From the Archives: Breaking the Criminal Mindset

I believe I mentioned once before the recidivism rate being 80% here. I could have sworn I read that somewhere, but I recently read it’s around 40% within three years. I’m sorry for conveying that bit of misinformation, though it undoubtedly bolstered my argument at the time, I assure you it was unintentional.

That said, let’s say the recidivism rate jumps to 60% within a ten year time frame. A loose corollary to this would be that 4 out of 10 inmates learned their lesson (or were never true deviants to begin with).

Obviously, I have no access to the raw data, but from my experience, vastly more inmates with “big time” appear ready for reentry into society. By that, I mean they not only won’t detract from society, but will benefit it, which I believe is necessary to “make it”, because, after all, there is no standing still.

This theory can be attested to by the fact that wings of the unit that house “short timers” get into much more trouble, on average, than wings with “big timers”—no pun intended! My belief for this is that those—not withstanding the non-deviants—who successfully learn their lesson have sparred with the devil—a disgustingly undoable large amount of time—and picked up shards of truth along the way, with which they can then see the facetiousness of their former ideals.

This breaking of the criminal mindset is what must occur for said successful reentry into society. The problem is that prison primes 6 out of 10 to come back, reaping destruction in their wakes. Furthermore, this situation is a troubling paradox: very few small timers learn their lesson, and the small time probably plays a major part of that problem. And for many of the big timers who did learn their lesson, with aggravated sentences (meaning they must serve half to even come up for parole) of 60, 70, 80 and life, for all intents and purposes—especially in their eyes—it doesn’t even matter that they learned their lessons!

I know, I can hear some screaming right now, “well, they dealt a bunch of drugs, or robbed people, or broke into a bunch of houses or killed people! They deserve what they got!”

And I understand the mantra, let punishment fit the crime. But if it’s all about punishment and deterrence, then do something cheap. Put convicts in the matrix and power cities off their heartbeats; put them on deserted islands in the south pacific and let them try to survive. Hell, film that and it can be “Survivor: Crazy Convicts”. If society is going to foot the damned bill however, it shouldn’t be about crime warehousing, but rather rehabilitation!

Of course, I have a proposed solution to the problem. Just give everyone a fake sentence, some huge number, loosely tied to the crime. Burglary—60 years. Robbery—125 years. Murder—Life plus 70 years. But really, in say, seven years or ten, bring the person up and see what they’ve done with their time, how they look, how well they interview, and maybe a psych test or two.

If signs indicate their deviance has been crushed, let them go (obviously, it’ll be a little rough around the edges, initially, but we’ll nail it). If not, put them back in prison and maybe they’ll be ready at a later date. There will be some social costs, such as those who were innocent or would have learned their lesson, yet had weak mental fortitude, and the huge pseudo-sentence drove them crazy. But the social costs of the system, as is, are profoundly larger.

From the Archives: Time. And Creating Value.

To take the time to create is to exist. Time is the most precious commodity, yet not for sale at any price, as any octogerian billionaire can attest to. Prison, however, is structured to facilitate the wholesale genocide of time!

Twin TVs blare into a morally and intellectually destitute dayroom for an average of 116 mind-sapping hours a week, while only a handful of inmates can get access to the library for one paltry hour a week (which, ironically, is hardly a haven, as it’s stocked primarily with sill “pop” novels)!

The jobs available for inmates are all wastes of time, menial in such an absolute sense as the render an inmate’s creative faculties impotent after so many years of exposure. Yet to allow an inmate to create value is the perfect form of rehabilitation! To create value is to fulfill one’s existential purpose.

To fulfill one’s existential purpose is to be sure of one’s self worth. When one’s self is worth something, he realizes fundamentally that others are either worth something, or have the capacity to be worth something. Then, concepts such as virtue and morality will be realized, and the inmate will never again be able to steal value from others (which is all, in one way or another, any crime is).

Prison shouldn’t be a place to “serve” time or “do” time; but one to “use” time. It should be a place of many levels, where those who are finding their sense of self worth ascend to a level more academic, and more like life. As one ascends, more and more external stimuli will be provided to facilitate one in his quest to find out how he can create value, preferably in a venue in which he is the best (or at least unabashedly feels so).

But, the sad fact is that prison is a place where one easily kills time, and effortlessly and instinctually detracts value. Many times, I daresay, a promising yet misguided young man will come to prison, and while incarcerated, become indoctrinated and primed in these wretched anti-values. When he gets out, and subsequently robs a convenience store, by golly it looks like the system was right in incarcerating him in the first place!

