Hrvatska

Here it is finally…the promised account of my sailing trip in Croatia with my girlfriend Mirena, Mike (fellow MBA Enterprise Corps alumi), his girlfriend Melinda, and his (and now mine as well) other friends: David, Marta, Ken, and Crystal.
Day 1 – Split
Our group convened at the Split airport where we tried to keep our driver from leaving before all eight of us were in the van. During peak vacation time (read: July and August) this little airport is overcrowded with holiday-makers from all over Europe, meaning there is no room to park (hence our driver wanted to leave) and little room on the tarmac for airplanes (which is why our last crew-member was still circling the skies above us.) The rest of the ride to the marina was uneventful until the last 500 meters, which although being a two-way road, was only one lane wide. This meant that at nearly every attempt our driver made, he could never make it to the halfway point or otherwise force the oncoming traffic to back up (incidentally, I had the same experience driving in Sofia the following week.)
This first day we did not even cast off lines; the afternoon was spent provisioning (which entailed pushing grocery carts full of food for over 1 km), briefing, and familiarization for our boat, an Océanis 411 called the Kučarin (pronounced “Koochareen”.) In the evening, we took a water taxi to the old town, which was interesting, but I didn’t want to spend too much time there as I was still trying to catch up the sleep I had recently missed.

Day 2 – Split to Brač Island
It seems none of my crew-members are morning people, so generally we got underway around 10 or 11 every day. After tacking back and forth into the wind most of the afternoon, we decided that Brač Island was far enough, and anchored in a secluded yet crowded cove that featured two primitive, outdoor restaurants (where we would eat that evening.)

The funniest thing to happen this day occurred as we were trying to anchor. On the stern of a neighboring boat there were two completely naked, young women (we assume they were German) frolicking in the water; in fact, one of them got on a pool raft and briefly got in our way as we were laying down the anchor chain. If only I had my camera at hand (and not been busy at the windlass,) I would have photographic proof of this distraction for you now. ;-)

Mirena was happy to be back on solid ground again, so we hiked over the hill to the little, sea-side town of Milna, which was pleasant but unremarkable by Dalmatian standards as we would find out later in the week; every town, village, and burg on these islands is an idyllic, old fishing village.

Day 3 – Sail to Vis
We left our little cove on Brač and sailed most of the day on a single, south-westerly tack in moderate winds to the island of Vis. Here we found Komiža, the town, harbour, and pebbled beach where we anchored, and which would later be the cause of all our problems.

Mirena and Ken watch dolphins from the bow near Vis
Although it was almost evening, some of us swam a little bit before getting ready for dinner, as tonight turned out to be “date night” and each couple found their own restaurant in Komiža. Our group (including David, Marta, Mirena, and myself) returned to the boat first, even after traipsing all over this little town and having dinner. David and I were sitting in the cockpit watching our boat and others being blown around by the strengthening “bora” winds that were coming off the mountains in front of us and wondering if we were getting closer to the anchor buoy of the boat behind us. You have to understand that a boat will move a little in wind and waves even when anchored securely—which is, of course, disconcerting.

We did indeed lose anchorage, and David and I were forced to haul up the anchor (partly manually because the windlass circuit breaker kept tripping.) At the same time, Mike and the rest of our crew attempted to reach us with the dingy (by now we had drifted almost 1 km downwind.) Eventually we got the anchor up and motored back into the harbour where Mike had found a British guy on a similar sailing yacht who helped us out and showed us how to how to rig two anchors in series, which he said should be good for winds up to 100 knots! This being done, I felt secure and went to get some shut-eye, while the rest of the crew stayed up nervously monitoring our movement in the still increasing “bora” winds.

I guess it was an hour later when I was awoken, told to put on a life vest, and assist on deck as our anchorage had either failed or been pulled up by another nearby boat’s failed anchorage. The skies were dark, the winds were howling, and other boats whose anchorage had also failed were motoring about the harbour seemingly not knowing what to do. Mike was at the helm trying to avoid other boats and make it easier for David and Ken to manually crank the anchor chain back up (the tension on the chain prevented us from using the windlass for more than a few second before the breaker would trip—which was Melinda’s job to reset, since the breaker was in her cabin; we later joked that we would call her up unexpectedly at night and tell her “reset the breaker” just so she could relive this exciting time!) We suspected that our anchor had become entangled with another boat’s anchor (specifically the British guy who had helped us earlier,) and that indeed became apparent as we reeled in the final 10m of chain. Imagine the scene: 2 boat, each over 40 feet long, attached bow-to-bow, spinning slowly around each other as if in an lumbering dance, as we both slowly reeled in our anchors. We finally got the first anchor up, and David heroically leaned over the bow railing to untangle our friend's anchor chain—we were finally free! Disgusted with our experience in Vis, we intended to sail through the night to our next destination. This turned out to be foolhardy in these less-than-ideal conditions, so we head back and anchored closer to shore. This third anchorage was successful, and the rest of the night (what little was left) was uneventful.

Day 4 – Blue Grotto, Vela Luka
In the morning, we were able to pull into one of the coveted marina slips in Vis to refill our totally empty fresh water tanks. Had this slip been available the previous evening, we would have been well rested, and not had any of the adventures of the previous night. We had a long day of sailing planned, but decided that we had to see the famous “Blue Grotto” on Biševo Island. This is a sea cave with a fairly large chamber and two openings: one long, narrow opening that can be negotiated by a dingy, and another short one that is underwater, and gives the chamber its namesake blue hue. It took two trips for everyone to see it, but was definitely worth it.

The Kučarin getting water at marina in Vis
The rest of the afternoon was spent sailing almost directly downwind in heavy seas; this was both fun/satisfying (we hit 9 knots) and—for the ladies—a little disconcerting since the boat would pitch and roll in every direction as 2 meter waves would overtake us from the stern.

