patrick.net

Scott J,

Randy H and I agree on a number of things (just part of being mid-westerners I suppose) but one thing we are in absolute agreement on is having your own business! Start it as a sideline, moonlight, weekend whatever! What ever lessens your reliance on your employer (in the long run) enriches you. Like Nike's motto, "Just do it"!

>>We have completely stripped our nation of all it’s manufacturing base and sent it to other countries where it’s cheap to do.

Let's not forget that the US still has a huge manufacturing base--it's just not done with actual people anymore. If not for outsourcing, more would be automated.

I'm not disagreeing that it's a concern, but I don't know what you want to do about it. You force those jobs back home and it'll mostly mean buying a bunch of japanese assembly robots.

One of my favorite books on factory work is "Rivethead," by Ben Hamper. Just an amazingly well-written true horror story about working at GM.

You just can't win at manufacturing jobs. Remember when everything said "Made in Japan" or "Made in Hong Kong" or "Made in Taiwan"? As soon as wages go up, the jobs migrate or get automated. Eventually, we won't see "Made in China" any more. A guy I know that owns a business tried to go to China for manufacturing and came back having decided it's already gotten too expensive there in the last couple years.

What do you do with all these displaced factory workers? When I was a kid they made a lot more money than my white-collar accounting father. Those were good jobs!

Not everyone is cut out or wants an office job. And there aren't enough high-paying services jobs for everyone anyway.

Wages seem stuck, too. We have too many people sitting in jobs that should be filled just by teenagers and other "starting" workers.

Looks like we're about to suffer from just about every kind of inflation but wage inflation.

A puzzle.

>>All that aside for just a minute, it’s fine to say you can still buy a 2,000 sq. ft. 3/2 w/great schools in OR for under 300K but where are you going to work?

I'm sure there's a hell of a lot better jobs in San Diego than Bend. I think Bend's plan is to cater to California retirees exclusively. We're like a big-ass old folk's home.

Scott J,

What DinOR said. The financial-geek-speak is "owning a piece of future free cash flows". It just means that your company makes you money. The more of that company you own, or the more pieces of other positive companies you own, the better. It isn't different than owning stock in a public corp., except that you have a lot more information and a lot more impact on the outcome, and usually a huge amount more stake in the profits.

Better to own 50% of a small, private cash-flow positive company than to own 0.0001% of a huge, massive, profitable company. The downside is that small ventures are usually riskier; but that is usually overblown. Big corps are pretty risky too.

T Lynch,

The Financial Times recently ran a piece about world manufacturing output position. I ran a thread on this blog .

The notion that the US has no manufacturing is false babbling by a clueless mainstream media. In fact, the US has dramatically increased its share of total global output while Japan and Germany have fallen. China is but a mere fraction of US output.

Don't head for the hills yet. It takes a real real real long time for empires to die, even today.

"I think we’ve built these huge houses out of nostalgia. We remember houses as huge because we were so little."

Interesting theory; certainly many of these homes have a cartoonish appearance.

"I’ve read that American homes are 40% larger than they were."

Here's some stats I found on the growth of the American home:
Average home size 1950: 983 sqft
1970: 1400 sqft
2004: 2349 sqft

It's true that the US has a huge manufacturing base, but it's also true that tons of high-paying manufacturing jobs have been lost. I just don't think there's any way to fix that.

T Lynch,

We all consume misinformation, no matter how hard we try not to. It is impossible in today's environment to not be consumed by hyperinformation.

If you can understand the front page of the Wall Street Journal or Financial Times then you can at least try to figure out what to believe and what to suspect. Nearly everything you read in other mainstream press, and absolutely everything else you hear/watch is either purposefully spun, ignorantly misreported, or simply lacking in essential context.

It's like this: Median Income in Santa Clara County is (I'm guessing here, so don't jump on me) $72,000 per year, the blond talking head reads from the teleprompter. That's up from $67,000 last year. Big smile.

