Category: Consuming

Even in the comparatively rain-soaked northeast we’ve got water troubles, as the recent Globe article on overuse of our river resources indicates. Well, I sent that out to my friend John Fleck in Albuquerque, who does a lot of science and drought reporting for the paper there.

He commented that drought isn’t necessarily a specific low level of water – just less than you use. Obviously New Englanders could use a lot less water than they do, but they’re used to not having to worry about it, so they don’t. And then they run out.

Other Southwesterners are likely to be a little less sympathetic. For example, this water-blogger in Tuscon just seems surprised that there aren’t any of the usual water-use policies that everyone’s familiar with in Arizona. I guess those rain-rich New Englanders will have to act like reasonable human beings instead of profligate wastrels. It kind of reminds me of the people who comment on financial articles illustrating families who run into financial trouble even when they make a lot of money.

It’s easy: Just spend more than your income.

Same with water: Don’t pay attention, and you’ll wreck everything.

I’ve been reading a galley of the upcoming book Cheap by Ellen Ruppel Shell, and it’s got me thinking about marketing practices a lot. I don’t agree with all of Shell’s conclusions – she seems to think that discounting and production efficiency is a zero-sum game, for example. But she definitely has keen insight into the psychology of discounting, building on studies of irrational behavior by people like Dan Ariely (whose book I also enjoyed).

At first I didn’t really believe what she was saying about how even savvy consumers are easily duped by the appeal of Bargain Prices, even when it’s not in our best interest. Merchants, she says, override our logical behavior at times of emotional stress, appealing to our irrational desires with discounts from arbitrary reference prices, a sense of urgency, and a feeling of participation in something special. Well, obviously that’s true for some people, but I’m no dummy, and I’m resistant to that kind of trick. Right?

Well, last week, while Bookdwarf was in the hospital having her appendix removed, I got an email from my local wine merchant announcing that Facebook fans would get an exclusive early peek at their best value ever, a heavy discount on a stellar bottle of wine that would be available for one day only. It turned out to be a good value indeed: A $10 bottle on sale for $4 if you bought a case. I did buy a case. Maybe because I was under emotional stress, but mostly because I thought I was saving a bundle, I ordered an extra $100 worth of other stuff I didn’t need. After all, it was also on sale, just not as much. The discounted wine turned out to be pretty good, but I was still unsettled by how effectively the direct-marketing specials plucked at my wallet-strings.

I got another email today that illustrates just how timely Shell’s book is, this one from a market research group, analyzing the ways that different groups of people have responded to the recession. One label in particular caught my eye: “The Ostrich behavior is self-explanatory and irrational. At 9% of the population, they feel unaffected by the financial chill are spending as normally. Some of them are well paid enough to get away with this, but the bulk of this group are in denial… This group is a double edged sword for businesses. In the short term, they’re great for the bottom line, but in the long run, many of them may be forced to raise their heads and lower their spending as the crisis catches up with them.”

Good luck, folks. They’re out to get you.

There’s a list of ideas on how to “go galt” – that is, truly live out an Objectivist protest against the constricting fabric of society. They say, for example, you should stop taking public transit to liberate yourself from subsidizing collectivist transit.

But that’s just a cop-out. If you want to do it right, you should stop driving on taxpayer-financed roads and obeying taxpayer-financed traffic laws. And definitely don’t use those meddlesome taxpayer-funded ambulances if you crash your car and get injured, or if someone beats you senseless for driving against the light down the sidewalk.

If you avoid using the taxpayer-funded grid to get taxpayer-subsidized electricity from coddled and over-regulated utilities, and switch to wood for heat and candles for lighting, and your house catches fire, be sure to put the fire out yourself rather than relying on your local corrupt taxpayer-funded fire departments.

Foodwise, you should definitely dig your own well and sterilize your own water rather than using the public water authority. And for goodness sake, don’t eat anything made from corn – that’s heavily funded by disgusting socialist subsidies that distort the true force of market pricing. That includes not just corn itself, but also sodas, baked goods, beef, pork, chicken, tilapia, E10 and E85 gasoline, beer, liquor, you name it. And definitely don’t buy any food that’s been transported through the tax-subsidized interstate highway system – only buy local foods carted in by donkey on footpaths.