We originally intended to sail to Korčula Town, but—as the light was waning—decided to pull into Vela Luka on the near side of the same island. Vela Luka was indeed a great harbour as its name suggests, but it is not the renowned fortress town of Korčula we wanted see. Never the less, we had a nice meal and managed to catch a folk dance exhibition in the town square.
Day 5 – Lumbarda, Korčula
The next morning we immediately set sail—well, after Mike got his requisite cappuccino—for Korčula. We arrived in the early afternoon only to find that the marina was full. Continuing on to the next little town, Lumbarda, we found that their slips were also either occupied or reserved. We had promised ourselves that, at this halfway point, we would treat ourselves to a marina, where we could get a real shower, shore power to recharge phones/cameras, and not have to be ferried to/from shore by dingy every time. For this reason, Mike became very persistent—circling our boat in front of the marina’s docks until they agreed to let us “just refill our water tanks.” With this foot-in-the-door, our crew was eventually able to secure us the slip for the night.
Clockwise from left: Marta, Crystal, Ken, Mike, and David enjoying drinks near Lumbarda marina
Day 6 – Korčula to Mljet
Unlike previous days, we planned to stay on this island for most of the day. Most of us rented scooters to get to Korčula town and explore the rest of the island. Mirena and I set off eastward on a road that followed the coast and revealed all the little coves and idyllic sea-side towns along the way—one of which we would stop for lunch, and have one of the best meals of the trip. Despite being an under-powered scooter, Mirena insisted I was driving too fast, so I let her drive, and—by the end of the day—she had become quite competent at negotiating a scooter with two people on it over narrow, twisting roads.

The village of Kneže, where we ate our best lunch

The historic town of Korčula
By 19:00 we were all back on board and ready to sail on to Mljet—an island comprised mainly of national park. We had planned this to be the evening that we would eat onboard instead of going to a restaurant, and preparations were going on below deck as we sailed…err motored into the evening. As we approached the island, it was totally dark, so we had to rely solely on the GPS; unfortunately, this was located below deck, so I had to call out headings and distances to Mike at the helm—it was actually quite amazing, this would not have been possible on a pleasure craft this size before the GPS era. We expected to find a desolate anchorage, but instead circled magnificent yachts before anchoring with in sight (and earshot) of a small town inside the nation park. As we ate our dinner, we were serenaded by a saxophone player whose music carried over the water on this calm evening.

Day 7 – Mljet, Lopud, Dubrovnik marina
This final day of sailing was going to be a long one; we needed to cover the remaining distance to Dubrovnik, since we were now a day behind schedule. Still, we made a beer stop, a stop for swimming, and stopped on Lopud for dinner. As we were finishing up our Prošek, a stiff wind blew into town, and we knew that we needed to get back on the boat quickly in order to continue down the coast to Dubrovnik and hopefully outrun the approaching storm—which we did. Although it was night, and there was lightning flashing across the sky behind us, we were reassured to see the lights of Dubrovnik in the distance. Soon enough we were under the Tuđman Bridge, and aside from one final incident, found ourselves safely berthed at ACI Marina for our final night on the Kučarin.

Ken, Crystal (hidden), David, Melinda (at helm), Mike, and Mirena in the cockpit of Kučarin somewhere in the Adriatic Sea
Day 8 – Dubrovnik
We had to leave the boat by 9:00 (which of course dragged out another hour plus,) and our flight back to Vienna left at 15:00. This meant we could only hit the highlights in Dubrovnik—which is an amazing city, and deserves a lot more time. Along with Marta, whose flight was also leaving around the same time, we made our best effort to see as much of the Stari Grad (old town) as possible in one afternoon. Unfortunately, after 813 photos, the battery on my camera ran out, so here is a picture taken with Mirena’s camera phone.
Evaluation: This was my third sailing trip, and probably my favourite. Last year I sailed in Turkey (also with Mike) and the Caribbean with my family. What the Dalmatian Coast lacks in sandy beaches and coral reefs, it more than makes up for in its ports of call. Being the Mediterranean coast, it reminded me a lot of Turkey, but what was missing in Turkey was the living sense of history that is pervasive in Croatia. Both countries have undergone conflicts in recent history, but—although Croatia’s war was just a decade ago—it has been all patched up and its towns have a sense of timelessness more like those in Italy or Spain.

Mirena prefers snorkeling in warm Caribbean waters and missed having a sandy beach, but back on land—aside from the natural beauty (which is sometimes hard to find)—the Caribbean simply lacks the millennia of civilization that is infused throughout the entire perimeter of the Mediterranean Sea. I am convinced that a day poking around the shore anywhere in this, the hub of ancient trade would yield at least a shard of antique pottery. And, as students of western civilization, many of the stories we already know took place in this region; the island of Mljet, for example, is a more probable location of the apostle Paul’s shipwreck than the traditional site of Malta, and Homer’s Odysseus is also rumored to have visited this island.
Notes on pronunciation: Serbo-Croatian, which despite protestations from Mirena and Marta, is indeed is the common language of Serbia, Bosnia, and Croatia—each have their own dialect that they insist is a separate language. On the Dalmatian Coast, and especially farther north in Istria, this language is spoken with a distinctly Italian cadence; without listening to the words, (many of which are recognizable to Bulgarian speakers) I could have sworn they were speaking a Romance language.

What really throws most people off though, is the elimination of the vowel “uh” in writing (both in the Latin and Cyrillic alphabets,) so if you see too many consonants in a row, throw an “uh” in there (especially before an “r”) to make it pronounceable. On this subject, you must read this humorous take that I originally thought Dave Barry wrote, but can't seem to find an attribution: Operation Vowel Drop

Pronounce most of the letter as you would expect with these exceptions: J is soft (“y”) like in German, C is always ‘ts’ as in Cincinnati, Č is ‘ch’, Š is ‘sh’, Ž is usually written ‘zh’ and pronounced like the ‘s’ in “measure”, Đ is our ‘j’; vowels—of course—are European: A=‘ah’, E=‘eh’, I=‘ee’, O=‘oh’, U=‘oo’...oh, and roll your R!

Nachmittag in Wien

I finally have some time to write about my trip, so I will start with the short time (~10:30 to 07:00 the next day) in Vienna two weeks ago. But first—as Ryan likes to do—let’s talk about the Washington Dulles International Airport. Amazingly, I had a great experience this time. My arriving flight from Columbia and departing flight to Frankfurt were both in the A/B concourse, and I found the (newly discovered—for me) B concourse to be the most pleasant part of the airport to kill a few hours of a layover. The Frankfurt-bound Lufthansa flight (or was it United—I can’t remember due the pervasiveness of code-sharing) was initially delayed at the gate because of a problem with the APU (which also meant the A/C wasn’t working.) Eventually the mechanics gave up and we fired up the mains with a promise from the captain that we would make up the delay in the air. As we landed in Frankfurt the next morning, I nervously looked at the time and wondered if I could make the Vienna-bound flight to meet Mirena at the airport as planned. Then, as we were taxing to the gate, we stopped for what turned out to be 20-30 minutes because another plane was in our gate (and was not supposed to be there!) As soon as I disembarked, I began sprinting to what seemed like the other end of the airport. Having been seated for 9 hours and missing a night of sleep, this was quite a feat—overcoming a nasty leg cramp and fighting crowds in the terminal. Incredibly, I made it to the departing gate without a minute to spare!

