More "Stimulus" Stupidity

Just before making his stupid "website number" remark, Joe Biden said something that might be even more comical -- if it weren’t so sad and pathetic.  In response to a woman who asked how the stimulus would help small businesses, Biden said this:

Quoting Joe Biden:

For example, it may very well be that she’s in a circumstance where she is not able, her customers aren’t able to get to her, there’s no transit capability, the bridge going across the creek to get to her business needs repair...

It’s hard to imagine a better way to prove that you’re out of touch with normal Americans than by honestly suggesting that you’ll help their small businesses -- which are in many ways the lifeblood of the country -- by fixing the bridge that goes over the creek on the way to the business.

Of course the truth is that there’s virtually nothing in the "stimulus" bill that will help small businesses.  The truth is that I will continue to pay a ~$5000 per year penalty, primarily in the form of extra Social Security taxes, as punishment for owning a small business.

Posted by Anthony on 1 reply

Crisis of Credit

Interesting and well-made video explaining the credit crisis.  Maybe Tash or Dan can chime in here with some thoughts, since they’re in a business so central to all of this?

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Electric Cars

It’s gonna take me a while to save up $109,000 for a Tesla.  In the meantime, I may have to make do with an Aptera 2e, due out in October for around $35,000:

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Why I Stopped Shopping at Circuit City

I don’t know when I first became aware of Circuit City, but once I turned 16 and was able to drive myself places, Circuit City was probably my most-visited store.  I was really into stereo equipment, and Circuit City had lots of stereo equipment.

I had never heard of Best Buy, and I think the first one in our area didn’t arrive until the late 90s.  But once I discovered Best Buy, I practically never set foot in a Circuit City again.

The reason is simple: Best Buy was bright, inside & out, whereas Circuit City was dark and depressing.  Best Buy’s colors are yellow, a little purple, and lots of white; Circuit City’s colors are... maroon and gray.

That may seem like a small thing, but I think it’s not.  I think that, all other things being equal, people will tend to shop at stores that are bright rather than ones that are dark, perhaps only subconsciously.  Certainly that’s true in my case.  You might argue that all other things aren’t equal in this case, but whatever other differences they had, Circuit City and Best Buy are fundamentally the same kind of store selling the same kind of stuff.

Or at least, they were.  Circuit City’s gone now.  There were probably many factors that led to their demise, but for me, Circuit City lost my business for reasons having nothing to do with products or services or prices.

Posted by Anthony on 1 reply

AOL Had Blogs?

Somehow I came across this page about AOL "Hometown" being shut down a couple months ago.  Apparently it was a blog provider, and people are now upset that their blogs are gone.

No doubt that sucks for anyone who used the service.  I feel bad for them.  But... the comments on this post are pure comedy gold:

Is there not a way to obtain the blogs anymore.

So proper... reminds me of this.

FORTUNATELY I SAVED MY WEBPAGE & TRANSFERRED IT TO GEOCITIES.

Link Here: http://geocities.yahoo.com/v/gcp_choose/

Real easy to do a simple webpage. With more time I think this could be better than aol.

Better than AOL!  That’ll be the day.

I honestly can’t decide whether AOL or GeoCities is worse...

WHERE IS THE HOME PAGE IT TOOK MONTHS FOR ME TO BILL. I DID NOT RECEIVE ANY NOTICE VIA THE MAIL OR E-MAIL.

PLEASE HELP ME FIND MY WEB PAGE SO I CAN COPY IT AND MOVE IT SOME WHERE ELSE.

I SUGGEST YOU PUT THE HOME PAGE BACK OR YOU WILL LOOSE A LOT OF CUSTOMERS.

I WILL SEE TO THAT.

Gotta love the threats.  I’m sure they don’t want to "loose" any customers.

It like stealing our hearts and souls without our knowledge...I WANT MY WEBPAGE INFO BACK I never gave you permission to destroy it..we should all file one big lawsuit against you for this. ANY LAWYERS OUT THERE THAT CAN HELP..EMAIL US ALL

This is very frustrating and angishly wrong for AOL not to at least had the decency to emailed their hometown members of this closing of "hometown.aol.com.html" so we could have been MORE AWARE of this closing. If anyone starts a liable law suit on AOL for this outrage action, please put my name down as a victim of this hanious action

PLEASE PROVIDE ME ACCESS TO MY HOMETOWN WEB PAGE.

