Author: A.T.

The first thing to say — as you’ll read in what I found to be some fascinating detail tomorrow — is that it’s not GM we should be primarily mad at. But I didn’t know that when I wrote about being charged $20 for being two or three days late on a $55 payment. (It turns out I may not even have been late — the company we should be mad at just likes charging the $20.)

You didn’t know it either when you responded. And boy, did you ever respond. A sampling (with some good general advice from Dorothy Mallonee at the end):

Don Hauge: You are so lucky to be able to vent publicly. If that had happened to me, I would have been just as mad, but I wouldn’t have been able to tell thousands of people about it. At least when you vent, someone at GM might actually read about their own stupid policy and change it. When I vent, the only one who hears it is my wife.

I am indeed lucky to be able to vent publicly. One of the great things about the Internet is that it makes it easier for all of us.

Dr. Tom Novinger:

You paid the $20?

You paid the $20?

You paid the $20???!!

How could you? Didn’t we grow up in the sixties, when we were all protesting over things like free speech, free love, taxes and the war in Vietnam?

Being lucky enough to vent publicly, I figured I’d protest that way. And then catching up on the past week’s Wall Street Journal, I saw something to suggest that my friends the trial attorneys — who do some excellent things for consumers despite the things for which I criticize them — may soon put a stop to crazy late charges. “Attorney Finds a Way to Battle Bill’s Late Fees” (October 6) describes Washington, D.C., attorney Philips Friedman’s attempt to fight late fees by using contract law. The idea is that being late with a payment is a violation of your contract — but contract law limits the damages to the actual harm done. And it would be very hard for a credit card company to argue that my being a few days late on a $55 payment has somehow cost them $20.

T.F. Gazda, “steelworker & consumer”: It seems I’m going through “deja-vu” reading your newsletter here…. I’ve had the exact-same experience — but with DISCOVER CARD (you know, “the card that pays you back”). I’m HAPPY to say that DISCOVER CARD SERVICES have a much more palatable group of “customer service team members” . . . in every case where there was a “slip up” (of my accord), they reversed the charges willingly. Their card is the ONLY one I use! THAT’S a GREAT COMPANY!

I don’t have ANY respect for GM or its products . . . being in the steel industry, I’ve seen our prices (steel sheet) DECLINE over the past 10 years, while it seems GM’s prices have increased at a rate greater than inflation, & they BEAT ON US for lower prices (“what about inflation fellahs?” . . .). I’ll NEVER EVER buy a GM vehicle, just for this reason. That company is BULL-HEADED & too big & working with management’s-style of the 1960’s (or was it the 1760’s? ) . . . . Fred Flintstone must be their CEO . . . I’m just so aggravated by their LACK of true customer focus that I had to put it on record . . . . I own a Dodge & a BMW. General Motors WILL lose — they just can’t see it yet (dinosaur company). Unload your stock in them. Get a Discover Card ASAP, & cut your losses on that silly GM card . . . . GM isn’t WORTH it — & there are far-better cars on the road.

Well, I’m keeping my stock, but with more qualms (though as you’ll read tomorrow these turn out not to have been GM customer service reps at all).

Rafal: I had the same thing happen to me when I missed the pay-by date on my MBNA Platinum Plus card by a single day (I had been out of town for about 10 days and had forgotten to pay the bill before leaving). Not only did I get charged the $20 or $25 late fee, I was also charged a ludicrous amount of interest (MBNA uses some horribly evil method for computing interest expenses). One would have thought that for a card that advertises itself as a step above a gold card, they would be willing to bend the rules for a cardholder with a pristine payment history. Guess that’s where the American Express people still have their niche well carved out. American Express allows you to call in payments, which has saved me on occasion when I realized that the payment was due in 2 or 3 days. I simply made out a check, dropped it in the mail, and at the same time called Amex to let them know it was on the way. No hassling with late fees, no guilt, and everyone’s happy. For this alone, I’m willing to shell out the annual fee on my Amex Gold card (and the fact that Amex is still one of the most pro-customer credit companies when it comes to disputes and other billing oddities. This has saved me from unscrupulous mail-order merchants once or twice).

