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.

Another tax season, another blood letting

Now that tax season is over, I can rant once again. The burden on the US public for this insane method of collecting revenue is staggering. According to the IRS, there were 133,917,068 individual tax returns filed for tax year 2006. Those returns yielded $1,236,259,000,000 in gross collections. That works out to approximately $9,232 per return filed. The average cost to US citizens to prepare those returns is $207. The total taxpayer time expended to create and file those returns was 26.4 hours according to the IRS. According to the Social Security Administration, the average wage in 2006 was $37,078.27 per year, or roughly $18.54/hour. So that equates to an average total cost per return of $696.46. Multiplied by the number of individual returns, and you end up with $93,267,881,179 wasted in time and expenses collecting individual taxes.

Yeah, sure, one can argue that $93 billion spent to collect $1.2 trillion isn't so bad. Yet one has to ask, why are we spending $93 billion dollars? And that isn't including the US government's time and expenses associated with collecting that revenue, nor does it include all the various state income tax costs. In this day of computers, electronic communication, automated record keeping, etc., why haven't we eliminated 90% or more of the expenses associated with collecting income tax? Do we really need to waste $93 billion? Or maybe if we just cut the tax code back from some 15,000-40,000 pages depending upon who you ask, to say 10 pages, maybe we could completely eliminate that $93 billion waste. That much money would eliminate world hunger according to a number of estimates. To put that in a world perspective that would eliminate 600,000 deaths of children due to hunger related illnesses per year!

How stupid do they think we are?

How can you tell when a politician is lying?



When their lips are moving.

In all seriousness how can anyone take Hillary Clinton or Barack Obama seriously? I want to keep a "I mispoke" counter someplace just to remember how many times they've lied or had to retract something they've said. In case you missed them, Hillary claims to have arrived in Bosnia under attack of sinper fire in 1996. When videos of the event clearly show her statement was a total fabrication, she claimed she misspoke. Is that like another word for LIE? And just the other day Barack Obama apparently decided that people from small towns in Pennsylvania are bitter and turn to guns and their faith. After being labeled an elitist, he recanted the statement and said he misspoke. I don't know if he ever said he misspoke about being a professor at the University of Chicago (he wasn't, he simply lectured there), or about his parent's falling in love because of the tumult happing in Selma, when in fact he was born 4 years before the riots occurred in Selma.

Can't we get someone to run that isn't a pathological liar?

Related to my topic is the issue of package sizes. I've noted with some dismay that ice cream manufacturers have quietly and slowly gypped us out of 12.5% of our ice cream. Over the last several years, the size of a half gallon of ice cream, you know the one, the rectangular box that ice cream has come in for decades, now only contains 1.75 quarts. Not 2 quarts as it used to, but 1.75 quarts, or 12.5% less ice cream. I wonder if they'll do as the deodorant manufacturers have done and at some point go back to a full half gallon and keep the price the same so they can say we're getting 14% more ice cream for free. Later they increase the price, then shrink the package, then claim to give us more for free, then increase the price, then shrink the package... Well, you get the idea.

And last but not least, how about those margarine marketing folks! Lite Margarine. What does that mean exactly? Well it means they add more water to the oil before turning it into margarine. In fact, some lite margarines contain 70% water. That has to make that water even more expensive than the bottled water the hotels leave by your bedside table hoping you won't notice the $8 price on it for a 375ml bottle of water (probably was tap water originally to boot!)

OK, that reminds me of one more rant before I go, which is bottled water. According to Consumer Reports, there is very little in the way of quality standards for bottled water. Tap water on the other hand is highly regulated in terms of water quality and purity. So why again do people buy bottled water at $1 - $4 per bottle when that same amount of water from the tap would cost less than a penny? It isn't necessarily going to be as good as the water from your tap either.

Leave politics out of it

I read with a certain amount of sadness that Britain's Prime Minister has decided to boycott the opening ceremonies at the Summer Olympic Games in Beijing. While I don't agree with China's handling of certain issues, I don't believe the Olympic Games are the place to hash those issues out. There are plenty of means to bring pressure to bear on China without entangling the Olympic Games in a political morass. Let's keep the Olympics about the games and not political gamesmanship.

Spam, Pizza Hut, finances, and the like...

Well after wasting the better part of a hour sifting through thousands of spam e-mail messages, I want to congratulate congress on the lack of progress they've made in eliminating truly one of the major banes of the Internet. Yes, my ISP filters my e-mail which in fact is part of the problem. Although the filter is pretty good (currently filters out about 200 spam e-mails each day) it isn't perfect. Unfortunately it has a tendency to occasionally mark valid e-mail as spam which means I need to periodically wade through my spam folder to see what got marked incorrectly.

While there have been charges now made against Alan Ralsky and Robert Alan Soloway, two of the Internet's most persistent spammers, I personally can't say I've seen a drop off in the spam I receive. Maybe even more disappointing in this whole spam issue is the lack of cooperation by the various e-mail software vendors, ISPs, and the like. There are solutions that would make it much more difficult for spammers to get spam into our mailboxes, but no one seems to be able to agree on the "best" solution, so no solution has been widely adopted. So in the meantime with 95% of all e-mail in 2007 being spam, we get to continue to waste our time and resources dealing with the actions of these criminals.

