Month: November 2011

The Upside of Facebook Use

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How is being active on Facebook and other social media sites affecting your friendships in real life?

According to Matthew Brashears, a Cornell University sociologist who surveyed more than 2,000 adults from a national database and found that from 1985 to 2010, the number of truly close friends people cited has dropped (even if we’re more active in socialization than ever before). On average, participants listed 2.03 close friends in Brashears’ survey. That number was down from about three in a 1985 study.

Here’s the gist:

Does that mean we’re more isolated in these times when we seem to meet more people online than in person? (How many of your Facebook “friends” are really friends of yours?) Defying some of the stereotypes of the digital age, social scientists say Facebook may actually be healthy for us. Keith Hampton at the Annenberg School for Communication at the University of Pennsylvania wrote a report for the Pew Research Center in which he found that “Internet users in general, but Facebook users even more so, have more close relationships than other people.”

“Facebook users get more overall social support, and in particular they report more emotional support and companionship than other people,” wrote Hampton in a blog post. “And, it is not a trivial amount of support. Compared to other things that matter for support — like being married or living with a partner — it really matters. Frequent Facebook use is equivalent to about half the boost in support you get from being married.“

That last sentence is both encouraging and frightening at the same time.

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For one personal perspective on virtual friendships, please check out Cheri’s five-part series, beginning here. Then move on to Part II, Part III, Part IV, and Part V. Highly recommended reading.

Nassim Nicholas Taleb on Banker Bonuses

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In today’s New York Times, Nassim Nicholas Taleb has a good op-ed decrying banker bonuses. He argues:

Instead, it’s time for a fundamental reform: Any person who works for a company that, regardless of its current financial health, would require a taxpayer-financed bailout if it failed should not get a bonus, ever. In fact, all pay at systemically important financial institutions — big banks, but also some insurance companies and even huge hedge funds — should be strictly regulated.

Critics like the Occupy Wall Street demonstrators decry the bonus system for its lack of fairness and its contribution to widening inequality. But the greater problem is that it provides an incentive to take risks. The asymmetric nature of the bonus (an incentive for success without a corresponding disincentive for failure) causes hidden risks to accumulate in the financial system and become a catalyst for disaster. This violates the fundamental rules of capitalism; Adam Smith himself was wary of the effect of limiting liability, a bedrock principle of the modern corporation.

Bonuses are particularly dangerous because they invite bankers to game the system by hiding the risks of rare and hard-to-predict but consequential blow-ups, which I have called “black swan” events. The meltdown in the United States subprime mortgage market, which set off the global financial crisis, is only the latest example of such disasters.

If you’ve never read The Black Swan, I highly recommend it. In it, Taleb goes into detail about the low-probability, high impact events that can derail individuals, institutions, and governments.

Taleb goes on to say:

What would banking look like if bonuses were eliminated? It would not be too different from what it was like when I was a bank intern in the 1980s, before the wave of deregulation that culminated in the 1999 repeal of the Glass-Steagall Act, the Depression-era law that had separated investment and commercial banking. Before then, bankers and lenders were boring “lifers.” Banking was bland and predictable; the chairman’s income was less than that of today’s junior trader. Investment banks, which paid bonuses and weren’t allowed to lend, were partnerships with skin in the game, not gamblers playing with other people’s money.

Of course, the big question is: how do we get banks to follow this no-bonus policy? Can it become a law?

Is Sitting in Traffic Killing You?

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A troubling piece in the Wall Street Journal, “The Hidden Toll of Traffic Jams,” explains the deleterious effects of sitting in traffic jams:

New public-health studies and laboratory experiments suggest that, at every stage of life, traffic fumes exact a measurable toll on mental capacity, intelligence and emotional stability.

and

Recent studies show that breathing street-level fumes for just 30 minutes can intensify electrical activity in brain regions responsible for behavior, personality and decision-making, changes that are suggestive of stress, scientists in the Netherlands recently discovered. Breathing normal city air with high levels of traffic exhaust for 90 days can change the way that genes turn on or off among the elderly; it can also leave a molecular mark on the genome of a newborn for life, separate research teams at Columbia University and Harvard University reported this year.

