part to save gas. I’m just on the cheap, trailing edge of the curve.’ Rob Myhre: ‘The Honda Insight was next to impossible to obtain when I was last looking for a car. I ended up buying a 1997 Geo Metro with 30k miles for $5000. It gets 45 mpg. Not as good as an Insight, but pretty darn good. And it can carry 4 people and it was $15000 cheaper. (Not much of a babe magnet, though. Babe repulsive, more likely.)’ John Evert: ‘Guess what, Andy. The switch to ‘dramatically more efficient vehicles’ ain’t gonna happen. You can’t pry these people out of their 12 mpg SUVs because 50 mpg has absolutely no meaning for them. I just sat next to one of them who left her ENGINE RUNNING for at least 10 MINUTES while she waited for her pizza! (No, it wasn’t over 90 or below 30 where one might want AC or heat; it was a balmy 72.) I sat in my Honda Civic with the engine off, aching to go over and demand, ‘What the &%$# are you thinking?’ But I didn’t.’ ☞ Good thing, too, road rage (even at idle) being what it is. But I like to think people can be educated. A shift in our taxing priorities would also make great sense: make gas cost what it does in Europe and Japan, and use all that revenue to lower the income and Social Security tax. You’ll encourage work and investment; discourage energy consumption. Y. Tony Lee: ‘If the US can improve its diesel fuel quality, we can have the VW Lupo, which gets 90 miles to the gallon.’ ☞ Obviously, not everyone is going to drive these little bugs, let alone the versions VW projects a few years out that will get 190 miles to the gallon. But it is clearly within our grasp over the next decade, if we care to, to cut our dependence on foreign oil, and our trade imbalance, and our pollution, way, way back. GEOTHERMAL Andrea Marcucci: ‘No discussion of improving energy efficiency and reducing dependency on foreign oil is complete without mentioning geothermal heating and cooling. It’s great for both new homes and retrofits of older homes.’ ☞ Click here for an introduction to this technology – even a little animation that shows how it works.
Oscillococcinum, Not Cipro October 22, 2001February 20, 2017 Probably the most dangerous thing you do is not exercise. Yes, it is all but certain there will be further acts of terrorism in the U.S., and that is awful. But your chances of being directly affected by any of them are slim. Air travel? It always used to be extraordinarily safe, and, statistically, even after September 11, it still is. Anthrax? One death in 280 million Americans so far, and what will be plenty of Cipro to go around for those few who may need it. Smallpox? If you saw ’60 Minutes’ last night, you may share my impression that the 300 million doses of vaccine we are in the process of acquiring, to augment the 7 million already on hand, are a prudent precaution; but that the chances of catastrophe are low. Beware of delirious men with grotesque rashes coughing on you. I don’t mean to be flip – what’s already happened, and whatever happens next, is horrible. We should expect our government to be working overtime to take precautions on our behalf. But with luck, you and I will be OK. And there may even be silver linings. How wonderful it would be if, over the next decade . . . The world united to come down hard on terrorists and largely rooted them out, thereby lessening (we will never eliminate) their threat . . . and at the same time finding common ground to come closer together. Witness our new closer relations with Russia and China. We joined with Europe and Japan in a “Marshall plan” of sorts for the Third World that substituted opportunity for despair. Easier said than done – no question. A very long-term project – no question. But worth trying? No question. We dramatically increased our energy efficiency, thus dramatically reducing our 50% dependence on foreign oil, our enormous balance of trade deficit, and the outsized strain we place on the environment. An energy-efficient home requires a fraction of the energy most of us now use. And the technology is at hand for affordable, attractive, comfortable, safe vehicles that get double, and soon triple, today’s mileage. Kathi Derevan: “The Toyota Prius, which my husband owns and loves, gets slightly fewer mpg than the Honda Insight [rated at 48 miles per gallon versus 63], but it is a real 5-seater with a few luxury-type features, and costs only $20,000. We have had it several months. It gets the best mileage in stop-and-go traffic, but we have also taken it on road trips and it can keep up with all traffic and has a good sized trunk for all our stuff.” In the meantime, we should be stocking the same basics we always should have on hand in case of floods, earthquakes, tornadoes, hurricanes, ice storms and power