Tuesday, January 17, 2017

How the Tax System Favors the Wealthy - 1031 Exchanges

If you are wealthy or even moderately wealthy, can you avoid paying taxes legally?   Yes, yes you can.

More viewer mail:

Hi Robert,

I read your post on converting ordinary income to capital gains. I have a question. Can you use a 1031 exchange to eliminate capital taxes on the sale? For example, a $100k property depreciated at 10% yearly with breakeven rents. According to your post, if sold for $200k minus Adjusted Basis $0, I would owe capital gains on the full price ($200k). Would a 1031 exchange wipe out the capital gain tax?

Short answer:  It would delay, not wipe out, except in two circumstances.

For example:

I bought a duplex for $95,000 in 1995.  I rented this out for ten years (approx) taking $9500 in depreciation deductions annually on my taxes - effectively lowering my income by that amount.  At the time, I was making well over $100,000 a year, so this knocked down my taxes quite a bit (I also had two other rental properties), as I was in the 35%+ bracket.  In effect, this was converting my ordinary income into capital gains and then deferring the tax until years later - if ever.

I then sold the property for $250,000 which would have been 100% taxable gains as the property was "fully depreciated".  Instead, I did a Starker-type deferred exchange or a 1031 as is now called, and bought two condos in Florida.  I rented these out but could not depreciate them, as the purchase price was equal to the un-taxed gains I used to purchase them.   If I had bought a $350,000 condo and kicked in my own cash (or got a mortgage) I could have depreciated another $100,000 - plus deducted the mortgage interest of course!

Now, if I sold those and took cash, I would have to declare this as a capital gain and paid taxes at 15% or so (consult a tax adviser for details).   So instead of paying ordinary income tax at 35% for ten years on $95,000 of income, I am paying 15% tax on that money more than a decade later.   I get a 20% drop in the tax rate plus delay the taxes.

"A tax delayed is a tax denied" as my tax law professor always said.  He showed us on the blackboard, using higher maths, how in effect, the delay means you have that capital to invest, and using the seven-year doubling rule (money doubles every seven years, if invested) you end up wiping out that 15% tax with your gains from that money in the interim.   Opportunity cost arguments work here, as this is an investment scenario, not a spending one.

But wait, there's more.

What I did with one of the condos, as I recall, was declare it as my primary residence, lived there for three years, and then sold it tax-free.  Yes, this is actually legal.  Or at least it was - in 2009 they changed the law and adjust the gains based on the number of years it was rented.  So this "loophole" has been partially closed.

I had to pay all the capital gains taxes on the other one, though.   But considering I put nothing down on the purchase of the original duplex and then folded that into the condos and then sold those for twice what I paid for them, I am sure you feel sorry for me that I had to pay capital gains on $250,000 of income when I realized $500,000 gain from the overall sale.

There is another way to avoid paying the capital gains taxes entirely - DIE.  If you die, the property transfers to your heirs tax-free (to them) and they get a stepped-up basis to the retail value, so if they sell it right away, they pay no capital gains tax.  The rich get richer, and heirs inherit tax-free.

So you can avoid the tax on the gains two ways - convert to primary residence (which used to be a freebie, but now is not as great a deal)  or DIE, the latter being less advantageous.

But even if you don't avoid the capital gains tax entirely, if you delay it, you come out ahead, and by reducing a corresponding amount of your ordinary income and "converting" it to a capital gains, you come out ahead.

Consult your tax adviser for details - there are a lot of forms and conditions with a 1031 exchange and deadlines as well.   And as you can see, the rules are changing all the time.  So it pays to pay someone to assist you with this - as I did.

Weird system, no?   Sort of favors people with money.

Monday, January 16, 2017

Good Old Joe!

Good old Joe!  What a nice guy.  Salt of the earth.  A raving hypocrite and an utter asshole.

I try to be accepting of other people.  Even someone who seems to have no redeeming qualities whatsoever, like some accused criminal, I try to see another side to them.   Maybe they had a poor upbringing or mental health issues or were drug addicts.   These things don't excuse bad behavior of course, but if people own up to the things they did, well, at least that is a start.

Other folks, they seem to get away with bloody murder, never own up to it, and moreover, come across as self-righteous - castigating others while not owning up to their own fallibility.   I know one such guy, and I'll call him "Joe" as everyone thinks he is a "good old Joe" and talks about him in that sort of tone of voice.   "Good old Joe!" they say, "He does seem to drink a bit too much, but you know, he is a good ol' boy, that Joe!"

And for years, I went along with this.  "Good old Joe!" I thought, just as everyone else did.   He was charming, I guess.   But when you look at his life and how he lead it - and what he thinks of other people, you start to realize "Good old Joe" is evil as all get out.   In fact, now that I think of it, I hate good old Joe.  He's a real jerk.   Let me explain.

Joe grew up on a farm in Kansas.   He was a typical farm-boy and dated a few girls in high school before joining the military during the Vietnam era.   He was shipped off to Okinawa and missed out on direct action in 'Nam, fortunately for him.   But he did see some "action" getting into small race-riots against black soldiers when on leave.   You see, "Good old Joe" was a raving racist.   Oh, yes, he uses the N-word a lot, in fact, in nearly every sentence.   In his mind, black folks are what is wrong with America and they have somehow "taken away" his money.   But as we shall see, that was not the case.  Joe managed to squander what little money he had.

After his stint in the military, he returned to the family farm, but farming didn't seem like the life for him.  Again, he dated some local girls - we'll get back to that later! - and left town to seek work in Arizona doing construction.  He found odd jobs in house construction, working for low wages and spending all his money at bars.   Yes, he had a serious drinking problem.  He liked to cash his paycheck at the bar (yes, I've done that once - just once!) and buy "a round for the boys!" and get snockered and melancholy and maudlin.  He loved to spend hours in bars getting drunk and talking to strangers.   He was a charming man that way, but nevertheless a raging alcoholic - good old Joe!

Of course, if he left it at that, I guess he was harming no one but himself, although he was putting the world at risk with his drunk driving - good old Joe!  But he met a young woman and convinced her to marry him, even though his immediate and future prospects were not so good - just a string of minimum-wage or near-minimum-wage jobs that lead nowhere and didn't even have benefits.   They got married anyway, even though he was a staunch right-wing Republican and she a left-wing liberal Democrat.   Not a match made in heaven, to be sure.   And while they got along at first, they stared to argue and get into shouting matches.  But before long, his wife was pregnant with one of several children.

The problem was, of course, that good old Joe didn't want to change his lifestyle much to accommodate his wife and new family.  He still hung out in bars, squandering what little money he had, and showed up every evening at home, late, drunk, and argued with his wife in front of the children.  Good old Joe!  Everyone loves Joe, right?   Except his wife, who was finding it harder and harder to make ends meet, and spent hours keeping house, taking care of the kids, and working at a job of her own, while Joe went out with his "buddies" and had a good time.  Yet everyone told her, good old Joe!  He's such a nice guy! which started to rankle her after a while.

Joe drove home one night from the bar drunk, crashed his pickup truck, and ended up in jail with a DUI - something they could not afford on their meager salaries.  They were already asking his wife's parents for assistance - now it got worse.   And it would not be the first DUI he would get, either.  Good old Joe!  Such a nice guy.

But the fun never ends with Joe.   After more than a decade of contentious marriage - one in which the children - raised in an environment of alcoholism and constant shouting - turned into juvenile delinquents - Joe had a surprise in store for his wife.   What's that, a surprise you say?  A new car?  A fur coat?  A vacation in Cozumel?