The evidence is still largely circumstantial, as the article notes, but it is worrisome. My daily commute is about twenty miles one way, and I sit in traffic for close to two hours daily. That’s one aspect of my life that I would like to change.

Why Wikipedia Is As Important as the Pyramids

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A rather interesting argument by Jonathon Keats, author of Virtual Words, in Wired:

But however much it may deserve designation, the truth is that Wikipedia doesn’t need the World Heritage List. The World Heritage List needs Wikipedia.

Unesco established the list in 1972 to help the UN foster “conditions for dialogue among civilizations, cultures and peoples, based upon respect for commonly shared values.” (Sound like a certain online encyclopedia?) But rampant politicking has nudged a rapidly expanding assortment of water management systems and silver mines into the league of universally significant landmarks like Persepolis and the Taj Mahal.

However, Unesco is plagued by an even deeper problem. Since the World Heritage Convention was written in 1972, the delegates haven’t known quite how to handle “intangible cultural heritage” — the traditions and wisdom that are as significant to civilizations as their monuments. After spending 31 years sorting out the intellectual property rights of ethnic groups, the delegates decided to create a whole separate convention for abstract landmarks, a second, independent roster. You’ll find the historic center of Bruges, Belgium, on the World Heritage List, and Bruges’ annual Procession of the Holy Blood ceremony on the List of Intangible Cultural Heritage of Humanity.

That’s ludicrous. Intangible cultural context is the essence of heritage, making wood and stone worthy of our interest. To merit the name, World Heritage sites need to encompass the intangibles, to be virtual at least as much as they’re physical.

That’s why Wikipedia is an ideal candidate to set the World Heritage List right. The Wikipedia World Heritage site would be more than a plaque on a server farm in Tampa. It would be data. But not a particular data set, since the data is always changing, and that mutability is what makes it a wiki. As more of the world goes digital and grows more networked, world heritage will increasingly have this characteristic. The World Heritage Committee will have to adapt to it or become obsolete.

 

On the Origin of Spray Paint

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The editors of New York Times Magazine unveiled a new section this weekend titled Who Made That?. And starting off this weekend, they dove into the origin of spray paint. Have you ever wondered who created spray paint?

The spray-paint can, however, has eminently practical origins. Ed Seymour, the proprietor of a Sycamore, Ill., paint company, was in search of an easy way to demonstrate his aluminum coating for painting radiators. His wife suggested a makeshift spray gun, like those used for deodorizers. And so, in 1949, Seymour mixed paint and aerosol in a can with a spray head. As it turned out, compressing paint in a can made for a nice finish.

Seymour’s humble creation quickly proved so popular that Seymour of Sycamore began customizing its own manufacturing equipment and eventually expanded into new businesses, including the auto and industrial-machine markets. Soon afterward, home-furnishing heavyweights like Rust-Oleum and Krylon jumped in. And by 1973, Big Spray was producing 270 million cans annually in the U.S., according to the Consumer Specialty Products Association. Last year, U.S. spray-paint manufacturers produced 412 million cans.

This is an interesting bit about European companies catering to spray can artists:

Companies like Montana, based in Spain; Molotow, based in Germany; and Ironlak, based in Australia, were pleased to associate with street artists. They offered professional-grade enhancements too, like different kinds of valves that emit different types of mists. (Some artists now complain that American alternatives are like buying a tube of paint with only one brush.) “The control you can get with the can, from the pressure, is phenomenal,” Gastman said.

Such innovation is not without blowback. Some spray writers dismiss the European brands as “fancy paint,” and in pursuit of lost authenticity, stick to Krylon, which is based in Ohio, and Rust-Oleum, which is located outside Chicago. “American writers really want to be loyal to Rusto,” Neelon said. “Rust-Oleum is like the Ford F-150 of spray paint. It’s the workingman’s paint.”

