Tuesday, July 14, 2009

IF You Can’t Say Anything Good…

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…don’t say anything at all.

So here goes.

I do not agree with this man whatsoever. But one thing I like, and IT IS ONLY ONE THING PERIOD.

We both like the Chicago White Sox.


Tonight The One Who Must Be Obeyed threw out the first pitch in the MLB All-Star Game wearing a White Sox warm-up jacket. B.O. is a southpaw. Who knew?

Oh well. Polyticks makes strange bedbugs.
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ATC, Getting Things Done

Usually Carl is the one with the interesting energy posts, most of which are about the doom and gloom that is going to befall us here in the US since we, in general, are not creating any new plants, nor upgrading our transmission system. I should start off by saying that I am no expert in this field, just a reporter on events.

I have noted in the past that here in Wisconsin I believe that things are better than in most places. The reason I say that is because of companies like ATC.

After five years, ATC has finally been granted permission for a new transmission line across Dane County, following the Beltline route.

For those that don't know, Dane county is the home to Madison, and the beltline is the major east-west highway that crosses it. I don't know how ATC keeps getting things done, but they simply do. All across the state of Wisconsin they are able to get their transmission projects through. They must have the determination and courage of a pitbull. I don't have the stones to go up against the boatloads of enviro types here in super liberal Madison, much less in more remote areas. I just couldn't stand the heartburn. I am sure that the enviros took some hide out of ATC along the way with lawyer fees, but ATC must have thought that it was worth it. The line will be 32 miles long, and is a 345k variety.

From the pamphlet:

The line will be above ground, and as part of the approval, the PSC [Public Service Commission] required the use of shorter poles near the UW Arboretum, required a crossing to the north side of the Beltline near High Point Road, and alternate pole designs and additional landscaping near the Odana Hills Golf Course to minimize the line's visual impact.
That is probably the tip of the iceburg as far as the concessions ATC had to make, but the process has begun and the project is scheduled to be completed in 2013.

As you can see from their website, ATC has a lot of projects going on right now, completed and in the works.

Transmission is an extremely part of our energy needs for the future, and I hope more companies like ATC can start to make headway against those who would try to choke the US off of cheap, plentiful energy.

Cross posted at ChicagoBoyz.

Monday, July 13, 2009

Madtown Throwdown Trials

Click any photo for larger.

The Madtown Throwdown is a series of MMA events that has been held in Madison for quite some time now. They do it about every three months or so.

In addition to this, they have begun some smaller events. This one was called "Trials". There were 9 fights scheduled, and there ended up being 8 total. It never fails, someone always is a no show.

This fight was originally scheduled to be held in Columbus, WI. For reasons unknown to me, it got moved to the CC Riders Motorcycle Club here in Madison. More on that in a minute.

This was my first experience "cornering". For those who don't know, I got to help out one of our fighters in the pre fight prep and walk down with him to the corner of the ring. It was a really cool experience.

Here are a bunch of fighters in what I believe is a storage room at the CC Riders clubhouse. You can see the guys getting their hands taped.
This is usually a family blog, but I couldn't resist taking a photo of this sign in the storage room.
The venue was outside, and it was a glorious evening. I thanked a bunch of the bikers for hosting the event.
They had a bar set up outside serving beer and other refreshments to the crowd.
It was a small crowd, I would guess 500 at the most. A bunch of military were there so that was cool too.
Our guy won in convincing fashion.

I really liked the amount of respect the fighters showed to each other - even though everyone shared the same locker room there weren't any puffed chests or anything like that. Most of them were talking to each other and joshing around after they had just fought. I did see one bit of poor sportsmanship after one fight, but I guess that is to be expected. Always one bad apple.

One thing I have never seen before - I saw a fighter walking around outside having a smoke before his fight. He was not in tip top shape, to say the least.

A really great experience and one I hope I can repeat soon.

Sunday, July 12, 2009

A Tale of Two Players

2009 stats:

Player 1:
70 games played
33 runs scored
2 home runs
15 rbi
.281 batting average
.354 on base percentage
fielding percentage .986 career
2009 salary: $1 million

Player 2:
77 games played
47 runs scored
14 home runs
32 rbi
.231 batting average
.294 on base percentage
Fielding percentage .970 career
2009 salary: $17 million
So who is the better player?

