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Redigi gets to live another day

Slashdot is reporting that selling used MP3s has been ruled legal. Unfortunately, Slashdot jumped the gun on that–it’s not quite what happened. Capitol Records asked a judge to shut down Redigi, and the judge refused. So Redigi can continue to operate, at least until the case goes to trial.

That in itself is a victory. But this isn’t the Super Bowl, where it’s just one game. More like the World Series.
Read More »Redigi gets to live another day

How to turn around an automaker

So if you’re a CEO of one of the Big Three automakers, you have to fly a private plane, as corporate policy, for safety reasons.

Congress suggested they save money by flying first class, or plane-pool at the very least.I guess the problem with flying first class is that they might run into some angry shareholders. And maybe one or more of those angry shareholders would recognize them and beat the snot out of them?

But that raises another question. Speaking as someone who lost a lot of money in Ford stock (but back in 2000 or so, so don’t cry too hard for me), how many of those shareholders would have enough money left to fly first class? The angry mob would have to be sitting in coach, right?

But seriously. There’s a lot wrong with the three domestic automakers and cutting the corporate jets isn’t going to fix the problem, at least not alone. But let me tell you a story.

In the mid 1990s, I was briefly the treasurer of a student organization while I was in college. My organization had a serious cashflow problem. At midyear, I estimated the remaining expenses for the year based on bills from the first half, and came to the conclusion that we were spending more money per member than we were taking in.

I made this startling discovery by dividing the amount of money we were spending by the number of members we had. It was a bigger number than the amount of money we charged to be a member of the group.

Sure, it’s sixth-grade math, but someone had to do it.

The problem was that I faced a room full of good-ol’-boy, stubborn German Lutherans, some of whom had difficulty doing sixth grade math, and I just couldn’t convince them what we needed to start charging more.

I couldn’t balance the budget by cutting things, but I figured being $100 short at the end of each month was better than being $200 short. And I knew it would get my point across. So I started slashing line items like the stingy Scottish miser I am (and was). Cable TV? Gone. Telephone service? Gone. But most importantly, everything related to parties and beer got cut. That sure got the good ol’ boys’ attention. After all, the only thing more important to a German Lutheran than stodgy hymnals and poorly maintained pipe organs is beer.

When I refused to sign any checks related in any way to the annual Super Bowl party, I got the changes I needed in the budget. They got a slightly cut-down party, and I got the bank account balance back up above zero. This was a compromise, because I wanted to have a surplus at the end of the year. You know, just in case anything broke sometime and needed to be fixed or replaced.

Sometimes you make cuts in the budget not because it’ll balance the budget, but because it sends a message.

If I were the CEO of an auto company, I’d get the rules changed so I could fly in commercial aircraft. I might even go so far as to fly coach. And I’d get rid of those planes.

I’d also get rid of the executive cafeteria. Bob Lutz argued in one of his books that the executive cafeteria isn’t just a perk, it’s a great place to get work done. The problem is the message it sends. I’m not an auto executive, but somehow I manage to get my fair share of work done over a microwaved lunch from Costco that I bring from home every day and eat at my desk.

Incidentally, my boss eats lunch at his desk too.

I don’t need to eat gourmet food provided by the company behind locked doors in a lavish room to be productive. And if you do, you’re not creative enough.

I’d go even further than that, though. I read that Rick Wagoner made $14 million last year. A $14 million salary suggests that you’re the executive of a successful and growing company. Rick Wagoner is not. Time for another story.

In 1997, there was a struggling computer company in Cupertino, California. This struggling company merged with another struggling company, one that specialized in trying to sell underperforming, overstyled computers that ran Unix. I say trying because nobody was buying.

It wasn’t long before the CEO of the struggling company departed, and the erstwhile CEO of the company he bought became interim CEO.

The interim CEO gave himself a base salary of $1. One lousy dollar. The bulk of his compensation came in bonuses and stock options. I don’t know exactly what his motivation was, but it tied his yearly compensation to performance.

It worked. Prior to his taking the helm, pundits had the company on a deathwatch. I don’t have to tell you how the company is doing today or how it got there. All I have to tell you is the name of the company was Apple, and the executive was Steve Jobs.

I don’t know if Apple would have turned around if Steve Jobs had taken a more traditional compensation package. But it’s safe to say that Jobs is highly motivated. And while I personally don’t care much for the products his company makes, he’s obviously successful.

