Saturday, November 27, 2010

Thanksgiving in the Bluegrass

Joey on the porch and snow on the roof.

Over the river and through the woods,
Elizabethtown in the rear-view,
Back to Muhlenberg County, down by the Green River
   where Paradise lay,
A picket fence of white-trunked sycamores
    guarding both sides of the WK.
On to Central City, home of the Everly Brothers,
My daughter asleep in the passenger seat,
(wake up, little Susie, wake up),
Near Madisonville (“Best Town on Earth”),
To grandmother’s house we go
for wild turkey in a snow-frosted log cabin with six carloads of cousins,
Topped off with a field full of smiling saints,
Cantankerous cowboys
and a nip of Knob Creek.

Friday, October 29, 2010

Social Security "Trust Funds"

    Sometimes, politicians refer to a social security “trust fund” that is running out of money, going broke, invested in Treasury bonds or, depending on the politician, bankrupt or headed there.  Representative Michele Bachmann, for instance, recently wrote a column stating, “Social Security is Broke”.
    In reality, social security is a pay-as-you-go system.  There is no giant trust fund invested to pay social security benefits.  Payroll taxes (FICA) are withheld from every employee’s paycheck and this money is used to pay the benefits of current retirees.  Currently, an employee pays 6.2% of the first $106,800 he earns and his employer has to pay an equal amount, totaling 12.4%.
    In other words, people who are employed today are paying for people who are retired today, and those people now paying for their parents’ generation’s retirement will have their social security benefits paid from the payroll taxes paid by their children’s generation of Americans.
    The Social Security Administration does not, as some people believe, invest your generation’s payroll taxes in a fund that will one day pay your generation’s social security benefits.  By the time you retire, your contributions will have been paid out to people who retired before you.
    At least, that’s the plan.  The problem is that the ratio of retired people to payroll tax-paying people is getting worse because of the Baby Boom.  There may not be enough workers to support all those retirees and that’s the reason for all the talk about cutting benefits and raising the retirement age.
    There is a trust fund (two actually, one for retirement benefits and one for disability), but it is mostly an accounting mechanism.  Here are two analogies to the family budget that might help explain.
    Imagine that your rich aunt died and left a million dollars in a trust fund to pay your retirement expenses.  She authorized a trustee to invest the money in stocks and bonds in a way that would preserve the capital in the fund and pay you the interest every year.  You could safely assume that you would always have at least a million dollars in the fund and that you will receive an interest check to live on every year for the rest of your life. 
    This is not the way the social security trust funds work.
    The Social Security program never had a rich aunt.
    The social security trust funds have two purposes, according to the Social Security Administration.  They provide an accounting mechanism for tracking all income to and disbursements from the trust funds, and they hold accumulated assets.  In other words, the payroll taxes collected in any year have to sit somewhere and be accounted for until they are paid out in the same year, and there must be a place to keep accumulated funds in years when payroll taxes exceed benefit payments.
    Let’s compare this to a household budget, which is more like social security than is the rich aunt scenario.  You expect to earn a certain amount of income for the year from your employer (like payroll taxes in the social security program).  You budget a certain amount for living expenses (payable benefits in the social security program).  If you make more than you spend, you place the excess in an interest-paying savings account for the future.  (Social Security buys Treasury bonds, but more on that shortly.)
    You don’t have your rich aunt’s pot of money to pay the bills; you have a budget (accounting scheme) that allows you to plan to pay future expenses from future job earnings. You “pay as you go”.  That’s more like the way social security works.
    The “accumulated assets” purpose of the social security trust funds is interesting and not entirely like your savings account at the bank.  When you (or a corporation or foreign country) purchase a Treasury bond, you are loaning the U.S. Government money.  Uncle Sam pays you interest until the bond matures and then you receive your principal back.
   When the U.S. Government buys Treasury bonds with the excess in the social security trust fund, it is borrowing money from itself and paying interest to itself.  It’s essentially an accounting mechanism, like having a few bucks left over at the end of the month and stuffing it under your mattress for some month you'll come up short.  Granted, you probably wouldn't pretend to pay yourself interest.
    Buying T-bonds does serve another important purpose.  If the U.S. Government merely tracked the excess funds in a budget, Congress could vote to simply to change the budget and make those funds disappear.  However, Uncle Sam must, by law, repay the debts of the U.S. Treasury.  They can't simply makes the bonds disappear like they can a budget item.
    There are social security trust funds, but they are primarily an accounting system to track income and expenses.  They don’t invest in stocks and bonds or anything else, unless you consider loaning yourself money an investment.
    So, what does it mean to say that the social security trust fund is broke or that social security is headed toward bankruptcy?
    The trust fund would run a deficit if payroll taxes plus the savings in the trust funds weren’t adequate to pay benefits in some year.  This nearly happened in 1982 and may be a problem again soon. 
    In 1982, Congress simply borrowed money that was paid back in four years.  This is a cash flow problem that was solved as anyone solves a cash flow problem, with borrowing.  It says, “the money will be there one day, we just won’t have it until after the bill has to be paid.”  It's the same mechanism that allows us to buy a home that we can't pay for with cash.
    The demographics issues, having a huge number of retirees and not enough tax-paying workers, is not a cash flow problem.  It is a budgeting issue.  According to the Trustee’s Report, under two different scenarios of future economic conditions, social security will remain solvent for thirty more years and in the best case 75 more years. 
    If the economy does better than expected and there are lots of payroll taxes to collect and the demand from future retirees isn’t as high as is expected, the program will be fine as is.  If not, expenses may have to be cut, by raising the retirement age or reducing payments, for example.  Or, payroll taxes could be raised, but that doesn't seem politically palatable.  Managing social security, like managing the family budget, is an ongoing process that will have good times and bad.
    Making a statement like “Social Security is Broke” simply doesn’t mean much.  If you think that your future job income won’t be enough to pay future bills, you make changes.  You earn more income and/or cut expenses.  That doesn’t mean you’re broke. 
    And it doesn't mean that the social security program doesn't need changes to remain solvent longer than thirty more years.  It just means that you might be broke one day if you don’t manage your money well going forward.

Sunday, August 8, 2010


"Goodbye, I'm off to E-town."

"Damn," my sister-in-law shuddered, "I can't imagine going to a high school reunion." She shook her head for emphasis.

A lot of people stress out over reunions, but I have a secret weapon. I was never the athletic, witty, handsome and charming kid that my former classmates can find me no longer to be. That takes away a lot of the pressure.

I went fly fishing with Kenny Clark the day before the reunion. Kenny looks exactly like he did in high school and I tried not to hate him for that. We stood just below Wolf Creek Dam and pulled in one fish after another, removed the hooks and released the fish, and reminisced.

"Do you remember," I asked, "that Thanksgiving weekend we went rabbit hunting and George Blandford ran into the back of that old truck on the way home?"

"Were you on that trip?" he asked. "I remember the trip but I didn't remember that you were with us."

"Yep. Greg Skillman and I were sitting in the back seat holding shotguns on our laps and bracing for the impact."

I borrowed my father-in-law's new, white Ford pickup so I could immerse myself in the experience as I drove the last two hours of the trip with a cooler of beer on ice in the back of the extended cab (it was BYOB.)

I've been hinting to my wife for years that I need a small pickup to take fishing and to haul mulch. She dismisses the idea.

"You haul mulch once a year and you can rent a truck at Lowe's for $19 to do that. Besides, at your age you should hire someone to mulch the lawn. Aren't you retired?"

As I was pulling out of the drive in Pa's new pickup, Vicki brought out a GPS and I cranked down the window to accept it, as if I'd have trouble finding a place I've visited twice a year for the past four decades.

"Hmm," she smiled. "You look good in a pickup!"

"Yeah?" I asked. I saw an opening. "How do you think I'd look on a Harley?"

