TCO - How to think like a Capitalist

There you are standing in the computer store trying to decide between two printers, A and B. Both have the same features, same warranties, same manufacturer and can be expected to last 5 years. The difference? A costs $50 and B $100 and B costs about 1 cent per page to print while A costs 5 cents a page (special paper). Which one should you buy?

Well, you could do "eeny meeny miney moe" or you could employ a capitalist tool called "Total Cost of Ownership" or TCO. This is a good measure of true cost. For example, you print about 10 pages a week or roughly 500 pages a year. So, over the lifetime of the printers, you would be printing 2500 pages. So, A would cost you $50 + 2500 x 5 cents or $175 while B would set you back $100 + 2500 x 1 cent or $125. I guess the cheaper printer would come out more expensive! Of course, if all you do is print one page a week or roughly 250 pages over the 5 year period, the TCO would be $62.50 and $102.50 respectively.

The above example is, of course, extremely simplistic. In real life, you may be comparing completely different technologies or different services with different guarantees etc. You may not even be able to predict your own behavior! But, if you compute TCO consistently, you can get a good feel for the costs and perhaps it would force you to figure out exactly how much you are going to use your new purchase.

So, big deal! Why is it so important? Well, TCO is a tool that we should employ in our daily lives but we don't. For example, many of us do not realize how much that must-have sweater really costs when you carry a balance on your credit card. Similarly, when we buy an inexpensive jacket that lasts just a year or two, we may end up paying a lot more in the long run than buying an expensive but durable jacket.

Another time we should employ TCO is when we are buying a car. We often pay far more attention to the price than to the costs of regular maintenance, fuel, insurance and what the vehicle would fetch when we want to replace it with a newer car.  You will find that the initial cost of the car (the purchase price) gets swamped by these"extras".  Similarly, when you renting or buying a residence, try to figure the costs of heating and cooling.  You will find that a well-insulated house is worth some extra dollars.

Anyways, keep TCO in mind the next time you are shopping for anything or even deciding whether to drive your own car or a rental on a road trip.  The results just might shock you...


Postcard from Europe #2

Long time back I was once traveling from Germany to Greece by train and ferry and I met a bunch of American college students who were going my way. We traded stories and tips on places to stay and things to do. We changed trains in Milan and had some time to kill. One of the fellow travelers looked up a sheet of paper from her backpack and got really excited. "There is a McDonald's right outside the station! We don't have to go far!".


Well, as it turns out, the beautiful Milano Centrale was right across the street from a McDonald's. But weren't we coming from the land of McDonald's? We could always have a happy meal back home. But, the Golden Arches beckoned my fellow Americans and despite my pleas to look elsewhere, they went off for cheeseburger and coke. I browsed through a few shops and soon had my hands on panini and gelato. We gathered up in the park right outside McDonald's where we compared notes.

I hate to gloat (well, maybe just a little bit...) but I think I came out far ahead in our quest for good food. My fellow travellers discovered to their horror that they had just spent a rather large amount of money (Italian Lire were confusing) on the food that they thought would be fairly inexpensive while I not only came out cheaper, but my food was not "icky" or "weird".

The lesson was not forgotten by them when we disembarked from our next train in Brindisi and found a small trattoria just a few blocks off the beaten path where the food was good, portions were large and the price was very very sweet.

But why is all this important? Well, back in 2000, the American people (s)elected a guy that they would feel comfortable drinking beer with. And less than 8 years later, we are in deep trouble. Now, we have two candidates - John McCain who, despite his "maverick" moniker, is in lockstep with the outgoing guy on most issues and Barak Obama who seems to be a step in a new direction. Now, there are many Americans who feel that Obama is an untested choice and thus feel that they should stick with a familiar face. Well, my good friends, this is not the time to grope for the familiar. The scrutiny of Obama over the last two years has revealed a guy who is a decent choice. No, he cannot fix all the problems faced by our country right away. But at least he has a good head on his shoulders and a team of advisors that anyone should be proud of.

As my fellow travellers learned, reaching for the familiar doesn't always get you the best deal. You do want a good deal, don't you?