Alan Silverstein: Today’s GM Credit Card Rage column was identical to the experience with my GM Gold card when I called to protest the same late fee. I pride myself on a virtually perfect credit rating and was not about to let “late mail” cause me to have to pay $20 when one payment came in a day late. I too got on with a GM service rep — and I am nice by nature in situations such as these, rare as they are — and immediately found the same confrontational attitude as you did. I have dealt with many service reps over the years on a variety of credit card issues (this new “late charge” that the industry has been levying caught me by surprise, as it apparently did you as well). Regardless of the other issuers, I have found that only with the GM service center have I almost immediately been put on the “defensive.” Virtually all other card issuers will let you slide when it is apparent based on your history that any lateness is clearly an aberration, and is not recurring. Not so with GM. I immediately closed out the card, with the service rep almost “daring” me to do it. I have also advised many an underling to relay common customer difficulties to higher-ups, but have always felt that these messages fall on deaf ears. I lost my points, but I will not buy a GM product until I see that they have “reformed.”

In light of what you’ll read tomorrow — these are not GM reps or GM’s policy — it’s amazing GM has allowed its reputation to get hurt so badly with this.

Tony Levelle: I once worked for a major credit card company writing technical manuals. They treated their workers worse than anyone I’ve ever seen. Stress illnesses were endemic. A friend went to the doctor with headaches, nausea, and constant vomiting. This was so severe that she was dehydrated by the time she made it to the clinic. “Oh,” the doctor said, “You must work at (major credit card company). I’ve seen several people with these symptoms.” Anyway, I feel that bashing credit card companies is a Good Thing. Keep it up. They won’t change, but I’ll feel better.

Perhaps it’s just this stress that led Deep Plastic, tomorrow’s source, to crack.

Rich: These people are idiots sometimes. Don’t they realize that the average dolt (that deserves to pay the $20) will not even have the common sense to call up and complain? It would be in their best interest to just waive it for anyone that calls. Meanwhile, I’m still waiting for Nation’s Bank to send me a letter. Last month they sent out a statement saying that their Blockbuster Visa card would no longer be giving the 1% in Blockbuster Bucks. They are doing this to “improve service” and are “investigating other alternatives.” Yeah, right. Lunacy abounds.

John Dobrinski: I spent six months trying to get GM to remove a several hundred dollar charge on my card that was done by an unknown person charging an airline ticket. I could not believe the incompetence of the customer service dept. The GM card customer service also has three different departments throughout the country so when you call the 800 number you might get any one of the three offices. They also do not give out their last names or phones so you cannot get hold of the person again. By the way, when I wrote to GM in Detroit complaining I was told the card is not affiliated in any way with GM.

True, except that GM made the deal with the company that services the card, and GM has its name and logo plastered over everything. If it’s the GM card, it’s the GM card. If they really have no control over the servicing company, they were nuts to sign a deal like that.

Rich Stehnach: My wife and I have purchased two Oldsmobile Silhouette minivans using the $4400 in credits earned from our GM Gold Card. With GM’s decision to limit us to $500 a year instead of $1000 a year in earnings, we certainly no longer feel as compelled to spend our next $50,000 on GM products. It’s clear to me but obviously not to GM that they’re probably viewing the billions that GM Card holders have accumulated in credits as a huge liability rather than the potential trillions in sales awaiting them an asset. The shortsightedness of corporate America should never be underestimated.

MK: We also once had a payment arrive late to the GM card, (I think in ’95) and indeed at that time a simple phone call did waive the interest and fees. You are correct in getting this steamed over the $20, and the fee is not only unjustified, but stupid for GM and the GM card.

All this illustrates a basic truth about life, and why the free market is only the “best system on earth,” and not a “perfect system.” You see, we all live on a planet that is by and large populated by idiots. If 90% of potential consumers of anything are willing to put up with unreasonable fees, or exorbitant prices, or shoddy workmanship, or poor quality, then the providers of the product or service can probably do all right only selling to them. We each have a duty, at least as fundamental as participating intelligently in our democracy, to participate intelligently in that most democratic of all human systems — the free market. When anyone of us forgoes our responsibilities as consumers, we diminish all the other consumers in our society by misallocating resources towards expensive or shoddy or unjustified goods and services.

