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The Almighty Buck
The NYT Magazine this week focuses on a topic near and dear to its heart: money. Stories about the dotcom boom, priorities, the cult of Wall Street. Some of the stories are interesting, as with this comparison of how far a dollar goes depending on where you live. Some are disturbing, like this one on CEO salaries. And several are (unintentionally) humorous, like this one about bankrupt Etoys and this one, by a rich writer who believes everyone else is rich too.
Hrm, the article doesn't mention two interesting part of the story. His "Stay Incentive" was stolen from money which was promised to the employees.
I used to work for eToys.
eToys layed off a bunch of nonesential staff in January 2001. The survivors of us were promised, if we worked until March 2001, our regular pay plus a retention bonus equal to 2 months of pay (some were offered more). This money was "supposedly" in a specially marked fund that was protected from the creditors.
But when March 2001 rolled around, eToys dropped the bombshell: The bonus money is gone. It wasn't protected after all.
But Toby still got his retention bonus. Guess who payed for it? That's right, we employees.
I've bought a lot of crap I don't need, but I want
Worse than that is when you buy stuff you don't need but really want, then two days later you realise you don't have much of a use for it, and don't really want it anymore. Anyone else just go out and buy something just cause it feels good to? What's going on? You know, I've been unemployed for a while, so I don't buy much of anything other than groceries (well, and beer) these days, and to tell you the truth, I don't really miss it. Maybe this is what the **AAs are really afraid of? Not that piracy will deprive them of their revenues, but that it'll get people used to not buying stuff, and then they'll really be up shit creek.
c-hack.com |
Another interesting part of the story.
eToys had one subsidiary, Babycenter [babycenter.com], which they bought in 1999 for like $90 million in eToys stock. I still know many Babycenter employees.
Here are some stats:
- Number of employees in December, 2000:
eToys: over 1000, not including babycenter
babycenter: 90
- Number of layoffs by Feb 2001:
eToys: 700
Babycenter: 20
- Revenue in 2000 (not profit):
eToys: $70 million
Babycenter: $20 million (consider that they had
10% of the staffing)
- Expenses in 2000:
eToys: $100 million
Babycenter: $20 million
- Typical expenses in the FALL of 2000 (Which
is when they were considering bankruptcy):
eToys: Brand new shiney Pentium III with a flat
screen monitor for most employees
- Brand new shiny headquarters in West Los Angeles, with a $100 million 10 year lease
Babycenter: The poor schmucks are still using
PII/366 & Sun Ultra5 machines
- converted warehouse in SOMA, San Francisco
- Amount that the entity sold for in spring 2001
eToys: $7 million to KBToys
Babycenter: $12 million to Johnson & Johnson
- Number of employees who still work for the company:
eToys: 10 or so
Babycenter: 70 (almost everyone)
- Number of days that the website has been down
due to the bankruptcy
eToys: 90 - March - May
Babycenter: Zero
- Number of managers who came in from the parent company to replace existing managers:
eToys: almost all of them
Babycenter: 1 , the finance controler
Ya i stopped buying moves and just download SVCDs and DVDRiP DivX until i got sick of watching all these movies. Now i don't watch any movies, new, old, theatre, dvd, bootleg, none. It's like man screw it after i started downloading movies and not even watching them i realised fuck i don't even want to see any of this crap. It's just movies are pushed into our culture so it was just something you do. Now i have a shelf filled with movies and i probably only watched half of them and i have no desire to see any more movies. I mean ya maybe i'll watch the new lord of the rings or the matrix 2 or something but i'm not really excited about it. I'll probably download a DVDRiP of it someday but i'm in no rush. So i guess the piracy just made me realise, shit i don't actually want this crap. heh.
This is not pleasant for many people to hear, but there are signs that the USA may be in decline. The 20th Century was the American century, and what do we see in the first year of the 21st Century? September 11. The Roman Empire did not fall to a single enemy, but to successful waves of attacks from "barbarians" from east of its border (the strongest being the Huns). Strong nations decline due to being worn out by external factors.
Bin Laden will be remebered in history as a terrorist and no more, but he at least shows the existence of the "barbarians" to America. These enemies will not be able to conquer America, but they, like the barbarians, can wear America out. The USA's policy toward the Islamic world does not address the "production" of these bin Ladens, so there will be more bin Ladens to drain America's energy for a long time to come.
We already see the changes inside the USA due to September 11. This new Dept. of Homeland Security will be a massive government organ and take over many agencies who previously focus on more "peace time" tasks but now turns to security matters above everything else. The internal orientation is changing. USA will be more like a police state. There will be more overhead on productivity and creativity. The previous "free" environment is in decline.
History may not always repeat itself, and the USA does not have to follow the cycles of nations. But it needs the right policy to resolve the root causes of the productions of the external threats, and so far there are no signs the USA is addressing these anti-American feelings in the Middle East. America is trying to build the dam higher to block the water rather than to open channels to let the water flow through without harm. This does not look good.