What the hell does any of that mean? I'll tell you. Nuttin'. But, a report that says something like: A county survey of 1,000 residents with incomes assumed to be normally distributed reveal a median of 72K with a standard deviation of 15K, and a confidence interval of 95%. While this number is up from the previous median of 68K, the previous standard deviation was lower at 8K. Further, researchers at UC Davis dispute that income is not normally distributed and instead bimodal in nature.

That just isn't as sexy, even if it is useful.

We all consume misinformation, no matter how hard we try not to. It is impossible in today’s environment to not be consumed by hyperinformation.

I love misinformation. Use it well. Use it often. :twisted:

Santa Clara county, income distribution, 1993 - 2003:

http://www.jointventure.org/publications/index/2005index/progress/innovative/graphs/21a.html

Looks like even the 80th pencentile is making less than 1 HaHa.

One thing though, the distribution is definitely skewed, so the median does appear to underestimate the earning power of potential house-buyers.

KurtS,

I've seen that data before and frankly (it's embarassing). Mind you all this time the avg. family size is shrinking! Before we can even break a sweat getting into the sociological impacts let's just look at the data by itself. Hmm? Total freaking waste. I'm not even an environmentalist for crissakes.

>>Don’t these self-important buffoons realize how truly insignificant their Petunia Ordinance of 2004 is, in the grand scheme of life? [Not to pick on Bend, per se, I am sure it is a charming town, but it is just an example]

Bend is trying to maintain a mystique.

The long-time locals seem chagrined or miffed or something. I think they were sort of rugged people before all the effete outsiders moved in.

I asked the local moving guy how he liked Bend. He said he liked it OK before all the new people moved in. Not something I expected him to say to someone who was just moving in.

This all just sort of simmers. It's a beautiful place (not rainy like the valley) and all the sunshine tends to keep everyone a bit more cheerful than is normal in the Northwest. People seem, overall, less cranky about Californians in Bend than in Eugene.

A mixed bag. It's hard to know what to think of the Californians when they are simultaneously making things unaffordable and creating all the employment.

I think some people may rethink the concept of "waste" as they tally long-term heating and maintenance costs. Many of these McMansions were sold to people who are now just covering their monthly nut; deferred maintenance anyone? How easy to compare long-term maintence for a 4000sqft vs 2000sqft home? I don't think many buyers work out the numbers beforehand, Given our stormy coastal winters, I'd never consider anything over 3000sqft here.

>>Yee, I know I’m evil, but I plan to be on the right side of that bimodel distribution.

I hate to see anyone suffer, but when an inlaw complains to me about how I live in a nice house while they live in a trailer, I think back to all the late nights I had teaching myself programming while they were toking on the Mary Jane. My wife and I were putting money away while they were getting knocked up by random guys out of wedlock.

Not only did I have to burn the midnight oil for me and mine, I ended up writing these people checks when they got into impossible scrapes.

I feel for the people who had genuine bad breaks. I don't feel for the people that made their own lousy bed.

Who is greedy, the guy that works his ass off to get ahead, or the people that are lazy and then beg for loot from the "more fortunate"?

SP,

The Mighty Columbia takes it's share of victims every year. Seems more often than not it's kids, too small a boat and no life preservers. Even in August the water is cold and swift. But we do have our share of drunks doing swan dives into the Clackamas that are found "face down" a week later and miles down river.

>>I don’t what the difference is between 1950 and now that makes that me so different from the Mom’s back then.

It's amazing to me some of the houses that had 7 kids raised in them. Seems like it must have felt like an Atlantic crossing.

the people that are lazy and then beg for loot from the “more fortunate”?

AKA, the Boomers?

A lot of people on this board talk about high density housing and how great it is and less wasteful and so on. And I’m sure you’re right. But I must admit, I am not a city person and apartment living is just this side of Hell for me.

I am open to higher-density housing. I do not care much about big houses.

