Friday, November 21, 2008

A Potential Solution to Somali Piracy

I cannot believe that the piracy off the Somali coast has continued to flourish. I saw a news report today that some officials in Kenya estimate that the pirates have taken in about $150,000,000 in ransom this year.

Why don't the ships form up and travel in convoys past the Somali coast? We did it in WWII across the Atlantic, with the peril of Nazi submarines as opposed to guys in inflatable boats. It seems to me that a convoy, protected by a single warship, would be a potential solution. The warships are in the region anyway, attempting to patrol a vast stretch, ineffectively. Surely some of the cost could be borne by the ship owners, insurance companies or the cargo owners. Let's get organized and shut this menace down!

Tuesday, November 18, 2008

Risk vs. Reward – Lessons from our Financial Mess

As I’ve invested money over the years the concept of risk vs. reward has been drilled into me. The larger the risk I choose to take, the larger my potential reward, or potential loss. I choose to invest fairly conservatively. I have some stock mutual funds, the majority of which are in large capitalization or blue chip companies. I do have some riskier small-cap choices too. But, that’s as far as I’ve gone.

Other investors chose to put money into far riskier ventures: mortgage backed securities, credit default swaps, or hedge funds that invested in these kinds of things. They earned hefty rewards while times were good. I saw none of that money. When those investments soured recently, I’m sure many of those investors took a substantial loss. Here’s the rub: so did everyone else.

If there are lessons to be learned in the latest financial mess it is that all of us are vulnerable to loss at the hands of relatively few very large, very wealthy investors. We don’t share in their rewards, but we do share in their losses. I, and most of my acquaintances, did not knowingly choose to take on the risk inherent in these derivative investments, but we certainly paid a large price for their devaluation.

That is what is so unfair about this latest setback. If there were some regulatory method that would confine the losses to the people that actually, knowingly signed up for the risk, I would be 100% for that. I’m not smart enough to know how to do that. I do think many people are angry. They are angry because a relatively small number of people prospered hugely when these investment vehicles were producing returns. When those same investments tanked, it took the rest of us down with them.

Wednesday, November 5, 2008

Choose Success

Every day we have an opportunity to choose between knowledge and achievement or ignorance and defeat. If we choose the former, every day, we will be successful. It's not complicated.

Monday, November 3, 2008

Obama is a Socialist?

I wish the Republicans would stop using name-calling as a consistent campaign tactic. Calling Obama a socialist, because he favors the progressive income tax, just shows their ignorance. Simply look in the dictionary. From my Webster's : "Socialism: any of various social systems based on shared or government ownership and administration of the means of production of goods". The progressive income tax concept may be considered a "redistribution of wealth" IF we were to return to previous welfare programs that were eliminated in the 90s (which is not in anyone's platform), but it certainly is NOT socialism - not even close. In fact, the Bush administration plan of buying into troubled (and not troubled) banks is much closer to the actual definition of socialism than Obama's tax plan.

Tuesday, October 14, 2008

Will We Ever Learn?

I'm in the midst of reading a book about the depression. It seemed appropriate, given the recent financial turmoil. It is The Day the Bubble Burst by Gordon Thomas and Max Morgan-Witts, written in 1979. Here's a quote:

“The circle between Madison Avenue and Wall Street was complete; they were inexorably linked, in a relationship developed in ten short years, during which the ad men had created an ambience invaluable to the continuing popularity of stock speculation. The limitless, desirable, and expensive goods coming onto the market – often products of companies quoted on the stock exchange – could only be sold by determined advertising campaigns. If those campaigns failed, the market would slump.

To maintain his place in consumer society, a man was told he needed a car, radio, icebox, and refrigerator; his wife required a washing machine, automatic furnace, and one of the modish pastel-hued toilets. To complete their domestic bliss they would have the latest in bathrooms: a shrine of stunning magnificence, containing, among other items, ‘a dental lavatory of vitreous china, twice fired’. To buy it would cost the average American six months’ salary. But paying was no problem; there were the installment plans. It was also part of the advertising philosophy that it was no longer enough to buy a car, radio, or refrigerator. People must have the latest model – junking the old one, even though it was still useful. Failure to do so would cause factories to close from the Atlantic to the Pacific, ending what some newspapers called ‘the golden era’. To protect it, they told their readers, was the patriotic duty of every American; one way to express that was, ‘to buy until it hurts’. "

Even then it was a house of cards, far too dependent on consumer credit and consumption. Will we ever learn?

Tuesday, October 7, 2008

MBAs - The Source of our Economic Problem

I think we need less smart people spending time dreaming up ways to make money by packaging other money in different configurations and more smart people spending time dreaming up more efficient ways to move things from one place to another, power our homes, feed ourselves and deliver the health care we need. We need less financial whiz-kids and more engineering whiz-kids.

Friday, September 5, 2008

Need a More Creative Health Care Solution

I read John McCain's speech. I prefer to read the transcript rather than listen to the speech itself because I believe all the applause breaks get in the way. I was very impressed. I do have to quibble with one line however:

"My health care plan will make it easier for more Americans to find and keep good health care insurance. His plan will force small businesses to cut jobs, reduce wages, and force families into a government-run health care system where a bureaucrat stands between you and your doctor."

