Archive for July, 2008

Small Homes are BIG!

Read the Wall Street Journal article in the Weekend Journal section on July 18, 2008 to be reminded of that old adage “everything old is new again”!

Small houses are new again. The article mentions an architect and developer who developed small (800 to 1,500 sq ft) cottages around shared grass commons an hour outside of Seattle.

Put your own imagination to use to envision how you might take advantage of the current economic climate by developing in-fill lots with smaller homes. This requires, of course, that over the past 10 years you’ve put some savings aside for the proverbial rainy day. This also assumes that you can get the financing necessary for such an endeavor — but many of the articles I read from various sources point to the need to downsize our buildings and move closer to urban centers.

The time might be right, right now!

Change in Accounting Systems

One of my favorite books “Construction Contractor’s Survival Guide” mentions a change in accounting systems as one of the 10 reasons contractors fail.

Many times I’ve seen a company move from one accounting system to another and lose control of the very information they intended to control better through the change. Needless to say, this is a frightening possibility and points up the necessity for good planning combined with measured expectations set against an agreed upon timeline.

The Wall Street Journal mentions this in an article on Levi Strauss in the Media & Marketing section of the July 18th edition. “Net sales … fell 8% in the second quarter of this year amid problems related to implementing a new software system designed to boost efficiency.”

If it can happen to Levi Strauss, it can happen anywhere. The point is to be sure you know what you’re trying to accomplish and plan for a reduction in profits during the 8 to 18 months that such a transition can require.

Emotional Architecture

Christopher K. Travis uses “emotional architecture” to create a house that is a “suite of emotional experiences”. This fascinating story in the NY Times Home Section on July 17, 2008, details the method of this architectural designer to develop “an exhaustive psychological and aesthetic compatability exercise for would-be home builders”.

The article mentions the auction of a dream house of a CT couple who spent $21million for 26,000 square feet only to discover that the house “did not fit them at all”.

How Green is Green?

Our favorite buzz word – green – can be seen to be just one more example of form over function. I’ve changed out the for fluorescent, bought a hybrid car, composted vegetable peelings and recycled the household waste: and made just a tiny dent in an enormous landscape. Can I call myself green? Perhaps greener than I was, but not green enough, not fast enough.

The NY Times article in the Business section of July 13, 2008 highlights Blaine Brownell’s quest to solve “…one of the greatest challenges that architecture and building construction has ever faced.”

“As energy prices have skyrocketed and concerns have mounted about the effects of greenhouse gas emissions on the climate, there is a new urgency in developing alternatives to traditional building products. Buildings must not only operate more efficiently, they must be constructed from materials that are produced with less energy, waste and harmful chemicals, according to a growing chorus of industry professionals.”

Visit his website at http://www.transmaterial.net or read the article for a better understanding of what the future might hold.

Lessons in Love & Economics

Ben Stein writes 9 rules on the “economics of love” in the NY Times Business section of July 13, 2008 (I paraphrase):

  1. “…the returns in love .. are roughly proportional to the amount of time and devotion invested;
  2. High quality love … yields more return than junk;
  3. Research pays off;
  4. … returns are greater when there is a monopoly;
  5. The returns … should at least equal the cost of the investment;
  6. Long term investment pays off;
  7. Realistic expectaions are everything;
  8. … stick with your winner;
  9. Have a dog … in your life.”

I.O.U.S.A

Peter Peterson, co-founder of the Blackstone Group, plans to spend $1BILLION to alert Americans to the very real danger of the increasing debt burden according to an article in the NY Times National section on July 14, 2008. Part of his strategy is the documentary film “I.O.U.S.A”. He “wants people to focus on what he considers real news: the nation is going broke. (…) The film aims to startle voters and politicians alike, and summon them to the task of closing the long-term imbalance between what the government will take in and what it has promised to pay out.”

The Website of his foundation (www.pgpf.org) foundation maintains that “every American is now burdened, most of them unknowingly, with $175,000 with federal liabilities and unfunded government promises.”

Education, hard work & economic freedom

David Brooks in the NY Times Op-Ed piece on July 29th, says that the US became the leading econmic power of the 20th century because of the “ferocious belief that people have the power to transform their own lives (which) gave Americans an unparalleled commitment to education, hard work and economic freedom.”

He cites the gigantic global lead taken in US education levels which boosted productivity and growth. That “happy era ended around 1970 when America’s educational progress slowed to a crawl. (…) Since then, progress has been modest. America’s lead over its economic rivals has been entirely forfeited with many nations surging ahead in school attainment.”

Quoting Claudia Goldin and Lawrence Katz in their book, “The Race Between Education and Technology” he notes that the slowing and subsequent stagnation of educational attainment increases the gap between rich and poor. “The relatively few skilled workers command higher prices, while the many unskilled ones have little bargaining power.”

He concludes that “this slow-moving problem, more than any other, will shape the destiny of the nation. (…) It’s not globalization or immigration or computers per se that widen inequality. It’s the skills gap. Boosting educational attainment at the bottom ois more promisng than trying to reorganize the global economy.”