No, no, nothing like that.  Joe surprised his wife by telling her that he had an adult son out of wedlock 20 years ago.   Nothing like secrets to keep a marriage strong!   And you see, good old Joe was quite comfortable walking away from family obligations - in fact, he made quite a habit of it.

Joe is a flawed man.  So am I.  I can be a real jerk sometimes.   I own up to this.   I am imperfect and don't judge Joe for all the really rotten shit he has done to his family over the years - that is between him and them.

What pisses me off about Joe is that he does all this and yet attends a fundamentalist church and believes in their hateful philosophy.  Even though a similar church was literally across the street from their house, Joe was concerned that the minister there was "too liberal" - believe it or not.  He made the family drive an hour every Sunday to attend a right-wing fundamentalist church.  Good Old Joe!   You see, Joe believed that sex before marriage was taboo, according to the Bible, and that having children out of wedlock was a sin - for other people, of course.

Joe was quick to castigate - damn to hell - the fornicators, the drunkards, the homosexuals, and all the other "bad people" in the world (including of course, the blacks and Hispanics, although the called them by other names).  He will bore you for hours about how black people are "having children like litters of puppies" with the Father "running off without supporting his kids!" - and the irony is lost on him.  It completely fails to register in his mind that his religious beliefs would put him in the front-row seat of the roller-coaster to Hell, if such a thing existed.   Joe was a raging hypocrite.   Good old Joe!

But maybe I am being too harsh.  Maybe Joe is just too stupid to know any better, and can't even spell hypocrite much less understand what it means.   Maybe he just can't help it, and doesn't see the disconnect between his beliefs about others and his own personal behavior.  Maybe.  Good old Joe!

All I know is, I would never get away with the shit that Joe does.   If I tried to even pull off half the stuff he does, people would call me out on it.   And maybe this gets back to how victimhood works.  Joe gets away with it because we condescendingly think "he doesn't know any better" because he comes from a rural home and does not have a lot of education.   He gets sympathy when he screws up.  We are held to a higher standard, at least in theory.   But if you think about it, all the time Joe spends at the Bible-Thumping church, shouldn't he know better than the rest of us?  Or at the very least, not be so eager to judge others.
The problem I have, is that there are a lot of Good Old Joe's in the world, who are quick to judge others, but not judge themselves.   Sarah Palin is quick to denounce extramarital sex and the high divorce rate, but fails to see how this plays out in her own family.   People are fallible - we all are.  But to claim to have the inside track to what God thinks, while at the same time leading a train-wreck of a life, strikes me as a bit odd.

So I won't judge Good Old Joe.  No doubt, his life has been marked by tragedy and hardship, and maybe that is the Karmic wheel turning.   Good Old Joe has had to deal with troubles in his life, to be sure.  And as they say, it takes two to tango - why his wife put up with him is beyond me.   She could have left early on, or simply chosen not to marry him.

Good Old Joe - the poor bastard.   Life to him is just one confusing and unexpected thing after another.   And maybe that is why he drowns himself in cheap beer and the friendship of strangers.  If there is a lesson here, it is not to be like Good Old Joe.

How Trump Can Piss on America and Get Re-Elected

Democrats are still in denial about Trump and have no idea what is about to hit them.

I mentioned before how Donald Trump and the GOP can afford to piss all over people on Obamacare and get away with it, because only about 10% of Americans are actually on the plan.   Of these, the vast majority are like me - getting a near 100% subsidy for the plan, and thus free medical care courtesy of your tax dollars.

Gee, freeI think I'll go get a CPAP machine and a prescription to Oxycontin and sell the pills for $20 apiece behind the 7-11.   Just kidding.  I'm kidding, anyway.  Others are not.  Obamacare is expensive because it is a huge giveaway.  End of story.

People like us - what Mitt Romney referred to as the 47%'ers are not likely to vote Republican anyway.  They can cancel Obamacare and leave us with nothing and it really doesn't matter in terms of getting re-elected at the Federal or State levels.   We are a minority and it is easy to take a piss on minorities.

Sure, maybe some folks in New York or California will get up in arms about this.  But as the last election illustrated, the electoral college acts as a snubbing damper on that sort of thing.   They will still win elections - and Trump may very well win re-election no matter how many blistering editorials the New York Times writes, how upset Democrats get about Trump insulting Civil Rights leaders or how many protests people on the far-left lead.  It is sound and fury signifying nothing.  In fact, these sorts of actions may make it easier for him to get elected - as they paint the Democrats as out-of-touch liberals.  Until people in Ohio, Pennsylvania, Michigan, and Wisconsin start to defect, nothing will change.

If Trump is successful in "bringing back jobs" to America - or at least appears to be doing so - those voters in Midwest manufacturing States will vote for him.  American productivity and manufacturing was on the rise before the election - by 2020 it was projected that we would surpass China as the world's leading manufacturer - again.  It was going to happen anyway, but now Trump gets to claim credit.  He also will claim credit for a growing economy, rising wages, and decreased unemployment - all things that were happening before inauguration day.  Four years from now, the GOP will ask, "are you better off now than you were four years ago?" and the answer may be a resounding "YES!" even if the Republicans did nothing to cause this.

Those folks with cushy factory jobs have paid-for healthcare.   They are not on Obamacare, so the GOP can repeal it and not lose that vote.  Again, they can piss all over the rest of us - it doesn't matter strategically.

Yes, there are a few people on Obamacare who do not get a subsidy and by cancelling Obamacare, they actually will gain votes.  Prior to Obamacare, I was spending about $400 a month on health insurance which I paid for.  Today, it is $1400 a month - but thanks to the subsidy and your tax dollars, it is zero.  However, if my income rose to $63,000 a year, I would have to pay the full amount.   Folks with good jobs but no health care (self-employed) got a real screw-job from Obamacare, and their perception was (and is) that Obama and Democrats didn't give a rat's ass they they were spending more on health insurance than their mortgage payment.

So, they actually gain votes by cancelling Obamacare.   They can piss all over the rest of us.

But what about other issues I said before, and everyone is in denial about it - legalized marijuana is going to go away and go away big time.  When Jeff Sessions from the banana republic of Alabama is made Attorney General, he will let loose the dogs of war - in the form of the DEA - to shut down marijuana dispensaries in Colorado, Washington, and other States where it is "Legal" on the State level but still illegal on the Federal level.   Even low-level employees of these operations face decades in prison and forfeiture of all their assets.

Just a suggestion, but if you run a marijuana dispensary, I would move my funds offshore and buy a house in Ecuador, which might shield you from extradition to the US.  As an added bonus, their currency there is the US Dollar.  Find someplace, because ultra-right-wing anti-drug Jeff Sessions is about to become Attorney General and no reporter has even bothered to ask Trump about how this will play out.   They are all obsessed with the pee-pee tapes.   Ah, the media!  Always missing the bigger picture.

Well, surely, you say (stop calling me Shirley!) that the public outrage from this would cause the GOP to lose the mid-terms and for Trump to be out on his ass.   Think again.   While legalization of marijuana has widespread support, it is thin support - winning legalization only by voter referendum in many States, and even then by fairly thin margins.   Plus, the States where it was legalized are firmly blue States.   The GOP isn't going to lose sleep about losing elections in California or New York, or losing those electoral votes.  Since liberals are concentrated in a few coastal States, the GOP can still win elections without the votes of the the blue States.

So, again, the Republicans can piss all over marijuana users and get away with it.  And they will, too.   Why not?  There is no political blow-back from it.   Oh, right, you believe that Trump and his cabinet won't do this because it isn't the right thing to do or because they believe in "States Rights."  Keep toking on that bong - pretty soon you will be in that alternate reality where this is true - but not for long.