Taking a page or two from Apple’s book seems like a good move for car companies, starting with executive compensation. How Apple manages to remain highly profitable and successful with a market share of around 10 percent would also be a good case study for U.S. automakers, since it’s clear they’re going to have to live with a smaller market share than they’ve been used to having, at least for a time.

Turning the Big Three around isn’t going to be an easy process, and it’s going to take a lot more than a $25 billion loan from the government to get it done. A true turnaround is going to require a change of culture, lots of shared sacrifice, and the motivation to think long term, far beyond the next quarterly report.

Changing things like corporate jets and corporate cafeterias won’t balance the budget, but it’ll help in the shared sacrifice and changing the corporate culture.

And in the long run, maybe some of those perks can come back some day. I don’t know this for certain, but I’d be willing to bet Steve Jobs doesn’t eat lunch at his desk.

How to find motivation to balance your budget

This week I read a story on Get Rich Slowly about a couple who refuses to budget. The conversation ended when the person who needed to budget bragged about getting five shrubs on sale for $10 each. She didn’t need them, but the deal was too good to pass up.Consumerism is an easy trap to fall into because of easy credit, and the messages are all around us. Most people who know me probably categorize me as an extreme cheapskate. Certainly there are lots of things I could be doing that I don’t, but even by doing a few little things you can improve your financial situation immensely.

Watch less TV. I think this is a really big one, because TV is the primary source of marketing messages. It’s not just the commercials either. The TV shows give lots of messages about how you’re supposed to live. It’s not a realistic picture.

At one point in my life I was able to go a year without watching TV, just watching the World Series each year. I watch more now. I try to catch This Old House on Sunday evenings and sometimes I’ll watch a show with my wife, so I probably watch 3-4 hours a week now. But that’s a lot less than average.

My advice to someone who wants to watch more TV than I do would be to watch older movies (1940s-1960s), as that would make it harder to compare your life to someone else’s. Plus, there’s a lot less product placement and other marketing shenanigans going on, and if you watch it on video, no commercials.

Have realistic expectations. A lot of 20-somethings seem to think they have to have furniture as nice as their parents. That’s unrealistic and sometimes impractical. The previous generation didn’t always have what they have now. Walk into the home of a 50-something, and some of the furniture will be new, but some of it will be 10-15 years old, possibly more. The furnishings were bought over the course of many years. Plus, nicer things are impractical when you have kids running around. There will be spills and stains and dirt. Kids need to be taught to respect things, but what’s the point of ruining a $1,000 sofa to teach the lesson? It’s better to put something older and cheaper in harm’s way instead–much easier on the credit card and on your sanity.

Budget. A budget isn’t some mystical thing. It’s a simple list of your money as it comes and goes. It can be as simple as a spreadsheet. In one column, list all your sources of income–your paycheck, plus anything you make on the side. Add up that total.

In another column, list your monthly expenses. That’s everything–your car payment, rent or mortgage, credit card bills, utility bills, gasoline, food, and entertainment. You may have to save your receipts for a month to do this realistically. Add up that total. Hopefully it’s a smaller number than the first total.

I first did this in college when I was treasurer for my fraternity. We were in serious financial trouble but nobody knew why. I grabbed the checkbook, did the simple analysis I described above, and figured out we were spending more than $400 per member every month. We were only charging $380 a month for people to live there.

When we couldn’t raise rates, I started cancelling things. I cancelled the Super Bowl Party. I cancelled cable TV in the lounge. If it wasn’t a basic necessity of life, it went. It made me unpopular and it didn’t balance the budget, but it cut the shortfall.

I’m guessing most of the people who voted against me raising rates are having more trouble paying their bills today than they need to.

The expenses involved in a personal budget are different than for an organization, but the principles are identical. You still need to have more coming in every month than comes out, and if you can’t figure out how to make more, the only way to have more money is to spend less.

Reward yourself. Practically. A few years ago my budget was tight and I’d taken on an expensive hobby. Then I realized what I spent on food every day. It started with $1 for a cup of coffee and a doughnut. Lunch was $5 at the cafeteria. And usually I spent another dollar or two in the vending machine. I let my ego tell me it wasn’t worth my time to pack a lunch.

Then I did this math equation: (365-52-52-10-10)*7 and came up with $1,687. I was spending $1,687 a year on (mostly) bad food because I thought I was too important to pack my own lunch.