Who Made That? is a series that I’m definitely going to be paying attention to.

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Some food for thought: is graffiti created with spray paint considered art or vandalism? Sound off in the comments.


How to Buy a Used or New Car: Confessions of a Car Salesman

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How did the car business get so screwed up? There’s nothing else in our society that is sold with the consumer so conspicuously unprepared.

And it’s true. Car buying is one of the most stressful consumer experiences. But it doesn’t have to be this way. After reading this extensive piece on Edmunds.com, I learned more about the business than I’ve ever had before. The author of the piece was a writer for Edmunds who went working undercover at two dealerships: a high-volume, high-pressure dealership and a no-haggle dealership:

The editor explained that they wanted me to write a series of articles describing the business from the inside. Of course I would learn the tricks of the trade, and that would better prepare me to write advice for Edmunds.com. But the benefits of the project would be greater than just information. I would live the life of a car salesman for three months. That would give me an insight and perspective that couldn’t be gained by reading books or articles or interviewing former car salesmen.

What he learned over those three months is incredible:

So, you think I’m romanticizing car salesmen? Trying to clean them up and excuse their evil ways? And, you might ask, if the salesmen aren’t the bad guys, who is?

Having been a salesman myself, I began to view the managers and dealership owners as the real culprits. While salesmen play people games with the customer, the guys in the tower work the numbers with computers, their eyes fixed on the bottom line. They can see at a glance what kind of profit they are taking from the customer and they do it any way. Furthermore, they bully the sales staff, encouraging them to manipulate, control and intimidate customers while they take the lion’s share of the profit.

Sometimes, the profit a salesman generates is not even pocketed by them. One salesman told me the F&I people can work their magic to rob a salesman of his commission. They move front-end profit to the back end where it evaporates from the salesman’s voucher and returns, over the years, to the dealer in the form of high interest and steady payouts.

There’s so much gold in the piece, but I picked out the highlights below. The piece is broken into nine parts: 1) Going Undercover, 2) Getting Hired, 3) Meeting, Greeting and Dealing, 4) Life on the Lot, 5) A Tale of Two Deals 6) Learning from the Pros, 7) No-Haggle Selling, 8) Parting Shots, and 9) Lessons from the Lot. The whole piece reads like a mini-novel, but if you’re in a hurry, at least check out the last section, in which the author provides specific recommendations on what you can do to get the best deal on a used or new car:

Concept 3: Profit Equals Commission

I never really thought of this until I sold cars but… Car salespeople earn their living by inflating the price of the car you are buying. The more they inflate the price, the bigger their commission. This might seem very obvious, but we tend to lose sight of it when the smiling salesperson greets us on the car lot. They make us think they have our best interests in mind. The good salespeople do have our interests in mind. The unscrupulous salespeople are thinking how your purchase increases their commission. One of the dealerships I worked at had a sliding scale for commissions. The higher the profit, the higher the commission. Naturally, the salespeople tried to hit that point where the commission was bumped to the higher percentage. That might mean moving you into a higher level vehicle. It might mean increasing the profit by financing sleight of hand. In both cases, this smiling salesperson, with the personable air, didn’t have your best interests in mind. I believe in paying a dealer a profit for his car. I also believe in rewarding the salesperson for their expert help. But I don’t think this justifies making an unfair profit at my expense.

On humor being an effective way to get closer to the customer:

Many salespeople find that humor is a good way to overcome objections. If a customer says they’re “only looking,” the salesperson might answer, “Last time I was only looking I wound up married.” If a customer objects to being hurried into buying the car, the salesperson might say, “The only pressure on this lot is in the tires.” These prepackaged lines were exchanged between car salesmen in the slow times with the feeling that the right joke at the right moment could be the ticket to a sale.