outages. (Three Mile Island was not a terrorist act.) That includes a case of peanut butter and a lot of Triscuits, and/or cases of tuna and salmon, several cases of water (or Honest Tea), a way to keep warm, and enough cash to carry you through until the ATM’s and credit card machines are back up. It includes, also, a prudent month’s supply of the medications you take regularly, batteries, candles, matches . . . think it through. Be prepared. I’m actually more afraid of disruptions to the electric grid and/or our computer systems than I am of Anthrax. (Columnist Andy Borowitz suggests the need for a combo Anthrax and anxiety tablet he would call Ciprozac. For his full report, inspired by an unattended powdered donut on the counter of an imagined donut shop in Ohio, click here.) The medication you should really consider stockpiling, in my view, is Oscillococcinum (ah-sill-o-COX-ee-num). I am not a doctor, obviously, and my medical advice is even more suspect than my financial advice. But the box says, 65 years of use by millions of people in 43 countries, and in the last year or so I have become one of them. The minute I feel even a hint of an achy, I’m-getting-sick kind of deal, I pop a dose under my tongue. And guess what? It works! For me, anyway. (And no, I own no stock in this.) It’s made by a French company called Boiron and is not entirely cheap – about $10 for a box with 6 little doses. They recommend you take 3 doses over an 18-hour period to keep the flu from getting a grippe. But to spend $5 every once in a while to bounce back from what might otherwise have been something worse? I grab a few boxes whenever I see Oscillococcinum on the pharmacy shelf. I think this year’s stocking-stuffers will be: a Compact Fluorescent light bulb, one of those crank-it-yourself radio-flashlights, and a box of Oscillococcinum (enter “oscillo” in the search box, and note the $14 price on the 12-pack).
Rev?on, Seatbelts, and a Big Part of the Solution October 19, 2001January 26, 2017 REV?ON Sowmiya: ‘Why is Revlon named REVLON when though the founder’s name is Revson?’ ☞ Early partner Charles Lachman was the L in Revlon. After the first year or two, when Charles Revson forced Lachman out – but could not wrest away his third of the stock – people asked Charlie Lachman what he did. For decades they would ask him this. ‘What do I do?’ he reply. ‘I rake.’ ‘You rake?‘ ‘Yes. I have a rake, and I rake it in.’ (To read the whole book – which long ago in a distant galaxy people paid cash money to do – just click on BOOKS, above, and then on FIRE AND ICE.) BOSTON DRIVERS Peter Kaczowka: ‘You mentioned auto accidents in your column, and asked ‘Have you seen how people drive in Boston?’ Before your readers decide it’s not safe to drive here, they should note that Massachusetts has the lowest fatality rate due to auto accidents in the US, and has for several years. The Massachusetts rate is around 1.5 fatalities per 100 million passenger miles; lower than any other state’s, and less than half the national average.’ ☞ Sure, Massachusetts – but have you seen how people drive in Boston? (OK, I’m basing this on how they drove around those rotaries 30 years ago. It may have improved – if only because traffic has come to a complete halt, which makes fatal accidents all but impossible.) (OK, the truth is, all this is said in fun. I love Boston, and Massachusetts. If there are finer places in the world, I have never found them. Except for November thru April, when it is fit for only for penguins and walrus.) Peter continues: ‘You are correct however in pointing out how dangerous driving an automobile is. Assuming that a person drives or rides a million miles in a lifetime – e.g. 20,000 miles a year for 50 years – and given the national average of 3 fatalities per 100 million miles, the odds of that person dying in a car accident in his or her lifetime is 3%. Predictions are that auto accidents will be the third leading cause of death (worldwide!) by 2030, after heart disease and cancer if I remember correctly. And that’s not including pedestrians and bicyclists killed by cars.’ ☞ Wear your seatbelts. A BIG PART OF THE SOLUTION The Honda Insight gets 50-60 miles to the gallon, or about twice the average on America’s roads today. A safe, comfortable, affordable car thet gets even better mileage is not far behind. So in 10 years, if we wanted, we could about double the fuel efficiency of the US automotive fleet, about halve our gasoline consumption, dramatically decrease our reliance on imported oil, decrease emissions, and slash our balance of trade deficit. How could this not be good? The next car I buy will get 50 miles to the gallon – or more – even if I have to swallow hard and buy a new, rather than a used, one.