The Friday night party was a cookout in Glendale and the temperature index was 104 degrees. It was held behind a restaurant and they kindly offered to allow us to come inside if we needed to cool off. I took them up on it and ran into my old buddy, Greg Skillman, in an absolutely frosty men's room.

"Greg," I said, "people may start to talk, but I say we hang out in here for a while."

"Works for me," he quickly agreed. "Do you remember that Thanksgiving weekend we went rabbit hunting and George drove into the back of that dilapidated old truck?"

Not only did Greg remember I was there, he remembered that the old guy in bib overalls driving the truck had neither a drivers license nor registration and that his name was Stanley. Of course, if he was making up the Stanley part, none of us have the memory to challenge it.

We finally ventured back out the door into a night so hot and humid that it felt like walking into a dog's mouth. Greg was behind me and I heard him say, "Gregg Melvin!"

Gregg Melvin and I may have met in E-town back in the day, but I don't recall it with any certainty. He was a year older, but I heard the name a lot. We've since hooked up on FaceBook and chat frequently.

I recognized his face from his profile photo and he immediately recognized me from mine. We shook hands and said hello.

"You're a lot taller than I pictured you," he told me, proving my previous suspicions that not only does no one know you're a dog on the Internet, but we're also all the same height on FaceBook. It's the social networking equivalent of Einstein's theory of relativity, I suppose.

Not everyone worked up the nerve or the interest to attend. Gary told Carol Brown, who did an outstanding job of planning everything by the way, that he would be there, but he called a few days beforehand and said he wouldn't be attending.

"Why not?" Carol asked.

"Because there's really not anyone that I'd like to see." Honest, but brutal.

"Well, f~@k you!" she responded. Apparently, Carol felt strongly about spending months planning a reunion of her friends and then having them all dissed in a single sentence. We all love Carol, but she's not really the classmate to engage in brutally honest discussion. You're not going to win.

I'm with Carol on this one. Gary, I thought we were friends. Remember blowing up shit in biology class in the name of scientific research? Does that mean nothing?

Some apparently didn't attend because they felt too fat or too bald or too wrinkled. I guess we were lucky to have even thirty or forty of us perfect folk to hold the event.

There are a few of us that you'd probably like to slap. Kevin Doyle has a full head of black hair without a touch of gray. He swears he doesn't color it, but we were all pretty sure we knew Grecian Formula when we saw it. (Honestly, we do believe him, but we're trying not to hate him.)

Doug Egerton and his wife Rhonda were just back from living in Shanghai for a while and yes, Rhonda is still a babe.

Lynn Mayhugh Altepeter is flat out gorgeous, Cathy Doyle looks just like she did in high school, Bobby Tabb has a thick head of hair to go along with the remarkable personality he always had, but none of us is perfect. If you have a few gray hairs or a wrinkle or two, what the hell? None of us can see you well enough anymore to notice. Come on down and join the party.

There were several identification faux pas, but everyone laughed them off. I had my own. I failed to recognize someone I dated for a year in high school, though she hasn't changed a bit. I hadn't seen her for twenty years and when I finally realized what I had done, I had to confess and apologize out of fear that she would think I had snubbed her.

"You look fantastic," I told her in all honesty.

"Aww, thank you!" she replied, but with a hint of "you're just being kind".

"No, seriously, you look fantastic and I mean that. I was actually hoping you'd look like crap so I wouldn't feel so bad about getting dumped forty years ago. Frankly, this is a terrible disappointment."

She laughed.

As I looked at her still-lovely face, for just a moment it felt like we were sitting across the table from each other in the library during study hall forty years ago and I remembered why I was so attracted to her in high school— despite our complete incompatibility.

Cathy was a know-it-all, bossy, had to be the center of attention, always had to be right, and thought she was smarter than everyone else. I, on the other hand, was a know-it-all, bossy, had to be the center of attention, always had to be right and thought I was smarter than everyone else.

You see the problem.

The party mostly broke up by 9:30 as sensible people went off in search of air conditioning. A number of us stayed much later. The evening air eventually began to cool and we sat in a large circle with a couple of fans aimed at us as we drank beer and talked about the good ole days. I pulled a chair up to the table, spun it around and sat with my arms crossed on the top of the seat back, not to try and look cool like I would have done forty years ago, but to allow the fan to dry the back of my linen shirt. I began to feel sorry for the people who had already left, air conditioning notwithstanding.

"Anyone want to go to Cecil Key's Truck Stop for biscuits and gravy?" I asked.

There was a large truck stop in Glendale when we were in high school, not far from where we sat, just off I-65. It had closed long ago, replaced by a shiny new Pilot station not known for either biscuits or gravy.

"The girls typically had to be home by 11:00, so we'd drop off our dates and drive down I-65 to Key's for a large platter of biscuits split in half, the entire plate then covered with gravy. I think it cost about fifty cents," I recalled.

"Did you know the guys did that?" one of the ladies at the table asked another. "I was so pissed off when I found out."

"We'd ask each other if anyone had gotten lucky. The response was always 'Do we ever?' "

"Would we have been eating biscuits and gravy with a bunch of guys at midnight if we'd gotten lucky?" Greg reasoned.

Just before we called it a night and went home to prepare for a larger reunion the following evening, an L&N freight train roared by about ten yards behind our table. We raised our fists and let out a yell, saluting a gargantuan hunk of steel that tore across the countryside like the Baby Boom, shaking its surroundings and, on this night, demanding center stage for a few minutes.  A lot like the Class of '70, I suppose.

For a few minutes it was too loud to talk.

That's when I looked around the table at Kevin, Cathy, Bobby Tabb, Doug, Rhonda, Martin Oliver, Carol Brown, Greg Skillman, Kenny Clark, Jim Duncan and the others and realized that forty years after going to high school with these people, and seeing them only on rare occasions since, there's really no place I'd rather be than sitting around a table outdoors on a summer night, drinking beer, listening to trains, reliving memories and creating a new one.

It was like forty years had never happened.

Friday, June 25, 2010

Everybody Loves Raymonds

We went to a London pub this week to watch a vuvuzela concert on their widescreen TV.

As misfortune would have it, the English soccer team was playing a World Cup match at the same time and in the same venue as the vuvuzela musicians.

The incessant drone nearly drove us mad. Not the drone of the vuvuzela, mind you. I’m talking about the English football fans’ incessant whining about their team’s inability to score a single goal against underdog Algeria.

We were in the U.K. because my daughter, Alex, had just graduated from high school and declared that she wanted to travel abroad as her graduation gift.

She seems to think that because she made good grades, earned acceptance to college, never causes any problems, likes spending time with her mom and dad, has wonderful friends, and behaves entirely responsibly that she is entitled to just about anything she asks.

OK, so I see her point.

I know just enough about the game from American youth soccer to follow the action, but one thing I don’t understand about professional matches is how an offensive player can intentionally run into a defensive player, flail his arms, fall to the ground and have the defensive player— who is simply standing there— assessed a yellow card.

The offensive player lies on the ground for several minutes, as if he’d been hit by a truck, and pretends to writhe in pain. He inevitably covers his face with both hands, though replays will show that he wasn’t actually hit in the face. I suspect it’s to hide his embarrassment at overacting.

Seriously, I’ve had more violent collisions with little old lady Londoners in the Tube and I somehow managed to stay on my feet.

Brits drive on the left, of course, but it is also local custom to walk on the left of stairs and escalators. The signs are everywhere, but this rule is particularly important in the fast paced confines of the Tube, and especially around sharp turns in the pedestrian tunnels.

The problem, of course, is the large crowds of American travelers accustomed to driving and walking on the right. I find the real decision to be whether you prefer to crash headlong into running Brits by breaking the rule and walking on the right, or to collide with onrushing Americans by walking on the left.

After several previous trips to London, I came to the somewhat counterintuitive conclusion that it is better to buck local custom and walk on the right. Brits are frequently smaller, and therefore easier to dodge, and if you can’t miss them entirely, they seem to absorb more of the impact in a head-on collision due to their slightly smaller mass.