The most interesting parts of the piece, to me, were the psychological lessons that they were taught as salespeople. For example:

At one point, during a sales seminar, I was actually taught how to shake hands. The instructor, a veteran car salesman said: “Thumb to thumb. Pump one, two, three, and out.” Another vet told me to combine the handshake with a slight pulling motion. This is the beginning of your control over the customer. This would prepare the “up” to be moved into the dealership where the negotiation would begin. The car lot handshake is sometimes combined with the confident demand, “Follow me!” If you employ this method you turn and begin walking into the dealership. Do not look back to see if they are following you. Most people feel the obligation to do what they are told and they will follow you, if only to plead, “But I’m only looking!”

The author made a strong point that the salesman wasn’t the customer’s enemy; rather, the enemy was the person who the customer doesn’t see (the manager). This is a key takeaway, I think:

What the customer didn’t realize was that the poor car salesman or woman was not really the enemy. The real enemy was the manager sitting in the sales tower cracking the whip. Suppose for a moment a customer told us they were “only looking,” and we said, “fine, take your time,” and went back into the sales tower. Now we find ourselves looking up into the steely eyes of the sales manager.

“That’s your customer out there,” the manager would say.

“But they said they’re only looking,” I would answer.

“Only looking? You’re going to take that for an answer?” Foam was beginning to form at the corners of the sales manager’s mouth. “What the hell kind of salesman are you? Of course they’re looking! They’re all only looking until they buy. You want them to go across the street and buy a car over there? Because they havereal salesmen over there. Now go back out there and sell those people a car. And don’t let them leave until they buy or until you turn them over to your closer.”

Again, this is a fascinating piece and well worth the read in its entirety. And while the piece is dated (circa 2001, when there weren’t as many people who realized that “The Internet is your friend”), there’s also an update for 2009.

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For the hat tip, I thank longform.org.

Questions for the reader: What has been your best/worst experience shopping for a used or new car? Feel free to share in the comments. Did you find any of the advice in the piece at Edmunds.com useful/interesting?

Wedding Lawsuit of the Decade

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This one takes the cake, folks. Todd J. Remis of Manhattan married in 2003, but he didn’t like the services of his photography studio. He claimed that H & H Photographers, a 65-year-old studio “known fondly among thousands of former and current Bronx residents,” missed photographing the last dance and the bouquet toss.

Forget that the wedding took place more than seven years ago. And that Mr. Remis has demanded to be repaid the $4,100 cost of the photography and and additional $48,000 (!) to recreate the entire wedding and fly the principals to New York so the celebration can be re-shot by another photographer. So what’s the kicker? He is now divorced from his wife, and he doesn’t even know where she lives (supposedly she is back in her native Latvia).

What a totally wild story.

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And a personal call to action: if you hire me to shoot your wedding, I promise to be there from beginning to end. I don’t charge by the hour. 

The Cult of Jurassic Park

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From the middle 1990s to the mid 2000s, my favourite movie was Jurassic Park. I’m not kidding. I must have watched it at least two dozen times in my life, more than any other movie.

In celebration of the release of Jurassic Park (trilogy) on Blu-ray, Bryan Curtis wrote a good piece about the cult associated with this movie.

On the origin of Jurassic Park (I’ve read Michael Crichton’s novel, and was thoroughly mesmerized by it):

When was Jurassic Park hatched? We could start in 1924, when the American paleontologist Henry Fairfield Osborn wrote about an “alert, swift-moving carnivorous dinosaur” — Velociraptor mongoliensis. We could start in 1970, when Steven, a young movie director, and Michael, a young novelist, had a chance meeting on the lot at Universal Studios. But I’m thinking we should probably start in 1983.

Entomologist George O. Poinar and his wife, Roberta, had begun taking DNA from insects trapped in prehistoric amber. They’d published an article about it in Science. One afternoon, a stranger dropped by their office in Berkeley, Calif. “Tall, pleasant guy,” Poinar recalls now. “Really lanky.” The man quizzed the Poinars about their work. He asked about amber mines in the Dominican Republic. Then, with his notebook filled, the man left. He never mentioned anything about a dinosaur novel.

