Rules - Summer Solstice 2021

If our year of living dangerously through a postmodern pandemic has taught us anything, it’s that the people of this country are not inherently rule-followers. This shouldn’t come as a surprise. This country was founded on ideals of personal freedom. But in recent decades we’ve witnessed the steady rise and corruption of libertarianism spread throughout the nation. Libertarianism advertises itself as a live and let live philosophy but increasingly has become live and let die. Ironically, the same generation that cut its teeth by pushing the limits in a flower-power fueled counterculture revolution has now given birth to Q-Anon.

 

As I said in the Notes & Asides of the last essay, Karen’s niece was living and working in China throughout the past year. So, we got a firsthand account of their response to Covid, the outbreak of which admittedly was less severe in her city than in Beijing or Wuhan. But even there, they were under strict lockdown for weeks, including needing passes to leave the house. They had rigid travel restrictions, stern mask mandates, rigorous isolation of infected people, and stringent contact tracing. All of which were enforced.

 

And yet, even in the depth of the crisis when no one knew how far or wide the pandemic would spread, or even how deadly it might be, the government bootstrapped food delivery throughout the country so that no one went hungry, and ensured the population had access to medical resources so that no one went without treatment.

 

It was a long, brutal austerity march like only the Chinese can envision and execute. But when it was over, it was over. The lockdowns were released and the population got mostly back to normal by last summer. In the intervening year, there have been spot flares of cases which they’ve isolated and treated but not major or sustained outbreaks. No more lockdowns.

 

Don’t like the example of China? Well, jump across the strait and look at Taiwan. Or Singapore. Or South Korea. Or Japan. All had comparable results from imposing similar sets of rules. None had even one tenth of the cases we had per million population. Never mind anything approaching comparable deaths. They chose short-term sacrifice for long-term gain.

 

As we all know, our country chose a different path. Last spring, the healthcare system in New York City came within a hair’s breadth of complete collapse, as a friend living in Brooklyn at the time attested to us, as did a doctor who lived upstate. Los Angeles, too, came perilously close, although somewhat later, after we should have learned. We could have, and should have, mobilized and organized resources from around the country to have on hand for any city, county or state that needed them.

 

Instead, while the countries in East Asia distributed masks and medical services, we stockpiled guns and ammunition thinking the apocalypse was nigh. If it had been, it would have been self-inflicted. They chose to implement rules for public safety. We chose laissez-faire. They picked a path of recovery; we blazed a trail to insurrection.

 

We had an opportunity to stem the pandemic early. We chose to squander it. All in the name of personal freedom and “liberate” politics. Where in East Asia, they held back a rising tide of infections by establishing rules based on proactive, science-based precautions, we chose to see the virus’s associated deaths as acceptable economic losses. Where we saw them as losses at all.

 

I’ve talked about this before, and likely will again. Much of this can be ascribed to a failure of leadership, as many politically driven crises can. This time, it cost lives. Over half a million total, a thousand more each day when I started this essay. All because in rather unchristian fashion, we the people valued a twisted, often highly manipulated view of our blessing of liberty over our country’s domestic tranquility and general welfare. So, for self-centered, self-serving reasons, we sacrificed the public good.

 

This isn’t a new concept to me. While I was working, I watched similar unfold firsthand albeit in a vastly different venue and on a vastly smaller scale. But the experience taught me that it doesn’t take long for people to adapt to the situation on the ground, especially when rules go unenforced.

 

Back in the mid-90s, I traveled to Puerto Rico. My company’s communications system was going through a formal demonstration for the US Navy aboard several ships coordinating with land-based terminals stationed in the US Virgin Islands. As the developers of the communication system, our company had four engineers assigned to each ship, of which I was one. They flew us into San Juan a few days before we were to set sail and put us up in a pretty low-rent casino, at least by Vegas standards, where several of us brushed up on the laws of probability while freaking out the pit bosses. Mostly burning through the per diem we wouldn’t be able to spend on our upcoming all-expenses-paid, two-week, midsummer Caribbean cruise.

 

San Juan at the time was a high crime city. All the houses, even the most improbable breezeblock shacks, had steel bars over every door and window. Even middle-class residences had chunks of broken bottles embedded in the concrete atop the walls that formed their private compounds.

 

Before we’d flown down, we’d been briefed on the differences between San Juan and St. Petersburg, which mostly amounted to a series of warnings. We’d been warned to avoid the local women. We’d been warned to avoid going out at night. We’d been warned not to attend the cockfights. We’d been warned not to get drunk, practice our gutter Spanish, and generally act like ugly Americans. Any of which we were told might get us killed. Other than that, we were free to see the sights and enjoy a day or two of fun and sun on island before we put to sea.

 

What they didn’t warn us about was driving. Which was convenient as they didn’t rent us many cars.

 

Puerto Rico is a US territory so no special driver’s license is required. They even drive on the correct side of the road. I am not sure how insurance worked as none of the cars was rented in my name. I expect this was one of the few times purchasing the add-on at the rental agency might have paid off. But that was where most similarities to my driving experience ended.

 

Twice we had to drive from our casino hotel in San Juan to Roosevelt Roads Naval Station. Once for an all-hands meeting and orientation. The second time to make our departure aboard ship. That trip is about an hour and a quarter more or less depending on whether you take the highway through the center of the island or the less direct, windier coastal road.

 

The first time out, we piled in four to a vehicle and opted for the highway through the interior which was theoretically quicker. Quicker but I am not sure safer.

 

It’s hard to describe exactly what that trip was like. The highway, as I remember, was mostly a four-lane affair, two in each direction separated by a median. Not much different from I-95 where I grew up. But I remember that it wasn’t limited access, rather that it had lights where it intersected with the other highways we needed to turn onto. That’s just my lingering impression. Thankfully I wasn’t in the front so didn’t get the full, panoramic view. When we were moving, things were mostly normal, or at least not too much crazier than other urban landscapes and highways I’d driven in at other times in my life with people weaving in and out closer than I would like at speed. It was the interchanges and intersections where things got interesting.

 

The best comparison I have for that is of driving after a hurricane when all the traffic lights are out from lack of power. In Florida, we are supposed to treat every intersection that normally has a working light as a four-way stop. But in reality, larger intersections become a free-for-all. People always assume their direction has right-of-way because it’s the more important or larger road. Horns blare, tempers flare, people blow through with barely a pause, never mind a yield.

 

In Puerto Rico, that seemed like the situation every day. At the interchange between two highways, complete with lights and well-marked turn lanes, cars snaked left to turn right, cars spilled into the medians and the breakdown lane to bypass others and gain advantage. No one fully ceased moving regardless of the lights, which were more of a suggestion than a hard and fast rule. If a driver saw an opening or an advantage, s/he took it. “Opening” is a generous term. Kind of like DC driving rules: If you could insert a corner of the car into a space between two other vehicles, you’d eventually make it fit just by continually creeping forward and claiming space in an elaborate game of chicken. As long as you kept leveraging your advantage without actually making contact.