I still do not understand why it is acceptable for an insurance company bureaucrat to stand between me and my doctor! Let's try and eliminate the middleman altogether. Is the insurance model the only way to solve our health care crisis? As I've written on previous posts: just think about the insurance business model. If you look at it from a business model point of view, I believe you'll find that private, for-profit insurance is not an optimal solution. Replacing that with a massive, centralized bureaucracy is not the answer either. Perhaps INSURANCE, public or private is not the way to go!

I wish I had the magic answer - I don't. I don't find it acceptable to have any bureaucracy between me and my doctor - private or public.

Wednesday, September 3, 2008

Labor Day Discussions

I had a discussion with my brother in law over the weekend about politics and economic policy. He is a Republican through and through (in fact, both of my brother in laws are right-wingers). We talked about tax incentives to send jobs overseas. He told me he had heard that, but didn't really know the facts. I thought I knew the facts, but I was wrong. I looked it up and got the same story from both and The Harvard University Law & Policy Review.

There is a feature in the US tax code that allows US companies to defer taxes on profits generated in overseas subsidiaries. Once that profit is moved back to the United States, it is then taxable. Not surprisingly, the profits are rarely moved back to the US. Harvard estimates approximately $639 billion in profits remained offshore in 2002 - all escaping US tax. Based on a corporate tax rate of 35%, that means that the United States is "out" $223.65 billion dollars in taxes (though after all the deductions and other loopholes, hardly anyone pays the full 35% rate). That sure would have helped our deficit a bit.

Companies invest in facilities (to varying degrees - few have actual manufacturing facilities in Bermuda, for example, but still manage to report huge profits on that no-tax island) in low or no tax countries to avoid US corporate taxes (approximately 35% - in line with other industrial nations - which is why there is no great rush to invest in the UK, France, Germany, Japan...).

However, even if the loophole is closed, there are still strong incentives to build facilities offshore: much less expensive labor and freedom from environmental and OSHA-style laws. So, while companies do get a tax break for moving jobs overseas, that may not be the overriding reason to do so.

My brother in law also stated that we should eliminate corporate taxes, since it is just passed along to consumers and we end up paying it anyway. That was a new one to me. So, I looked up some information. According to the GAO, corporate taxes are only 14% of the federal tax revenues - far lower than I expected.I found reports dated in August 2008 that state: "The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.

More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said."

So, it seems to me that corporate tax is just not that big a burden. The idea that we ultimately pay it seems absurd. First, it's a tax on PROFITS, not revenue. So, perhaps companies build it into the price, but if there are no profits, there are no taxes. And companies go through great accounting machinations to show no taxable profits. So, if it is built into the price of the products we buy, then it's just a guess and at least 72% of the time "we" are not paying their taxes but simply adding to their profits. If anything, corporations should pay their fair share of our tax burden. It strikes me as humorous when the Reagan Republicans cite the 1950s as the glory years of our country and wish we could go back to the values of that time. Well, one of the reasons it was the glory years is because corporations paid far more of their fair share of the federal budget and regular people less! Of course, the Limbaugh crowd doesn't want to talk about that. According to the GAO, the % contribution of overall tax revenues paid by corporations during the 50s was:

1950 - 26.5%
1951 - 27.3%
1952 - 32.1%
1953 - 30.5%
1954 - 30.3%
1955 - 27.3%
1956 - 28%
1957 - 26.5%
1958 - 25.2%
1959 - 21.8%

The percentage stays in the 20s until 1976, when it dropped to 11%. Compare those rates to today's 14%. If anything, I think the loopholes should be closed and US corporations should pay more for the benefits they receive by being incorporated in the United States, which are considerable. One thing we have not seen (and will not see) is a rush to incorporate in the no, or low tax countries. There are substantial benefits to being a US corporation: a stable government willing and able to defend your interests if you are a multinational corporation, a relatively stable legal environment (while they whine about frivolous lawsuits, things are far worse in "banana republics"), an educated and experienced workforce, a world class educational system (especially post high-school)... all things that they should pay their fair share for.

Thursday, August 28, 2008

The American Economy: A House of Cards?

From an article on the economy earlier this year: "Consumers gave some of the nation's retailers a little relief in April following months of dismal sales, but business was helped along by heavy discounting that could hurt fiscal first-quarter earnings."

I've read that our economy is largely driven by consumer spending. That seems awfully fragile to me. Eventually consumers are going to wake up and realize that they no longer need a larger big screen TV or a bigger house or to slavishly change their home decor because the advertising industry declares their current look "dated". How long will consumers choose to go into personal debt to buy yet more stuff that doesn't truly make them happy?

Personal consumption has always been a large part of the economy. From the 1950s through the early 1980s it was around 63% of the GDP. In the middle 1980s it started increasing to it's current 70% number. What changed? The large increase in credit card usage and mortgage / home equity loans. We all now know the consequences of all that mortgage debt, which I've written about in other posts. Is credit card debt next?