Free Software: the software by the people, of the people and for the people. Develop! Share! Enhance! Enjoy!
I completely agree, yet we're now at the point where it's exactly the opposite: In Canada we've had to continually increase immigration to keep the population from contracting, as the "native" birth rate is far below the necessary 2.2 or so. Many advanced European countries, such as Italy, are much further along this curve and have a serious population implosion in the near future. It's a bizarre irony that the world has taken a "reverse Darwinism" : Those least capable of supporting offspring are having them by the dozen, and those theoretically most capable aren't. I fear for the genetic future of the planet.
Sidenote: Personally I think the premise of population contraction is a fantastic one -> Contrary to any "Straight from China/India/Some other obscenely overpopulated area of Earth" BS about North America or Europe being "underpopulated", it seems to me that already we're grossly overpopulated, and we continue it based on outdated, unsustainable notions of drawing graphs of GDP growth, home value growth, etc, all of which is supported only by a perpetually increasing population, yet at the same time the net wealth of all of us is decreasing (soon we'll all have no National parks, no rural areas, and we'll all be just so grateful that the GDP rate increased 4.7%, watching the screen at the end of our tiny habitat-cube
Does David Brooks' claim that the USA is different from other empires and will never go through a decadent phase remind anyone else of the end of the business cycle supposedly heralded by the dotcom boom? I think one of the greatest problem any society has to face is complacency: once you get too many people at the top saying "yeah, we're great, we've created the perfect never-ending utopia" they stop responding to outside pressures, stagnate, and start to decline. I don't know if that's happened in the US yet, but I'd definitely rather that our national leaders were all a bunch of pessimists. First, they're probably more likely to be right; and second, if they're wrong, the consequences aren't as bad as they would be if they were incorrectly optimistic.
Just to put a response on this from someone you're talking about... :)
:) Nobody in the house drinks, smokes, or does drugs other than caffeine and chocolate. I've always said I never did those other things because I couldn't afford them :) Yes, we have two cars; one is my economy car for shuttling to and from work, and the other is the grocery getter / kid hauler. Both cars are fully paid for, and over 10 years old.
:) (She's the one with the business degree, after all; I'm just a geek.) She says things are kind of tight, but they've always been that way; we still manage to get by somehow. We don't have the latest and greatest toys (despite my geeky wants and urges), but we're still a happy, "average" American family. I don't see that we're particularly well off, but we're holding our own. The trick to the financials of all this is -
:) Sifting through to edit out some of the more personal information...
:)
I live in Taco's neck of the woods - cost of living is a bit on the high end here, IMHO - and I'm working one job, while my wife stays home to take care of our two kids. We're paying the bank for the privelage of living under a single roof, and that privelage takes up about 50% of my monthly takehome pay. The only reason we could afford the house was thanks to an inheritance, which barely covered the down payment.
Yes, we have two color tvs and two vcrs, but that's only because we spent good money on the first ones, and they still work well enough to be used in the basement on occasion. There's also an original Nintendo connected to that tv in the basement that we bought used years ago - no Playstations, no XBoxen. No Game Boys in the house, either. I splurged last month and ordered one of those 76-games-in-one game systems that were mentioned in an article here recently, and it's the best thing in the world as far as the kids are concerned. The dvd player that we just got last Christmas is a no-name Best Buy special, and we don't own any dvds (yet). The newest computer that was purchased was a used Bondi blue iMac, and that was two years ago. There's also the G3 that I bought five years ago (wow, that thing's getting old...) with a G4 upgrade that I put in it last year.
We don't go out to the movies, and if we're lucky, we go out to eat once a month. It's too expensive for these things, and the kids are too much hassle to take out in public sometimes
According to that article, we're a "below average" household, based strictly on the income numbers and education levels. Strangely enough, our household basically is the 50s/60s standard model - I come home from a day at work, the kids run up to greet me at the door, and the wife is getting dinner ready after her long day of cleaning / laundry / kid corraling. She does the bookkeeping too - I just bring home the money
wait for it -
live WITHIN your means.
Just like they did back in the "good old days" before all the PDAs and TiVos and cell phones (oh yeah, one Tracfone in the household - $20 every two months for a phone I barely use for thirty minutes a month), you only spend what's in the bank, or what you KNOW is going to be in the bank come the next paycheck. There's only been a few times that our total credit card debt has been over $1500 at the end of a month, which from what I understand is WAY below average. This is something that people seem to have forgotten - the people that give you those pieces of plastic want their money back someday, and someday SOON.
Like that NYTimes article says, everyone acts like their financial salvation is coming just over the next hill... but the odds are REALLY good that what's over the next hill is just the next paycheck. If you live life expecting that next check, you won't be surprised - or at least, you won't be disappointed when the monthly bills show up. If you learn to take care of what you have, and make do with what you have, you don't have to be throwing tons of money out the window every month for the next "newest and bestest". Regular oil changes are a lot cheaper than a new car every few years because the engine blew up after you kept treating it like crap.