(This logic doesn’t work with cars, so I advise going with local custom when driving.)

We took a bus tour into the countryside west of London and our first stop was Stonehenge. I have wanted to visit Stonehenge since the first time I saw photos of the site decades ago. The building of this amazing structure, sprouting up from the middle of a broad expanse of pastureland on the Salisbury Plain, began during the Bronze Age about 2500 BC. No one knows for certain how or why it was built.

The large stones were somehow transported 19 miles, possibly pulled over rollers by as many as two hundred men.

I imagined a man with a rope over his shoulder two hours into pulling that first 50-ton stone saying to his companion, “Tell me again why we’re doing this?”

We took a lot of pictures with my digital camera on this trip. I remember as a kid saving up to buy 12-exposure rolls of Kodak film for my Instamatic and painfully conserving each frame, but that isn’t a problem, anymore.

I have reviewed the technical specifications for several SD memory cards for my camera and devised an intricate scheme for selecting which size card to purchase— I buy whichever size costs twenty bucks at the time.

Twenty dollars once bought a tiny 128-megabyte card, but I recently bought an 8-gigabyte card for the same amount. After Stonehenge, my camera showed that I had snapped 156 shots and had room for 3,585 more.

Next time maybe I’ll just settle for the $10 memory card.

Our next tour stop was Bath, a town imaginatively named for the ruins of an ancient public bath fed by a hot spring, the only one in England.

(No, there is no English town of Toilet, at least that I could find on the maps, hosting the ruins of a great civilization’s public outhouse. But, the Brits hang large signs on empty buildings saying “TO LET” instead of the American “FOR RENT”, and they always looked to me like TOILET with the “I” painted over. American teens would spray paint in the "I". Maybe that’s why our signs say, “FOR RENT”, instead.)

A mineral water bath piqued my interest because I grew up in Dawson Springs, a tiny town in rural Kentucky that enjoyed a temporary boom near the beginning of the twentieth century from the same misperception that drinking and bathing in the mineral water from springs has medicinal value.

After about twenty years of rampant tourism, Dawson’s visitors apparently realized that, while a lot of medicines taste like crap, tasting like crap doesn’t necessarily make mineral water medicine.

Our tour guide at the bath kept talking about “the Raymonds” in a heavy British accent.

“Who were the Raymonds?” I asked.

The Saxons I knew. Even the Normans. But, the Raymonds?

“People from Rayme,” she answered incredulously.

I shrugged.

“The Raymond Em-piah.” She finally added with emphasis and a note of frustration.


The statues of the Caesars suddenly made a lot more sense, as did the Latin inscriptions. These were ruins from the Roman invasion of England.

Because of the ruins, Bath was packed to the hilt with tourists in cars and tour buses of all sizes. There were long lines at all six Starbucks. Bath is an amazingly popular tourist destination.

Apparently, what they say back in the states is just as true in England.

Everybody loves Raymonds.

Thursday, April 29, 2010

I Don't Know. Third Base!

Writing humor when you live in the South is mostly just reporting.

Same goes for writing drama, really.  Do you think if William Faulkner had lived in Brooklyn he could have made up a story about a family trying to take their mother's body home for burial in a horse and wagon across a flooded river because her husband wanted new false teeth?   Trust me, you can't make this stuff up.

Take this morning, for example. My wife and I had coffee and pastries at Weaver Street Market, as we do a few times each week. Our routine is precisely honed. She selects pastries while I grab a tray and two cups of coffee. While I stand in line to pay, she claims a table in the dining room and begins reading the Raleigh newspaper so I can have the New York Times first.

This morning, I got in line behind a middle-aged woman in a long cotton dress who waited until her purchases were completely rung up before beginning to search for her wallet, the paying part of this transaction apparently having come as a complete surprise, and then she began to dig for a small change purse. The change purse was inside a small bag with a zipper that was inside a larger purse stuffed into the bottom of her backpack, which looked quite fashionable with the long cotton dress and white gym socks, I should add.

Now, I have waited for women to search diligently for precise change at checkout stands all over this country. (Men, on the other hand, will throw down a twenty for a pack of gum when they have exact change in their other hand.)

In other parts of the country, this might seem an annoyance. I remember a tightly-strung woman from Northern California ranting a few years back that toll booth signs saying “Exact Change” don’t mean, “do you have exact change?” but rather, “do you have exact change that you might be able to lay your hands on in, oh, the next ten minutes or so?”

I see her point, but Southerners are generally more laid back than that. I haven’t heard a car horn blow in the past five years and we generally just smile at times like this. Worst case, we shake our heads nearly imperceptibly to express total outrage. Getting to tell the story later and laugh about it is an inexpensive and reliable form of entertainment around here.

So is keeping your ears open while you read the paper so you can catch gossip like this little gem I picked up from the nice ladies sitting next to us this morning.

“She was runnin’ short of cash so she sold her banjo to her ex-husband.”

There had to be a story there. I laid down the business section.

“Excuse me, ma’am”, I interrupted, “but could you hold the rest of that story until I refill my coffee?”

My friends know that I spend a lot of time at UNC baseball games and at six bucks, there is no better value for your entertainment dollar. In fact, after the third inning, they stop selling tickets and you get in free.

Midweek games like yesterday’s contest against High Point are frequently laughers, but last night’s was entertainment with a capital “E”. At one point, Coach Fox brought in a reliever in a tight situation with High Point’s power hitter at the plate.

The pitcher promptly skipped his first throw off the top of the batter’s helmet. The hitter was awarded first base, but I suppose that’s better than giving up a home run in a tight game. Seems like the starting pitcher could have done that, too, though. No need to bring in a specialist.

When the kid’s second pitch hit the dirt in front of home plate, Fox practically ran back out to the mound. It’s the first time I’ve seen a pitcher yanked after just two throws, but no one seemed to disagree with the decision. One smart-ass fan even yelled, "What? Did he reach his pitch count?"

The main event occurred a few innings later, though, when Carolina should have easily scored runners from second and third on a single to right field. As the runner from second rounded third with plenty of time to score, Coach Fox stood waving his right arm frantically in a huge circle to send the runner on to home. It’s fun to watch a grown man excitedly imitating a high-speed windmill anytime, but last night’s event was special.

The runner may have made the turn at third a bit wide, but not excessively so, while in his excitement Coach Fox had hopped out of the coach’s box and a bit too close to the base path, again with his right arm flailing in a huge circle. The runner crashed directly into his coach, falling to the ground and having to stumble back into third base instead of scoring the run.

Meanwhile, Coach Fox fell backward into a complete reverse somersault, somehow keeping his cap in place over his silver hair. The fans, at this point, were completely focused on Laurel and Hardy at third base and lost track of the play on the rest of the field.

Had the runner scored instead of being tackled by his own coach at third base, Carolina would have won the game in nine innings, but that wasn’t to be.

Coach Fox walked over to the runner on third, who was bent over at the waist and apparently in some pain, put his arm around his player and whispered to him. I can only imagine the conversation went something like this.

“Son, we just made total asses of ourselves; well, maybe me more than you since you were actually supposed to be on the base path. On the other hand, they announced attendance of just 500 and I’m damned if I can count more than a hundred fans or so, so we have that going for us. YouTube might be a problem; I thought I saw a guy pointing his cell phone at us. Keep acting like you’re a little shook up— people seem reluctant to laugh at someone who’s been injured. OK, I’m going to walk away now. Just nod your head and act like we were talking strategy.”

The next few innings might have been a little boring except for a pitch to a Carolina hitter that crossed the plate about two inches above the ground and that the umpire inexplicably called a strike. The “crowd” went crazy and Coach Fox began arguing with the plate umpire. Arguing balls and strikes is a no-no and Fox was quickly ejected.

