Don't Be Detroit

As a native - and now current - Clevelander, an old joke is that however bad things might be in Cleveland, "Hey, at least we're not Detroit*." And certainly, that joke is even more apropos this week, after Detroit applied for bankruptcy. While it would be easy (and entertaining) to write about this from a political point of view (particularly to fisk Krugman's pathetic dismissal of it, done already here), it is more useful and instructive to learn something from it, instead, whether as individuals, families, or communities.

The key lesson: Don't be Detroit.

• Don't overspend on education, especially if it's not that great. Detroit spent more than the national average on education, yet had a 47% illiteracy rate.
• Don't spend money on stuff that doesn't work, no matter how 'necessary' it seems. Detroit's police force solves 10% of crimes committed.
• Don't buy more house than you need. About 1/3 of Detroit's 140 square miles are empty.
• If people like you can make do with less, so can you - and so should you. Detroit has twice as many municipal employees as same-size cities. 
• Don't pay for stuff you don't use. Detroit's city water and sewer department employs a “horseshoer” although it keeps no horses.
• Don't use credit cards. Detroit has $20 billion in unfunded liabilities. 
• Don't assume you'll always have the same income, or two incomes, and especially two growing incomes. Detroit's population fell from 1.85M in 1950 and the highest per capita income in 1960 to 710K and rampant unemployment.
• Always have a backup plan. Detroit had 296,000 manufacturing jobs in 1950. Today it has 27,000.

It is impossible to stress enough the difference between those who pay for the future now and those who pay for now with the future. While the first group may not have all the luxuries of the second group for the first few years, they will also not have the stress, poverty, and decay of the rest of the years. It's the difference between buying a mansion off the bat, but not being able to keep it up, vs. buying a modest house and continually upgrading. In the beginning, the person with the mansion may seem better off; but within a few years, they have a big, run-down house, while their friend keeps expanding and enhancing.

Be smart, be frugal, and plan. Don't be Detroit.

* For all those who don't get the reference, these are a hilarious must watch: 1, 2.

EZ Reads 2/28/11

• Via Daas Torah, a very interesting inside look at London's Charedi community by The Telegraph. I haven't finished it yet, but it's quite fair through where I got up to and very intriguing.
• Doctors in the UK are now being instructed to tell mothers-to-be that it would be safer to abort than attempt to have a baby. (The Telegraph)
• MintLife has a really interesting piece that breaks down credit card numbers - they're not random at all, it turns out. Plus a trick to know if a card is fake.
• Brilliant: Government spending didn't create jobs in the end at all, but now cutting that spending will somehow cost jobs?(WSJ)

  In 2009 the Obama Administration said $814 billion in stimulus spending would create three million new jobs and keep unemployment below 8%. Instead, two years later the economy has two million fewer jobs, and the unemployment rate is still 9%. GDP growth fell $400 billion short of where the White House economists promised it would be. Employment by the end of 2010 was predicted to be 137.6 million as a result of the stimulus, but instead it was 130.2 million—a 7.4 million jobs overestimate.

•  My mom sent this great video a while back: How teaching math sparks kids' creative thinking. (WSJ)

Endangered Jobs & Needing Innovation

There is a very interesting (if obvious) editorial in today's Wall Street Journal by Andy Kessler, discussing whether people's jobs are "endangered species". In essence, Kessler is discussing how technology in particular is completely revamping the job market, making many jobs completely unnecessary while reducing the need for others. For instance, if you were a librarian or a stock trader ten years ago, there's far less of a need for your services anymore. Online trading and Google have eliminated the need and reduced the cost of performing those services. This change in the economics of our time matches up very well with the economics of the Jewish community.

Some of the best aspects of this overall economic change is that it forces innovation, competition, and ultimately, better prices and services. If one company cuts its costs, then it can keep the profits and that's it, or more likely, take those profits and expand the business, or reduce prices and pick up more business, the larger profits of which can then be kept or used to expand the business, or reduce prices and pick up more business... and so on. Even for those who have lost their jobs, while in the short-term this is very difficult (trust me), ultimately it allows them to be as innovative as possible, and seek out a way to shift into the new economy in an advantageous way. Scott Adams (yes, of Dilbert) had a great piece a few months back that noted The Perfect Stimulus is Bad Management: it pushes people to be innovative and creative, determine how best or better an industry or business can run, and pushes them as well to go do it.

