Monthly Archives: October 2010

We Fed Them KOOK a COLA but They Drank the KoolAid

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“It’s the economy, stupid!”

We’re back! There is no inflation. The Cost of Living has not risen yet again and seniors get stiffed for the second year in a row. I wrote this column in April but there have been developments:

The Associated Press reports that “the government is expected to announce this week that more than 58 million Social Security recipients will go through another year without an increase in monthly benefits.

“It would mark only the second year without an increase since automatic adjustments for inflation were adopted in 1975. The first year was this year.

“Based on inflation so far this year, the trustees who oversee Social Security project there will be no cost of living adjustment for 2011.”

Cost of living is by definition the cost of maintaining a certain living standard.

Employment contracts, pension benefits, and government payments such as your Social Security check can be tied to a cost-of-living index, typically to the CPI or “Consumer Price Index.” Federal law requires the Social Security Administration to base its Cost of Living Adjustment on the consumer price index changes in the third quarter of each year (July, August and September) with the same quarter in the previous year. Remember that.

The CPI reports the average price of a lot of stuff — what is called a constant “market basket of goods and services” — purchased by average households. According to Bloomberg Business News, the CPI wonks add up and average the prices of 95,000 items from 22,000 stores and 35,000 rental units. Those prices are weighted by assuming that you distribute your spending along strict percentages. Housing: 41.4%, Food and Beverage: 17.4%, Transport: 17.0%, Medical Care: 6.9%, Other: 6.9%, Apparel: 6.0%, and Entertainment: 4.4%. Taxes are exempt from the CPI totals so when your property tax or sales tax or income tax or ObamaCare health tax or gasoline tax or telecommunications tax or blue cheese tax rises, it doesn’t actually cost you any extra.

In calculating the CPI, the U.S. Bureau of Labor Statistics uses a formula that reflects the fact that consumers shift their purchases toward products that have fallen in relative price. Although this substitution game means the BLS reduces what we pay by “living with” store brands instead of name brands, BLS says my analysis is incorrect. Their objective “is to calculate the change in the amount consumers need to spend to maintain a constant level of satisfaction.” As long as the BLS gets to define “satisfaction.”

Where, oh where is Mick when we need him?

The Social Security Administration writes, “Since 1975, Social Security’s general benefit increases have been based on increases in the cost of living, as measured by the Consumer Price Index. We call such increases Cost-Of-Living Adjustments, or COLAs. Because there has been a decline in the Consumer Price Index, there will be no COLA payable in 2010.” Or 2011.

Did your cost of living go down?

  • Campbell’s Cream of Tomato soup costs between 80 cents and $1.29 per can in most markets today. Do you remember when it was 40 cents? I do. But the Cost of Living has declined.
  • A five-pound bag of flour costs about $2.49 in most markets today. Do you remember when it was a buck? I do. But the Cost of Living has declined.
  • Gasoline prices dropped in the third quarter but its cost is flying upwards again; it will be over $3 before I get back to Florida this year. Do you remember when it was $0.999? I do. But the Cost of Living has declined.
  • According to USAToday, health insurance premiums cost about $13,375 per annum in 2009. (And despite the new law, insurers say they do not have to cover kids with pre-existing conditions.) Do you remember when a family policy cost $2,500? I do. But your premiums will still go up. And, of course, the Cost of Living has declined.
  • Milk costs between $3.50 and $4 per gallon in most markets. Do you remember when it was $1.75? Or $1? I do. But the Cost of Living has declined.
  • Property taxes on the Vermont house are $3,869.96 and $3,892.26 on the Florida house this year. Do you remember when they were each $900? I do. But the Cost of Living has declined.

The AP report continued, The stagnant Cost of Living Adjustment is “not seen as good news for Democrats as they defend their congressional majorities in next month’s elections.

“Last fall a dozen Democrats joined Senate Republicans to block an effort to provide a bonus payment to Social Security recipients to make up for the lack of a COLA this year.”

I wish stuff didn’t cost so much but even more I wish our “leaders” didn’t lie to us about stuff costing so much. Oddly, I still cannot vote myself a raise.

Bob reminded us last time this appeared that “taxes don’t go into the CPI” so I updated the list to include property taxes. I didn’t include the little increases in government programs “recovery” on the phone bill or the increasing number of cities and towns implementing local sales tax “options.”

44 million Americans subsist below the poverty line because the cost of things we buy has skyrocketed past our incomes. Guess how many of those Americans depend on Social Security?

It is likely that Medicare Part B premiums will remain frozen at last year’s levels but premiums for Medicare Part D, the prescription drug program, will rise.

Federal law requires that the Cost of Living Adjustment be based on the CPI changes in the third quarter of last year to the third quarter of this year. Well, Ollie, some of the items in the CPI haven’t changed much, so seniors are now behind the same eight ball as they were last year.

Except their taxes, insurance premiums, drugs, heating oil, and cable TV subscriptions are all going to cost more.

Good thing there is a sale on cat food down to Price Chopper, isn’t it? Mmmm. Cat food.





The Aftermath — Part III, Multitasking

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10-10-10-10-10.