IF I CAN GET IT I MIGHT STAY A CUSTOMER. IF NOT ME AND MY FRIENDS ARE AS GOOD AS GONE.

Where is my homey page?

Posted by Anthony on reply

Is Now the Time for a Gas Tax?

The other day on Car Talk, they suggested that now is the time for a (higher) gas tax.  The idea is that now, when gas is only $1.70 per gallon, an extra 50 cent tax would only bring the cost up to $2.20 -- still less than half what we were paying a few months ago.

According to the Car Talk guys, a 50 cent tax would bring in $50-$100 billion per year.  They suggest this could be used to help fund high-speed rail projects between major cities.  They also suggest the big 3 Detroit car companies could lead these projects.  Considering how well they run their current enterprises, though, I’m not so sure they’re the best candidates for the job.

It seems to me that getting lots of cars running on something other than gas should be a higher priority than setting up high-speed rail service between major cities.  When the gas runs out, people who live in cities aren’t going to have much trouble getting transportation to their jobs, since mass transit within cities already exists.  The real problem will be the huge amount of people who live in the suburbs and have long commutes to their jobs.

The best investment might be to work on upgrading the nation’s power grid.  Whether you’re talking about alternative energy from wind and the sun, or powering a large and growing fleet of electric vehicles, there seems to be consensus that the current grid isn’t going to be able to handle it without serious upgrades.

But whatever we would spend the money on, is the gas tax a good idea to begin with?  I’m not anxious to hand over more money to the government, but desperate times call for desperate measures, and the "desperate times" case can certainly be made right now.  There’s also the added bonus that when gas prices go up, people buy less gas, and of course reduced consumption will make the gas we have last longer.

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A Marketing Failure

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Who would send their kids to a place like that?

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Zombie Zunes

Yesterday, a large number of Microsoft’s Zune portable music players spontaneously died in their owners’ hands.

After spending much of the day digging into the problem, Microsoft said that it had traced it to a software bug "related to the way the device handles a leap year."  Apparently the Zune was expecting 2008 to have 365 days, not 366.

Though this does suck for Microsoft and for their customers who bought the Zunes, it makes me feel a little less bad about any bugs I’ve had in any of my applications.

The fix for the glitch?  Patience.  The company said the internal clock on the players should reset itself at 7 a.m. Eastern time on Thursday.  [...]  Those who were hoping to provide the soundtrack to New Year’s Eve parties had no choice but to find a friend with an iPod.

Realistically though, there’s probably not much overlap between "people who’ve bought a Zune" and "people with enough friends to host a party."

At least the Zunes came back to life a day later.

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The Social Security Scheme

Quoting Paul Mulshine:

Madoff [with his Ponzi scheme] at least made an attempt to invest the money he got from early investors to give them the returns he promised. [...] The federal government, on the other hand, never tried to make the Social Security system work. The feds didn’t invest the money in the market. They took the money that we gave them and lent it to themselves, promising themselves interest. To be paid by themselves. [...] This scheme is even more crooked than Madoff’s.

Indeed.  Maybe we can arrange to have them manage our health care, too.

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The iPhone is the New iPod

After absolutely dominating the portable media player space, Apple no doubt hoped to be able to do the same thing in the mobile phone space.

By now it’s probably safe to say they’ve done it.  The iPhone became the best-selling smartphone in October, and the best-selling phone period in November.

But Apple isn’t finished yet.  They most likely sold another boatload of iPhones in December during the Christmas shopping season.  And now, 3 days after Christmas, they will start selling iPhones in Walmart stores.  There are over ten times more Walmarts than Apple Stores, so this move will put the iPhone in front of millions of new customers.

My younger sister and niece, both in their early-mid teens, got iPod touches for Christmas.  It’s hard to imagine that they’ll get any cell phone other than the iPhone when their current cell phone contracts run out.  I think within the next couple of years, for anyone under say 30 or 40, not having an iPhone will be like not having an iPod: possible, but not very likely.