Tuesday, August 26, 2008

The Problem with Pets

The cat on the left is Harvey. He is,
without question, the best looking cat on
the planet. He's also the sweetest, most
friendly cat we've ever had.

My wife wants to get him a buddy, either
another cat or a dog. I've been resisting.
Another cat means I have to clean twice
the litter, twice the puke... And a dog is
even higher maintenance.

However, these aren't the real reasons.
The real reason is they will break my
heart. Harvey is 8 or 9 - he's got another
8 years or so if we're lucky. And then,
he'll break my heart.

I've been thinking about death lately. The
end of the summer is here. The plants
aren't growing as fast; some are starting
to fade and wilt. Everything has a season
- and that includes us. Our season is
actually quite long, compared to the
plants in the back yard and our cat. But,
it doesn't seem long enough. It all goes by so fast.

Sunday, July 27, 2008

Backyard Pics

I went out to the backyard today to get some pictures of birds at the feeder or chipmunks. Those pictures didn't turn out so well, apparently I need to use a tripod when I use the digital zoom. However, at the height of summer, the flowers do look beautiful.

Saturday, May 31, 2008

Saturday Morning Pictures

I went for coffee Saturday morning, as I usually do, and because the weather was so perfect, I took a little walk around the Batavia Riverwalk and took some pictures.

This is one of a few windmills that you can find on the Riverwalk. Batavia, in the 1800s, had around a dozen companies that made windmills. Three of the major ones were Appleton, US Wind Engine and Pump Co, and Challenge. The one you see above is the OK model from Challenge, which was found widely in the western US pumping water for farmers in the early days. According to the Batavia Historical Society: "In 1890 Batavia was recognized as the leading windmill manufacturing city in the world". If only that were so now, with our looming energy crisis!

The Fox River - the source of Batavia's early economic success, along with the railroad. I don't know what kind of fish he catches (if any) or if they're edible. It was such a gorgeous morning I suppose he didn't care.

Another shot of the Fox River looking north.
The Riverwalk
One of a few bird "condos" on the Riverwalk. They seemed filled to the brim.

Saturday, May 24, 2008

New Camera Again

I went out for coffee this morning and took a few pictures of the town I live in.

Friday, May 23, 2008

SS United States

In Her Glory Days


I recorded a PBS show on the SS United States. It was very good. The SS United States was the largest ocean liner built here in the US and was a spectacular ship. It was built in 1952. It was 990 feet long and 101.5 feet across. It weighed in at 53,290 tons. (It was larger in all dimensions than the famed Titanic.) The ship could do over 40 knots, with 240,000 combined horsepower. She was the fastest ocean liner of her day and still holds the record for the fastest westbound Atlantic crossing.

I've seen this ship. It's sitting at a dock in Philadelphia. It's in a sad state. But even in her bad condition, you could see that she's a beautiful ship.

As the PBS show mentioned, Lindbergh's Spirit of St. Louis is in the Smithsonian and Eli Whitney's cotton gin is preserved, but this magnificent ship rusts away. There is hope: Norwegian Cruise Lines purchased it in 2002 and has stated plans to refurbish it and return it to service, perhaps by 2010. It's an enormous and expensive project, and with the recent fuel increases and economic problems, who knows if it will really happen? I hope it does.

Thursday, May 22, 2008

MidWeek Vacation Day - Downtown Chicago

I spent most of yesterday downtown. It was a perfect day - the sky was crystal clear and the temperature was in the 60s. I had a wonderful time wandering around and taking pictures.

Tuesday, May 20, 2008

The Free Market Doesn’t Always Get it Right

Here we are with gas at $4.00 per gallon. The American car companies are suffering because most of their products have pretty poor mileage. We are currently overstocked in trucks, SUVs and high horsepower cars. Many economists, oil industry experts, anyone with common sense knew that gas prices would go up eventually. So, why did the auto industry, especially the American auto industry, get caught with an inappropriate product mix?

Proponents of the free market often claim that you can’t legislate what the market should make. They claim that centralized planning doesn’t work and never will. The market produces what people want to buy all by itself – like magic. I agree with this, but not as strongly as I used to.

The problem is the lag time. Free market capitalism is reactive. It doesn’t think ahead. In fact, it can’t. There is little profit to be made by developing a high mileage vehicle when you are making gobs of money by selling monster SUVs and high horsepower sedans. Business will not invest the money in developing something that no one wants now, or in the very short-term future. American business has a problem with looking beyond the next quarter, certainly they will not attempt to guess that the public will want a high mileage vehicle 2 – 3 years from now. It’s too big a gamble given the development costs – even though anyone with common sense “knew” that gas would be increasing at some point in the future.

Perhaps the collective common sense of the people, through the legislative process, can be used to guide the free market when it can’t manage to make a commitment itself.

Monday, May 19, 2008

New Camera

I bought a new digital camera. I’ve hardly scratched the surface of its capabilities. I’ve only snapped a couple of pictures so far. I used to have a really nice 35mm camera and I knew how to work it. I have boxes of slides and prints from those days. I gave that up years ago, as I did music and so many other things that were fun.