Mirena’s flight from Sofia and my flight from Frankfurt arrived within minutes of each other, and—in fact—our flights were assigned to the same baggage claim belts, where I met her. After a joyful embrace and claiming her bag, we sadly came to the realization that my bag had not made it. Usually, I have found that baggage travels faster through a terminal than passengers, but apparently I had been able to out-run my bag in Frankfurt. Thankfully, the bag did eventually arrive later that day and was delivered to us in the city.

High Speed Sightseeing

By the time we took the train into town, it was nearly noon, so if I was going to show Mirena around town, it was going to have to be quick. We strolled down Kartner Strasse to Stephansdom, had lunch at Austria’s ubiquitous fast-food seafood restaurant, Nordsee, and coffee, Sacher torte, and ice cream in one of the numerous sidewalk cafes found inside the “ring.” Below is Mirena enjoying the liegewiese in Stadtpark, which is still as meticulously maintained as I remembered from 3 years ago.

In the evening, we went to the Prater to see the sights, ride the rides (including, of course, the Riesenrad,) and eat schweinsstelze at Schweizerhaus—which, at 2 kilos, we were sadly not able to finish.

Early the next morning we caught a SkyEurope bus to Bratislava, passing through rural Niederösterreich where it seems the fastest growing crop is wind farms. I’m really starting to wonder how much power these produce and if they are really economically feasible without special government subsidies—interestingly enough one of my shipmates, Ken, was actually an expert on the subject and we discussed this topic while sailing. So, stay tuned this and other tales from the sailing vessel Kučarin.
Observation: Flying over northern Virginia, it seems all you can see is suburban sprawl (from Washington DC.) Everything is either shopping centers, apartments, tract houses, or mansionettes on 1+ acre lots; all tied together by crisscrossing 4-lane highways. This is in stark contrast to the landscape that unfolds as you fly into Frankfurt. Here compact little villages are surrounded by vast stretches of forest or croplands despite the overall higher population density. I know Micah is going to rag me for this, but thinking about where I would rather live, Germany looks a lot better from the air than the typical American sprawl.

The Itch

When I created The Persistent Itch (and its predecessor found at joel.froese.com/blog,) I intended it to be a travelogue—for the benefit of friends and family back home (and myself, so that I didn’t have to repeat the same thing to everyone via phone, IM, or separate emails.) Despite promising myself that I would continue to write after I returned home, there just hasn’t been much incentive to do so. I enjoy writing topical posts, but they do require more effort, and—since my primary audience is no longer reading this blog—I see no reason to do so.

The remaining three topics I promised you on March 14th, as well as a further theory on economic development and a scathing review of Michael Moore’s Sicko that I’ve been meaning to write, have been put on the back burner indefinitely.

I say all this to say that I am returning The Persistent Itch back to its roots; on Thursday I fly to Vienna to meet my girlfriend, and then we will fly on to Split, Croatia where we will meet friends for a week of sailing the Dalmatian Coast down to Dubrovnik. Expect glowing reports and stunning photographs starting next week.

In family news, the Froese family grew by two within the last three weeks as Jordan (left) was born to Micah and Debora on July 6th and Hutch (right) was born to Simon and Sarah on the 19th. All of the babies, parents, grandparents, and uncle are happy and healthy!

The real digital divide

The “digital divide” is supposedly a socio-economic division that is propelling young, rich and middle class kids into a wonderful, new, technology-based economy, while leaving behind lower classes—especially those growing up in the developing world. Earnest crusaders are bridging this gap by setting up computer labs in schools and community centers for disadvantaged youths, and even building $100 laptops for kids in the developing world. This is admirable, and I appreciate anyone giving their time and money to help disadvantaged kids, however I wonder: what is this really helping? Now these kids can create their own Facebook page and copy and paste from Wikipedia for their school projects like their more affluent peers—is this really a step in the right direction? By virtue of the fact you are sitting here reading my ramblings (and I have spent time writing them for this forum) we know that the Internet is more often just a time waster. The cynic in me (and I am probably not alone) looks at the picture below, and braces for an onslaught of even more 419-style email spam.

No, the real digital divide is a generational divide; its victims are often otherwise successful and affluent professionals, business leaders, “old-economy” corporations, and even entire sectors that just don’t get it. The most obvious example is the music and film industries; as entertainment is increasingly being distributed and delivered digitally, traditional distributors and retailers of these goods are becoming increasingly irrelevant. Instead of finding sensible ways of delivering this content to consumers (meaning cheaper and more convenient,) they have balked—either by ignoring the reality of how music is being “consumed,” or by proposing ridiculous schemes whereby consumers are locked into a particular technology, yet given no significant discount for buying this crippled product. Let’s face it, it is technologically impossible to create a format that can be played on a variety of players from different manufactures and—at the same time—be hacker-proof.

Therefore, I predict that the traditional distribution channels for music will shrivel up and eventually die, as the industry continues to push for more onerous restrictions (namely Digital Rights Management [DRM] schemes, constraints on the types and number of playback devices an individual can use, and limitations on sharing music among friends,) all of which will drive consumers to “pirating.” What will eventually replace the current “music labels,” will be an E-bay like marketplace where consumers buy music directly from the musicians—cutting out the middle man—at a fraction of the current retail price. Musicians will gladly allow consumers to freely share their music with friends, as this will grow their audience.

Likewise, the sale of movies will have to radically change as the general population will have access to ever increasing bandwidth, meaning high-resolution movies will be able to be delivered via the Internet. Certainly movie theaters/cinemas will continue thrive as they have through the advent of TV, VCR, and DVD. But if the movie studios think they can retail movies for the same prices as they do DVDs—which is what they are trying to do now—then they are kidding themselves. A downloaded movie has to priced at least half of what a DVD costs since you are providing your own storage, and no longer have access to a real, physical backup copy of the movie. [2016 Update: It looks like I didn't see the streaming revolution coming.]