In that strange tradition of baseball, coaches who have been ejected reserve the right to argue a while longer, figuring they have nothing further to lose. One advantage of the pathetic attendance was the fans’ ability to hear every word of the tirade and they became eerily quiet to take advantage of the opportunity.

Coach Fox kept screaming at the umpire that he should be ashamed to eject a coach over so minor an objection and that the umpire was now going to have to “wear that”. He said it several times, but I never quite got it. As Fox walked off the field, the fans roared their approval and began shouting, “Wear it, Blue!” The fact that we had no idea what it meant made it that much more fun to yell.

Having had no ejections, unintentional beanings, two-pitch outings or physical comedy on the base paths for two entire innings, our boredom was broken in the seventh when a UNC fan got into a screaming match with the popcorn vendor and again, since the crowd was so thin, we got to witness every word.

The fan involved is a regular, an older gentleman with a huge paunch and an entire wardrobe of UNC Tar Heels paraphernalia, including stadium seat with shoulder strap, all in powder blue.  His regular seat is near the popcorn stand and his constant yelling at umpires and players seems to irritate the vendor, who apparently feels the need to remind the fan at every opportunity, night after night, that it’s “just a game”.  F-bombs and threats by the fan to stick the vendor’s popcorn machine where the sun don’t shine ensued and Security had to ask the fan to leave.

By the way, women love a really big fella in all baby blue, which explains why Tar Heel defensive linemen get the pretty girlfriends.  I bought a three-piece suit in that hue with matching suede shoes and belt and a light blue print tie, but I wore it with a white shirt.  (You don't want to overdo it.)  All I got from the ladies were rolled eyes and grimaces.  The look just doesn't work for a skinny guy.

Coach Fox having. . . shall we say, “held up” the earlier potential go-ahead run at third, we entered extra innings with the score tied at 2.  High Point’s pitcher gave up two singles and Carolina’s third batter in the bottom of the 10th reached on an error.  With the bases loaded, the pitcher ran the count to 3 and 2 against Ryan Graepel.

With the bases loaded in extra innings, a walk would have ended the game.  High Point’s pitcher had to throw a strike and “Grape” jacked a walk-off grand slam over the left field fence.

I was telling all this to the lady at Weaver Street Market this morning while she searched interminably for her change purse at the checkout stand.

“You really should go to a game," I told her.  "It’s hard to find three hours of comparable entertainment anywhere for six bucks. . . and, if you can’t find your wallet by the fourth inning, they’ll let you in free!”

Friday, April 16, 2010

Can Inexperienced NBA Prospects Win A Title?

The 2009-10 Kentucky Wildcats, among the youngest basketball teams in Division I, “only” made it as far as the Elite 8 in this year’s NCAA Tournament.  With five players apparently headed for the NBA and four of them freshmen, the team generated a lot of speculation about whether an inexperienced team, even one loaded with NBA talent, can win the championship.

Kentucky was, to say the least, young and inexperienced.  Ken Pomeroy calculated an experience factor for all 347 Division I teams and posted them on his website,  He weights the player’s class in school by the number of minutes actually played to obtain not just an indication of how many upperclassmen are on the team, but which one’s actually played.  UK ranked 341st, with just six teams in all of Division I having less experience playing in the NCAA.

Referring to UK’s loss to West Virginia, one of the more uninformed posts I’ve read said, “UK lost the first time they had to play an experienced team.”  Since UK didn’t play any of the six teams ranked less experienced than themselves, every single game they played in the 2009-10 season was against a more experienced opponent, yet they ended the season with a record of 35-3.

UK beat UCONN, Auburn, Mississippi State, Alabama and Tennessee during the regular season and all of those teams were more experienced than the Mountaineers.

UK also soundly defeated Cornell in the third round of the NCAA tournament, a quality team with a Pomeroy experience ranking of 8— about the same distance from the top of the experience ranking as UK was from the bottom.  In this year’s tournament, only Arkansas-Pine Bluff (6) and Notre Dame (3) were more experienced than Cornell (8).

(Numbers in parentheses are Pomeroy Experience Rankings for 2009-2010.  Lower numbers indicate greater experience.)

Ironically, A-PB and ND, the most experienced teams in the field, both lost in the first round.

The argument that UK was too inexperienced to win the tournament is also weakened by the fact that only four of the tournament’s 64 entrants made it farther in the tourney than did the Wildcats.  So, while many argue that UK didn’t win the championship despite all that talent because they lacked experience, one might also argue that 62 other teams didn’t win the tournament, either, and UK came as close or closer than 97% of them.

A single tournament doesn’t provide a significant statistical sample, but it can provide some interesting observations.  I divided the 347 teams with experience ranked by Pomeroy into quartiles.  Since “quartile” is one of those words that numbs the mind, let’s refer to the most experienced teams, those ranked 1 through 87, as seniors, and the remaining three groups as juniors, sophomores and freshmen. 

Kentucky (341) and Kansas (264) would then be referred to as freshmen, since their weighted class rank falls into the bottom one-fourth of experience of all 2009-10 NCAA Division I teams.  Duke (70) was a senior, Syracuse (181) and Butler (177) juniors, for example.

To win the NCAA tournament, a team first has to make the field.  Two-thirds of the 64 teams invited to the big dance were from the middle of Division I in terms of experience.  Surprisingly, more teams made the tournament from the junior and sophomore classes than from the senior class. This distribution would seem to imply that having some experience is important, but having lots of experience isn’t an additional advantage in reaching the tournament field.

How did inexperienced teams fare in the 2010 tournament?  Perhaps surprisingly, less experienced teams won more than half of the games played in this year’s tournament— 32 of the 63 games, or 51%.  Teams highlighted in yellow in the bracket diagram below won games against more experienced teams.  Considering the entire tournament from round one through the championship game, experience doesn’t seem to have been a huge factor.

The less experienced team actually won 20 of the 32 first-round games (63%).  The first round, however, hosts the greatest discrepancy in seeding (1-seeds play 16-seeds, for example), so a good but inexperienced team like Syracuse defeats a more experienced but weaker Vermont team.  Not that surprising.  Still, five teams with less experience and a worse seed won their first-round games.

The later rounds are more interesting.  As the tournament progresses, the seeding advantage decreases and we end up with 1- through 5-seeds, in other words, teams with better-matched talent.  Less experienced Michigan State (205) beat Tennessee (98) in the Midwest Region. With comparable seeding, the less experienced team won.

Similar results came from the West, where junior team Kansas State (159) was more experienced than sophomore team Butler (177), and was seeded quite a bit stronger at 2 than was Butler at 5.  The less experienced, higher-seeded team won.

In the East Region, UK and West Virginia were seeded 1 and 2 respectively, but the Mountaineers (147) were a junior class to UK’s (341) freshmen.  In the South Region, Duke (70) beat a significantly less experienced team in Baylor (170).  They were seeded 1 and 3 respectively in that region.  The two more experienced teams won.

Interestingly, half of the Final Four teams beat a more experienced team in the regional finals to move on to Indianapolis.

In the championship game, senior Duke beat sophomore Butler, but in a game that went right down to the wire.  Top-seeded Duke beat a significantly less experienced team in Butler, but only by a basket.

So far, from this limited data sample of one tournament, we might deduce that some experience increases a team’s chances of making the tournament field, but additional experience doesn’t seem to add a lot.  Less experienced teams win more often than not in the early rounds, but that is also a time when more experienced teams may simply be over-matched in talent.  Less experienced teams win the regional finals as often as more experienced teams. 

In the Final Four, however, the more experienced team won every game.  Does this suggest that experience is more important in the Final Four than in earlier rounds?

Just for grins, I decided to look back at the last five Final Fours. The Final Four team with the most experience, Duke, won the 2010 tournament.  In 2009, North Carolina (60) won over marginally more experienced Gonzaga (52).  In 2008, Kansas won the title, also with the most experience.

Florida won with the most experience among the four finalists in 2007, but while they were the most experienced among that small group, they were only juniors among the full set of Division I teams.  The entire 2007 Final Four wasn’t especially experienced.

