Virtue in Failing the Credit Game?

Posted on May 12, 2012 by brewster

I was turned down for an American Express card.   Repeatedly.

I have plenty of money and, when I enquired about my “credit score” I found it in the 700′s which they say is quite good.   So why was I turned down?   Well, I don’t have any recent credit history.   It seems you have to owe money to be thought of as a good borrower.     But I did not want to borrow, I just wanted a card so I could use it as a money substitute.   And that seems to be the problem.

I didn’t really want to borrow money from them.   So they turned me down.   I was bemused and perplexed.    Now I am thinking that failing the credit game is a virtue.

A few reasons:   This “credit score” thing seems to resemble the discredited “IQ score” and “SAT score” as measures of worth or worthiness.   Maybe we can fast-track this one into the dustbins with phrenology.

I sat next to a woman on a plane as we flew to Florida.   She was sick because she was living in a house with poisoned wallboards from China, that had a mortgage for more than it was worth.  I asked why she did not just give the keys back to the bank and leave, and she said:   she was suing the builder and that might turn out good (she said she would repair the house by taking out all the walls), and besides if she turned in the keys and lived in a cheaper house or apartment, she would “ruin her credit score.”    Something seems wrong.

Another example.  Great New York Times piece on our paying for services that were mostly done by friends or common sense: The Outsourced Life by Arlie Russell Hochschild May 5, 2012. We seem to have injected commerce into almost everything.

And with commerce seems to come debt.    With living in a house comes debt.   With getting an education now comes debt.

So, what if we fail at the Credit Game?    Well, people will not extend you credit.    Isn’t not being in debt a good thing?    As more people turn from credit cards to debit cards and forgo the month interest payments, maybe we should celebrate those that just don’t play the game.

So I am credit free, and loving it.

Posted in Housing | Tagged , | 5 Comments

GlobalInet talk notes of Jimmy Wales talk: Predictions for the Future of the Internet

Posted on April 23, 2012 by brewster

#1:  mass connectivity
2billion people access the internet
easy parts are done

$80 for smartphone in kenya: encouraging.

developing countries are doing what we do on the internet: google/facebook/ etc

#2: no one will notice when hollywood dies
large scale collaborative stories/filmmaking coming

nupedia to wikipedia, but top down: failed.
ward cunningham invented wiki’s in 1995
wikipedia is not a tech invention, it is social innovation:
blend with the search engines
save all history, makes it more robust

new opportunity is in video.  it is where text was in 1999
geocities were individual contribution, we need group contribution

what tech exists for 6 years now, that has not coalesced yet?

communities will make hollywood and better movies.

britannica sold 3k copies this last year of being in print.   it died with a wimper, hollywood could as well.

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Gave 2 Talks in 1 day: Russia and Massachusetts while being in San Francisco

Posted on April 22, 2012 by brewster

I don’t know how the talks were to the participants, but I gave a talk at Wellesley College and then at an Internet Conference in Moscow, both via Skype.    It certainly worked for me even though the Russian one was at 2:30AM.   With the one at Wellesley, I gave the talk by showing me at first, then my slides (by screen share), and then me for Q&A.   They said they were happy.   On the Russian one, it was a 15 minute Q&A with a moderator.    I never saw the audience there, so that was a bit difficult.    I have heard the Tim Berners-Lee does most of his talks remotely.

When I totaled my “carbon footprint” the biggest issue by far was air flights.    I know that there is nothing that replaces face-to-face, but the time and stress it takes to travel costs and costs.

Flying is one of the most magical things I get to do.    I would enjoy it more if I went less often and stayed for more time– basically like vacation travel.     I think other fellow travelers would agree given the looks on their faces as I walk the airplane aisles.

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Self-Sufficient County

Posted on March 31, 2012 by brewster

How about a competition, or a goal to bring counties to be as self sufficient as they can be?    Local water, local power, local farmers, local schools, local furniture, local housewares, local building supplies.    Local and proud of it.     Local and can prove it.    Local and better for it.