You see? You’re not just fighting fer yer own twenty dollars, Jimmy (picture Ma Joad borrowed for a Frank Capra movie on credit card rip-offs, with either Jimmy Stewart or Henry Fonda in the role), yer fightin’ fer all the people. But while it might not be as noble as all that — the point of Adam Smith’s invisible hand is that you don’t have to be noble, you can just be out for yourself — it’s true: a market works best when information is clearly disclosed and consumers are intelligent in assessing it.

Bill Fletcher: Not only do they now clip $20 for a “late fee” — but don’t look now . . . some cards have removed the – once 10 day grace period – once 5 day grace period – so there is now NO grace period. This is with both of my credit cards. And I am getting the statements only two weeks before the due date. They can easily hold the posting of the payment one or two days so it’s getting very hard to even get them the payment on time if you have the time to run from the mail box to your checkbook and back again (and who does have the time). I’ve made my calls to them — Bank of America and Wells Fargo — and my “Sean” said “we’ve had to do it because people are taking advantage of the grace periods.” Need I say more?

I think Bill refers here not to the ordinary grace period — no interest charged if you pay your bill in full by the due date, which most cards still allow — but an extra little grace you’d get to avoid charges if your payment came in a few days after the due date.

Rick Lafford: I’m like you in that I tend towards used cars and drive them mostly to the end. My current is a 1990 Camry bought from National in 1992 for $11,000. Still going strong at 173,000 miles.

So why did I ever fall for that GM rebate-on-new-cars-only card in the first place? I guess it was the 5% that got me. Not my brightest move — though you never know. One of these days I might go crazy and buy a new car. Do they still make Buicks? When I was growing up — well, you should just have seen the looks on all our faces that day when my Dad brought home a brand new Buick. (Well, it was the 50s.)

And finally, more good advice from Dorothy Mallonee: “I feel qualified to comment, both as someone who’s had a fair amount of congress with customer service personnel as a consumer, and someone who’s been on the other end of the phone. I was a service rep for ‘the telephone company’ for 13 years, and have spoken to — and, I hope, helped — a fair number of customers.

Some pointers:

1. Know what you want. Your best bet is to make clear not just that you’re angry, but what action will satisfy you. Be reasonable, of course, but stand firm.

2. Everyone has a boss. Although this varies by organization, the front-line people are often all too eager to kick you upstairs. The first-level supervisor usually does not want you to escalate. Play these cards for all they’re worth, and never hesitate to escalate ever higher.

3. Co-opt the person you are dealing with. Use every cheap trick you know to create the illusion that you and your new ‘friend’ are a ‘team’ trying to reach a mutually-agreeable goal. [This also works well if you ever find yourself the hostage in a kidnapping. — A.T.] For example, shamelessly use plural pronouns to discuss ‘our problem’, and ‘what we can do about it’.

4. Keep venting to an absolute minimum. You have no idea how anger can affect people who have to listen to it many times during the day. It frightens some people and others simply become angry in turn. Anger sounds very personal to the rep on the other end of the phone line, even though you know the rep is usually just a functionary with little more control over the situation than you have. So vent, but use your dog or your co-workers, and try to keep your interaction with the rep as calm and business-like as possible. The points you score with your booming voice or your razor wit will rarely carry the day. [You mean sarcasm doesn’t make people love me? Uh, oh!] Stay focused on the problem and your expected solution.

Tomorrow: Deep Plastic Reveals All – The Inside Story

Thursday in this space you will find the inside story of the GM Visa card (and some others serviced by the same credit card service company). Deep Plastic reveals all.

But wait. It seems people are not only angry with GM. They’re angry with Ford, too.

Writes Edward M.: I have read your comments on the $20.00 late fee on your GM card. But that is nothing compared with what Ford has done to me and other likewise situated credit cardholders. They have canceled their rebate program as of the end of this year. Now, they have a right to cancel their program, but not to the present owners to whom they have agreed to honor this program! If they want to cancel this program, I do not feel that they have a right to renege on their agreement to existing cardholders who are using it to accumulate credits for five years. I have complained to the State of Florida, Dept. of Consumer Services, who have written Ford Motor Co. four or five times. Ford has not even had the courtesy to respond once. I am now trying to find a lawyer who will file a class action suit to force this firm to live up to its agreements.

