Thursday, September 14, 2017

HALV: On the (breaking) backs of the citizenry.

By now you've probably read about Mayor Turner's proposed "undo the revenue cap" tax designed not to provide relief for struggling citizens, but to replace city vehicles that were stupidly left in underground garages during Harvey and to repair government buildings. It's a brutal pill to Houston residents who, foolishly, elected a career back-bench legislator to be the Chief Executive of the fourth largest city in America.

Turner wants, at all costs, his revenue back, and he'll do whatever he can to try and get it there, even if it means pushing through a tax increase on home-values BEFORE the flood, before they're reappraised to reflect current market conditions AFTER the flood.

On top of that Harris County has caught the tax-them-until-their-eyes-bleed bug and is preparing to take a $1 Billion bond-issue to voters, the majority of which would go to buy-out around 3,000 flood-prone homes, pay-off patrons to begin planning for a third reservoir and "revamp the County's Flood Management Strategy" which basically sounds like a ReBuild Houston style slush-fund to heap taxpayer largesse onto preferred political patrons.

In short, the Houston Area Leadership Vacuum is sucking harder than ever.

The response to this, from what passes for Conservative leadership in the area, is to scream "government waste, fraud, abuse!" without offering any real examples of this. It's the playbook that's turned Houston blue and will probably turn Harris County blue (and eventually Texas) in the coming years.  It doesn't matter how bad the Texas Democrats are (and trust me, they're pretty bad) as long as Texas Republicans are worse.  Which they are, and it's not close right now.

In fact, while many of the issues in Houston are the result of a long-line of bad Democratic Leadership (Hi Lee P. Brown!) and a County Commissioner election process that was basically a lifetime appointment due to poor media coverage and cronyism, the Harris County Republican Party has been unbelievably worse.

Even worse is the fact that both of these tax proposals have arisen before the City or the County even understand the full scope of the task in front of them.  In the linked Chronicle article even Sylvester Turner admits he might not need all of the tax money he's asking for, but he's going to take it from citizens anyway.  The County doesn't yet know how much FEMA will provide to assist in the condemnation process, but they're going to collect the tax anyway.

And be sure, if the City of Houston's insurance, FEMA or the State make the City and County whole there's NO WAY that tax money is going to be refunded.  The County will divert it to the Astrodome so Ed Emmett can get a plaque with his name on it and the City will squander it repainting bike lanes, probably.

Remember all of this in late December, when you're looking down the barrel of home repair bills as, hopefully, you're spending the Holiday with your family.....then, in the mail, comes a bigger tax bill than you were expecting. A tax bill based on your property's value BEFORE the flood because the City of Houston and County of Harris wanted to ensure the greatest amount of money possible was extracted from your bank account.

And the thing is, this is just the beginning.  There are many in the Courtier Class who are already starting to demand more.  When it comes to the Editorial Board of the Houston Chronicle however I offer this advice:  The Chronicle keeps suggesting that "$10 per month is not going to bankrupt anyone with a home".  Fine, I say, a Chronicle subscription runs around $10-$12 per month.  What say we all cancel those when the tax hit comes to keep our budgets even and see how much it effects them?

I've a feeling they'd be in a world of bother.

Monday, September 11, 2017

BadBusiness: It's a pretty thing, but what does it do? (Part IV of ?)

Part I: Luxury Demands, Commodity Pocketbooks
Part II: "I'm just looking"
Part III: Introducing the new....

News is coming out hot and heavy that Apple is going to be releasing the 8th version of their popular iPhone.  This has techies in a craze over the details and wonders that promise to make this version WAY more advanced than anything prior.

That's the buzz anyway, the reality is that cell phones have advanced remarkably little since the introduction of the first iPhone yet prices for them have increasingly skyrocketed.

This runs counter to other trends in tech, where prices seem to drop fairly rapidly. (Priced a 4K HDTV lately?)  In fact, I will argue that tech is the one consumer area where Americans will pay a premium consistently for a brand. (Cell phones, not tech in general)  Even personal computers lack 'traditional' brand loyalty.