Lets break it down a bit further into intangibles. I have seen player one hustle every single play he has been involved in. He storms into second to break up double plays. He turns a double play playing second base better than most. Each and every at bat he works the count. On top of all of this he is an old man.
I have seen player two about a half dozen times this year. He routinely misplays balls in the outfield. He stikes out all the time. I once saw him this year literally quit running going from first to second to avoid breaking up the double play. This was unfortunate as the third baseman dropped the ball, but still threw to second for the force out. This is a pattern I have seen with this player over the years.

So now for the reveal:

Player 2: Alfonso Soriano
Player 1: Craig Counsell

I swear to god I would rather have hard nosed, gritty player like Counsell that hustles every play than a showboat like Soriano who strikes out all the time and doesn't try his hardest - offense be damned. And look at that salary difference! Nice value, Cubs.

I am going to the Brewer game today, hope Craig is in the lineup. He is my favorite player in the big leagues right now.

Saturday, July 11, 2009

How I Got My Glock Back

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Don’t ever do this, kids.

Last December I went duck hunting in southwestern Illinois. My Glock 22 was loaded and in the armrest compartment where it is on every trip. I could care less if my Indiana CCW permit is void in states I pass through and Illinois is one.

Anyone who has read any of my writings on guns knows I am not a collector, fancier or expert on guns especially handguns. I don't pretend to be a know-it-all as some gun bloggers do. I shoot for fun and practice. I hunt a lot and have the right to self protection. My guns get used and I don't care if they get scratched or the wood gets nicked. My guns are tools and I only own as many as I need.

On the final day of our stay I showed the Glock to my buddy Nestor. He asked if he could give it a few pops since he lives on a farm with nobody nearby, so I said sure. He has many fine handguns in his vault but never even touched a Glock. He explained that he thought they were ugly, plastic, and just wasn’t interested in them at all. We were called in for breakfast so I set it on a high shelf in his barn.

After a classic country breakfast with our wives we said goodbye and ventured on back to the free world of Indiana with plenty of duck meat in the cooler. Once past Springfield I realized we never shot it and it was probably still on the shelf in his barn. A quick phone call confirmed it was still on his shelf. Sh!tdamn!

I told him to have fun with it and he said he would. I explained to him that a Glock has no mechanical safety, knowing he never shot one before. With a round in the chamber it’s hot. That was news to him.

The next day I inquired on how to ship a firearm. This was new to me since I never purchased a firearm that had to be shipped. Legally, I was told by my local gunshop, it must be shipped overnight FedEx from one FFL to another FFL. It would cost upwards of $150. Fonk that. I do have a backup.

After another phone call he promised to bring it with him on a goose trip south of Joliet in January. We would meet up and he would give me the gun. The trip was cancelled.

Well last week he called to tell me his daughter was traveling to Chicago for the weekend and she could meet me near where I-80 and I-55 meet. Yesterday I drove to an undisclosed location where I got my Glock back. There was no problem with his daughter carrying it. She hunts goose, duck and deer and knows her way with weapons. When she handed me the bag with the gun I asked if it was loaded. She said, “of course not, my FOID card expired and I forgot to renew it”.

I’m sure what we did was illegal in the People’s Republic of Illinois. I believe with oppressive Illinois laws if she was caught with it the police would have taken her in, confiscated my gun and she would have paid one hefty fine. Oh well. at least it’s back in time for Gunstock, the annual LITGM firearm meetup.

One last note. Nestor liked shooting my Glock 22 in .40 cal so much he went out and bought one for himself. He now prefers shooting it to his other favorite handguns, one of which is that widely worshiped, mighty John Moses Browning 1911 in .45 ACP. So there ‘ya go!

That’s almost as unlikely as a PC slave buying a Mac. Welcome to simple, easy-to-use modern technology bud!
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Thursday, July 09, 2009

Rainbow Over Trump

Yesterday there was an amazing sight... a rainbow directly over Trump Tower. I could even see the entire rainbow from my balcony. I made a movie out of it because I couldn't get the rainbow in a single photo from end to end.

New Fighters

We seem to have a bumper crop of new fighters at the gym. As always I am there to help.

