zen in the art of mopping

The humble mop. This is the secret to a happily married life. Believe it.

My maid has taken a month off. She has gone to her village to get her son married off. Basically there are two important things she does, washes and then keeps the vessels in place, and then brooms and mops the floor. So in her absence the pressure is on us to do the same.

I think in the middle I had gotten into a negative frame of mind at home. I probably refused to see the work at home and I would possibly not help out as much, possibly I was tired or pre occupied, or just plain blind. But I never saw the work and now in hindsight I agree that I was not much of a help. This time around I was determined to be a better spouse around the house.

I think in the middle I had an unjustifiably large ego about myself. I thought I was helpful and did a lot of work. But I had gotten into a bit of pride doing it, which I now see and realize. So I picked up one thing on doing while reaching home. THE MOP.

Normally I would have hated mopping the floor. The way the maid does it by bending over and using a swatch is impossible for corporate backs like ours. But with the introduction of our house to this brilliant mop has made mopping very simple. This is a lovely magic mop. You just wet it, then squeeze it with the handle provided and start mopping the floor. I love going in lines, tile by tile and cleaning the floor.  The floor then becomes squeaky clean.

I think that’s the secret of my new found happiness. I don’t mind mopping the floor. The clean floor acts like a beautiful feedback. Keep mopping and keep seeing a clean floor. I was explaining to Jispa that while one cleans the floor one must do even a simple activity like this with pride and not miss a single spot. Tile by tile you cover the entire house and keep it spotless. I told Jasmine “you know what, I really don’t mind doing this.” And then I thought a while and rephrased. “I don’t mind doing this if I had the money to have a maid to do this. I would definitely not be happy mopping the floor if I did not have the money to hire a maid for this”. Jasmine and I had a good laugh on this. It’s probably true. There are a lot of things we really don’t mind doing or even possibly enjoy, but they are really fun doing if you do them by choice and are not forced into doing it. Don’t we all humans essentially want choice?

Talking about choice, I read an interesting book “the art of choosing” by Shreena Iyengar. One of the points she makes is that while choice what we seem to crave for, too much choice can be bewildering to the point of paralysis. She ran a famous experiment where she presented shoppers with a variety of jams to taste and followed with discount coupons for redemption. The findings were clear - The higher the variety offered, the lesser was the redemption rate.  She also says that while we don’t want that much choice, many cultures don’t even care for choice. Possibly Asian cultures defer to higher authority and want the choice to be made for them. You are the smart guy with all the authority, you should know better than me on these choices.

Listen to her TED talk here

It’s a very profound learning I have had. NOT ALL PEOPLE WANT CHOICE. I have struggled with some of the members in my team. No matter how much autonomy you give or force upon them, they would like to defer to you for your decision. At first I thought they were merely scared to make the choice. Now I think otherwise. They are just not trained or mentally tuned to make choice. You being the boss must choose. They probably see deferment of decision as a weakness. Why can’t you choose if you are the boss? Or your choice is obviously the right one, why should I change my world view. I think once I changed my view on this issue, I got a lot less worked up by this lack of decision making. I tackled it as a cultural issue and not as a personality issue. It’s been much easier then. I can handle this much better, and I can direct much better. My exasperation levels have surely gone down. And yes, possibly I have become a better husband, father, friend and an easier human being to relate to. Possibly… but then again…

State of the sport

This is a photo graph of the Swimming pool at Balewadi at Pune. This is where the state trials where held and where Jispa participated to win her relay gold. Beautiful isn’t it? Lovely infrastructure. This is part of the larger sports village. There are separate arenas for different sports. Coming at the first seemed like a cultural shock. We first passed the athletics track. As I walked ahead I realized that it was just the warm up track. The main track and stadium was elsewhere. Wow. Two synthetic tracks? Not bad. Then you have badminton, weightlifting and even an AstroTurf practice hockey ground. Pretty cool. I thought India has finally arrived. We stayed at the business hotel that is within the sports village area. We were recommended to stay here even though there were athlete hostel facilities. And since all our friends were staying here, we didn’t mind too much.

So we first enter this massive aquatics stadium to be greeted by a huge spectator stand (rightly facing east) and massive swimming pools. See the picture. In front is the main swimming pool with starter stands on the left and right, full out 50 mtrs, touch pads on the left for finishing, a massive digital board, a huge diving pool on the right with platform and spring boards, then a full size fully equipped warm up pool (or an extra pool for heats) at the back of the main pool, and the best of all, a cool down pool at the extreme left. You can see it behind the shamiana, and of course the lovely stands with colored bucket seats. There are even the shower and washroom facilities for the athletes in the structure you see next to the warm up pool on the right. Nice infrastructure, thoughtfully built and definitely spent a bomb.

Then you see closer. The water you see is green in color. That’s not photo tricks. Its actually green and dirty. So bad that you can easily see the bottom. So the swimmers really need to look hard to know when it is time to turn. The filtration is clearly not up to mark. Then see the diving pool on the right. Here the water is so bad that you can’t even see the floor. All you see is a green patch of water with some crap in it. then you see the seats, dirty and unclean. Everyone has to wipe the seats before you sit. And of course the loos. No water in the loo or in the showers. None. The taps are bone dry. So even if you have to go potty, do be smart and carry a toilet paper. And if you feel hungry or thirsty – no food, no canteen, and yes no water coolers. afterwards i saw one table behind teh stands selling boiled egg, pastries and some poha and bottled water. So much for nutrition. And no detailed schedule of events and no commentary of events. My GOD.

We spent all the money on building the infrastructure and now we have no money to keep in decent shape. Even for the prestigious state level championship meet. What on earth is going on?

On another day I asked Jispa, “When you swim in the competition can you actually see left or right if your competitors are ahead of behind you?”. “ya, ofcourse, I see them and I know if I am ahead or behind”, she answered, “but in this Pune competition, the water was dirty and I couldn’t see anything”. There, Maharashtra state’s top event is held at the top stadium in an elite sports complex and the water is so dirty that you can’t see the other swimmers.

And yes the touch boards. You would have guessed out by now that they don’t work. But the fun part doesn’t end there. Not only did they not work, but on the second day the competition was delayed by around two hours thanks to them. Well how can not-working boards delay the event? Because these non-working boards gave an electric shock to one the participants and they had to delay the event to figure out and solve the problem.

Indian sports is clearly in safe hands.

Feeling wanted or not?

This weekend we took Jispa (a few other friends joined in) to Esselworld. Esselworld is an amusement park that has largely not reinvented itself since it first opened… when did it open? Around 20 years ago, I assume. I don’t remember too many changes in the park since I first went there as a college kid. That was a fun thing to do. Go with the gang, and of course your girlfriend. You like bumping into her when you sit at the dodge’em cars or at the rollercoasters. It surely was a nice place to be away with your friends or girlfriend in the good old days. Today at best what I can say about it… it’s a neat place. It’s not a dirty place and over the years, I don’t think it has gotten out priced and expensive.