I took a short drive out to the new LaFox train station and found this old, abandoned freight station right next to it. It will probably be torn down shortly, so I snapped a picture of it before it was lost. The train line now goes out to LaFox and Elburn. I was not surprised to see all the new subdivisions on the ride out to the new station. If a new train station is built in a town, it seems that guarantees new housing will follow.

I was playing with one of the photo image programs that came with my computer. It's amazing what it can do. All I had to do was choose one menu option and I created the image below. I think it was called "oil painting". Amazing.

Thursday, May 15, 2008

I Read a Good Book Yesterday

I read a book yesterday called Now Coming to a Town Near You by Gina Olszowski. The subtitle tells you what it is about: Voices of Urban Sprawl. The writer is from my town, so some of her insights are particularly relevant to me.

We moved to Batavia, from Crystal Lake, in 1992. Part of the reason was to be closer to my wife's work, but also we felt that Crystal Lake was starting to get too crowded. Crystal Lake and the neighboring community of Lake in the Hills were building developments of 500, 700, 1000 homes. All those extra people and all that extra traffic just made it less enjoyable to live there.

When we moved to Batavia, I think all we had on Randall Road (Route 37 in her book) at the time was the Jewel, the Ace, and Target. Now that I look back, we had everything we needed in those 3 stores. But, now the road is packed with places to shop and eat: Home Depot, Menards, Lowes, Fridays, Chilis, Bennigan, Applebees, Borders, and the whole Geneva Commons complex of really high-end foo-foo stores. Having a variety of places to shop does have its benefits. But, there is no character to Randall Road. It’s exactly the same as Route 59 in Naperville / Aurora and thousands of other strips in cities across the country. The sameness and ugliness of it all is depressing. There are no sidewalks – there is no easy way to walk on Randall Road. It is designed for wheeled vehicles only.

What can be done? Nothing can be done for Randall Road now. It’s all built up and there’s no going back. There isn’t much undeveloped land north of Main Street anymore, so all we can do is try and stop even more strip malls south of Main Street.

She does point out something important regarding what can be done. Pay attention to local politics. I spend much more time reading about, thinking about, the presidential race than I do local politics. Which has more of a direct impact on my quality of life? Local politics! I have never attended a city council meeting, a county board meeting, or most importantly (as it impacts my already outrageous property taxes) – a school board meeting. I assume these meetings are open to the public, but I honestly don’t even know. That is going to change.

Thursday, May 8, 2008

Property Taxes & Government Spending

Our property tax bill arrived recently. It went up again - 5.42%. I have to let our county politicians know that it can't continue like this. At some point the property taxes become too much to pay.

At about the same time there was an article in our local paper about Kane County's childhood obesity study - projected to cost $500,000. The article said it would be funded by a grant and some taxpayer money, but that is not really the point. Why is my county government doing anything at all regarding childhood obesity? I could save them a bunch of money because the answer is obvious: eat less junk and get outside and do something instead of sitting in front of the TV or computer for hours. I work at our local library and I am amazed how many kids, on a gorgeous day, come to the library to sit in front of a computer for hours at a time to watch videos. Don't kids shoot hoops anymore? Play softball?

Monday, May 5, 2008

Return to Geekdom

My work at Yoopersoft has largely been in the area of marketing and writing some web copy. Now, however, I'm trying to help out in the programming area.

I didn't realize how much I'd fallen behind in technology. The last time I did a website for someone, I had hand coded the html. Now I am using a tool called Visual Web Developer. Some things seem simpler, but a lot of what used to be simple seems much harder.

I used to be up until the wee hours of the night trying to figure out a SQL statement that will do what I want. Or, I used to stay up all hours trying to get some silly program to do what I wanted it to. I finally got more serious this last weekend and now I've switched back over to geek mode. I was up way too late trying to figure out how to read a database record and populate a label or a text box with the value from a specific column. It seemed like it should be so simple, but it took lines of code to do it. I still think there has to be a simpler way of course, but for now it's working. Thanks in no small way to my partner's help, by the way.

I haven't picked up a new pocket protector yet, but it's just a matter of time.

Thursday, May 1, 2008

Stay Away from Our Water!

The US states and Canadian provinces surrounding the Great Lakes are in the process of passing the Great Lakes-St. Lawrence River Basin Water Resources Compact. This compact, when passed by all of the surrounding entities, will prevent the removal of any water from the five Great Lakes.

Why is this important? Because of the large shift in population from the Great Lakes region to the southern and southwestern states.

From the Toledo Blade: "As recently as October, New Mexico Gov. Bill Richardson told the Las Vegas Sun editorial board that the Great Lakes states were "awash in water" that could someday help the southwestern states."

I bet the governor of Georgia has had similar thoughts as Atlanta's water resources have dried up.

Again from the Toledo Blade: "It may sound cruel, but no one promised those who fled to the Sun Belt unrestricted access to the resources of the rest of the country to maintain their tenuous existence."