Speaking of, I have a reward of sorts coming. One of the best fighters at the gym has an MMA fight this Saturday night. He asked me to be part of his crew. I will be one of the guys who gets to walk to the ring with him, and will help out cornering. More than likely I will be the one who carries the water, towels and stuff, but I was honestly pleased that he asked me. I have trained this guy on the pads pretty strenuously for the past several months and this was his way of thanking me. I am totally stoked as I have never been ringside for a fight, and can't wait to hear the leather snapping into the flesh and bones of the poor opponent. The concensus in the gym is that this one doesn't go past one round.

But back to the new guys. There are a lot of guys training at the gym for some fights in September - our gym usually does what is called a "12 week camp" for most fights. Some of the new guys look pretty good, some look not so good. All are a bit out of shape and need a lot of work. We will get them in order, of that I am confident.

The first few rounds of training, we did some basic drills. We are still teaching the new guys how to hit pads, and what drills we like to put them through. After that there was sparring. Pretty ugly stuff. But they are new and I remembered how I looked when I was sparring early on. Timid. No self confidence. Afraid to unleash my techniques. Scared. Tight.

I couldn't take it any more and told them that they each had to go a round with me, and the others had to watch and learn. And learn they did. The new fighters were presented with a blizzard of punches and kicks from me. One of the larger guys thought he could throw me to the ground in the clinch, but my strength training paid off and he quikly found out that the clinch was "my house". The new fighters all tired toward the end of the round and then I picked up the pace.

It was a good exercise for them. They don't know yet how to be confident in their abilities. They need to get off on their angles; just walking forward and putting out techniques is so 70's.

All the time I was very encouraging and pumping them up on the good things that they did. And they did some good things. But they have a long way to go. I can't wait to see them in 12 weeks for their fights.

I told them last night that they will hate me in training, but love me when it is time for the fight. And that is true.

Wednesday, July 08, 2009

Chicago River Revitalized

One civic renovation project that I wholeheartedly support is cleaning up the Chicago River. The Chicago River runs right through downtown, and in fact the "River" in "River North" means, obviously, that we live north of the Chicago River.

I didn't live in Chicago decades ago but apparently the Chicago River used to be in terrible shape. Famously, the flow of the Chicago River was reversed so that foul water was pushed away from Lake Michigan (where it impacted the water supply) and down towards... well... St. Louis. Wikipedia has a nice page on the Chicago River, along with information about all the bridges that line the river and of course the St. Patrick's Day tradition of dyeing it green.


Colorful kayaks are a common sight on the River, when it isn't frozen, of course.


Here is a photo I caught recently of a wedding party that took a photo by the abandoned bridge (in the perpetual "up" position) on the Kinzie bridge. They probably had their reception at the East Bank Club which is only a block or so away (I don't think that the bride walked that far in her dress).

Finally - here is something odd. A "fish hotel". I saw this near a bridge and down by the waterline and had no idea of what it was. A guy seemed to be "sweeping" the water near the edge. I looked online and it provides sanctuary for fish - here is a link to an interesting web site describing the function, which apparently has been going on for several years, since this site references 2006.

Realism on Alternative Energy - Wind Power

Today Reuters posted a story called "Pickens backs off wind farm project"
Texas oil billionaire T. Boone Pickens has called off plans to build the world's biggest wind farm in the Texas Panhandle, the Wall Street Journal said.

Pickens said the wind farm project was scuttled partly because of the lack of adequate transmission lines to carry the electricity from remote locations to cities, according to the paper.

The oil tycoon had hoped to build new transmission lines but could not secure financing, the paper said.


This paper neatly summarizes the impossible economics for most of these large scale alternative energy projects, focusing on areas that aren't usually covered well by the media or academics.

One of the favorite alternative energy projects involve wind energy, basically giant windmills / turbines that generate electricity when the wind blows. Wind energy viability is determined by a lot of factors, including:

1. how much the wind blows, or more accurately, how "steadily" the wind blows at a relatively high rate of speed
2. cost of the turbines / windmills
3. reliability of the turbines / windmills (one of the major manufacturers out of India has been recalling and having issues with the blades)
4. ability to find permits to site the blades (famously the Kennedy's are blocking them for damaging the "view" off their compound on the East coast)
5. amount of subsidy that the state power commission / Federal government is providing for the energy (else they generally aren't financially viable)
6. access to transmission lines to bring the electricity back to the urban areas that are most likely to utilize this electricity
7. access to funding (debt and equity) that allows the developer to build and secure the land, materials and equipment to complete the job

Of all these items, people tend to focus on items 1-4 above, with some understanding that without 5 (subsidies or requirements to "source" a certain percentage of generation alternatively), it isn't going to just happen.