But for me most of the rides have been completely closed to me. I can’t handle any ride that takes people in circles. Any circle. Even the sweetest, cutest and slowest of merry go rounds can get me queasy and likely to puke within seconds. I can handle rollercoasters with jumps and dives and stuff but just nothing round. The worst ride for me will be a simple cup saucer ride. The whole ride goes circular and then the cups inside of it also goes in circles. YUCK. Jamsine is blessed. She can happily go for any of these rides and come out smiling or even bored. Jispa takes after her. She too can handle as many circles as these stupid rides throw at her.

We have taken Jispa a couple of times to Esselworld before. The last was about three years ago. I remember her enjoying the rides and I remember me enjoying being with her. She would round and round on the merry go round, and I would be the stupid father, going “aaaaa” and “booooo” and “ wheeee” from outside the enclosure; shaking my hands wildly to get her attention and get her to smile. Then we would put her on one silly ride after another, spending good family time.

This time around at the entrance I should have known of what lay in store for me. At first, I had to shell the full adult fare for her. ‘HUH?’ Full fare? Wow. She is now above 4ft 6in, which means she is now a full price ticket with access to almost every adult ride. She beat it by a good two / three inches. Cool. Inside, it wasn’t as if papa would be taking her everywhere. She was going everywhere on her own with her friends. The ones that go in circles for sure, but I was quite amazed how she was completely at ease on her own in the dodge cars. She got into the car alone and she drove it all alone. Wow. How did she learn to do that? Elder kids struggle with the cars. Invariably there will be one adult stuck in the end with the car not moving. Without any instructions she was driving steering and banging into everyone perfectly. She was aiming the dam car right.

(thats her in the grey cap and jacket on the right)

Then followed the roller coaster. There too she was on her own. Who needs dad? So was for the tornado and the big splash. DONE. I told Jasmine, DONE. I am not going to go to Esselworld anymore. I always hated the rides, I hardly had two three rides which I could sit on; I went for spending time with my kids and here, I was completely …. not required. Really. It was so bad that in the middle I actually slept off on the bench.

Jispa is now growing up, no… Jispa has now really grown up. It’s difficult, but the faster we recognize that the better it is for us and her. Both Jasmine and I need to step off the pedal and let be free. The good old adage comes to mind – Permit where you can, protect where you must. Easier said than done.

Yesterday at night while she was going off to sleep she was protesting to me. She wants to enjoy her vacations but we are making her do half an hour of writing and then some tables and some Hindi. All that her school teachers asked us to do. I explained to her that she is now grown up. Her teacher wants her to write fast, as that’s the only thing that an issue with her. Her teacher says that next year, she won’t have the luxury of time. Her Hindi teacher wants her to improve her vocab so she must read a few Hindi books. And math tables are a bloody must – its even part of her summer homework.

I explained that – she has now grown up. I explained that she was on her own at the amusement park, wasn’t she? She doesn’t really need dad anymore in the same way. Thus she has a lot more freedom and a lot more power, and with it comes responsibility.  No option. She needs to study her stuff and write fast if she wants to do anything in her life. I explained how 100 mark papers have to be finished in two and a half hours. She needs to write fast. Then she asked me a basic question, why do you give less time in the exams. Errr? “Good question Jispa. I also don’t know why there is less time in an exam. Why would you need to write so much in so little time? I also don’t believe it”

Why do we have these stupid exam formats? It’s not like one more hour will make a bad student. Why are evaluated thus? Do we need a written pressure exam to separate the wheat from the chaff? “sorry Jispa, that’s the way it is. You will have to write fast for sure. And tables…. Tables are amongst the most important thing you must learn. Here I can help, by taking them up and making you learn, but rest… you are on your own in many ways. You will have to do the stuff”. “ok dad”.

What to do. I can’t understand why they still give dictation and notes in class. Just explain eth stuff, give out the notes and give us home-work and stuff. Why should we write notes in class? Why? I remember writing notes like crazy in school and college. There were limited text books, especially in B school, no internet and definitely no money to get the notes copied. But now all this is standard. But hell, we will still write and then we will insist on good handwriting and give limited time in the exams. What yaar. Come on. This shit must improve. How long can the education system lag. We are teaching kids to only expect questions from question banks. We are teaching them to learn by rote and we are definitely pushing them not to ask too much.

On asking… Jispa was asking me about my job. I was explaining marketing to her. How marketing should work and the role of marketing as opposed to simply advertising. How we must benchmark to the best across industries etc… and one topic was left to be answered. I have to explain to her this week about Sensex and Nifty. She heard it on TV once and she made a mental note about asking her Daddy. Finally I am suddenly feeling important after all. Dad seems to be in demand and of value. Otherwise the bloody Esselworld experience was leaving my self worth and self esteem in tatters.

Its the chair

Its really quite funny. The head of marketing in a 250 man company is different from the head of marketing in a 4,500 man company. I have been head of marketing for a long time now. The roles kept expanding and now in my current division which has around 4,500 employees, I am the head of a department. And here I am being made to feel like one. If you have read some of the old blogs you would know that here I have a largish cabin to sit in. I think the visibility that it gives others about me is something very very different. Like I was telling someone, this can get to your head. It can bloat your already expanded  ego. It takes effort to be level headed. Simple stuff can be seen. People look with some amazement that I drive only a hatchback. Now that can mean two things, either I am a really simple humble guy or I am a stingy miser. I guess I must be getting equal measure of both. The other day, I did not get my car. I was about to catch a taxi to go home, when I saw a colleague of mine leaving at the same time. So I offered him a lift. He pointed to the company bus which takes people back to the train station in the evening from the office. Ok, what the hell, let me hop on to it today. The station is on the way home. I was the last one in climbing the bus while it left. As soon I boarded it, I felt a silence. For a few seconds all eyes were on me and the bus fell quite. The receptionist who was sitting at the front, looked at me and remarked “sir, the first time some senior person like you has come on our bus”. I just smiled, shrugged and walked on. Two three remarks “you, sir, are in this bus?”. “err, ya”. I just took the seat at the end and felt like a Chinese doll at an exhibition.

I must be the only hatch back to be given a designated parking slot in the company. For an overcrowded place like Mumbai, I must have really achieved in life to get this slot. So when I once got my sedan, which normally Jasmine uses to office, the watch man loved it and even remarked “Sir, nice, this car is good. It suits you”. I could only smile back in response.

I think we humans area  show off society. We like segregation. We like us and them. We like to show off our feathers and mane and other forms of success.