Colin Powell speaks... But did he say enough?

I don't have to tell you that the biggest political news over the weekend was Colin Powell's endorsement of Barack Obama for the presidency of USA.  Rightly or wrongly, Colin Powell is considered an influential person in American politics.  He was the Chair of the Joint Chiefs of Staff (the first Black) under Papa Bush, Secretary of State (the first Black) under Baby Bush and he is associated with the selling of the current Iraq War at the UN.

Colin Powell made quite a spirited effort to denounce the "Obama is Muslim" strategy of McCain/Palin ticket by saying "So what if?  There is an American soldier who is buried in Arlington National Cemetary who died fighting for US in Iraq and he was Muslim."  But is this really news to him?

The Republican Party and the Bushes have been using this strategy for years.  There was the "Cadillac-driving Black Welfare Queen" during Reagan's campaign and Willie Horton during Papa Bush's campaign.  In 2002, the Republicans questioned the patriotism of Max Cleland, a guy who lost both his legs in the Vietnam War.  Baby Bush and his surrogates used similar tactics to question Purple Hearts awarded to John Kerry during his military service in the Vietnam War.

Has Mr. Powell truly changed his mind?  Or is he a Johnny-come-lately just so that he can say that he supported Obama?  Has he realized that the Republican party has treated him as a prop (much like they have used Condi Rice and Clarence Thomas)?

If Colin Powell really has had a change of heart, he should do the honorable thing between now and November 4 -- Vigorously campaign for the Obama/Biden ticket by pointing out that John McCain and Sarah Palin are not good for our country.  They would rather demonize their opponent than support good ideas that improve our country.  And Mr. Powell needs to reiterate that the Iraq War, enthusiastically supported by John McCain, was a folly of the first order.  His ex-boss got it completely wrong and there is no other way to look at it.

But the question remains, would he?  I guess just a couple of weeks would make it crystal clear...


Protect "Traditional Marriage"?

Year:  1939.  Location:  Varanasi, India.

A young man had his heart set on marrying this young woman.  They were both single and had known each other for a long time (they were in school together).  But there was one hitch.  He was of Agrawal sub-caste while she was of Mahuri sub-caste.  When the other Agrawals in Varanasi heard about the intentions of this young man, they warned him.  They told him that what he was doing was against God's will and if he did do it, he would be excommunicated...

Year:  1958  Location:  Virginia, USA

Another young man had his heart set on marrying this young woman.  He was White, she was "Colored".  And in Virginia in those days, anti-miscegination laws were in effect and such a union was a no-no.  Well, they ended up getting married which landed them in hot water with the law and they had to move out of the state as a penalty.  Well, they still had family and friends in Virginia and so ultimately, they sued the state... 

Year:  2006  Location:  California, USA

Two lesbian women have been a couple (in their hearts and in the eyes of their friends) for the last 53 years.  They are growing old and frail and want to make it official.  But while Califonia's constitution seems to support the women in their quest, the laws require that a marriage recognized by the state have a man and a woman.  So they took their pleas to the California Supreme Court...

I think you have a clear idea where I am going with this.  People fall in love and want to get married and live the married life.  They are not asking for favors such as free housing or a car or even compelling people (other than their friends) to attend the wedding.  They are looking for that piece of paper that makes it all official.  They don't want to sneak around and lie that they are not a couple.  They want to climb the rooftops and yell "Yes, we are a couple".  They want the right to hold hands in public and to hold each other.

The first story has a happy ending.  The couple not only got married but also had 6 kids, the first of which was my father.  Yes, they were excommunicated but they managed to survive and thrive.

The second story also has a happy ending.  Richard and Mildred Loving were able to convince the US Supreme Court to overturn the Virginia laws (and laws in 15 other states) regarding inter-racial marriages.

The third story has a happy ending as well.  In 2008, the California Supreme Court ruled that same-sex couples have a right to get married.  Del Martin and Phyllis Lyon celebrated by getting married in San Francisco with the mayor officiating.

