Happy Thanksgiving! Parable of the Pies

t was thanksgiving. The family was looking forward to its usual gathering. Everyone would be there, brothers and sisters, and even a few more distant relatives that had moved far away. Much planning had gone into the event; for months before careful counts were made of guests, estimates of food were made, and careful seating arrangements organized. The planning was comprehensive.

There was a young cousin who had gone into business for himself recently. He started some kind of internet business. It would be his first time attending this particular event. He was asked weeks in advance if he’d be coming alone or with someone. He was a friendly type and met people easily.

“Hmmm. I’m not sure,” he thought. “Me and two others?”

The planners were fine with that and careful notes were taken of preferences and food allergies. Vegan, vegetarian and gluten free options would be available and allowance was even made for big eaters versus small. But what mattered most was the plan; everything had to go according to the plan.

The cousin made his plans for travel. But by the time he was ready to leave he’d added a few more friends to his list. He had decided to reserve an RV for the trip. They set out in the road early and the RV was full, but everyone was having a great time. They even crammed a couple people they met along the way. The group started looking for a second RV.

Just before they rolled into town for the thanksgiving dinner the cousin realized all his friends could be a problem. So they stopped at a grocery store and bought lots of food items and even ingredients like flour and other baking goods. The cousin figured it would all work out, the holiday is all about hospitality he thought.

Well, his arrival didn’t generate lots of joy. Even though there was lots of food the cousin got a scolding.

“This wasn’t part of the plan,” said his aunt. “We worked on that plan forever. It’s a beautiful plan!”

She made him sit down in the family room, dimmed the lights, and started a power point presentation. The first few slides were about the families history. His aunt was especially proud of all the old photos of long dead relatives in fur hats and floor length dresses and big hats.

He peeked through the blinds. His friends were playing volleyball and lying on the grass. It was warm in this part of the country and some were from colder climates. Most of his family was on the porch with their arms folded wearing frowns.

“Excuse me,” the aunt said noticing his distraction.

“Sorry,” he said, and turned back to the slides.

She outlined how the plan brilliantly assessed the weight of all the attendees based on census data then, using data from the Food and Drug Administration determined the calories needed to be sure people were full. They had even factored in economic data: people would be allocated calories based on income. Those guests who earned More would get an appropriately smaller serving of stuffing, for example.

“You see,” said the aunt as she pointed to a chart, “this plan means everyone will get what they should.”

She turned on the lights.

“But will people enjoy themselves,” he asked.

She looked shocked.

“Enjoy?” she asked, taking off her glasses. “How do you measure that?”

But it was almost time for dinner. And things were tense. Additional tables had to be set up, new silverware found. Even historical china had to be taken out of a cupboard and dusted off. A few family members protested this.

“Those plates have been up there in that cupboard since I was ten,” said one. “I grew up in this living room and now it’s changing. It’s like we don’t matter anymore.”

Some family were very bitter about the new seating arrangements. Some were now seated between the cousin’s friends. One relative was especially upset.

She grabbed her name card with, “Mable” printed on it and demanded she be given her regular spot back between “George” and “Louise” who also had neatly printed cards. Now she was sandwiched between Jose and Rohit. This was not what she expected when she came. She’d had the same spot for years. Now these kids were messing things up.

One relative leaned over to the host and offered a solution.

“Look,” he said, “if they’re going to treat this place like a restaurant instead of a home, then we should charge them; they’re making a huge impact.”

Somehow the group got through dinner. There were lots of tense, “thank yous” and “could you pleeese pass the butter,” comments made with eye rolls. But everyone ate and got full, even though the neat weight and income allocations fell by the way. Because the cousin and his friends brought so much food with them everyone ate until they were satisfied. Some were resentful of the friends.

“He ate two dinner rolls, I saw it,” complained one, “and I only got one.”

“But you don’t eat dinner rolls,” said the cousin.

“Whatever. It’s not right, everyone should get equal amounts of food.”

The cousin could only shake is head and look forward to the pies. Everyone loved pie.

And the pies were all laid out beautifully. Pumpkin. Apple. Cherry. There were even some pies the cousin didn’t recognize.

People started to serve themselves. Some took big slices, some thin. It was a frenzy of slicing and scooping and plating. Soon there was almost no pie left. People starting eying other people’s plates.

“His slice is so much bigger than mine,” said one. “And it’s pumpkin, and that means because he got more, I got less.”

She started to cry bitterly. An older aunt came over and grabbed the plate from the friend with a larger slice.

“Give me that!” she said.

She took out a sewing measuring tape she had in her apron. She carefully measured, then sliced of a section of the pie to give to the crying relative.