You see, nonsense like "States Rights" are just a smokescreen the GOP uses when it is convenient to do so.   Want to outlaw abortion, but can't get the Supreme Court to go along?  Argue it is a "State" issue that should be decided by the States.  Ditto for gay marriage or whatever else the S.C. has said is a "right" and likely won't change their mind.  However, once you pack the court with your justices, then it is the other way around.   These constitutional issues should be decided by the high court - in your favor of course - and the States should have no say.   It is just political boondogglery on both sides of the aisle.

The other aspect of the equation is that while a majority of people are in favor of legalization, a majority don't smoke pot.   Sure, I favor legalization.   I don't see the point in spending money throwing some po-thead in jail.   But on the other hand, I don't think marijuana is "harmless" as some say it is, and I don't smoke it.   So if you make it illegal, it doesn't affect me directly, so my outrage would be muted.   And that goes for a vast majority of Americans.  Support for legalization is wide but not deep.

Or take abortion.   A burning issue?  Yes, but again, many of us are not in the situation where it is a personal issue.    So while we might be in favor of legalized abortion, well, we don't get all that upset when the GOP chisels away at the edges of it.

And will the majority of Americans be outraged if gay marriage is overturned by the Supreme Court?  Screwing up the taxes of less than 10% of Americans isn't even a blip on the radar for the rest of America.   Support is wide, but not very deep.   They simply won't care and that's all there is to it.

You see how this works, and it has been done before.  During World War II, minister Martin Niemöller wrote this chilling passage:
First they came for the Socialists, and I did not speak out—
Because I was not a Socialist.

Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out—
Because I was not a Jew.
Then they came for me—and there was no one left to speak for me.
Divide and conquer, the oldest play in the book.   30% of Hispanics voted for Trump - a statistic that is not mentioned too much in the left-wing press.   By moving too far to the Left, the Democrats lost a lot of their working-class vote - a working class that tends to be Catholic or fundamentalist Christian.  While Trump's comments about Mexicans as rapists may not have resonated with the Hispanic and Latino communities, Obama's policies on abortion, gay rights, and transgender restrooms certainly offended the religion components of these communities.  (And let's face it, that quote about rapists was taken out of context - he clearly was not saying all Mexicans are rapists or drug dealers, and when the press tried to slant it that way, it sort of was an insult to our intelligence).

The same is true for the Black community.  Not many voted for Trump, but a lot just stayed home instead.  Many Blacks are Baptists - conservative Baptists (if that is not an oxymoron) and are not receptive to a lot of the left-wing policies spouted by the Democratic Party.

Again, while it is nice we have gay marriage, I would gladly give it up to see Donald Trump back in the reality TeeVee business instead of a reality on TeeVee.    What is nice and do-able is fine and all, even if it is "justice" or "the right thing to do".   Winning elections is also "the right thing to do" and the Democrats appeared to be tone-deaf in an era where the entire world is lurching to the Right.

There are five stages of grief in the Kübler-Ross model: Denial, anger, bargaining, depression and acceptance. Democrats are still stuck in denial mode, calling the Trump victory "illegitimate" and crying about the popular vote - and claiming that Russia somehow "hacked" the election, when all they did was a very obvious Social Engineering job on John Podesta, to get him to stupidly cough up his e-mail password.   Don't blame Putin, blame Podesta - he's a blithering idiot.   He probably answers Nigerian scam e-mails, too!   Maybe the Democrats need smarter people?  Just a thought!

But even if we assume that all of those complaints about the election are true, it doesn't really change things.  The electoral college is what it is.  Votes were not improperly counted - and Jill Stein is even a bigger blithering idiot than John Podesta.   Well, the people who sent her money for a "recount" are even bigger idiots.   And the "hacking" even if improper, merely made public a few e-mails that said nothing of consequence, other than what we already knew - that Democrats were not keen on a non-Democrat (Comrade Sanders) winning the nomination.   And no, Bernie would not have beat Putin Trump in the general election.

We have to move beyond the cry-baby stage.  The idiotic protests.  The name calling.  And yes, golden globes speeches.   Meryl, we love you dearly, but did you really think that Trump would resign or something in response to a very well-delivered speech?   If so, you are right up there with the Times editorial staff in your naivete.   Withering editorials or speeches given to a liberal audience aren't going to change anyone's mind one iota.   The guy whose mind you have to change is the black barber in Milwaukee who didn't bother to vote, or the laid-off assembly line worker in Michigan who thinks that voting Democratic might somehow make him gay.

Just a thought, but maybe the Democrats need to sponsor a few monster-truck rallies or "mixed martial arts" contests.   Yes, some folks like this kind of entertainment, and Ms. Streep's comments to the contrary aren't helping.   You don't win the working-class vote in North Carolina by attacking NASCAR.   How do you think Bill Clinton won twice anyway?   He was in touch with the common man - a Rhodes scholar who liked corn dogs, lite beer, and busty women.   People will vote for that.

So long as the Democratic Party looks down on the average Joe - and tells them what is best for them (or at least gives that impression, or worse yet, allows the opposition to characterize them as such) they will continue to lose elections.

And so long as that happens, the GOP will piss all over us, and we can do nothing about it.

 Just singing.... and dancing..... in the rain!

Is The Golden Girls a Myth? (LOL's are Evil!)

The idea of shared housing for the elderly is a sound one.  Why do so many old people live alone?

The television show The Golden Girls was a sitcom based on the premise that a group of elderly widows would live together in one house, in order to cut down on their retirement living expenses.   It is a sound idea on a number of other levels as well.   When you are retired and on a fixed income, the cost of living can ratchet up over time, and you may find yourself priced out of your house or apartment.   Moreover, today, many are finding they failed to save enough for retirement, and the cost of a place to live is usually the largest single item in their budget.

There are ancillary benefits as well.  Having someone else around when you are elderly is a good thing, as if you fall and break your hip or have other medical emergencies, someone is around to call 911 and make sure you are OK - and they are there to watch the house while you are in the hospital.   It also means the daily chores of housekeeping can be shared, which lessens this burden as well.  It also can be handy if you can no longer drive a car - but your roommate can.

And most importantly, it provides that daily companionship and friendship that is essential to human living - which keeps the mind active and staves off depression.

It is such a good idea on so many levels - why don't more people do it?

The short answer is, Little Old Ladies (LOL's) can be evil.   Oh, sure, your sainted grandmother is so friendly and warm when you come to visit.   She bakes you cookies and fawns over her grandson and granddaughter.   She is nice to you.

But if you were one of her fellow LOL's in the Parcheesi club, watch out.  Because your sainted grandmother will talk utter trash about you behind your back - if in fact she doesn't black-ball you from joining in the first place.   Little old ladies can be downright evil, especially to each other.

In a way, they are like old cats.   We had three cats that lived to be over 20 years old.   The male cat mellowed out with age and just wanted to sit on your lap and purr all day.  He got along with the two females just fine.   The two elderly female cats, however, hated each others guts and would hiss and claw at each other whenever they happened to come into contact with one another.   Sharing the litter box or the food dish could cause a major meltdown. 

The LOL's are the same way.   They arch their backs, they spit and hiss and growl.   And they will claw your eyes out, if you are not careful!

For this reason, we see a lot of widows here on the island, rattling around in four-bedroom houses that are slowly deteriorating around them.  Oh, sure, the lawn guy comes once every other week and keeps the grass down.  But the plantings are all gone to weeds and the shrubs are growing up over the windows - the classic "haunted house" look.   And of course, the gutters are filling with leaves and the paint is peeling on the eaves.