Columnists October 18, 2001February 20, 2017 Thomas Friedman’s columns in the New York Times are superb. Last Friday, he wrote what he had hoped President Bush might have answered Osama bin Laden, upon seeing bin Laden’s videotaped message. ‘What was most revealing,’ Friedman had Bush answer bin Laden, in part, ‘was what you didn’t say: You offered no vision of the future. This was probably your last will and testament – I sure hope so – and you could have said anything you wanted to future generations. Yet you had nothing to say. Your only message to the Muslim world was whom to hate, not what to build – let alone how.’ Columnist Maureen Dowd, meanwhile, as you may have seen, writing for the same publication, was struck by the visuals of the set against which the bin Laden message was taped – a lot of rocks. She wondered whether we aren’t at war with the Flintstones. And here are some thoughts from an Arab-American journalist that struck me as worth sharing: An Arab-American Looks at the Middle East By Joseph Farah It is a sad statement about the Arab-American community that I find myself virtually alone publicly denouncing the violence of the Palestinian Arabs. It is sad because it shows how little diversity of opinion exists among Arabs in America, where we have the freedom to speak out without repercussion. In the Arab world, by contrast, there is less freedom to state opinions. With more freedom here than anywhere in the Arab world, more Arab Americans should speak out. I published a column titled “Myths of the Middle East” on October 31, 2000. I received in response 15,000 e-mails from just Israel, and thousands from the United States as well. The Jerusalem Post reprinted the piece and told me that it evoked more reaction than anything the paper had ever printed. But the reaction was not all positive. I received death threats that were turned over to the FBI. Indeed, many Arab-Americans were quite distressed over the things I had written. But 10 to 20 percent of the Arab-Americans who responded said that my message was long overdue. The column was designed to debunk two central myths about the Middle East. Myth-shattering is important to a journalist like me. Interestingly, I have two specialties as a reporter: the Middle East and Hollywood. The two fields have a lot in common, for both are characterized by myths. The first myth is that the conflict in the Middle East today is about the struggle for a Palestinian state because Palestinian Arabs were displaced by the creation of Israel, and the world is now responsible to assist in the establishment of a Palestinian homeland. Regarding Palestinians as a distinct people, however, is a notion that must be reconsidered. There is no distinct Palestinian culture or language. Further, there has never been a Palestinian state governed by Palestinians in history, nor was there ever a Palestinian national movement until after the 1967 Six-Day War, when Israel seized Judea and Samaria. The Palestinian national movement has one primary goal: the destruction of Israel and the creation of a Palestinian state to supplant Israel, with Yasir Arafat as its leader. A second myth deals with the issue of Jerusalem and the Temple Mount. The myth is that Jerusalem is really an Arab city, and that the Temple Mount is the third holiest site in Islam, and a central focus of Islam. The truth is that the Palestinians expressed very limited interest in the Temple Mount before 1967. Further, Jerusalem has always been a city with a substantial Jewish population, even during the period of Ottoman rule, 1517-1917. There are other myths which I explored in subsequent columns. If you believe the Western media, Arafat is a Nobel Prize peacemaker who is central to any settlement. He is portrayed as the place where the peace process begins and ends. But this is not the truth about Yasir Arafat. I recently interviewed an analyst who worked for the National Security Agency in 1973. This man intercepted communications between Arafat and his murderous Black September organization in Khartoum, capital of Sudan. The communication involved the 1973 kidnapping of two U.S. diplomats and one Belgian diplomat. In the end, Arafat gave the order to kill all three. Why do the American people not know about this incident? Where are the investigative journalists? And why has the U.S. government not charged this man with the deaths of two U.S. diplomats? Because Arafat is thought to be Israel’s “partner for peace.” The charade continues. There is only one country in the region with an acceptable level of freedom, and that is Israel. When I go to the Middle East and visit Syria or Lebanon or Egypt, there is no question that I am in a police state. And believe me, working as a journalist in a police state is no fun. By contrast, when I am in Israel, I feel that I am in a free country. So, why is the media always critically focused on Israel? It is one of the few places you can take a television camera with virtually unlimited access. Why can’t we take cameras to Syria when the president there decides to destroy an entire town? Simple: we are not allowed. The West has a different standard for the Arab Middle East than it does for the rest of the world. It is not a healthy thing, but shows a kind of disdain. Arabs need to be judged by the same standards as everyone else. When I engage in debates with Arab-Americans, I constantly raise this. Their families came to the United States for freedom and opportunity, just like mine did. So, why, when they look at the Middle East today, do they side with the regimes that perpetuate the oppression that their parents or grandparents fled? Why do they think that they are standing up for Arabs when they justify the murderous actions of someone like Saddam Hussein? Joseph Farah has worked over twenty years as a journalist, including stints as executive news editor of the Los Angeles Herald Examiner and editor-in-chief of the Sacramento Union. He founded the Western Journalism Center in 1992 and has taught journalism at UCLA.