However, I do hope that the following "guidelines" be implemented in the future:

1) At least 1 bathroom per bedroom
2) No bedroom smaller than 150 sqft
3) No bathroom smaller than 100 sqft
4) At least 100 sqft of storage

>>AKA, the Boomers?

Haha. I like your boomer jabs. Mostly because I'm a '63 boomer and never felt like part of the grande mass. My group mostly just watched what was going on. We didn't lead anything, we just dressed and talked like the older boomers. Kinda pathetic.

But I think it’s two things in particular that I don’t like. Vertical neighbors and no yard. The place I lived in had great insulation, but I could still hear my upstairs neighbor blaring his radio at 5:00am. That kind of stuff drives me batty.

There is nothing we can do about the yard.

But concrete and steel construction and sound isolating materials should take much of the noise problem away.

We can even have upside-down two-level layouts so that no one (outside of your control) will be making noise directly above when you are in your bedroom.

SQT,

For years we had a 2,100 sq. ft. home and that didn't stop our kids from driving us crazy! Before I was advocating drunk driving, sleeping "spoon style" and having "big brother" run our lives I should have been perhaps a little more clear.

The need for space (while starting out innocently enough) seems to breed the need for what? Uh huh, more space. It's this "lust" for space that leaves me scratching my head? It was a HUGE obligation and a rather sizeable tax bill too I might add. My take on this is bound to be different b/c we are on the downsizing side of life and while we could afford a much bigger place (currently 1,450 sq. ft.) we don't WANT to! I know I've said this before but there is so much more to life than cleaning gutters. Buffpilot, chill out man, you can keep your car.

I don’t think I could stand to live in 983 sqft

Nor could we, sans kid. Recently, I calculated our basic housing needs, and I got 1700sqft, 1500 if the place was a perfect match. Far cry from the average McMansion.

2) No bedroom smaller than 150 sqft
Right. I can't possibly imagine a 100-125 sqft bedroom. Our current MBR is 180sqft (with walk-in), and I consider that bare minimum. That said, we don't need 4BR or 3000 sqft.

Actually, I meant: "Our current MBR is 180sqft (plus walk-in)."

Right. I can’t possibly imagine a 100-125 sqft bedroom. Our current MBR is 180sqft (with walk-in), and I consider that bare minimum. That said, we don’t need 4BR or 3000 sqft.

Most newer homes have 10x10 secondary bedrooms. Way too small.

180 sqft master bedroom is about right. 15x12 is the ideal dimension for me.

I do not know why they have a living room, a dinning room, a family room, a nook BUT small bedrooms.

All I need is a living room and a nook.

SQT Says:

My parents are in a 3500sqft home, which was great when they had four kids at home, but now my Mom’s finding it hard to maintain as she gets older. They’ll probably downsize in the next few years. It’ll be interesting to see how small they decide to go.

They, along with all the retiring adn downsizing baby boomers. We'll have our pick of oversized McMansions. I do wish them well, though - my parents are in the same boat.

Most newer homes have 10x10 secondary bedrooms. Way too small.

I mean most newer homes for minions like me. But these are still 1600sqft homes.

If someone likes (and can afford) a bigger place or is at a stage where they are actively using the space more power to 'em! I just question how many people really "need" all that space and as we're finding out with pre-foreclosures and defaults not many of them could afford it either.

They, along with all the retiring adn downsizing baby boomers. We’ll have our pick of oversized McMansions. I do wish them well, though - my parents are in the same boat.

But I do not want a McMansion. I only need a 2/2.5 + Den. :(

KurtS Says:

How easy to compare long-term maintence for a 4000sqft vs 2000sqft home? I don’t think many buyers work out the numbers beforehand

Not only that, the upfront costs of furnishing all the rooms in a 4000sf home can be significant. I've been to a few McMansions of acquaintances where 1-2 bedrooms and maybe the family room or living room are barely furnished at all. It almost seems like they ran out of money for furniture.

Peter P Says:

But I do not want a McMansion. I only need a 2/2.5 + Den.