This could unite both across the party lines, it could unite city and country, it could provide jobs for all involved.    I find the dichotomies often laid out by the political parties to be harmful– lets rally around something together.    Might building and believing in our community, in our county, be a way forward?

Some things would still come from outside– electronic signals over the Internet and some gadgets and probably cars–  but we could minimize those things to a very small percentage of the economy.    Money that was spent in the county would be spent again inside the county.     Money would pass from person to person providing a high GCP, or Gross County Product.

Suddenly everything would need to be provided, and provided by people you know or might know soon.   Your fellow citizens making dishes, books, fixing the roof.    Running the bank, running the store, owning the store, owning the bank.

What would it take?    I think as little as focusing on the goal.     Can every county do it?   No, some are over populated like San Francisco county, some are too underpopulated, but we might find that many are just right.

This could be good fun and build a healthy community and county.    It would be exciting to try.

Maybe a competition?    What are the rules and the metrics?   Do we do a certification with progressive levels like the certifications of the greenness of buildings?

Posted in Food, Housing | Tagged , | 1 Comment

-1 = 1 fallacy

Posted on March 27, 2012 by brewster

on trying to figure out i^i, I stumbled on the following fallacy that I can not peg:

1 = 1

(-1)(-1) = (1) (1)

(-1)^2 = (1)^2

\scriptstyle \sqrt{\,\,} (-1)^2 =\scriptstyle \sqrt{\,\,} (1)^2

(-1)^(2 * 1/2) = (1) ^(2 * 1/2)

(-1)^1 = (1) ^ 1

-1 = 1   QED

hum.

 

 

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My Firefox plug-ins to stop ads and tracking (all free add-ons)

Posted on March 21, 2012 by brewster

In case you might care to try these, here is a list of the plug-ins I use on firefox:

Adblock Plus (version 2.0.3) Does a great job

DoNotTrackPlus  Super great,highly recommended. turns off tracking sites.

FlashBlock 1.5.15.1   lots of ads use flash, so it helps.

HTTPS-everywhere by EFF.org if you go to http://nytimes.com it redirects you to https://nytimes.com. works for a large number of sites.

Alexa Sparky 1.6 this actually tracks web use, but gives info about the site you are on, which I find handy, and I like alexa.

Posted in Uncategorized | 6 Comments

Putting restrictions on a house title to keep it debt-free may not work well

Posted on March 12, 2012 by brewster

In this exploration of debt-free housing, we had two scenarios:   buy a building and renting units, but bring the rents down because the units become debt free.   The other is to have people put a title restriction on their house so that it can not be remortgaged.

This second approach may not work well.     Janelle Orsi, a wonderful lawyer that works with those that want to share (turns out to be a legal minefield), showed me this very readable case.

Someone tried to effectively gift a property but with a limitation that it could not be sold or mortgaged in the giver’s lifetime, or it had to revert to the giver.    Turns out the courts did not like this, but it ultimately prevailed because it was a limited time and an understandable cause.    So putting title restrictions might not hold, and can be blow away by the courts if they think they are unreasonable.

So back to the renter ideal, which uses same mechanism that others use to keep debt ratched up (corporate ownership, in their case banks, in our case non-profits to keep the debt racheted down), because that approach is harder to undermine without the other guy’s approach being threatened.    I believe this is Richard Stallman’s insight on free software (open source) when he made sharing leverage copyright law.