I’ve actually gone out on a tangent with this rant on the entertainment industry. What I really wanted to say is that I have had the experience of helping people with their websites both at home and abroad, and I’ve noticed that otherwise successful business people of a certain age want their websites to look like a slick brochure. The result is a lot of websites with text in graphics, 100% Adobe Flash sites, and other obvious self-sabotage. On the Internet, content almost always trumps presentation: just look at the minimalist design of ultra-successful sites like Google and Craig's List.

Furthermore, what is more important nowadays is to be part of the Internet community rather than an “island” website unconnected to the rest of the net. In fact, it turns out that many individuals and small organizations simply don’t need their own website. An individual or artist/band will find that a MySpace profile is more useful and easier to create and maintain. Likewise, a professional will find LinkedIn to be more useful for networking, and even small net-based retailers would find Cafe Press, Yahoo! Store, or even Ebay to be a more efficient way to list and sell their merchandise. Hmm, Joel.Froese.com is up for renewal in May; I wonder if I really want to renew it now. [2016 Update: Indeed, I couldn't justify the $35/year price, and have let my original website expire.]

Petroleum: your all-natural, organic choice in energy

With trouble in the Middle East and gas prices approaching $3 per gallon, everyone is concerned about fuel prices. However, it seems most Americans have not changed their driving habits or dumped their gas-guzzling SUVs. Instead we are looking for salvation in biofuels (ethanol and bio-diesel) and hydrogen/fuel cell technology. What is conveniently forgotten is the cost of these technologies—both economic and environmental. The process of making biofuels generally consumes more than half of the energy that it produces, and is only feasible because of government subsidies. Worst of all, using agricultural resources for fuel instead of food means our grocery bills will increase—most adversely affecting the poor. Agricultural land, although plentiful, is a finite resource, as are the nutrients in that soil—which ironically, are usually supplemented by petroleum-based fertilizers. One insightful farmer noted “The ethanol craze means that we're going to burn up the Midwest's last six inches of topsoil in our gas-tanks.”

To me, it seems strange that ethanol and bio-diesel are considered a renewable, “green” energy source. I’m not an environmentalist; I just like pointing out the intellectual dishonesty of championing biofuels as a preferable alternative to petroleum. In terms carbon output, the only difference for biofuels is that the cultivation of inputs (corn, sugar, or switchgrass) supposedly offsets the burning of the resulting fuel later; however, in most cases, the land used to cultivate these crops would have some kind of carbon-sequestering plant life on it in any case. Furthermore, ground-level pollution from biofuel use and manufacture shows few advantages over petroleum. The fact of the matter is that biofuels are manufactured in a factory, whereas petroleum is naturally produced by the earth over millions of years from basically the same inputs. Granted, crude oil must be refined before it can be used (as gasoline, diesel, and other petrochemicals) but this processing is minimal compared to the manufacture of biofuels; in other words, switching from petroleum to biofuels requires expanding the capacity and/or number of already unpopular fuel plants (be they refineries or ethanol plants.)

The other alternatives for mobile/portable fuel are batteries, fuel cells, and hydrogen. These zero-emission energy sources sound great until you look at the source of the energy required to charge the system or extract hydrogen from water or other compounds (often petroleum.) Certainly real, renewable energy sources like wind, water, and solar power would be great, but realistically these sources contribute only a small percentage to the total electricity used in the US, and—for practical reasons—this will remain so for a long time; electrical power will likely continue to be produced mainly from the dirtiest source of energy: coal.

Therefore, I propose that the most sensible course of action is to continue to use this perfectly natural source of energy for as long as we still have it. By virtue of the fact that oil is becoming scarcer, the market will automatically reward makers of more efficient vehicles, engines, and other processes that use petroleum. Eventually, even more expensive alternatives energy sources will become economically feasible to develop—and without artificial incentives!

Of course I am all for conservation of all our natural resources; I am particularly irritated by the thoughtless waste that is characteristic of American society. Particularly when it comes to petroleum, this waste is directly responsible for making us dependent on some of the most reprehensible governments in the world, simply because they have the majority of the world's crude oil reserves. I say let’s tap the ANWR and other verboten reserves within our territory; there is no reason to let this perfectly good resource go to waste. Our current policy regarding these reserves are as if you were to go down to your wine cellar, (assuming you have such a thing) notice that racks are starting to look a little empty, and then swear off your finest, well-aged wines forever in favor of cheap domestic beer.

Cooper River Bridge Run

On Saturday, the 30th Annual Cooper River Bridge Run—a 10 km foot race—took place in Charleston, South Carolina. I had heard about this event for many years, but never considered it because I am not a runner. This year, my father decided to participate. He instructed his daughter-in-law to register him for the event, but then registered himself on the website as well. This meant that there were two runner’s packets available, and I felt had no choice but to participate despite having not trained at all—outside a few Hash House Harrier runs every other week.

We left Columbia at 5:00am in order to arrive in Charleston with plenty of time to get prepared—which was a good thing, because getting the runner’s packets from the friend who picked them up turned out to be quite challenging. Despite this hitch, we were ready an hour before the start time, and made our way to the start line in Mount Pleasant to join over 40,000 other runners and walkers who were lining up for the event. Understandably, I was anxious knowing that, despite having the option of walking the course, I would get caught up in the spirit and competition of the event and run 6.2 miles with absolutely no training—and suffer the consequences afterwards (which I am, as I write this on Sunday.)

The magnitude of this event is difficult to fully convey; with 40,000+ competitors, there seems to be an endless line of people ahead and behind you. When the official start time came, and the clock began ticking away, I was not able to get over the start line for another three and a half minutes. Throughout most of the event, competitors spanned all 4 lanes of the road—we were racing 20+ wide!

I felt amazingly good for the first 3 miles; I ran 10-minute miles up to this halfway point (which also coincided with the peak of the namesake Cooper River Bridge.) However, on coming down the bridge into Charleston, my knees started hurting, and I was forced to walk. Despite the pain, I couldn’t stand watching hundreds of people go by me, so I would alternately run and walk for the rest of the race.