At the same time, technology can't replace certain things (at least not yet). About a week ago, I was in a bank and thought that the bank manager's pitch to a customer was really interesting. She openly acknowledged that she couldn't beat another (online) bank's savings rate, a rate a full 1% higher than what they were offering - and yet still almost kept the customer from moving their money out. She shifted the banking industry into a customer service provider: "Would you be able to walk into the other bank and easily talk to a personal banker or manager, have someone to discuss your options with, etc.?" Banks traditionally are about helping people manage their money in the most efficient, money-making way possible; and yet now, this bank was offering customer service as a pitch over making money. But even then, it is about money to an extent: If someone has trouble with their bank and needs help, the instant access to a banker could easily make up for the 1% interest on a savings account - if it has $5,000 in it, that's $50 a year. There are certainly many people who would rather spend 15-30 minutes in a bank than 2 or more hours on a phone in exchange for $50 a year.

Sadly, while almost all businesses and most individuals embrace technology and its ability to cut down on costs, government is usually lagging well behind. Whenever it is suggested that a government move toward a more efficient system, there is an outcry of the number of government (or union, depending on the case) jobs which will be lost: Ignoring that essentially the argument is to continue forcing the people to subsidize unnecessary jobs and place everyone at a disadvantage. One of the best things President Obama has done is push for efficient use of technology, particularly in the medical fields, which have the thorniest privacy issues; hopefully this same push will be carried over to other areas as well. As Kessler notes as he breaks down the types of workers into types, "DMV employees and so many other government workers move information from one side of a counter to another without adding any value. Such sloppers are easy to purge with clever code." But by definition, government workers have no incentive to be efficient or to add economic value; merely to service what needs to get serviced while making sure to retain their own jobs and the jobs of their friends. There is almost no sense of "this is wasteful and must be eliminated" among government employees: It would not serve in their best interests to do so.

This theme translates over well to the Jewish community. While some places are working to cut costs, others work to increase revenues - stabilizing and protecting the jobs that exist within them. In the end, though, this can come back to hurt the community, through higher prices and less innovation: Tuition hikes; charities where large chunks of the money fund operations instead of the charity; etc. In addition, the formerly standard professions of Orthodox Jews, thanks to their perceived stability and reasonably good pay - doctors, lawyers, and accountants - are all being impacted negatively as technology and regulations make their jobs less needed or less well paid. We have far too many accounting and lawyer friends who are looking for jobs (or better jobs), and future doctors are already finding out that it's going to be far more difficult to pay off their loans. All of these factors point to a Jewish community which must start being innovative within itself (and fast), before the fallout severely impacts the infrastructure of the community. It's bad enough that living as an Orthodox Jew until now was so expensive and difficult for large portions of the community; but as things continue, unless we find a way to bring the costs of Orthodoxy way, way down we are going to find that Orthodox Jewry is no longer the middle-upper class life we like to believe it is (and hasn't been for a long time), but significantly down near the bottom after all is said and done.

Cutoff to a Fresh View

We take this commercial break from the discussions below to discuss... accounting?

For some people, December 31st is meaningless. It's just another day that rolls into another and nothing really separates the two - perhaps having to remember to change what year they write on the rare check they write, or maybe it means a nice day off. Other than that, it's really not particularly important. But for some, December 31st means cutoff day: Trying to close out your books, making sure you've put everything in the right category, trying to get everything in as much order as possible so you're as prepared as you can be to put together your financial statements as accurately as possible and in a way that any auditor in the world would be satisfied. Sure, you can always correct an error, but the closer you can get it to perfect on the first try the better.