“There!” she said looking over her glasses, “everyone must allow me to measure their slices!”

“Oh my God,” said the cousin. “This is ridiculous!”

He started to laugh and rolled around on the floor.

“What’s so funny?” shouted the relative holding a knife and measuring tape.

The cousin walked over to the pantry where he’d carefully put all the ingredients he’d bought on the way to dinner. The pantry was full of flour and cans of pumpkin and other baking goods.

“Guys,” he said pointing to the pantry and then to the oven,” we can just bake more pies!”

En Mexico: Cash, Entrepreneurship, and Jobs

One of the things that adds to the unique economy in San Agustinillo is it’s cash economy. And, there are no cash machines in San Agustinillo. Nada. Cero. The closest machines are up the hill in Mazunte about a 15 walk away. Imagine a world where your cards are simply meaningless. No value. Useless other than noisemakers in your bike spokes. And your phone. No help there either. What would you do? How would that change your life? The cash only economy promotes the sell, sell, sell nature of the place. It’s an entrepreneurs paradise.

I was ok on cash. Remember things are cheap and I loaded up on pesos. But, one never knows. So while I was in Mazunte I figured I’d better stock up on pesos. Better to have some in reserve. I found one machine, but it was out of service.

“Donde esta otro?” I asked.

“Alla,” the security guard said pointing down the street.

So I went. The line looked long. It was about 86 degrees give or take. But having some pesos now would save a lot of hassle later. So I got in line.

It was hot. Really hot. And the line wasn’t moving. The line stretched out in front of a pizza that had slices baking in the sun. Not very appetizing at the moment. But maybe he had a bottle of water.

“Tienes agua?” I asked.

“Si, agua de fruta,” he answered.

“No, tienes una botella de agua?” I asked.

“No tengo botellas de agua,” he said.

So no water. I waited. The line did not move.

As I stood in line I remembered I had some American cash. The heat was making me light headed. I started fanaticizing and doing math and Spanish in my head.

“Se vendes pesos?” I practiced, imagining talking to a store owner.

“Yo tengo dinero de Estados Unidos,” I thought I’d say. Maybe I’d hold up a wad of bills. Presidentes muertes.

I figured if I offered a good deal, maybe I could get 1000 pesos for $100. Was that right? It wasn’t getting any less hot. Was my math messed up?

Finally I calculated how long each transaction was taking inside the little closet with a glass door where the machine was. I started counting the seconds. I got up to about 180 when I counted the people in front of me; at least 20. Math. Three minutes times 20 is an hour. No gracias. So I left.

As I walked through the town I thought exchanging dollars for pesos on the street might be illegal or at least out of line. I imagined what if the shoe was on the other foot and someone offered me a wad of some currency in exchange for some dollars. It would be inconvenient. I’d have to go change the money into dollars and what rate would I get?

Then I thought of how a business could spring up around the lines. Fans? Water? Paying people to wait in line? Of course the people had no cash, so there would be risk. What if they got the water and took off. You could sell it for a lot, but how would you collect? The line water idea was the best one. I take your card and pass word and take 10 percent. Crazy? Wait for an hour and half in line and it doesn’t sound that bad.

The cash economy seems to inspire a lot of hustle around here. Nothing bad or nefarious, but an item that can be turned into cash has value. One starts looking around and figuring out how to make that transformation. Not having cash can be worse than waiting in line; what do people want that will make them give me some cash?

As I wrote before, one thing is a ride to the next town. Food. Clothes. I saw a guy walk up to a food vendor and make a sales pitch to her for some clothing. It was a good pitch. She considered it. But said, “No, gracias.” He was polite, smiled and moved on.

Why, I wonder, do the socialists and communists in Seattle advocate for higher wages. When I look at the economy here I don’t see many jobs, at least as they are construed in the US: an hourly wage. How can anyone who knows the writings of Karl Marx put price on exploitation. Remember, in Das Kapital, Marx lays out beautifully that the worker owns no property, thus she sells her labor. Meanwhile, the capitalist owns the means of production and exploits the worker’s labor. But the worker can live without the wage.

Here in Mexico, it’s true the traditional jobs are few. I needed the bathroom. I walked into a restaurant and got lost in the back. A young boy stopped me. He asked me some questions. Was I planning to eat here, he wondered when I said I need to use the facilities. Another question. I handed him 20 pesos. A win win solution.

Jobs are great, but they can be soul sucking. And the notion that one’s health care and livelihood is tied to people who own property and the means of production is depressing. In Mexico everyone scrambles to make a living. Have some property? Rent it out to campers and their tents for the jazz festival. Have an oven? Bake bread and sell it on the beach. Own a car? Give people rides.