But the third happy ending has a dark epilogue.  There is a constitutional amendment on the ballot (Proposition 8) that would slam the door shut on same-sex couples.  But they have a seductive slogan - They are trying to protect "traditional marriage".

I wonder how my grandparents' lives would have turned out if they had succumbed to the pressure exerted by the "traditional marriage" folks.  Don't you?

Please say NO on Proposition 8.


It's a small world...

Last weekend, I made Ghee (aka Clarified Butter). Now, before you marvel at my cooking abilities, please note that making Ghee is a fairly simple exercise. It consists primarily of two steps:

A. Buy unsalted butter.
B. Cook the butter at low heat till all the moisture is cooked off, leaving just the fat behind.

But wait, there is actually another step. You see, butter consists primarily of three things - fat, water and a small amount of protein. If you try step B in turbo mode, the protein burns and gives the Ghee a smell and taste you would not relish (Trust me, I have done it). Many people just throw the protein residue away and enjoy the rest. But, back when I was a kid, my mom introduced me to this delicacy (called Mehran in Hindi) and I have enjoyed it ever since.

So, there I am, in my kitchen, keeping an eye on the pot with the butter and making sure nothing sticks to the bottom when I am reminded of a conversation from way back...

Back when I was living in Germany, I went to see the Meissen porcelain factory one weekend and as always, Monday was the day I updated my colleagues on my weekend travels. When I mentioned that I had "Meissen Wedding Soup", Wolfgang Uhlig piped up "Do you know the critical ingredient for it?" Well, I didn't so Wolfgang continued "You see, when you cook butter, you get this fried mass that is made only near Meissen..." Of course, I knew exactly what he was talking about and when I mentioned that I have eaten it all my life, he could not believe it! He thought that it was something so unique to the area around Meissen that he had never met anyone who could even figure out how it was made or had a name for it. And there I was, a guy raised in India, who had not only eaten it and had seen it being made, I even knew a word for it!

So, back to the present. Here I am, making Ghee and Mehran in Silicon Valley and instead of being reminded of India or of my mom's cooking, I am reminded of a conversation I had with a German guy... The world is indeed a small place. Don't you think so?


Tyranny of wire-hangers

I get my shirts laundered at a local laundry where they wash, starch and iron my shirts and put them on wire hangers. I love the feel of starched shirts. That crisp look and feel of the fabric is almost intoxicating. But there is a slight snag in the whole process.

You see, I grew up in India. And hangers came at a premium. I had a bunch of wire hangers that were either bought in the market there or were hand-me-downs from my uncle in USA. I never thought of throwing them out (unless they were horribly bent out of shape). So now, I never feel comfortable throwing out perfectly good wire hangers that I get with my shirts from the laundry.

Think about it. Some guy working in the mines in Chile brings out copper ore which gets smelted into copper and then blended to form ingots that then get extruded into wires which are then transformed into wire hangers and there is a lot of heating and cooling and transporting going on at the same time. To take the shirts home from the laundry and then simply toss the hanger in the trash is, well, an insult to the people who were involved in the whole process.

Yes, I know, we are living in the throw-away society. There are a lot of things that we use exactly once before throwing it away. Pasta jars, soda cans, boxes made of cardboard, foam, clear plastic and what not get dumped in our garbage can every day. Some of these are now making it to the recycle bin but it is still too little. But there is a solution.

When you go to Italy and buy a bottle of spring water, you will find that that very bottle has carried water to many consumers over its life. People pay a deposit for the bottle which they get back when they return the empty bottle to the store. It saves the company a lot of money, keeps the bottle out of the trash and saves energy that would be consumed if the bottle were crushed and remade. Similarly, when you are in Iowa, you pay 5 cents for every can you buy which you get back when you return the empties to the store. That is one of the major reasons why the Iowa roadside has a lot less littering than the surrounding states where there is no can deposit scheme.

So, I propose that laundries be required to charge a deposit for their hangers (say a dime or even a quarter) which they give back when the customers return the hangers. This may even lead to laundries using more durable hangars that they can use many times over. I would like it, wouldn't you?