Some people take this 10K less serious than others; I saw all kinds of whimsical costumes. The following all participated in this event: some girls in hoop skirts, a group of people in banana costumes and in bowling pin costumes. I saw two brides, one of which actually was wearing a short wedding gown and carrying a bouquet; her husband (or fiancé) was running beside her in a tuxedo t-shirt. At least two marines in BDUs, combat boots, and carrying 55 lbs of weight in a backpack. However, my favorite was a group of guys dressed as bulls followed by a group of girls in white (al la “running of the bulls” in Pamplona, Spain—except they should have been in front of the bulls.)

I crossed the finish line at 1:08:38, making me the 12,540th finisher (out of 28,641.) My father (middle) was 13.5 minutes faster, and placed 14th in his age group. My niece (right) was 25 seconds faster than him with an official time of 54:38.

We had lunch in the beautiful, historic district of Charleston, and then spent the afternoon on Folly Beach. The water was a bit too cold, but the weather felt almost summer-like. All in all, it turned out to be a wonderful day; even the pain is a “good hurt”; I know this makes me stronger!

Insurance is a rip-off

Before you get the idea that I just figured this out (and because of my business education,) let me assure you that I’ve been of this opinion for quite a long time now. I’ve just recently become aware of otherwise intelligent people around me buying silly insurance policies such as extended warranties and mobile phone insurance—I thought everyone was already aware of what a waste of money these are. As Groening, et al derisively had Homer say when Dr. Nick restored his stupidity in episode BABF22: “Extended warranty? How could I lose?”

Before we begin, let me be clear about my thesis: insurance is too often assumed to always be a prudent purchase that demonstrates the purchaser is a grown-up, responsible adult. I therefore propose that, at least as a first approximation, we assume that insurance is always a bad investment since, by definition, the average buyer—in the long run—will pay more in premiums than he or she will incur claims (otherwise the insurance company would go out of business, right?) Furthermore, since we can't predict catastrophic events, we can never time when to buy a policy (or let it lapse.) Therefore we commit ourselves to a periodic (most often monthly) expense for the rest of our lives, and this is the worst part: we never see this money again... it's really gone...we could have saved it or at least spent it more prudently, on something that would benefit us or our family now.

Let’s start with the basics: insurance is a financial instrument used by individuals and organizations to protect themselves against a risk (a greater potential financial loss.) You pay a (relatively) small amount of money over time to protect yourself against a possible catastrophic monetary loss. The insurance industry hire actuaries to determine the likely amount and frequency of payouts, adds their (hefty) profit margin, and comes up with the premium to the policyholder. (Granted, this is a simplified view.) Therefore, before we even get into paying middle men (agents/brokers) and for insurance fraud, you will always pay more in the long run with insurance than without, unless you happen to be one of the few exceptions that does indeed experience a catastrophic loss that the carrier actually covers (and, by definition, you can't possibly know if you are going to suffer a catastrophic loss.) To those that say “I know that I'm a unlucky person, so I will buy the best insurance”, I hear “I'm a careless person” and rest assured the insurance company will learn this and cut you off before long.

HEALTH
This is probably the most sensible—and, in fact, prudent—insurance out there. Since you can quickly incur tens or even hundreds of thousands of dollars of expenses due to a serious illness or injury in the US, you need to protect yourself from the financial devastation this would create. Note: despite the perception that insurance is required to be treated in our mostly private health care system, insurance is actually for protecting your assets and credit standing after being treated for a major illness or injury. Even the prestigious Mayo Clinic regularly serves the indigent local population of Rochester, Minnesota knowing they will never be paid for their services. This is the law in the US; hospitals cannot refuse service to anyone in need. Of course, this causes a major problem; hospitals must charge those that can pay more to offset these losses. As a result, conscientious people with health insurance are underwriting the whole system.

Therefore, it is reasonable to propose a reform that would include everyone in the coverage and payment pool. However, I am not naïve enough to think that a single-payer system would necessarily put a dent in our outrageous health care costs (17% of GDP!) I am afraid that trading the corporate profiteering of our current (private) model for the bureaucratic inefficiencies of a single-payer system would do little to reduce cost; sadly, limiting (that is rationing) health care is the only way, and Americans will not stand for this—so expect no change here.

By the way, dental insurance is overrated; suppose you visit the dentist every six months for a cleaning and pay $70 each visit. With insurance, you may pay only a $10 co-pay, and the insurance plan may have negotiated a lower price—let’s say $50. So their payout is at least $100 per year; what do you think they will charge you (or your employer) as an annual premium? I don’t think it would be a stretch to assume that it would be more than $140—so where is the savings?

LIABILITY
The second prudent choice in insurance is liability insurance for your home, vehicle, and business. In our litigious society, you could lose everything in a court judgment, even if you are not at fault by any reasonable person’s estimation. The solution to the growing cost of liability insurance (especially professional malpractice insurance) is tort reform—but I don’t see that happening soon, since our legislators are usually lawyers, and the legal community has immense influence in government at all levels.

LIFE
Life insurance was designed to allow a family to live on with the same standard of living after the death of the breadwinner. This can still make sense for a modern, dual-income family, but these policies are being over-sold. The most egregious example of this excess is the marketing of policies for children; I find this disgusting! How can money ever alleviate the anguish of losing a child? Generally, you should only buy term life insurance to cover the loss of family income from yourself and/or spouse until your children are of age; in this age of equality of the sexes, your spouse will be able to support himself/herself after that, right? I see no reason why a family member’s death should be treated like a lottery windfall—in fact I find this concept revolting.

I understand that a funeral can be costly, but it’s not an open-ended expense; you can cap this under $5000—something that could be covered by a “rainy day” fund—money that is accumulated when it is no frittered away in premiums to an insurance company for an occurrence that is very unlikely to happen to a relatively young person.

DISABILITY
There is normally some kind of disability coverage in a life and/or health insurance policies, but what is becoming more popular is short-term disability policies to “help pay the bills” while one is out of work due to an injury/illness. While this sounds to be a prudent policy for working class people, it is just one more drain on their already overstretched budget. From what I can tell, the rise in popularity of this type of policy is due entirely to the massive advertising campaign of one particular company and it’s spokes-duck.