Writes Jim L’Heureux: With a Ford Visa card, I’ve been getting the 5% rebate good towards a new car for just about 5 years now and have almost maxed out at $3500. Just recently Ford announced it would end the program on Jan 1 1998. In addition, rebates will be rescinded after a five year period. For example, rebates I earned in 1992 will be deducted from my "account" after the five year anniversary of those charges. I think the rebate expiration feature has been in place the entire time, I just didn’t care because I would continually "renew" them with new charges.

This leaves me with a big dilemma. I had planned on replacing my ’87 Escort in a few years. I thought that I would be able to get a new car at a fairly reasonable cost with the rebates included. Now I have to weigh the declining value of my rebate vs the expected lifetime of my Escort. Any suggestions for making that decision?

I have actually considered buying a new, low-end car on Jan 1 with my rebates and then reselling it immediately. Obviously, I could not realize the full value of my rebate, due to taxes and the "used" nature of the car. However, at least my rebates would be utilized. I would pick a low-end car to limit the amount of taxes and the "used" car discount.

What do you think?

A: Buying and reselling immediately won’t work and is too much effort . . . unless you can find someone who’s basically in on the deal from the beginning. Your cousin or a co-worker wants a new car (you’re too smart; you’ll buy a used one — perhaps even his). So you let him pick out the one he wants, agreeing that you’ll take title to it to use your $3,500 (but it will be his cashier’s check that pays for it). Then you’ll transfer title to him. The cost of that in fees and taxes will depend on where you live, but should still leave you a good "profit."

But literally buying a car and then trying to sell it to a stranger? You’ll get killed.

Have I mentioned my new book? Well, my new book is a bomb. Or so the United States Postal Service fears because it weighs slightly more than a pound. As many of you know — and possibly because of our good friend The Unabomber — one can no longer drop a book or anything else in the mail if it weighs more than a pound. All that advertising about "priority mail" for up to 2 pounds at just $3? Well, that’s fine, but if I drop my book in the mail to someone priority mail, it comes back to me with a notice that any item weighing more than a pound must either have a postage-meter strip (presumably so they can trace the source of the postage if it has not been blown to smithereens) or else be handed to a postal employee at the post office personally, during postal business hours.

That means walking or driving to the post office, waiting in line, and walking or driving back. Hellooooooooooo Fedex!

(What with the potential of the Internet to eliminate the middleman — but not the physical delivery — I recommended FedEx a couple of times in this space 18 months ago when the stock was half its current price. It’s a much less compelling buy now, having doubled, but it does remain intriguing: FedEx is efficient. And unlike UPS, its stock is publicly traded.)

Is the idea that letter bombers, having decided to kill or maim someone and having built a bomb to do it — not a decision taken casually — will get to the mailbox, see they have to go to the counter, and give up? (Yes, the lines at the Post Office are long, but they’re not that long.) Might not someone this heinous be able to steal a $3 strip of postage from some mail room? Or just go to the Post Office, as I did, and mail the thing?

As best I could tell, no dogs sniffed me or my book as I handed it over; no X-ray machine radiated it; no camera homed in on the address label and then my face. So in what way was this package made safe by my having to waste half an hour taking it to the Post Office?

Here’s my free-market suggestion. Let’s X-ray any packages above a pound that are left in postal drop-boxes. Any found to be bombs would be destroyed; the other 99.99999999% could be sent on to their destinations. To cover the cost, let’s add a $1 surcharge to the rate for packages left in drop-boxes. Wouldn’t you like the option of paying an extra $1 to save half an hour? And couldn’t this become a nice little profit center for the Post Office? Win-win. We save time, they make a profit.

Or here’s another way to do it. Why not have the Post Office offer $3 meter strips, or "registered" stamps, to people like me who have no postage meter. You could go and buy 10 or 20 at a time, paying with a credit card and showing a photo ID. The computer would match your credit card to the numbers on the meter strips or the special serial-numbered stamps, so the package could be traced back to you just as if it had come from your own Pitney Bowes. You’d still have to go to the Post Office in person to buy a new batch when you ran out, but nine times out of ten, you’d just affix one of these babies to your package and off it would go.