If you want to live in an area with abundant water resources, move back. Bring your companies and JOBS back up north and share in the bounty that the Great Lakes region offers. Forget about trucking it, barging it, piping it south to water your golf courses, lawns, and flower gardens. It's not going to happen.

Wednesday, April 30, 2008

The Joys of Homeownership

Lots of people are stuck in homes they no longer want to live in.

From the NY Times: “You hear a lot about foreclosure and the thousands of families who are being forced out,” said Joseph S. Tracy, director of research at the Federal Reserve Bank of New York. “But that is swamped by the number of people who want to sell their homes and can’t."

It is starting to have an effect on worker mobility and people are now turning down promotions and job transfers.

The United States is a very mobile society. Our economic success has been, in part, attributed to the fact that workers and entrepreneurs strike out for a new start, often in a new place. The current housing problem has slowed that down drastically and that has a ripple effect on various other segments of our economy.

Home prices have risen too fast in most markets and now the inevitable correction is happening. But, may homeowners are resisting, refusing to sell at the market price because they "think" their homes should be worth more. It's time for people to come to grips with the fact that their homes just aren't worth what they thought they were.

Tuesday, April 29, 2008

Girls Gone Wild

I read that Ashley Alexandra Dupre, the call girl who dallied with New York Governor Elliott Spitzer, is now suing the founder of "Girls Gone Wild". She claims that she was too young (17 at the time) to have entered into an agreement with the company that distributed 7 full length tapes which Ms. Dupre spent a week filming back in 2003.

All this activity springs from the fact that "Girls Gone Wild" rescinded their $1 million offer to film and promote Ms. Dupre after they found they already had footage of her. Hence, her suit. She's trying to cash in on her 15 minutes of fame.

What amazed me about the whole thing was that the "Girls Gone Wild" people (Mantra Films, Inc.) could pony up $1 million. I have seen their ads on late night TV, so I knew about the phenomena. What I didn't know was that it is a $100 million per year organization (Wikipedia).

Won't the girls that participated by stripping for the camera be proud when they are 40 and their videos are still out in the marketplace? Whatever will they tell their kids?

We're doomed.

Monday, April 28, 2008

Sickness in Austria (this time)

Not that I required any further evidence, but this latest story of the 73 year old man in Austria convinces me that people should have to obtain a license before having kids. The guy kept his daughter locked in a secret room for 24 years and fathered 7 children with her! How did he keep this a secret from his wife, living in the same home, for 24 years? Surely she had to suspect something was odd about his "secret" room.

I wonder about the supposed maternal or paternal instinct when I read stories like this. When I read about families in Thailand that sell their daughters to pimps I was just amazed. There are plenty of additional stories right here in the Chicago area too. I guess "family values" means different things to different folks.

Friday, April 25, 2008

Good Spring Thunderstorm

The weather forecast calls for a strong thunderstorm today. I must confess that a really good storm scares me and fascinates me at the same time. I will often go out on the screen porch to watch a storm. Here in Illinois you can see them coming for quite a while and then when it finally arrives right over us - wow!

I read somewhere, years ago, that wasps are awakened from their winter hibernation by spring thunderstorms. That's how they know it's time to get out there and pollinate. Isn't that just amazing?

Thursday, April 24, 2008

Ford - $100 Million Profit

Ford announced a $100 million profit for the first quarter of 2008. It's nice to read some good news about the American economy. Apple had a great first quarter too. There is so much negative news in the media that if you focus on that exclusively, you will not have a good day. There are problems of course: the real estate meltdown, the credit crunch, a stagnant stock marker. But, we're pretty smart when we put our minds to a problem and we can work hard to produce a positive outcome.

Wednesday, April 23, 2008

How Long Can it Last?

I read a couple of statistics the other day:

1. Corporations pay only about 10% of all federal tax receipts. In 2003, they contributed only 7.4%! The rest comes from individuals.

2. Only 33% of the US Gross Domestic Product (GDP), the measure we use to determine the state of our economy, comes from corporations. The rest comes from individual's spending, quite a bit of it on products produced in places other than the United States.

How long can this continue? How long can our society function when the entities with the most money fail to contribute in proportion to what they take? It wasn't always this way, of course. In the supposed "golden age" of the 1950s corporations had a more patriotic attitude and did not set up offshore entities (just a post office box on an island in the Carribean) to avoid taxes. The government did not shower them with massive tax subsidies for moving jobs overseas. Corporations invested in manufacturing and research facilities here in the United States as opposed to overseas, thereby making a healthy contribution to our GDP and creating jobs. Beginning primarily in the 80s, they began investing much of their money in lower-cost locations - not in the United States, so other countries benefit.

The individual cannot sustain an economy and government that has grown so large. The people's capacity to carry debt will dry up at some point and the whole house of cards will come tumbling down.

We need corporations to pay their fair share - both in taxes and activity here in the United States. They incorporate here because the United States has stability, laws and an environment that allows them to make money and keep most of it. They are getting the benefits of this, without paying for it. Loopholes should be closed. Offshore entities that are an obvious tax dodge should not be allowed. Corporations should not get tax subsidies for investing outside of the country.