From Janelle:

I thought you might be interested in this case and the two dissenting opinions – it’s about “unreasonable restraints on alienation,” which I’m thinking is a key concept to wrangle with if we want to remove housing and land from society’s big game of Monopoly. The interesting thing in this case is that the owner was prevented from mortgaging her property, but not prevented from selling it or giving it away. The court determined that it was fine and reasonable, but two of the WA Supreme Court judges voiced strong disagreement on that, which sheds light onto how courts generally analyze the whole restraint on alienation issue. The second dissenting judge said something to the effect of: “but mortgaging property IS how most people transfer land.”  Alby v. Banc One Financial, 128 P. 3d 81 – Wash: Supreme Court 2006

Janelle

–
Janelle Orsi
Law Office of Janelle Orsi
1010 Grayson Street, Suite 2, Berkeley, CA 94710
510-649-9956
Janelle.Orsi@gmail.com
www.JanelleOrsi.com
Book and blog: www.sharingsolution.com

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Another class-size-of-1 school, but seemingly more expensive

Posted on February 16, 2012 by brewster

A fellow custom-school parent, Karina, pointed out a class-size-of-1 school: Fusion Academy.

It seems expensive compared to what we are spending (we are $35/hour, but we are doing the arranging and sometimes provide a room, and this school seems to be $120/hr):

middle school     $3,600 per semester per class, 30 sessions.
They say most take at least 6 classes, so $21,600 per semester, or $43,200 per school year.   If a session is 1 hour, then that comes to $120/hour

They provide school facilities.

Our custom schooling approach stays less expensive than private schools, and everyone seems happy.   But it more hands-on.

Love to know of more class-size-of-1 approaches.

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Summary of the Debt-Free Housing for Public Benefit Workers Idea, and Responses to Critiques

Posted on February 5, 2012 by brewster

Summary:

(for full idea and footnotes, please see http://brewster.kahle.org/2012/01/19/debt-free-housing-for-public-benefit-workers-2/ )

With a long-term mindset, we can cost-effectively and permanently decrease the rent on apartments 75% for the people that work in public-benefit non-profit organizations.   This can improve social services by attracting more people to this important sector.    This can be done today by recasting endowment dollars, currently going into investment accounts in big banks, into permanently debt-free apartment buildings for the employees that are the core of our organizations.   Houses can also be converted one at a time to permanently debt-free structures yielding benefits for decades or centuries.

  • Most people in US spend 30-60% of their income on housing (the poor pay the higher %).  Internet Archive employees are the same.
  • 75% of the cost of housing, for either renters or mortgaged homeowners, is for debt payments.
  • Debt resets on sale, and sales happen on avg ever 7 years.   70% of homeowners have a mortgage, and rising.
  • Therefore if we had debt free housing, then many would pay 75% less for housing, or save 22-45% of our income.
  • We can transition housing from market-based to debt-free by owning for the long term.   Since individuals and investors generally do not do this, we need a different entity that thinks long-term.
  • New and special non-profits that buy housing can pay down the mortgage with market rate renters– then it becomes debt-free forever.   The non-profit has to be structured to not allow new debt or selling-out.
  • Buying an apartment building, and keeping it full of market-based renters will pay for the mortgage.   Wait a while and it becomes debt free.    This is a long term strategy.    Certainly by 30 years, but usually much before that, there is surplus income from market rents above the mortgage plus other expenses.
  • The benefit of these future debt-free, therefore subsidized, rental units can be any set of people that the non-profit is designed to serve.
  • I am interested in those that work in public-benefit (non-profit) organizations, but it could be union members, or teachers, or government workers or anything.
  • This form of endowment for organizations makes financial sense compared to invested-money endowments.   Also, it can build community and reduce commuting.
  • Donors that would endow organizations might be shown that this is a good way to create a lasting positive legacy.
  • Government can help, but is not necessary.   Ways it can help:  Fannie and Freddie mortgage support, which is available to all, is a huge help since it takes the risk of a 30 year mortgage at a fixed interest rate.    Could be reduced interest loans.    Could be source a preferred source of housing units, maybe that are in financial distress.   Might not tax employees on the subsidy as income.    Might get the county/state to not charge real estate tax because it is owned by a non-profit and is to benefit non-profits.   But we do not want to give up too much freedom by getting government help.
  • If there were many debt-free apartment buildings, then an exchange system could be set up, so employees have many choices of where to live, and could even change employers, stay in their apartment, and not lose the subsidy.
  • Subsidized housing provides financial security both the the employee and the public benefit organization.
  • Ideally 5% of a city’s apartment buildings would be public benefit housing.