Dick Cheney was right

Back in 2001, when California was reeling from electricity shortages (later found to be artificially created by Enron), Dick Cheney (the vice-president of USA) made a comment:

"Conservation may be a sign of personal virtue, but it is not a sufficient basis all by itself for sound, comprehensive energy policy"

Many people, including me, were aghast that at a time of severe electricity crunch, the VP would not encourage people to reduce their consumption! The single largest economy within USA was being damaged by the electricity shortages and something had to be done and Dick Cheney, rather than leading the charge, was saying that conservation was not good enough. Well, when Californians dropped their electricity consumption by 12%, I felt vindicated. We had shown the oil-oriented bad guys that we could conserve!

7 years later, I would like to, in public, change my mind. Yes, you read it right. I am going to reparse the phrase above and come up with a whole new interpretation of what Dick Cheney was saying (or at least trying to).

Dick Cheney is a capitalist at heart. While he sees a small segment of society changing its habits solely to save the environment (my view: 10 - 20%), he doesn't see the larger society doing more to conserve unless there is something in it for them. Why do people switch from incandescent bulbs (the Thomas Edison kind) to the compact fluorescent ones that are the rage today? To save X tons of carbon dioxide? No! To prevent global warming? No! To save money on the monthly electricity bill.

This behavior can be seen all over the place. When people decide to use more energy efficient lights, carpool to work or replace single-pane windows with double-pane windows, they might be thinking about the environment but what propels them to actually take action is money. We are, after all, a capitalist society. Doing good for others is a good motivator but doing good for oneself is even better.

So, how should our society behave when it comes to energy consumption and environmental protection? While Dick Cheney may not admit it (due to political realities), I think that he feels that most efficient and effective way to reduce energy consumption without damaging the economy is to place an explicit tax on energy and channel the generated revenue towards rewarding energy-efficient behavior.

Why? Why not simply ban poor mileage cars and force people to install double-pane windows and turn down the thermostat in winter? Well, for one thing, such heavy-handed approaches do not work. Even when they do, the efficacy is not as good as a market-based approach would.

Take the case of sulfur oxide emissions. For years, the federal government tried to force coal-fired plants to install scrubbers (essentially giant gas cleaners) to reduce sulfur oxide emissions that was causing acid rain. All the plant owners balked at the requirement and applied immense pressure on the US government from implementing such a requirement. Finally, a cap-and-trade setup was created and guess what? All of a sudden, an entire industry sprung up around reducing sulfur oxide emissions cheaply.

Similarly, it is politically impossible to push for higher fuel efficiencies for cars. But look at the market. As gasoline has gone from $1/gallon to $3/gallon, the demand for higher efficiency cars has shot up. Imagine if the federal government instituted a $1/gallon tax that was funneled into better and cheaper public transportation. All of a sudden, taking the bus or train or tram would become that much more attractive to the general public. People would seek out carpool matching services. Traffic on the roads would ease and with it local pollution. Our economy would reward energy-efficiency more than it does now and so innovations in the field of improving energy-efficiency (be it for cars, homes, manufacturing processes etc.) would get an economic jump-start.

I am not saying that such a tax can (or should) be imposed overnight but imagine a 20 cent increase every year for 5 years. Dick Cheney would like that...


Book Review: The Omnivore's Dilemma

Omnivore's Dilemma has been on my radar for quite some time. I am a foodie and therefore, the moment I heard about it, it landed on my (perpetually unread) to-read list of books. But even after I read (and enjoyed) articles and columns by Michael Pollan, I was hesitant to read it. For one, I am (mostly) an omnivore and I feel that far too many books on food involve giving meat eaters a guilt trip. I don't need that. And twice I have realized that someone who is really good at writing columns and articles doesn't always end up writing good books.

Well, chance plays such an important role in our lives. My book club picked this book and so I was propelled to read it. And oh, what a joy! Michael Pollan has such a fluid style of writing that before I knew it, the book was finished. And the descriptions! I felt that I was walking in Pollan's shoes as he toured the corn farm in Iowa and the Polyface Farms in Virginia and when he went mushroom hunting in the Sierras. Wow!