When I used to work as an auditor, our dream was a client that didn't do any transactions in the last few days of the year. Working from the other end, it's easy to see how impossible that is - but the experience has taught how important and helpful it will be for both us and them to have as few as possible and to have a great way of showing just what's floating at the end of the period. The other important lesson was to utilize the tools and skills we developed on the audit side for ourselves - both as a check and for analysis. It will always shock me at how underdeveloped most companies are when it comes to quick and easy analysis of data. In my old job, auditing complex hedge funds, we developed formula-driven templates and pivot tables to almost instantaneously be able to analyze any data we were looking at and to find any errors - and all in Excel. Now, we're almost done developing a system to track and analyze every single transaction we make in the company outside of QuickBooks, in addition to working with a great consulting group that is helping us to tweak QuickBooks to suit our needs, so we have a great side-by-side check - plus a much better way of analyzing data and developing reports than what QB can do. [For the nerds: Rating the most useful tools in Excel, pivot tables have got to come in right at the top, challenged closely by vlookups and the now unlimited IF functions. And I barely know Excel compared to what's really available there.] We'll be able to literally group or drill down by any category we want - by division, by type of expense, by date - and see the data we want to see instantly in as detailed a fashion as we'd like.

It's fascinating to be working in a company that in has a strong start-up feel, but at the same time is really running with a huge jump start. We started with a cushion that allowed us and is allowing us to quickly determine best practices and to invest in technology and expertise that, while perhaps not cheap in the short run, will provide us with huge savings in the long-term. We also have a mostly young, bright, energetic group, peppered with some people with more experience as appropriate, but with varying expertise across the board and some specific knowledge that puts us literally years ahead of where most start-ups would be six months in. Most companies don't start earning real revenues for 2-4 years; we have the potential to do that in the very near future. At the end of the day, no business survives unless it starts earning money, and to be in the position we're in this quickly is a blessing.

We've also been able to learn from the successes and mistakes the various people we have have made in the past - whether operational, marketing, or anything else. Our cushion let us 'overhire' early to move ahead faster and to avoid letting details slip through any cracks - both operationally and financially. Last quarter, we reconciled our books to within 3 cents - perhaps something only an accountant could appreciate, but something we were quite proud of.

When I was leaving my old job, my former boss told me simply: "Public accounting just isn't for you. You need to do something entrepreneurial, start your own company or something. I'm just not sure you'll be able to do it without having to put up with a few more years in a corporation like this." It took a year, but thank God, it appears that we've been quite fortunate. It would have been impossible to imagine 7-8 months ago when things looked quite bleak that the right set of circumstances would result in being in the position and situation we're in now. Now, it's amazing to look back and see just how much has happened in such a short period of time and to think just how much can happen over the next.

God definitely works in mysterious ways, and sometimes it takes that looking back a bit to appreciate just how amazing everything was to get us to where we are, to see what we couldn't before.

EZ Reads, 7/15/09

• Honestly Frum with an interesting rant to the Modern Orthodox world.
• Ariella at Kallah Magazine asks what you'd do different if you could redo your wedding.
• Gil writes about whether one is obligated to give charity to someone who does not work (and can). Conclusion: No.
• I enjoyed this list of classic insults from classic people. A couple fun examples:

  "He has never been known to use a word that might send a reader to the dictionary." - William Faulkner (about Ernest Hemingway).
  
  "Poor Faulkner. Does he really think big emotions come from big words?" - Ernest Hemingway (about William Faulkner)
  
  "A modest little person, with much to be modest about." – Winston Churchill

• Fantastic piece by Mortimer Zuckerman on unemployment in today's Wall Street Journal. Basically, this is much worse than the numbers say, and we've just blown a trillion dollars.
• A really good piece on judges and umpires in the New York Times. Interesting and well-written.
• RafiG notes that new Cav Anthony Parker is wearing #18 to harken back to his positive times as part of Maccabi Tel Aviv. Cool.
• He also has a hilarious "Jewish Sports" video that is so classically Jewish. "Come on, let him move up 6 meters... his mother came so far to watch him... Why can't you do a little favor!? Everyone is against the Jews!"