Michael Crichton, in fact, was already trying to bring dinosaurs back to life. But he’d gotten stuck. “It is always a problem for me to believe in the stories that I am writing,” Crichton later wrote to Poinar, “and a dinosaur story especially strains my own credence.” When Crichton discovered the Poinars and their bugs-in-amber, he stumbled onto the foundation of a billion-dollar enterprise. It was a beautiful premise for a thriller, in that it both contained cutting-edge science and was ridiculously easy to understand.

I agree with the below assessment entirely. I love the original film. I tolerate The Lost World. I’ve only seen Jurassic Park III in theaters, and I loathed it:

There’s some stuff you ought to know about serious Jurassic Park fans. On balance, they love the first movie; they’re OK with The Lost World; and they absolutely hate Jurassic Park III. (The proprietor of the Jurassic Cast podcast calls it “the abomination.”) Moreover, Jurassic fans have a moment that is their version of Greedo shooting first. “The big numero uno,” Terry says. It occurs in the third movie, when the Spinosaurus and the tyrannosaur get locked in a Hell in a Cell match.JPers hate this scene because it ends with the tyrannosaur getting killed.

I don’t really care for the feminist comparisons in the piece, but I did like the neat trivia. I loved this line: “As Alan Grant might say: I bet you’ll never look at blockbusters the same way again.”

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In other news: it’s my birthday tomorrow, and this would make an awesome gift. Hint hint.

Are Southern Manners on the Decline?

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For those of you living in the South, would you agree that the Southern charm is fading? Today’s piece in The New York Times asserts so:

The Tavern at Phipps case, and a growing portfolio of examples of personal and political behavior that belies a traditional code of gentility, has scholars of Southern culture and Southerners themselves wondering if civility in the south is dead, or at least wounded.

But what is the reason for the decline in Southern manners?

Newcomers still get much of the blame. In the past decade the South has seen an unprecedented influx of immigrants from both other states and other countries. The population in the south grew by 14.3 percent from 2000 to 2010, making it the fastest growing region in the country.

But there is more behind the social shift, scholars say. Digital communication and globalization have conspired to make many parts of the South less insular. Couple that with a political climate as contentious as anyone can remember and a wave of economic insecurity rolling across the region, and you’ve got a situation where saying “thank you, ma’am” isn’t good enough anymore.

Anecdotally speaking, I would agree (living in Atlanta) that living in the South is less about “Yes, sir” and “Thank you, ma’am” than it used to be. However, since there is no stringent way to test this assertion, your experience will probably vary.

The Perniciousness of “Buy Here, Pay Here” Car Dealerships

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I had no idea that there was a market for such things…

These dealerships focus on people who need cars to get to work, but can’t qualify for conventional loans. They sell aging, high-mileage vehicles at prices well above Kelley Blue Book value and provide their own financing. As lenders of last resort, they can charge interest at three times or more the going rate for regular used-car loans.

Many require customers to return to the lot to make their loan payments — that’s why they’re called Buy Here Pay Here dealerships.

If buyers default, as about 1 in 4 do, the dealer repossesses the cars and in many cases sells them again.

The dealerships make an average profit of 38% on each sale, according to the National Alliance of Buy Here Pay Here Dealers. That’s more than double the profit margin of conventional retail car chains like AutoNation Inc.

That 38% return is higher than anything you’ll see on Wall Street these days. And investors are paying attention. But here’s the rub:

Buy Here Pay Here is also being boosted by one of the sophisticated financial strategies that drove the nation’s recent housing boom and bust: securitization. Loans on decade-old clunkers are being bundled into securities, just as subprime mortgages were a few years ago. In the last two years, investors have bought more than $15 billion in subprime auto securities.

Although they’re backed mainly by installment contracts signed by people who can’t even qualify for a credit card, most of these bonds have been rated investment grade. Many have received the highest rating: AAA.

This is the same kind of thinking that led to AIG getting AAA rating and subsequently going bust. I can’t see this investment strategy working out in the long term. It will probably be another disaster.

Read the full story at The Los Angeles Times. This is predatory lending, but what can be done about it?