But what was he talking about? Well, Pollan he has an indirect manner of getting his point across. Rather than put a list of points that he wants to convey, he takes a subliminal approach. He wants you to not just read the book as an "interesting" tome, he wants you to change your life. Rather than making you think while reading the book, he plants seeds in your head - a whole garden's worth from technology, law, history, anthropology, economics, politics, environment... - which germinate after you are done reading.

My personal take on what is the at the very core of the book is the exploration of the difference between Industrial Food and Artisanal Food. While labels such as organic, farm-raised, all-natural, free-range etc. are useful, the author wants you to go beyond labels and really think about what and how you are eating. He wants you to realize that not all food is alike - food raised or grown in a factory setting is very different from those from a traditional farm. They are different in nutritional aspects, food-borne illnesses, food safety and yes, impact on our environment.

Reading this book has made me think about food a lot more than ever before. I think I can easily blame Michael for my cooking spree these days. So, go ahead and read the book. And then post the results of your cooking experiments here...


Immigration, assimilation and identification

Background: I am of Asian Indian origin and if you looked at me, you would place my genetics from the plains area stretching from Tehran to Dhaka.

So, I am on the BART, when a man of similar origin (i.e. similar skin tone, facial features and hair) as me approaches me and asks: "Where are you coming from?"

I figured he was trying to figure out where the train was coming from and said "Oakland".

"Oh, where did you move from?"

(In exasperated tone) "No, are you Indian or Pakistani?"

That question triggered a memory from more than a decade back. I was at a gas station in New Jersey and an older man (maybe in his 50s) of similar origin as me came up to me and asked the same question "Are you Indian or Pakistani?" Without hesitation, I said "I am an American." His reaction surprised me to the core. His eyes lit up like a kid in a candy store, his lips swelled into a smile and he grabbed my hand, shook it and said "Finally! You know, I have been waiting for this answer for 20 years!" Then he added, somewhat cryptically "You can't love one girl while married to another."

So, back in the present, I said "I am an American." I was not trying to be facetious or overly smart. I am an American. I live here in the USA, pay my taxes here, have an American passport, vote in the elections, own a house (well, at least a fraction of it) and I feel that I am a part of the American experience. When I think of the American public, I use the pronoun "We," not "Them".

Somehow, my answer was not the one my fellow BART rider was looking for. He moved away, shaking his head and muttering something to the effect of how idiots don't know their heritage.

I think I answered the question very honestly. The question comes down to who I am. My parents are Indian (well, my father is no more), they live in India and feel a part of the Indian society. My sister and her husband are Indians and they live and work and pay taxes in India. I, on the other hand, am not an Indian. I feel emotionally close to my extended family no matter where in the world they live. But for me to say that I am an Indian is false advertising, not only towards others but towards myself.

I am not in USA temporarily, working on a project or visiting on vacation. I am here, as an integral part of this society. Why should I say otherwise???


Capitalism, Efficiency and the Environment

Many years ago, I "interned" at a sugar factory in India. The factory was owned by Uncle V, my dad's college friend. For some reason, I wanted to go see this factory and ended up spending a fortnight there, looking through the plant layout drawings, goofing off in the maintenance shed and learning the difference between various kinds of gears, lathes and such. I am sure Uncle V was confused as to why I wanted to spend my time this way (I was 13) but luckily he didn't question my thinking. This is what I learned.

Uncle V inherited this factory from his father in the early 1960s. It was the era of "License Raj", when the Indian government kept all the "dirty capitalists" on a tight leash. The prevailing thinking was that small-scale capitalism was okay, it was the large-scale capitalism that would destroy the society. Therefore, many aspects of any factory were tightly controlled by the government including vacation time, salary structure, production capacity and such.

At that time, the incoming sugarcane was crushed, then run through a water shower and crushed again, the juice was split into molasses and sugar syrup and the sugar was crystallized with heat from a coal-fired boiler. The sugar was shipped to the distributors and the molasses was shipped to rum makers and the factory made a nice tidy profit. All of the production was sold, the selling price was controlled by the Indian government and there wasn't really any competition. Most people would have enjoyed the status quo. But Uncle V was not content. He was an engineer at heart and he pushed the people at the factory to make improvements, hoping to increase production or reduce costs.

