Grecian Earn

By Russell Ethridge

I’ve probably been complicit in tax fraud. Certainly not illegally; I’ve always paid Uncle Sam every dollar he says he’s owed. Where I suspect I went astray was during a recent trip to Greece, a country of remarkable beauty and history, warm people, and a government few trust and not enough pay for.

My crime was facilitating tax avoidance by paying in cash instead of a credit card to get a discount exceeding the modest fee VISA or American Express charges the merchant. Major hotels, the worldwide car rental companies, and high end retailers are not involved, at least that I could tell, but everyone else I encountered, the little tavernas and gift shops in small towns and every cabbie, offered at least a five percent markdown or more for cash. Nothing was rung on a register. Instead, a roll of Euros was whipped out, and the cash transaction was handled with no mechanical or digital finger prints.

Such transactions are invisible and impossible to tax without voluntary compliance. Greece, like much of southern Europe, is struggling economically. Although socialist Portugal (to the surprise of many) is doing a remarkable job paying its debts to its financially stronger European Union partners, Italy, Spain, and Greece are still drowning in debt. There is only so much rich countries are willing to do, especially with the headwinds created by the nationalist movements sweeping across Europe and, last  November, our own amber waves of grain. Greece is in the worst shape, and the world’s bankers think it is months away from financial meltdown.

Courtesy of bespokemag

I knew why, but I asked people there anyway. “The government does nothing for us,” many vendors told me. “They take our money and for what?” I suggested that maybe the government could use the money to improve the schools, repair infrastructure, promote business development, or just cut the grass in the beautiful but neglected parks and other public spaces that keep Greece just a tad less polished than France or Germany. These small proprietors would have nothing of it. They needed that money, and they were loath to give it to a government they see as ineffective and confiscatory.

I don’t know enough about Greece to say the allegation is true, but I certainly saw, amid remarkable evidence of thousands of years of western civilization, a tincture of physical and social decay, and a general malaise, largely among young people. Nearly 25% of them are unemployed, just hanging out at coffee shops and surfing on their smart phones. I don’t know who pays their phone bills.

At the same time, this is a government that requires early elementary school children to learn a second language while their brains are still malleable. It works hard to support tourism which provides many jobs. Signs of investment in alternative energy are everywhere despite the fact that oil is cheap and close by. The pollution in Athens is much less than it was only a few years ago. The government is doing some things that only governments can do, and it needs money to do them.

What do we expect of our government, and how much should we pay for it? How do we make sure that everyone pays their fair share? If government is a service like car repair or house painting, why should some people pay more to have their house painted because they make more? Bill Gates doesn’t pay more for bread than I do although it is a much larger proportion of my income than his. Or, are taxes related to the return we get from the opportunity government gives us to make money by creating social and commercial structures? Should it be the “juice” we pay for our success or just a fee at a toll booth paid equally by the drivers of a Benz or a beater? Either way, taxation requires sufficient faith in government to encourage voluntary compliance. In that, Greece is lacking. Trust in government is essential for an ordered society.  Trust, however, is threadbare in many places for many reasons, including the U.S. Greece just may be the first in the Eurozone to suffer the cost of losing it.

Question: If Mexico had a 5% percent total tax would you move there?

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Immigrants Welcome

By Noah Graff

Just got back from Spain and Scandinavia last week, traveling on business with a little bit of pleasure thrown in.

During my travels it was easy to observe the steady influx of Arab refugees and other immigrants into Western Europe, which continues rapidly amidst backlash from many Europeans. I had the opportunity to meet several immigrants as well as “native” Europeans who shared with me their perspectives of a diversifying Europe.