We're seeing a raft of new tech items that sure look nice, but don't seem to DO a whole lot. Again, we've stagnated.  When the biggest news about the iPhone 7 was that they eliminated the headphone jack you know something is amiss.

Apple has been the master of this, convincing people they need the new flashy toy without actually explaining what it does that's all that different, but other companies are gaining ground. Samsung (who currently makes the best cellphone in my opinion) has, to date, given me little reason to pay an increasing price for the S8 which doesn't appear to offer more in functionality than does my current S7.

Motorola is now offering extensions, which supposedly turn your phone into a 70 inch television screen, or a DSLR camera, but doesn't seem to have bridged the gap of providing a battery that will either watch an entire movie or take more than a handful of pictures.  Browing the Internet on your phone?  Good luck.  Battery drain falls quicker than Hillary Clinton's Presidential hopes on election night.

The newest doo-dad is the so-called "digital assistant" who can play music for you, turn on the lights, order pizza (and pay for it, if you load a credit card into it's memory [which can be hacked]) and...what actually?

Yes, they're cute little dots, but I can't help but be reminded a little bit of the Dr. Who episode where all of the black cubes appeared on Earth.  We already have invented AI that's created it's own language, and while I think the "SkyNet" doomsayers are being more than a little silly, it's not too hard to imagine a day where less of our day to day decisions are made by us rather than computes.

And that's the danger.  We've already accepted a world where we allow politicians, marketers and big business to make many decisions for us, (Think about that, complete strangers that you're letting run your life) is it much of a stretch to think that computers running complex algorithms could going forward?

Unlike clothes or cars or foodstuffs, tech is sold to us with the promise that it will make our lives easier, that not having it makes one a Luddite and is akin to Ted Kascinsky sitting in that damn cabin slowly, inexorably going insane.  And we're buying into it.

Possibly at the risk of everything else.  Including our common sense.  Which we've outsourced to the government, which is a problem I'll address in the next chapter.

Sunday, September 10, 2017

BadBusiness: Introducing the new..... (Part III of ?)

Part I: Luxury Demands, Commodity Pocketbooks
Part II: "I'm just looking"

A couple of years back I decided to buy a new car.  My old Mazda3 was getting up in miles and was starting to show signs of age. I thought the transmission might be going out, the interior was pretty worn and it was just time.

Since i hadn't been in the car market for almost 10 years (I hold onto cars) I thought that test-driving almost everything in the style I wanted, a 4-door sedan, would be the way to go.  I started off heading to dealerships, getting harangued (while I typically like good customer service I would not qualify what happens at car dealerships to be such) and finally heading out on a pre-determined course to highlight what each car did well before coming back to the dealership to be hard-sold on a vehicle in which I had little interest.

As I drove, I was noticing a disturbing trend.  All of the cars that I was driving felt and looked, minus a few obvious cosmetic differences, almost exactly the same. (Ignoring the Nissan Altima obviously, which is a piece of automotive crap) The Kia Optima was indistinguishable from the Hyndai Sonata, which felt remarkably like the Chevy Malibu, which was remarkably similar to the Ford Focus.  I even test-drove a Mercedes CLA 250 which was remarkably similar in form to all of the above. (albeit around $10K more expensive.)

Of all the cars the CLA was the most disappointing. I LOVE Mercedes, I consider them to be some of the finest machines on the road. And what they have created is a middling front-wheel drive sedan with the tri-star badge.  It was horrible.

I eventually settled on the Subaru Legacy, in large part, because the driving position was insanely comfortable and the cabin was a nice place to be.  I have not regretted that decision, but I worry that the next time I go to purchase a vehicle it will be even worse.

We've entered a moment in consumer history where companies have figured out that they can spin less as more provided they make the price point right. Technologically we've stagnated, and that's in large part because the consumer has decided that the price point is king.  Granted, this is not true in all cases. There is such as thing as "label envy" where people will pay more for a "name brand", but in many cases (as with the CLA) the upmarket badge doesn't provide any additional quality. 