 

What fascinated me most was not how the locals drove. I’d already seen a number of different customs in different cities and countries I’d been in.

 

In Boston, the unwritten rule is that you don’t make eye contact with another driver. Because the moment you do, you have acknowledged you’ve seen them which they take as permission to do as they please because it’s now your responsibility to avoid them.

 

In DC, you automatically yield to diplomatic plates regardless of right-of-way or rules of the road. Those guys have immunity and know it. You also avoid the people shaving or applying mascara in their rearview mirror or the people with a hardback book propped up on their steering wheel in 35 mph bumper to bumper traffic at o’dark early in the morning (true story).

 

In Spain, I was told that if you had a choice between hitting sheep or hitting a shepherd on a mountain road, it was in your best interest to hit the shepherd. You would only pay compensation for him once, where with the sheep you would pay for the generations of offspring it might have. Dehumanizing advice but there it was.

 

In rural Mississippi and Alabama, Georgia and Florida, you don’t go too fast or too slow, never mind cross the center line or even the outer lane marker unless you looking for a rather expensive ticket in places like Meridian, Madison, Marietta or Raiford. Basically, you don’t drive in these places with out-of-state, or sometimes out-of-county plates. Or on I-95 in the 80s or 90s much south of Jacksonville or much north of Miami if you are driving while black.

 

In rural one-track roads in Scotland, it was a race to see who could to get to the pull-off first and let the other driver by. In Wales, you just had to be mindful not to flip the three-cylinder car on the tight, wet, mountain corners that most English drivers took at speed. In England, you could easily get stuck on a roundabout like Charlie on the MTA.

 

And that’s without ending up facing a car weaving toward you in your lane on a well-lighted divided road after midnight on Halloween until you ditch for the median with palm to horn like an air raid siren which goes unheeded in the blur of alcohol trailing the car that passes you by (true story). But I expect that could be a holiday tradition in any US city or town, not just Seminole.

 

No, what fascinated me was how little time it took for the people I was with to adapt, or more revert, to the rules being off. Less than zero. Almost instantaneously, they drove like they were born to it. Using medians and breakdown strips as auxiliary traffic and passing lanes, Turning left from the right across three lanes of moving traffic, wedging a bumper between two vehicles with three horns harmonizing while curses and threats were issued in Spanish, English and some hybrid creole, complete with multicultural, international gestures in case anything got lost in translation.

 

I’d worked with most of these individuals long enough, and under similarly stressful circumstances, to understand that the situation would have been vastly different had stricter rules been on the table and enforced. For example, witnessing one of my compatriots sent home from Wallops Island after getting tagged by the installation police for doing over 100 mph across a bridge into the facility when he thought no one was around, despite having been warned that federal cops have absolutely no sense of humor for that. Or any of a myriad of rules most of us might consider polite, social conventions that I witnessed in the lab when they knew there would be no repercussions as I discussed in Switching Sides.

 

The rules they followed, the rules almost all people in such circumstances follow, is the example set by leadership, the rules and conventions their leaders and peers choose to accept or enforce, not the rules on the books. And when that leadership is absent or turns a blind eye, they consider all other rules to be optional. In this case, ambiguous or ambivalent rules, ones generally long adhered to and ingrained in other circumstances, were turned off like switch, despite what it might mean to the safety of those around them, or the public welfare in general. Aggressive behavior that only benefits the individual over defensive behavior that benefits everyone.

 

Which is what we saw much of last year with our pandemic response, from our president to our governor to a county commissioner, as they all drove home their “liberate” politics fed by a well-coordinated disinformation campaign, whether on masks, vaccines, or voting.

 

Generally, I don’t have a problem with people making their own decisions. If they want to commit slow or even fast suicide, that’s pretty much is a personal choice. People make bad decisions all the time. They drink, they smoke, they overeat, they engage in other risky behaviors that we, as a society, usually end up paying for one way or another.

 

Where I do have a problem is when those behaviors directly endanger others. Or when those decisions are based on orchestrated disinformation and conspiracy theories, especially for personal or economic gain. It may be your right to smoke. It’s not your right to promote smoking as health benign or nonaddictive, or market it to kids. It’s not your right to deny its links to cancer. It’s not your right to smoke in public spaces, or even certain enclosed private spaces, and endanger others with your choice, thus denying them their own. Just as it’s not your right to spread a disease during a pandemic that can absolutely collapse everyone’s healthcare system to where even getting routine emergency care becomes a roll of loaded dice. Ask Italy how that went. Or ask Brazil.

 

And specious economic arguments about the increased cost and inconvenience of getting your dog’s anal glands expressed don’t really stack up well with me against over half a million dead (true story). Especially when falling out of the mouth of a political leader during a public meeting. Especially a Q-Anon spouting elected official who stood firmly against any mandated response, public or private.

 

A few weeks ago, we had a technician from a company we’ve used before out to check our AC. By that point we’d both been vaccinated with enough time for full effectiveness. As had our tech, as it turned out. But when he arrived, all three of us were wearing masks. For us, that was as much providing a good example as well as gauging a stranger’s comfort level and circumstances before deciding how to proceed forward. For him because it was still company policy. This was just after our governor had rescinded all the local mask mandates despite our state still having the highest number of daily cases in the country.

 

After a brief exchange of information, we all decided going maskless was ok. But we still maintained social distance. And yet, had the tech said he would prefer the masks, we would have honored that even in our own home.

 

He then related that when the mask mandates first came out, he hated them. Absolutely hated them. He hated wearing the mask but did because he had to, both because his employer and the county required it. But sometime over the intervening year, he not only became more comfortable with his mask, he now had trouble setting it aside even where he could, places like restaurants and grocery stores.

 

Some of that was from the stark reminders of his boss’s twentysomething son getting hospitalized from his infection, and having a high school friend die from the disease back in Indiana. Either way, the intervening time had integrated and ingrained both the necessity and prudence of wearing a mask to him. And yet, I strongly suspect from his initial reaction, he would not have worn one without the county or corporate mandate.

 

The lesson I took away from all this is that people take a lot of time to get used to new rules, but very little time to rules being removed unless absolutely required by threat of consequences. When left to their own devices, people follow the example of those around them, especially those they trust.

 

Trust is a funny thing. It’s not based on information or intelligence, although it is sometimes based on experience, rarely on expertise. And sometimes that trust is situational and transactional. In the case of driving Puerto Rico, my coworkers trusted that the locals knew what they were doing (or more knew what they could get away with) and imitated them. We are truly primate children who play follow-the-leader instinctively.

 

Trust is the underpinning of all modern society and social interaction. We generally couldn’t live as close to each other as we do without at least a modicum of trust that certain social conventions will apply. Laws are a matter of trust that we will all be better off obeying them, and trust that the minority who refuse will be caught and punished (at least in American justice). Even our entire concept of money is entirely based on trust and always has been.

