THE WAR ON COLLEGE EDUCATION. PART 2

I was at the Target store in Emeryville today. It”s a fairly large store with 12 checkout lines – but only 1 live cashier was on duty. Customers were encouraged to use the self-checkout registers instead. From a practical standpoint, customers didn’t have much choice. There was a long line of people waiting for the 1 live cashier. The same thing is happening at supermarkets everywhere. Supermarkets and lots of other stores are replacing cashiers with self-checkout registers. Did you read that Amazon just opened its first 100% self-service convenience store in Seattle? It’s like a 7-11, but with no cashiers, none at all. Amazon plans to open these stores all over the country.

According to a new study by the McKinsey Global Institute, robots and automation will eliminate 800 million jobs around the world by 2030. As shocking as this number may sound, it is in line with other studies on the same subject. The jobs most likely to be eliminated by automation are low-skilled, low paying, repetitive jobs. You don’t need a crystal ball to know this is coming. Just look at what’s happening to cashiers. And it isn’t just cashiers. All sorts of jobs are being eliminated by automation and robots.  The jobs of the future will require more education than the jobs that are disappearing. What will happen to the U.S. if our educational system is producing mostly high school graduates who are only qualified to work at the kind of jobs that are disappearing?

WHY DON’T INTERNET RETAILERS MAKE MONEY?

Most people assume that internet retailing is a very profitable industry. Internet sales are growing rapidly, and internet retailers don’t have the enormous expense of operating brick-and-mortar stores, like the ones you see at shopping malls. Because of internet retailing, hundreds of departments stores and shopping malls have closed all over the country. It seems like internet retailing should be a gold mine, but it isn’t. The sad fact is this – most internet retailers lose money, a lot of money. And it doesn’t seem that its a question of size. In most cases, the bigger an internet retailer is, the more money they lose. Even Amazon loses money. Over the past 20 years, Amazon has only made a profit in few quarters but lost money the rest of the time. Amazon makes money on some of their services, especially Amazon Prime, but they lose money selling merchandise, and they always have. Amazon may someday become profitable, but if that happens, it probably won’t come from selling merchandise online. So what’s the problem?

The problem is the cost of shipping and returns – especially returns. About 10% of all the merchandise purchased in brick-and-mortar stores is returned, but 20% to 30% of all goods purchased online is returned. Even worse, 30% to 40% of all the clothes and shoes purchased online are returned. Still worse, most internet retailers pay the shipping both ways. Add to that the labor costs for filling and packing orders and then unpacking and processing all those returns. Then add to that the fact that most returned merchandise cannot be resold for full price. Some cannot be resold at all, like damaged clothes and toys. Some can be resold, but only at a discount, like the ‘out of box’ TVs at Best Buy. However, most returned merchandise is sold to liquidators, and they pay just a fraction of the good’s wholesale cost. So, why don’t internet retailers charge for shipping or adopt less generous return policies? Well, they would if they could, but they can’t. People who buy stuff on the internet have gotten accustomed to free shipping and returns. People take it for granted. Besides, who would buy something like a pair of shoes online if they didn’t know that they could easily return them for a refund if they didn’t fit? But most important, internet retailers know that if they charge customers for shipping or for returns, they will quickly lose those customers to other online retailers that still offer free shipping and no-cost returns. Until internet retailers figure out some way to significantly reduce the cost of shipping and returns, I don’t see how the industry will make money.


Of course, things are very different for retailers that just sell their own brand products, like Ikea, Godiva, and Gap. Because they are just selling their own products, they have pricing power that general merchandise retailers do not. If you are considering a career in internet retailing, think twice about it. Remember that we live in a market economy. Making a profit is not just a desirable objective. A company that fails to make a profit must eventually go out of business.

MARBLE BROWNIES.

 

_Are you going to a Super Bowl party? Would you like to take something that
looks showy but that’s easy to make? Marble brownies are showy and very
easy to make! The finished product looks like a cheesecake brownie._

Ingredients:
1 jar of Berkeley Nut Co. brownie mix
1 8 ounce package of cream cheese (softened to room temperature)
1/3 cup sugar
1 egg

1 teaspoon vanilla

 

Preheat your oven to 350 degrees. Grease a 9″ x 13″ baking pan or spray it with Pam. (I always go with the Pam. Greasing baking pans is messy.) Prepare the brownie mix according to the directions on the jar. Spread the brownie batter into the pan. Beat the cream cheese until creamy. Add the sugar, egg, and vanilla. Mix well. Drop by spoonfuls over the brownie batter and swirl them together with the tip of a knife. Bake for 35 to 40 minutes or until the cream cheese mixture is lightly browned. Cool completely before cutting. This makes 18 good-size brownies. Because these brownies are made with cream cheese, you should store them in the refrigerator.