We may not be financially compared to other households in this country, but we're financially stable, and we're overflowing with intangibles that a happy family provides.
/me checks the preview... wow, I was in a mood to write tonight, wasn't I?
And after this lengthy monologue about money and happiness and making do, I leave you with a link to a site where you could win new geek toys, and put some affiliate money in my pocket in the process so I can buy more toys
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Apple hardware still too expensive for you? How about a raffle ticket?
Come to the University of Mars! Classes starting soon!
I have to respond, I'm like that other guy. :)
:) (Being fired and collecting unemployment isn't always a bad thing) But my wife is going to work to pick up the extra money to make ends meet.
:) (Yeah, I know, some places you can pay someone the same price, but they try to rape you on services I can do for MUCH cheaper, I know because I used to work there too :) )
My wife stays home, I go to work. We have two kids, two cars, a house (sorta), a yard, etc. We live in Microsoft's backyard, and we pay $690/month in RENT to live in the basement, effectively a 2 bedroom apartment. We have a fireplace, a BIG yard, a garden (nothing growing yet!), a barbecue, etc. We clock in with about 4 computers, consisting of K6's, our newest technology is a slower Duron with the KT266a chipset (making it faster than shit, for about $225).
I'm about to be laid off from a job where I made 30000/year, and I'm going to pursue self-employment, and look for a job while collecting unemployment. It's a great opportunity, I'm glad it's finally happening.
Before this, I was making about $18k/year working as a mechanic. We still made ends meet.
We threw away our tv and vcr and have become more active as a result. We run Linux, partially to stay out of Microsoft's deadly upgrade scheme, but for other reasons as well.
I drive a 1971 Chevy Pickup, my wife drives a 2001 Corolla. Both were gifts, therefore both are paid off. Since I'm a kick-ass mechanic, maintenance is dirt-cheap. Costs us about $8 for an oil change.
I have a beatup old BC Rich, a nice Fender Champion 110, and a Boss GT-3 (did brakes for a buddy, he bought me the boss). I have enough computers to put one in every room, although I'm going to do it smarter than that.
We're blissfully happy with this situation. We're putting money away into savings, we're saving for the kids' college thanks to UPromise.com (not yet for our own retirement). We go out to eat every couple of months for convenience, because the restauraunts up here SUCK HARD. We're Texans living in WA, so we barbecue almost every weekend and play in the yard and stuff.
We're about 10 steps ahead of where we were two years ago (fighting for divorce). LIke the guy says, live WITHIN your means. We are rebuilding credit right now (in my wife's case, building credit) and paying off old debts. I hear it's impossible to do what we've done with so little money....
But then, I've spent my whole life proving that impossible is only a state of mind.
Dave
But there was a silly remark in one of the articles: "American workers are still the most productive on earth, two-thirds more productive than our counterparts in Great Britain, for example."
Why would the writer want to compare the US to the UK?
This is where your first remark comes in again, the Brits have a relatively high per capita income but their Purschasing Power is almost the lowest in Europe, only the Greek and Portugeese are worse off!
But it must be said, at least Britain overtook them in the last 15 years.
And indeed, true poverty is when your family goes hungry after a days work.
Something not uncommon in Great Britain but virtually unheard of in Greece and Portugal.
Just do a search on the net about the number of British children going to school hungry. That's why it's silly to compare the US and the UK.
"The likes of Facebook and WhatsApp are free to those whose privacy is of zero value."
That's the "advertised" view - CEO's are somewhat more able, or are able in areas we (who's we) don't really understand.
Come to think of it, the whole top-to-bottom structuring of salaries/rewards is based on the theory that people higher up in the hierarchy are more experienced/skilled/able than people lower down in the hierarchy and thus need a proporcionaly better reward.
When i started working in IT, i was a bright-eyed kid that trully believed that if someone was above me in the hierachy and/or getting a bigger salary, that was because they were beter than me.
After years in IT, having contacted with all levels of management (including CEOs) and having developed some of the people-skills which i was never taught in my technical degree (things like networking - the people type of networking - which are taught in management degrees but not technical ones) i came to the conclusion that decieving is the most rewarded ability in IT:
I've seen these over and over and over, and i'm still amazed at the stupidity (or maybe ability for self-decieving) of most people which cannot see beyond the outer layer (or maybe just won't do anything about it).
I don't know about Australia, but as a college counselor I've had plenty of students relate the same story: their relatives from other countries rarely recognize any name but Harvard. Literally: "What the hell is {Princeton,MIT,Stanford}? Why aren't you applying to Harvard?"
They should be applying to Harvard.
At Harvard you get an honors degree if you have a B-minus average. No thesis necessary. 91% honors graduation rate.
Think of that when you are in the job market.