Americans can seem kind of lazy by comparison. They expect a job. They want you to have a job. Councilmember Sawant and the City Council collude with the capitalists to be sure that your labor is sold for at least $15 an hour. That seems strange to me. And in Seattle, being an entrepreneur is getting more difficult.

To me, looking at the beach, it seems to me that universal health care and a guaranteed basic income could give people the safety net they need to hustle and innovate rather than join the direct deposit culture. People here work hard. So do many Americans who own small business. We should reward and encourage that rather than have elected officials negotiate the price of our labor.

New Video: Landlords are Human Beings, Small Business Owners

Watch and share this great video.

One of the reasons people blame and bash landlords is the myth that property management is largely done by corporations. Most landlords are just like anyone else, trying to make a living providing places for people to live.

En Mexico: We Have Lots to Learn from the Rest of the World

I’ve been the subject of much affection on the internet. Just the other day someone confused me with Richard Cranium! I don’t mind ad hominem attacks or clever sobriquets, but if the name is just wrong, I have to fix it. One of the most stubborn epithets attaches to me that is wrong is libertarian. But my time in Mexico is leading me to believe maybe I’m wrong. Perhaps rules of any kind are the enemy. Or maybe we have a lot to learn from San Agustinillo.

My trip to Mexico began at 10PM in the Seattle airport with a change of planes in Mexico City. Then I managed to avoid a long scheduled layover and caught an earlier flight to Huatulco. From there, it was a wending hour long ride toward the coast and the small village of San Agustinillo.

Before I left Huatulco, I was advised to get as many pesos as possible; San Agustinillo is an all cash economy. There are few cash machines and nobody uses cards. I was glad I got the advice and took it, because the town we passed through just up the road was hosting a jazz festival; the lines at the cash machines were down the block.

There is only one, narrow road through San Agustinillo, a town about five blocks long with a beach on one side and a slight hill sloping up the other. To the north is Mazunte, a slightly bigger town and the location of the jazz festival and about a 15 minute walk.

Two things I’ve noted. Prices are low and innovation and entrepreneurship is high. Breakfast on my second day, huevos rancheros, an americano, and a bottle of water; total price 105 pesos or about 5 American dollars. I typically pay $4 for an americano with an extra shot at home.

Also, there is lots of selling and buying. On the beach one is occasionally approached by someone selling something; sweet bread (pan dulce or just “pan”), jewelry, other food items, or clothing.

Now I can hear an angry, white, American voice in my head saying, “These are among the poorest people in the world. Of course they’re selling. What else can they do? There’s no jobs. Sad!”

I’m not convinced. Someone in the States is reading some New York Times article packed with statistics about how the rest of the world is suffering. It’s called American Exceptionalism and it is a stubborn disease with no known cure other than travel and real world experience. The most common symptom is assuming everyone else in the world wants what we have quantitively (more wealth) and qualitatively (a nice, safe job).

Leftist exceptionalism sees swarms of dark poor people yearning to be like us; what characterizes it is it’s assumption that we, or more accurately white, male republicans and he corporations they run, are responsible for the suffering of the masses. Right leaning exceptionalism tends to see the source of the masses suffering as home grown, things like misgovernment and over population.

Here’s a thought: maybe the rest of the world isn’t as miserable as some of us think. And another thought: They do capitalism far better than we do.

Here’s the case of the ironically named Collectivo, a pick up truck with little shack like structure on the bed that works as part of the local transportation system.

I haven’t deeply studied the Collectivo but such an operation would be strictly prohibited in the United States. One can only imagine the pears that would be clutched in Seattle if a guy put a shed on the bed of a truck, a couple of benches on either side, and some rails to hang off the back. Dios mio! Add to that picture that it’s a cash business and there appear to be no unions involved. I’ve checked, but the sense is that there is some regulation to the trucks and the taxi cabs that pick up people as they go, cramming as many as seven people in a car.

This improvisation is driven by the need for low cost transport between towns, and it appears very competitive and efficient. I asked a local how many people have been killed in accidents. None. One person fell off the back of the truck, but he had a heart attack.

How about the low prices?

I’m no economist and I have done zero formal research, but I’d say that it’s because labor is plentiful and there are plenty of jobs doing various things. There is also likely limited demand; it’s a hard place for tourists to get to. Taken together, scarce land but lots of labor and modest demand for services means prices are very low. The beer on the beach is cheap compared to the US but the proprietor runs the place themselves and probably has fewer regulations and codes to comply with.