All this can get to you if you are not careful. In one of my earlier avatar, I was easily one of the most powerful people in the mutual fund industry in India. It was because of a default. My business head who was really the most powerful man (because his decisions could swing the future of the fund houses) would refuse to meet any one from the industry. SO the only way to him was to convince me and everyone in the industry would meet me. The same guys would get their CEO’s as well as their fund managers to meet me and try their best to talk to me. I would have meetings lined up, one after the other meeting these guys. It was tough but I think I never managed to get heady. My immediate boss Prakash Dalal and my colleague Suman who taught me about the industry, always maintained a level head and I , I think, followed in their footsteps. So I tried to remain level headed. I always maintained, that they are not here to meet me or respect me. They are here to meet and respect the chair I have, I sit on and that is not mine. It belongs to the company and I am nothing compared to it. This attitude kept me level then and it keeps me level now. When the bust followed the boom and slowly that job lost its importance, fewer and fewer people came to meet me. Slowly the role got swept into oblivion and I moved on. I was right. They only wanted to meet the chair.

Sure enough I must have gained some respect. I treated people right. I never kept them waiting and I tried to be honest with them. At the same time, I was a tough negotiator and I extracted every penny till the very end. They probably realized that as well. I have many acquaintances from that period but almost no friends. A sales guy who has come to pitch to you is not likely to be friends with you for life. He is focused on the job and his smile, manners, discussion is focused. I don’t think he has the time or the inclination to court you beyond his scope of work.

I have had friends from my marketing side of my work. Agencies, vendors etc. Some people for whom immediate sale was not the priority. Slow happy relations that translate into sales, perhaps.

So here I am sitting on my chair with hope that I never lose sight of it. I should never ever think that this is my ass doing things. The sun doesn’t shine off my ass. It shines off my chair and that my ass is on it is just a coincidence. It fools most people. They think it’s their ass. But no, believe me, it’s almost always the chair.  

Thats my chair.i have given up on the normal office chairs with wheels and reclining back support after facing severe lower back pain. I love my chair and i am thankfull to my earlier division that allowed me to bring this chair along with me when I moved. Thanks Agnel, you are an angel.

first in the family

Well…  the story was so big that I never got around to writing the whole thing. At the start of the month, Jispa finally completed in the annual state level swim meet. She was never in the medal hunt and we were there largely for the experience. Her coach said that this was a stepping stone meet for her. Her big chance should come two years hence. She had started competitively coaching only quite late and her strokes still needed to be worked upon. But nevertheless she qualified by virtue of being in the top four for the relay championship. Here I was pretty confident on her winning. I think she was as well. This was a dream team and the difference between the swimmers was very narrow. I think it was around a second and a half within the team. It was an ace swimming team. They won gold. So here…..

That is Jispa’s first gold medal of real consequence. We are proud parents for sure. A nice top off to a tough year. We had the coldest winter ever and we woke up on time in the mornings and went for swimming. She really swam a lot and worked hard. Well done Jispa.

You know, the funny thing is that the feeling is just sinking in. Slowly slowly as time is passing by funnily I see myself getting prouder of her achievements. Suddenly at various places I let it slip that she is a state level swimmer or she is a state level gold medalist. Yes she won gold. No matter how much matter of fact I can attempt to behave, the fact is that it’s a great achievement. I know my dad would have been really proud. It is he who instilled the value of sports in my life. He always encouraged sports and games. I owe to him that I still want to play constantly and that I see sports as an investment. Jispa and I laughed like hell on Jamsine’s expense. We kept telling that her side of the family has no one interested in sports. They are champions in eating pani puri and ice cream, not playing sports, or anything that’s got to do with moving your butt anywhere. Hehehehe. Jasmine is going to kill me.

why cant i just play ball

Every night before sleeping, Jispa will come to me and make a baby face with Bambi eyes – ‘will you please put me to sleep?’. And like the sweet dad that I obviously am – I will get up and lie down beside her till she sleeps. I did this all of last year. She had to wake up for school or for swimming sessions. This would be early so it was important that she sleeps early enough and if that required me to spend some time with her, so be it. Many times, I would be so tired that I would simply fall asleep next to her while getting her to sleep. Jasmine would come in and wake me and I would amble half asleep to my bed. In summer Jasmine figured that our room was cooler than the room Jispa sleeps in. So Jispa slept in our bedroom for most of the summer. So now with the monsoon cooling life in Mumbai a substantial bit, getting Jispa to sleep all alone is going to Be a big task.

Her school vacations just started. So I decided that this is as great a time as any for inculcating ‘good habits’. A few days back she came in again with her Bambi face and asked if we could put her to sleep. I refused. Whoops. I was the best daddy in the winter. I would always have time for my daughter to put her to sleep. I would never say no and now I was the meano. Oh God. Such is the fickle nature of parenting. All I could do was explain to her. “Jispa, you are now old enough to sleep on your own. The full year I agreed as you were to wake up in time for school or swimming class. Now you have your vacations. You must learn to sleep properly and on your own”. Fatherhood is about being soft and tough as the demand is. I would have to draw the line but also explain it. I thought as a child most the time I was simply shown the line and was expected to toe it. I wanted to know why. So with Jispa, as a dad I too have to draw the line, but at least I try and explain it to her.

Here is an interesting article that explains what a father gives the child – persistence. http://www.sciencedaily.com/releases/2012/06/120615103529.htm . How? Well it argues thus…

"This research also helps to establish that traits such as persistence -- which can be taught -- are key to a child's life success." The key is for dads to practice what's called "authoritative" parenting -- not to be confused with authoritarian. Here are the three basic ingredients: 1. Children feel warmth and love from their father -- 2.Accountability and the reasons behind rules are emphasized—3.Children are granted an appropriate level of autonomy

I think it gives mothers the short end of the stick here. It puts all the focus on the father. Definitely as a father I am not complaining but mommies too are equally responsible for the above. But yes, as parents we have a role to play in teaching ‘persistence or whatever.  Basically the three principals are well said. Once you explain your reasons for what you approve and disapprove, you also have to give your child an appropriate level of authority. And I love the distinction between authoritarian and authoritative parenting. Its interesting. But also between the two of us, I think Jasmine taught me to be a bit more relaxed. I think I was far too possessive of her. When she first went by lift all alone in the building, it was on Jasmine’s ok not my. When we first left her to play down, unsupervised, it was at Jamsine’s ok, not mine. There are many such instances. Jasmine all tries her best to drive accountability and explain the rules. But you know… moms will be moms… they are ones to always say ‘just’ on questions that kids raise. I guess the more time you spend with your kids the more you are inclined to say ‘just’. How much patience can you have?  So dads have an additional advantage and corresponding responsibility. Since we are the ones away most of the time we need to have infinite patience and teach ‘persistence’. Oh dam you. All I want to do is play ball with my kid.

whats riskier? having a home or not having one?