THE WAR ON COLLEGE EDUCATION.

In 2007, Congress changed the federal bankruptcy law to exclude student loans from the debts that are discharged in bankruptcy. As a result, if you run up $200,000 in debt to become a doctor (and that is not hard to do) and declare bankruptcy, you will leave the bankruptcy court still owing the full $200,000. However, if you run up $200,000 in credit card debt traveling around the world and declare bankruptcy, that debt will be wiped out completely.

Last month, the House of Representatives passed a tax bill that made college tuition waivers taxable income. Senate leaders removed this provision from the final draft of the tax law just after strong national public uproar against this provision. Had this provision remained in the final law, tens of thousands of graduate students would have been forced to drop out of college because they would not be able to pay this new tax. The tax on tuition waivers would have taxed the discount graduate students receive for working in labs and teaching classes. The problem is that you can’t pay income tax if you have no income, and a discount is not income. The House bill would have eliminated the deduction for interest on student loans as well, but this too was eliminated in the final law due to public outcry.

All over the country, state legislatures are passing laws designed to make college education less affordable. Did you know that in a lot of states, if you don’t pay your student loans on time, you can lose your job? For example, if you are a physical therapist and you get behind in your student loans payments, your license to work can be revoked in 20 states. If you default on a student loan, you can be fired as a schoolteacher in 11 states. And in South Dakota, Iowa, and Oklahoma; if you don’t make your student loan payments on time, the state can take away your driver’s license. In other words, if you went to college and are not making your student loan payments on time, the state can take away your ability to work in your profession. Then how do you repay your student loans?

SOUTH DAKOTA. South Dakota has perhaps the most punitive student loan default laws. If you default on a student loan in South Dakota, they can take away your driver’s license. However, if you default on your mortgage on a multi-million dollar mansion overlooking Mount Rushmore – well – that’s OK. The state’s DMV can’t take away your driver’s license for just that. Taking away a person’s driver’s license, and in a largely rural state like South Dakota, for failing to repay a student loan on time seems just plain mean-spirited to me. Also, in South Dakota, if you get behind in repaying your student loans, you can also lose your license to work as a registered nurse, a physical therapist, or a speech pathologist; and if you are employed as a public schoolteacher in South Dakota, you can be immediately fired. Plus, at last count, about 1,500 people living in South Dakota were denied hunting and fishing licenses for failing to repay student loans on time. So, if you are behind in your student loan payments in South Dakota and you work in a licensed occupation, not only are you barred from working in your profession, but in addition, you can’t legally hunt or fish for your dinner. You can legally eat vegetables that you grow in your backyard. Sounds ridiculous, doesn’t it?

HATS OFF TO MONTANA. Things are getting better in one state. Montana used to have the harshest student loan laws in the country. Not only could you lose your job and your driver’s license for failure to repay student loans on time, you could also go to prison for it! However, in 2015, the Montana legislature passed a law with rare bipartisan support that decriminalized failure to repay student loans. The new law also allows Montana residents to keep their driver’s licenses and their jobs when they are behind in their student loan payments. The argument for the new law was that it doesn’t make any sense to punish a person for failing to repay a loan on time by taking away his ability to earn a living. That just makes it more unlikely that the person will ever repay the loan. Unfortunately, Montana seems to be the only state moving in a more enlightened direction on this issue.

BERKELEY. Here in Berkeley, the main driver of college student debt is the cost of housing. A 2 bedroom apartment in a new building near campus costs $4,000 to $5,000 a month, but I’ve seen some that cost over $6,000 a month. Everyone in Berkeley city government is aware of this, but no one seems to be concerned about it. Quite the opposite. The mayor and Berkeley city council are constantly passing new laws and regulations designed to raise, not lower, the cost of building new apartments near campus. For example, a permit to build a new apartment house in Berkeley near campus now costs between $100,000 and $200,000 per apartment – and the council is planning to raise the price of permits next year. Now – who do you suppose ultimately pays for these astronomically expensive building permits? It’s just who you think it is! It’s the tenants who live in these buildings.

College students all over the U.S. are graduating with more and more student debt, and the cost of repaying that debt keeps rising. Every American should be very concerned about this. If a college education becomes just a privilege of the rich, as it was in Colonial times, we are in serious trouble as a nation. An industrialized society that does not value higher education is doomed to poverty and becoming a third rate and third world nation.