 

But social norms are also self-perpetuating even when people can see and understand that the situation as it stands is neither ideal nor in everyone’s, or even anyone’s, self-interest. Once you start down that road, it is very difficult to find your way back. Which is why it’s important never to let things get that far out of hand.

 

It’s an abject lesson in the practical realities of unrestrained libertarianism. Without rules, without leaders who provide and reinforce a positive example, without enforcement, people only do the right thing through the lens of enlightened self-interest at best. And that’s being generous.

 

So, where we’ve been in 2020 came as no surprise to me. Or with the Insurrection of 2021, where we’re going. I’ve said before, this represents a fundamental failure of leadership. Or in the case of the past several years, a calculated subversion. It’s a Machiavellian tactic we’ll see again and again until the political environment or public tolerance changes.

 

One of the house rules we had in friendly games of Machiavelli, a game of conquest and unification in Renaissance Italy, was that you could always call to see someone’s sheet when they were reading out their orders. Misrepresenting the orders you had written was not encouraged but was not strictly against the rules if you thought you could get away with it. The heart of the game is about negotiations, and all negotiations are based on trust. Trust you are being honest. Trust you will keep your word.

 

Sowing distrust, and exploiting the resulting chaos, is a common strategy with poor or inexperienced Machiavelli players. They think they’ll score an easy victory, but in reality, unless they are very good and very circumspect about how and when to use that tactic, it’s the quickest way to lose. Or at least ensure that no one wins.

 

And sometimes that’s the only point.

 

 

© 2021 Edward P. Morgan III

Wildcard - Summer Solstice 2020

I am a big believer in participatory democracy. I always have been. Over the years, I’ve run into a lot of cynicism, which perpetually says that you can’t fight city hall. Politicians won’t listen to you anyway. Often that’s true. Except when you can and when they do. You just have to know how to approach it, and maybe get a little lucky.

In general, I am a crotchety old wizard. I live in my cave and like to be left alone. But when I emerge to engage the world, there’s often a well-timed spell involved. Usually nothing flashy but sometimes it inadvertently ends in pyrotechnics.

In previous essays, I’ve mentioned that one of the main reasons we bought this house was location. The property bordered on 400-600 undeveloped acres destined to become a county park. Just north of it was another large piece of property also optioned by the county that they were trying to figure out what to do with.

Everyone in the county wanted a piece of both of those tracts of land to use as recreational parks, a botanical garden, an art museum with studio space, sports fields, a wildlife preserve, locations for various county agencies, etc. The oddest request for space came from Pinellas County Utilities, the organization that supplies the county’s drinking water.

A short history lesson. This would have been in the late 90s. At the time Florida was involved in a water war with Georgia and Alabama, specifically over control and use of cross-border rivers. Because of an ongoing drought and increased development, as well as a diminishing aquifer, water was in short supply. Due to the shortage, that interstate infighting had spilled into internecine rivalries as counties around Tampa Bay struggled to secure water sources to quench the thirst of their growing populations. Our county, the most densely populated in the state, owned land in an adjoining county and proceeded to pump water out of the underlying aquifer, leading to a series of recriminations and lawsuits about who controlled what.

The overarching entity in charge of settling that conflict was Swiftmud (SW Florida Water Management District). Through their charter from the legislature, they have great power to mediate disputes. As a part of a tri-county settlement, our county agreed to several mandated actions so the state didn’t enter into a rob Peter to pay Paul scenario. That meant initiatives like conservation and constructing new reservoirs to capture rainwater as well as finding new sources of water if they existed.

The problem was, they really didn’t. The Florida Aquifer, one of the most productive in the world, was already strained to near capacity in trying to support the state’s agricultural base as well as major and expanding population centers such as Tampa/St. Pete, Orlando and Jacksonville. Over-pumping had already led to accusations of increased sinkhole development, a long-running issue in the state.

Without getting too mired in the technical details, there are several layers to the aquifer, each generally separated from the next by layers of partially isolating rock or ideally by isolating clay. Each layer rises and falls in an underground topography that often mimics but doesn’t completely follow the aboveground terrain. In some places, freshwater rises to the surface in the form of springs or rivers. In others, like beneath this county, it dives deep below, making water more expensive to extract.

To give you an idea, our well, which we use to water the lawn, taps a layer of non-potable fresh water near the surface (about 30 feet down) that gets replenished by rainwater and proximity to the ditch and the lake. It is considered a groundwater layer. Isolated below that is a brackish water layer, basically saltwater intrusion from the Gulf. Below that lies a freshwater layer that needs very little treatment because it is purified by the very slow percolation through the surrounding limestone. Beneath that is a second saline layer.

Each layer has a transmissivity, how fast you can draw water from without it running dry. Think of it like a water filter or a series of small pipes. You can only draw so much so fast no matter how hard you try. If you exceed that, you come up empty. Or sometimes you deplete the resource, weakening surrounding underground structures. Picture burying a balloon full of water beneath the sand at the beach. Then picture puncturing or draining it through a tube. If the balloon is close enough to the surface, the sand above can’t support its own weight. Like a poorly built dome, it collapses. You have just created a sinkhole.

In reality there is a lot more complexity to aquifers, water wars, and sinkholes but you get the idea. Sinkholes specifically only occur in very specific underground geologic terrain, not just anywhere. That fact becomes important in a minute.

So back to the county land where we started.

Because of the water wars, the county needed to show they were making a good faith effort to either conserve water or tap new water sources. On the conservation end, they began to design and implement a reclaimed water system that essentially cleaned water already available from the waste water treatment process and make it available for watering lawns, landscape and golf courses, the low-hanging fruit of county water consumption. The problem was that would take years to implement and even then, with the projected population growth rate, wouldn’t be enough.

That meant finding new sources of water within the county. The problem there was that the Florida Aquifer was pretty much already tapped to its maximum by our and the surrounding counties. Leaving aside that it would be expensive to drill deep enough to extract from it, it was the kind of zero-sum game scenario that Swiftmud didn’t really like. So, the county had to look elsewhere.

At the time, both Saudi Arabia and California, each short on water for different reasons, had developed and deployed innovative desalination plants. In both cases, their source water was an ocean or a saltwater gulf. One big problem with desalination plants is that even with the new technologies, creating drinking water from the ocean is a multistage process usually involving reverse osmosis. You may or may not recognize that term from a high school science class, but if you don’t it doesn’t matter. It’s just a process. But an expensive process.

Another problem with desalination has to do with the environmental impact of what to do with the super-salty waste water that is an inevitable byproduct. Typically, that has to be pipelined miles offshore into deep water where it won’t impact local fisheries. The outlets can’t be close to your intakes or you create a self-defeating feedback loop, which again makes for expensive engineering and infrastructure. With all that, at the time, you really had to have no other options before you went down the full desalination road.