In Madrid I saw a banner hanging on the Palacio de Cibeles saying “Refugees Welcome.” (see photo) Later that day I saw a procession of Somalis carrying similar signs. In Barcelona I met a very friendly Pakistani man in Plaça Nova selling castanets for two Euros a pop—you know, those clickers used by Flamenco dancers. The guy was beaming as he enthusiastically peddled his goods. In excellent English he talked about all the interesting tourists he had met from around the world, including a wealthy American woman who he had a love affair with. He was not a refugee, just a Pakistani man who moved to Europe to find a better life. I asked if he had felt hostility from the people in Spain, a country that is considered one of the more welcoming destinations for immigrants. He said that the Spanish people had been very polite to him, but he could still feel that they wished he was not there. He said that people said subtle things to him like, “Don’t you think you would feel happier back in Pakistan with your family?” His long-term goal is to get a job as a waiter in a restaurant in Barcelona, a respectable legal job where he could utilize his language and social skills. For now he spends each day ably bouncing around Barcelona’s plazas scooping up his merchandise in a mere 30 seconds when the authorities look like they are threatening to bust him and his colleagues.

Palacio de Cibeles in Madrid, Spain

On the plane to Denmark I met a Swedish woman from the city of Malmö, right across the bridge from Denmark. She said she had mixed feelings about the refugees. She said Sweden has been trying to make immigration more difficult, but she also said that the Swedish government has started a new program in which it invests resources in immigrants who have professional medical or science backgrounds. The government provides them with additional training and tries to place them in jobs parallel to those they had in their former countries. This way immigrant doctors and engineers can enrich the country’s economy rather than be wasted cleaning toilets.

I took the train from Denmark to Sweden. Thousands of people commute between the two countries daily for work like Americans do between states like Illinois and Indiana or New York and New Jersey. Since 2016 when commuters enter Sweden from Denmark officials check their passports or identity cards, however when commuters return to Denmark their documents are not checked. Denmark is in the European Union where people can travel freely between countries so it cannot monitor everyone who enters. Sweden is not in the EU, which gives it the freedom to monitor who comes in with document checks.

On the train I met a 40-year-old Somali man who had been living in Sweden for 20 years. He was friendly to me but reserved and was conservatively dressed in a grey sweater vest. He told me that he was a bus driver in Malmö. On a stop he got out to smoke and shared a lighter with a large Polish man from the train. He seemed fully assimilated both in his attire and his stereotypical Scandinavian reserved friendliness.

The last immigrant I met was at the Helsinki, Finland, airport on my five-hour layover going back to Chicago. I talked to Karine, an Armenian, professed lesbian, with dreadlocks who grew up in Russia. Her personality was an intriguing mix of hippy granola, Scandinavian socialism, and raw, aggressive, “survival of the fittest” Russian/Armenian blood. She beamed as she talked about the socialist Finish system which supplied her with a decent apartment and stipend when she lost her job, even though she wasn’t even a Finish citizen at the time. She talked about her lesbian civil union as a path to Finish citizenship. She said that it is difficult to become rich in Finland because the average income tax rate is around 50% but says she is content because the standard of living is good for everyone with the country’s free healthcare, excellent free education and a generous safety net.

When I asked about life in Russia she immediately became animated. She portrayed it as the complete opposite of Finland. She said that in Russia it is possible to achieve great wealth but life there is aggressive and cutthroat. She said to survive in Russia you have to be strong, aggressive and watch your back because you never know who will be gunning for you. Everyone will stomp on the next person to get ahead in a system that revolves around theft, bribery and blackmail. According to Karine if a person wants to do well in a Russian school, bribery with money or sex is a given. Starting in childhood, on the first day of class students bring the teacher candy to try to be in his or her good graces. Karine tried to go to a special theatre school when she was 16 but the teacher told her dad that he would require sexual favors for her to enter. She said her sister who remains in Russia can’t advance professionally because she refuses to give in to the sexual advances of her superiors. The Russian police and legal system also cannot be trusted and require bribes from everyone.

Despite her depiction of Russia’s bleak, ruthless economic way of life, Karine says that Russian people have a profound warmth and show love for each other in a way other cultures cannot match. She misses the warmth and the passion of the Russian people but she is willing to sacrifice it to be in a safe, pleasant, Scandinavian country. I was surprised when she told me there are not that many Russians who emigrate to Finland when the countries border one another. Perhaps this is because the cultures of the two countries are so different.