And so the social cancer spreads. What a disturbing paradox…

I’ve evaded becoming an agent in this process, partially via my unwavering and acrimonious rejection of all this place is. This rejection has, in fact, become part of my persona. But, others haven’t been so adept at grappling for the elusive stimuli that I’ve exploited. To assist them is to cure this social cancer that is pyramiding exponentially. Just check the trends.

From the Archives: The Guard is Always Right

The key distinction between the job of a prison guard (correctional officer) and most, if not all, others is the attitude toward the client. Whereas, elsewhere, the customer or client is always right (within reason of course), in a correctional facility, the prisoner is always wrong. Now, I’m not contesting the validity of that premise – save for the “always” portion – as a starting point for a case-by-case decision making process. While racial profiling, being technically logical, may inhabit an ethical grey area (depending on its exact relationship with individual rights), value profiling is certainly in the free and clear (because everyone in prison, innocent and guilty alike, had some degree of immorality in their code of values. Of course, some cases of complete mistaken identities, resulting in incarceration, would be exempted from this logic).

It’s the natural consequence of this premise that I take issue with. Imagine if, at McDonald’s operating under a customer-is-always-wrong premise, an altercation between a cashier and customer erupted over whether a Quaterpounder or a Big Mac was ordered. In this doppelganger universe, instead of a “sorry about that sir. I’ll have it out to you in a moment,” an irate cashier may bellow, “shut up! You ordered a Quarterpounder, now either take it or get the hell out of here!” Granted, I’m embellishing a bit for the sake of argument, but because prisoners are considered always wrong, we have the phenomenon of many guards – already generally not the happiest subset of people on earth – bringing their problems to work, and (it appears) taking it out on the prisoners. Systemic recognition of the client being perennially wrong morphs into an implicit sanction to turn him into a punching bag.

From the Archives: The Death Penalty

The death penalty is a deservedly hot button issue these days. The masses overwhelmingly approve of it, though by a lesser margin than 30 years ago. I disapprove of it for four reasons, which I’ll detail in order of importance.

First and foremost, there is the omnipresent risk that an innocent man could get executed. When considering a death sentence is the prosecutorial equivalent of a grand slam, I believe there is a high probability that the risk of wrongful execution gets arbitraged away amidst a flurry of rationalization, justification and ambition on the part of the prosecutor. This presents a clear conflict of interest.

Secondly, the evidence that indicates the death penalty is a deterrence to future would-be capital murderers (or the few other crimes that potentially elicit the death penalty) is just as spotty as the evidence that indicates it is not a successful deterrence (according to all the literature I’ve read on the subject). However, to me, common sense dictates that it would only successfully deter rational men. So, ask yourself, are men always rational? Are you always rational?

Next, we must consider personal accountability, and whether or not death is truly the ultimate punishment (much less what it says about a society that condones, facilitates and executes—no pun intended—it). I think that, in truth, it misallocates the punishment. My belief (which was formulated in observance of many of those around me, right here, right now) is that the truly miserable wretch—which one must be in order to, with cool malice and cold intent, commit such an atrocity deserving of an “ultimate penalty”—is punished far more by being forced—not simply allowed—to remain alive in a small cell for the rest of his natural life.

No women around, so he can masturbate his reality away. No inmates around, so he can socialize reality away. Just himself and books, so he can crumple under the intense weight of his worst enemy—awareness.

On the other side of the token, his family and victims, in their own right, suffer profoundly as a result of his execution. With his remaining alive, their suffering will rightfully ease. The victim’s family, however, unquestionably has an emotional stake in what transpires, but it’s my heartfelt belief that given the logic of my arguments, they’ll agree that life without parole is the more fitting and noble punishment.

Lastly, the economic perspective heavily favors life without parole. Housing a death row inmate runs $1.2 million a year, for what can run many, many years. Housing a lifer runs $40K a year.

I hope and pray that these arguments were clear and concise enough to effectively assist you in coming to terms with such a weighty issue.