While I was on my reading spree during the recession, I had read an interesting bit of research. Richard Florida was talking about home ownership in cities. His hypothesis was that home ownership for a city is good but to a point. He says “This is so ironic, places with the highest levels of home ownership have low rates of growth; they tend to be older, lagging cities with older economic structures; they tend to be less innovative; they tend to have lower levels of human capital, of creative, economic activity; lower wages, lower incomes; and the people there have lower levels of well-being… by having a lower level of homeownership, and that’s around 50 or 55 percent,… actually makes them quite fast and flexible… If you lose your job in Detroit or Cleveland, you own your house: you’re stuck. You can’t even move to another part of Detroit or Cleveland for a job,… If you work in New York or Los Angeles or San Francisco and you lose your job, first thing you can do is downshift to a cheaper apartment, and if you need to move to a new region, when your lease ends, you can up and go”

I have put the larger extract below and the link to the complete interview. I found it interesting at the point. It did make sense. Flexibility is the key to business and hence growth. Housing is just one big strong element of getting stuck. My own firm, when I see it I realize this. As we get bigger we start getting inflexible. I have seen my management justify the bureaucracy, the willingness to accept it, unwillingness to tear down old practices, unwilling to take risk, having multiple levels of approvals and the sort. I guess a lot of it is possibly good. We are of course less tolerant of failure. The cost of failure is possibly too high. So it makes sense to take a few sturdier steps than big bold initiatives. But I also wonder isn’t a bigger firm more resilient to risk. More able to absorb the costs of failure and hence best placed to learn from it.

Smaller growing firms would have people with higher risk taking ability. People who just say ‘chuck it, let’s do it and go ahead’. I used to always say, it’s better to ask for forgiveness then to ask for permission. But suddenly larger firms clamp down on all of this. There are too many satraps to break through. Everyone seems to have his own domain which one is encroaching upon. These domains are nebulous and fluid when the organization is geared towards growth and rigid and unaccommodating when the organization is big. Simple things like the laptop brand is also a big issue. I came from one of the smaller divisions (250 employees) of my firm where I wanted a Dell laptop with a very good display. I got it. Here within the same group another division which has 4,000 plus employees, the Dell laptop which I got transferred with, gets undue attention. Here the official brand is Acer and you can’t get anything else. How was I roaming around with a Dell? Oh god man. All in the name of process.

I think process is good. Some things are important but too much process can screw up any initiative. Within my limited understanding and experience, my belief is that even creative can have a process. You must follow process but have the sense to know that the process is path but you are allowed to forge new paths. Logical behavior and thinking is not a barrier for creative. Just because you use the left side of your brain is no excuse for you to not use the right side as well, and vice versa. I think most of us inherently can use both sides well. It’s when we are suddenly rooted for some reason or the other we start exercising one side. The boring regimented predictable side and are impervious to outside thought and action.

I think the rooting of the brain happens when you start having too much at the table at stake. Typically this means a house. See the house by itself seems like an innocuous thing but over here buying a house would mean pledging the next 20 years of your life in equated monthly installments or EMI for short. Once you have EMI’s running, there is no chance that you are going to take risks. You start growing roots around the place. You start making friends, be familiar with the grocer, the milk man, the watchman… you build your life around your commute and then you are finished as a risk taker. Then having the monthly pay check coming in is very very serious business. Why – because the predictable monthly paycheck ties in very well with the infallible predictability of the EMI.

When I bought my first home it was a very fortuitous time. The EMI was at a fixed interest rate and housing prices very low. They were to just start their sky rocketing orbit. My home price has gone up 5 times since I bought it in 2004. At the time I was still ok with the EMI amount. In the slowdown of 2008, I wasn’t worried, I wasn’t scared. I saw my fixed income balance and I saw my liabilities and I slept in peace. Then I went ahead and bought my second larger house. I haven’t ever slept well if I thought about it. Earlier I would be nonchalant in my attitude. I would be able to call a spade a spade, but now I see myself thinking twice. I still try and push the bar but I am careful not to push it carrying my resignation in my pocket. I have become too big in my own life to fail. I have two EMI’s to feed. Hopefully the second house is ready for possession soon enough which would means that I can rent it and it becomes an income stream from an expense stream.

But there are other issues that stop me from taking risk and hence give me limited mobility. Jispa’s school and Matunga gymkhana around which we have revolved our life. Schooling is a huge issue in Mumbai. With a dearth of good schools and at reasonable price points we can’t afford to take risk with schooling. Jispa’s school is impossible to get into. We don’t know how we got through and it was a stroke of good luck. Once when I was offered a job in Europe in the same company I refused, how would I come back and get my daughter reinstated in the same school. It would have been a four to five year stint but how would I come back and fight again for admissions. As a city if we are unable to provide for or encourage good schooling we wouldn’t be able to attract and retain talent. Cities must also fight for talent in similar fashion. Now I understand the value of the Kendriya Vidyalayas that the government set up all over the country giving a uniform education for its entire government staff that would get transferred. Having schooling that is uniform and predictable for the child and the parent is so critical. And of course the gymkhana. Gymkhanas in Mumbai are elitist and restrictive. They open their doors only to members and memberships are limited and are opened only at intervals. Currently the Matunga Gymkhana is open for membership at a steep one million rupees. What the hell. Where does the average person train his daughter or give his kids a decent healthy lifestyle. So thanks to that not only am I rooted as a risk taker, my risk taking has come down to not moving to anywhere further than two kilometers to where I am currently staying. Else the commute and hence the schedule that Jasmine follows everyday will get awry. Wow. Risk aversion has a new meaning altogether.

No wonder I have noticed that even with the same firm, when we Indian go abroad we get highly politicized. We start playing games and we stop taking all kinds of risk. We only start doing stuff that protects our back side. We lick our boss’s derrières and we eschew all bold action. What if things go wrong? We would have to uproot our families from there and come back, in the middle of the school term that too. I saw this in our offices abroad and I saw this in my dad’s stories of when we were in Dubai. The politics is unbearable.

So I kind of agree with Richard Florida. Home ownership kills risk and mobility. We have a deep rooted desire to own our homes and the EMI’s coming with high cost of homes will kill us and our city. Luckily for Mumbai, the saving grace is that we have made renting slightly easier and relatively less risky. The Enforcement of leave and license agreements which are clear and solid has allowed for investors to give their homes on rent. Earlier the laws were completely in favor of the tenant and renting was akin to selling giving rise to a pagdi system in Mumbai. While we were in Dubai, our home was kept closed and locked rather than let out, as we were afraid we would not get repossession of our home when we needed it. No one really benefits from an asset that is underutilized.