The French Presidential election was held the day I left Europe, pitting the Pro European Union Emmanuel Macron verses the xenophobic Anti-EU Marine Le Pen. On the journey I pondered the future of Europe’s welcome mat for immigrants. Would I be able to travel from country to country as easily in the future or would there be more passport checkpoints like the one I encountered at the Swedish border? Macron’s victory points to the status quo surviving for the time being, but the ethnic and political future of Europe is certainly murky.

Question: Has President Trump been too hard on immigration?

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French Vanilla

By Lloyd Graff

Emanuel Macron is the new President of France. He is a political newcomer who saw an opening in a divided dispirited country of 80 million people. He played the election like Bill Bellichek, figuring that the burnt-out leftist and rightist parties would neutralize each other in the qualifying election and he could sneak down the middle of the field. Then he would finish in the top two with the populist with neo-fascist roots, Marine Le Pen. If he could sneak in to face her in the Finals, he figured the losing parties would rally behind him as the anti-Le Pen, and he would have the election for the taking, unless he really screwed up.

That was exactly how it played out. Macron, the Kennedyesque 39-year-old former Rothschild banker, crushed Le Pen 2-1 on Sunday.

Macron wears a paper crown as he tastes the traditional Epiphany cake in a visit to a Paris shopping mall, Jan. 6, 2016. (Beloit Daily News).

One of the most intriguing things about Macron to me is his unconventional marriage. His wife, 24 years his senior, Brigitte Marie-Claude Trogneux (heiress to the five-generation Chocolaterie Trogneux), was his high school drama teacher and coach when he was 15. They stayed in touch throughout the years and she ultimately left her marriage and three children to marry Macron. She helped choreograph his shocking political career that took him from investment banker to a prominent position in Socialist Francois Hollande’s cabinet, to the landslide President of France. Vive la différence.


We are headed, apparently, for another Battle of the Titans in the NBA Finals between Cleveland and Golden State. This will be the third straight Finals with these two great teams.

The NBA season is an 82-game slog, but the Finals are real theatre, especially with these teams because they are so special and well-matched. LeBron James plays with such heart, such total unalloyed passion for the game. He has amazing court awareness and intelligence, you just have to admire him. His game has evolved in a similar way to Michael Jordan’s—playing outside, picking his spots to drive, and willing his team to victory when necessary. With the addition of Kyle Korver and his 50% 3-point shooting skill to go along with J.R. Smith’s touch, Kyrie Irving’s playmaking and Tristan Thompson’s rebounding knack, the Cavs are a formidable defending Champion.

Golden State has the greatest group of lights out shooters ever assembled. Steph Curry, Klay Thompson and now Kevin Durant are just unfair to be on the same team. But the player who is the difference maker, even with those three crazy accurate gunners, is Draymond Green, the 6’5” swingman who plays with the energy of a rabid mongoose with an almost Trump-like unpredictability. Draymond lights up the floor. He may start a fight or kiss the referee in a 30-second flurry. His first step to the hoop is unmatched and his dunks are atomic. LeBron is the best player in the game. Draymond is the most fun to watch. If you love basketball like I do, or even if you think a “pick and roll” is a breakfast pastry, Cleveland versus Golden State will be worth watching.


Blog fans. I am a person who loves ice cream, but as a cardiac patient I cannot eat it to my “heart’s content.” Rum Raisin is my all-time favorite—for me it’s the Michael Jordan of ice cream. I want to know the best ice cream, gelato, frozen yogurt etc. that you’ve ever had. It can be smooth or chunky, populist or elite. It’s almost summer, so they say, so tell me about your best ice cream experience ever.

Question: What is your favorite ice cream?

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Goodbye Columbus

By Lloyd Graff

I found last week’s Precision Machining Technology Show (PMTS) in Columbus an exhilarating and exhausting experience.

It was exhilarating because for the first time in 10 years the participants were confident again. I do not remember one person coming to our humble exhibit and complaining about business. Maybe they grumped about their back or metatarsals, but about business, they were positive. This is an extraordinary shift from even two years ago, and I think it reflects more than just monthly sales figures (which are darn good, by the way). The climate for machining folk has changed. “China” is now considered a long-term competitor, not a monster vacuum sucking up almost every biddable job. The American survivors, and the European, Mexican, Brazilian, Canadians and Fijians too, understand the kind of work they are good at and what the Chinese will devour. There is a relative stalemate with China today. A little comes back, a little goes away. This is stasis that you can borrow money against.