Now because we live in Florida, which has seen a major population explosion in my lifetime and has long been short on water, there have been numerous groundwater surveys done over the course of decades. The gold standard are still the ones conducted and maintained by the federal government, specifically by the US Geological Survey. That name should ring a bell with many readers as where my wife worked for the vast majority of her career. But again, more on that in a minute.

Somewhere along the line, someone very clever looked at one of those surveys and noticed that briny layer we talked about wedged below the surface water layer of our well but above the freshwater Florida Aquifer. Brine is basically salty water, so not useful on its own, but not nearly as salty as the Gulf of Mexico where it seeped in from. Which means it wouldn’t cost as much to desalinate. And then this clever individual noticed that salt water layer deep below the freshwater of the Florida Aquifer, which also wasn’t clean or useful on its own. So, this clever individual, really a clever company, approached the county with a proposal.

They had developed an experimental technology that extracted freshwater from briny water at a fraction of the cost of extracting it from ocean water. How large a fraction I don’t remember but appealing enough for the county to consider. All they had to do was pump it out, which wouldn’t be too expensive because it wasn’t that deep, shallower in fact than the Florida Aquifer. But what to do with the waste water I mentioned? Well, why not just pump it back into the ground, into that already unusable layer below the Florida Aquifer? That would eliminate almost all the expensive logistical and environmental concerns.

The county really liked this idea. Mainly because they were under enormous pressure from Swiftmud, and by then the courts to find new water sources. Any perceived progress would do to buy them time for negotiations with the adjacent counties. Actual progress was somewhat less important.

But where to put such a project? I’ve mentioned this is a densely populated county. Land is just as scarce as water, and just as expensive to acquire without a developer’s deep pockets. But remember way back when you started reading that I mentioned the park land that had just opened up that everyone wanted a piece of? Sounds perfect right? The county already owned it. As it turns out, it wasn’t badly sited for what the company proposed. So, the county authorized some adjacent test wells and thought it was clear sailing. Done, done, and done. Problem solved as long as those wells panned out.

They did, at least according to the company operating them. So, they formally submitted their proposal. Because they had approached the county and not the other way around, there would be no competition. And because they knew the county was desperate, they crafted a sweetheart deal. The contract basically said they would construct and run the desal plant on land the county would lease to them for something like $1. The plant which would provide a minimum of 1 million gallons of drinking water a day, which the county would buy back from them at cost of extraction plus profit.

Now a million gallons sounds like a lot of water, but in a county with nearly a million people, it really isn’t all that much. But this company said, don’t worry. Based on the surveys, we can scale it up to extract at least ten times that amount without a problem. As it turns out, 10 million gallons a day was a magic number. It was nearly the exact good faith progress the courts and Swiftmud wanted the county to show. Once you threw in the reclaimed water system, that gave them a buffer. Almost sounded too good to be true.

As most of you know, with all contracts the devil is in the details. And as I remember it, this contract said that the company would build the plant on its own dime. But that the county was obligated to buy a million gallons of water a day, whether the plant could produce it or not. The technology, after all, was clearly labeled as experimental. Which meant that the company had never implemented it in the field at least at this scale. There was a clause in there about the county covering the cost of the plant if it backed out of the contract later. Basically, all the risk was on the county and all the reward went to the company.

None of that seemed to matter. The county commission had stars in their eyes and was ready to sign up for about anything. Just hand them the pen.

Now there’s a tricky thing about county government in Florida. It’s subject to the Sunshine Law which at the time was one of the strongest government transparency laws in the United States. Which meant any contract, any project, any money authorized and spent had to be part of the public record, with time for public comment.

When this item was first floated at a commission meeting, buried as it was in all the various business the county does, the public didn’t take much notice. But a reporter from the regionally recognized local paper did. The paper had covered the water wars and knew there was a story here, especially with the proposed use of park land, which everyone was already talking about. So, s/he did his/her job, talked to the right people, chased down the details, and published the story. The commission again didn’t seem to care because they thought they were solving a problem, despite the shakiness of the proposed contract.

The general public did not agree. The story quickly blew up. People started scrounging up pitchforks and torches as they ripped their bodices in preparation for storming the barricades. Within days we had received fliers from a NIMBY organization that had just formed to oppose the project. They flooded the commissioners with angry letters and phone calls the point where the commission was forced to delay voting on the proposal in the routinely scheduled general meeting.

But the commission hadn’t given up. Being career politicians, they had seen this kind of reaction before. They understood the fervor often quickly died down as the public shifted its focus to the next daily outrage. So, they went on a bit of a charm offensive, scheduling three separate public hearings to pitch the proposal where the company and their consulting team would present their plans and be available to answer questions. And like any commission meeting, public comment would be accepted in the form of time blocks for any citizen to speak. They slated three of these informational meetings over the course of a couple weeks, one in the north of the county, one in the south and one central maybe half a mile from where the proposed plant would be built. That one was assigned to a room in a cooperative extension that we’ve since learned is the largest conference room the county owns.

The north and south meetings went off without a hitch. A few dozen people showed up and generally expressed their lack of support but in no numbers that might blunt the effort. You could sense the commission felt like things were back on track. All they had to do was survive the final meeting, vote the project through and deflect a little fallout. No significant problem.

Especially since the NIMBY organization I mentioned wasn’t exactly helping the opposition’s cause. Full disclosure, I am no fan of NIMBY organizations because in general they are more interested in killing projects because of their homes’ resale value rather than because they are not in the best interest of the community. The name says it all. Not In My Back Yard. Doesn’t matter whether it’s a desal plant, a Walmart or a fire station. In general, they dislike change.

Then again, I was no fan of this experimental desal plant either. Mainly because it didn’t pass the smell test. I also didn’t think the proposed location was the proper use of park land. But in the end, I believe in democracy. If it passed muster and the county voted it in, I would have to deal with it. A couple big ifs.

Anyway, the first issue this newly fledged NIMBY organization focused on in its literature was sinkholes. They painted a grim and inaccurate picture of our houses being swallowed up when the plant over-pumped the aquifer, as everyone rightly expected they might. Now remember somewhere near the dawn of this essay that I mentioned sinkholes depend on the underlying geology? Yeah, this part of the county doesn’t have that structure. Karen knew that from glancing at a couple bedrock maps. Not really a problem.

Which she told a couple neighbors who were semi-organizers when we were talking to them one day. Initially they didn’t want to believe her, even though she said she was a geologist, because they thought she might support the project. We cleared that up pretty quickly, and I added that as an engineer, I was more concerned with the plant’s proximity to the water. The lake in the park the county proposed putting right beside is a 100-acre reservoir that drains through a series of creeks and canals both north and south before meandering its way to the Gulf. Any saltwater intrusion would be devastating to the surrounding ecosystem, never mind out subsurface wells.