And since they are so stressed and house-poor, they can't afford to go out, travel, or do other things they would like to do at this point in their lives.   I know more than one LOL who has confided to me that they envisioned growing old as something different that what they have.   One is basically doing nothing with their time, as they have to pay off a loan their husband stuck them with!   At the same time, they have to clean three bathrooms and dust four bedrooms every week in an empty house that they rattle around in.

In short, it is the same way young people make themselves miserable - valuing possessions over living.   And in this case, the possession is the home.   But it could also encompass other things - I've seen widows cling to their dead husband's car ("It was a collector's item - he wouldn't want me to sell it!") or boat or even RV, for years at a time.   One widow hires a man to come out every year and wash, wax, and change the oil on her husband's old motorhome (and usually replace the battery as well) even though she hasn't used it since he died almost a decade ago.  

Whoever said, "With age comes wisdom" never lived on retirement island!

So why this urge to keep the huge house and other possessions to the point where they interfere with life?

Well, it is the same old thing: Status.   In this case, on retirement island, selling the four-bedroom home (you need those extra bedrooms for when the grandchildren visit!  They never come, though) is seen as "giving up" for some reason.   The ladies in the Parcheesi club will cluck their tongues and say, "Well, old Edna is losing it - she put the house up for sale!" and they will all shake their heads and think of Edna as some sort of "loser" unlike them - because in their minds, they will live forever and never sell their homes.

And the LOL's know the ladies in the Parcheesi club will say this about them, because they said the same trash talk about others, themselves, when somene else sold their house.   When people move off the island, it is not usually to a grand send-off from their friends, but rather quietly, with their tail between their legs, as if they did something wrong.

As I noted before, there are two things you don't want to do in a retirement community - run out of money or get sick.   You will be treated as a pariah in short order - shunned like an ex-Amish.   Your name is stricken from the rolls of the Parcheesi club and never spoken of again.

To be sure, some of this tomfoolery and nonsense has to do with a fear of death.   No one likes to think about their impending demise, particularly when you are looking at less than a decade on the clock.   As I noted in earlier postings, my Grandmothers went into an assisted living Senior center near the end of their lives.  Both had sections for the ambulatory and the non-ambulatory.   For one, the non-ambulatory section was called "The Seventh Floor" (a good name for a Stephen King novel!).  For the other, it was the eerily-named "The Other Side" (as the building was divided into two sides).

Once you went to the seventh floor or "the other side" you were never spoken of again.   And few people from the ambulatory section would come visit you, either.  If you came back from the other side, you were literally treated like a ghost, which I suppose was a preview of things to come, eventually.

Mark's grandmother went through this at Shell Point.   Once you went to "The Pavilion" you were not talked about - as if you had been sent to the Gulag, and loose talk about you might get them sent there as well.   Even when her friends ended up in the Pavilion, they pretended not to know each other (and no, it was not dementia causing this).

Getting older doesn't mean you deal with death, life, or anything else better than youth.  It just becomes scarier, and people engage in denial mechanisms even moreso, in order to avoid dealing with it.

Of course, in years gone by, people did share housing when they got older.  And usually, this was when grandma or grandpa moved in with their kids and grandkids as part of an extended family.   When we were a more agrarian society, this was more practical to do, as the family homestead didn't move every five years, and moreover, there was really no place else for grandma or grandpa to go.

In a way, it might have been a healthier practice, in that the children grow up realizing that aging is all about on a first-named basis.   The practice of "retirement communities" and parents going off to live separately from their children - often in another State on the other side of the country - is a relatively recent post-war invention.  In reality, only one or two generations have lived this lifestyle from start to finish.

So maybe that is part of the problem right there - a lack of normative cues on how to live.   Widows get stuck rattling around and old house because they don't know what to do otherwise.  Their friends are all here and they are used to a certain lifestyle and pattern of life, which is comforting.   Making any changes threatens this hierarchy and pattern.  Changing your life is somehow admitting defeat.

Granted, there are other factors as well.  It can be hard to change when you are elderly - you are in a rut, so to speak - a comfortable rut.   One widow, when her husband died, put her house up for sale and moved into a senior apartment community.   She moved back within a few months.   When we asked her why, she said, "It's just a bunch of old Republican ladies over there!" which gave everyone a chuckle.   But I think the problem was not the politics of the ladies, but that she was a stranger in their society, and like a new cat being brought into a home, was clawed and hissed at by the other cats.

(You see, that is the other half of LOL evil - they want to haze newcomers.   You've read, no doubt, the accounts of hazing atrocities at fraternities and sororities on college campuses.   Frat houses will make young pledges drink (alcohol or even water!) until they literally die from it.   Sorority sisters just mock and belittle the pledges until they develop eating disorders.   But in both cases, they are rank amateurs compared to Little Old Ladies.   They will harass and annoy newcomers - if they don't flat-out prevent them from joining the Parcheesi club.   Like I said, LOL's can be evil - very, very evil!).
The sad part is, eventually we all get older and more tired.  We can't keep up the house, we can hardly even drive, and things get ugly in a real hurry.   And we see this firsthand, often up-close.   Those who can afford it can hire a day nurse to come visit and "help out around the house".   Those who cannot, struggle to get by, and often it ends in a very ugly manner,

For us, the plan is pretty simple.   We don't intend to stay in a three-bedroom house for the rest of our lives.  Already the chore of keeping up a 1/4-acre of lawn and garden seems like a real hassle.   We look forward to downsizing to an apartment with a small balcony and a couple of potted plants.   But then again, not being members of the Parcheesi club, we really don't care what the LOL's think or their trash-talk.

I can see living here another decade or so, God willing.  But if I should live longer than that - I would prefer to be able to do things rather than merely own things - particularly when I would be owning things that would be falling apart around me.

Sunday, January 15, 2017

Poorly Balanced Flatware

Flatware with heavy handles ends up on the floor all-too-often.

I hate my flatware - with a passion.  Why?  Well, it works well enough, and is stainless steel and is durable.   But it is very poorly balanced - the handles are large and round and solid metal and thus are very heavy.  As a result, if they are placed on a plate, and you go to clear the dishes, they tend to fall off and clatter to the floor, while your dinner guests (or even your spouse) ridicules you for "being clumsy".

If you look at the photo above, you can see that the handle is quite heavy, in that a very small portion of the handle is enough to balance the weight of the rest of the piece.  The balance point is nearly two inches from the "throat" of the flatware piece.

This commercial fork from a hotel has a far better balance than my hated fork.

Other brands and styles of flatware are better balanced.  This commercial restaurant piece has a balance point about one inch from the "throat" of the piece and the handle is thinner and flat.   As a result, if you carry a plate with this piece on it, it tends not to fall off, which is a handy thing if you are a waitress and are carrying an armload of dishes and flatware back to the kitchen to be washed.

So what's the point of all this?  Well, for starters, if you are buying flatware, be sure to take a few pieces out, balance them and get a feel for them, or be frustrated for years by the sound of clattering forks, knives, and spoons on the floor.  Sadly, many flatware sets are sold in sealed packages and are hard to open and study before you purchase.   

But if you can handle the goods ahead of time, check the balance point.  More than an inch from the throat of the piece and you will have a handle-heavy piece of stainless that will give you years of trouble and difficulty!

Saturday, January 14, 2017

Google-Induced Hysteria

A mass-murderer, a "self-investigator", and a "self-radicalized jihadist" have one thing in common - they were driven crazy by the first ten hits on Google.