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The Fat-Powered Battery

Over the weekend we were in Maryland for Travis and Megan’s wedding.  Before the wedding, I had to go to Best Buy, and this Best Buy was in a mall, which was so packed that I had to park about a quarter-mile away.  As I walked towards the store, I thought, "At least I’m getting some exercise."

What I needed at Best Buy was a battery for Kim’s camera, because hers was dying and the charger was back in PA.

It occurred to me that humans and batteries are constantly dealing with the inverse of the same problem.  For humans, the problem is that our bodies are so good at storing energy that we need to go out of our way to get rid of it on a regular basis.  For batteries, the problem is that they can’t really store very much energy, so they need to be recharged often.

The solution is obvious: we need a way to plug our phones and other gadgets directly into our stomachs and our butt cheeks.

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Alarmist Headline of the Day: "Chrysler shuts down all production"

The fine print: "for [...] a month."

The finer-print: "The company ordinarily shuts down operations between Dec. 24 and Jan. 5. This closure would add roughly two weeks to that shutdown."

This stupidity brought to you by CNN Money.

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Cancer Declines in US, Increases in Poorer Countries

It’s good news for the US:

A report released earlier this month showed a decline in both cancer incidence and cancer deaths [in the US] for the first time in a decade.

But in less wealthy countries, the news is not good:

Today, more than half of cancer cases and two-thirds of cancer deaths occur in these underserved countries, and the disparity is expected to rise.

I bet you can guess the primary cause:

The dramatic increase in smoking in low- and medium-income countries, which began in the mid-1980s and early 1990s, is the biggest single cause of the projected increase, which is expected to peak in 2030.

I don’t know how people who work for tobacco companies can live with themselves.

The big tobacco companies started to move pretty strongly into these low- and medium-resource countries in the early 1990s at about the same time that we were working very aggressively to reduce tobacco use in Western countries.

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GM: Turning the Corner. Again. And Again.

GM has been apologizing to the American public for nearly 30 years.  For decades they’ve been telling us that they’ve "turned the corner."  Unfortunately for GM, you can only turn the corner so many times before you’re just going in circles.

Quoting BusinessWeek:

GM has lost a breathtaking 74% of its market value -- some $43 billion -- since spring of 2000, giving it a valuation of $15 billion.

GM is not, as they’d have us believe, a fundamentally sound company fallen on hard times due to the economy.  Despite their continual pronouncements of an imminent comeback, they’re never going to regain the market share they once had; there are simply too many other car companies now for that to be possible.  And those other companies are actually profitable, unlike GM.

Quoting BusinessWeek:

GM has reached the point at which it actually consumes more cash than it brings in making cars, for the first time since the early ’90s.  GM, once the world’s premier auto maker, is now cash-flow-negative.  [...]  Normally a company in such straits contracts until it reaches equilibrium.  But for GM, shrinkage is not much of an option.  Because of its union agreements, the auto maker can’t close plants or lay off workers without paying a stiff penalty, no matter how far its sales or profits fall.  It must run plants at 80% capacity, minimum, whether they make money or not.  Even if it halts its assembly lines, GM must pay laid-off workers and foot their extraordinarily generous health-care and pension costs.  Unless GM scores major givebacks from the union, those costs are fixed, at least until the next round of contract talks in two years.

That was nearly four years ago!  And that is the crux of why a bailout is the wrong answer to GM’s problems: they don’t need some quick cash for a temporary problem; they need boatloads of money for a systemic problem: the UAW, which is bleeding GM to death.

GM and the union want to make it seem like a bailout is the only option, but the truth is, there’s another option: fix the real problem by renegotiating the labor contracts now.  In addition to actually fixing the problem, this has the added benefit of being funded by the people involved with the company, rather than being taken out of the pockets of the taxpayers, who never enjoyed the extremely high compensation that the UAW workers do.

Quoting Fred Wilson:

I really don’t know why it takes a year to negotiate a union contract, but if they want to auto industry to survive, the union leaders ought to be prepared to rip up their current contract and negotiate a new one over the weekend.  That’s how things are done when you are on the verge of going out of business and losing $4.4bn per month.