From the Archives: "Kit"

Penitentiary Colloquy Defined: A “Kit”

Here, there are instances where a prisoner must masturbate on the go. He may go to the infirmary, and there is an officer there who is “good.” Or, at school, there may be an opportune moment for him to duck into a bathroom and masturbate on the “free world” women passing by. His “Kit” usually consists of a tied up latex glove, some Vaseline, and a dab of toilet paper for after-the-fact primping. What he does with it is disgustingly obvious. Careful, he may get out and work at a Wall-Mart near you. And until he robs the place, there will be masturbation!

Saving Money and Energy: The Way of Pre-Packaging

The software-as-a-service business model has succeeded by outperforming the pre-packaged software in cost—by outsourcing the necessary hardware infrastructure to the cloud—and by giving users instant access to innovation. It may be the case that this model outperforms in an environ like InfoTech, where the underlying commodity is increasing in supply and falling in price. With energy, however, given that its depleting nature (in most cases) necessitates long-term falling in supply and rising in price, it may be that the pre-packaged model would work best.

It’s well known that running a washing machine in the late afternoon will cost quite a bit more than doing so in the middle of the night, because the former is a time of peak power usage, while the latter is not. Well, what if we reacted not only to times of peak power usage, but also to regions of peak power usage in relation to each device in question?

What if we sold electric cars, fans, dryers etc. with an average lifetime’s worth of pre-packaged energy costs—specific to each exact region—built into the price of the product? I believe that this model would have three direct benefits:

1) Consumers would get a better deal by buying all of the expected energy usage up front because the energy purchase would be made in bulk for each regional product line.
2) Manufacturers, or market makers for this system, will be able to provide customers with another wave of savings by exposing each to their sophisticated hedging techniques.
3) And the upfront pre-packaged energy cost component in each product’s price—with savings demonstrable and comparable from region to region—will incentivize the purchase of the most efficient products, on average, for their specific regions.

Moreover, if this technique is spread across enough products, it will have the effect of greatly increasing the size of our futures markets. Thus, the economy will more efficiently allocate E&P, CleanTech etc. capital.

As energy usage for a product’s lifetime paid upfront would, in many cases, be a huge amount, it will instead usually—at the consumer’s request—be financed over time. But the interest and principle will not fluctuate with spot energy prices; it will be just like a car note. Except, however, those who use more than the average energy usage for a product’s lifetime will, at benchmarked increments tracked by the smartgrid, be charged for their excess energy usage. Likewise, those who use less than average energy will be refunded at those benchmark increments. This debit/credit system will iron out any outlier usage effects on the benefits of the pre-packaged energy system.

One caveat: regarding innovation in the field of energy, any major advances in some energy source or another that results in great savings will require that those savings be funneled back to the consumer who bought more expensive pre-packaged energy contracts. Our purpose is not to lock in non-competitive rates, but only savings.

A Veritable Bust

The authorities busted up a veritable cartel on our wing yesterday. Various kinds of drugs, an abundance of cash, a digital scale, cell phones and chargers, knives…Four men were escorted right to lock-up in their boxers.

Such an operation is a pretty big deal out there in the free world, but the audacity to pull something like that off within a penal institution is amazing. Of course, all involved have life sentences anyway, so perhaps were able to, in their own minds, wring some sort of quasi-favorable risk-reward ratio out of their endeavor.

Generally, in light of said life sentence, the authorities tend to not push for more trials, etc. because it’s a waste of resources. But, if the details that the rumor market is currently gushing forth are true, these guys may find themselves at the wrong end of the long arm of the law yet again.

The strange thing—initially, at least—was that our wing didn’t get locked down. Ordinarily, the discovery of phones or knives (let alone both!) merits at least a twenty-four hour investigation (which necessitates the wing being locked down). But, this time—of all times! —nothing happened. We simply went to commissary as scheduled.

Of course, someone informed the authorities on these guys. And, just for the record, I’m completely neutral when it comes to power struggles like that. I don’t believe in honor among thieves, or care if someone is a “snitch,” because none of that directly affects me in furthering my goals of attaining freedom and staying completely out of the way of prison drama. The best way that I can help is by counseling those who I perceive to be headed down the road to perdition, and leading by example.

That said, evidence of the work of an informant came in how the raid went down: fifteen officers (rank included) made a beeline straight for the cells in question. Moreover, I’ll reiterate: we didn’t get locked down, and still went to store. Why this one time, and not all other times? This is subtle, but think about it—if the informant system is working, would the authorities, having got what they wanted, want to punish their “boys?”

I’m just glad that I got to go to store!