HOME
Since most homeowners have a mortgage on their property, the lender usually requires homeowner's (fire) insurance; they know that if your home were destroyed, (or uninhabitable) you would have little incentive to continue making mortgage payments. This is reasonable; most people don’t have an extra $50,000-$100,000 lying around to rebuild a house in this case. However, I see no reason to pay extra to insure the content of you home—you really don’t have to replace all that junk you’ve collect over the years, do you? The same goes for renter’s insurance; if your apartment burns down—taking your nice, new flat-screen TV with it—you certainly would appreciate having a policy that would let you replace this. However, can you honestly justify paying a monthly premium to protect this and other non-essential belonging against something that is such a rare occurrence?

AUTO
Liability insurance is required by the state (to cover damages/injury you may cause), and a lender will require you to buy collision (your own fault) and comprehensive (acts of nature) insurance. Eventually though, you will own an automobile outright, and I posit that by this time you will be financially secure enough to self-insure repairs to your own car. It will really hurt when you dent your own bumper and have to pay for it out of your own pocket, (especially if it’s a brand new car) but you will certainly save money over the course of your lifetime.

RECOMMENDATIONS
This list could go on and on, so I will just stop here and say that every other type of policy (at least for individuals) is a waste of money! All these other policies and add-ons add up and start to cost real money, and worse—it is a recurring expense that you will pay every month for the rest of your life. You are much better off to set aside this money in a “rainy day” fund for several reasons:

1. If no major calamity ever transpires, you still have the money.
2. This “rainy day” fund will eventually become a sizable investment that starts earn money on its own, that then can be used for other purposes (college fund, real estate down payment, retirement, etc.)
3. Best of all, you will never have to jump through hoops and fight for a payout.

So, here is my recommendation on what policies to buy:

• You need health insurance, but go with the highest deductible you can; you will get less in payouts, but the lower premium costs will offset this.
• If—and only if—you have dependents, and you contribute significant finances or labor (child care) to your family, buy term life insurance for yourself and/or spouse, so that your family can live in relative comfort in the unlikely event of your early demise. Once these “dependents” are independent, cancel the policy.
• Ensure you have liability insurance to shield you assets from seizure by court judgments; this means home, car, and malpractice if applicable.
• Carry insurance that the state and your lender may require for your home and car, but run the numbers on the cost and possible benefit of any additional insurance.
• Generally speaking, don’t buy any other kind of insurance; especially don’t insure anything you can live without.
• Always shop around.

A lot of insurance companies market themselves as a comprehensive service that “takes care of you” in a time of need (e.g. arranging a rental car after an auto accident); I don’t understand why anyone would want to pay extra for this (oh, you don’t think they incorporate that into their premiums?) I just want a bare bones insurance company that just processes legitimate claims as efficiently as possible. I will talk more about this later, in my “Responsible Insurance Company” post.

DISCLAIMER: This should not be construed to be professional financial advice; it is merely a thought-provoking suggestion for intelligent and financially disciplined individuals.

The Persistent Itch is back!

To my few remaining faithful readers I apologize for not writing in over a month now. February is my first month-long break in blogging since January 2005; I will try not to let this happen again. To that end, I’ve come up with 5 new topics, which I may flesh out and publish over the next 5 weeks or so.

• Insurance is a rip-off. Your premium is always going to be greater than your average expected loss.
• Bio-fuels are unnatural. Actually, good old crude is the all-natural (organic) choice in fuels.
• New business idea: Responsible Insurance Co. The challenge: come up with objective criteria that could be used to legally select a low-risk pool of policy holders—resulting in substantially lower premiums for these “responsible” individuals.
• New business idea: The Global Warming Fund. OK, I get it, global warming is real. Now where can I invest to make money from the inevitable consequences. Seriously, I'd like to see people putting their money where there mouth is—betting for climate change.
• New business idea: Ante-Diamonds. Because diamonds are a girls best friend…we need a substitutes for “Blood Diamonds”

As far as life in Columbia, South Carolina goes: I feel like it is summer already. Daylight savings time began on Sunday—meaning I bicycle with a group of friends every Tuesday and Thursday night now—and the weather so far this week is cooperating (today it will be 82F – 28C!)

On Capitalism

Monday night, I watched an interesting documentary on PBS called Power of Choice: The Life and Ideas of Milton Friedman. The late Dr. Friedman was one greatest proponent of laissez-faire capitalism in the 20th century, and—thankfully—had the clout to be heard in Washington and around the world. I am convinced that much of economic boom of the past century is directly attributable to him.

Then, on Tuesday, I read a short article entitled “The Hard Rain That’s Falling on Capitalism” written by Ben Stein in the New York Times. I found this story through Reddit.com—a website which also lets you comment on the featured stories. I had been meaning to formulate my thoughts on capitalism for some time, and in responding to the mostly left-leaning critics, I finally got a start. However, newer stories are constantly making their way to the top on Reddit, and by the time I wrote these comments, most of the debate here had already subsided; therefore I will expand on my theories and observations here.

The criticism usually leveled at capitalism—and the US in particular—by the left and anti-globalists, is generally that this system only makes the rich richer (and by extension the poor get poorer.) Their proof tends to be pointing out specific cases of corporate corruption and other malfeasance, and instances of excessive compensation for top management. What they seem to suggest by this is that there was an idyllic time in the past characterized by more compassion and transparency in commerce.

With the exception of a few true, ideological communists, I think we all agree that the problem is not with capitalism as such, but corruption and the lack of transparency. This is especially egregious when big businesses use their influence extract subsidies from government or to induce the government to create barriers to new entrants (foreign or domestic) in their particular industry. Then there is the internal corruption, where management—usually through creative bookkeeping—steals from the corporation and, by extension, the shareholders and other stakeholders of the company. I admit this is a real problem, but I don’t believe it is an endemic or growing problem. I assume that this has always been going on; it was just not spoken about as much. I dare say the farther you look back in our history, the more corruption and back-room dealing you would discover—meaning the economic climate was less fair and transparent at any time in the past.

This is why, whenever a corporate scandal is uncovered, I gain—not lose—confidence in the business world. I believe the reason we hear more and more about these scandals is not because they are occurring with more frequency, but because the press is becoming more vigilant—uncovering and reporting more cases of malfeasance than ever before. The logical result would be fewer and fewer occurrences of malfeasance over time, since management knows they are being more closely watched. Pessimistically, it also means that future malfeasance will be more esoteric and harder to detect, but like with spam and viruses, it is a cat and mouse game between the good guys and the bad—alternately one-upping each other. If nothing else, this vigilance means the repertoire of deceptive practices available to unethical managers is constantly shrinking.