Just a suggestion.

Incidentally, Amazon.com is now selling the book for 40% OFF — or was last week, anyway. I was so excited, I bought ten more. Now I have to figure out a way to mail them.

Yesterday I ran a letter from Mary, who says all she really asks of her mutual funds is that they do at least as well with her money as she could do in a money-market savings account. Anything beyond that, to her, is gravy.

Although I doubt she was entirely serious in this — and it sounds as if she has enough money not to have to worry much in any event — clearly, she’s not expecting a lot.

Not so most investors. You probably saw it, but if not it’s worth highlighting the table the New York Times, and perhaps other publications, ran last week. It came from Montgomery Asset Management, which had surveyed 750 mutual fund investors as to the level of annual returns they expected their mutual funds to provide them over the next year and the next decade.

In fact, Montgomery has been gathering this data quarterly since the start of 1997, and if the data is to be believed and the sampling techniques trusted, investors are becoming more euphoric by the month. It’s as if St. John’s Wort had been added to the national water supply, if not something stronger.

In January, investors said they expected to see their returns top 15% for the next year and 21% annually for the decade ahead. In April, they were only a hair more upbeat, but by July their ten-year expectation had climbed to top 25% and in October — drawing the notice of the New York Times and others — they were looking for a gain of about 22% for the year ahead and annual returns of 34% in the coming decade.

The first thing to say is that if this is the case, there will almost surely be a tremendous number of disappointed investors ten years from now. No way is the Dow headed for 149,000 in ten years (today’s level compounded at 34%). Even the icon of investment success and nation’s second richest man, Warren Buffett, has not been able to compound money at that rate — and suddenly, going forward, we expect this to be the norm?

The second thing to say is — AEIEIEIEIE! Which may be misspelled, but is roughly what the cavalry used to say when they spotted 20,000 Indians coming over the ridge.

Another applicable phrase might be: irrational exuberance.

This is not to say there will be a crash, or that our outlook in America is not bright. But one sure sign the market is not poised for unprecedented appreciation over the next decade is that so many people apparently believe it is.

I forget what the opposite of a “Type A” personality is (Type Z?), but here is a woman who would appear to be both wonderfully relaxed about life, and honest. And I’m not just saying that because I am her love slave for life for having added significantly to my already vast fortune. (Typically, on hardcover books the author gets 15% of the retail price less a small-concealed shipping charge, though only 10% on the first 5,000 copies and 12.5% on the second 5,000 copies. On paperbacks, 5% to 10% of the retail price.) She writes:

OK, OK. After only mild suggestions, I purchased your book on-line through your hyperlink. I got it in the mail yesterday and began reading it this evening. It promises to be as entertaining as your Investment Guide, which I read under the Caribbean sun. Not that I have made any particularly outstanding investments over the years, but I did enjoy the book and have given a number of copies away. I am going to the hyperlink right now to get a couple more copies for friends that I talk money with. Not that any of us spend very much time on money matters, but it has become a “fun” topic over the years. The kidding about the ones that got away and the ones we rode to zero. Such as you may have missed IBM at 50, but you managed to get some great Barton wallpaper.

Actually I wonder if I am the only person that has found a few stocks to lose money on in the last few years. I do not think so, but few people admit it.

I believe that I have a realistic performance threshold for funds or brokers. The funds should do as well as if I had gone fishing and left the money in a money market savings account. Is that just too difficult? Actually, the last couple years have been fine, but over the long haul some of the accounts have not come close to passing that arduous test under my careful tending. Pretty scary.

Mary A. Block
devoted fan, but bad investor

I run this letter partly because I promised Random House I’d find 101 ways to plug my book, and so far I have inflicted on you only 83. Eighteen to go. But also because I thought you might find Mary’s attitude interesting. Either it mirrors your own, and makes you feel better for not being alone (I’ve never heard of Barton wallpaper — do they make wallpaper, or did this just become the best use for their stock certificates? — but I have managed to lose money in any number of stocks these last few years) . . . or else it gets your blood going (Type A that you are, like me), angry that she allows herself to be taken advantage of by poorly performing brokers (she’d have been a lot better off picking the stocks herself and paying deep-discount commissions) and poorly performing mutual funds (she should have gone with a no-load, low-expense index fund) . . . or else it gets you racing to find her e-address, hoping to sell her something with a high commission (which is why I have disguised her name).