Calling on Kairos: The Capacity to Rehabilitate

I wrote to the Kairos Society (an organization for college-aged entrepreneurs) a few weeks back about starting a chapter for entrepreneurial-minded prison inmates, and received a very favorable response from their representative.

Needless to say, I’m ecstatic. As you well know, since I heretofore detailed my “creation of value equals rehabilitation” philosophy, I passionately hold that productivity, creativity, etc. are all fundamental virtues that a man—if he has any capacity whatsoever—must acquire on his path to redemption. For once he creates value and learns to respect himself, then he’ll explicitly understand why he must respect the lives and livelihood of others.

It just so happens that those very same fundamental virtues are prevalent in the predisposition of the entrepreneur, as well. Thus, entrepreneurialism is the modus operandi that will lead many inmates on the right path. And what better way to highlight this dynamic than by starting a Kairos Society chapter here in prison?

There is the PEP (Prison Entrepreneurship Program) here in Texas, but it is a very small program, and the requirements to get in exclude most inmates—and not always because of a lack of entrepreneurial spirit. For instance, one has to be very close to one’s parole date. But what of the man with a life sentence, yet the capacity to be another Michael Dell? Sacrifice his massive potential to the actuality of a man of lesser capacity just because the latter is about to make parole?

Even if that scenario is right and proper (though I firmly hold it not to be), it still indicates the overly narrow scope of the PEP. Criminals (and hence prisoners) are but a consequence of the underlying problem of Criminalism. To prep a few guys on the way out the door with business principles and a network is to focus mainly on the effect to the neglect of the cause.

Prison culture itself is one of the most evil sets of values that I’ve ever seen or pondered. That is what needs to be healed. And injecting the seed of legitimate entrepreneurialism directly into the soul of the prison system seems an innovative way to do so.

For you can leave the man with a hundred years to his own devices, but let us not forget that one of those devices is influence. And not everyone has a hundred years.

Prison Payphones: A Lesson in Idiocracy

Texas, in its classic hang ‘em high fashion, was the last state to install payphones in its prisons, when it did so last month. But it was a pyrrhic victory for those who wish to talk to their loved ones, because since the phones approve inmates via voice recognition software, and live in a line going down the wall that separates the two blaring TVs in the dayroom, it’s virtually impossible to be confirmed and have the call approved.

A prison dayroom is an excruciatingly loud and obnoxious place. TVs roar. So inmates yell over the TVs. Then other inmates yell over each other. And so on and so forth.

But it gets better. When the naïve techies from Embarq (oh, how I’d like to short you, you sell-out corporation) had us give our voice test into the system, they turned the TVs way down and instructed everyone but the testers not to talk. And now, surprise, surprise—in the midst of the natural dayroom environ, the phones don’t work.

I’ve gotten through four times out of perhaps seventy increasingly frustrated attempts. And that was only because I luckily said my name and place of residence during one of the once-in-a-100-year lulls in the perennial storm that is the dayroom. Moreover, the few times of the day that the dayroom may possibly be less noisy are early in the morning and at high noon. And those are precisely the least likely times that one’s loved ones are home or receiving calls!

Yesterday, as I sat on the end of a bench streaming tears of sweat and repeating my name over and over and over—desperately trying to sound like myself, as ludicrous as that sounds---into the sociopathically stoic phone, I thought of the unwavering efficaciousness of the phone in the austere office of the beauracrat who decided that we should get voice recognition software over biometric thumb print pads. Oh, the irony.

The Culture of Wings

In my last post, I touched on the subject of cultures. In prison, every different pod or wing has its own distinct culture. The amazing thing is that even though wings “flip” (i.e. new inmates to the wing fully or almost fully replace the old guard), the culture of each wing is permanent.

I live on “N” wing, wherein inmates with more than fifty years are housed until they serve ten flat (for aggravated time) or five flat (for non-aggravated time). Our wing is the richest wing on the unit by far. Such was the case for the “big time” wing on my last unit as well. Our wing there spent four times as much as the dormitories wherein the inmates with the most privileges and least time were housed. Do our circumstances induce more pity or concern from our loved ones? I’d imagine so.

Moreover, our wing is by far the most entrepreneurial. I get two sandwiches a day delivered to my cell, my clothes washed and pressed, and my mail delivered to me, all for a competitive price! People run stores, cut hair, make loans, run pots and parlays, fix radios, draw and engage in countless other “hustles” to make a profit. My buddy who just moved to “A” wing said that no one does anything there. He can’t get a sandwich to save his life, and horror of horrors, has to wash his own clothes. He said everyone there is broke, and content being so.