There is no comfort in business. The “comfortable” ultimately die a very uncomfortable death, but the people who are uncomfortable about the present yet confident about their ability to weave and bob into the next few rounds, are the folks who predominated at PMTS.


When I returned to Chicago last Thursday afternoon, Cathy Heller, who runs the spare parts business for Graff-Pinkert, proudly told me she had her second great month in a row selling mainly Wickman tooling and spare parts. Even more significantly, the percentage of surplus oddball parts was unprecedentedly high. This is an indicator that does not show up in The Wall Street Journal stats, but is one of the tea leaves that I monitor.

When our customers are upgrading their tired and haggard 40-year-old multi-spindles, they are dipping into the capacity that has been sitting in the empty ocean containers for the good times they thought would probably never come. Or maybe they are finally changing the spindle bearings of the clunker in the corner they used on the sloppy bushings they used to run before China happened and cars became reliable.


People are still in love with Swiss CNC screw machines. The technology keeps getting just a little bit better every year. Citizen, Star and Tsugami keep slugging it out to get every sale with the Korean and Taiwanese machines close enough to get their pieces. There are not many good used machines available, so the new builders usually do not have to compete with the second hand market.


A volleyball tournament is pushing PMTS out of the Columbus, Ohio, Convention Center. Courtesy of USA Volleyball.

After eight shows over 16 years, the PMTS Show is leaving Columbus for Cleveland in 2019. The show got the boot because it did not bring enough hotel room buyers to town to justify its prime time slot in the Convention Center. If I am privileged to attend in 2019 I will look back nostalgically on the Ohio capital. The facility was efficient, clean, and not ridiculously pricey. But the chipmakers do not show up in the numbers that the volleyball tournament’s parents and fans do that will supplant PMTS in April of 2019. Volleyball may reign in Columbus, but Cleveland loves us.

Question: Are you winning or losing against China now?

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Machine Tool Scuttlebutt

By Lloyd Graff

As a dealer in used machinery I get to hear a lot of things if I ask the right questions and have the good sense to shut up and listen.


Today, as we begin the PMTS show in Columbus where a lot of new machines are on display, the price quote you get may not be the final price. Importers of machinery have had the advantage of a strong Dollar for almost three years versus the Euro and Yen. If they have not dropped their list prices they may have room to throw in options or take trade-ins. They are under a lot of pressure to make their numbers by the foreign machine tool builders and may get concessions from them to move the iron.

American builders like Haas Automation are really putting the pressure on their distributors now. We hear Gene Haas, who owns the company, is telling his top lieutenants that they must sell at least 1400 machines per month, and he recently let go several top employees who had been with the company for a long time, to emphasize the urgency of the goal.

F1 Haas team drivers Esteban Gutierrez of Mexico, left, and Romain Grosjean of France pose during the official presentation of the new Ferrari-powered VF16 car at the Catalunya racetrack in Montmelo, just outside of Barcelona, Spain, Monday, Feb. 22, 2016. (AP Photo/Siu Wu)

There are rumors about Haas Automation finally going public as one reason for the jump from 1200 machines a month, but those have been around for a long time. Gene Haas has also gone into Formula One Racing, a very costly hobby, while continuing his Nascar racing team.

Haas dealers, I have been told, are now very aggressive in taking in trades in order to hit the ambitious sales targets. This aggressiveness trickles down through the machine tool industry. A Haas Factory Store is now akin to a Ford or Toyota dealer. They are eager for trades that they will quickly cash out with used machinery dealers who serve a bit like Carmax does for the new car dealers. A VF-2 Haas machining center is not quite as easy as a Camry to cash out, but not too far off.