WOULD YOU LIKE A HAPIFORK?

Have you ever seen a Hapifork? I think I would find this product very, very annoying. This rechargeable electronic dinner fork is designed to improve your eating habits. If the fork’s sensors feel that you are eating too much food or that you are eating your food too quickly, the fork will vibrate to show its disapproval of your eating habits. The fork is also Bluetooth-enabled, and when you connect your Hapifork to your computer, pad device, or smartphone; the fork will report on such things as how many bites you ate per minute and how long you took between bites. The fork will reprimand you and give you eating advice for your future meals. The fork can also be programmed to report to your parents how and much food you are eating and quickly you are eating it. As I said, I think I would find this product very, very annoying. Hapifork sells for $62 at Amazon. I like to write about useless kitchen devices, but please, don’t give me one of these things!

SPRAYWAY GLASS CLEANER

You may never have heard of this product before. It isn’t sold in supermarkets, but Sprayway is the glass cleaner that the pros use. People in the glass business don’t use Windex. They use Sprayway. Nothing else works as well. You will find Sprayway glass cleaner in almost every glass repair shop. The product has been around for generations. You will be surprised at how much better a bathroom mirror looks after it’s been cleaned with Sprayway. You can pick up a free can of Sprayway in my chocolate room.
Warning:
Do not use Sprayway to clean transparent plastic products like non-glass television screens or computer monitors. Sprayway should only be used on real glass. Before cleaning transparent plastics, make sure the label of the product says that it is safe to use it on the thing you want to clean.

PARTY MYTHS

There are 2 widely-held myths about parties in college towns everywhere that I regularly have to speak to my tenants about.

#1. THERE IS NO ‘RIGHT TO PARTY.’ A lot of tenants (not just college students) think that as an American citizen, you have a legal right to have parties in your apartment, but that is not true. There is nothing in the Constitution about a ‘right to party.’ It’s not in any state or local law either. Lots of leases contain provisions prohibiting tenants from having parties of any kind on the premises or that limit the number of people who can attend a party or that set limits on the dates and hours of parties. Lease clauses restricting and prohibiting parties are legal and enforceable in every state.

#2. YOUR NEIGHBORS HAVE A LEGAL RIGHT TO GO TO SLEEP AT A REASONABLE HOUR EVERY NIGHT. Disturbing the peace is illegal. You can be cited and fined for it, and in some cases even arrested. You are not being considerate or courteous to your neighbors by telling them in advance that you are going to have a party that will prevent them from sleeping. It is legally useless and could be dangerous for you.

Robbing Bank of America. Simply announcing in advance that you intend to do something that is illegal does not give you the right to do it. For example, it is not O.K. to rob a bank providing that you tell the bank in advance that you intend to rob them. Somebody actually did that here in Berkeley. There used to be a Bank of America on Ashby Avenue across the street from the Ashby BART station, 2 blocks from my house. It was where I did my banking. A man once robbed that bank with a gun. He didn’t wear a mask because he didn’t see any surveillance cameras in the bank, and so he assumed that there weren’t any, but he was wrong. This guy wasn’t very smart and was quickly caught. At his trial, the bank robber compounded his folly by acting as his own lawyer. He thought he had an airtight defense that was going to get him off. The bank robber told the jury that that he mailed a letter to the manager of the bank a week before the robbery stating that he intended to rob the bank. He included the date of his planned robbery in the letter. The manager of the bank testified that he received the letter but did nothing about it. He thought the letter was a practical joke or a fraternity initiation prank. The judge told the jury that simply informing the manager of the bank in advance that the defendant intended to rob the bank was not a defense. The bank robber went to prison. Surprisingly, this happens fairly often – that a criminal informs his victim in advance of the crime that he intends to commit in the belief that by doing so, it will give him some sort of legal cover if he is caught. That doesn’t work. As I often tell people – playing amateur lawyer is dangerous.

The idea that it is O.K. to have a loud party late at night providing that you told the neighbors in advance is an urban legend that gets college students into trouble all the time. Berkeley has one of the toughest noise pollution laws in the United States, and they enforce it. Berkeley policeman have decibel meters in their patrol cars. People having loud parties late at night in Berkeley are regularly issued large fines. Also, it can be dangerous to tell your neighbors in advance about your parties. Some people will interpret your notice as an invitation to come to your party, which can lead to awkward situations. Even worse, dishonest neighbors may come to your party to rob your place. Yes, that does happen.