In addition, it's time they pick up their spending here in the US - recycle some of the profits here instead of overseas. The consumer cannot continue to provide 66% of the GDP of this nation by buying stuff produced elsewhere. Common sense tells us that this can't continue for very long.

Tuesday, April 22, 2008

Wasting Time

My productivity has slacked off lately. I'm not writing anything (look at the last time I wrote a post). I am not getting much programming work done (I hope my business partner isn't reading this).

There's probably some deep psychological problem causing my slacking output, but there's also some external time wasters that I know of: reading internet "news", chat and TV.

If I sign on to My Yahoo or iGoogle, inevitably some news item will catch my eye. Of course, most of these stories have links to other things and before I know it, time has flown by. The worst thing is that the news is usually trivial, stupid stuff.

If I see friends on chat and get started I can lose hours. Sometimes I chat with multiple people. While it's nice to catch up, I have not mastered the art of multitasking such that I can get any work done.

Lastly, TV can take up most of my evenings if I'm not careful, and I rarely am careful. I'll turn on the tube at 6 and usually around 11ish I'll notice that 5 hours have gone by and I have no recollection of what I just watched. My mind turned to mush around 9ish and I realize I'm dead tired and should have gone to sleep right around the time my mind turned to mush. Last night I got home from work around 9:40 and ended up watching a movie about Rubin Hurricane Carter until 12 AM at which point I remembered I had a DVR which could record the remainder of the movie. What a waste.

Thursday, March 20, 2008

Health Insurer Tales

I received three letters from my health insurer yesterday. One informed me that they were requesting my medical records from my doctor. Another informed me that they were requesting my records from Wal-Mart Pharmacy. The third letter was the one that really made me angry. They included a form asking me to fill in all the docs, hospitals, pharmacies or any provider that treated or consulted with me in the last 5 years. Here's the line I liked the best: "Although medical information may have been provided at the time of your application, please take this opportunity to send us a complete listing including any additional information not previously disclosed". First, they know darn well they asked for medical information on my application. In my case, I had to go back 10 years! I was really upset at the implication that I was dishonest in my application. Their tone sounds like "tell us now before we find out".

What's all this about? Approximately $22! I went to my doctor in February. My goal was to re-establish the relationship (he didn't know I had moved back from New Hampshire), get a refill of my cholesterol medicine, and to ask him about the pain in my hands. I have pain in both hands that prevents me from opening jars. It makes opening potato chip bags painful (of course, one could argue that not being able to open potato chip bags is a benefit). The doc prescribed Clorindin / Sulindac. I went to Wal-Mart pharmacy and got a 30 day supply. Based on my condition, the doc said that these pills will help and may even put the disease in remission!

Now, my insurance carrier is going to spend hundreds, perhaps thousands of dollars to try and determine if I had this condition prior to being insured. Because, if it can be proven, then they don't have to cover anything related to it for a year. I'm sure they think it's not just $22, but that this condition will lead to more. Mind you, they aren't going to have to actually pay me a penny - I have a $5000 deductible!!! But, the idea of applying anything to my deductible seems against their rules. None of my doctor visits to check up on my cholesterol are covered - because I had high cholesterol prior to being insured. So much for being proactive - not rewarded.

I was much angrier yesterday. But, this is their business model. And, as I've stated in earlier posts, the for-profit insurance approach to health care is a bad fit. It works for cars and homes, but not healthcare.

As a side note, not that the insurance people will ever ask or care, the pills have done wonders. My hands do not hurt. I can open things without pain. I can type this post without pain. The pills do have some side effects, but I'm putting up with the inconvenience (I'm going to spare you the details) because the elimination of the hand pain is worth it. I really hope when the 30 day supply is done that the pain continues to stay away.

Sunday, March 16, 2008

Perfectionism a Symptom of Getting Older?

I shy away from activities I'm not good at, or feel I'm not good at. I just can't seem to be a beginner anymore.

I don't post as often to this blog as I might if I didn't have this slight case of perfectionism. I get an idea, but after I've written it down it usually seems too trivial, or boring, to post. The blogosphere is full of the trivial - why should I feel bad about my posts?

I took piano lessons when I was very young. I was OK. I played a few songs adequately. I didn't like to practice, so I plateaued. I think I'm interested in trying again. I have both a piano and an electronic keyboard. I have the time. But because I can't make amazing, accomplished music right now, I don't sit down to play. It's difficult to listen to myself play - it's not that I'm so bad, but I'm back to being a beginner.

I took a drawing class when I lived in New Hampshire. Actually, I did pretty well. But I haven't picked up my drawing pencils (despite getting some cool new pencils, sketch pads, and helpful books for Christmas) because, of course, I'm not an expert yet.

I'm not going to do this anymore. My posts will see the light of day, regardless of how trivial they seem. I will sit down at one of the pianos and play, no matter how painful. I will keep trying to draw the perfect boat in the perfect harbor.