The other day a guy went into an airport in Ft. Lauderdale and started shooting people in the head.   The funny thing was, no one noticed.   People shooting up bars, restaurants, shopping malls, school campuses, and airports is so commonplace that it hardly lasts one news cycle.   We look at random shootings the same way we look at car wrecks - part of the cost of doing business.

And about the same number of people die every year due to gun violence as to car wrecks - about 35,000 or so.  The number of car deaths has dropped by 10,000 due to safer cars, while the number of gun deaths remains relatively flat.   In both cases, we live with this carnage.  We are not about to dismantle our transportation system just yet, but try to improve the situation with automation, and so forth.   It is the cost of using a car-based transportation system.   And I guess we view the number of gun deaths as the cost of having "second amendment rights" and learn to live with that, right or wrong.

And it is sad, we view this as a random thing like the weather.  But I digress.

In most of these cases, however, the issue is crazy people with guns doing the carnage.  And what sets these crazy people off is Google.

Google's algorithms are tied across platforms.  If you use gmail, Youtube, Blogger, as well as the Google search engine (and who doesn't?) you may have noticed already that once you express an interest in a topic, you get inundated by suggestions for other, similar media on the same topic.   It can get really annoying, as if you click on even one cute cat video, for example, you are flooded with cute cat stuff for the rest of your life.

Rather than expose us to a panoply of different ideas, Google gives us more of the same, over and over again.  Worse yet, what Google thinks is "important" enough to make the first ten hits in response to a search is often the worst sort of dreck imaginable.   For example, headlines were made recently when it was noted that if you Google "holocaust" the top ten hits were to neo-Nazi holocaust denial sites.   This was the result of using brigades of online users to "upvote" these sites on various platforms (such as Reddit) so that Google would think they are more popular than they are.

In fact, on Reddit, in the months leading up to the election, many pro-Trump supporters were making no bones about how they were manipulating Google searches by getting thousands of up-votes for images and URLs so that they would appear as number one on a Google search.   And no doubt, much of this brigading is coming from Russian troll farms, who can hire armies of people to manipulate Google search results and thus manipulate public opinion.

Google's algorithm was based on popularity - much like social media is - so if your URL is mentioned on a number of other sites, it elevates your site to the top of the Google cesspool.  If you are astute you know how the algorithm works (or know what an algorithm is, even) - or you can sort of guess how it works based on the results you see.  If you are astute, that is.  Most people aren't.

That is why when I heard about this Ft. Lauderdale shooter, I felt a chill run up my spine.  He apparently had some mental health issues and actually complained to the FBI that the government was "forcing him to watch ISIS videos".   And I could see where a mentally imbalanced person who is also a veteran, might begin to think this when his "feed" online and his google searches all turn up ISIS videos. As a veteran, he might google something to do with the Iraq war, which in turn links to Islamic fundamentalist sites, which in turn links to ISIS.  Google doesn't care if you are for or against something, it just barfs up topical content.  He then goes to YouTube, and if he watches even one ISIS video, he is flooded with dozens more.

By the way, why again do we allow ISIS videos on the Internet?   Are there no limits to free speech?

And then a week later, we hear from mass-murderer Dylan Roof, who said he was radicalized to believe in race war after reading a bunch of hits on Google about the Travon Martin case.   And no doubt, like so many other Google search results, it included a lot of far-right neo-Nazi URLs that decried "Black on White violence" (when Black on Black violence is far more common).   He "self-radicalized" but not without the help of what is becoming one of the most powerful companies in the world - Google.

Two points define a line, three points define a plane.   And it struck me that if you "connect the dots" that a lot of this nonsense is going on.   The self-proclaimed "self-investigator" of the "pizzagate" hoax said he had - you guessed it - Googled it online and found tons of conspiracy videos and links.   How could this not be true?  Why wasn't someone doing something about it!  In his small mind, he was going to be a "hero" and rescue children from sex-trafficking.   It never occurred to him that so much of the information on the Internet could just be plain wrong, made-up, or a bad joke.

And it never occurs to most people that much of what we get as "news" is often filtered and skewed and should be viewed with skepticism.   Sadly, people are so quick to discredit the local newspaper (which may have a liberal or conservative bias) but are willing to embrace entirely, some unvetted website that spouts radical ideology.

Self-radicalization is the new trend - you go on the Internet and you listen to people who think just as you do.   Or more precisely, you click on one link and you end up down a rabbit-hole, coming out the other end as a different person with different belief systems.   

We shake our heads as to how some teenage girl in the UK could "self-radicalize" online and run off to be a bride to ISIS.   What sort of idiot would do things like this?   Or the teenager in Minneapolis who "self-radicalizes" online and tries to fly to Syria.   Are these Muslims a threat?   Or is it just one of the more effective rabbit-holes online?   And will we see more of this sort of thing in the future?

The last thought is a scary one.   We are entering a world of Google-induced hysteria.   People go online, read a few articles or watch a few videos, and once they do, Google shows them nothing else.   Suddenly the world takes on a very narrow focus - everything is related to itself and no opposing or balanced views appear.   The world takes on a fun-house mirror view - a view that is basically that of insanity.

For example, my sister-in-law sends me a video on how to cut a bottle with string and lighter fluid.  Before long, my YouTube "recommended videos" are nothing but Russian click-bait glass-bottle-cutting videos.  It was such a thing, I ended up making my own.  Video, that is.

Already we are seeing a far right-wing resurgence on the Internet due to this sort of circle-jerk echo-chamber approach to the Internet.   I am picking on Google here as the worst offender, but Social Media - in the form of Facebook in particular, is no better.   You go on Facebook with any sort of preconceived notion, and pretty soon, that notion is fed-back in an endless feedback loop until your head explodes.

It is not hard to see how a young Muslim "self-radicalizes".   He goes on Facebook and mentions he is Muslim.  Pretty soon, he is getting hits on his "feed" from related Muslim content, which is going to include radical conservative Muslim sites.  If he clicks on one, it reinforces the algorithm that he is interested in this sort of thing.  If he "likes" it, it becomes an even more powerful factor in the filter.  Within a few months, his "feed" and his "wall" are all radical Islam.

And the same is true for neo-Nazis here in the US - or Racists.   Dylan Roof, by all accounts, was a loner who didn't get his racist views from his peers at school, but rather by spending countless hours online, on Facebook, on Google, on YouTube, watching and reading the same opinions again and again - that blacks were assaulting and raping whites in record numbers and that the "white race" was under attack.   It became an echo chamber, a funhouse mirror.  Throw in the teenage onset of schizophrenia and you have a perfect storm.

And this could happen to any of us.   It is comforting to think that these are all "crazy people" and that we, as normal human beings would not be affected by these sorts of radical sites or links.   But the reality is, much of what we think of as our "opinions" and values is indeed affected by the environment around us.

We recently started subscribing to the New York Times, and it is almost comical how out-of-touch that newspaper is with mainstream America.   The editorial staff of the New York Times is convinced that if they write enough witty editorials about Trump, it will bring down his administration in short order.   Readers are convinced that if they write enough letters to the editor agreeing with said witty editorials, they will put a stop to Trump once and for all.   No opposing views are shown.

Fox News works the same way.

So you click on one article, and that leads to another article.   Google now assumes you are "Liberal" and filters your results accordingly.  Click on one "conservative" article and the same thing happens.   We are all being manipulated by this tendency today to isolate ourselves from opposing viewpoints. 

And if we are not careful, we might end up like the three people shown above - going off our rocker based on a distorted view of reality.

Motor Voter - How Government Works

The Motor Voter law was designed to make it easier to register to vote.   Which States are failing at it and which are succeeding may surprise you.  Click to enlarge.