However, #6 and #7 are actually the biggest bottlenecks right now, and tied to long term items that the state, local and Federal authorities are doing the least about.

Item 6 - I would view our transmission grid the same way that you'd view the layout of factories during communism; based on a blueprint of assumptions from a methodology long since passed by. Back in the days when you could actually BUILD a transmission line, before you had to snake it around every coyote, plant, and sign of human habitation, the lines were built to connect the power sources at the time (hydro, coal, nuclear) with the population centers and large industrial areas at the time. Basically, we are talking about the 60's and the early 70's. This grid is what it is - in some places it makes a lot of sense, in some places (like near high growth areas in Nevada and California) it makes little sense - but you need to understand that it simply can't be "fixed" by a policy paper or by throwing a few billion dollars at it here and there - it would take a major project, on the order of construction of the original interstate highway system, to fundamentally "fix" the grid to map it today where the people, industry and power sources of the FUTURE will lie, and require massive amounts of political will to fight NIMBY's every step of the way to make it happen. Basically, this means we have what we have and, with only minor changes and upgrades along existing "rights of way", it isn't changing.

Item 7- access to funding for transmission is VERY difficult, for a host of complex reasons. Basically the underlying financial support network for many types of projects was taken away by "deregulation" (I use the words in quotes because it wasn't deregulated, just regulated differently), where utilities in MOST areas could recover these types of infrastructure costs in the "base" rates charged to customers. Today generation has been mostly deregulated (meaning no one is building anything except for "toy" alternative projects and gas-fired peak plants) and the local distribution company (which is saddled with buying power and makes little money in the best of times) has to front the bill for transmission. Building transmission is a lonely business - it costs billions, and all it does is lower the price of power to the end customer and can reap a "toll" along the way between the generation site and the power user. Back in the old days, utilities would invest in transmission because it is critical to reliability and allowed them to expand their revenue base, but today these super high risk investments, which face fanatical opposition from local residents, are generally beyond the pale.

Pickens basically gave up because #6 and #7 were not viable.

Reality is going to hit all of the alternative energy concepts, sooner or later.

Cross posted at Chicago Boyz

Tuesday, July 07, 2009

Single Family Mansion


An interesting pastime of mine is walking past the various real estate signs in my neighborhood watching them "one up" each other. Here is something even I saw that struck my eye for a condominium development - a single family "mansion".


Here is an example of a single family mansion (that is part of a condo development) in River North. You can see a building that looks like a two flat on top of the parking lot in this building, about 10 stories or so off the ground.

That would be ODD to live there. You would go into a condominium entrance, get on an elevator, get off, and go into your "house"? Who are your neighbors? It just seems like a really strange idea. Why wouldn't you just buy a mansion "on the ground?"

Monday, July 06, 2009

The Very Best Burgers On The Grill

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Everything I grilled and BBQ’d last weekend went far beyond my expectations and those of my guests. What stood out most were the humble burgers.


Burgers on the grill can be tricky. I have experimented with every suggestion that has come along from mixing spices and vegetables in the meat to grinding my own cuts to using butcher shop "gourmet" patties formed from steak tips to adding bacon, andouille sausage or even extra pork fat. Results were mixed.

Through trial and error I found it best to leave the lid off and grill them over open hot coals since covering the grill was guaranteed to overcook them. I would flip them only after juice oozed out the top of the raw side. After flipping I would wait for the ooze again and remove them from the heat and quickly serve and eat. This is grilling, not BBQing and burgers must be closely watched and coddled. The results were always a guess.

There were times when the meat was dry and hard to swallow, other times the center was raw. About 50% of the time they came out perfect. That’s a ratio that’s unacceptable to me even if the meat is cheap. My goal is 100% outstanding meals each and every time. My guess would be I am at about 90% there, not bad but not good enough.

Being a subscriber to Cook’s Illustrated I remembered a past issue with a recipe for well-done burgers. Of course it was dismissed by me even if Cook’s published it. Well-done? HA! From the bible of outstanding homemade cuisine? Well-done meat?