NAZIS, JEWS, AND THOMAS JEFFERSON.

During the 1930s, Nazis promoted the idea that Thomas Jefferson hated Jews. Nazis still believe that is true. At a nighttime rally earlier this year on the campus of the University of Virginia, near Monticello, a large number of Nazis carrying torches circled the Thomas Jefferson monument on campus chanting ‘Jews will not replace us!’ The Nazis were and are entirely wrong about this. Thomas Jefferson was completely devoid of any religious prejudices, and Jews in America and Europe always regarded Jefferson as a reliable friend and ally.

MONTICELLO. Thomas Jefferson died broke and deeply in debt. Soon after his death, Jefferson’s home, Monticello, starting falling into disrepair. It is expensive to maintain a mansion, and there was no money in Jefferson’s estate. The only reason Monticello didn’t just rot away was because a Jewish family bought the house soon after Jefferson’s death in order to preserve it. Uriah Phillips Levy, the first Jewish commodore in the U.S. Navy, bought Monticello in 1832 and immediately began making repairs and repurchasing furniture that had been sold after Jefferson’s death. During the Civil War, there were no battles around Monticello, but the house was extensively damaged by vandals. Even Jefferson’s gravestone was overturned and defaced. Most of the furniture was stolen by looters. After the war, Jefferson Monroe Levy bought Monticello from his uncle, Uriah Phillips Levy, and once again began restoring the mansion and recovering Jefferson’s furniture. In order to get back Jefferson’s furniture from the people who stole it, Levy had to advertise that he was prepared to pay cash for Thomas Jefferson’s furniture with ‘no questions asked’ as to how you got it. Although this was a morally questionable thing to do, from a practical standpoint, it was the only way that Levy could get Thomas Jefferson’s furniture back, and ultimately, he did get most of it back. In 1923, Levy turned the title to Monticello over to the Thomas Jefferson Memorial Foundation, which still owns it. The Levy family spent over $2 million (inflation adjusted) of their own funds in order to maintain Monticello during the 90 years that they owned it. I don’t think that the Levy family would done all this if Thomas Jefferson was an anti-Semite.

MONTICELLO INVENTIONS. Visit Monticello if you get the chance! You may be surprised at the many inventions and innovations you will see there. Jefferson was quite an inventor. Thomas Jefferson invented the first hideaway bed and dumbwaiter for wine bottles, both of which are still there. Jefferson also invented the pedometer and the polygraph (not a lie detector, but a copying machine.) Jefferson enjoyed fine food and was the first person in the United States to make waffles, ice cream, and macaroni. In the photo below, you can see Monticello’s pond. This pond was not just ornamental. Jefferson enjoyed eating fish, but Monticello is not on a river, so Jefferson had live fish delivered to his home and dumped in the pond. When Jefferson was in the mood for fresh fish for dinner, he would go to the pond, point to a fish, and have his cook scoop it up and cook it.

NIGERIAN EMAIL SCAMS.

Email scams, also known as 419 scams, are Nigeria’s second biggest industry, just behind oil. These scams bring in billions of dollars to Nigeria every year. I don’t know why so many people still fall for them. Nigerian scam emails almost always contain obvious signs they are frauds. They are usually poorly written with lots of grammatical and spelling mistakes, and the stories they tell don’t make sense. They come from people who you have never heard of before, and who for some improbable reason want to give you a lot of money. Below is a Nigerian email scam letter that I received recently. It has all of the telltale signs of a 419 scam. The thing about this letter that I found interesting and unusual is that it was written by a dead man. Notice that the author of this letter repeatedly refers to his wife as ‘my widow’. If the author’s wife is his widow, then the man must have already been dead when he wrote the letter.

CONFIDENTIAL

Dear Sir,

Good day and compliments. This letter will definitely come to you as a huge surprise, but I implore you to take the time to go through it carefully as the decision you make will go off a long way to determine the future and continued existence of the entire members of my family.

Please allow me to introduce myself. My name is General Agoda Abacha, the late head of state and commander in chief of the armed forces of the federal republic of Nigeria.

My widow’s ordeal started immediately on the morning of 8th June 1998, and the subsequent take over of government by the current administration. The present democratic government is determined to portray all of my good work in a bad light and have gone as far as confiscating all my assets and properties, freezing my accounts both within and outside Nigeria. As I am writing this letter to you, my son Mohammed Abacha is undergoing questioning with the government. All these measures taken by present government is just to gain international recognition.