Let’s take the Enron debacle for example—could this happen again? Well, certainly not in the exact same way. More importantly though, the complicity of auditing firms in such scandals has been forever broken. Arthur Anderson is now defunct. Don’t you think that this has put the “fear of god” in the remaining big-3 accounting firms? This was a beautiful example of the free market at work—no government intervention was necessary; these firms now clearly understand their only really important asset is trust—specifically their reputation. If shareholders don’t trust an auditor, they will not approve them, and they will quickly lose all their clients—ending up bankrupt like Arthur Anderson. Certifying that the books of a client are accurate is no longer just a formality; it’s putting your reputation—and therefore your existence—on the line for these firms.

This trend toward greater transparency is self-perpetuating. It improves investor confidence, and investment naturally gravitates to its most efficient and profitable use.
The financial markets in London are a perfect example; previously characterized by widespread back-room dealing, they have recently been cleaned up, and are seeing a boom that is making them the premier international financial marketplace.

Therefore, my main assertion is that we are now seeing an emergence of truer, more open, equitable, and much more transparent capitalism—not just in the US, but also around the world (even China and left-leaning South American governments see the benefit of a free market.) Furthermore, this embrace of true (and global) capitalism is what is responsible for the exponential growth that we have seen in the world economy in the last 10-20 years. This boom is being felt not only in the industrialized world, but also throughout much of the developing world—particularly Asia. The result is that infrastructure is being built and the economies of the countries are growing faster than under any other economic regime/philosophy. Even the supposedly “exploited” workers of the developing world are earning more and are accumulating more valuable possessions than their forefathers could have imagined. I challenge you to find a more prosperous time in history.

In regards to the growing income gap between the rich and the poor, I can’t believe this is a result of poor getting poorer; the rich are simply getting richer at a faster rate—deservedly or not. And this group of super-rich is larger and more diverse than ever. Back in the day, there was only a handful of super-rich in the US; these families are household names today: Rockefellers, Vanderbilt, Carnegie, Morgan, Getty, et al. Today you have all kinds of innovators and entrepreneurs from unknown families (even from groups that were previously discriminated against) becoming fabulously wealthy.

For comparison, let’s go back to the idyllic “good old days” of yesteryear. A middle class working family lived in a tiny (by today’s standard) 2-bedroom saltbox house, had one car, never traveled by air, had no credit cards, no cable TV, no cell phones, no computers, no Internet access, etc.—all these things we now consider necessities and whose monthly payments now suck dry the wallets of the middle class. The working class is not poorer today; they are just stricken with affluenza.

The ultimate argument for capitalism is its results; find me an economic system that not only created the greatest amount of raw, economic power this world has ever seen, but also given nearly all strata of society more purchasing power and therefore a more comfortable life. This last part is very important to remember when we begin discussing real wages of the working class, which have supposedly been flat or even declining in the US since the 1970’s. The homes, cars, appliances, and especially electronics we buy today are many times better (in terms of quality, efficiency, durability, etc.) than anything you could buy in the 70’s, and certainly not as manifoldly expensive. Technological advances can explain only part of this effect; I am convinced that we have—and continue to—see an incredible increase in the value of goods we purchase over the years due to efficiencies realized thanks in large part to more open and transparent global capitalism. This “Wal-Mart effect” in fact makes us richer, and it is not sufficiently reflected in the usual empirical statistics.

Any argument against capitalism, would by definition propose an alternate (or at least modified) economic system. And again by definition, any system besides a pure, laissez-faire capitalism would require some type of government or at least collective controls that would introduce distortions into the marketplace—either placing more or less value on a resource than it would naturally be entitled to. I am not advocating pure capitalism, I only want to make you think: what aspect of the economy is so important that we need to tinker with it (and be more likely to screw up rather than improve), and who (politicians, bureaucrats) can we trust with these decisions? We have seen that concentrated central planning—namely communism—has failed miserably; where would you set the limits? Many people hold up European (and especially Scandinavian) socialism as the perfect balance between capitalism and communism, and in a lot of ways it is hard to argue with: they have the lowest poverty rates, highest wages, and—amazingly enough—export more value per capita than low cost, export-oriented Asian countries. (This is because they produce higher-end products and operate more efficiently largely due to their excellent educational and vocational training systems.) However, I am convinced that this supposedly most advanced economic system is not the answer for the developing world. Just as with your personal finances, you can’t spend your way into long-term prosperity.

Here is my 6-step program to economic prosperity for developing countries:

1. Tackle corruption.
2. Throw open the floodgates of laissez-faire capitalism to build wealth.
3. Institute a low, flat tax rate.
4. Invest tax revenues into infrastructure and education.
5. Add regulations slowly.
6. Add social programs as tax revenues allow.

I see doing this in any other order as “putting the horse before the cart.”

Well, that was longer than I expected it to be! Sorry for rambling on; I guess I should organize this a bit better, back it up with research, and write a more coherent article, but that’s not going to happen realistically!

MBAEC reunion in SC

MBA Enterprise Corps alumni and current South Carolina residents Joel (Bulgaria 2005), Ryan (Bulgaria 2005), and Pete (Kazakhstan 2002) painting the town in Columbia on Friday night.

Flyin’

Friday was moving day for my brother, Simon, and his wife. Thankfully they didn’t have too much junk (at least by American standards,) and many hands indeed made the work light—in fact we were done in a few hours. So, Micah—my other brother—asked me if I want a ride in his new airplane—a Lancair Legacy. Of course I jumped at the chance; he has been building this high-performance airplane for a couple of years now, so obviously I wanted to experience what it is like to ride in this “sports car in the sky.” As you can see from the battleship gray color, there are still a few cosmetic tasks that need to be completed, but nothing that would affect its air-worthiness (despite the ominous “passenger warning” on the instrument panel.) In fact, he had just modified the oil door on the cowling, which allows us to appreciate the throaty six-cylinder engine (it did sound like a sports cars when he fired it up) in the picture at the top—it certainly doesn’t need any help from a hypothetical MTV “Pimp my plane!”

We taxied to the runway, checked the engine, and then Micah released the brakes. I was immediately impressed; the plane pushed me back in the seat in a way that I’ve only ever experienced in a jet.