Friday, March 14, 2008

Notes from the Library

Are we really doing kids in our community a favor by providing computers with internet access? Consider the mission statement of my local library (from their website): " The mission of the library is to provide and ensure access to materials and services to meet the lifelong learning needs of residents and organizations as well as to create a welcoming place to gather, exchange ideas and participate in cultural events." I could quibble with this mission statement. I think libraries should be places that promote reading, culture and a spirit of critical thinking and contemplation. However, everything seems to be market oriented now - give people what they want.

My observation is that many of the kids in the library spend all their time in front of computer screens on MySpace, chat and watching videos. No books enter their hands; Microsoft Word is not used to write a paper; the internet is not used to research school assignments.

According to Susan Jacoby in her latest book (The Age of American Unreason), our children are already suffering from too much "infotainment" - junk disguised as news or knowledge. They know quite a bit about hip-hop stars and the latest activities of Brittany Spears, but not much that will help them make the world a better place. Our tax money should not be spent such that it makes our kids dumber. Our libraries should not be participants in that activity.

Tuesday, February 12, 2008

We Don't Know What We're Doing - Part II

I just finished reading a book called The Ingenuity Gap by Thomas Homer-Dixon His basic premise is that things are very complicated and we don't know what we're doing. In the previous post, I wrote about the grand experiment on our planet - considerably risky since we have so little knowledge of the ramifications of our actions. Today however, I would like to discuss economics.

First, the “market” is not a force of nature. It’s a man made concept. It seems obvious, but to hear free market advocates talk about it, one might think it’s as natural and inevitable as the weather.

Do the “experts” really know what the heck is going on? These experts – financial analysts, media stars on CNBC, get paid a lot of money because they supposedly have insight and analytical skills that allow them to predict what the market, and elements of the market, will do.

The expert’s track record indicates one of two things to me: either they are grossly incompetent or corrupt. Let’s consider three relatively recent large economic events: the 1997 Asian currency crisis, the 2001 dot-com meltdown, and the current subprime credit mess. What do they all have in common? All of these events showed a failure of the financial analysts and rating organizations to warn us in time. Right up to the end, in all of these cases, analysts were either pushing stocks (the dot-com meltdown) that tanked, or were rating companies and bonds (Asian companies, dot-coms, and mortgage backed securities) as good bets. The “system” that is supposed to help out the smaller investor totally failed us in these three cases. In retrospect, you have to wonder how they (or we) got it so wrong. Of course, the fact that the “experts” get paid indirectly by the same entities they rate (through investment banking deals, for example) leads me to think it’s not exactly incompetence, but a conflict of interest. Either way, it seems the “average joe investor” can’t really trust the experts to get it right – at least get it right in time for us to get out of the way of the financial avalanche. We have to do our own homework and act based on our own intuition – just following the crowd, even if that crowd is led by a so-called expert, could lead to significant losses.

Monday, February 11, 2008

We Don't Know What We're Doing - Part I

I read a book recently called The Ingenuity Gap by Thomas Homer-Dixon. His basic premise is that the world is a complicated place and we really don't know what the heck we're doing. And, we'd better get smart quickly before we really screw things up.

I also read on Yahoo that ranchers, farmers and timbermen in Africa and South America are burning 60 acres of tropical rain forest every MINUTE! Consider this: the state of Illinois is 57,000 square miles. At the rate of 60 acres a minute, they are burning a rain forest the size of the state of Illinois every 424 days!

The Yahoo article states that 20% of all manmade CO2 emission are due to this burning. That's more than all the planes, trains, trucks and automobiles combined. It's second only to the burning of fossil fuels for electricity and heat. So, if we can get nuclear technology back in business, this might be the #1 source of CO2. Plus, the burn of the rain forest is a double-whammy: the forests absorb and store carbon from the atmosphere. They clean up the junk we put up in the air as a result of burning stuff! So, if they are burning down our atmospheric cleansing mechanism, it compounds the problem.

What does this have to do with the book? We're unwittingly performing a huge experiment on a planetwide basis. We don't know the ramifications of our activities because we really don't understand how the whole system works. And, we may never understand how the whole system works. But, destroying vast tracts of the system, when we don't know the implications, seems really stupid. I don't understand the plumbing system in my house. It would be similar to me ripping random sections of plumbing out of my house... and not expecting any adverse effect.

Some think they know more than they do. Many of those people are policymakers or influence public opinion - and that's the problem. As Shakespeare said: "The fool doth think he is wise, but the wise man knows himself to be a fool." We have so few wise people in the public eye today.

Thursday, February 7, 2008

Spring Can Start Now

Spring can start next week as far as I'm concerned. We've had more snow this winter than we have had in a decade or so. I'm tired of it. I didn't go to work yesterday (I work occasionally at our local library in the computer room) because the library closed early due to the snow. We really didn't get too much (around 5"), but places north of us got 10" - 12". And, while we have a day or two respite from the snow (more supposedly Friday night / Saturday), there is no relief from the cold for weeks. What ever happened to global warming? Where did it go? It makes me want to buy a big - no, not big, GIGANTIC - SUV and just let it idle in the driveway.