My buddy on “L” wing said the culture there is even worse. The majority of them are broke as well, but they’re also exceedingly vice-ridden. The occasional stray sandwich won’t sell, as any horded soups are saved for cigarettes. Fighting and extortion is rampant. And whenever anything “free” is being offered—chow, barbershop or library—the dayroom is beyond packed. Our wing musters up barely a shot (20) of inmates at the ungodly predawn hour in which breakfast is served. “L” wing regularly cranks out five or six shots of inmates for breakfast.

These wings have had these cultures for decades, across thousands of souls.

Act Your Race

From time to time, one will run across a white individual who “acts black”, or a black individual who “acts white.” Often pilloried by members of both races, said individuals will often justify their position by saying, “black (or white) is a state of mind.”

On the surface, this logic appears to be both non-racist and individualistic. In actuality, however, implicit within it is a gross inversion of logic that is racist and anti-individualistic. To propose that black, white, or any race is a state of mind is, while seemingly clever figurative language, is to presuppose that race is the defining element in the housed content of a man’s mind.

Rather, a state of mind is simply a state of mind! I’m an anti-racist. I hold race to be an invalid fundamental distinction concerning men. Myriad cultures exist within each race not because of the race’s genetic signature, or any other racial trait, but as the result of external influences such as geography, climate, etc. Culture neither defines race nor is defined by race. It’s a social phenomenon, yet is individually volitional. Should one choose to adhere to the social cues of another culture, whatever race it may have originated in, then one’s “state of mind” is not blackness, whiteness or any other racial pigmentation, but rather predominantly accepting of the values subscribed to within said culture.

To say that a race is a state of mind is to assign primacy to the racial traits and not the state of mind. Such is the height of racism (not of one race relative to another, but of race relative to the individual) and thus obliterates any notion of individuality.

The concept of culture is not subsumed by the concept of race, and that is what most individuals who utter the line “_______ is a state of mind” are attempting to express. The irony, of course, is that that expression actually subsumes the culture (i.e. values) into the race!

From the Archives: Derivative Justice

A while back, I committed a gross misrepresentation. I expressed the notion that any slack between justice within the realm of consciousness and justice within the realm of existence, itself constituted a form of injustice. Quite the opposite, in fact is true.

In my perennial effort to define a theoretical “perfect justice”, I sometimes lose sight of justice’s cardinal virtue—it’s dynamic nature.

Said slack between the justice of consciousness and the justice of existence is itself perfect, and I’ll hereby coin it, “derivative justice.” Fundamentally, it consists of the ramifications of justice from one realm upon the nature of the other realm.

For instance, if a man “gets away” with murder within the realm of existence, he most certainly does not within the realm of consciousness. And the ramifications of his consciousness executing justice upon him will inexorably dictate his actions within the realm of existence.

He will dabble more and more in irrationality until something horrible happens to him, and justice within the realm of existence coalesces with the justice within his consciousness. But this lag between the two—derivative justice—is precisely wherein he has the time to ascertain his previous and current irrationality, and act, if he wishes, to embrace the right way and save his own soul.

Conversely, if a man is wrongly convicted of murder within the realm of existence, the ramifications of justice within his consciousness will enact derivative justice upon existence. His actions will be dictated to dabble more and more within the realm of rationality until something beautiful happens to him (i.e. attainment of freedom), as justice within the realm of existence coalesces with justice within the realm of his consciousness.

I believe that the ramifications of justice from one realm upon the other—the “slack” between the two—what I’m calling derivative justice, is what makes justice perfect. For it’s what anchors justice to truth.

How It's Made: Tattoo Needles

Given the demand for tattoos in prison, tattoo needles are a highly coveted item. To make them, the ingenious inmate first removes wire bristles from a wire brush. Then, he tapes a piece of sandpaper to the front of his fan so it will spin rapidly when the fan is turned on. After turning on the fan, the inmate sharpens the needle to the point that he needs by pressing the wire bristles against the sandpaper. Lastly, he bleaches the needle in boiling water, and, presto, he’s ready to work!

Crunching the Numbers

Metadata is an invaluable thing when scouring for obscure trends, even with one’s rudimentary tools here in the penitentiary. For several years, I’ve tracked my daily intake of calories, grams of protein, my productive time and exercise regimen details, my recreation time and amount of sleep. I’ve distilled the data into rolling one-week averages, so as to identify and correct any areas of slippage.