Enjoy!

The Savior

From today's Wall Street Journal:

Mr. Obama's comments yesterday are a perfect illustration of just such a claim. In the months since Congress approved the stimulus, our economy has lost nearly 1.6 million jobs and unemployment has hit 9.4%. Invoke the magic words, however, and -- presto! -- you have the president claiming he has "saved or created" 150,000 jobs. It all makes for a much nicer spin, and helps you forget this is the same team that only a few months ago promised us that passing the stimulus would prevent unemployment from rising over 8%. [...]

"You created a situation where you cannot be wrong," said the Montana Democrat. "If the economy loses two million jobs over the next few years, you can say yes, but it would've lost 5.5 million jobs. If we create a million jobs, you can say, well, it would have lost 2.5 million jobs. You've given yourself complete leverage where you cannot be wrong, because you can take any scenario and make yourself look correct." [...]

If the "saved or created" formula looks brilliant, it's only because Mr. Obama and his team are not being called on their claims. And don't expect much to change. So long as the news continues to repeat the administration's line that the stimulus has already "saved or created" 150,000 jobs over a time period when the U.S. economy suffered an overall job loss 10 times that number, the White House would be insane to give up a formula that allows them to spin job losses into jobs saved.

Quite (and Quote) the Weekend

It was quite the weekend...! We think it was Elianna's favorite weekend with almost all her favorite people: SJ and Erachet visited us for Shabbos, J&S (and for the first time, our friendly sometime lurker Shosh!) came over Friday night, RivkaT stopped by, we were late for a kiddush for D&E before their upcoming move away, ate at Pobody's Nerfect & Shake for lunch, had a dessert at D&E where it seemed a nice chunk of our friends were, and then hosted shalosh seudos for a bunch more, including Rea and Xvi.*

Oh, and: My brother and SIL had a baby boy on Shabbos (Mazel Tov!!!), Kayla's birthday was Friday, I got a job, and we had parties galore it seemed.

All in all, it was nice, exciting, exhausting, and nothing compared to what next week will probably be like in terms of hecticity. This is niece/nephew #17 for us (#8 on my side), and mother and baby are bH doing well. Ben, Hen, and Shen are super excited about their new baby brother!

And of course, there's never a dull moment, so here are some of the best quotes from another great Shabbos:

Serach: What's Daddy's favorite color?
Elianna: E!

Elianna (rambling about a story she's making up as she goes along) "...I made a cupcake."
SJ: What was in it?
Elianna: Vanilla... and ice cream... and blue!

Older gentleman on way home from shul, as we walked past heading toward a kiddush: {smiling} "Are you going in the right direction?"
Ezzie: {smiles} Yes, I am. Perhaps you are going in the wrong direction?
Older gentleman: No, I'm going in the right direction as well. Isn't it something that two people going in opposite directions can both still be headed in the right direction?
Ez - I just love that one.

* Later, we got ice cream, although we did not have a hot chocolate ending.

Touching Tampa

I thought this video (via Deadspin) was really nice:

It's a cold world out there in these hard economic times, especially in the world of hockey. But meet Ben Gullett, who whipped up a unique scheme to help find his dad a new job.

Mark Gullett, the marketing director with the Tampa Bay Lighting, knew that he was in danger of being laid off. So his son, Ben, 14, came up with the idea of producing a YouTube video touting his dad's employment credentials. When Mark was laid off on Thursday, Ben posted his video. And the result has been pretty amazing. ...

How To Deal With Unemployed People

Jewboy has a fantastic post about unemployment and the assumptions people make about those who have graduated law school. First, let me excerpt a bit:

First example of people being out of touch with reality: "Oh, is your wife going to stop working now that you finished law school?" Well, number one, I don't have a full time job. Number two, do you know what kind of costs a frum family faces? I have bills to pay that I don't even want to talk about, and I haven't even hit the big tuitions yet. G-d help me when that happens. So no, even when I get a full time job, my wife will not be retiring from the workplace. I'd give anything if she could, but that is simply not a reality, not if my family wants to be self sufficient.