Indeed.  And perhaps if we stopped even entertaining the idea that taxpayers would willingly fork over tens of billions of dollars to finance such outlandish compensation packages, then the auto-workers at GM (and Ford and Chrysler) would consider a different solution:

Quoting Associated Press:

Most Southern U.S. auto plants run by Toyota, Honda Motor Co., Nissan Motor Co., BMW AG, Daimler AG and other manufacturers are nonunion. The UAW has tried numerous times without success to organize workers at the foreign-owned factories.

That’s because no sane person or business would want to be in the position that GM is in, and they’re in that position in large part because of the union.

To a GM employee, getting paid a fair market rate for their labor sounds bad, because congress is sending the signal that the other option is free money to preserve the unionized (and unrealistic) status quo.  But if those employees thought that the other option were actually unemployment -- as it would be in any other business in America -- then suddenly a fair market rate doesn’t sound so bad.

Of course creating realistic compensation packages will only solve part of the problem.  GM is also going to have to get a lot smaller in order to survive, which means some workers are going to have to lose their jobs -- and again, that’s something that the labor contracts make difficult or impossible.

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Struggling?

Quoting Adam Pasick at Reuters:

It looks like a falling tide sinks all boats.  Out-of-work Wall Street workers have been on the front pages for months. Auto workers at the Big Three have been struggling for years...

Where I come from, when someone gets paid 70% more than other people doing the same job, we don’t call it "struggling."

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Bailout Bonanza, Continued

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There Is No Automaker Bailout

Let’s be honest.  This proposed 25 34 billion dollar bailout is a bailout for the United Auto Workers union.

The UAW has utterly failed at what is ostensibly its primary duty: to protect workers.  It has artificially inflated the wages of those workers to the point where they’re being paid far more than their non-union competition at other automakers.  Pricing your workers out of the market, out of their jobs, and driving their companies into the ground is hardly a good way to protect them.

Quoting The Wall Street Journal:

To put it concisely, the [other automakers] operate under conditions imposed by the free market.  Detroit lives on Fantasy Island. ... Hourly labor costs are $44.20 on average for the non-Detroit producers, in line with most manufacturing jobs, but are $73.21 for Detroit.  This $29 cost gap reflects the way Big Three management and unions have conspired to make themselves uncompetitive... Both management and unions chose to sign contracts that let them live better and work less efficiently in the short-term while condemning the companies to their current pass over time.  It is deeply unfair for government now to ask taxpayers who have never earned such wages or benefits to shield the UAW and Detroit from the consequences of those contracts.

Every dollar spent on labor is a dollar that the automaker can’t spend on R&D to improve its products, and can’t put towards lower prices to attract buyers.  So it’s not hard to see why Detroit is getting hammered by its competition.  And that competition isn’t so "un-American" as the UAW would lead you to believe:

Quoting The Wall Street Journal:

These are the 12 "foreign," or so-called transplant, producers making cars across America’s South and Midwest.  Toyota, BMW, Kia and others now make 54% of the cars Americans buy.  The internationals also employ some 113,000 Americans, compared with 239,000 at U.S.-owned carmakers, and several times that number indirectly. ... A government lifeline for Detroit punishes these other companies and their American employees for making better business decisions.

One person who knows how to run a business is Bill Gates; here’s his take:

Quoting AFP:

"If no one else is willing to invest, why is that?" Gates told CNN ... "What is it that investors are seeing about this business model or cost structure that makes them unwilling, and why, in that case, is the government alone stepping forward in this way?" Gates asked in the Wednesday evening broadcast.  "When you don’t have any private investors you really have to say, is taxpayer money going to have the desired effect?"

We’ve already given Detroit automakers $25 billion; do we really want to give another $34 billion to them, and then however many more billions they ask for after that?  The law offers bankruptcy protection for businesses for exactly this situation, so let them use it.

If we the taxpayers are going to be forced to fund automotive development, the funding should not go to failing companies; it should go to companies that are successful and innovative like Tesla, which is already delivering pure-electric cars with proven technology and putting us on a path towards energy independence.