While experience may not be the critical factor to get a team into the tournament, the most experienced of the Final Four teams does seem to have the edge at winning the championship for the past few years.

But does this argue, as many suggest, that a highly talented but inexperienced team like UK fielded this year will never win the title? 

In 2006, Florida won the NCAA tournament with four sophomores and a junior.  Pomeroy doesn’t have experience statistics for that season, but one can be calculated from the team’s individual data.  For the 2005-06 season, the Gators had an experience factor of just 1.26 years.   That would have ranked them around 290th in this year’s Division I and would have positioned them in the least-experienced quartile of any recent season— in fact, in the bottom 15% for 2010.

So, it’s already been done.  At least once.  And recently.

Friday, March 19, 2010

Your Team Probably Won't Win the Tournament

Your team probably won't win this year's Men's NCAA Basketball Tournament.

Mine probably won't, either.

There are 65 teams in the Men’s NCAA basketball tournament.  Only one will go undefeated for six straight games and win the national championship. Despite these odds, there are millions of us fans supporting lots of different teams and somehow convinced in our hearts that ours will be the one to cut down the nets.
Nearly all of us will be wrong, but our beliefs won’t waiver one iota until we lose.

For those teams seeded in the bottom half of their region, history says that winning is nearly impossible. But even for teams seeded 1st, 2nd or 3rd, the odds aren’t pretty.

How do I know that your team probably won’t win without knowing who you are or what team you support?   Simple probabilities.  The ones we all choose to ignore. 

This phenomenon isn’t limited to basketball, or even to sports.  An entire academic field known as behavioral finance has sprung up fairly recently to help explain the reasons and the methods we use to deceive ourselves into ignoring the odds.

We can, however, look at the last 25 years of NCAA tournament results and gain some perspective on the probabilities.  That includes 1,600 teams (if we ignore the play-in games) and 1,575 games.

Twenty-five years ago happens to be when the NCAA expanded the field to 64 teams.  Yes, there is a "play-in" game for the 65th team, but ignoring those for the last few years won't impact the statistics in any important way.

The 4 through 8 Seeds

First, let’s look at the seeds who have slightly better than a snowball’s chance. That would be the group of 20 teams seeded 4th through 8th each year.  Over 25 years, that group includes 500 teams that have won a total of three championships. The three low-seeded teams that won it all were seeded 4th, 6th  and 8th.

The success rate for this group is 3/25, or 12%, so there is a 12% chance that one of the 20 teams seeded 4th through 8th will win the tournament, based on historical results. But, the record for individual teams seeded 4th through 8th is 3 title wins per 500 attempts, so the probability of an individual team seeded in this group winning it all is about 0.06%.

The Bottom Half

4th through 8th seeds may be a long shot, but at least they have three titles.

Not one team in the bottom half of the field has won a championship in the current format.  Only four 15-seeds have even made it to the second round.  Only two teams seeded lower than 8th have made it to the Final Four (LSU in ’86 and George Mason in 2006, both 11-seeds).

No 16-seed men’s team has ever won a game.

(A 16-seed did win a game in the Women's NCAA Basketball Tournament once.)

Seeds 9 through 16 have never won a title.  Seeds 4 through 8 have won 3.  And, a whopping 88% of national titles have been won by 1-, 2- or 3-seeds.

The Top 3 Seeds

How about the top seeds, the ones who have a real shot at putting together a six game winning streak to win a championship?  Doesn’t it seem like the teams that end the regular season ranked number one in the polls win the NCAA tournament more often than not?

They don't.

1-, 2- and 3-seeds have won 22 of the last 25 championships, but 1-seeds have won 15 of those, or 60%.  The remainder have gone about equally to 2-seeds (4 titles) and 3-seeds (3 titles).  Now you know why Rick Pitino preached to his Kentucky teams that they needed a 1-seed to have a real chance of winning a championship.

But how likely is the big trophy, even if you are a 1-seed?  The NCAA only began announcing overall 1-seeds in 2004, but since 1985, only 4 of the 25 teams (16%) that ended the season ranked number 1 in the major polls have gone on to win the championshipi.  That’s about 1 in 6.

In the past 25 years of tournaments, 100 teams have received a 1-seed and 15 of those teams won the title.  The success rate for those four 1-seeds averages 15% each year.

2-seeds have won 4 of 25 championships, so the probability that the tournament winner will be a 2-seed is 16%, based on historical data.  During that period, there have been 100 teams seeded 2nd, but only 4 won titles, so the probability of your 2-seed cutting down the nets is about 4%.

If you’re a 2-seed, the challenge is potentially having to beat three 1-seeds, one in the Regional finals, one in the Final 4, and one in the championship game.  With a historical winning percentage of .536 for 1-seeds versus 2-seeds, the probability of a 2-seed, like West Virginia this year for example, winning three games in a row against 1-seeds is (0.5363)3, or slightly better than 15%, and that’s after having won the first three rounds against lower seeds.  The only team to beat three 1-seeds in a single tournament to date was 4-seed Arizona in 1997.

Of course, who’s to say that West Virginia is seeded correctly?  Maybe they should have been a 1-seed.  They think so.  And perhaps other 1-seeds will be knocked off before WVU has to play them. But seeding is just one of the reasons that the statistical favorite doesn’t win the NCAA basketball championship. 

There are new injuries, injured players who are finally healthy, lucky shooting nights (an NC State air-ball that becomes a lob pass against Houston), emotional rivalries, bad coaching decisions (Pitino not guarding Grant Hill on the inbound pass to Laettner), and fortunate calls from the officials. 

There are bad matchups. Just because Team A beats Team B and Team B beats Team C doesn’t mean Team A will beat Team C.  It just doesn’t work that way.  There is no transitive law of college sports. UK is ranked second in the nation but beat Mississippi State—who didn’t even qualify for the NCAA tournament— by one-tenth of a second in the SEC Tournament finals last week.

Probabilities can’t tell us who will win the championship, but they do tell us that the winning team, even if they are a 1-seed, will have to beat the odds. No matter how good your team is, the odds are slim that they will win the tournament. 

Probabilities also tell us that improbable doesn’t mean impossible. If you bet long-term statistical averages, which means just picking the higher seeded team, you will be right more often than you will be with any other method, but these are one-game competitions, not seven-game series.  And an individual NCAA tournament is a one-time event. 

That’s what makes the odds for even the best teams daunting.  The winner has to play near-perfect basketball for six games in a row, but it only takes one game for a lower seed to knock you out of the bracket.

While only 4 teams ranked number one at the end of the regular season went on to win titles in the past 25 years, this feat was accomplished twice as often in the past 60 yearsi

I suspect this is because the fields were smaller before 1985, meaning fewer rounds and fewer opportunities for the regular season champion to get knocked off by a lower seed.  If so, that doesn’t bode well for the expansion of the tournament to 96 teams, as has recently been discussed.

As I said, improbable outcomes are not impossible.  In 1985, Villanova was an 8-seed playing top-seeded Georgetown in the NCAA title game.  All it took to win the national championship was to go further than any 8-seed had ever gone in the tournament. . . and then to play one perfect half of basketball.

Saturday, March 6, 2010

Clanking Shots Off the Back of the Irony

It’s easy to get caught up in the madness of college basketball and miss the entertaining sideshow just off-court.  Let’s take a moment to review some of the rich ironies of the 2009-10 season.

Irony is an incongruity between what might be expected and what actually occurs.  You know, irony.  Like when the most maligned college coach in the country, John Calipari, spends a Sunday during basketball season raising over a million bucks for relief efforts in Haiti. 

The “March to 2,000 Wins” that UK “won” by beating Drexel last December 21st holds some ironies, too. 

Bill Mayer, writing for the Lawrence Journal-World, wrote recently, “It’s regrettable that [Kansas University] grad Adolph Rupp factored so heavily in a shady Kentucky march to glory. Kentucky may have hit 2,000 first but KU and UNC will do so more honorably. The Wildcats got there with considerable assistance from cheating and NCAA criminal indifference and oversight.” 