The Precision Machined Products Association figures are showing that March was one of the best months ever for companies in the group. Most of the reporting firms showed improvement over the previous month and March of last year. The “Trump Bump” was definitely in evidence. My sense is that people in the industry are finally changing their mindset from cautious to “beginning to get more confident.” I have recently noticed auction prices bouncing up on multi-spindle screw machines, even National Acmes like 1 ¼” RA6 models from the near scrap value we saw last year. At a recent auction of Brown & Sharpe automatics in Dayton Ultramatic Ram Slide machines brought $7000. Last year $4-5000 would have been strong.

Returning to the Haas strategy, I think the top brass in Oxnard, California believe that the market is robust enough today to support the aggressive sales push. It is a good piece of knowledge to have if you are a potential buyer of a Haas machine or a competitor’s.

Question: Is business really getting better?

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One Company’s Life Cycle

By Lloyd Graff

Jeff Pedu called Graff-Pinkert to find a new home for three Schutte screw machines, an SD32, SD50 and SD80, that his dad bought new in 1967 for the family’s machining company, now called Placid Industries. They don’t need them anymore because they sold the company recently, and the new buyer doesn’t want multi-spindles. The machines may have no value, but Jeff’s story of a small American manufacturing plant, started 62 years ago by his father on Long Island, is the stuff I love about working with machining people.

The company started as a job shop after the Korean War. It was growing in the mid-‘60s but Alex Pedu didn’t like the economic climate of labor unions and high wages around New York City and decided to move the business to upstate New York, little Lake Placid, which is famous for only one thing, the Winter Olympics of 1980 when the American hockey team beat the Russians in the Miracle on Ice. It is slightly miraculous, too, that the tiny 10-person shop of the Pedu family has survived profitably since then.

The United States hockey team celebrating the victory over the Soviets at the 1980 Winter Olympics in Lake Placid, N.Y. Courtesy of the New York Times.

Soon after the Olympics Jeff’s dad, a tinkerer and lover of mechanical things who fell asleep at night reading machinery catalogs, developed a clutch and brake product for specialty applications. Son Jeff had just come into the business, and he had no taste for the insecurity of the job shop world so father and son focused on the clutch business. They kept the three big Schutte multi-spindles partly because their loyal employee from Switzerland who set them up and ran them made the move to Lake Placid with the Pedus. He worked there until he retired ten years ago.

The clutch and brake business developed into a highly profitable cash producer. It was a low-volume, high-margin product with long-term clients who valued American quality and reliability. Jeff’s brother Jason came into the business in the 1990s.

Jeff and Jason’s father died in 1987, but the business continued to prosper under the sons’ ownership. With a staff of 10 including the owners they could make a nice living with around $2 million in sales.

But every business has a cycle. Jeff’s two children are now launched in careers outside of Placid Industries. Jeff’s wife is spending much of her time in Florida dealing with her ailing mother. Jason’s daughter is only 10 now. The Pedus’ 91-year-old mother, who owned 8% of the stock, lives in Florida, too. When Jeff and Jason Pedu made the decision to sell the company, they called everybody they knew in the clutch and brake business and many they didn’t know. They ultimately figured out a price that made sense to a buyer and would satisfy them. For a closely held business with a profitable product line like theirs the price was probably about 4-5 times EBITDA (earnings before interest, taxes, depreciation and amortization). Jeff is now headed to Florida; Jason is sticking around Lake Placid.

The buyer of Placid Industries is SEPAC, Inc., a privately held 40-person firm whose owners are refugees of the old Bendix plant in Elmira, New York. They are moving the operation. They do not need three 1967 Schutte multi-spindle screw machines with a thousand collets. They bought a product, a brand and a reputation that they believe they can grow.

After 62 years, the Pedus are walking away comfortable and happy. Anybody need a big Schutte in a hurry?

Questions: Do you want to sell your business? Would you like to buy one?

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Beds, Banks and Beyond

By Lloyd Graff

The economy is always hard to figure out, but we seem to be in an especially baffling period for both professional economists and amateur business people like me. The Federal Reserve has given the banks two .25% rate hikes recently, yet the 10-year U.S. Treasury has fallen back to 2.25%. This number dictates the mortgage rate and many other interest rates. The dollar has been steady versus other currencies. Unemployment is supposedly at 4.5%, yet there seems to be no upward pressure on wages, an apparent anomaly. The real estate market is steady generally. Home prices are going crazy in Toronto, but in Chicago, Detroit and Miami, not much movement.