One trend that I noticed occurs during the month that we don’t go to commissary (a phenomenon isolated at this unit due to the absolute ridiculousness of the commissary schedule). It’s a dreaded month, which practically wrings the entire wing dry of foodstuff, and happens once every three months. In the caloric intake portion of my trackings, I noted that every time this month came around, the average first and second weeks would see declining caloric intake rates, the average third week would see an odd caloric spike, and the average last week would see intake rates plummet.

Given that the third week’s caloric data didn’t seem t fit, as the average amount of food must inexorably descend throughout the month, how was I taking in more calories on the third week without commissary?

Well, during the first two weeks, I ate down my own food supplies fairly consistently, leading to declining caloric intake rates. By the third week, however, all of my healthy foodstuffs were wholly depleted, leaving me little choice but to eat that much more of my less healthy, higher calorie foodstuff. Moreover, at that point, starving, I’ll purchase less healthy items from various inmates’ “two for one” stores and just about every kitchen sandwich that I can get my hands on—all on credit.

Hence, due to a drastically less healthy diet—fewer trail mix and mackerel pouches, more chips and double hamburgers—my caloric intake soars. By the fourth week, however, no one has anything to sell at all—commissary wise—and the sandwiches that make it to our wing are such a hot commodity that one naturally attains few of them. Thus, relegated almost solely to subsisting off of our chow hall, my caloric intake plunges.

Lately though, I’ve made progress in attacking this heretofore hidden problem. Managing money more prudently, I’ve been preserving commissary further into the month. Also, the sandwich sellers like me better than other consumers, as I now prepay, and thus limit their risk of not being able to sell sandwiches in more abundant times. I’m a market-maker!

The Blame Game

Note from the proxy: The following post is a response to comments left for Texas Inmate after he scribed a guest article on Jon's Jail Journal.

Regarding the responses to my post about my ex-celli’s masturbatory brouhaha at the schoolhouse, I must take issue with anonymous’ comment first…

…and foremost, within the context of my opinion on rap, the phrase you used, “favorite rapper” is an oxymoron. And no, if a rapper told me to do something irrational now, as a philosophically sound man, I’d refrain from doing so. But as a 15-year-old boy, I had no such fortitude.

Please try and substantiate your condemnation of me (“always blaming others”) by using my blog posts of the past as evidence. If you remain objective, I doubt you’ll be able to. But I will condemn what I believe to be demonstratively evil. Rather than always blaming others, I think your real beef is with ever blaming others.

Yes, I will condemn evil, and I’ll try my hardest to never do anything that merits deserved condemnation. And it’s a grotesque inversion of logic to blame the blamer of evil for blaming evil! But, other than that fact, I appreciate your feedback.

Regarding another criticism of initial masturbation post, “The Justice League of America” – I’m sorry. I read it to about ten guys in my accounting class the other evening, and they were hanging with feverish grins and barely stifled laughs on every word. I guess it’s only funny within the context of prison, where sensibilities erode markedly all across the board. But, regarding this “blame game” I’m accused of partaking in, Chris Phoenix nailed it on the head when he wrote that I was merely pointing out association, and not cause and effect.

Chris, you brought up some good points. The media’s only role is bringing a man down is by facilitating and fostering the spread of irrational ideas with which he can bring himself down. The media, per se, cannot be blamed for the substance it contains, because as freedom is an ideal, people can say whatever they want. Rather, it’s media’s form, that is, its way of validating its substance to its consumers. So when said substance is evil, it creates a damnable offense. That said, man’s volition is still the supreme element in all that he says or does.

Thank you all for your comments. Please keep reading, peruse my blog’s archives and ask any questions you wish (only forgive my delayed response, as my partner and I must deal with two rounds of snail mail in our information conduit). Let’s keep this conversation alive.

Scary Smart

A few days ago my celli and I were discussing the myriad things we could do with internet access in here, and joked a little bit about acquiring a smart phone. Then, he said I’d never do that because I’m “scary” (or, ‘scared’ in proper English), but that he wouldn’t either for the same reason.

Defending against this affront to my character, I explained that I wasn’t scary but smart. He refused to see the distinction, and exposed his backward premise by attempting to equate the two.