I suddenly started thinking about this because of the conversation I had with Jasmine’s cousin. We are all from part of the baniya sect in the Hindu world order. This means we are essentially traders, businessmen by birth. It is our job to trade and to make profit. To be fast and flexible. He said, “us baniya, we should always be ready for mobility. In fact we baniya’s traditionally never bought houses.” I understood what he meant. If a trader is to thrive he must always be mobile, always ready to move to opportunity. Why else would Jasmine’s maternal grand-dad go all the way to Cochin, in an alien culture, to set up business. Her paternal Granddad came from Gujarat to Mumbai to set shop. My grand dad (maternal) went to Burma (Rangoon) to set shop and then came to Mumbai and set up his business. My Paternal Granddad moved from his home in Savarkundla in Gujarat to Mumbai to study and become a Doctor, after which he moved to Gondal in Gujarat to start his dispensary (it’s a business).

And now Jasmine and I are at loathe to even move three kms from our current home. Sheesh. Obviously we are no more baniyas. We have lost risk taking ability. That doesn’t bode well for our family. Or on the contrary it does. Simple predictable lifestyle. The shift from the hunter to the farmer. Possibly parenting is all that in our city. Growing roots. Staying in and withering away. Possibly we are the 55% giving the chance for the rest of the 45% to go out and push the envelope, take risks and be free.

While I was reading on Richard I came across his concept of ‘creative class’. An extract “Florida says that the Creative Class is a class of workers whose job is to create meaningful new forms (2002). It is composed of scientists and engineers, university professors, poets and architects, and also includes "people in design, education, arts, music and entertainment, whose economic function is to create new ideas, new technology and/or creative content” (Florida, 2002, p. 8). The designs of this group are seen as broadly transferable and useful. Another sector of the Creative Class includes positions that are knowledge intensive; these usually require a high degree of formal education (Florida, 2002). Examples of workers in this sector are health professionals and business managers, who are considered part of the sub-group called Creative Professionals. Their primary job is to think and create new approaches to problems. Creativity is becoming more valued in today’s global society. Employers see creativity as a channel for self-expression and job satisfaction in their employees.”

This creative class I see in the suburbs in Mumbai not in town. Town is old money, high rents, old houses and no buzz. Suburbs have buzz, have restaurants opening and closing at will, new ideas and of course the new age of creative people in design, arts and other stuff, pushing the bar.

I end on a story – once I met a friend of mine after a long time. She is in the creative field and her husband was setting up something in IT. they had bought a flat in the suburbs somewhere. While I was talking to her, she told me that the flat was bought on a home loan and then the price of the house had gone up crazy. Then in the middle of it all they thought of selling their home and pocketing cool ten to fifteen lakhs. (ten lakhs = one million). This they would spend a part of it touring Europe (Spain) and then shift to another house on rent. They would save on the EMI every month and pay a lesser rent, as well as have a sustainable life. At first I was appalled. What shit, sell an asset! Then I realised – you are young only once – have fun. And now I realize, selling their home and moving on rent to a smaller, cheaper place, gave them the flexibility to enjoy and follow their dreams. Being unencumbered by the EMI they could start a business and she could work free-lance. They could do something New and Not Conform to boring conformity. They wanted to be the ‘them 45%’ not the ‘us 55%’. I respect that. As a baniya, I genuinely respect that.

Interview on www.bigthink.com with Richard Florida. Full text here: http://www.bigthink.com/ideas/20243

This is so ironic, places with the highest levels of home ownership have low rates of growth; they tend to be older, lagging cities with older economic structures; they tend to be less innovative; they tend to have lower levels of human capital, of creative, economic activity; lower wages, lower incomes; and the people there have lower levels of well-being.

The ones that have lower home ownership, they’re stronger economies, they’re more innovative, they’re higher wages, higher incomes. And I thought about this and it’s not only that those cities are more expensive, right? Los Angeles and New York and San Francisco and Seattle and Boston, they’re not only more expensive, so obviously fewer people can afford houses. Actually by having a lower level of homeownership, and that’s around 50 or 55 percent, where the big, the cities that have a lot have 80. It actually makes them quite fast and flexible. And I find this really interesting. If you lose your job in Detroit or Cleveland, you own your house: you’re stuck. You can’t even move to another part of Detroit or Cleveland for a job, never mind to a place that might have more economic opportunity on the east or west coast. You’re stuck and you’re stuck with that house and you can’t get rid of it and you have to pay for it.

If you work in New York or Los Angeles or San Francisco and you lose your job, first thing you can do is downshift to a cheaper apartment, and if you need to move to a new region, when your lease ends, you can up and go. So I actually believe, the Urban Land Institute says we’re falling in home ownership. We’re going to come down to about, I think, they think, anywhere to about 62 percent, I think we’re going to go a little lower. I think a nice balance is about 55 percent, with the rest of the people renting. I do think we need to reinvent rental housing, though. I think the kind of rental housing we have now, where you go find a landlord on Craig’s List and you get a place and they don’t fix the windows and the dishwasher breaks and you’re doing it; that’s crazy. I think with all the condos that are vacant, in fact, we’re even seeing this in Miami. And I see this when I go to Miami, it’s actually my cycling route. I cycle down through the city and through the City of Miami, into Key Biscayne. You see all the condo towers that went bankrupt, that were distress sales, now being turned to rental. And what’s interesting is you’re renting from a real rental agency, the housing is nice and high quality, but it’s very affordable, lots of people are streaming back into downtown, empty nesters, young people, people with families, more street-level activity.

I even imagine something more than that, where you could sign up with Acme Rental Company, or XYZ Rental Company, and if your job changes in New York, or San Francisco, Toronto where I live, and you want to be closer to where you work, you can switch apartments. Or if you transfer to the West Coast or the Midwest or wherever it is, San Francisco, Chicago, you can basically be part of that rental company’s units there. Some way, and I think with the excess inventory—according to one analysis, we now in the United States have 8 years, 103 months, of excess housing inventory; well, somebody’s got to do something with that. If companies over the course of the reset in an entrepreneurial fashion begin to roll that up, begin to provide mass rental housing, if you will, and what gives me—I talk to a lot of developers and I speak to developers' forums, I was just at the Urban Land Institute: multi-family housing is one place people are actually profitable in.  

And just to spice up things a bit, here is a video I showed to one kid in office today. She went to Vashi station for the first time in her life and was impressed by it. When it was first constructed and Vashi was still a growing far flung suburb of Mumbai, the station won a lot of rave reviews. So much so that this movie song was also shot on location in the station. The actress is actually in the middle of eh song gyrating on the tracks. Development is always Sexy.

you never know what you can get

It’s always great fun to meet a veteran, from any business and at the same time it’s pretty irritating to meet a cousin (especially wife’s) who you have never ever met, but you have to and exchange pleasantries. So last week I was pretty unexcited at the prospect of meeting one such relative. But since my mom in law doesn’t normally ask me to come and meet, I thought of going nevertheless.