Secondly, it's rather annoying when I tell people I'm applying for a certain job, and they respond by saying things like, "Oh, but doesn't pay very well." People seem to assume that because you went to law school you can automatically make a lot of money. Yes, some lawyers can make a good living right out of school. But especially in the worst economy since the Depression, several of my colleagues and I are struggling just to find hourly pay that pays more than a grocery clerk.

While there are a couple of caveats to what he's pointed out, all in all he's right on point. There is a very common, unrealistic idea of what different jobs make, what things cost, and how much people need to live within the Orthodox community. (Easy survey plug!) Far too often, the assumptions people make include but are not limited to:

• People are always able to pay their bills... and often, someone else helps pay those bills.
• Even if a family pays their own bills, if they couldn't for some reason, someone else will help them do so.
• Certain jobs are immune from economic downturns.
• That a person is better off taking a lower-paying job than remaining unemployed.
• That a person is better off remaining unemployed than taking a lower-paying job.
  

There seems to be an all too often lack of sensitivity in the Orthodox community to any number of people: Singles; childless couples; people who are depressed; people who are sick; poor people; etc. etc. Add unemployed people to the list. I am certainly not saying that we should all go walking around on eggshells around everyone to avoid being insensitive - in fact, please don't, it's far more annoying. Just use your brain. Much like all the other examples, being unemployed is not a badge of shame to the person, and they'd rather not be treated as such.

Certainly, everyone is different in their approach. I'm of the more "open" type; I'll openly discuss certain aspects of our situation with friends and family, if not others. Many people are less open, and that's obviously understandable. Perhaps one of the reasons I've actually not faced most of what I described above, and have not heard many insensitive comments, is because I've given people a better understanding of our situation; this does not mean that others should do the same, but it does mean that if you are going to comment on someone's unemployment or job search, you should know whether or not what you're about to say makes any sense. As an easy example, before you say something like "is your wife going to quit her job now that you've finished law school", think if that makes sense. Perhaps ask if she is going to be able to stop working once the lawyer finds a job. Before you comment on a job not paying so well, perhaps it's worthwhile to ask if the person has the luxury of waiting it out for a better job - not to mention gauging what they think of the job in the first place.

I will be quick to admit that I've probably messed up the above on occasion. We all make assumptions, and sometimes those assumptions are wrong. Nevertheless, this is something I need to improve upon, and something to think about.

Helping Hands

As a general rule, I don't write about anything involving my work on this blog. This is the wisest, safest choice and avoids my ever running into a problem with work because of this blog. However, there's something I want to write about right now because I think it's important to get out, so bear with me please.

Many friends of ours have known for a while, and many other readers caught on from this post, that I am currently unemployed. (Managing a hedge fund? Call me! {wink}) While I happen to be enjoying unemployment immensely at the moment, with the extra time to read and write when Kayla takes a nap, and the ability to spend some time playing with her and Elianna, I understand (okay, Serach insists) that in the long run, I'm going to need to find a good job. So after taking a little time off to figure some things out, I started to look recently for positions that were up my alley.

What has been amazing has been the help from people, whether friends, people who read this blog, people who barely know us, and people who just hear that I'm unemployed. Everyone either has a lead, thinks their own company might be looking, or has friends to send my resume to who might be able to help. More impressively, some of those friends of friends - people who don't know who we are at all - will call and say that while they don't know of anything, here are some friends of theirs who might. Others will follow up with me before I've even had a chance to do so with them, e-mailing or calling me to offer their help. It's truly amazing, touching, and heart-warming.

The kindness of others has reached the point where I'm starting to feel bad. It's simply impossible to keep track of all the people who have contacted me and follow up with them all as I would like to. I've had to prioritize by which jobs seem most up my alley and that I would have a reasonable chance of getting the job, while pushing the rest to the back burner until those first few play out. This is obviously a wonderful luxury, but it hurts to not be able to properly thank all those who have been going out of their way for us.

So... for all those who are reading this, thank you.