It takes all kinds in the stock market, and I fear that some of those who are nicest, like Mary, may provide more than their share of fuel for the great money machine. Then again, it sounds as if she isn’t hurting, and she’s having a good time. Hard to beat that.

Tomorrow: Scary Expectations

Real estate can be an appealing investment, but slum properties pose their own special challenge. As some of you know, I own a few such properties, purchased with the hope that we might be able to fix them up and improve the neighborhood. You know: do well by doing good, and all that.

It’s a long story (see: Chapter 2, “Never Buy Real Estate Over the Phone“), and from an investment standpoint, you would almost surely be better served by buying shares in a publicly traded real estate investment trust. However, rather than reprise the whole thing here, I thought I’d just give you today’s slice:

Today, my property manager reported to me, was the day the sheriff came to put the people in Apartment 4 out on the street.

This is something no one feels good about, for all the obvious reasons, plus one more: if the sheriff is coming, that means no voluntary accommodation could be reached. (Usually we just work something out with the tenant and swallow our losses.) And that means the full formal eviction process was necessary, adding at least another $375 to our cost.

The tenant in Apartment 4, I’m told, was a heavyset white woman, a recovering addict, referred to us by the Human Resources Service (a government agency).

We are certainly not above renting to recovering addicts, who need a place to live too, and when H.R.S. sent her around we apparently rented her a small one-bedroom apartment — $350. She agreed to live in it alone, and reviewed with us and signed our standard list of good-neighbor rules. Rules like: no drugs, no loud noise that disturbs the neighbors, and so on. Not long after she got the key, I’m told, her boyfriend moved in, and we got reports of the frequent coming and going of strangers — the kind of activity that appeared to be drug-related.

The city of Miami relies largely on landlords to rid their buildings of drug activity. The city appears overwhelmed by the prospect of doing it through police action. If a building is cited repeatedly for harboring drug activity, what eventually happens is that the city (believe it or not) tears the building down. One two-story apartment building on our block suffered just this fate. It’s now a vacant lot.

Anyway, in a constant battle to keep the neighborhood on a gradual uptrend . . . and not eager to see our building bulldozed . . . after two months we asked the tenant to leave. But sensing she might not, we plunked down the $375 to go through the formal two-month eviction process. That meant losing a good chunk of rent, because we’ve found that tenants, while being evicted, do not pay. So instead of getting $1,400 for the four months she would be there before we could get the apartment back ($350 times 4 months), we would get $700 less our $375 in eviction fees, or a net of $325, less the cost of water and sewer and taxes and insurance and management, repairs and, of course, the mortgage.

This is a tough way to earn a profit, and leads some landlords to abandon their properties, which is one reason neighborhoods remain mired in decay.

Anyway, that’s the background. Here’s the new twist. It seems that if, at the final stage of the eviction, when the sheriff comes to actually put people out on the street, the address on his work order varies at all from the address of the property, the whole process goes back on hold for at least another two weeks.

This is presumably done to assure that sheriffs don’t go around evicting people from the wrong apartments — a practice no one could favor.

Knowing this, our tenant and her cohorts apparently removed the address from the front door of the building shortly before the sheriff was due to arrive. Pried off the little metal numbers.

Fortunately, our guys spotted this and, unbeknownst to the tenant inside, quickly spray painted the numbers back on.

When the sheriff came, minutes later, and knocked at Apartment 4, he was met with complete ignorance. You have the wrong address! This is not such-and-such number! We don’t know what you’re talking about!

And had our guys not restored the address just in time, that would have been the end of it, for two weeks, anyway.

Instead, everyone went out to the sidewalk where the numbers did indeed match the work order. Five people were evicted from this small one-bedroom apartment.

(Often, in a situation like this, the air conditioner would have left with them, costing another $350 or so, but in this case, perhaps not expecting to have to leave for another two weeks, they took only what was theirs.)