He was Jasmine’s cousin and a veteran in the old coconut oil trade from Cochin. It was quite nice and mentally I ate some humble pie. I judged before I met and if I don’t meet then how would I learn from others. There were a few things that he said that hit me. One of it was when he explained why the middle men in Cochin in the coconut oil business completely died. It seems Jasmine’s grand dad from her mother’s side was a kingpin of sorts in the business. The business died when Marico professionalized and bought directly from the manufacturers. The middle man was bound to die a natural death. He said that three things contributed to the death of the middle man. They were road, mobile telephony and banking. Bang on. These three improvements surely have contributed a large amount to the productivity gains and of course productivity can’t be enhanced without squeezing the middle man.

 14 years ago I worked as a sales guy in rural Guajarati. The mobile telecom boom hadn’t happened and I had to call up the Area sales manager in the evening at his home to get through to him. There was no contact possible when I was on the road and my ASM’s would have no clue what I was up to. I also used it to my advantage in those days by disappearing and fudging reports. I learnt later the power of diligently working and not bunking office. But at the time, I was shuttling between Gujarat and Mumbai, trying to squeeze every second I got by coming home. I wouldn’t recommend slacking off to anyone. But the point is that mobiles would have greatly enhanced our productivity. We would be in touch a lot more with each other in the sales system. I for one would not have gone missing. Though I did not see this one coming, it surely

Roads for sure would help. Rural Gujarat meant a lot of travelling. It was evident that road network needed improvement. I travelled all across the place to encounter bad roads. I travelled in buss, three wheelers, trucks, matadors, scooters and what not. It definitely screwed up my back completely. The lack of a road network would mean that we would not be able to transport goods cheap and fast across the country. Markets would remain inaccessible and the transfer of goods based on price movements would be severely curtailed. Roads are great and having roads is a greater leveler than what I had imagined.

Banking. I had got this one right. I remember my first cheque quite clearly. It was a non MICR cheque. In other words, Ahmedabad did not participate in MICR clearning – that is the cheques did not have the magnetic ink at the bottom. This is the number that helps the RBI in clearing the cheques. I found it highly amusing. Gujarat had a plethora of co-operative banks in every nook and corner. When we collected cheques from the distributor we had a list of approved banks. The thing was that for cash management services we had tied up with a third party provider. We used to have blank cheque leaves signed by the distributor at our end. We would send the stock and write the amount on the cheque and give it to the third party whose job it was to get the money. When I first heard the concept, I was quite confused. Why would you need someone to help you clear the cheque. Our deal was that I would get the money within two or three days of presenting the cheque and the third party would somehow get the clear funds from the banks in question. This is pretty stupid archaic concept. You present a cheque you should get the money, right? It seems there was a huge delay in banks clearing payments. Especially if it was a cooperative bank. Some of my distributors were the heads of the banks themselves and cheques would be held back for two weeks before being released. The third party would give us a list of banks they thought were acceptable and would accept cheques only from them. This was a system that was plagued with obvious difficulties and inefficiencies. During the 2000 dotcom boom, I knew that the banking industry would be able to add percentage points to a nation’s GDP by digitizing all their transactions and records all over India. Access to credit, access to creditworthiness and the ability to effect instant payments would be a huge booster to business and productivity. It had to work.

So banking, telecom and infrastructure were the three buzz words that removed the middle men in India. Well said ‘cousin of Jasmine’. Well said. I agree whole heartedly. Sorry Jasmine. Next time I will come without whining.

finders keepers

Last weekend Jispa had her trials to represent the city for the state meet. Jispa has been training pretty hard over the last one year. This is when she and her coach started to seriously set their eyes on qualifying. She has had some amazing improvements in timings over the year. But she has been unable to br4eak into the top three. Her coach is also realistic about it. He told us that it was pretty difficult as Jispa seriously started only a year back. The other kids had been at it much longer. But his immediate priority was a top six finish at this meet. Jispa managed that in the 50mtrs butterfly (fifth place) and the 50 mtrs free (fourth place). The top 6 go to Pune next month for the state meet. Her coach feels that the exposure and the confidence gained will be good.

The tournaments are held with an age bracket of two years being bunched together. At their age two years is a lot of difference. So in the under 11 category someone aged 10 has little chance of winning. Everyone talks about the disadvantage year and the advantage year. The year gone by was an advantage year for Jispa, and the one coming up is a disadvantage year. Next year she would participate with little chance of winning anything. Her coach was telling Jasmine that Jispa has a lot of potential. He said if she can be so fast with such horrible strokes, just imagine how fast she would be if her strokes is corrected. After June is the off season and this year is her disadvantage year. So the coach will now have time to correct the strokes and movement. I want to go and tell him. He is talking about preparing for the state meet two years hence.  Pretty deep stuff. Stuff that we had no insight into until you go through with it yourself. I am looking forward for the state meet. I want to see what it’s like. How are the facilities and the arrangements? How do swimmers across the state stack up against the Mumbai lads. How they come, what they do and how they behave.

I noticed an interesting things at the meet on Sunday. As Jispa and her contemporaries lined up at the starters block, I saw something that struck me. All the kids at the whistle took the block with a small ritual. They touched their hearts or they touched their heads or made a cross or something. They all looked for divine inspiration. Some supernatural force to come and assist them or mere blessings before the BIG race. Jispa merely took the starters block with no such ritual. We haven’t taught her God Rituals. Now I don’t know if this is a good thing or a bad thing. Definitely I was not going to teach her empty prayer or stupid rituals which have no meaning but at the same time, what I have robbed her of, is an external focus. Something that can help you when you are all alone. I don’t go to temples at all and I don’t recite any prayer, but in times of extreme situations, I do have my conversations. Something that I tell him, come dude, get me through this shit. Or thanks dude, nice one. Or its testing but I will be back, just give me strength to weather this one. I assume this is there because as a child I did believe in God. Today I grow up to question common belief and faith. Shit cannot happen to me just because I don’t pray or good cannot come because I do so. But sometimes, when the going is tough an external voice to talk to in private may be a good thing.  As of now Jispa doesn’t have this God figure in her mind. At least that’s what I think. But instead she has herself to talk to. I have spoken to her about what she thinks. Like the time when the results for the Hindi elocution was to be announced. She talks to herself. I think that internal belief is possibly better than a God belief.

