The Water Engine

About thirty years ago, David Mamet wrote a play about a man who invents an engine that runs on water. (Dwight Schultz of The A-Team played the inventor on stage at the Public Theater, and William H. Macy played him for a cable production.) I haven’t seen it, but I gather that things don’t go well for the inventor and his invention when they run up against the forces of capitalism.

Now a researcher from Pennsylvania named John Kanzius has found a way to burn salt water by exposing it to radio waves of a certain frequency. (Kanzius had been investigating the use of radio waves to treat cancer.) It’s not clear whether this method will ever produce more energy than it uses, but it’s surprising and encouraging that seemingly simple discoveries like this are still being made. Let’s keep our fingers crossed for the continuing health and safety of Mr. Kanzius. 

The credit card trap

Following a lunch-table discussion at work, one of my colleagues pointed me to this article from the Columbia Journalism Review. It underlines the gap between much of the business press, which writes breathless articles about the exciting profits of the credit card companies, and (some of) the mainstream press, which recognizes that these profits come from fees, penalties, and high interest rates that were once illegal.

The twin myths of over-consumption and the immoral debtor, to use [Harvard law professor and bankruptcy expert] Elizabeth Warren’s phrases, have been debunked for years. Warren documents that the average American household today actually spends less than in the 1970s on clothing, food, and major appliances, and that, after paying for education, housing, insurance, and health care, it has less disposable income, even though the household now has two wage earners.

Research shows, for instance, that nearly 30 percent of low and middle-income people with credit-card debt reported medical expenses to be a major contributor. And in a study cited by Warren, 87 percent of families with children filing for bankruptcy listed one of the “big three” reasons—divorce or separation, job loss, or medical expenses—as the cause.

So you want to open a bookstore

In the three and a half years that Jenn and I ran a bookstore cafe in Brooklyn, we met a lot of people who wanted to do the same thing. Sitting down with a cup of herbal tea and some chocolate chip cookies, listening to Miles Davis on the stereo, and looking out at the fountain in our garden, customers would remark on how relaxing it must be to work there.

There were many great personal satisfactions to running Indigo Cafe & Books in those years. We met a number of authors we admired, and thousands of book lovers. We looked forward to seeing our “regulars,” and became good friends with some. (We even went to Paris to visit the jazz trombone player who used to live upstairs.) But overall, it was not a relaxing existence.

Consider the numbers. Let’s say you sell 500 books in a month, at $20 each. That’s $10,000 — but given the skimpy discount you get from book distributors, you keep only $4,000. Out of that $4,000 comes the rent, the phone and electricity (both charged at a higher rate because you’re a business), the cleaning lady, the counter staff, the musicians you hired for a special event, and the toilet paper in the bathroom. Keep in mind that you’ve already spent tens of thousands of dollars to renovate the space, buy furniture, and fill the bookcases with books.

Soon you discover that the only way you can break even is to fire your helpers and do all the work yourself. So six days a week you put in a 12-hour workday that might end at 10 or 11 at night, when you gently urge the last customer toward the door, start the dishwasher, pull down the security gate, and trudge home. One day a week the store is closed, but you spend most of the day catching up on paperwork and going through publishers’ catalogs.

You can help boost your bottom line by selling remaindered books, where the profit margin is much better, or other items like mouse pads, candles, incense, pastries, and coffee. But you will have to sell a lot of these things to make up for the fact that selling new books (without the sweetheart deals that the big chains get) is inherently unprofitable.

If you’re thinking seriously about opening a bookstore, you should read Rebel Bookseller by Andrew Laties, which makes many of these points with wit, force, and numbers. If you go ahead anyway, know that you are doing your part to save Western civilization — but don’t expect to make money.

Andrew Tobias: First blogger?

I’ve been reading Andrew Tobias’s daily column for at least ten years now, but it’s only recently that I realized it’s a blog. I don’t think he’s ever called it that himself, but it must surely be one of the first blogs on the Internet. I first started reading it when it was on the Ameritrade site, and in January 1999 Tobias bid farewell to Ameritrade after 751 columns. (Of the earlier blogs cited a few months ago by Cnet, Justin Hall’s and Carolyn Burke’s are no longer active.)

Tobias has not only stayed active all this time, he’s stayed lively. I first started reading him because of his down-to-earth investment advice. (His Only Investment Guide You’ll Ever Need has yet to be surpassed.) I’ve continued reading because of his humane and often funny take on the political scene. It’s a wonderful time to be rich and powerful, he often says, and he doesn’t mean it in a good way. Tobias isn’t the most liberal member of the Democratic Party—he says he’s enthusiastically neutral about Hillary vs. Obama—but he’s heartfelt about traditional values like tolerance and fairness.