(The World part, in case you’re wondering, refers to the fact that the LJ-W isn’t limited to Lawrence, but also serves Tonganoxie, Baldwin, Basehor, Bonner Springs, Eudora and De Soto.)

"Criminal" indifference is either hyperbole or ignorance, since the NCAA doesn't enforce actual laws, and the irony involving Mr. Mayer is rich.  As most college basketball fans are aware, last year’s national basketball championship was won by a school that was on probation— Kansas. 

According to an ESPN article by Pat Forde, dated 2006 and entitled  “Kansas Isn’t Alone in Cutting Corners”, Kansas may not be alone, but they are alone at the top.  They lead the league with five major infractions.  Ding!  Was that the irony bell ringing?

UK, admittedly, is not far behind with four.  UNC, with one major infraction and probation in 1960, should be offended that Kansas would lump its reputation with theirs.  That probation, by the way, led to the promotion of assistant coach Dean Smith.

I’m not proud of Kentucky’s history of NCAA violations.  All of the top college basketball programs have been sanctioned by the NCAA at some point, but that’s no excuse.  We deserve the shots we take for past infractions.  But I have a theory about why those major programs all have violations— it’s because they win. 

Casinos don’t ban gamblers who count cards, they ban gamblers who count cards and win.  Count cards badly and lose and you’ll go completely unnoticed.  If the casino does happen to notice you because say, you move your lips while you count, they will gladly direct you to the nearest ATM machine and comp your dinner.  Likewise, I doubt that losing basketball programs get a lot of NCAA scrutiny.

The whole “College Basketball’s Winningest Team” race is a bit strange, anyway.  Dean Smith said years ago that he put little stock in this statistic because one of UK’s wins was against the Lexington YMCA (there weren’t a lot of teams available to schedule in 1903) and one of the Tar Heel’s wins was against the Chapel Hill YMCA.  This is probably the worst example one could find, but still it brings into question the equality of competition the top teams in this “race” have faced over the past century.   It’s hard to imagine that a fair analysis of the competition could even be performed.

One thing we can analyze however, is the number of games each team has played and both UNC and Kansas have played far more games than the leader, UK.  At last count, Kansas had played 140 games more than UK and UNC had played 64 more.  Makes you wonder how UK ever got the lead in the first place.

To put this in perspective, if UNC sat out their next 64 games and waited for UK to catch up in games played, and UK won their long-term average of 75.8% of those games, then UK’s lead over UNC all-time would be 65 games instead of the current 16.  If KU obliged UK in the same way, Kentucky’s lead over Kansas would be 124 games instead of the current 18.

So, several teams are apparently competing in a race, having played dramatically different numbers of games, against competition that can’t be compared and, ironically, the team with the fewest games played among the top three has the most wins. Ding!

If Kansas is not the team to be sanctimonious, I was even less inclined to listen to the recent sermon on sportsmanship and propriety from Bobby Knight.

Knight recently said, "We've gotten into this situation where integrity is really lacking and that's why I'm glad I'm not coaching. You see we've got a coach at Kentucky who put two schools on probation and he's still coaching. I really don't understand that." 

I'm sure there are lots of things he really doesn't understand and that includes the facts with respect to Calipari. UMass wasn't placed on probation and Memphis' probation is under appeal, but that is not the larger issue.

Bobby Knight may have been a great basketball coach and he may even have a few correct ideas about changes needed within the NCAA, but in questioning John Calipari’s integrity, he was a very large pot calling the kettle black.  Or perhaps he was smoking pot, because his major accomplishment in attacking Calipari seems to have been to bring his own questionable behaviors back into the news spotlight for a generation of fans who might not have been old enough to witness them firsthand (many were televised).

You may remember the classics, including choking a player, grabbing an IU student by the arm because he addressed him as “Knight” instead of  “Your Lordship”, belittling the crime of rape in an interview with Connie Cheung (on national television), getting arrested for assaulting a Puerto Rican policeman while representing his country in the 1979 Pan American Games (probably on Puerto Rican television), firing his shotgun at a man's house during a dispute over the man's complaints that Knight hunted too near his farm, being put on a zero-tolerance leash by IU's president, banning author John Feinstein from IU's home games because he didn't like A Season on the Brink, quickly running Larry Bird off to Indiana State University (unless Bird thought Terre Haute was a better showcase for his talents), and in an event that would presage vice presidential political drama, hunting without a license and accidentally shooting his friend. Ding! Ding! Ding!

Apparently, Knight thinks the word integrity only applies to NCAA sanctions, of which he has none-- whoop-de-doo, coincidentally the same number of NCAA sanctions (zero) that have been given Calipari-- and now Bobby has brought an entire generation previously unaware of his shenanigans up to speed; I hope that makes him happy.

Were it me, I would have preferred my transgressions to remain forgotten. Yes, Your Honor, I admit I shot at that man's house because I was angry with him and that I will be arrested if I return to Puerto Rico, but I didn't want to go back there, anyway, and by the way, I don't have a single NCAA sanction. Ding!

This season, when Kansas State fans began chanting "OVERRATED" near the end of their win over Texas, Knight suggested this chant was unsportsmanlike and that fans should chant "great effort" or "thank you, thank you."  This from the coach who threw a chair across the basketball floor on national television after being called for a technical foul.

Picture Bernie Madoff at courtside leading a chant of, "Full Disclosure!  Full Disclosure!"


“Whoa, baby!” as Dick Vitale would say.  “They rolled out the irony GONG for The General, Mr. Robert Montgomery Knight!  Are you kiddin’ me? ARE YOU KIDDIN' ME?”

Back to the "March to 2,000 Wins", fans seem to believe that someone will actually win this race by taking the lead and keeping it.  It is more likely, though, that Kansas, Kentucky or North Carolina will have a string of great years, as UK did under Pitino the last time UNC nearly caught them, or a string of bad years, like  UNC did under Matt Dougherty and UK did under Billy Gillispie, and completely change the leader board.  

(I was relieved to learn that LOST is a popular TV series and not the title of Billie G’s autobiography. Hey, I'm still recovering from Glory Road.)

UNC is nearing the end of one of those horrible seasons, though I am sure they will be back with a vengeance soon.  But, how can a team with seven McDonald's High School All Americans, a coach who has never had a losing season, and a returning All America candidate (Ed Davis) be fighting to avoid last place in an unusually weak ACC?  Only Duke is currently ranked in the top 20.  Doesn't that qualify as an incongruity between what might be expected and what actually occurs?

My UNC friends taunted me last season with predictions that they would take the lead as college basketball's winningest team in 2010 and furthermore, that Kansas might also overtake Kentucky, leaving the Wildcats in third place.  Instead, UK has built significantly on it's lead this year and it appears that Kansas will go deep into the NCAA tournament, passing the Tar Heels by the end of the season and leaving them in third place. 

Ironic, isn't it?

Thursday, February 18, 2010


When I began attending UNC baseball games in 2006, Garrett Gore was a freshman with a good glove at second, no offense, and no nickname. Pitchers Daniel Bard and Andrew Miller would soon play in the major leagues, Chad Flack would become Mr. Clutch and a host of other players on the team seemed destined for the big leagues. Carolina would make its first of four straight appearances in the College World Series in Omaha, with Garrett as a role player.

Photo by Joe Bray

took over the starting second base role at the end of his freshman year and ended the season batting .227 and committing four errors. He finished that year at the College World Series in Omaha, one game short of a national championship. I thought Garrett would be an outstanding second baseman, but I didn't expect a lot from his bat.