The very first improvement was to install a third crusher, thus increasing the juice yield. More importantly, the bagasse (the fibrous cane part of the sugarcane) became easier to burn due to less sugar and moisture left behind. Earlier bagasse was simply discarded as waste but now, it started being used for firing the boiler. This made operating the factory cheaper because the coal needs went down dramatically. Another improvement was the installation of a heat exchanger. This is a wonderful piece of machinery that reduces energy needs by pre-heating the incoming water with the heat from the outgoing waste hot gases.

Now, with the new heat exchanger installed, the process improved so much that bagasse started to pile up! Rather than simply throwing it away (as it used to be done earlier), someone figured that it could be put to better use. In the end, the bagasse was used to make cardboard, setting up a small sister factory next door.

The fact to remember out of all this is that Uncle V was not doing this out of the goodness of his heart. He didn't have any pro-environment protesters at his doorstep demanding that he reduce his coal usage. I am sure that in those days he hadn't even heard of global warming. He did all this to improve the profitability of his factory. He did it to save money.

Today, many commentators and politicians are portraying green technology as a zero-sum game. They think that becoming more green can only mean more costs. However, this is not true. Everything a factory consumes costs money and it is financially smart to use the inputs more efficiently.

Last I heard, Uncle V was trying out a bonus program that gave sugarcane growers more for their crop if the sugar content in the sugarcane was high. I am sure this would create a whole set of incentives for the growers that would help Uncle V improve the efficiency of his sugar plant...


Postcard from Europe

Back in geography class in school I learned that Italians spoke Italian, the Spaniards Spanish, the French French and the Germans German. The Dutch spoke Dutch and the Danes Danish. Each country was a homogeneous place where the people were "naturally" of a single culture and that is why Europe had fractured into the shapes and sizes as it had, each piece taking with it its own linguistic, cultural and ethnic heritage.

But two countries made me wonder - Austria (why isn't it part of Germany) and Switzerland (why do people there speak so many different languages).

A few years later, when I was actually living and working in Germany and traveling like a madman, I discovered that my teacher had lied!

Well, not exactly. She had merely glossed over many of the more inconvenient details. You see, despite what people might say, European countries are actually an accident of history. Just in the 20th century, European borders have shifted around dramatically and if you take into account the movements of peoples and rise and fall of states and empires in the last 2000 years, you would come up with a dramatic and utterly confusing story.

Let us start with Germany, sitting smack dab in the middle of the continent. It was not even a country till 1871 when Otto von Bismarck realized that he needed to create a unified state under Prussian control in order to project power over the neighbors. But the state that was created is very different from the re-unified Germany as it exists today. Alsace and Lorraine are in France, a little slice is over in Belgium, another slice in Denmark and large lands are in Poland and Russia.

Italy was created partly due to the hard work of Garibaldi and his redshirts from a mass of kingdoms and principalities. After World War I, a piece of Austria (called Sued Tirol) was lopped off and tacked onto Italy where it is called Trentino-Alto Adige. There are many such adjustments all over the European map. Perhaps the most blatant of them all is Poland, which has been created, destroyed, sliced, shaped and fussed over with by all the major and most of the minor players. If you compare the maps of Poland before and after World War II, you would think that someone put it on a flat-bed truck and drove it westwards!

So, where am I going with all this? Well, it is quite common to assume that the national boundaries haven't shifted and that each country is basically an indivisible unit of ethnic cohesion. The only exceptions being the "artificial" countries such as Yugoslavia and USSR which have exploded once the strongmen ruling them died or countries that have been shaped by immigration such as USA and Canada. But that is not the case. You can go anywhere in the world and find that most boundaries have been drawn by political and military realities at various times.

Rather than yearning for ethnic, linguistic and cultural uniformity, we should realize that such entities have never existed and never will...