Of course, that was even worse than his initial proposition. To disprove his logic in concrete terms, I used the case at hand. I explained that if I were “scary” in that context, I’d have really wanted a phone, but was too much of a coward to stand up to the potential consequences. Being smart, however, means that I don’t really want a phone, as I’ve measured the risk against the rewards, found it grotesquely unworthy, and refused to chance those consequences.

My celli’s logic would give one the justification for doing the wrong, that is, for the “right” reasons, and the guilt for doing the right things, that is, for the “wrong” reasons.

My celli didn’t respond to my final point of contention. Instead, he jumped in his bed and started reading. I told him that that was probably the most important part of the day (i.e. unearthing a distinction and integrating it into one’s conceptual knowledge), and went back to my writing.

A Silver Opportunity

Two partners and I own a leather shop in the craftshop, and another individual owns a silver shop. During a conversation with the silver shop owner the other day, he fleetingly intimated that his shop might be on the market.

With fire kindling in my eyes, the gears in my brain instantly processed the opportunity at hand. His station is the proverbial corner office (though it’s not quite actually in the corner). The craftshop is a large square room with twenty-five woodshop style tables. Each table shares four craftsmen at each corner, and their respective lockers beneath.

The stations on the outside edges of the outermost ring of tables get the wall space behind them as well. The rows of stations at the front and sides of the craftshop are close to walls, but the ones at the back have a very large space between them and the wall. And they all have desks, display cases and a larger bevy of tools in that large wall area. The silver shop is one of those, and that real estate was almost as appealing to me as the actual business.

The silver shop has generated an average of two hundred dollars a month in operating cash flow during the past six months. As it’s not very labor or capital intensive, it averages 65% operating profit margins. Revenue growth has been in an upward trend for better than two years. Moreover, as its debt was incurred to buy fixed assets in recent months, future capital expenditures will be lower, and free cash flow higher.

So, I consulted with one of my leather shop partners who also happens to hold $1,300 of the silver shop’s $1,700 debt load, and offered to go half with him on a bid for the silver shop (granted that I get the station). I ran down the numbers to him and said that we could bid 12.5 times cash flow (that is, by assuming the $1,700 in debt and paying $800 more). Though admittedly pricey, if we could simply maintain cash flow at its six-month average, we could pay down debt in 8 ½ months, and break even on our equity component in the subsequent four months. Hence, after roughly a year, we’d be splitting profits thereafter.

My leather shop partner’s upside was the fact that while the silver shop owner must live off of his business (thus taxing cash flow and impeding growth opportunities), both he and I get more outside financial support, and he’d certainly prefer to have a 50% equity stake in his own company and owe the debt to himself, rather than having a debt stake, which he admittedly questions the worth of, in another’s company.

My upside was even greater. By partnering with such a large debt holder, my negotiating leverage was powerful. And by making this debt holder an equity holder as well, I’d guarantee his having a longer-term perspective (and not strangling the business to get his debt investment back at any expense as soon as possible).

Moreover, to limit his equity stake, and if we did well, I’d pay him half back—making him half owner—but if we didn’t do well, I’d pay him all of it back—making me full owner. He felt more comfortable with this set up because my credit is pristine. Hence, acting as bank, he was providing the leverage for my buyout, and I was to pay him back $50 a month out of my commissary stipend going forward. Depending on how the business performed, I was going to aim to pay him back out of extra cash flows (instead of out of my commissary stipend), or ask if he’d agree to extend the debt payback time to the whole year so I could pay him back my debt out of my portion of our cash flows at the same time!

Thus the takeover would have no downward effect on my personal spending power, and a long term risk/reward ratio of at least three times my worst case investment and six times my best case investment.

Unfortunately, the silver shop owner mawkishly back pedaled out of our finalization plans the very next day. The prospects of a quasi-venture he’s a part of brightened, and he decided that he didn’t need capital so rapidly after all. Perhaps our little cobble shop haven isn’t yet ready for an era of black hat corporate raiders, but mark my words…

I’ll have my day!

Living a Blog

I saw a buddy in the craftshop today, who I generally only see once a week. After a hearty handshake, the first thing out of his mouth was, “what’s up Dave? Anything funny happen to you today?”

What’s funny is that my life has virtually turned into a blog. And others are apparently beginning to take notice.

Out there, in the free world, some people go live abroad to escape the banality that surrounds them. In here, I accomplish the same refuge by living a-blog. :)