I recently went to renew my driver's license at the Georgia DMV (or DDS as they call it here - Department of Driver Services - the registration of cars is handled by the County tax authorities).   It was an interesting, pleasant, efficient, and brief experience.  I was sent a renewal notice by mail (a post card) and encouraged to pre-apply for the renewal online.   We were also advised what documents we would need to comply with post-9/11 hysteria - our old driver's license, a passport, a birth certificate, a social security card, and a piece of mail with our name and home address on it.

As you might expect, a lot of people showed up with nothing but their driver's license and a credit card.   And they fumed and fussed when told this was not enough.   I recounted before about how a man at the Virginia DMV in Arlington held up the line while he went through a meltdown, screaming at the entry clerk that he "didn't have time" to go back home to get these documents.

I finally tapped him on the shoulder and he turned and shouted, "WHAT?"

I then calmly explained to him that three of the 9/11 hijackers got their fake IDs standing in line right where he is standing right now, and that the clerk behind the kiosk was not authorized - nor was anyone in the building authorized - to make an exception for him, and that he might as well spend the 15 minutes of screaming and arguing, pulling out hair and rending garments, just driving back to his condo in Foreclosure Mews Estates and getting the damn documents.

The clerk mouthed the words, "thank you" as he left.

We saw the same kind of arguing and negotiating - on a lesser level - at the DDS here in Georgia, although people today realize that arguing with authorities over procedures is about a pointless and dangerous as arguing with a TSA agent or a flight attendant.   You make a scene, you're not getting on that plane to Poughkeepsie. 

I had been forewarned about the Social Security card thing by another oldster (yes, technically, I am one of them now) and applied for a card online.  DDS also has a "mini-Social Security Office" onsite, consisting of a computer terminal.  If you didn't have your social security card, you could apparently get one there at the office, as several people who were booted from line apparently did.

Social Security cards, by the way, are the lamest form of ID - a piece of cardboard with your name and number on it.   I never had one as a kid, as I am sure my alcoholic mother lost it - as she did my birth certificate.   When I applied to the bar I had to order a birth certificate, as all I had in my possession was a "notice of birth" from the hospital with "unnamed male Bell" listed on it.   Proof once again that all pregnancies are carefully planned!

And a funny thing, when I was born, my Mother decided that she should probably apply for Social Security numbers for all us kids, having waited nearly a decade, so she went off to the office in Rochester and as a result, we all have sequential social security numbers.   Kind of cool if I want to hack my brother's bank account, which I would do if there was anything in it.

Anyway, on the pre-application online you can register to vote with a click of a mouse.   It is that easy to do.  Even if you are using the paper form at the DDS building (which does sound like a dentist's office!) you just need to check the box with a pen.   It is that simple to register to vote in Georgia.

And this is part of the "motor voter" law that was enacted nationwide to encourage people to register to vote - a law that has largely worked, although not as Democrats thought it would.   More people are registered to vote, but few people actually vote, and lately, they aren't voting Democratic.   Voter suppression doesn't seem to be the issue - not resonating enough with voters to get them off their couches maybe is.

Anyway, it was a fast and efficient process, and we were there a total of 20 minutes (five minutes for our name to be called, 10 to get the paperwork, 5 to park the car).   Georgia government can be very efficient when it wants to be. 

It can also be creative as well.   When we registered our boat, we were given a piece of paper to fill out and mail in and were told to keep the stub as proof of registration.   A month or two later, our new registration arrives - good for ten years.   In the interim, we were told to keep the old boat registration numbers on the boat.   I think they realized that registering boats was a bit of a government boondoggle that did little to enhance security or safety, and it was a lot easier to take this laid-back approach than to say, use New York's approach which is to call you a criminal for even moving a car or boat that hasn't been sanctified by local government offices.  And boat registrations in New York were an annual affair.

When I first moved to the South, I was a bit alarmed by how casual they were about these things.   When you buy a car, they just put a piece of cardboard on the back with the name of the dealer, and then mail you the tags a couple of months later.  Not even a temp tag is issued, just a piece of cardboard with the dealer name and logo on it.   Others merely make handmade cardboard signs that say, "tag applied for" and tape those on the back.   They drive right by cops and are not hassled.   In New York State, if you didn't have a regulation license plate on the back of your car, you would be pulled over toute de suite.

We grew up with "big government" in New York, as exemplified by the enormous Governor Nelson A. Rockefeller Empire State Plaza government center in Albany - a monument to that former "liberal Republican" governor in an era when Republicans believed not in small government, but big and efficient government.   And in that era of the corporate man, IBM punch cards and whatnot, a lot of faith was placed in the corporate governance-type structure.   Efficient management was the solution to governance problems - armies of blue-suited technocrats would solve every problem with regulations and rules and government forms.  We were raised in a State with big government, big taxes and big laws and regulations.   Where I grew up, we were terrified of being pulled over for even a broken taillight or a missing license plate light.   The government was know-all and end-all and we lived in constant fear of it - to some extent.

Thus, it came as something of a surprise today that the United States Government is suing the State of New York for failing to comply with the motor-voter law.  Yup, you read that right - "cracker" States like Georgia have efficiently and easily complied with this law - with the click of a mouse - while liberal "blue-state" big government States like New York have not.

What's more, this trend is not unique.   If you look at the history of Motor Voter, you see that many "Blue States" such as California, New York, Connecticut, New Jersey, etc. are "low performing" in making motor voter work and getting people registered.   Yes, Alabama is up there too - but it technically isn't a State so much as it is a third-world country.  The middle- and high-performing States include a lot of places you'd think would be out to suppress the vote such as Texas and South Carolina.   It goes to show that stereotypes are never a good thing.

And maybe big, onerous, overpriced government isn't necessarily the most efficient, either.

Friday, January 13, 2017

No Way Back!

It is possible today to get into situations that are nearly impossible to get out of.

Everyone, including myself, likes to take a shit on Millennials.   Well, we like to shit on the media's representation of them, anyway.   And this is not a new sport.  Old people have been ridiculing the hair styles, clothing, and cultural values of the young for generations.   And if you are my age, and you look back at your high school year book photos and cringe, you realize the old people were right.

Millennials we are told, are protesting their high ($25,000 average) student loan debt.  They are protesting "Wall Street" and the "1%'ers".   They are protesting "white privilege" and other PC-nonsense.   This is what we are told by the media, anyway.   The media likes to paint young people as clowns doing stupid things.  And the media loves to paint college students as out-of-touch liberals who believe in crazy things - again, something that has been going on for a long time - since before I was in college.

But not everyone in college is - or was - protesting, and it is only the louder voices we hear.  The vast majority of Millennials are probably not the clown-like caricature the media presents.   In fact, many are serious and studious and are approaching this dangerous new age with a combination of caution, vigor, and common sense.

Millennials, the argument goes, are getting a raw deal compared to previous generations.  And I would have to agree with this - but for entirely different reasons that posited by the protests the media loves to harp on.  According to the media, Millennials are upset about the balance on their student loans, racial discrimination, transgender rights, and income inequality.   And while some of these things are indeed real issues, some are over-stated or are tertiary to the real problems facing the upcoming generations.

Quite simply stated, if I had to live under the conditions that kids today have, I would have probably shot someone.   Helicopter parents and a drinking age of 21 were not in the cards for me as a teenager.   Yet, the young generation today seems to take these things in stride, as if wearing a straitjacket was the new vogue.  We treat young people as children today, but at the same time tell them if they make even one mistake in life, it's all over!   The pressure is enormous.