Capital equipment is not doing much except in aircraft. Machine tools are scuffling. The oil and gas market is rebounding while cars and trucks are softening a bit, making things generally decent but nothing to have a party about.

I am looking forward to the Precision Machining Technology Show in two weeks in Columbus, Ohio. I hope it will give the precision machining folks a good excuse to issue some big orders.


How do you find a bed you love and a pillow that doesn’t crimp your neck? I’ve been struggling with sleep issues for many years. I fall asleep fairly easily, but a 3 a.m. bathroom call can often mess up the rest of my night’s sleep. I also tend to wake up at first light and struggle to fall back asleep. Add to that a case of sleep apnea to my slumber issues to complicate a night’s snooze.

I really crave a comfortable mattress and pillow to make my night less wakeful.

My wife Risa and I currently sleep on a Sleep Number bed. In my opinion, the bed’s real number is 3 out of 10. I sleep well on maybe 3 out of every 10 nights. Besides not really being able to calibrate the hardness of the mattress, my big beef with the Sleep Number is that I slip off the sides when I play Words With Friends on my iPad before going to bed, or when I try to tie my shoes in the morning. The Sleep Number company replaced the foam on both sides of the bed but the slippery slope problem persists. I cannot sit up in bed without getting back and neck pain, so I have to sit on the side of the bed to read my phone or iPad. Maybe I need to put pine tar on my sheets to stick on the bed.

The pillow is also a pain in the neck. Conventional pillows are always too hard or too soft. A hard pillow tends to make my neck crooked, culminating in numbness in my fingers. A soft pillow makes me feel submerged. I have a gel pillow now that cost $200, but it seems to be the best remedy for neck pain that I have found. The gel in the center of the pillow is depressed and is a good compromise between firm and “give.” The only negative is that I need to stay in the center of it to really get its benefits, which can be tricky for a side sleeper in the middle of the night.

The mattress market is now in a period of disruption by lower-priced, mail order entrants. I relish the competition for the old cartel of overpriced bed makers, but it is extremely difficult to pick one off the Internet. I look forward to your comments about success or failure in finding a mattress and pillow that really works (or fails) for you.

Question: Do you have a mattress and pillow you like?

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Our Crunchy New Car

By Emily Halgrimson

About two weeks ago my boyfriend bought a 2013 all-electric Nissan Leaf while I cheered him on. Steve had been driving a 2005 Chevy TrailBlazer he bought used at Carmax for the past eight years, and was tired of the $50-$70 in gas money he burned up each week commuting 26 miles each way on a semi truck-heavy stretch of I-94 in Northwest Indiana. I planted the idea of an electric car in his head months ago, and after lots of Internet research and discussion we decided to go test drive one. We were impressed with the surprisingly powerful acceleration, smooth handling, interior space and comfort of the car. After the dealer accepted a price just above our seriously low-ball offer, Steve decided to roll the dice and go for it.

It’s very exciting to get a new car, but we do feel the nervous uncertainty of being early adopters. The U.S. is definitely setup for gas engines, and stepping outside the norm means a learning curve, challenges and some sacrifice. People’s reactions have been fun to watch. Family and friends want to see it, look under the hood, and drive it, and few people try to hide their skepticism about if this was a dumb purchase.

The price of a used Leaf sounds too good to be true. Our 2013 with 22,000 miles was priced online in the south suburbs of Chicago for $8900. After our initial offer of $7500 was rejected we agreed to pay $8000. These cars sold in 2013 for $30,000-$35,000 in three trim models, and look and feel like $30,000 cars inside. Most new Leaf buyers lease the cars, which has left the used Leaf market flooded and the used car price unnaturally low.