The entire members of my family have been held incommunicado, hence I seek your indulgence to assist us in securing these funds. We are not allowed to see or discuss with anybody. Few occasions I have tired traveling abroad through alternative means all failed.

It is in view of this I have mandated DR GALADIMA HASSAN, who has been assisting the family to run around on so many issues to act on behalf of the family concerning the substance of this letter. He has the full power of attorney to execute this transaction with you.

I had Eighty Million USD ($80,000,000.00) specially preserved and well packed in trunk boxes of which only I and my widow knew about. It is packed in such a way to forestall just anybody having access to it. It is this sum that I seek your assistance to get out of Nigeria as soon as possible before the present civilian government finds out about it and confiscate it just like they have done to all our assets.

I implore you to please give consideration to the predicament of my widow who is in need.

May Allah show you mercy as you do so?

Your faithfully,

General Agoda Abacha

DON’T INVITE BURGLARS INTO YOUR HOME!

That may seem like very obvious advice, but the fact is that thousands of burglaries are committed every year by thieves who gained entry into their victim’s homes by being invited in! There are many tricks that burglars use to get their victims to let them into their homes. Once inside, it is much easier for a criminal to rob a house, ‘case the joint,’ or assault the occupant.

Fake Building Inspectors. One very common trick is the fake building inspector. This is an old trick that never goes away – because it works! What should you do if a stranger shows up at your door and says he’s a building inspector, a health inspector, the fire marshal, or some other government official, and asks you to let him in?  Just Say No!  Give him my phone number and tell him politely, but firmly, “Speak to my landlord.” Do not let him in! Real building inspectors make appointments in advance and will normally contact the landlord or property manager first, not the tenant.

The Furnace Inspectors. I used to own a house on Milvia Street near campus. Many years ago, one of my tenants there, a U.C. Berkeley student, let 2 men into his house who showed up unexpectedly. They said they were Berkeley city furnace inspectors. Once they were inside the house, these so-called furnace inspectors tied up my tenant and robbed the place. Fortunately, my tenant wasn’t physically injured, but he and his roommates lost a lot of property. After the robbery, I asked my tenant: “Why did you let these guys in? Weren’t you suspicious?” My tenant told me that he that he was suspicious and asked these men to show him I.D. before he let them in. One of the men handed my tenant a flyer titled ‘Furnace Safety’ with the City of Berkeley logo on it. Based on that – and that alone – my tenant let these 2 men into his house. My tenant showed me the flyer. I recall looking at the flyer and thinking: ‘This is pathetic.’ The flyer was just a list of furnace safety tips. It began with: ‘Don’t store flammable liquids like gasoline next to your furnace.’ I told my tenant that I had seen this flyer before, and that it was not I.D. You could pick up one of these flyers at any public library in Berkeley. I also told my tenant: “There are no city furnace inspectors. The city of Berkeley doesn’t have any furnace inspectors.” I don’t know of any city that has furnace inspectors.

Don’t Be Fooled By Appearances. Professional burglars don’t look or sound like burglars. If they did, nobody would let them in! Some burglars wear business suits, carry attache cases, and come with phony I.D. and documents that look authentic. Criminals posing as government officials often try to gain entry by intimidation. They may threaten to have you fined or arrested for refusing to allow them to come in. The more intimidating a person is, the more suspicious you should be! The fact is this – you cannot be fined or arrested  for refusing to allow a government inspector into your home unless he has a Search Warrant signed by a judge and stating exactly what it is that he is looking for. That’s in the Constitution!

The Boston Strangler. How dangerous is it to let uninvited strangers into your home? In 1962 and 1963, 13 women in the Boston area were killed by the Boston Strangler. All of these women were murdered in their own homes. All were raped and then strangled with articles of their own clothing. They were all respectable women who led quiet lives. The police were baffled because there was never any sign of forced entry. The Boston Strangler was front page news all over the U.S. and around the world. In 1964, Albert DeSalvo was arrested and confessed to all 13 murders. When he was asked how he gained entry into his victim’s homes, he said he simply followed a woman home, knocked on the door of her apartment and asked if he could come in. He claimed to be a handyman who had been hired by the landlord to check the apartment’s plumbing. He wore work clothes and carried a bucket of plumbing tools. If a woman showed any reluctance to let him in, he just left and then followed another woman to her apartment. He never tried to force his way in. All of the women killed by the Boston Strangler voluntarily let him into their homes, even though everyone in Boston knew there was a strangler loose in the city. OK. I know that this story sounds scary, but I am telling it to you because it could save your life!