While they remained skeptical about the likely lack of sinkholes, they added environmental impacts to their list of grievances. Their continued skepticism meant we couldn’t sign on to their movement directly as it struck us as not just NIMBY but anti-science. Even back then, neither of us was comfortable with the kind of science denial we heard, and that was before it was fully in vogue.

At the same time, we weren’t ready to completely shut them down either. While their facts might have been wrong, their instincts were right. The county seemed to be trying to pull one over on the public. And without a public outcry, it was unlikely to be stopped. They were mostly harmless, anyway, in that Douglas Adams kind of way. But without them, there would be no way to stop this project if stopping it was warranted. So, we were stuck with somewhat unreliable allies. But allies nonetheless.

Now the key words in the above paragraph are “if it was warranted.” From my point of view, if the science supported the project, I was willing to begrudgingly accept it because I recognized the problem. Or at least fight it only on the grounds of inappropriate siting alone. As I said, I am definitely not NIMBY and am not focused on winning at any cost.

But when I do enter the lists, it’s always with an eye on the prize. I figured these allies might have a part to play before this drama ended. So, we left them to it while we investigated other avenues, neither joining nor disclaiming them.

The first step was determining whether the project would actually be feasible. When I asked my resident staff geologist, she promptly answered, “Dammit, I’m a sedimentologist, not a hydrologist.” Well, do you know any hydrologists, I prodded innocently. Narrow eyes, a light bulb sparking. May-be. Let me look into it.

Karen did a search of relevant research in her office, which came up empty. Not surprising since they were a coastal research center. But there was a hydrology office located across the bay. She dug up a contact and wrote them, asking for information, as a private citizen not a federal geologist. I’m a little foggy on exactly what happened next, but I assume it involved trench coats and a dead-drop in a dark alley near the airport somewhere around midnight with an admonishment that, “Should you or any of your team be caught or killed, the Secretary will disavow any knowledge of your actions." Or words to that effect.

What Karen came up with was two official USGS research reports on the underlying hydrology of this area near our lake. Turns out, they had been studying it for at least a decade. As a private citizen, Karen neither asked for nor received any interpretation of the data, just the reports as written. But one thing a master’s degree teaches you is how to read an official government research study, even if it’s not in your particular field of specialty.

Both reports said pretty much the same thing. The underlying geology would only support pulling about a million gallons a day at most from the brine layer. Which translated to less than a million gallons of fresh water once it went through the desalination process. Anything more was unsustainable, though the specific impacts of attempting it went unaddressed. As did the level of isolation between the proposed wastewater injection layer and the freshwater Florida Aquifer should that be attempted.

And the commission had requested and received copies of both reports. They might even have been involved in commissioning the second one.

Being extra cautious to make sure that she wasn’t missing something, Karen approached a hydrologist colleague in her office to confirm what she thought she’d read. Yup, that is exactly what those reports were saying. And no, the underlying geology hadn’t magically transformed in the decade between the two reports, despite anyone’s wishful thinking.

When she told me what she’d found, I knew we had all the ammunition we needed. Locked and loaded, it was now just a matter of how to play it out. I knew exactly how to work it for maximum impact, but that required Karen playing an active role. While I could be the front man myself, and had absolutely no problem doing so, I knew she would be better for multiple reasons.

That prompted a second discussion on ethics and conflict of interest. Because they were USGS reports, and she was a USGS employee, she had to be very careful not to even hint that she was speaking in any official capacity. Which I absolutely knew wasn’t a problem as long as she didn’t mention who she worked for. I’d done my due diligence. Government employees maintain their right to free speech as long as they don’t overtly invoke their agency. The reports were in the public record, freely available to anyone who asked. Karen interpreted them based on her education, not her position with the agency. It’s a tricky balance but a pathway existed as long as she was careful.

To help convince her, I outlined my plan. Reluctantly, she agreed.

By now, we were just a few days away from the public meeting. Which worked out perfectly. With her onboard, I knew exactly how to set this up. First rule: Don’t talk about Project Mayhem. Second rule: Don’t. Talk. About. Project. Mayhem.

At this point, operational security meant strictly need to know basis only. Never trust especially sketchy allies with sensitive information if you want to maintain the element of surprise. If your enemy doesn’t have time to prepare, they can simply react. Use that.

So, when the public meeting rolled around, we stayed in our work clothes, shirt and tie for me, business casual for her, and drove to the meeting. We wanted to arrive a little early to make sure we could get Karen a time slot to speak.

When we pulled up, the county cooperative extension was already mobbed. Hundreds of people were streaming into the building. Two different individuals with clipboards tried to stop us and get us to sign a petition opposing the proposal. By then, I had my game face on. I simply waved them off and kept walking, my dress shoes hitting the concrete with a heavy heel. A third canvasser in support of the measure took one look, got my best “bring it” stare, and didn’t even try.

We got a lot of sidelong glances on our approach. No one was sure exactly who we were. Everyone suspected we were players by the way we were dressed and moving with a purpose, along with the papers Karen carried, but they had no idea on whose side. Exactly as I wanted it.

Inside, we found row upon row of chairs set out with aisles separating them. At the top of the center aisle was a microphone facing the table where the Commissioners would sit. To one side, near the entrance was a large table with a conceptual diagram of the proposed desal plant and where it would be situated. The consulting team hired by the company making the proposal hovered around in their suits, ready to answer questions. We only glanced at them on the way by.

Instead, we headed for the signup sheet for public comment. Karen entered her name. We sat toward the back near the center of the room where we could survey the crowd. Then we settled in and waited. I engaged the eyes that look right through you to ensure people kept their distance, seeing but not making eye contact or acknowledging anyone.

Eventually, the meeting was called to order. By then, every seat was filled with SRO in the back. Only three Commissioners had bothered to show up, the Chairperson and two others. Only one of them was interesting. He had been appointed by the governor to finish a vacated term. Not only was he the only Democrat on the commission in a decade, he was also the only, and perhaps first, person of color. All of which put him in a somewhat awkward position in this county at the time if he intended to stand for an elected term.

The desal plant was the one item on the agenda that night. The consulting firm for the company gave a brief introductory presentation of the proposal. A polished, professional presentation. Nothing new or earth-shattering. We didn’t pay much attention other than to note the overall contours of the plan remained unchanged.

Next, the Chairperson opened the floor for public comment. An official called the first name on the list. Each person had three minutes to speak. Karen had at least a dozen people ahead of her. By convention, the Commission did not address public comments, they typically just sat and listened. A few speakers in we could sense they were only there to make a good-faith showing, absorb any damage, and move on to a vote the next week. All they had to do was survive the meeting just like they had the other two.

Two of the commissioners sat stone-faced as citizen after citizen stood at the microphone to object to this proposal. The Democrat looked more sympathetic but only slightly. Most of the speakers were impassioned though not always eloquent, which is the way a democracy is supposed to work. Their facts were all over the board as we knew they would be. But we could see there were no new arguments. The Commissioners had heard it all before. Sometimes from the exact same speakers. A quiet boredom evolved behind their Easter Island expressions. They just wanted to get this over with. Even the crowd and speakers began to sense theirs was a futile rearguard action. When the clock ran out on the evening, it would be all over but the crying.