Steve’s 2013 all-electric Nissan Leaf

A 2013 Leaf when new reportedly had a range of about 100 miles per charge. Our used Leaf shows 91 miles of range after being fully charged, so we’re already seeing some signs of battery capacity loss, though it doesn’t seem too bad considering it’s a four-year-old battery. This is the scariest part about the Leaf, not knowing how much battery capacity it will lose each year. There is some worry that we may be left with an un-drivable car that needs a $4000-$5000 new battery sooner than we expected. After reading hours of blogs and articles on the subject it’s clear the battery wear issue isn’t simple. A lot depends on how the car is driven, the climate the car battery is subjected to, and how it’s charged.

Driving a Leaf does mean a bit of a lifestyle change. The automatic noting of gas prices I used to do while driving around has morphed into a feeling of smugness I try to resist while watching people burn dollars at the pump. You also see your neighborhood in a new way, because I wouldn’t feel comfortable traveling more than 35-miles from home without having a plan in place to charge the battery.

It’s surprising how many charging stations are around. Of course, there’s an app for that. BP is reportedly working on a network of quick charge ports at their gas stations, though there aren’t any in Chicagoland yet. We’ve already taken a trip to the Indiana Dunes National Lakeshore Park for a hike so we could try charging the Leaf at their free charging station while we walked the beach trails near Lake Michigan. And knowing there’s a charger next to our favorite farmer’s market in Chesterton, IN is exciting. Our local hospital and park have free chargers, and every Kohl’s store has a free charger too, info that has changed our opinion of the retailer notorious for its fake sales.

Charging the Leaf is a learning experience. The car comes with a Level One 3.3 kW, 120-volt charger that fully charges the battery in about 11 hours, which perfect for overnight when electricity is the cheapest. You can purchase an after-market Level Two 6.6 kW, 240-volt charger for about $500 that will do the job in 5 hours, but you’d need an electrician to install a dedicated line in your home. A public fast charge port can charge the battery to near capacity in 30 minutes, but these aren’t always free. It’s estimated that home charging a Leaf costs $2-$3 from zero to full, a quick-charge station can be up to $7.

Since we’ve only had the car two weeks the newness and excitement hasn’t worn off, we don’t yet have a feel for how well the car will work for us in the long run. The modest car payment is easily being covered by Steve’s previous monthly gas expenditure, so financially we should feel no worse off. And we still have my 2010 Subaru Forrester for Steve’s fishing trips and our vacations. But there is a small sense of loss of freedom, because the combustion engine lets you get up and go anywhere without much thought. Right now we feel it’s a positive move, but ask me again in a year and I’ll let you know if we’ve passed the real world test, and Steve has in fact sold the TrailBlazer.

Question 1: Would you ever consider buying an electric car?

Question 2: Tesla’s market value just surpassed Ford’s. Does this make sense to you?

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Shot at Stardom

By Lloyd Graff

Jon Samuelson has three daughters, Bonnie, Karlie and Katie Lou. Two were in the NCAA Basketball Final Four over the weekend. A third started for Stanford and graduated in 2015. How do you end up with your three kids all starting for big time college programs? Start by having them shoot 500 shots every day with Dad checking the numbers and the form.

Jon Samuelson is 52. He played college ball himself at Cal Fullerton and Chapman College. He took his love for the game to England to play European Pro ball and met his wife Karen who was a Netball player, a poor cousin of basketball. The three girls have the b-ball genes and being over 6’ tall doesn’t hurt. The youngest, Katie Lou, was the most sought after, considered the top high school recruit in the 2015 class. She picked UConn, which had won 111 games in a row before losing to Mississippi State in Saturday night’s semi-final.

When I researched the Samuelson family my a priori feeling was that Jon must have been a crazy, autocrat of a father, demanding his girls practice like fiends. This was the picture tennis great Andre Agassi painted of his father who he despised. I have this image of the Indian and Chinese parents who relentlessly drill their kids on spelling words day after day hoping they will win the National Spelling Bee.

Karlie, Jon, Katie Lou and Bonnie Samuelson. Courtesy of ESPN. 2014

But the Samuelson girls portray a tableau of a loving family of jocks who were in constant search of vacant gyms to practice in. Jon delighted in seeing them surpass his skills, though he still thinks he can beat them at HORSE because he is ambidextrous. They have trouble with their left hands.