Micah’s friend, Eric, was also ready to fly, so he got into his little plane and joined us in the skies within a few minutes. He also built his own plane—a Cassutt, which is a type of aircraft that they race around pylons in Reno, Nevada; needless to say it is fast. Never the less, Micah was able to blow his doors off, as we say in the American vernacular for racing past another vehicle. We flew to the Pelion airport for fuel, and I learned just how expensive this hobby is—avgas is over $3 a gallon!

On the way back, we came across Micah’s neighbor, Tim, who is an aerial photographer. Of course, we had to get some more pictures (I had been taking many from our perspective, but needed some of us.) So, we flew to Lake Murray to snap some air-to-air photos: in the picture above, Eric is on the left in his Cassutt, and Micah’s Legacy is on the right (if you blow it up, you will see Micah in the left seat—looking toward the camera, and I looking forward—starting to get a little queasy from all the steep turns.) Photo credit: Tim French. I took the final picture here: silhouettes of Tim’s plane on the left and Eric on the right captured over the lake at sunset.

On Blogging

I’ve been blogging nearly continuously for 3 years now. So, naturally, I’ve given some thought to why I do this. I started my first blog when I went to business school in Vienna in 2004. It was intended as a way for my friends and family to keep up with what I am doing without sending out individual emails (or pestering anyone with bulk emails.) As such, it was successful; my audience grew by word of mouth to include all kinds of friend, family, acquaintances, former colleagues, and classmates. Granted, it was not a steady audience (except my mother, who would ask my father every morning if I had written anything new,) but this is the beauty of a blog: friends who had “not visited [my] blog in a while” could easily catch up, since a month’s worth of post can be easily read in one sitting. However, one unexpected person I found out that I am writing for is myself—specifically my “future self.” It turns out my blog is also my diary; I actually enjoy reliving the heady days of grad school, for example, by reading something I wrote a year or two ago. Of course, I would not actually write a diary (that is something only teenage girls do,) so blogging for an audience is an incentive for writing my personal history. However, this dual usage leads to some conflict, namely self-censorship. Due to the broad audience that could potentially read my blog, I often have to choose my words carefully. It’s not that I lead a particularly scandalous life, I just don’t want to bore my audience most of the time (sometimes, though, I do nerd out for the sake of my brothers.) Never the less, many times I redact large portions of what I write in Microsoft Word before I even post it (which, by the way, is good advice for you students out there: don’t write up to a minimum word count; write past it, then cut out the weak portions, leaving only the good stuff.) The other issue is that some characters that make up this ongoing story of my life like to maintain a lower profile. I have little compunction about sharing my life on the Internet, but I’ve found that some people don’t like the idea of me writing about or posting pictures of them on my site. Therefore, I have become more guarded—practically, I have adopted a first-name only policy. One particular young lady has made it clear that she did not want to appear here, but recently has relented, and even ask “why am I not on your blog?” So—without further ado—here is my girlfriend, Mirena.

Ski Borovets

Despite dire warnings that there is insufficient snow in Bulgaria for skiing, we went to Borovets on Sunday with two American diplomats. But first, we had to go shopping. After spending most of the day in countless shops, we went back to a little shop and bought a cute snow bunny outfit that Mirena had initially found. (We also bought a business suit the same day.) Mirena insisted I buy something for myself, so I got a cool new ski jacket; the total for everything was a mere 320 leva ($212.)

The actual skiing was decent; the slopes at the top of the mountain were fine for the most part, although there was over a meter of snow missing compared to last season. I skied nearly nonstop all afternoon, getting my money's worth for the half-day ticket (25 leva.) Meanwhile, Mirena and one of the diplomats were getting beginner ski lessons on the bunny slope. I know this can be frustrating, but she had a reasonably good time.

The past two days have been spent running around town getting "loose ends tied up." For example, this afternoon—just before my flight—we were in the notary's office getting some documents officiated for my business (investment.) Then it was off the the airport, but the new terminal, which is finally in operation. After a tearful goodbye, I was taken by bus to my plane in front of the old terminal—the jetways were standing unused. The Sofia-Brussels flight was remarkable only for the beautiful view of the sunset crisscrossed by contrails of other flights over the skies of Europe. At one point, I looked down I noticed a large river, which I thought probably was the Danube; indeed, just a few seconds later I noticed the unmistakable junction of the Sava and Danube at Belgrade!

Right now I am writing this in a fairly nice hostel in the center of Brussels, having spent my last Euros for the key deposit, I can't even buy a fine Belgium beer! Tomorrow I will get that 10 Euro back, and stretch it between lunch, souvenirs, and train ticket back to the airport. UPDATE: I ended up frittering away the morning, and had to rush to the airport with only minutes to spare—so don't expect any souvenirs! :-(

Velingrad

First, here are some time exposures (all 25 seconds) from New Year’s Eve. The first one—made at 22:00—is a calm view toward Mt. Vitosha (which was only barely visible by the naked eye.) After midnight, fireworks broke out all over the city; people were shooting them rooftops, balconies, and the street—it was like the fourth of July! ;-) In the third picture, you can see the burst of light coming from the official New Years/EU Accession party downtown—which we just watched on TV.

Spa

For the New Year’s holiday (of January 1st and 2nd) we went to spa resort town of Velingrad. We originally made reservations at an old restored hotel (check out the iron work over the door in the picture below!) but we decided on a nicer, newer, and cheaper hotel after tearing all over the city looking for the best value. As in many places in Bulgaria, these spas are fed by naturally hot, slightly minerally water.


The pool was a balmy 31C (88F.) We also hit the Roman (steam) bath, sauna, and had massages. Mirena asked where people go relax in the US; I honestly couldn’t think of an equivalent. I am sure we do have spa resorts somewhere, but I think most people “just go the beach.”

TP

On the way back to Sofia, we came through Belovo, home of Belana Paper Mill—Bulgaria's largest producer of TP and paper towels. Along the road opposite the factory, the street was dotted with vendors selling all the various brands produced there. We stopped and Mirena bought a restaurant-sized roll of paper towels for 3 leva, but she said their prices were actually not that competitive; I suppose they lure Sofians into thinking they can get a good deal on their way home.

Below is one last time exposure I took at twilight as we were heading back to the expressway (notice the streaks of light from cars on the extreme right.)

Oh, and BTW, it is snowing right now! ;-)