I was taking in the room again when Karen’s name was called. Specifically, I was watching the consulting team sitting up front, facing the commissioners. When Karen rose after the official called her name, I saw the only woman on the team snap her head around to look. Turned out, she recognized Karen from them both being members of the local Association of Women Geologists chapter. For an instant, this woman looked like she’d been poleaxed. Her expression quickly transformed back to neutral as she turned to face forward, staring at nothing in particular. That told me everything I needed to know. We had the initiative and had maintained the element of surprise.

The hall quieted as Karen strode up the aisle, papers in hand. All eyes traced her progress as she approached the microphone. After introducing herself by name and city of residence, she launched into her very brief geological review. As she did, the expression of two of the commissioners transformed from bored to apprehensive. The Democrat leaned in to listen more intently. Less than three minutes later, Karen concluded by holding up the pair of reports in her hand, slightly splayed so the Commissioners could see them both, as she pointedly asked her final question “Why are you even considering this proposal when you have two US Geological Survey reports that say it won’t work?”

There was a moment of stunned silence as Karen turned away from the microphone and headed back toward her seat. Less than a second later, the room erupted. A woman from the neighborhood, a member of the opposition, raised a hand in a high-five as Karen passed. She slapped it as she strode by.

The remaining speakers on the list spoke, but you could tell their remarks were pro forma. Everyone knew the argument had already been won.

The commissioners looked dismayed. Our ambush had been perfectly executed.

So perfectly, in fact, that the moment the Chairperson gaveled the meeting to a close, he and his comrade bolted from the room, not even pausing to shake a hand or acknowledge any constituents. Only the Democrat remained, and he sought Karen out. He only had one question for her.

“Are you a geologist?”

She smiled sweetly back at him and answered, “As a matter of fact, I am,” neglecting her affiliation. He nodded sagely before continuing to circulate through the room, obviously calculating how to exploit this newfound knowledge. We left right after, before anyone else could seek us out. Mission accomplished.

The following week, the Commission pulled the proposal from the next commission meeting’s agenda, awaiting further study. Karen was afraid that meant they’d try to bring it back. I shook my head. They were just saving face until no one else was looking. Sure enough, a few months later, they quietly strangled the proposal in its sleep with a formal vote and buried it in an unmarked drainage ditch behind the house.

By then, Karen had been transformed into a local folk hero, somewhat because of her high recognition factor. People we didn’t know and had never really met would wave and introduce themselves whenever we were in the park. They’d thank her for what she’d done. The neighbor couple we’d talked to early on smiled and reminisced every time they saw us walking literally for years after. No one would forget Karen’s fateful encounter with the Commission that night, charging like Uxbridge at Waterloo from behind the concealment of the crest to spike battery after battery of exposed French guns. By the time she rode back to the safety of her lines, unscathed in her case, the Grand Battery would fire no more.

So, what is the lesson in all this? Come now, if you’ve read the previous essays this year, you know there has to be one.

The first and simplest is the most obvious. You absolutely can fight city hall and win, but only if you know how to seize a moment and have all your facts in line and a little expertise with a little guts behind it. It helps immensely if your opposition is unprepared. Politicians often are.

But that’s not the one I wanted to focus on. The real lesson to me is more subtle. And that lesson concerns allies.

In recent years, I’ve heard a lot of talk about what it means to be an ally, whether regarding LGBT rights, women’s rights or civil rights, or even ordinary politics. Mostly from people who have little idea what they are talking about or what that word truly means.

An ally is not a subordinate, even though they fight beside you. They do not blindly follow your orders or slavishly defend your position. Those are people who have already enlisted in your army, who fight and die beneath your banner because they choose to for one reason or another. With them, you are all one unit, one organization. They are you in a sociological sense.

An ally is not.

An ally is someone whose goals and objectives overlap with your own. They fight for their own reasons, for their own causes, some of which you may or may not agree with or fully understand. Some are allies of convenience, others are more deep-rooted and dependable. But either way, they choose their own ground and make their own decisions, right or wrong. If your interests align, especially if you are outnumbered and outgunned, it is best to welcome them, even if you cast a wary eye toward a future where circumstances may change.

If all that sounds a bit Machiavellian, it absolutely is. It also happens to be the way the sausage gets made, to misquote Bismarck. For any of his faults, he was a man who fundamentally understood how politics and allies work.

Without the NIMBY crowd of opposition, we were unlikely to succeed. They did the hard work of crystallizing the opposition and getting people to turn out. Without an audience, without a pitchfork and torch wielding mob behind her, Karen’s facts would likely have fallen upon deaf ears. Just another bit of information to spin. Politicians are good at that and do it all the time. They usually only listen when you threaten them with votes.

In fact, this opposition’s efforts may have led to the slow transformation of the County Commission which had been dominated by a single political party for three decades at that time. In that, the Commission had become more than a bit arrogant in thinking they could do whatever they wanted without consequence. They eventually paid for that, one by one.

This opposition had the numbers and emotion on their side, two things we could never conjure up. We had facts, a strategy and a sense of timing. They knew where to strike, we knew how and when to direct the blow.

Each side didn’t want this project, each for different reasons. Our interests aligned. Which is why we neither joined them nor disparaged them early on. We needed them. Just as they needed us, though they didn’t know it until the end. We didn’t share an outlook and didn’t share tactics, or even information, just a common goal. When it was won, it was done and the alliance dissolved. But we both walked away happy.

And if our interests had aligned once more in the future, perhaps we could have worked together again.

So, as we talk about BLM, or LBGT, or renewed interest in ERA, please remember that while not everyone who stands beside you is black or gay or female, they still might be dying beside you for their own heartfelt reasons. Sure, you can attempt to educate and enlighten them if you are able, and likely should. But it’s better to honor them than disparage them, especially if you want them to continue to fight.

Or in Karen’s case, to pull the sword from the stone and unite the disparate tribes of Pinellas in an epic quest for good governance.

© 2020 Edward P. Morgan III

Cash Is King - Debt

Of all the people I talk about, Frank E. South (my grandfather, to whom this guide is dedicated) perhaps had the greatest impact on me. He understood financial reversal from experience and passed his knowledge on to anyone willing to listen.

When the Great Depression struck, his family owned a very nice home and a string of businesses, some of which he sat on the boards of, at what seemed to me to be a young age. They had cars at a time it wasn’t common. They had horses and tutors. All mortgaged to the hilt. As the crisis from the crash continued year after year, his father ended up selling off those assets one by one.

With little more than his education, my grandfather rebuilt a comfortable life for himself and his family. Even after a health crisis involving my grandmother at the end of her life ate up much of what he’d saved, he still left my mother and aunt a small but tidy inheritance. Not enough to set either up for retirement, but enough for him to feel that he’d done his job in looking after them.