Even at a $1.50 a bottle the owner makes $18 for 12 beers, and in Seattle a 12 pack at a grocery store sells for about $14.00. Even at that retail price, the sale clears about about $.30 a bottle. Not much, but remember everything is cheap here.

Maybe there is some dynamic I’m not aware of that keeps people trapped in this tiny coastal town working for as little as $2250 pesos for a seven day week — the pay of a security guard I heard about. Perhaps everyone here would rather live in a frigid coastal city up north, with wet feet caused by rain not salt water, and ride in very safe buses with well paid drivers that would deliver them to a job paying $22.50 (about $17,000 pesos a week, almost 10 times what the security guard makes) an hour in a cube in building downtown.

There is absolutely no doubt that this is a poorer country. But that doesn’t mean the people are miserable. Nor is their success at meeting local needs the basis for ignoring imbalances in the world economy; would the cynical dweller earning $22.50 an hour immigrate illegally to a foreign country where she doesn’t speak the language and would face racism and harassment for $200 an doing the same job? Not unlikely.

But we can learn that relative poverty does not necessarily mean misery, and fewer rules and fewer taxes (taxes are hard to collect on cash transactions) mean poorer people can get into the economy must faster and make a living building their own solutions to local problems. From the perspective of small business, compared to Mexico, the United States seems like an oligarchy controlled by people with lots of money and a government that has rules and taxes that keep small players out.

JLARC: “Why is Housing So Expensive?”

Life is full of surprises. I was on a last minute trip to New Orleans when I found out that Governor Inslee had vetoed a budget proviso we had requested in the state budget. Senator Braun was our champion on this request. The proviso would have allocated $500,000 to study housing costs and compare non-profit costs with market rate costs. I was not happy. I sent a pretty stern message to Inslee’s staff person and wrote an angry post at Forbes, comparing Inslee to Nixon. The point of the proviso was to shine a light on the big cost of subsidized non-profit housing. The reason why Mandatory Inclusionary Zoning (MIZ) was proposed, was to shift money from the market into the coffers of non-profit housing producers. Why? Because their business model is wasteful; when market rate producer costs go up, they raise prices and when the same costs go up for non-profits, they ask for more money. The good news is that in spite of the veto, the Joint Legislative Audit and Review Committee (JLARC) are doing the study anyway. Here’s the proviso we wrote:

NEW SECTION. Sec. 103 Joint Legislative and Audit Review Committee

$500,000 of the general fund state appropriation for fiscal year 2018 is provided solely for an evaluation and comparison of the cost efficiency of market rate housing in Washington versus publicly subsidized housing projects intended to assist low-income households.

(a) The comparison will include, but not be limited to, a comparison of the costs of:

1. Land acquisition;
2. Preconstruction activities including development an design, environmental review, permitting, and other state and local review processes;
3. Construction and rehabilitation,
4. Capital and financing,
5. Labor costs,
6. Construction administrative costs include legal, contract and finance activities
7. On-going maintenance and operating of the housing constructed, and

(b) The comparison will include a review of the department of commerce housing root cause analysis due to the governor on June 1, 2018 Included in the review will be a consideration of geographic and regional factors affecting costs. The report will include a recommendation for a publically available and easy to read sources and label for each publicly subsidized housing project. For purposes of the evaluation and comparison, publicly subsidized housing project means housing that is funded, in whole or in part, by state, local or federal funds or financing programs to assist low-income households.

(c) The evaluation must solicit input from interested housing stakeholder, including representatives from the Washington state affordable housing advisory board, the department of commerce, the Washington state housing finance commission, representatives from the private rental housing industry, housing authorities, community action agencies, local governments, and nonprofit and for-profit housing developers.

(d) The evaluation and comparison is due to the legislature by December 31, 2018.

I met with the team from JLARC. I went the same day they asked. I am sure they must think I am crazy. But they at least looked interested as I described the whole story about how our efforts to support cities as sustainable solutions to climate change and a myriad of other resource issues got waylaid on the “affordability” issue. They even took notes. And these people are way, way smarter than me. I don’t want to raise expectations, but the folks at JLARC seem truly committed to finding answers. I feel relieved. There are some smart people to help answer the question, “Is non-profit affordable housing more expensive than market rate? Why?”

I think this is a big win for the whole discourse, and I told the JLARC team this. If we had solid data and numbers we could have a argument on the politics. Right now, we’re arguing over terrible measures of affordability (i.e. 30 percent of monthly income spent on housing means it is affordable), and trying to solve a “crisis” with no quantitative measure of when it started and when we know it has ended. I told the JLARC team that the solutions are going to be decided by a political process, but that process would be much better informed by their work.