I was also making about $15,000 a year less than I make now. Dice.com tells me I’m slightly underpaid now, let alone then. Who was I kidding? That $1,687 was a luxury I couldn’t afford.

So I went to the store, bought a Thermos and a big can of coffee, bought some instant oatmeal and some breakfast bars and granola bars, and started packing fruit and sandwiches. What was left became my hobby budget.

I couldn’t motivate myself to cut that expense just to have more money, but being able to afford something I otherwise couldn’t was enough motivation for me. Eventually I shrunk the hobby budget and started using that money to pay down debt.

But had my situation been different I don’t think it would have been a bad thing, necessarily, to keep using that to fund a hobby. It’s easy to get discouraged when it seems like everyone else is passing you by, even if they’re passing you by on borrowed money.

Look at opportunity cost. Opportunity cost is about the only thing I remember from college economics. The theory goes like this: The cost of a new car isn’t $20,000. It’s what else I could have done with that money. So the cost of a new car is a plasma TV ($5,000), a high-def DVD player ($500), a nice computer ($1,500), a new high-efficiency furnace ($4,000), a nice vacation ($3,000), all three current generation video game systems (roughly $1,000), a new living room set ($2,000), and you’d still have $3,000 left to replace two or three appliances with high-end models, or all your major appliances with new low-to-mid-range models.

Would it be worth driving an older car for a few more years to be able to afford to go on a home-improvement binge like that?

Or here’s the way I prefer to look at it. I could invest that money conservatively, using a no-load index fund that just does exactly what the Dow Jones Industrial Average does. Historically, money invested in the DJIA doubles every seven years. Some seven-year periods are better than others, of course. If I dump $20,000 into that kind of a fund, it will be worth $320,000 in 28 years.

The sticker price on the Honda Civic sitting in my driveway was around $15,000, but that’s not what it cost me. It didn’t cost $16,500 either (I paid some interest on it because I didn’t have the cash to buy it outright immediately). It cost $264,000.

I know some people look down on me for driving what’s now a five-year-old car, but I can build myself a very nice nest egg just by keeping my cars two or three times as long as everyone else does. Will they still be looking down on me if I retire at 65 and they have to work 10 more years because they still have debt to pay off?

If the cost of a secure future is driving a car typical of what 16-year-olds drive, I’ll pay that price. It’s a bargain.

Don’t pay interest. If you have a choice between financing something and waiting a while and paying cash, wait and pay cash. Paying interest is like paying rent. It’s paying money off and having nothing to show for it in the end.

I do use interest-free periods to buy things because that gives me a little more time to get the money together. I financed a furnace earlier this year because they offered 6 months same as cash. I probably could have paid cash on the spot but it would have been less comfortable. Being able to spread my payments out over six months allows me to pay more on the mortgage, which does charge interest.

Does God have to heal?

Strong religious content again. I make no apologies. People who are offended by this kind of stuff are probably long gone anyway.
My friend and co-worker Charles Sebold helped inspire this one. Charlie’s page is worth a read. He writes with considerably more brevity than I do, but if you like the kind of content I produce, you’ll probably like Charlie too.

Charlie pointed out an alternative reading of Genesis 3:16 on Saturday that dovetails nicely with the interview I conducted Sunday night. Genesis 3:16 is a verse that feminists hate, mostly because they read it incorrectly. True, it’s been misapplied over the years. Here’s how it reads:

Then God said to the woman, “You will bear children with intense pain and suffering. And though your desire will be for your husband (or: And though you will desire to control your husband), he will be your master.”

Some men wrongly use this verse to lord over women. Charlie raised an interesting question. Keep in mind that when Jesus spoke, He used parables that people would understand. Doesn’t it stand to reason that He learned the technique from God the Father? Also keep in mind that we, God’s people, are referred to as the Bride of Christ. And keep in mind that Adam and Eve sinned because they wanted to be like God. Pure power trip.

So let’s paraphrase it in light of that:

Then God said to the woman, “You will bear children with intense pain and suffering. And though humanity will desire to control Me, I will be your master.”

Eve undoubtedly already knew the desire to control Adam. Undoubtedly if she desired to control God, she also desired to control Him. I’m sure she got the metaphor instantly. I’m sure Adam got it too–he understood control.

