Metric System, Kinda

There's a lot of talk about this cash for clunkers program. Canada had something similar but it wrapped up last year. If you bought a certain fuel efficient new car you got a rebate from Transport Canada. You could get up to $2000. Which ain't bad.

I guess the cash for clunker intent is get older fuel inefficient cars off the road, get people to drive new fuel efficient cars, save the environment, save jobs, save the cheerleader, save the world. You know the drill.

I drive a "clunker", a 1995 Pontiac Firefly. I probably would have bought a new car last year but. Dot dot dot. The but requires a long explanation and a complicated chain of logic. I was abroad for 8 years and my Canadian drivers license expired back in 2003. I didn't renew my Canadian driver's license because that would have made me a "deemed resident" in Canada. That would mean I would be subject to paying Canadian income tax on the money I earned in Seattle, WA (a state with no state tax) and Korea (a country with an income tax rate of about 3.5%). In Canada, if you want to escape the long arm of the Canadian tax man, you have to quite clearly make it appear like you have no intent to return to Canada. Renewing your driver's license is a pretty big tip off. Renewing your health card, having property, or leaving a baby in Canada are other big red flags. It's actually pretty subjective, depending on the whim of the Revenue Canada employee assessing you. I believe in the USA it's purely objective. Either you're living in the USA or you're living in a whole other country that's not the USA. If you check the second box, you don't have to pay taxes. Okay technically if you earn over $91,400 abroad you have to pay taxes on income above that amount. I've always mused at that point your income is probably directly or indirectly tied to the American military. No American military, you probably wouldn't, for long, be able to keep any of the big bucks you were earning abroad.

Where was I? Oh yeah, so I let my Ontario drivers license expire (along with my health card). When I returned to Canada in 2008, I was over a 5 year limit which meant I now had to do all the road tests 'n' stuff again to get a new license. (I passed on the first try.) Alas, this new license gives me a completely new driver's license number. So here's the kicker. When I went to apply for insurance, I was considered a new driver (not a 42 year old man who has been driving accident, ticket, and claim free since aged 16). I went from the best possible rating (four stars) to one of the lowest possible ratings (a new male driver aka Satan behind the wheel). About the only thing I had in my favor was my age. At 42, I'm happy for whatever testosterone I still have and I'm certainly not going to waste it trying to prove I'm Mario Andretti.

No matter how much I was able to document my previous insurance coverage and my previous driving experience, the insurance companies would only look at my new drivers license number.

So I took my 1995 Firefly out of my sister's back yard and put it back on the road. Without collision, fire, theft, mysterious disappearance, and quantum entanglement coverage, I got my rate down to $120 a month. (Which is what I'd be paying for a new car with all the bell 'n' whistles covered if I hadn't been enjoying four years of snow free winters in Seattle and four years of chasing women in miniskirts around Asia. I know. Cry me a river.)

Where was I going with this?

Oh right. Clunkers. I've reached a certain age where I get edgy if my gas gauge falls below the 3/4 full mark. So I'm always topping up Ray Hnatyshyn (a coworker suggested it's proper to name old cars, so that's what I call mine) and never paid much attention to my gas mileage. Last weekend I took the car on an extended highway drive to my home town. I usually fill it up right when I get into town but it was a busy weekend with my Family Film Festival and all. So by the time I went to fill up, I was on E. ("I was on E" is a sentence that means something entirely different to a 21-year old.) My trip meter reported I had traveled 520 kilometers and I had to pump 26 liters to refill my tank. Yeah, I know, metric crap.

To save you the effort of converting to your foot/pound system and then figuring mpg, I'll do it for you: my clunker gets about 47 miles per gallon. That would be miles per American gallon and not Imperial gallons because you just know Canadians need to complicate things even further where weights, measures, English usage, holidays, currency colors, downs in a football game, drug prices, and standards of attractiveness are concerned. You're so lucky we never gained control of baseball. Looking again at that list of fuel efficient cars, the Canadian government would give you $2000 to buy the Toyota Prius (one of those fancy hybrids) which gets 47-48 mpg on the highway.

So basically the same as my 14-year-old clunker.

Part of me is wondering why the Canadian government didn't give me $2000 for not buying a Smart car which according to their figures gets worse gas mileage than my clunker. Hrmph.

Anyway, this whole miles per gallon thingy got me thinking about other x per y metrics we use. Or at least I use. An x per y metric is a good way of figuring out if it's worth it. My two key metrics are for food and entertainment. I generally don't buy meat over $5 a pound or about $12 a kilogram (or $1.20 per 100 g). I generalize this to all grocery food purchases (from meat to veggies to butter tarts). For liquids I use milk as my metric. I'll pay about $1 for a liter of milk ($4 for a gallon). If any beverage costs more than $1 a liter, well, there better be a compelling reason to buy it. For example, they put beer in it.

For entertainment I use the price of a movie ticket as my metric. A movie ticket costs about $12 in Toronto. And you generally get about 2 hours of entertainment. Canadians don't mess with time so an hour in Canada is the same as an American foot/pound type hour, even though I'm sure an hour seems a lot longer when you're with a Canadian. So that busts down to $6 an hour is my metric for entertainment. A one day ticket to Disney World (happiest place on earth) costs $79. I would need to get 13 hours of fun at Disney for me to judge the admission meets my metric. Since the park is normally open from about 9 am to 10/11 pm Disney certainly can provide fun at a rate of $6 an hour. (Of course the numbers are skewed when you figure in hotel, airfare there, car rental, and trips to Sizzler.)

Many many moons ago I was trying to decide among four potential jobs in four different countries: the USA, Canada, Singapore, and Korea. Now if you're presented with monthly salary figures like 2 million Korean won, 3,000 Singapore dollars, or 4,000 American/Canadian dollars, what is your basis for comparison? What I did was figure out the price of a Big Mac in each nation and then figure out how many Big Macs I could buy a month with a given salary. Even to this day I pretty much work so I can afford fast food on the weekends so my basis for comparison wasn't purely hypothetical.

I thought my method was pretty clever and told my Chartered Accountant friend Lorna about it. Lorna quipped "oh that's the Big Mac index." As it turned out The Economist had created the Big Mac Index for similar comparisons. I believe The Economist mostly uses it in a tongue 'n' cheek fashion but they don't mind crowing about ex post "predictions" it made regarding exchange rates.

The key to finding a good metric is find one that you don't have to mentally readjust for inflation. For example, my $5 a pound for food is fixed and I don't think I've adjusted it for inflation since 1994. However my milk and movie ticket metrics are based on the current price. In Canada you buy a bag of milk. You get three small bags for a total of 4 liters of fresh creamy milk. Yeah, you buy it in bags. You assumed Canadians wouldn't mess with something as basic as packaging milk in cartons or jugs? So whatever the current price of milk is, I divide by 4 and get my price per liter. I don't even want to tell you the fits of depression I go into when a liter of gasoline exceeds the price for a liter of bagged milk. The entertainment metric is also based on a movie ticket price divided by two. The danger of having a fixed metric, like my food one, is you run the danger of growing old and crotchety and start barking at people that in your day a no-whip-half-decaf latte used to cost a nickel.

And then people start to think you really suck.

-- Karl Mamer