It’s baseball season again, and I’ve been bubbling with anticipation. My Cubs are stacked, but it is extremely hard to repeat even if you have a great team.

On paper, the Cubs are superior to last year’s team. They are better at catching, possess the best defense in the game, and sport a superior offense with Kyle Schwarber and Willson Contreras who will be playing most of the games in 2017.

But the team has something special that cannot be easily quantified – players with character and leadership. Start with Anthony Rizzo and Jon Lester, both cancer survivors. Rizzo spends at least one day a week at Lurie Children’s Hospital, really connecting with kids with cancer. Matt Scczur, an important substitute outfielder, is a bone marrow donor.

Jason Heyward, who signed a huge contract last season and had a disappointing year, held the crucial meeting during the rain delay of the seventh game of the World Series to rally the team to victory. He spent a grueling winter working with special instructors to remake his swing despite being guaranteed $25 million a year.

Heyward also paid out of his own pocket for an upgraded hotel suite for third string catcher, David Ross, last season that could hold his whole family during every road trip. This is something I have never heard of before.

Kris Bryant, last year’s National League MVP, beat out his closest friend, Rizzo, for the award. They are such close buddies they had jerseys made up with an amalgamation of their two names, Bryzzo, to wear.

Miguel Montero, the Cubs backup catcher, is tutoring his replacement, Contreras, a fellow Venezuelan. The Cubs also signed John Jay for $8 million to be a utility outfielder and coach his friend and protégé from Miami, Albert Almora, who will start in Center.

This collection of young men is very special. Theo Epstein, Cubs President, understands that you do not just put together an assortment of batting averages and 90-mile per hour sliders. Over a 6-month season, character and chemistry make a tremendous difference when things get tough. Same goes for a business or a Boy Scout troop.

I like the Cubs’ chances in 2017 to repeat.

Question: Did you push your kids too hard, not enough, or the right amount?

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Paid by the Hour

By Lloyd Graff

I received an email recently from Steve Rose, a veteran of the machining wars who was educated in an apprentice program in England during the 1960s. Steve had a CNC training business in Cleveland for many years but now teaches Trig and programming while whiffing cutting oil again in lovely Olympia, Washington, where raindrops fall for two months straight.

Steve’s reason for writing to me was not to lament the wet, but to discuss the question of why so many jobs in machining go unfilled. In his opinion, wages are stubbornly low for people in the field, especially the technical school grads who he teaches and trains.

I have grappled with this issue myself for decades as I run a machine tool business and publishing business. I am always trying to figure out how much to pay employees in order to hold onto them. I also have to motivate the most productive people, yet not sow discontent among the marginal but still useful ones.

In my experience, we tend to not pay the best people enough while we pay too much on the low end. This hurts us in attracting promising young people.

I am finally trying to address the issue by hiring people when needed and paying them by the job, which probably means paying $30-$50 per hour for machinery rebuilding specialists who are very efficient. By doing this I avoid paying health insurance which would cost $10,000-$15,000 per employee. I also only pay for the labor when we need it.

I think that specialists in machining such as repair or setup people for Hydromats and CNC Swiss enjoy making $50 per hour while being paid to do a specific job extremely well.
It makes me think that one reason so many jobs are “unfilled” in machining is that businesses are organized in an old school, basically unproductive hierarchical system that actually overpays unproductive folks and underpays the truly outstanding people. If success is rewarded accurately and properly I see machining companies becoming more specialist oriented with experts making $50 or more per hour while being supported by $15 per hour assistants. There will be a mid-group of minor league prospects who have a chance to make it to the majors if they work hard and progress. Larger companies will have training programs and coaches to help promising candidates move up.

I am curious whether you think I am nuts in my analysis of the current and future trends of working in the machining realm. Will the cost of health insurance tend to keep the old wage system going or will it doom compressed wage ladders?

Question 1: How does health insurance affect your business or personal healthcare situation?

Question 2: Should factory workers be paid by the hour?

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