Meanwhile, be sure to pull your kids out of school. Of course, to properly home-school them in the Galt tradition, you’ll need to teach them only things you already know or can learn without relying on taxpayer-funded curricula, taxpayer-funded libraries, or the taxpayer-funded internet. So, basically, just bible study. Although most of those bibles are produced through religious charities and that Jesus guy seems like he was pretty into helping the poor, so you might want to reconsider that. I guess just read to them from Atlas Shrugged and make them memorize the multiplication tables. I’m sure that will be enough for them to sustain themselves in a new individualist society.

Shadow Inventory is the term used to describe properties that would normally be for sale, but for one reason or another are not. Typically that means bank-owned units that the banks just haven’t been trying to list because they can’t move them. But also things like properties people would like to sell – either a property they live in but want to leave, an investment property they’d like to sell, or a home they’re stuck renting out because they moved into a new place and can’t unload the old one.

I don’t know what category the pair of condos at 67 Church in Union Square, Somerville fall into. But they’ve been pulled from the market – both the 3BR asking under 479k and the 1BR asking just shy of 300. I don’t even know if they truly count as shadow inventory or if they’re just unsold.

Either way, over the past few months, I’ve seen several promising homes in that neighborhood go on the market, languish, and then exit without a sale, meaning there’s probably just as many sellers waiting on the sidelines as buyers. In other words, I’m not seeing any signs of turnaround or uptick. And if I’m anything like the rest of the potential first-time buyers the Globe is rooting for, I doubt we’ll see one any time soon.

Look at it this way: I’ve got some money saved up. I’ve been lusting after Boston-area real estate for almost ten years now. I’d be a prime candidate to be swooping in to buy at a discount right now. But frankly, even taking on a yearlong lease seems like a dangerously risky financial move. A 30 year loan? Nobody I know has any confidence they’ll have a job a year from now. Who on earth would make a 30-year promise when they can’t predict with any certainty at all where they’ll be in 12 months?

The song chosen for the background of the following series of interviews about the housing bubble?

“Pawn Shop” by Sublime. Kind of fitting, really, to have the anthem of collapse be the tale of a ratty thrash band whose lead singer kept pawning their equipment to buy heroin.

Your average newspaper these days has added a comment section to many of its articles. That’s basically an invitation for extremists, trolls, and jackasses. A Boston Globe story about taxes, transit, or the MBTA is generally followed by several comments insisting that bloated corrupt unions are the cause of all its problems and that only a repeal of the income tax will solve anything. In the New York Times, every article about the economy will draw approximately equal numbers of comments George W. Bush and Barack Obama for the parlous state of global finance, plus at least one blaming George Soros and one advocating a return to the Gold Standard and the abolition of fractional-reserve banking systems.

But the best whackadoo comments are to be found in the dedicated financial press. For example, check out this article about oil-price fluctuations. The entirely reasonable premise of the article – that oil prices are volatile and we should plan for such volatility – leads to six hundred comments in under a day. About half are totally dismissive of a possibility of oil returning to high prices, or insisting that only speculators (George Soros again playing the role of bogeyman) caused oil to cross $100/barrel mark last year. Others of course play the opposite role and insist that ammunition, not oil, is where you want to be investing right now, and at least one commenter pops up noting that he’s stockpiling diesel, ammunition, honey, and clean underwear for the coming apocalypse.

Then you’ll love the value in this beautiful Victorian single-family home on Alston St. in Somerville, located a stone’s throw from the McGrath elevated highway, Pat’s Tow impound lot, and the local waste transfer station.

Sure, it needs a new roof, interior paint & plaster, new siding, probably floor-refinishing, de-leading and maybe even asbestos remediation, but what an opportunity to own a home! Plus, if they ever build that proposed green line extension, you’ll just have to dash across four or five lanes of traffic to get to your trolley stop!