What exactly were five adults doing in our one-bedroom apartment at 11 on a weekday morning? I don’t know for sure. But a good guess might be that the apartment was being used as a place to do drugs. Not to sell them, necessarily, but a place crack addicts could come use them and crash, in exchange for a small fee or a cut of the crack.

My property manager called H.R.S. to report what had happened. H.R.S. told him there was nothing she could do, and that, if asked, it would now set about trying to find the woman we had evicted another apartment — another chump landlord. That’s their job.

(Given that our tenant and her boyfriend knew to remove the street address from the building shortly before the sheriff was scheduled to arrive, we got the impression they may have been around this block before. And with taxpayer-funded H.R.S. help, it looks as though they’ll be around it again.)

I’m less angry about any of this than sad. On one level, of course, one can and should blame the addicts. Weren’t they listening when Nancy Reagan told them to JUST SAY NO? But one should also blame the pushers and, when you think about it, the absent fathers or rotten schools or overwhelmed teachers . . . not to mention the lack of midnight basketball programs and big-brother/sister programs and church programs and good jobs — or any jobs, in some cases . . . some dismal combination of which led these five adults, who were children once, to be in that one bedroom at 11 a.m. on a Friday morning.

Maybe the answer is just more cops, prisons and homeless shelters. But how vastly much more efficient if we could find the resources to prevent the problem in the first place (or at least a larger chunk of the problem than we’re preventing now).

From your feedback to prior columns, I know some of you feel government — at any level — has no rightful role in any of this (except the prisons) and that left to their own devices, the good people of Miami will solve this problem by themselves. I don’t see it. Rather, I see the affluent sections of the city simply breaking off from the problem areas — as Aventura, a few miles from my little slum, seceded from Miami not long ago — so as to be able legally to say, “not my problem.”

Well, that’s not the right solution.

My Harvard Business School yearbook opened with a quote from John Kenneth Galbraith. "It’s a good school," he said, in his wry way. "We should be grateful to it for training people who will shoulder the dull, tedious administrative jobs in organizations."

This goes back 25 years, but my recollection is that the teaching at the Business School was a lot more animated and accessible than the teaching at Harvard College. The College was academic. Few academics have the outgoing personalities of, say, a Galbraith (and few Galbraiths spent a lot of time teaching undergraduates). At the B-school, by contrast, the professors were, for the most part, more fun.

Business: dull? Tedious? I don’t think so.

Better than half the respondents to our class survey responded "yes" when asked, "Do you consider yourself an entrepreneur?" Tedious administrative jobs, indeed.

What strikes me in contemplating our 25th reunion isn’t so much our two years in those United Nations-like horseshoe classrooms (instead of signs in front of us that read NIGERIA, CUBA, FINLAND, we had signs that read PERELLA, HOBBS, SCHWARZMAN), but how much has changed in the interim. We have gone from the days of pocket calculators and inflation so severe, at 4%, that President Nixon (that laissez-faire Republican) imposed wage and price controls, to a world where each of our kids has more computing power on his or her desk, and each of us on his or her lap, than all of Harvard had in its entirety (or certainly all of Harvard Business School) . . . a world that seems to have found a better way than price controls to tame inflation (free trade, competition, innovation, dour central bankers).

In these 25 years HBS has gone from being an acronym only a little more palatable around the world than CIA, to symbolizing much that the younger generation and people everywhere aspire to.

Not to say my classmates and I have had a whole lot to do with ending the Cold War or the near universal acceptance of market economics. Or that dear old Professor George Lodge, in our day more or less the liberal "conscience" of the B-School, succeeded in making us all ethical, compassionate capitalists. One of my most likable sectionmates made the front page of The Wall Street Journal for massive insider trading even before our fifth reunion. Another — a centi-millionaire by now, I would guess — was featured in that same newspaper with a quote so unsentimental, in connection with a takeover years ago, that it was runner-up only to the "greed is good" quote Gordon Gekko wound up using in Wall Street. But most of us, from what I can tell, fall comfortably in between: modest to significant successes, honest, doing our bit for the economy and our communities, paying our taxes (grumbling, if we’re Republicans, and amazed, if we’re Democrats, that the top federal bracket is only 39.6% – it was 70% in 1972).