Louis Vuitton is a prime example of this.  They are faux luxury, the victory of marketing over substance. In reality thy make bags of middling quality and unimaginative design that people will pay a premium for because they think it makes them look wealthy.  No it doesn't, it just makes you look like you've got the measles.

Despite their upmarket reputation however LV items can be had for cheap.  Yes, there are knock-offs, but there are also discount bins at outlet malls and you even find their stuff at Costco.  Now, I like Costco, even have a membership there, but there is nothing about the place that screams 'luxury'. In fact, there's nothing about Louis Vuitton that screams it either.

In fact, you name the 'luxury' brand and I'll show you where quality has fallen.  Tommy Hilfiger?  They used to make GREAT dress shirts, now their items of OK quality for the masses.  Polo? Except for their top-end 'couture' lines they're the same. Coach? There's better leather out there, Cadillac? They are responsible for the Escalade, a gigantic waste of tarmac.  I've already spoken about Mercedes (except for the S class obviously) and even BMW has fallen off of late.  Audi's are basically 4WD Volkswagens (and you can't buy one lest you be branded a prat) even Lamborgini is owned by VW, which is a crime.

Yes, I know, there's still Ferrari, but you can't afford one of those anyway, and I wouldn't drive one on the streets of Houston even if I could.

In fact, very little that is out there today can really be called "luxury" with a straight face. And when someone tries to produce a luxury item they're soon slapped in the face by the realities of market demand.

Consider this: After performing many upgrades to their first and business class services airlines are already starting to pare them back. The reason for this?  For the most part they're giving it away as upgrades as the American traveler refuses to pay premium prices for a premium product.

The notable exception to this trend is technology, but I think there are more problems there which I'll discuss next.

Saturday, September 09, 2017

BadBusiness: "I'm just looking" (Part II of ?)

Part I: Luxury Demands, Commodity Pocketbooks

In part one I discussed American's wanting the allusion of luxury at a low price.  Today I want to discuss how this, in part, has led to the death of retail.  I'm not suggesting what follows 100% killed the industry, but it was a big contributing factor.

As Americans have gone for "cheap at all costs" in retail, automobiles, airfares etc. two things have happened.

1. Customer service has died.
2. Pride in ownership has faded.

I want to take a minute to discuss issue 1 here, because it's been something that I've especially noticed both living in Houston and traveling.

The WORST trend in retail is price matching.  The person who invented the price match should be drawn, quartered and have their brain examined for signs of CTE.

The problem with price matching is that not all goods are created equal, and not all stores are created equal either. A boutique store selling Polo shirts should provide a higher level of customer service than would Wal-Mart selling made in Mumblistan knock-offs. As well they should. But when that store decides they have to compete on price with said retail giant, they then have to cut their staffing budget and Henri the tailor is replaced by Stephen the 18 year-old who could take it or leave it whether you buy that shirt.

When customer service goes the way of the Dodo, there's no reason for Marcus' Haberdashery to continue to exist. Contrary to popular belief, it wasn't online shopping that did in retailers such as JC Penney and Sears, it was the rise of Marshall's and Ross and other off-price retailers, and outlet malls. The simple fact of the matter is that JC Penney still offers a good line of store-label clothing, but they have chosen to price it as though it's being sold at Wal-Mart or other discount retailers. As a result of this their customer service is atrocious.  As a matter of fact, it can be worse than atrocious during busy hours.  And I say that as a fan.

Other industries have followed suit.  Airlines have stripped their planes bare, cut down on food choices (including in First Class) and have generally made the flying experience a pathetic one in an effort to offer the lowest fare possible, in many cases this is the only fare they can offer.

It used to be that you could find a nice wine store, complete with a licensed Sommelier, who could assist you in navigating the weird world of Cabernet Sauvignon, Cabernet Franc and *shudder* Sauvignon Blanc. Now you probably purchase most of your wine at the grocery store.  Have a question about a wine-growing region or a certain vintage?  Yeah good luck.  And don't count on those bottles having been properly stored either.  Not that many Americans know, sweet wines still being the number one seller.