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Why Government Intervention Won't Last

Quoting Michael Schuman:

Every time there has been a perceived crisis of capitalism in recent decades, the government’s economic role has swelled. But inevitably, this process gets thrown into reverse and the free market stages a rousing comeback. That’s because governments can screw up economies just as effectively -- in fact, more effectively -- than free markets.

He goes on to explain how that’s exactly what happened in the UK, India, and Japan over the past few decades.

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Barney Frank Provides the Best Reason Yet to Not Bail Out the Auto Industry

Barney Frank, today:

Quoting Barney Frank:

"The House is ready to [bail out automakers]," said Democratic Rep. Barney Frank of Massachusetts, chairman of the House Financial Services Committee.  "There’s no downside to trying."

Barney Frank, 3 months before Fannie Mae and Freddie Mac collapsed:

Quoting Barney Frank:

Fannie and Freddie are fundamentally sound, [they] are not in danger of going under... their prospects going forward are very solid.

With the endorsement of Barney Frank, what could possibly go wrong?

Posted by Anthony on reply

The Upside of the Recession

Scott Adams nails it as usual:

It’s expensive to travel anywhere, but on the other hand, the new season of 24 is almost here.  I don’t need to go to faraway places and meet people when I can sit on my couch and watch Jack Bauer shoot those people.

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Solar Energy Timeline

Quoting Cringely:

The result of this relentless application of Moore’s Law to the solar industry is that we can see a time in that near future when the cost of producing a watt of electricity from a solar cell on your roof will be approximately the same as the cost of delivering that same watt over a power line from an electric utility.  And of course that means that 18 months after that point the solar watt will cost HALF of what the same power would cost from the electric company, which will completely change the game.

The time when that electricity cost parity will be reached, I’m told, is seven years from now.  Just think of the impact that will have on electric utilities!  Why would any of us continue to buy our power from them?  We might use them as a giant storage battery and possibly for backup on cloudy days, but why would we use them at all for power if we can generate it cheaper at home?  You can bet that’s a question the electric power generating industry is asking itself.

Posted by Anthony on 1 reply

The President, the Stock Market, and Liberal Bias

A New York Times writer says that Democratic presidents are better for the stock market:

Quoting The New York Times:

As of Friday, a $10,000 investment in the S.& P. stock market index* would have grown to $11,733 if invested under Republican presidents only (...) Invested under Democratic presidents only, $10,000 would have grown to $300,671 at a compound rate of 8.9 percent over nearly 40 years.

John Gruber picks up on this and quips that "Facts continue to hold a liberal bias."

Then Mathmatica co-founder Theodore Gray points out that the Times’ simplistic analysis conveniently excludes all of those pesky issues that actually apply in the real world, like inflation and dividends.  When you adjust the model to actually reflect reality, it turns out that Republican administrations are actually better for the stock market.  Oops.

Gruber’s response to this?  "This is not a good metric for measuring presidential economic policies."

Hilarious.

Posted by Anthony on reply

Diversification

Scott Adams on diversification:

When I first started making serious Dilbert money, I let experts manage half of it, and I managed the rest, as a hedge against both the experts and myself. The experts invested in Enron, Worldcom, and a number of other companies that promptly exploded. The experts reduced their portion of my money by about a third over five years. (The experts work for one of the most respected financial institutions on Earth, by the way.) My own investments did better, precisely because they were more diversified. So now I handle my own investments, probably incompetently.

I didn’t own much in the way of stocks for the past several years, thanks to not using professional advisors. A big chunk of my money has been in California Municipal bonds of various types, and all are insured. When I asked my bond advisor what good it would be to have insurance if the entire state of California goes to hell, they advised me emphatically, and obviously incorrectly, that these big insurance companies are ready to take any hit.

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Fuel Economy

Am I the only one who’s disgusted by these car commercials touting "28 MPG" and "30 MPG" cars?  My 2000 VW Golf has been getting 28 miles per gallon FOR THE PAST 9 YEARS.  A cynical person might think that fuel economy doesn’t matter one bit to the car companies.

It seems absurd to tag this post as "Tech" when the "technology" involved doesn’t seem to have progressed at all in the past decade.

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iPhone Now the Best-Selling Smartphone

...and the #2 best-selling phone overall, behind only the RAZR.  (via)

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