One of the first financial stories he related to me was about buying his first house. The Great Depression was still on. He’d recently gotten married. He and my grandmother wanted to start a family. They needed a home. He looked around and found something modest he could afford. He had an engineer’s salary which, just like today, is firmly middle class. The house he chose cost around $6000, which was a fair piece of money at the time.

Now when he said “could afford”, he meant something a little different than you and I. He intended to pay cash for the bulk of it. In fact, he and his father got into a debate over just that point. His father, ever the leveraged businessman, insisted he would be better off buying a larger, more expensive house and financing it all. In ten years he would never miss the money.

My grandfather insisted he didn’t want to pay “on time” which is what having a mortgage or buying on credit was called at the time. Because he was younger, I think, he saw the Great Depression differently than his father. Where his father saw a deep yet transitory situation, my grandfather saw an existential change in circumstance he didn’t wish to go through again. He had learned his family’s lesson where perhaps my great-grandfather had not. Or perhaps they just had different perspectives, neither wrong.

My grandfather bought that house with cash he’d saved and a small mortgage which he paid off after four or five years. He and my grandmother lived there until he retired. The proceeds from the sale of that house became his primary nest egg and emergency fund to supplement his pension and social security.

His basic philosophy was, contrary to most of what business schools teach, don’t use other people’s money unless you absolutely have to. You are paying someone for the privilege, sometimes quite a lot. If circumstances change and you miss a couple payments, the bank will reclaim its collateral. Default or bankruptcy is a last resort for extreme situations. Situations he hoped to avoid if at all possible.

Now most of us, including me, are not in a position to buy our first house without a mortgage, or even a small one. How long would Karen and I have had to save up to buy our first (and only) house with cash? About seven to ten years. Perhaps five if we’d really applied ourselves and maybe purchased something smaller.

Now anyone who has ever bought a home knows there’s a little piece of paper in the mountains of other documents that you sign at closing that fulfills the Truth in Lending Act. This is a federal law enacted in 1968 that basically says the bank or other lender has to discloses all the terms and costs of the loan, including the calculation of total interest. This little document is the one that gives most homeowners the biggest reality check. It’s the one that say exactly how much interest they will pay over the life of the loan.

I vividly remember this document. When I looked at the final number, I saw it that was roughly three times the list price of the house. I liked the house, and on most days I still do, but no way in west hell was it worth three times what it was listed for. I swore to myself I would never pay that much.

And I didn’t.

But my word is my bond, which is exactly what I had given when I signed the note. So how did I do it?

Well, I had a little experience in this arena already. As I mentioned in an earlier essay, I came out of school with debt. On top of student loans, I had to borrow a modest amount from my father just after I got my first job for a few things I needed, mostly professional clothing and a down payment on a car. As well, I owed Karen some money from moving expenses while I was unemployed.

I didn’t quite have the mechanism as refined as I did by the time I started paying off the house.  Now I would do it slightly differently. What I did then was pay Karen first (very kindly, she didn’t charge me interest). That got me floating about even, finally. I took some of the difference in my budget and began paying down my father. At the time, I was paying him about $100 a month. I still remember how amazed he was when I paid him off early. Next, I let that extra $100 build up and then paid off the smaller of my student loans.

An important note here. Most, but not all loans, do not have an early payment penalty. I have no idea where I ran across that piece of information but I knew it at the time. I checked both my student loans and indeed they did not. But paying them off early did not avoid the total money owed as I remember. Still, I took the money those missing payments from the smaller student loan freed up, along with the extra from my dad’s loan and let it build until I could pay off the larger student loan. That, too, quickly disappeared.

Now I was mostly starting with a clean slate. Almost but not quite. I still had a car payment, as did Karen. By then, I’d found a new job in Florida that paid more with a lower cost of living.

But because I was living below my means, I was saving money fairly steadily even with giving myself a pretty generous allowance (which was more than it is today). But I knew I needed a down payment on a house, so I left the car loan alone for the moment.

That loan repayment scheme set up probably the best financial decision of my life.

As I said in an earlier essay, when Karen and I bought the house, we weren’t married. We were each responsible for our half of the mortgage, though we owned the house as joint tenants with rights of survivorship (a legal arrangement that basically guaranteed both our rights to the property in case something happened to either one of us). That meant that if I wanted to put extra toward the principal each month, I had to convince Karen to do the same. So I showed her the numbers.

Being an engineer, I found the formula on how loans get repaid based on the interest rate charged. Then I designed a program to calculate how much we would save and when we would pay off the mortgage based on adding extra payments.

Many people don’t understand that even though you have a thirty-year mortgage, the interest of that loan is recalculated each year based on the outstanding principal and the agreed to interest or annual percentage rate (APR). Basically, the first year you pay a mortgage, you are pretty much paying interest because only a tiny fraction of your payment actually pays off the principal. Over time, you build up equity, meaning you owe less on the note and more of your fixed payment goes toward the principal. Until by the last five years, you are mostly paying down principal. The whole payment schedule is just a formula that allows you to have equal payments for the duration of the loan, a convenience really. It doesn’t cost you anything unless interest rates go down, though it saves you if interest rates go up. Like insurance, it’s a hedge against uncertainty, at least with fixed interest rate loans.

Which means paying principal early becomes a big deal going forward.

How big?

Well if I remember my calculations right, by Karen and I each contributing an extra $50 a month ($100 total), we would pay off the 30-year mortgage in 20 years. With an extra $100 a month ($200 total), that went down to 15 years. That alone would save over the list price of the house in interest over the life of the loan. So we’d only be paying double the list price instead of triple.

That big.

Now keep in mind that at the time interest rates were running high. And I mean what today we would consider usuriously so (at least until you look at the APR on your credit card). We had a 9% rate which at the time was considered good (and we paid for the privilege to secure the loan). We have been spoiled by a decade of amazingly low interest rates.

Remember way back in the first essay when I talked about average S&P returns? Our APR was almost that. Investing that little bit extra a month would pay just 1% less than what investing that same money in an S&P index would pay on average, only guaranteed. No good years, no bad years, just steady returns.

Once I explained all this to Karen and showed her the calculations, she was onboard. But since we were in fairly different financial circumstances (there were points before this she was working a second job to pay down her debt and keep afloat), she could only afford the extra $50. Soon, as her situation stabilized and she grew more comfortable, she could afford the extra $100.

The one caveat was we had to write a separate check for the additional payment and note that it was paying principal, not interest (some banks will pay off interest for the year first with additional payment unless you make it clear).

The next phase in the plan involved another piece of mortgage arcana I’d run across. Every mortgage I’ve ever seen has a line item in the payment schedule for mortgage insurance. Mortgage insurance protects the bank in case you default but conveniently, you pay for it. But you don’t have to. Once you have 20% equity (own 20% of the value of the house through a combination of your down payment and paying off principal), you can cancel the mortgage insurance. After that, the bank figures they will break even by seizing the property if you default.