Even liquor and beer fall into the trap.  Total Wine & More has just moved into the Houston area. They are widely considered to be the Wal-Mart of the liquor industry, moving in, offering certain high-demand items at bargain prices (they have tremendous buying power due to their national footprint) and running existing stores out of business because they cannot compete on price.

Once upon a time, they could compete on service (The customer service at TW&M is horrible FWIW) but now they can't because the customer doesn't care.  Americans have allowed themselves to become a commodity themselves.  Sure we throw up airs, post on social media, feign outrage when we feel we've been slighted, but in reality what people are really looking for in this case is a few moments attention and (hopefully) a bucket of free shit.

This idea has caused several companies to pack it in. It used to be that, when you entered a store, a sales rep was immediately there offering assistance.  After years of being angrily shouted at "I'm just looking!" most companies have abandoned this tactic and now only employ some cashier and stock personnel, whose job it is to clean up the messes that customers leave behind.  If you think things look bad after a hurricane, walk into a clothing store during a holiday sale.  It's bad enough that they should be declared disaster areas.

The take-away from this is that, while it's hip and trendy to blame Wal-Mart, or the airlines, or the "Internet" for ruining things the fact is that we brought all of this on ourselves. We demanded, through our buying habits, that companies race-to-the-bottom and offer less and less and less in the way of customer experience.

After they cut out any semblance of service, the next step was to decrease the quality, which is something I'll discuss next.

Friday, September 08, 2017

BadBusiness: Luxury Demands, Commodity Pocketbooks. (Part I of ?)

I ran across a pretty interesting article on Inc.com the other day that made me think.

The Really Comfortable Plane That Airlines Just Don't Want to Buy. Inc.com

The story is about the Bombardier C-Series commercial jet. The C-Series is, by all accounts, a marvel. It's got wider aisles, wider middle seats, more space between rows, and the airlines aren't interested.

Not because they're a bunch of sadists who like to see passengers cramp-up due to lack of circulation mid-flight, or because they're clueless (although the media would certainly like you to think they are). Nope, they don't want to buy this plane because they, rightfully, understand that the vast majority of American passengers won't pay even a small premium to fly on one.

And that's a big problem in American consumer culture right now.  We've been led to believe, by Madison Avenue, that we have champagne tastes when we're actually running on a Mad Dog 20/20 budget.

Yes, Americans demand nice "stuff", but they demand that "stuff" at bargain basement prices. This has led to two things:

1. True luxury goods becoming more and more scarce, especially in America
2. Faux-luxury taking its place.

For example:  If you travel to Las Vegas, as I do often, you see brand names selling wares that are decidedly not cheap.  The Europeans and Asian tourists flock to these stores (Prada, David Yurman, etc.) and buy one or two pieces before spending the rest of the evening playing Baccarat and quaffing Champagne by the bottle.  American tourists are hitting up the sales rack at Tommy, various "off-label" stores offering cheap knock-offs of designer goods while standing in line to play $5 blackjack, the shitty $5 "Sands" Roulette wheel and penny slots.  They then go to White Castle or some restaurant with a celebrity chef's name emblazoned on it to try a "seasonal" tasting menu that doesn't change year-round.

An American might walk into Prada, but will run out once he/she sees that the shoes have a price tag of over $1000. (Full disclosure: I'm not a fan of Prada, I don't find their designs all that practical or enticing)  And this is in 'see and be seen" Vegas, where 7 For All Mankind and Lucky Brand jeans are still a thing.

Go to a city like Houston and luxury goods in the Galleria are jumped on by tourists from (again) Europe, Asia and South America. (The Galleria in Houston being one of the most multi-lingual malls in America I'm betting) while locals head to one of the many "outlet malls" to fill up bags full of Tommy Hilfiger, Polo and US Polo Association.

But those aren't even the REAL Hilfiger, Polo, or Brooks Brother's items.  They're outlet mall knock-offs usually made in Vietnam.