Jispa willy-nilly has become a test case. Not out of my wanting it to become. But it is an interesting study on what a human do would if he were not brought up on a religious diet. What would you do if your dad actively questioned religious belief and God, your mom didn’t teach you to pray but at the same time your grannies took you to the temple? How would you have your conversations? I guess she will rely on her instinct as a human more than her instinct as a religious person. So she will take the starting block stand as a human being free from man constructed beliefs. She will I assume talk to herself. Look at an internally locus of control, an internal voice to guide her. A voice that is not borne by faith taught or not borne out of a faith in opposition to faith taught (like me), but a natural voice that human will have. That I think will be her God. And I hope and Pray that she finds it useful for her and holds her good stead. I Pray I have not robbed her of something important and eternal, but that I have given her something natural, inborn and lasting. I hope she finds her own GOD. Finders keepers.

Jump Jump

This week end Jispa has her top city swimming event. If she does well, she represents Mumbai at the state meet. She seems to be doing well and she has a decent chance of making the cut. At least in a couple of events. The last one year has been a bit tiring for us as regards her swimming. How much do we push? What does she require in nutrition and how do we balance swimming and studies. Her studies are cranking up a notch and Jasmine is feeling the pressure of studies which is getting transferred to Jispa. I don’t really blame anyone. Jispa is a nine year old, aspiring champion and a smart kid. Jasmine is a mother who knows that while swimming is good, studies is probably more important. How do we balance the two? It’s a delicate balance and here I must interfere and calm all the nerves around the house. Sometimes things are on the edge and the atmosphere gets very tense.

Even while swimming, it can get very tense with Jasmine getting dam irritated with Jispa when she suddenly starts swimming awkwardly. Jasmine goes twice a day to the pool, manages the food, the studies, everything and then if Jispa suddenly decides to do silly things, anyone can blow a fuse. My role is very clear in these times. I am lucky to be detached from the system. I am one step away. I can stay out and keep telling jasmine – its ok its ok. At that time, the biggest risk is that I can get the brunt of it.

Parenting is really frustrating at times. It’s impossible to keep your sensibility in check at all times. You never know what’s the next fight that’s around the corner. While swimming Jispa behaves like the champ. She changes into her costumes, adjusts her cap and goggles, takes her start and swims like crazy. As parents, one tends to forget that the tough competitor hides a child. A nine year old child with enough ants in her pants. This came to the fore during the otter’s club meet. The otters club swimming pool has a section which has a diving board. The kids completely freak out on it. Jispa has never been off one. Between events Jasmine told me that Jispa is having fun at the diving boards. I thought should go around and teach her a trick or two. I used to dive off the board as a kid and it was good fun. We used to have fun diving just like that as well. Who needed a board. We tried to perfect dives and I remember we even tried to do a somersault while diving. That was real fun. Especially if you land on your back and get a whack from the water. So I thought it would make sense to knock some non sense into her diving.

I reached there to find Jispa doing this…

So here I was the one trying to teach a kid to be a kid. It’s humbling to know that your kid doesn’t need you to teach her. Later I asked her who taught her and of course, I should have guessed. Her friends. Get a board and a water body, that’s all the kids need to have fun. I can only take credit for the fact that I did not stop their fun.

making money - out of nothing at all

Seigniorage – Simply explained, this is the profit that the government makes from printing money. Your ten rupee note doesn’t cost the government ten bucks. It costs much less. Hence for a fraction of the cost the government can pump money in the economy. Of course things are not so simple. Here is one nice podcast by planet money on the topic. http://www.npr.org/blogs/money/2012/04/19/150976150/should-we-kill-the-dollar-bill . Transcript at the bottom of this post. You should be able to broadly understand seigniorage while listening to the benefits of the coins versus notes in circulation. One of the most interesting stuff is the argument that the government makes a lot of money by having coins as opposed to notes is because people don’t put coins back into circulation because they don’t like them in their wallet. And to add the fact that coins tend to get lost between the cushion on the sofa! That’s all profit for the government. But obviously there is a cost to such seigniorage, which they correctly identified. Moneys made through inefficiencies are what you count as profits. It is stupid. It is not your primary job. The primary job for money is to pass around, not sit in the vault like McScrooge. Do you guys remember this cartoon of Donald Duck’s uncle jumping and swimming in his vault with tons of cash stashed around?

Cash in your wallet and in your jars and under your sofas are profit from the government but are absolutely useless for the economy. The money has to be in circulation and put to productive use. If you save it, put it in the bank, so that a portion of it can be lent out. Accounting for accruing money from lost coins is the same as black money you can store in your vaults. It’s the same problem. It’s not simply the tax that is saved. Legitimizing the flow of money has a much larger positive effect of the economy than simply the tax being collected.

Similarly, even corporations try and earn money through inefficiencies. The finance industry’s famous one is called ‘float’. Simply – if I owe you money and I write a cheque to you and give it to you one day late, I will earn interest income for one day. Not that you mind it too much. You don’t care about the one day interest on your small amount, but added up in a large amount of payments and you have a very large float for the organization. So if you ever wondered why they love you to pay online, instantly but they always like to pay you by cheque, you have an answer.

Even in mutual funds and other such organizations, you will have tons of money that is lying with the organization which is pretty much forgotten. Some body once told me that UTI would have hundreds of crores of money that would always be invested with them because of people who simply forgot or have dies and their heirs are unaware of the investment. I am not sure, but it’s likely that even insurance firms would accrue such seigniorage. The fun of policies sold and lapsed due to non-payment created a happy boom for them till the new rules set by IRDA disallowing the firms to benefit thus.

I think we get too clever for our own good. We forget our core job, which may be to provide a service in the best possible way for the customer. It should be a firm’s fiduciary responsibility to ensure efficiency in the system. One normally blames the regulators but the Indian regulators brought in some semblance of order to the insurance industry causing abnormal inefficient profits to be wiped off, also the regulators forced the banks to pay daily interest. Otherwise they were paying only on the lowest balance of the month with some other complex calculation. Ditto for getting rid of prepayment of home loan charges.

Even in the other firms I have worked for, not just financial firms, I see this problem. The finance guys get over smart and start controlling the system. They make an excel sheet to prove how paying payment a little late and getting payments a little earlier can cause great amount of ‘savings’ and profits to the firm. Money is an interesting topic. The structuring of money and the economic, monetary, banking systems are lopsided towards making tons of money through inefficiencies. The ones in the know can hugely benefit from those not in the know. In India this is popularly known as the Gujju mindset and this particular breed seems to understand this better than others. Gujjus and Marwaris are typecast thus. Or if you prefer the Brahaminical order, you would call it the ‘banya’ mindset. Use your trader mindset to make money. You definitely need a trader mindset while doing business and understanding cash flow is critical but using it to overrule simple customer centric thinking is pure stupidity.