Can is the operative word. It doesn’t happen automatically. The bank would have been quite happy to let us pay it for the life of the loan.

I want to say ours was roughly 5-10% of our loan payment (not including homeowners insurance and property taxes) but I forget. Either way, it was money I could put to better use. So the moment we had our 20% equity, we went to the bank and cancelled the mortgage insurance. We then rolled that additional money directly into paying the mortgage principal, too.

Then we got married and I kicked my evil plan into overdrive. At the time we bought the house, we both had car payments. By the time we’d gotten engaged, I’d paid the Jeep off early (while contributing extra to the mortgage). Karen paid her car off with some money she’d inherited. After we were married, I took most of the money we would have been paying toward those two cars and dumped it into the mortgage principal, too.

All of which meant we paid down the note in just over five years. So instead of paying three times what the house was listed for, we paid 1.5 times, including all the fees and commissions we’d paid to buy it (which weren’t included in that Truth in Lending Statement).

I remember telling my grandfather what we’d done and why. He gave me a look of pride I rarely see in my family. He finally knew I’d listened and understood. I’d benefited from his experience.  

Of course, if I were to do it again, I would observe a different hierarchy. I would start by paying off the loan with the highest interest rate. When that loan was paid off, I would roll that payment directly into the next highest, and on down the line until I came to the lowest. In general, that lays out credit cards first (I’ve never carried a balance, but as I said Karen has briefly), then auto loans, student loans and mortgage.

I call that leverage, though it’s not the kind most investors mean when they use the term. But “give me a big enough lever and I will move the world.”

Interestingly, our financial advisor at the time told us we were nuts for paying off the mortgage early. As did Karen’s father. Both thought we could make more in the market which was in the midst of the dotcom boom. Yeah, that would have positioned us to experience the brunt of the bust, though we couldn’t have known that in advance.

But they did have a point worth considering.

Ok, as I said the average return on the S&P 500 is roughly 10% (really 9.8%). We were paying 9% interest so that seems like a no-brainer for only saving 1% with the money at risk, right? Well, we were only paying 9% interest on paper. In reality, the Federal government was giving us a subsidy on that interest. At the time, we could claim the interest paid as an itemized deduction on our taxes. Which meant the government was giving us back whatever our tax bracket was at the time (28%) in the form of lower taxes. So suddenly, that 9% interest rate was actually 6.5%, leaving almost 3.5% in growth by investing in an S&P 500 index in an average year. That’s just over the average annual rate of inflation, so worth claiming, right?

Not so fast. We really weren’t getting a 28% subsidy on our interest rate. We didn’t have any other itemized deductions like healthcare payments (already pre-tax for us at the time) or education costs. This was well before we could claim state sales tax. Which meant we would only be earning a 28% subsidy on any interest we paid over the standard deduction in a given year. A quick, back of the napkin calculation told me that in the best year, we were only paying a couple grand more in interest than the standard deduction at the time. Which meant our subsidy would only have been about 5.6% (20% of 28%, which was the excess of interest paid over the standard deduction) on that 9% interest rate bringing it down to roughly 8.5% instead. A 1.5% theoretical return doesn’t look like quite so appetizing as a reward for the risk.

And that was only in the first year. In later years, our tax benefit would have declined even faster because there was less interest being paid. Eventually, it would not have overcome the standard deduction.

The quality of the silence was priceless when I patiently explained that math.

Not that the math swayed me very much. My plan from the beginning was simple. Once we paid off the house, that freed up a significant amount of money each year for other things. Which was the first mother-may-I step toward our financial independence. With the mortgage gone, we always had a place to live as long as we could pay the property taxes. Plus we could always tap the equity in an emergency. That, for me, was a huge piece of financial security, one I’d never trade.

Debt is a lot like dieting. The real trick is staying out of it just like keeping off the weight once you’ve lost it. Both almost always requires a lifestyle change. Binging as a reward almost always sets you back at least as far as where you started, maybe farther.

Since we paid off the house, we’ve only taken out one loan, the one for Karen’s current car. That was done with the intent of paying it off after a few months, which we did. We could have paid cash but thought at the time it was prudent to keep our (mainly my) credit score up. I’m not sure I would do it again but at the time it was more of a concern.

At the same time, we haven’t bought a new car since then. Karen’s car is seventeen years old. Mine is almost thirty. Both of them run fine and are generally reliable. Neither of them requires repairs that approach a year’s worth of car payments, partly because we invest in routine maintenance so things don’t get out of hand. While each of us occasionally gets the urge for something new (me more than her), it generally passes quickly. In fact, last year she decided to get her car partially repainted because she still liked it well enough to want to drive it for a bunch more years.

Some of that comes down to luck in that both cars have held up. In the case of mine, it doesn’t get much mileage in a given year, and hasn’t for almost twenty. Some of it came from picking a quality car that will last. Karen’s Toyota has the reputation for running a very long time. And some of it comes from just plain hating what’s involved in buying a new one. That’s time we don’t get back. But some, too, refers back to the essay on priorities. We don’t Need new cars, though sometimes we Want them. The midnight black Mercedes I’ve always dreamt of but never bought would be a Nice-to-Have.

The same applies to the house. One of our wish list criteria when we bought this house was that it back up to a park. We got lucky to find one that did. We also wanted a quiet, closed neighborhood at least a half mile away from any major road. We got that, too. Finally, it had to be big enough to grow in if we wanted to. Turns out even if we’d had one or two kids, it would have still suited our needs, though it might have been a little tight.

As well, we set our budget with the real estate agent so that we could pay the mortgage on one salary if necessary. As a defense contractor and a government employee, we were keenly aware of the potential volatility of our careers. Unfortunately, it had to be the largest salary (mine at the time) because we couldn’t make the smallest work and get what we wanted. As it turned out, that decision paid off in being able to lose one salary entirely.

Planning, patience, discipline and simplicity.

So where did all this get us?

Let’s run some theoretical numbers. Let’s say our mortgage was $1000 a month. Let’s say as well our car payments totaled $500 a month. What we would have freed up by paying them off was $18k a year, take home.

Which translates to roughly $29k less in salary we could live on ($18k/0.62 which accounts for taxes at a 28% rate, 6.2% Social Security and 3.8% Medicare). Alternatively, it was $18k or more that we could invest and grow for retirement (with luck at 10% a year). Or $18k we could spend on things that inspired more joy in us than paying other people interest (that’s a lot of wargames and yarn). Or some combination of the three.

As you can see, this first step toward financial independence opened up a number of interesting possibilities, including the path we took.

But where exactly did that extra money come from? In short, from living below our means. I touched on that in the last essay and will delve a little deeper into over the next two. Then we’ll see if I can get these seemingly disparate voices to harmonize in a third.

© 2019 Edward P. Morgan III