Garrett owned second base his sophomore year. Paired with shortstop Josh Horton, the Tar Heel's middle infield was formidable. Much to my surprise, he also increased his batting average nearly 100 points to .324 and won an award for being the Tar Heel's Most Improved Player. He committed only six errors and made a second trip to Omaha, again falling just short of the championship, but he was becoming a recognized key to the Tar Heel's success. In his spare time, a scarce commodity for college athletes, he made the Dean's List.

At the end of his junior year's regular season, the wheels came off. With the departure of Josh Horton to the majors, Coach Fox moved Garrett to shortstop, a very different position than second base. He came into the last few series of the season with a handful of errors, but his throws to first base began to sail on him and frequently ended up in the visitor's dugout. He would commit a whopping 21 errors before being demoted to designated hitter. Leaving the field after yet another throwing error, I watched Coach Fox meet him at the third baseline and gently tap his fingers on Garrett's temple. "It's all right up here now."

As Garrett's troubles at shortstop grew, I found myself becoming a bigger fan. Ryan Graepel took over his shortstop position and Garrett was relegated to just a hitting role, but I noticed that every time we really needed a hit from him, he delivered. I cheered for his every plate appearance. My friends gave me puzzled looks, but that made me support him even more. "Shortstop isn't his natural position", I'd tell them. "The team just needed him to replace Horton. Don't give up on him." Garrett made his third trip to Omaha as the DH.

Opening day of the 2009 season was also the debut of the renovated Boshamer Stadium. We had a sellout crowd and my group of friends, about a dozen retirees and spouses, had bought season tickets together. We're perhaps an unlikely bunch, retirees ranging in age from mid-fifties to nearing eighty, a few diehard Yankee fans sitting next to a few died-in-the-wool Red Sox fans. I, myself am a Kentucky Wildcat fan to the core, who loves college baseball and happened to retire in the town where the Tar Heels play their home games. Some of us went to UNC, but others are alumni of UNC Charlotte, Boston College and other fine schools. Somehow, we come together every spring to share a common love-- college baseball-- and to support a team many of us "adopted".

We huddled under blankets on a cold but sunny February 20th and were surprised to find that Garrett Gore had moved to right field. Suddenly, the arm that had overthrown first base so often was throwing 330-foot strikes from right field. He threw out base runners at the plate, until they learned not to try to score on him. He picked up singles in right field and gunned down runners at first who made the turn to second a little too aggressively. He ran down everything catchable. Then he caught the uncatchable.

Photo by Joe Bray

The first weekend in March, during a tight ACC series with Clemson, the Tiger's batter smashed a pitch over the right field wall with a runner on first. Garrett ran and leaped above the fence for the ball, crashing into the padded wall, and fell to the ground. The batter began his home run strut to first. Clemson fans cheered, Tar Heel fans were silent, and the Tiger's other base runner was nearly to third when Garrett jumped up off the ground, pulled the ball out of his glove and threw to first base to double off the runner. What had appeared to be a two-run homer became a double play. Adam Warren, who would later be picked up in the 4th round of the draft by the New York Yankees said in his NCAA blog, "Garrett Gore's robbing catch on Saturday was most likely the best play I have seen in my baseball career."

Garrett had also caught a nickname, "G", the ultimate sign of respect. We yelled it when he came to the plate and we watched with great anticipation when a ball was hit to right field because we knew we might see something spectacular.

His batting improved, too. Going into the 2009 College World Series, he was hitting .307 on the year and had committed just three errors. In the NCAA Regional series, Kansas' coach decided to change pitchers when Garrett came to bat with the bases loaded. With only three homers through the season, Garrett drove the reliever's first pitch, a fast ball, over the wall in dead center field for the first grand slam of his career at any level. His next plate appearance, facing the same reliever, Garrett slammed a first pitch fastball over the wall in left center. A Jayhawk fan sitting behind me deadpanned, "I don't believe I'd throw him another fastball."

The following weekend in the NCAA Super Regional series against East Carolina, Garrett crushed yet another homer to dead center, hitting the wall high above the 405-feet mark.

If the big leagues drafted "heart", Garrett Gore would go in the first round. He wasn't drafted and I'm sure he didn't expect to be, though seven Tar Heels were. (My Wildcats had four players drafted by the MLB in 2009 themselves, thank you.) Fittingly, with all the major league talent the Tar Heels have fielded for the past four years, Garrett Gore, who wears number 4 on his jersey, is one of only four Tar Heels who have been to Omaha four times. His twenty-first College World Series appearance against Arizona State in his last college game gave Garrett the CWS record for most games played. He has been a major contributor to UNC's baseball success since he arrived on campus. He's a good student and a great kid with an infectious smile. A sports photographer commented in the caption of a photo of one of Garrett's heroics that he was one of the finest young men that the photographer had ever met, and he meets a lot of them.

I met Garrett and his parents at the Boshamer Stadium dedication. I told him I was his biggest fan and that my friend's had even jokingly asked if I had adopted him. He smiled and said, "I didn't know I had any fans after last year. These are my parents. They're probably ready to get rid of me." Hardly. Every parent's dream is to raise a kid who can hit a rough patch in the road and come back stronger than ever.

Garrett went to college to get an education and not just as a stop along the way to professional baseball. He didn't play to get a scholarship, either. Most college baseball players get a small fraction of a scholarship, at best. He played for a national championship and realized every ounce of his potential along the way.

December 2009

Post  (from the internet is always right: intrepid media 2009)

Sometimes, I pour my heart into a piece and work on it for months or even years. These are the pieces that I love and want people to read. Sometimes, a piece spills out onto the page in half an hour and it turns out to be one that people want to read. “G” is a bit of both. It flowed easily onto the page and it was heartfelt. I have written pieces that I love more, but I am usually writing about events that have impacted my life. This time, writing something was the event that impacted my life.

“G” is about a college athlete I hardly knew at the time. I wrote it in less than an hour one evening after watching a kid who had struggled mightily the year before hit two home runs off consecutive pitches in a playoff game, one of them a grand slam.

I say, ”hardly knew at the time”, because Garrett Gore and I have become friends since the column. He emailed me after reading it, we met to talk, and soon Sunday afternoons became the time we meet at Fosters Market to chat about baseball over an iced tea. We also chat about his career plans, to become a color commentator for sports broadcasts, and his final semester of college. I'm helping him with the job search and a paper he's writing on social networking. I have a son Garrett's age and two children a few years younger and it's striking how much easier it is to mentor someone else's son.

Garrett wrote me that what struck him about my column was how I seemed to have seen from a bleacher seat exactly what was going on in his career. He complained that he usually reads columns by sportswriters with direct access to the players and wonders if they have ever gone to a baseball game. I suspect that's because I was writing about what was going on in his life and not about his batting stance or his on-base percentage.

Garrett confided that after his last college baseball game, having been eliminated from his fourth College World Series by Arizona State, he felt a strange sense of relief. The pressure was off for the first time in a long while. He was packing his suitcase in his hotel room after that game when a sports announcer stopped by to suggest he read the column I had written. He walked into his parents' room to find his mother reading the column and crying, a revelation that I absorbed with mixed emotions. Making his mother cry was the last thing I intended. Garrett says he told her to stop crying or he would start.

“G” isn't about baseball, though Garrett's amazing talent and tenacity certainly provided a great backdrop. It's about an overachieving, personable kid from Wilmington, NC with great parents and a great work ethic who hit a rough patch in the road and grew because of it. Writing his resume has been a snap.

Thursday, February 11, 2010

The Fallacies of Safe Withdrawal Rates in Retirement

If you've given any thought to funding your retirement, chances are you've heard about a strategy for investing in stocks and bonds and spending about 4.5% of your savings “safely” throughout a long retirement. Perhaps you've used an online retirement income calculator that is based on this strategy.

The sustainable withdrawal rate (SWR) strategy is usually stated something like this quote from

Advisers typically recommend that 65-year-old retirees limit themselves to an initial draw of 4% of their portfolio, and then adjust that dollar amount for inflation each year. By doing that, they have roughly an 80% to 90% chance that their savings will last at least 30 years.