Polyamory requires multitasking. Serial monogamy doesn’t. And multitasking is a kind of circus act of the brain.

gekko and I are juggling again. You can read her new Circus Act (Another Polyamory Poast) over on LizardDreams

I have an idea with a couple of data points to support it. Here’s the data:

Desdemona has a dear, close friend named Maggie; Like Anne and “Sally” and so many other close friends, they spend hours and hours together. Before hooking up with Maggie, though, Desdemona spent most of her free time with Susan. Their interests were poles apart so they spent their time differently.

We have previously suggested that one can have sex without love and, more important, one can have love without sex.

Desdemona and Maggie might fit our definition of lovers. Likewise Desdemona and Susan, except the latter pair seems to have become passe.

Fred and Gwen and Bonnie and Carol are our polyamorous friends from Part 2 and Part 3. Fred passed along something interesting. When he spends time in the library with Bonnie neither Gwen nor Carol cross his mind at all. Fred has tremendous concentration and he focuses entirely on Bonnie when she is with him. At the motel with Carol, Fred is absolutely unlikely to ponder a logical plan for resolving the nation’s economic problems.

But wait! There’s more!

I’ve watched Fred move his focus from one lover to the next. He pulls away slightly from Gwen even before leaving their house so he can better concentrate on his coming partner.

I often describe multitasking as that familiar circus act of keeping plates spinning in the air. I’ll bet you expected me to say “juggling,” didn’t you?

Wikipedia tells us that plate spinning is a “manipulation art where a person spins plates, bowls and other flat objects on poles, without them falling off. [It] relies on the gyroscopic effect, in the same way a top stays upright while spinning. Spinning plates are sometimes gimmicked, to help keep the plates on the poles.” David Spathaky holds the world record for spinning 108 plates simultaneously in 1996.

Like the juggler, the plate spinner plies his art by touching just one plate. (See, that way I didn’t have to say he holds just one of his balls in his hand at a time.)

We also know that “multitasking” is actually serial (mono)tasking with fast enough switching that Task #1 keeps on rotating on its own while one spins up Task #2 … and so on.

Desdemona serially switched from Suze to Magster. She keeps her BFFs in series. Fred task switches between Gwenny and Bonnie and Caroleena. He (almost) keeps his BFFs in parallel.

One way or another, people switch focus.

“When I’m home, I’m home,” Jon Stewart told NPR’s Terry Gross, host of Fresh Air, about how he separates the parts of his life. “I can’t not be at work but the real challenge is when I’m at work, I’m at work. I’m locked in, I’m ready to go, and I’m focused. When I’m home, I’m locked in, I’m ready to go, and I’m focused on home.”

One way or another, people switch focus but some people maintain a mental map of their frame of reference for each ongoing task.

“I serially task switch when it comes to Things That Must Get Done,” Nancy said, “but Dick has had a taste of me doing the micro-switching I am capable of when I texted my daughter, played Solitaire and carried on a reasonably in depth conversation with him.”

I’m not very good at true multi-tasking. I can carry on a conversation while I carry a load of lumber to the barn. I can listen to a polyamory podcast while driving across a bridge. But I cannot use the same brain center — communications in this case — to manage conversations with two or three people at once. I can, however, switch from one conversation about boat design to another about network integration almost seamlessly because I remember the context from one to the next.

Here’s the big idea: Since our monogamouses serially monogatask but the polyamouses appear to multitask, perhaps having poly tendencies has more to do with the way we manage time (and hold on to our memories) than the way we reach for love.

For those who absolutely need to know, Dez and Maggs go to a movie every Tuesday, play poker on Saturdays, and take a long weekend or whole week road trip about once each month. On the other hand, Susan swims twice a week at the Y so Dezzy swam twice a week. They played bridge with a couple of different bridge clubs, sometimes on Tuesdays or Saturdays. And, since Suze doesn’t like sleeping in an empty house, the girls had “sleepovers” once or twice a week when her husband traveled on business.

[Editor’s Note: gekko and I shared the four-part polylocution that lead up to these afterposts. Please visit The Poly Posts for the entire series and for other resources.]


Sculpture by Ania Modzelewski




Premte Peeves

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I downloaded a “few” more podcasts today and was pleased that my iPod didn’t run out of space. When I moved them over to the podcast directory I noticed yet again that Windows 7 doesn’t display free disk space on the status bar.

The size of a selected item is does appear in the details pane just above the status bar but free disk space can’t be made to appear there. The only way to find used or free disk space is to select the drive and right click into properties.

Change. It’s what we do. Yay.




Words not on Paper

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“I have to switch back to my iPod, since my audio book is on that device,” Liza Arden told me. “I can listen to it in iTunes and on my iPod, but not on my Android phone because Audible dot com does not provide multiple versions when you purchase a la carte.”

Elizabeth “Liza” Arden is an engineering manager with a long commute, a gymnast, and no relation to the cosmetic maven.

She still likes print on paper but is more likely to read with her ears or on a device.

Liza may be one reason Dorchester Publishing has stopped printing its bread-and-butter “mass market” paperback books as it transitions to e-books and “trade” sized paperbacks.

