Where the money goes

I received a call yesterday from some "Cancer" related organization, I wish I remembered their name. In any case after getting this pitch to help those with cancer I was asked for a tax deductible donation with $75 as the suggested amount. I asked how much of my donation would actually go to the charity. The caller hemmed and hawed for a moment and then said she thought about 10% went to the charity. 10%? 10%? 10%? If the charity on whose behalf this call was made is a legitimate charity why would they allow this? I understand that it is essentially free money to the charity, but come on, only 10% of what's collected? This is part of the reason almost all my charitable donations go through my church.

Zero Emissions?

I have to love marketing folks, especially when I read an ad or article on a Zero Emission vehicle. Someday perhaps we'll really have Zero Emission vehicles, but in the meantime until the energy they draw from is produced without emissions and the manufacturing process used to build them doesn't generate emissions, they won't really be Zero Emission vehicles.

Who does Detroit think it's fooling?

Although I believe CEOs are dramatically overpaid (as are sports figures, but I'll leave that for another post), does anyone really think that Ford CEO Alan Mulally pay will make one bit of difference to Ford's financial situation? Or whether they sell their 5 company aircraft will have any impact on the long term viability of Ford? Or for that matter how the Detroit automotive CEOs travel to Washington makes any difference?

I think it's a total mistake for the government to spend even $1 dollar to help maintain the US automotive industry's failures. The market has voted on their vehicles. Wall street has voted on their confidence in the industry. Why does the government need to intervene? Let nature take its course. If Ford, GM, and Chrysler dry up and disappear, then others will step up to fill that void if it needs to be filled.

Spending tax payer money to prop up an industry with so many ills makes no sense. Let the bankruptcy courts determine what if anything will survive. Maybe after the management has been replaced, the union stranglehold broken, and viable long term goals established, maybe then there will be something worth rescuing. Perhaps if Detroit figures out that it isn't in the fashion industry and that just maybe people want safe, fuel efficient, reliable, functioning transportation, and not a new fancy hood ornament, they'll be able to compete again. Who knows.

Bailout Schmailout

All this rhetoric about bailing out homeowners that bought houses they should never have bought in the first place makes me want to barf. Yeah, there were probably a lot of sleazy mortgage brokers, sleazy bank officers, greedy investors, etc, that help create this crisis, but fundamentally it's about homeowners that bought more house than they could safely or reasonably afford (likely based on the falsehood put forward by Realtors that real estate almost always goes up.) That's a little bit like saying inflation always occurs. In general that is a true statement, notice I said "in general".

Now the question becomes: "Why should the taxes the rest of us paid be used to cover the losses of these gamblers?" Yes, I called them gamblers as that's exactly what many of them were. Now that their bet is being called, those that bet house prices would always go up lost. Too bad! If they had put some equity into the house, or only bought a house that they could reasonably afford to pay the mortgage on, or not based their purchasing decisions on current short term teaser interest rates, they wouldn't need a bailout. They gambled that housing prices would continue to rise and they lost that bet. Yeah, the fallout is going to be painful, but again, why should our tax dollars be wasted on this?

iPhone disappointment

Well after being a Windows Mobile user for some years, I decided to try an iPhone, mostly because I'm cheap and AT&T gave me a better deal on the iPhone than the Tilt. I have to say I'm unimpressed. Like most of my experiences with Apple technology I'm a bit awed by the look and feel, but totally disappointed with the functionality and reliability. My biggest complaints are:

1. Missing features that even the most basic cellphones have such as beaming a contact to another phone. Sending and receiving MMS. Taking a video instead of just photographs. Only bluetooth profiles supported are handsfree and headset. These sorts of omissions are absurd.



2. Few user settable options. Although Windows Mobile perhaps went overboard in allowing you to set options, the iPhone goes too far the other way. When getting my e-mail, I want it to GET my e-mail and not just tease me with a 2 line preview. A two line preview doesn't help much when I'm 35,000 ft over the Pacific ocean. I have found no way to change that behavior. There seem to many defaults like this that can't be changed in any obvious way.



3. In my experience Apple and Reliability are two words that just don't belong in the same sentence. This is based upon having a family that has owned too many iPods and now my experience with the iPhone. Sometimes it just hangs. It drops calls. It wouldn't connect to a network in Singapore without a lot of work (45 minutes on the phone with AT&T support), and even then it was unreliable in connecting to networks elsewhere in Southeast Asia. Now that I'm back, it refuses to update my e-mail.



4. Battery life is abysmal. If you just leave the phone in standby with all data options disabled, it might go 2-3 days between charges. If you talk much that time decreases. If you actually use the data features (which are hard not to given the mandatory data plan and that most applications rely on the data connection) then you likely won't make it to the end of the day on a single charge.



5. The device is slow. Sometimes it takes many seconds for it to respond to something. Even my grossly under powered Cingular 8125 (HTC Wizard) was much more responsive.



6. Apple's tight fist around applications is just a royal pain. No turn-by-turn navigation software. Most applications require a data connection, which is great if you have one. But if you're in an area that you can't get one, or are roaming internationally and don't want to get killed in data charges, most applications are useless. Apparently the assumption is that you'll be connected all the time. That's a pretty big assumption in my opinion, especially given the spotty AT&T 3G coverage. No background applications.