And increasingly, it is getting harder to "come back" from some of life's mistakes, as I was able to, when I was that age.   As I have noted before in this blog, I was thrown out of high school, flunked out of college, and still managed to become an Engineer and Lawyer.  I had shitty credit and was lackadaisical about paying my bills - but that didn't prevent me from getting a job or renting an apartment.  Back then, your credit score was not an indicia of your worth as a citizen, mostly because the credit score didn't exist, although your credit report did.   But few employers and no landlords I recall ran a credit report before renting out their hovels or giving you a job.

Today, it is different.   As I noted before, the vaunted "student loan crises" is somewhat overstated, as the average amount most students graduate with is not much more (and in fact far less) when adjusted for inflation than I had.   And I paid mine back.    Average student loan debt is not hundreds of thousands of dollars per student, but rather the amount most Americans have as a car loan for a nicely optioned medium-priced Toyota Camry - one of the most popular cars in America.

What has changed isn't the average amount of debt, per se - although it has crept up.   What has changed is that student loan debts are difficult if not impossible to discharge in bankruptcy.   This change was made when I was in school, so arguably it is not a "new" aspect to living that Millennials have to deal with.  But when I was in school, private student loans were not a "thing" and were not protected in bankruptcy, and thus were generally not available to students.   Today they are, and some students foolishly borrow money for living expenses and live large in college, only to pay for it later.

So yes, that bear-trap exists, if you choose to step into it.   I was fortunate that this temptation was not offered to me (although by the time I was in law school, they were throwing money at me).   Also, I never asked my parents to co-sign loans for school, particularly for non-school related expenses.  I was also fortunate - or smart - to get a degree in something that paid back, and in fact, the people I was working for paid me to go to school, because there was a shortage of people in my lines of work.

But the big deal is the credit score and credit report, and how over the years, these are being used against people to keep them out of jobs and apartments and whatnot.   If you have shitty credit and a low score, it may be very difficult to get a job, rent an apartment, or even find a spouse!   And as I noted in my last posting, it becomes a Catch-22 type of situation.  You cannot get a job because of your low credit score, but you can't improve your credit score (by paying down debts) because you have no job.

If these were the rules of the game when I was 20 years old, I would have been screwed.   I would not have gotten that first apartment.  I would not have been hired at Carrier or maybe even the Federal Government.   I would not have been able to do a lot of things that I ended up doing, because my credit record would have prevented me.

So yea, that is unfair to the Millennials - not "white privilege" or "cultural appropriation".  But no one is protesting how credit scores are being used to keep people down.   I guess it doesn't have a catchy catch-phrase that can fit on a sign or make a good chant.

Another thing that has changed since I was a youth is how we treat criminals after they are released from jail.   Now, granted, it is a lot harder to feel sorry for a convicted felon than it is for a college student who took on too much debt.   One put a gun in your face, the other just did too many beer bongs.   But we expect criminals to be "rehabilitated" and to learn from their prison experience that prison sucks, and that being a criminal is a dead-end.

And this might actually happen if we didn't make it nearly impossible to do.  Once you have a criminal record - something that employers and landlords also check these days, it is difficult if not impossible to get a job - even a low-wage labor job.   The problem is insurance.   If you hire someone without checking their background, you are deemed negligent.  If that person commits a crime or some other wrongdoing, you could get sued out of existence for failing to use "due diligence" in your hiring practices.   If you knowingly hire a convicted felon, and something goes wrong, it is arguably worse.  And your insurance company is going to make sure you have proper hiring practices in place, which effectively prevents you from hiring an ex-con.

And this goes for low-wage jobs as well.   Hiring a pizza delivery driver?  Better check his criminal record. If it turns out he was convicted for "date rape" and a customer alleges he made improprieties, you are on the hook.   So even low-wage grunt jobs are often out of reach of ex-cons, as any contact with the public or children may make them unhireable to the employer.   And the employer has no choice in this.

I recounted before how a friend of mine was entrapped by one of the oldest gags in the book and ended up going to jail under "Rockefeller's get tough on drug laws" back in the 1970's.  Yes, back then, the Republican party had a big-government "liberal" wing, and a Republican was governor of New York.   They also experimented with - and later revoked - the get-tough-on-drug law and the mandatory minimum sentences as being unworkable.   This didn't prevent the Federal government or many States from later taking up the banner.

My friend did his time in the County lockup and when he got out got serious about his education and got an Engineering degree.  Of course, his brush with misfortune wasn't quite over.  He was severely burned in a Volkswagen accident which took months if not years of rehabilitation to overcome.  The last time I heard, he got married, got a job, and managed to live "happily ever after."   It makes me realize how lucky I have been, in comparison.

I mentioned sex crimes, that is a special category.   Once you are registered as a sex offender all bets are off.   And of course, there are good reasons the sex offender registry - and lifetime registration - were created.   Serial rapists and murderers should be registered, at the very least, based on the severity of their crimes.   But others who commit lesser offenses are often lumped into this category.   The documentary "Pervert Park" illustrates this point.   Some of the residents of that trailer park are actual rapists or child molesters who deserve to be registered for life (if not actually in jail!).   Others were tempted to download child porn from a government-run "honeypot" website.  Still others were "entrapped" into saying things in a chat room by a local Sheriff and convicted on conspiracy charges.

The law does not differentiate between the child-rapist/murderer and the teenaged boy caught in the chat room describing his sexual fantasies (who never actually molested anyone or downloaded child porn) to an undercover Sheriff.   Both have to register as sex offenders, and that basically makes them unemployable for life.  Worst yet, some self-styled "vigilantes" fail to discriminate between the levels of offenses and assault or even murder people on the sex-offender registry.   It doesn't take a psychologist to understand the real motives of these vigilantes.  It's called over-compensation.

When I was in high school, high school kids had sex.  I know, act shocked.   But back then, the "age of consent" was 16, so when an 18-year-old senior had some "heavy petting" with his 16-year-old sophomore girlfriend up on "lover's lane" it was not considered a sex crime.   And since we didn't have cell phones we didn't do stupid things like take pictures of ourselves having sex.   Today, that is of course, illegal, and teenagers are being sent to jail and forced to register as sex offenders for what when I was in High School, was considered "young love."  Times have changed and a law designed to ensnare sex offenders is having unintended consequences.

The point is, it is possible today to do some stupid things early in life and end up with the rest of your life very limited in scope.  And this was not the case in the past.   Not long ago, you could screw up your finances and still be able to work things out, over time.   Not long ago, an ex-con was given a second chance in life, if not necessarily all the chances in the world.   Not long ago, chat rooms and cell phones didn't exist, so teenagers didn't end up going to jail for typing out their sexual fantasies or dating a sophomore in high school.

It is a harsher world we live in today.   More and more, there is "no way back" from mistakes you may make in life - large and small.  And granted, maybe some of these horrific things should be a one-way trip to oblivion - but since there is no fine gradation between levels of culpability, the very guilty are banished along with the lesser culpable.

It seems that in our "Christian Nation" we are less and less prone to forgiveness.   And granted, maybe some crimes or offenses should be unforgivable.   But making a late payment on your credit card?   Today that makes you as unemployable as a convicted felon!

When Did FICO Become a Slut?

Your FICO score is no longer a State Secret!

In a very early posting, I noted that while, under the law, your credit report has to be provided to you once a year for free (at annualcreditreport.com - do NOT use any other site!) your credit score is considered "proprietary intellectual property" and if you want to see it, you generally have to pay for it.

In a way, it reminds me of that chaste cheerleader in high school.    You remember her - the girl who was "saving herself for marriage" - or so she told you.   Then later on, you found out she was gang-banging the entire high school football team or became a porn star.   How people can change!  Or how they can lie, anyway.