But forget all that. When we went to Matheran a few weeks ago I did something that made the government a teeny bit richer. I remember as a kid once we had a trek organized to Matheran. We went up the hill station from the back road and came down the main road which at a few points crosses the Famous Matheran Light railway. At the time, my friend had pulled out a few coins and put it on the rails to see how they become when the trains run over it. This time around I had the chance to do it and show Jispa. We saw a train coming and I quickly put in a one rupee coin and a five rupee coin on the tracks. Jispa was wondering what I was doing. Sure enough the engine passed over it and flattened the coins. Jispa was pretty excited and we could send it with her the next week to school for a show and tell. That was a pretty unique show and tell and it benefited the government by around five bucks (I am assuming it cost one buck to make the two coins). Here are the two profitable pieces of metal for the government.

The Transcript of the podcast as follows.

April 19, 2012 -:

Subway riders here in Washington were recently the target audience for an unusual ad campaign. The ads show giant one dollar bills and asked, do you heart the dollar? They're part of a small lobbying war over the fate of the dollar bill. There's legislation in the House and Senate that would eliminate all $1 bills and replace them with dollar coins.

NPR's investigative unit and our Planet Money team checked into the debate over coins versus bills. And David Kestenbaum and Robert Benincasa think they have a winner.

DAVID KESTENBAUM, BYLINE: Here's the question. Given that we need to have some form of money out there worth a dollar, which is more cost effective, a bill or a coin?

ROBERT BENINCASA, BYLINE: Before we tell you who the winner is, let's hear each side's case.

KESTENBAUM: In one corner, arguing on behalf of the dollar coin, Senator Tom Harkin, Democrat from Iowa. He told us coins are a clear win. They last much longer than bills.

SENATOR TOM HARKIN: The most important thing is it's just more efficient. It's way more efficient than a paper dollar.

BENINCASA: Dollar coins last something like 30 years and he says switching to coins would save hundreds of millions of dollars a year.

KESTENBAUM: Coins are also, he says, easier to stick into vending machines. Harkin's office put out a video of him struggling to buy a snack with a worn out $1 bill.

(SOUNDBITE OF AD)

HARKIN: Has this ever happened to you? You try o put a dollar bill in the tray, but it won't take it. Well, that's why I've introduced bipartisan legislation to replace the dollar bill with a dollar coin.

KESTENBAUM: Harkin can rattle off a long list of countries that have replaced bills with coins.

HARKIN: Canada has a coin that's worth $2. England has a coin worth about $3 U.S. Switzerland has one worth about $5 U.S. And yet, what have we got? We got a 25-cent piece.

KESTENBAUM: Republican Senator John McCain has also signed onto the bill. And it's worth noting that businesses in both senators' states would benefit if this bill passes.

BENINCASA: Harkins' state, Iowa, is home to a company called PMX, which makes the metal sheets that get turned into coins.

KESTENBAUM: Senator John McCain's state of Arizona is home to some big companies that mine copper, the main ingredient in dollar coins.

BENINCASA: So, that's the coin side of the fight. In the other corner, fighting for paper, you'll find an organization called Americans for George.

KESTENBAUM: Because George Washington is on the $1 bill. Americans for George put those ads in the D.C. subway and again, here you find a lot of money behind the arguments over money. Americans for George was started by the company that makes the paper the $1 bill is printed on. Crane & Company.

BENINCASA: Doug Crane is a vice president there. As you might imagine, he says paper dollars are better than coins.

DOUGLAS CRANE: A dollar bill is made from a blend of cotton and linen fiber.

KESTENBAUM: Paper bills are cheaper to manufacture than coins, he says, and they last surprisingly long. According to the U.S. Federal Reserve, a $1 bill lasts about four and a half years.

CRANE: U.S. currency, you know, it's some of the most durable banknotes on the planet. And, you know, the $1 bill is probably the hardest-working note there is.

KESTENBAUM: So, what to make of this. The coin people say coins are better. The paper people say paper is better. Both cannot be true.

BENINCASA: And to make things more confusing, both sides point to the same official report to make their case.

KESTENBAUM: The report was written by the Government Accountability Office, a non-partisan arm of Congress that's often called on to settle questions like this.

BENINCASA: We talked with the GAO's Lorelei St. James who oversaw the report. The GAO has recommended switching to coins.

LORELEI ST. JAMES: That still stands.

KESTENBAUM: She says switching to coins would make the government money. Over 30 years, a lot of money.

JAMES: We show that there would be a $4.4 billion net benefit to the federal government.

KESTENBAUM: But it turns out that $4.4 billion does not come from the fact that coins are more cost effective to make. Coins do last longer, but they also cost more to manufacture. No, according to the GAO, the extra money for the government comes from this other weird thing. It's going to take us a minute to explain.

BENINCASA: It turns out if you switch from dollar bills to dollar coins, you can't just do a one for one replacement. You actually need more coins than you would bills. Why? Because people don't like carrying coins around.

JAMES: A lot of people when they take their coins out of their pockets at the end of the day or their purses, they'll put in what we call a coin jar.

KESTENBAUM: The coin jar effect. In Canada and the U.K., the governments had to put out all these extra coins, over 50 percent more, just to keep enough money circulating. The GAO says these extra coins mean extra money for the government.

BENINCASA: Because the government makes a profit from every bill or coin out there, so more coins, more profit. It's called seigniorage.

KESTENBAUM: So case closed, right? Not so fast. We're here to tell you there is something big missing from that GAO report, which is where all that money the government is getting comes from. It turns out it comes from us.

BENINCASA: To help explain how this works, and to render the final judgment, let's meet one more person, Robert Whaples. He's an economist at Wake Forest University.

KESTENBAUM: Whaples weirdly came to us via the dollar coin lobby, a group called the Dollar Coin Alliance. The Dollar Coin Alliance said make sure you talk to him; he's a pro-coin guy.

BENINCASA: So, we called Whaples up. He read the GAO report, thought about it, and he said the choice is very clear: The paper dollar wins, the coin loses.

ROBERT WHAPLES: It's clearly an inferior substitute. People are going to be putting them on top of their bureaus instead of spending them for transactions. And that seems like a big waste of resources to me.

BENINCASA: Whaples says all that money the government makes on the dollar coin, all that extra money, it doesn't come from nowhere. It comes from us.

KESTENBAUM: Think about it this way, if I have a paper dollar, I'll probably use it or put in the bank. But if stick a coin in a jar, I'm not getting anything from it. I'm not earning any interest on it. It's like we're paying a tax.

WHAPLES: That is exactly how I would see it.

KESTENBAUM: Well, but the Dollar Coin Alliance said I should talk to you because you favor the...

WHAPLES: Yeah, I guess they made a mistake.

(SOUNDBITE OF LAUGHTER)

KESTENBAUM: There you have it.

I'm David Kestenbaum.

BENINCASA: And I'm Robert Benincasa, NPR News.

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