All in all I'm pretty disappointed with the phone. I think it is probably fantastic hardware crippled by immature software and poor marketing and business-policy decisions. Hopefully Apple can fix these problems before the next generation of iPhone comes out. At the moment it seems more suitable as a game platform than a usable business tool.

Short term gain for long term pain

When are we going to stop selling our future? I read today how President Bush was in Saudi Arabia seeking higher oil production and I have to think, why? Yeah I hate paying $4/gallon for gasoline as much as the next person, but I also can look beyond today and realize that we're headed for major problems unless we can curb our appetite for oil. The CIA says that according to estimates for 2005, the U.S. consumed 20.8 million bbl/day of oil. More recent estimates from the U.S. Energy Information Administration places oil consumption in 2008 at 20.6 million bbl/day. At the current rate of $127/bbl, that works out to $2.6B/day or just under one trillion dollars/year on crude oil.

The Energy Independence and Security Act of 2007 allocated a whopping $2B for renewable energy research. Doesn't that seem a little ludicrous? Allocating just barely 0.2% of the money spent on oil to research alternatives? It almost sounds like most U.S. citizens plans for saving for the future, far too little far too late. Yes, I'm sure there are other sources of research money for non-petroleum based energy, but is it enough?

I don't believe we'll do anything serious about oil consumption until we hit a crisis. I believe our government and society is caught up in only looking at the short term. Unfortunately we need to make hard decisions and investments now that will hurt in the short term, but will pay off some time in the future. We should be investing at 10 times the current rate in alternative and renewable energy resources. Given the recent past events such as the sub-prime mortgage crisis, are we really able to delay gratification and to the smart thing instead of the expedient thing?

The real question is: Do the Baby Boomers, of which I'm a part, have the guts to do what it takes instead of mortgaging our children's future? For our children and grandchildren's sake, I sure hope so.

Gas Tax Holiday?

Do we live in the now or what? In what reality does a Gas Tax Holiday make any sense what-so-ever?? Sure, I'm as unhappy as the next guy when it comes to filling up my car to the tune of $60+, but why should the government give us a tax holiday on gasoline? I thought our goal was to try and reduce our dependence on oil, especially foreign oil, but long term all oil. In case you haven't figured it out, oil takes a very very very long time to create. Since the current consumption rate far exceeds the production rate by many orders of magnitude, and our world wide consumption rate continues to increase, at the current trends we will run out of oil. It's simply a matter of when.

So what is the behavior that a Gas Tax Holiday rewards? Using more gas. Way to presidential hopefuls. This has to rank up there with the most stupid ideas ever. In fact it must be right up there with rewarding people for making really really bad financial decisions and buying a house they had no business buying in the first place, by helping bailing them out of their financial mess. This is truly reverse financial Darwinism at its best!

Forgive me if I write from a reward/consequence model, but that model appears to work in many situations. It has certainly worked with my children, although I'm not necessarily perfect at applying it. It must be pretty clear that if you reward people for making stupid financial decisions, they are simply going to make more of them. Let me count the ways the government encourages stupid financial decisions:

1) The current sub-prime mortgage fiasco where people bought far more home than they could reasonably afford under the false belief that they'd be able to sell their home when needed at a nice fat profit. This is leverage working for you, i.e., you put little real money into the investment and hope that the gains on a much bigger, leveraged, amount will earn you big time money. The problem with leveraged investments is that if they go the other direction, i.e., down in value, your liability is also greatly enhanced. This is the basic problem many sub=prime mortgatge holders are finding themselves in.

2) Penalize people for saving money. This comes in all forms but was most poignantly pointed out to me in applying for financial aid for college. I diligently filled out a FAFSA form, the required Federal form to try and get any form of financial aid, only to find out that I've been too fiscally responsible to get any form of financial aid for the 3 I have in college right now. What I find out is that with my current and past (not even considered I believe) income levels that because I have saved and been prudent with my money, the Federal Government feels no obligation to help me pay for 3 in college. YET had I spent most of my earnings over the last 25-30 years and not saved, the Federal Government would be happy to give me money to pay for my families higher education. I know people that have had two incomes, spent most of it on transient things, and had little saved. The Federal Government rewarded them by offering money to help put their children through college.

3) Aid to dependent children. I don't know that I need to say more.

As long as we continue to reward people for making bad decisions, why should we ever expect them to make good decisions? Increase the gasoline tax, don't decrease it. Encourage people to buy more gas efficient vehicles, encourage them to drive slower to both save gas and lives, encourage them to find ways to eliminate unnecessary trips via car, encourage them to carpool, etc. Yet the morons we are considering electing think we should instead make it cheaper to waste a non-renewable energy source. Whoever it was that said we get the government we deserve was all too correct!

Now, after increasing the gasoline tax, take the additional tax revenue and truly fund significant research to get us off our dependence on oil. Plow that money into solar research, fuel cell research, etc. But please whatever the bloodsuckers do, don't let them do what they did with the lottery. Lotteries were introduced into most states under the premise that the additional revenue to the state would fund education. Well perhaps on paper that's what's happening. But I think peoples reasonable expectation is that education funding would go up by that amount. But that isn't what was promised. So instead the existing funding gets redirected elsewhere and then the liars in office can truthfully say that the lottery money is going to education. Nice slight of hand or trickery of words.