The FICO people are about the same way.   Well, it is more complicated than that.   You can obtain a "credit score" - sometimes the actual FICO score - in a number of ways, for free.   Credit Karma, for example, will provide you with credit scores.  But they are not necessarily the FICO score from Fair Issac Corporation.

And these scores can be calculated using different algorithms.   For example, Bank of America offers a "Free FICO Score" which is based on Transunion data.   Under this scheme, I score 798 as of 12/22/2016   Credit Karma gives you two "scores" (not FICO scores) based on Transunion and Equifax data, yielding 816 and 811, respectively, as of 01/13/2016.    Capital One credit card, offers a "free credit score" feature, which is based on God-Knows-What, and is also 816 as of 01/13/2016.   They also offer a "credit report" for free, but it is not clear which of the three databases (Transunion, Equifax, and Experion) it is based on.

Note the spread in the scores, depending on how they were calculated.   Most lenders use the FICO-branded score for their evaluation of your creditworthiness.   I have noticed that in general, the non-FICO scores tend to be higher (by about 10-15 points) on average than the "real" FICO-branded score.  Note also that your score can change pretty dramatically over time, even from month to month, particularly if, like me, you have very low debt and low lines of credit.   Your debt-to-available-credit ratio can change dramatically between the day before your credit card payment is due and the day after.

The Bank of America FICO page (I am not sure if this is offered to all customers or just the "Platinum" members or what) also shows a neat breakdown (above) of average FICO scores for consumers in America.   Usually, in order to get these come-on offers they advertise on TeeVee, you have to have a score of 770 or better.  Oddly enough, the graph above does not break out at that level.  But interpolating from the graph, it appears that only about 30% of people in the USA qualify for this "excellent" level of credit.  Quite frankly, this is far higher than I anticipated.

Of course, I live near a very impoverished city, and low credit scores and shitty credit deals are the norm where I live.   More affluent areas are likely to have higher credit scores.   Quick:  Which is chicken and which is egg?   Do poor credit practices lead to poverty or vice-versa?  Food for thought.

The chart above also shows than nearly 40% of people in the US have really shitty credit, and maybe 70% - the vast majority - have to accept sub-prime lending deals.  These are the folks paying huge interest on car loans and credit cards.   And in a way, the graph above is skewed.  It appears to be an even, almost Bell-curve (no relation) distribution of credit scores.   But since the cutoff for "good" credit is about 770 or so, it really is divided into two groups - the haves and have-nots.

In other words, it doesn't matter much if your score is 780 or 820, you are still going to get the best deals in terms of interest rates and whatnot.    And similarly, it doesn't matter if your score is 550 or 620, chances are, you aren't going to get a loan at all, or if you do, at onerous interest rates.   The scoring system is binary, you are either in or out.  Or more precisely, trinary:  There are the best deals, shitty deals, and no deals at all.

But credit score isn't everything, and for this reason, I counsel people not to obsess about it.  Pay your bills on time, don't borrow money for stupid things - and don't borrow more than you can pay back - and your score will be excellent, regardless of attempts to "game the system".   And there are some ways you can game the system to bump up your score a point or two, but they are hard to do without a time machine.

For example, "oldest account" data is one of the minor factors in your score.  The older the oldest account is on your record, the higher this factor is in your score.   So when I closed the Sears account I opened at age 21, this factor went down - but it did not lower my score by an appreciable amount.   You might be able to bump up your score if you had an older account - but again, without a time machine, this is kind of hard to do.  For me, keeping an old Sears credit card account open wasn't worth the hassle - or the possible five-point bump on my score.

The biggies are whether you pay your bills on time, your debt-to-available-credit ratio, and whether you have any judgments or bankruptcies against you in the last seven years.   Being late on a mortgage payment can really kill your score, compared to being late on a department store card.   Both are bad for your record and score, however.    And there really is no way to "repair" bad credit - anyone promising to do so, is just trying to rip you off.

Correcting incorrect information, on the other hand, is something you can do yourself for free, and it can "repair" or correct your credit record.   I recounted before how an erroneous "late" payment appeared on my report when my bank sold my mortgage to another bank.  (Today, I am told that banks do not report late payments during this transition period, to avoid just such mishaps).   All it took was a phone call to clear up the error, and my credit score no doubt greatly improved (back then, we plebes didn't have access to the scores - or to chaste cheerleaders).

But again, obsessing about credit score is playing their game to some extent.   Borrowing money is not a privilege and borrowing for stupid things like consumer debt isn't a "smart financial move" but just a way of taking a dollar out of your pocket and making it worth a dollar less - just so you can have bragging rights to owning something.  And that is foolish.

Moreover, your score doesn't matter, if you have low income.   You can have the highest score in the land, but if your income is zilch, no one is going to lend you money.   I find myself in this situation right now, and maybe it is a blessing.  As an early-retiree who is living off after-tax savings, my taxable income is very low.   In fact, I have to be careful to make sure it does not fall below the poverty line or I will lose my Obamacare subsidy, which means I would have to pay $14,000 a year for my health insurance, instead of getting $14,000 in tax credits.   Such is the crazy patchwork quilt of Obamacare.

But getting back to loans, if your W-2 shows you made only $30,000 last year, you are not going to qualify for a mortgage for $300,000, no matter how high your score is.   I could not get a mortgage to buy the house I currently live in, based on my current income.   Weird world we live in, eh?

On the other hand, a guy with a $100,000 annual paycheck and no savings in the bank could.   Which guy do you want to be?  He has to work for a living - 40 hours a week.   Like I said, it is a blessing in disguise.

And as I noted before, when a bank declines you for a loan, you should listen to that good advice from the bank.  Getting debt advice from a bank is generally a bad idea, particularly when they are eager to approve you for a loan.  When you are declined, however, that is often an indication you need to get your financial house in order - listen to that advice!

When I was a big-shot lawyer and real estate investor, we were spending money faster than we made it.   I asked my banker friend if we could borrow more money.   Now bear in mind this is a bank I bought founding shares in - and still own stock in - and the Vice President I was talking to was a personal friend of mine.  All that doesn't matter.   If you think banking is done on a "who you know" basis, you are sadly mistaken, particularly in this day and age.

Anyway, he cranked the numbers and told me I was over-extended as it was, and he was really sorry, but they couldn't loan me more money.   I told him not to sweat it, as this was some great advice and an indication that maybe I needed to re-think my finances.

Others take this a different way.  They get angry with the bank, as if somehow it was a personal slight and not just what a spreadsheet algorithm cranked out - or what your credit score said.  They truly believe they are "lucky" to get a loan, and the ways to get it are to "know somebody" or through luck.   So instead of looking at their finances (and credit record) and thinking about why the bank declined them, they run off to seek shitty sub-prime financing that will surely ruin them over time.

And usually, they get these sorts of loans for stupid things like jet-skis or a motorcycle, or a pool.   Yea, I've been there, done that!

And the opposite is also true.   Just as having a great credit score and low income means you will not qualify for a loan, having a low credit score does not mean you are not wealthy or well-off.   There are a lot of people who live the cash lifestyle - some even for legal reasons - that just don't care about credit score because they don't need credit.

Sadly, this is becoming harder and harder to do, as credit score is now used as a factor in hiring and renting.   If your credit score is in the tank, you won't be able to get a job or rent an apartment - which is Catch-22.  If you can't get a job due to low credit score, how can you be expected to ever bring that score up?  It is like being a convicted felon - a one-way street to poverty with no way back.