Interestingly, before the 2007 crash, SWR advocates said that a 4.5% withdrawal would provide a 95% chance of funding thirty years of retirement. Either way, let's look at what is missing from this statement.

First, an 80% to 90% chance of your savings lasting at least 30 years is another way of saying a 10% to 20% chance that they will not that the retiree will find herself flat broke before retirement ends.

A 90% chance of avoiding ruin may sound safe to some, but not when you compare it to the overall rate of bankruptcies for retirees. According to a study done by Elizabeth Warren at Harvard Law School, the overall bankruptcy rate for American households over the age of 65 was recently only about 0.5%. About 99.5% of all retirement-aged families manage to avoid bankruptcy, with or without a spending strategy. The SWR strategy promises that only 80% to 90% of retirees who use it will be as fortunate.

In other words, if you choose the 95% safe withdrawal rate, you can apparently improve your odds of avoiding bankruptcy from 95% to 99.5% just by abandoning the SWR strategy.

It is also important to note that successfully avoiding ruin in the SWR studies means dying with at least a dollar in the retiree's portfolio. Some retirees might consider this success; some would not.

Second, the strategy cannot deliver its most highly-touted benefit, that of providing a constant annual withdrawal amount with constant risk. The amount that a retiree can withdraw annually with a 95% a priori probability of not outliving his savings is a percentage of the remaining portfolio balance at that time. Furthermore, like the portfolio balance itself, the “safe withdrawal percentage” varies over time. The studies show that safe withdrawal rates for expected retirements of ten years approaches 10%, for example.

The SWR probability of success is an a priori estimate. A priori knowledge is knowledge about a process or event (like retirement), that is available before the event occurs, rather than that estimated by recent observation. It roughly translates to “at first”, or “at the start”. If a bag contains two black marbles and two white marbles and we remove one marble without looking, then before we draw there is, a priori, a 50% probability that we will remove a white marble. Once we do, the conditional probability of removing another white marble is reduced from one in two to one in three. After the first marble is removed, the fact that we used to have a 50% probability of removing a white marble is irrelevant to our future chances of drawing another.

A retiree may have a 95% probability of funding thirty years of retirement on the day she retires, but if her portfolio value drops substantially due to a market crash, her probability of successfully funding the remainder of retirement also declines dramatically. The fact that she used to have a lot more money is no longer relevant to her future success.

Here's another example. Let's say you board a plane in Los Angeles bound for Hawaii and historically, 99% of similar flights have had adequate fuel to reach the islands. Soon after takeoff, the plane's fuel tank develops a very large leak and the pilot has to decide whether to turn back. You really want him to base his decision upon conditional probabilities that take into consideration this new information and not upon historical results. The long-term success rate for similar flights may remain about 99% no matter which decision your pilot makes, but that shouldn't bring you much comfort. Suggesting that retirees can safely withdraw the same amount after a market crash is like telling you that you still have a 99% chance of reaching Hawaii after the fuel tank begins to leak.

At this point, we could dismiss the strategy as unworkable without considering the accuracy of the probabilities. After all, if a priori probabilities on the date of retirement are largely irrelevant after retirement begins, then the exact measure of that irrelevant probability is, well. . . irrelevant. Some may consider it useful that, while a constant amount cannot be withdrawn annually with constant risk, it might be safe to withdraw an annually varying 4.5% of remaining portfolio value each year. In other words, abandon the goal of constant annual income, but hold the risk constant at say, 95%.

Unfortunately, the probabilities calculated by the study are also highly suspect because they are based on a model of irrational retiree behavior.

If we gather observations about the accuracy of blindfolded dart throwers, we cannot then correctly infer that these observed results should be expected for all dart throwers, blindfolded or not. The observed sample has to be believed to be representative of the larger population before we can make that inference, and we can reasonably expect that dart throwers will perform better without a blindfold.

The models used to calculate probabilities for the sustainable withdrawal rate studies simulate a retiree who withdraws the same amount from his portfolio every year, even in the face of near-certain impending financial ruin. No rational retiree would do this, of course. When it appears that continuing one's spending pattern will soon lead to bankruptcy, rational retirees would reduce their withdrawals to avoid ruin, living on less being the preferred strategy to living on nothing. So, the percentage of rational retirees who would wind up broke using the 4% Rule strategy is likely far smaller than the 5% calculated by SWR studies, but the number who would underfund their retirement plans would almost certainly be much higher.

We can't infer the rate of ruin for rational retirees from a model of irrational retiree behavior any more than we can infer the accuracy of all dart throwers from observations of blindfolded dart throwers. Metaphorically, the retirees simulated in the sustainable withdrawal rate studies have blindfolded themselves to the reality of market risk. The SWR models simply don't represent expected retiree behavior.

In summary, the SWR strategy would be extremely risky, compared to observed bankruptcy rates for retirement-aged families, even if it were logically sound. But it isn't, and neither are the online retirement income calculators based on it. To summarize the logical flaws:
  1. A 95% probability of avoiding ruin is not “safe”; it is an order of magnitude higher than the currently-observed rate of bankruptcies among retirement-aged families,
  2. The calculated probabilities are a priori estimates. After a significant decline in a retiree's portfolio value, the retiree must either reduce spending, perhaps significantly, or accept greater risk of financial ruin, possibly much greater risk. The retiree who continues withdrawing the same amount after a major decline in portfolio value has a new probability of success that may be far less than 95%. The strategy cannot provide both constant withdrawal amounts and constant risk throughout retirement, and
  3. Rates of ruin for retirees who would reduce spending to avoid bankruptcy cannot be inferred from a model of retirees who would not.

What is the correct probability that a retiree will deplete his savings if he withdraws a fixed amount annually equal to 4.5% of his initial portfolio value? That depends entirely upon how he would behave. It's probably around 4% to 5%, as the studies indicate, if he would continue spending at the same rate right up until he was completely broke. But, that behavior seems extremely unlikely.

If he would abandon the strategy and spend less when facing potential financial ruin, a quite rational thing to do, then the probability of failure would depend on how much he reduced spending and how quickly. Unfortunately, the potential number of those scenarios is infinite and the problem is probably not solvable in a useful way. The best estimate we can make without specifying how much and at what point the retiree would reduce spending is the overall bankruptcy rate for families in this age group, which was recently about 0.5%.

SWR is not a prudent strategy for developing an individual retirement plan, nor is it a strategy built on sound logic. Withdrawing a fixed amount annually from a volatile portfolio of stocks and bonds while holding the probability of bankruptcy constant throughout retirement is not achievable.
One reliable way to estimate the amount of income a retiree might generate with a given amount of savings is to shop for fixed annuities on the web. Although most retirees seem to shy away from purchasing these insurance contracts, they tend to generate more income than the SWR strategies promise and they are the only safe way to ensure a steady income for a lifetime. Even if the retiree considers fixed annuities undesirable for other reasons, they offer a baseline from which to evaluate other strategies that promise benefits that fixed annuities can't deliver, but with greater risk.

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Dirk Cotton is a retired executive of a Fortune 500 technology company. Since retiring in 2005, he has researched and published papers on retirement finance, spoken at retirement industry conferences and events, and regularly posted on retirement finance issues at his blog, The Retirement Cafe. He is currently a Thought Leader at APViewpoint, Advisor Perspectives' online community of  investment advisors and financial planners. He provides retirement planning advice as a fee-only financial planner.

Mr. Cotton holds an undergraduate degree in computer science from the University of Kentucky, an MBA from Marymount University, and a certificate in financial planning from Boston University.

He and his family currently reside in Chapel Hill, North Carolina. He loves to spend time with his family, fly fish, shoot sporting clays, attend college baseball games, sail, follow the Wildcats, and write.

Dirk holds a bachelor's degree in computer science from the University of Kentucky, an MBA from Marymount University, and a certificate in financial planning from Boston University.  He attended high school in Elizabethtown, Kentucky.