Thursday, January 31, 2008

Health Care: It’s not about insurance!

Why is the discussion about healthcare always about insurance? Why is it that the two choices always seem to be “socialized medicine” or affordable insurance? I think that we have socialized medicine right now – it’s just run by the private sector for profit rather than the government! And, it’s almost as dysfunctional. Consider the socialist maxim: “From each according to his ability; to each according to his need.” Isn’t that pretty darn close to the insurance business model? Don’t the insurance companies take from those able stay healthy and give (reluctantly, but that’s another story) to those unable to stay healthy? And, because we are a compassionate people, those of us who are able to pay insurance indirectly subsidize those who cannot through higher rates. So, in effect, I maintain we already have socialized medicine. The big difference is that the organizations currently running healthcare (the insurance companies) have profit as their primary goal – NOT our health! I don’t care what the pretty advertisements say, these companies exist to make money, not help us with our healthcare needs. And the way they make money is by charging as high a premium as they can get away with, investing that money well, and paying out as little in claims as possible. It has always amazed me that people seem comfortable with a profit oriented, completely non-accountable insurance bureaucracy managing their healthcare versus a non-profit, accountable (through the election process) government bureaucracy.

But, allow me to get back to the main issue. The issue should not be framed as an insurance problem. It is an affordability problem. Americans seem to want someone else to pay for their healthcare – whether it is insurance or the government. I think this is the root of the problem. If we all had to pay our own bills, we would take better care of ourselves. The system might change from insurance companies influencing, sometimes dictating, the cost of healthcare to competition. We do not have a free market in healthcare right now. I can’t shop between the equivalent of WalMart healthcare and Sak’s healthcare and make an informed choice. The way the system works right now, that’s impossible to do.

It costs too much to go to the doctor. Medical procedures and tests are too expensive. But, because there is no true competition for these services, and because we as individuals rarely pay the bills ourselves, there is little incentive for those costs to come down. That is the root of the problem.

Wednesday, January 30, 2008

Check out the latest version of DecisionPlanner!

Amber & I have release the latest version of DecisionPlanner. It is available at

DecisionPlanner now offers Decision Modeling. Help people make decisions by sharing your expertise. Create a decision model for others to copy. There are three programs available, two of which can allow you to make some money and build your own business.

DecisionPlanner now has a wizard that makes it easier to enter information related to your decision. Simply answer the questions on the screen and click the next button. You’ll get feedback early and often. DecisionPlanner will offer recommendations and rank your alternatives early in the process and often as you give it more information.

One of the most powerful new techniques used in DecisionPlanner is paired rankings. If you have more than two alternatives, or more than one perspective, paired rankings offers a superior method of ranking you options. The theory is that you can choose between two options far easier than you can rank a list of more than two options. Based on this, we present each combination of options and ask, by perspective, you to choose which of the two you prefer. After each combination has been presented, DecisionPlanner ranks you alternatives and offers recommendations such as eliminating alternatives that received absolutely no votes or even adding alternatives and perspectives if it’s appropriate. If this process gives you a clear solution, great! If not, it’s on to the next technique: Pro-con analysis.

Pro-con analysis asks you for the factors, or decision criteria, you will use to decide. Each factor is then designated as a “pro” or a “con” for each alternative. Based on this, DecisionPlanner will once again rank your alternatives and offer recommendations.

The final and most powerful technique is the Analytical analysis. For those of you who have used DecisionPlanner already, this is the tool you are already familiar with. The analytical analysis asks you to enter target values for each factor, and then actual values for each alternative / factor combination. Using various formulas, DecisionPlanner compares the target values to the actual values and, once again, ranks your alternatives. Comprehensive reports then guide you to the right solution for you.

Thursday, January 10, 2008

24/7 News Cycle is Costing Us Billions!

As I was driving from Escanaba to Batavia yesterday I listened to the radio. I heard a report that Goldman Sachs now believes we are either already in a recession, or will be shortly. These are the same folks who told their clients and others that subprime loans were a good investment, but now have to write off about $3.4 billion (according to because they were SO wrong. Now they expect us to believe them when they predict a recession? The market went up yesterday, apparently ignoring their pronouncement.

The market gyrations lately have been overreactions. The media stokes the fires and the traders overreact to the supposed news - most of which is rumor, or at best undigested raw facts.

Recession? When I graduated from college in the late 70s:
  • Inflation: 13.5%
  • Prime Rate: 18.5%
  • Unemployment: 7%
Today's numbers are no where near that. We survived the late 70s - early 80s, and we will make it through today's numbers too.

I was watching the pundits after the New Hampshire primary and the only one who made any sense at all was Tom Brokaw. He said that we should all "take a breath" and quit speculating about Michigan and South Carolina. He's right - all this speculation (on the financial channels too) is just to fill air time. And, in the case of the financial media, it's costing us billions in evaporated market value because traders react (stupidly, but what else do they have to do?) to these pronouncements.

What happened to slowing down long enough to understand?