The important thing is that they are cheap, and plentiful.  And if America likes anything it's cheap and plentiful goods.  See Wal-Mart for an example of that.

This race to the bottom of the price structure has led to two bad trends.  Trends that I'll discuss further in Part II of this series.

Enough Harvey: On a brighter note

If you haven't seen this video by Jon Bois you're doing yourself a disservice.


HALV: Destroying Houston is the consensus way to save it.

Politicians and the media love to drone on and on about so-called 'teachable moments'.  When bad things happen they like to tell us that we can learn from this and, through trusting in government and anti-business activists, take the right steps to ensure their upper-income, trendy enclave neighborhoods never have to worry about disaster again.

The fact is, Houston has a monumental rebuilding task ahead of it which may need to include buying out several properties in flood-prone areas.  Certainly there are going to be many long months ahead as people begin to unwind.

Yesterday I wrote about our unity, and how quickly it is fading as Houston's dimmer element starts trying to carve up the populace among the wise, and the gormless.  You're considered gormless by the way if you reject the idea of living in a Soviet-style high-rise remaining totally dependent on a light-rail system that goes out of order when the tracks get damp or on the many occasions when it decides to hit something (or someone).  None of this is helpful of course, so naturally the Houston Chronicle Editorial Board has decided that every single bit of it should be adopted in order to make Houston a more "resilient" city whatever the hell that means.

So yes, we could transform Houston, buy out everyone who has built in an area the Crossley crazies deem inappropriate, work to eliminate the energy industry in it's entirety, driving it from the City and "building batteries" in an attempt to remain relevant. Houston could even try to provide Amazon with a huge tax break to lure them into town as the host site of their 2nd Headquarters.

This could all be done.

And if it is then you could say goodbye to a great many things in Houston, as well as many of its residents.  Because without the good-paying jobs that the energy industry provides and without the relatively cheap housing that Houston offers these people, and businesses, will move on.  They will leave.

And I wouldn't blame them.  Despite having a shining moment during the devastation of Harvey there's really not much in Houston that would keep you here if your job prospects were brighter elsewhere.

The museum district?  Bah, every city of any reasonable size has museums.  The theater?  Even Lincoln Nebraska gets travelling Broadway shows.  And don't tell me that it's 'better' in Houston because it's just not.  Birmingham has a ballet company for Chrissakes.

I will admit that, after Harvey, I've thought long and hard about how much longer I want to continue to live in this fetid swamp.  Sure, the pay is nice but, as an accountant, it's not as if my skill-set won't travel.  I'm typically not an emotional type but I feel the edges fraying after Harvey, being stuck at home watching days of devastation will do that to you.  Fortunately, I've still got a clearer head than Jennifer Lawrence or Ann Coulter as I still think Harvey was created by the Atlantic multidecadal oscillation more so than Trump, Annise Parker or climate change.

I also remain concerned that no one in the media is asking what's been done with all of the tax money supposedly collected to improve drainage in Houston?  TIRZ money seems to be increasingly wasted, and ReBuild Houston has, to date, accomplished nada, despite draining Tens of Millions of dollars from the local economy.

I would be remiss however if I didn't remind you that a diminished Houston is exactly what the environmentalists and Crossley Crazies really want. I'm sure more than one of them is currently lamenting (privately of course) that the death count wasn't higher. Mathusianism you see.

I'll repeat again that Houston needs to focus on our better angels, not on those whose instinct is to lecture, harangue and sue. There is still so much to be done, so many people suffering, rebuilding, trying to make ends meet that tut-tutting them just seems to be counterproductive.

My fear being that, if the wrong voices are listened to, there won't be much recognizable in Houston that's worth fighting all that hard for.  The reality is however that I probably won't be around to witness it. The reality is also that my time here is coming to an end. Given that realization you might not want to listen much to what I have to say at all. (if you ever did in the first place) Increasingly I feel more and more separated from Houston and its future.

Which probably means that it's time to move on.