We have gained some weight, lost some hair, and seen the world take giant leaps forward and a few steps back. Many of us would never be remotely where we are today had we not lucked into the HBS imprimatur and network of connections (not to say we would have been circus performers or busboys, but still). Most of us are really glad we chose business school rather than law school. (We surely need good lawyers just as we need good politicians — but talk about maligned professions!) And almost all of us, I imagine, regard the next 25 years with a sense of wonder.

Recently I mentioned going to my 25th Harvard Business School reunion. While you were left wondering why the reunion would be held in the fall — isn’t June reunion month? — I was left wondering how a young guy like me could possibly be this old. I must have graduated when I was 12.

It also occurred to me that a couple of comments might be in order.

The first is: what is this fund-raising stuff? My classmates and I were asked to pony up ten million dollars. OK, I sent something — I do believe in "participation." But if there’s any school in the country that should be self-sufficient, it’s Harvard Business School. It’s the college or the divinity school or the ed school or the science labs that need alumni money. If I were running the B-School (and you can be sure I will never be asked), I would jack up the tuition from whatever astronomical sum it now is ($25,000 a year?) to the full unsubsidized cost plus a profit ($50,000?) and then offer the 95% of students who couldn’t afford it a couple of financing plans.

They could borrow as much as they wanted on terms more or less identical to a 15- or 30-year mortgage (with a small life-insurance fee tacked on to pay off the debts of those struck by lightning out on the golf course). Or they could agree to pay, say, 5% of their income for life (or until they had paid a sum equal to double all they had borrowed, plus accumulated interest at the prime rate).

This is obviously rough — it would be fun working out the details — but the ballparks are right. Say you borrowed $75,000. That works out to about $7,000 a year for 30 years on an 8% loan. Starting pay for graduates of top B-schools tends to range between $50,000 and $100,000, so 5%-of-pay for most would quickly rise to cover the cost — and over a lifetime, most students would wind up paying their debts in full, with interest, while many others would pay up to double their debt with interest. The extra money from those would cover any shortfall from those who chose less lucrative careers.

That’s my plan. Understandably, the B-school alumni magazine chose not to include it with the other thoughts it solicited for our 25th — which, if you are really a glutton for this kind of musing, you are invited to come back to this space to read tomorrow’s comment.

(OK, OK — for it to work, I guess the country’s other excellent business schools would have to do more or less the same thing, lest Harvard lose all its best applicants to lower-priced rivals. So maybe Harvard should just begin to ease into this gradually, raising tuition a little and offering financing options, leading the way for the other schools to follow suit.)

You know the episode where Kramer has this terrible cough but, not trusting human doctors, he finds a dog with a similar cough and off they both go to the vet? Well, here is the converse of that story, and it’s not from Seinfeld. It’s from The Very Rich, by Joseph Thorndike, Jr., via Dave Davis:

John Wendel worked as a porter for John Jacob Astor and took to heart his employer’s advice to invest his savings in land. With unwavering trust in this ancestral wisdom, the family held on to their real estate until in the twentieth century it was valued at one hundred million dollars. The last of their line were two spinster sisters, Miss Ella and Miss Rebecca, who for fifty years seldom ventured outside their brownstone, huddled amid the stores and office buildings at the corner of 39th Street and Fifth Avenue.

According to Lucius Beebe, they resisted offers of five million dollars and up because their succession of dogs, each named Tobey, liked the garden to run in. Once when they could not reach a veterinary, the current Tobey was taken to Flower Memorial Hospital, where a kindly doctor treated him. The Misses Wendel did not forget, and in 1931, when Miss Ella died, leaving the family estate to charities, sixteen million dollars of it went to Flower Hospital.

Be nice. What goes around comes around.

“I saw your advice in PARADE recently about tempering the impulse to purchase non-necessities. A habit I developed in college was, when I felt the urge to buy some item that caught my eye, to wait two weeks. If I wanted it then, I told myself, I would buy it. Usually, I didn’t even remember it after two weeks. Even though my financial situation is much changed from those days, I still maintain this habit and consider it really useful.” — Vince DeHart

This is so simple and so smart and so important, I have only one thing to add: it does not apply to books.