Critiques and responses:

Tying housing to employment can lead to abuse like company towns a hundred years ago.
Answer:   We can reduce this issue by detaching the apartments from the employers with separate ownership.    Another diminishing of this issue might stem from having subsidize employees from several non-profits live in the same apartment building (this can be done by having the donor select a set of public benefit organizations to support).   Also, company towns were mostly remote mining towns where there was little choice in employment or housing.

A public benefit organization might later want to sell the apartment buildings to raise cash or focus on their mission.    Answer: since the building would be owned by a separate non-profit from the ones that it is benefiting, there is no line of control to induce a sale.   Since some of the non-profits goes away, we need a way to expand the set of organizations that get a subsidy while staying within the interest of the original donors.

Someone that is getting a subsidy will have a difficult adjustment if they move into market-based housing.   Answer: true.   Not sure how to avoid this other than to allow someone to stay in their unit for a period after their employment stops.    This is particularly an issue for retirees– is there some point that someone gets to continue their subsidy as a retirement benefit?

People want home ownership not to live in rentals.    Answer:  true, this first approach is a rental-like system.    Maybe there can be some experiments in debt-free housing that is owned (but still transfers to new owners without debt).     The rental approach seems easier to start with.

Will this subsidy just look like lower rent from a rent-control point of view making it difficult to have ex-employees stop receiving the subsidy?    Answer: Since the subsidy is given monthly by the non-profit, and it is taxed as income, I think it can be distinguished from simply a low rent.

This is nothing new: it is happening already at Universities and Churches for their communities.  Answer: True, but it is not available to smaller non-profits– this is a way to spread a good idea.

This is complicated, so it will not scale.    Answer: At first it is complicated, but if it is successful, then model legal agreements and donor pitches can be refined and replicated.

Who would possibly finance such a project?   Answer: We hope this will fit fairly normally into the banking and Fannie and Freddie mortgage system, but we are also building a Credit Union that might help:    http://creditunion.blog.archive.org/

Are you going to try it?    Answer: I would like to try it in the San Francisco or Richmond California area, where the Internet Archive owns buildings.   The next step is to find people that know more about this.

You are a newbie at housing, who are you talking to?    Answer: I have been fortunate to talk with some great SF based people who have worked on affordable housing, and I have been introduced to some fascinating people through the MacArthur Foundation.    At this point it is still just talk, but the first reactions is that this is somewhat novel and refreshing.   It is novel because it is not as wrapped around government subsidies, and it requires long term thinking (delayed gratification).

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My Blog Experience 1 Year In

Posted on January 31, 2012 by brewster

I started this wordpress blog a year ago ( http://brewster.kahle.org )– pretty with-it, huh? Soon I will open a Friendster account ☺. I basically write what I would write in my journal: first draft ideas and inventions, and a yearly paper usually on how to make the world a better place.

A few observations:
• It is somewhat unnerving to be public on subjects I used to be private.
• At first first I got about 5 readers a day, until I got a twitter account and would announce some of my posts.
• Now I get about 20-50 readers a day depending if I have posted on twitter.   Humbling because the Internet Archive gets 2,000,000 visitors a day.
• On twitter, I have drifted up to about 1,000 followers in 6 months (81 tweets– I try to make them worthwhile). So maybe 7.5% read a post if I tweet it.   Not sure how people find me on twitter, another mystery for another day.

What are other people’s stats?  I would love to know.

My favorite posts:    Debt Free Housing, Custom Schooling (class size between 1-4), Small Scale Fantastic Fish Farming, and Michael Hart Memorial.

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