The typical mass market paperback uses cheaper paper, has few illustrations, and smaller print, all to fit the story into the smaller (usually about 4″ x 7″) book. The larger trade paperback are usually printed on better paper and have font and line spacing similar to a hardcover book.

E-book revenue has gone from 0.5 per cent of publisher revenue about two years ago to nearly 10 per cent now. According to a recent Harris Interactive poll of 2,775 American readers, 8% of the reading population uses e-books already and those reading electronically are reading more books more often. Popular e-readers are available from Amazon, Barnes and Noble, and applications are available for computers, iPads, smartphones, and PDAs.

I have that gut feel as well although the numbers are probably closer than we think. Typical trade margin ranges between 37% discount and 50%. Most popular books cost the publisher half the cover but reference titles typically run 37%. Wholesalers work on low single digit spreads. Co-op is another 3-5 points at most publishers.

Printing costs (meaning for a physical book) also include the cost of returns and warehousing. There is a non-negligible “warehousing” cost for the server farm and Internet infrastructure for an e-book. The biggest problem with trade publishing and the reason it is a single digit net margin business is returns which can run as high as 40%. These are good numbers:


by %

in $
Book List Price

100%

$6.99
to retailer

50%

3.50
printing

8%

0.56
inventory and obsolescence

10%

0.70
royalties

7%

0.49
sales and marketing

10%

0.70
overhead and warehousing

10%

0.70
co-op

2%

0.14
editorial

4%

0.28

If you noticed, the publisher’s cost adds up to more than the 50% “take.” The actuality is that some of the fixed costs (like printing) really is fixed based on run size and other constant costs (like , overhead, and editorial) probably are indeed fixed for any issue, meaning it costs, say, $1,000 to edit a book. That’s the reason a mass market paperback now costs $7.95-9.95 instead of $1.50-3.95. Ditto the $6.99 e-book cost.

Let’s consider that from the e-book side. These are made up numbers but pretty accurate:

by %
in $
Book List Price

100%

$6.99
to online retailer

50%

3.50
royalties

20%

1.40
sales and marketing

15%

1.05
overhead and warehousing

10%

0.70
editorial

4%

0.28

There’s the potential for actual profit in there.

Founded in 1971, Dorchester is the oldest independent mass-market publisher in the U.S. Their romance line has included Christine Feehan, Jayne Ann Krentz, Katie MacAlister, Lynsay Sands, and more. The private company specializes in mass-market paperback fiction in romance, horror, Westerns and thriller genres. They also distribute pulp mysteries of the Hard Case Crime line and the Family Doctor series.

Dorchester sees the market soaring as more devices, apps, and programs become available. They predict that e-reader and e-book sales will continue to increase. The company will also offer print-on-demand (paper) copies for selected titles through Ingram Publisher Service. Some e-books that sell well will also be released as P-O-D trade paperbacks.

Dorchester’s e-books are available at most major vendors and compatible with most platforms at an average price of $6.99. Trade paperbacks will be priced in the $12 to $15 range.

Romance novels. Science fiction. Textbooks. Mainstream fiction. Are newspapers next?

Four years ago, IFRA — the newspaper trade group in Germany — and The New York Times started looking at De Tijd “e-paper” devices.

What a lousy idea that is!

Let’s imagine, just for a moment, that I’m the typical book-or-newspaper reader today. I have a few minutes here, a few there to read. I might take a little downtime at my desk. I’ll poop at least once for a few uninterrupted minutes in the “reading room.” I’ll stand in line at the grocery store, do 40 flights on the stair climber, and commute to work.

I absolutely do not want yet another device just to read my newspaper on.

“My desk has a computer that I usually stare at; I want what I’m reading right there,” Liza said. She won’t take her laptop to the reading room, so “I want today’s tome on my (waterproof) smartphone for that or for standing in line. Sitting by the pool is a great place for a full size e-book. Drive time isn’t, but that is perfect for an audio book. So is going to the gym.”

Americans once had a love affair with multi-featured gadgets. I have a Shopsmith, for example, that my grandfather built furniture with in the fifties and my father cut two fingers off with in the sixties. I still have all my appendages. The Shopsmith is a lathe-based woodworking tool with a single motor that drives its lathe, tablesaw, drill press, horizontal boring mill, and disc sander. Like MS-DOS, you have to stop using one tool to mount, setup, and use the next.

Most of us today have individual tools, hence our pockets and purses crammed with smart phones, iPods, netbooks, and Kindles™.

A monthly Audible contract would give Liza access to multiple versions of a file but even that offers Mac, Windows, or Linux computer and iPod files, but not for computers, iPod and any additional MP3 devices. Audible also offers a monthly subscription to The New York Times Audio Digest.

The book publishing and the newspaper industries can make both the Shopsmith owner and Liza happy.

Bundling.

Dear publisher:

I can nuke my TV dinner or cook it in the oven. Surely you can do the same.

When I buy my next book, I want a printed book on actual paper. I want an e-book in the three major formats. An audiobook on CD, AAC, and mp3. And a cross-platform app for my computer and my PDA or smartphone. All in that one package.

Theng yew vedda mush.