We still have control issues today. It tends to fall into one of two extremes. One extreme denies that God is in control, whether it’s by choice or ineptitude, and believes that God won’t reach down and help us. An awful lot of mainline denominations fall into that trap, wittingly or unwittingly. Many fundamentalists hit the other extreme, teaching that if we say or believe the right things, God is obligated to perform a miracle. St. Louis Rams superstar Isaac Bruce falls into that category. During the Rams’ Super Bowl season, Bruce totaled his car. He threw his hands off the wheel, cried out, “God, save me!” and believed God was obligated to save him. Bruce walked away from the accident. When asked why the same thing didn’t happen to Payne Stewart when his plane went down, Bruce said Stewart didn’t say the words. Now, while it’s very admirable that Bruce’s gut reaction was to say “God, save me!” instead of one or a series of four-letter words your mama didn’t teach you, it’s wrong for Bruce to believe that God is obligated to do anything, and it’s wrong for Bruce to judge people whose lives God chooses not to preserve.

What Isaac Bruce forgets is that God’s priority is to get as many people into heaven as possible. Yes, God loves us and cares about us and cares about what happens to us. He cares when I lose my keys and how many stoplights I have to sit through on my way home late on Friday nights. But if for some bizarre reason me sitting through 10 lights for five minutes apiece could help someone else get to heaven, it’s gonna take me an hour to get home. Every time.

So, when my work is done, I’m finished, no matter what age I am or what condition I’m in. The reason for that is really simple. Those of you who are married will understand this. Being alive and on this Earth is like being engaged. When you’re engaged, you can spend a fair bit of time together, but not as much as when you’re married. Your desire to spend more time with one another, and to do things you can’t do when you’re not married, are what drive you to get married. And whether you’re willing to admit it or not, you long for that day. Some people lie to themselves and try to tell themselves there’s something better than that day, and their lifestyle reflects it, but in reality by living that way, they’re in their own way longing for that day.

God has that same longing for us. He longs for us to cross over and be in Heaven, where He can spend more time with us, and higher-quality time with us. God looks forward to our deathbed like we look forward to a wedding day.

So, yes, God wants to heal us, because He doesn’t like watching us suffer. But that’s secondary. God wants us to want Him to heal the people we love. Somewhere I read a very interesting study titled, “Why God Needs a Human.” Interestingly, Jesus’ hands were tied when He went back to His hometown, because in His hometown, the people had no faith in Him. He tried to perform miracles there, but they weren’t as spectacular nor as numerous as anywhere else. So our unbelief in what God can or will do does seem to hinder His work.

So yes, we are supposed to want God to perform miracles on the people we love. Intensely. And when He does, the results are often spectacular. My friend Emily totaled her car a few months ago. She didn’t walk away from the accident like Isaac Bruce did. So some might say Emily didn’t have as much faith as Isaac Bruce did. To that I say, well, you don’t know Emily, and I don’t know Isaac Bruce, and it’s not my place to say anything about anyone else’s faith. But Emily should not be alive today. She says the only thing she remembers about her accident is an angel coming and getting her. And Emily was found laying in the road, where there was danger of her being run over. I would argue she was there for good reason–the dangerous place is also the place you’re most likely to be found quickly. And the same angel who could take her out of the car can just as easily be there to protect her. Potentially there was more than one.

When Emily tells that story, people get goosebumps. When Emily talks about her comeback, people get inspired. I didn’t know Emily very well before her accident–we met about a month before it happened–but at the very least, this incident in her life gave her another tool in her arsenal. And thanks to that, God may get another engagement or three He wouldn’t have had otherwise.

God knows–and only God knows–when it makes sense to heal. Our job is to be concerned on behalf of our brothers and sisters. But in those cases when God decides it’s time to call someone home, it’s not up to us to question the timing.

That’s much easier said than done. I wrote that bit about 4 pm on Sunday, in preparation for an interview for my documentary. Well, it’s not my documentary. I deliberately separated myself from the story, so I’d go in knowing just the very basics–a young couple from our church, named John and Karin, had twins in early September. Tommy, the boy, is completely healthy. Katie, the girl, has a heart condition. You can instantly tell when you see Katie that all’s not well with her. Don’t get me wrong–she looks fine. But when Katie and Tommy are in the room, you can’t hear Tommy breathing unless you listen for it. You can hear Katie. They’re short, desperate breaths. Tommy breathes about 60 times a minute, Karin said. Katie breathes 100 times.