I would like to congratulate my local Pizza Hut for subjecting me to a lot of unnecessary pain and headaches. The reason I was searching through my spam folder was to look for additional notices that some account or another was late due to having to cancel my credit card. Why did I cancel my credit card? Because the local Pizza Hut managed to lose mine! They forgot to return it to me one night when I picked up a pizza at the drive through (after finally getting it ordered on a really bad website!). They called me about an hour later and told me they had my card. So far so good. Since it was a virtual blizzard outside I asked if I could pick it up the next day. Seems pretty simple. I go the next day, and now they can no longer find my card. A couple of days go by and they STILL can't find my card, leaving me no choice but to cancel the card and get a new one. Now all the services that charge to my credit card such as my phone service, some donations we make, etc., all have to have my credit card information updated. Thank you Pizza Hut! :-(

So why are the tax payers bailing out Bear Stearns and probably others? Were the tax payers responsible for the bad decisions made by mortgage applicants, the shady practices by mortgage brokers, and the greed and deception by the capital markets? Why aren't the people responsible for this fiasco paying the price? Oh that's right, responsibility died when it was decided people weren't responsible for their own actions. Just look at the product liability cases, the labels on a ladder, or the McDonald's hot coffee case. Why would we expect those involved in the sub prime mortgage disaster to be responsible when we don't think someone is responsible enough to realize that if they pour hot coffee in their laps, IT'S THEIR PROBLEM, not the person who gave them the coffee! Did a jury of 12 really think McDonald's was responsible for some klutz putting a cup of hot coffee between her legs and burning herself when it spilled? Do I really need pages of information about what not to do with a lawn mower such as "Don't pick up the running lawn mower to use it to trim your hedges." Really? Maybe a little more cleansing of the gene pool is needed.

So what's the moral here? Be irresponsible, blame it on someone else, let the government and tax payers bail you out, just so you can do it again! Personally I think a bunch of people should be pounding rocks in a nice penitentiary somewhere.

Random rants and observations

Yesterday I tried to get some satisfaction from Sears over a clearly defective design in the snowblower I purchased a little over 2 years ago. Instead what I got was someone telling me that I had to have purchased a "Protection Plan" to have anything covered after the warranty expired. Normally I wouldn't have a problem with that. What I do have a problem with is that the design of the chute on the snowblower is clearly bad. So much so that when I went to purchase a replacement one at the Sears parts store, low and behold, Sears changed the design to prevent the problem I was having. Nonetheless, Sears refused to do anything about my defectively designed chute. I will have to think long and hard about any possible future major purchases at Sears. So much for Craftsman quality and excellent customer service.

Why is the government thinking about bailing people out of their subprime mortgages? Yeah, I understand the financial implications to the economy if we foreclose on a million homes. But is bailing people out for making bad decisions going to help us in the future?

The more I think about our tax code the more I realize the government wants us to spend all our money. The proposed rebate or whatever it's being called to stimulate the economy aptly illustrates the point. The government is willing to give us back our own money, well thaaank yoooouuuuu (sarcasm_off), in hopes that we'll promptly turn around and spend it to bolster a flagging economy. It's also why I believe a consumption tax, also called a fair tax, will never be implemented. I think it's a great idea, but it would encourage people to save as you would only be taxed on the money you spend. If people actually saved instead of spending, the short term effect would likely hurt the economy in a big way. On the other, long term people would have even more money to spend. But with our short term focus in this country (can we even look past tomorrow?) it isn't likely to happen.

Why do we waste so much money on elections? The various candidates and parties have raised well over half a billion dollars to spend campaigning!!! And that money is helping anyone how? What a total waste of money and resources. Mitt Romney alone has raised nearly $100M, roughly ten times the amount of money raised by Mike Huckabee, yet he has only 50% more delegates than Huckabee. And all of this is just for the primaries. I can't imagine how much more we're going to waste once we get down to a real election. That much money could substantially improve the quality of life for millions of people in the poorest parts of the world. Which brings me to my close. A little bit of humor from a friend of mine:

One day a florist goes to a barber for a haircut. After the cut he asked about his bill and the barber replies, "I cannot accept money from you. I'm doing community service this week." The florist was pleased and left the shop.

When the barber goes to open his shop the next morning there is a 'thank you' card and a dozen roses waiting for him at his door.

Later, a cop comes in for a haircut, and when he tries to pay his bill, the barber again replies, "I cannot accept money from you. I'm doing community service this week." The cop is happy and leaves the shop. The next morning when the barber goes to open up there is a 'thank you' card and a dozen donuts waiting for him at his door.

Later that day, a college professor comes in for a haircut, and when he tries to pay his bill, the barber again replies, "I cannot accept money from you. I'm doing community service this week." The professor is very happy and leaves the shop.

The next morning when the barber opens his shop, there is a 'thank you' card and a dozen different books, such as "How to Improve Your Business" and "Becoming More Successful".

"Then, a Congressman comes in for a haircut, and when he goes to pay his bill the barber again replies, "I cannot accept money from you. I'm doing community service this week." The Congressman is very happy and leaves the shop.

The next morning when the barber goes to open up, there are a dozen Congressmen lined up waiting for a free haircut.

And that, my friends, illustrates the fundamental difference between the citizens of our country and the members of our Congress.