There's an outside chance that McMansions will become so cheap that if you wanted to, you could buy one, rip out a room or two, and "downsize" that way. They're pretty much disposable anyway.

There’s an outside chance that McMansions will become so cheap that if you wanted to, you could buy one, rip out a room or two, and “downsize” that way. They’re pretty much disposable anyway.

True. But if a McMansion is cheap, I would rather buy a cheaper 2/2.5 + Den. ;)

skibum,

Kudos! When we sold our over-sized place the options were slim.

OH, you want to downsize, O.K I got it. How about looking at a two story 2,750 sq. ft. home on a 4,000 sq. ft. lot! I mean being as you're coming off of 3+ acres this is downsizing right?

This is how we wound up with so many McMansions to begin with! You don't think builders/lenders (which really sleep in the same bed) were going to let anyone walk away from their "child rearing home" and KEEP that money did you? OH, you want a LUXURY condo! NO! We just........ you know what, just forget it.

Not only that, the upfront costs of furnishing all the rooms in a 4000sf home can be significant.

I know the story of a couple who called in a high-tone decorator that provided a ~$400k estimate for furnishing their 4BR home. Even by high-income standards, they were floored and said no thanks. Even a minimalist minion like myself doesn't like the idea of sparsely furnishing a home over 2500 sqft. I don't want an echo chamber as I slowly add furniture over years.

Sure are a lot of pessimistic MSM bubble bust articles out there all of a sudden. It's making the contrarian in me very confused.

Anyone else feeling uncomfortable at all the pessimistic stories? I expected this to take longer.

T Lynch Says:

The middle class is shrinking, to sustain our unprecedented economic growth..corporations have outsources most of our highest paying manufacturing jobs to pay the dirt cheap labor in China and India.

We have completely stripped our nation of all it’s manufacturing base and sent it to other countries where it’s cheap to do.

What is a factory worker going to do if they can no longer get a good paying job? You’ll probably find them at the Togo’s and Staples’ around the country.

_____

Ha, ha! Yeah...Ahh...I'm laughing hysterically at the truth of those sentences, but not in a good way: I'm laughing in an insanely maniacle way like I want to reach out and strangle a f-cking Boomer!

Can you imagine the ad for a Togo's job: "Come join the most educated workforce in Silicon Valley, can you guess who we are?"

So, out of curiousity, you read on expecting an ad for IBM, or Intel, or Applied Materials as you think to yourself, "Hmm...the company with the most educated work force, just who is it?"

Then you are shocked to find out that not only is it TOGOS, but it's fricken'
true.

And you read the resumes: Surfer-X, Phd, Meat Slicer, Bob Smith, JD Sammich Maker; Michael Holliday, MBA, Janitor/Table Cleaner; Cindy Joker, BS (Double Major: Accounting and Finance); Sally Goofball, MS Computer Engineering.

Come joing the winning Togos team!

Yay!

I subscribe to the WSJ. Is it worth getting the FT as well? Jeez, I wonder if I can even get it delivered to me at home where I live.

I subscribe to the WSJ. Is it worth getting the FT as well?

FT is all you need. How could you resist pink?

Michael Anderson,

Uncomfortable? No I do not feel uncomfortable. It feels like walking across the Mojave expecting to find a glass of water and instead getting a drink from a fire hose though. I think of all the posters here I am the most hard landing/crash person here, but even I didn't expect this.

Just what about residential or commercial density has resulted in superior outcomes. I’m not being restrictive in any way. Pick the standard, do the math.

I much rather stack homes together and have more open space.

You want math?

Instead of have 2000 sqft homes on 1/8 acre lots, we can put 8 spacious condos (3000 sqft whole-floor condos) on one 1/2 acre lot and still much open space.

Here, we have 16 families per acre (versus 8 in SFH configuration). Each family has more interior space and there will be more open space. Magic!

I think I've (re)discovered the answer to all our housing problems!

80's, Boomer cheese psychology redux: Rediscover your "Inner-Child."