I had John and Karin tell me the story, more or less from the beginning. Twins, a boy and a girl. Wonderful. Then Karin notices a yellow sticky-note where they were keeping Katie. The nurse wouldn’t give a straight answer. Heart murmur. That’s OK though. A lot of babies have what looks like a heart murmur and it goes away. Katie’s didn’t go away. Enlarged heart. OK, so you wait for the baby to reach 11 pounds, then you do surgery. Katie wasn’t growing.

I saw Katie and Tommy’s baptism, through the camera eye. I filmed the entire service. One of the church members wanted John and Karin to tell their story on video. John and Karin were very open to the idea. I agreed to the project, assuming certain resources would be available to me. It took about 45 minutes one Tuesday afternoon for all those resources to come together. OK, God’s pretty clearly behind this one–all the doors are wide open and the sun’s shining in and I do believe I left my sunglasses in the car. Alright alright, Dave can take a hint or twelve.

Pastor broke down while he was baptizing Katie. I caught the whole episode on tape. You can tell a lot about a Pastor from the way he handles infant baptisms. I’ve seen Pastor baptize dozens and dozens of babies. One has cried. Exactly one. Pastor has cried once, and that was with Katie. He loves her like his own daughter. So do a lot of people in the congregation.

Well, come late November, Katie had a growth spurt. Here she is now, the end of December, 10 pounds. That’s not much for four months, I know–I was born 10 pounds. But 10 pounds is close enough. Her surgery is Wednesday. It’s going to be a 10-hour ordeal. There’s little question that the surgery will make her a normal baby. The question mark is whether she’ll survive the surgery. Many don’t.

John and Karin sat down and talked with me for about 30 minutes, telling me their story. Everyone involved in the project knew what they wanted John and Karin to say–they knew John and Karin and they’d heard them talk. What they didn’t know was how to coax them into saying the good stuff. After a couple of conversations with people who knew them, I knew, mostly instinctively, what questions to ask to bring the story out. Four years of journalism school proved useful after all.

So I rolled the camera, played with the lights to get John and Karin to look good, and started asking questions. They answered the questions I meant to ask, rather than the questions I actually asked. Easiest interview I’ve ever done, far and away. After 20 minutes, Karin had to leave with Katie–she was uncomfortable in the lights. Karin apologized. I told her not to. At that point, John said there were three things he wanted to say. I told him I had plenty of tape. So he poured his heart out. Some of it I can’t use. But some of it was among the best stuff to come out of the interview.

The gist of it: They know God has a plan. They don’t know what it is, they don’t understand everything. But they trust Him. They trust Him more than I do.

By that time, Pastor was there, along with some of John and Karin’s friends. They wanted to pray for the whole family and annoint Katie with oil, as James 5:16 says to do. I caught that on tape too, along with some of the chemistry of the group. Pastor wanted me to emphasize the importance of small groups with the video, so I wanted to capture the essence of the group. The group was an awful lot like mine. That’s good. John and Karin said without the small group’s support and concern, they wouldn’t be what they are right now. I know. Without my small group, I wouldn’t be either. And I thought I had the coolest small group in the world, but this group is just as good. Same love, different people, that’s all.

There must have been 15 people in that room who’d have given their hearts to Katie if it would help. Katie didn’t understand what was going on. She looked over at her dad and her brother, then up at her mom and stopped crying. A room full of people confessed their sins to one another, as James 5:16 says to do. That’s awkward, but none of that stuff will leave the room. I’ll destroy the audio portion of the tape if it turned out–I was having problems with the microphones at that point. A room full of people prayed with intensity. And pastor pulled out a vial of oil, annointed Katie, and prayed for strength for her. John and Karin were holding their twins, sitting in front of an altar, Pastor standing right behind them. It was a beautiful picture–John and Karin sitting there. Pastor’s got their back. And God’s right behind all of them. Meanwhile, they were all surrounded by a tight circle of friends, hands outstretched.

By the time it was over, I think everyone except Tommy and Katie was crying.

I took tape home last night, but I didn’t take any equipment. Right now I don’t need to be editing video. I need to be praying that Katie makes it through Wednesday and sees Thursday. And the next Thursday. And let’s see… There are 52 Thursdays in a year, so about 4,000 Thursdays after that.

The tape can wait.