Undercooked ground beef can be dangerous, I know. Been taking my chances for years without incident. But due to my inquisitive food nature this well-done burger recipe deserved a shot

The Cook’s article by Matthew Card claims, “the reason a medium-well to well-done burger becomes dry and tough is because collagen, a protein in muscle fiber, seizes when heated beyond 130 degrees, squeezes the meat tissue, causing it to expel it’s juices.”

With pork and fowl brining is the best way to keep meat moist and tender, brining beef does not work the same. What to do to avoid eating a hockey puck on a bun? Card had the solution. Add bread and milk. Yep, bread and milk. Sounds like meatloaf.

But wait, there’s more! Here’s what to do for outstanding, beefy-flavored burgers that turn out delicious. I know, I overcooked them according to directions and they were by far the best burgers I ever made.

Take a slice of plain white bread and cut into ½” squares discarding the crust. add 2T milk, ¾ t salt, ¾ t pepper, one clove chopped garlic and 2 t Worcestershire sauce. Mash all ingredients with a fork.

Take 1 ½ lb. ground beef (I used 85% lean ground round) and break it up into small pieces over bread mush and mix together. Form patties (I prefer ½ lb. monster patties).


Pile coals on one side of the grill leaving a section of no coals, the cool side. Grill over hot coals for about 4 minutes, flip and wait 4 minutes more. While the onions grilled and the buns toasted I placed the patties over the cool side of the grill for another three minutes.

My daughter, who is more of a food perfectionist than I am, said these were very juicy and beefy flavored. She gave me four stars.

I suggest you give this method a try. It’s simple and doesn’t take a lot of prep. There is no way you would know the bread/milk/spice mixture was added.

Beef. The original red meat.
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"Green" parking structure



I was walking down the street and noticed that someone was building a parking structure in River North. This is a great idea since the congestion here is unimaginable for those who don't live in a big city and over the years the ground level lots that used to provide for parking overflow (and the valets for late night dinners) have mostly been chewed up to make room for more large buildings. New condos generally build parking in for their tenants and if they have significant retail space (such as our local Jewel or Bed Bath and Beyond) they will have additional public parking.

One interesting thing I noted was that this parking structure was calling itself "green". This made me chuckle a bit because usually nothing associated with autos is considered "green". Here is a link to a web site that describes how they are calling it green, and I guess there is some substance to it - they are putting wind turbines on the roof to provide power and doing some other elements to reduce power consumption, along with a plug in for electric cars (should they arrive). I also noted that they were sourcing materials locally to reduce the amount of long-haul driving to bring the materials onsite.

I will say that this seems to have more substance than the "green" condos I saw in bucktown.

Sunday, July 05, 2009

36 Hours In Madison

I see that the NYT (boy do I hate linking them, but it is an interesting article) spent 36 hours in Madison. I haven't done a good fisking in a long time, so here goes. My thoughts will be in italics after each activity. First off, I am happy they came when the weather was nice. Any time from November to May is usually too crappy to have much fun.

Friday
3 p.m.

1) GLIMPSE OF GRIDIRON
University of Wisconsin football inspires obsession in Madison, and even in much of the off-season, you can share a little of the excitement with a tour of Camp Randall Stadium (1440 Monroe Street; 608-263-5645; www.uwbadgers.com/facilities). Walk on the field, glance inside the locker rooms, check out a luxury box and pose with a statue of the former coach Barry Alvarez. The free tours are normally for groups of 10 to 75 people, but individuals can latch on with a scheduled group; check for availability at least two weeks in advance. There are no tours from mid-November through late Apirl, and dates are limited during the football season.

This is interesting if you have never seen the inside of a stadium before. If you are not interested in sports, there are a ton of better things you could spend your time on. By the way, the statue of King Barry is outside of the stadium, so if you really need your photo with it, that can be done without going on the tour.

5 p.m.

2) BEER OR BOTANY?
Drink in views of Lake Mendota, one of the lakes that give Madison its miles of waterfront, along with your pint at the Memorial Union Terrace at the University of Wisconsin (800 Langdon Street; 608-265-3000; www.union.wisc.edu/terrace), an outdoor four-tiered space with candy-colored chairs, a lakefront path and live music in the warm months. Or for quieter outdoor relaxation, try the Allen Centennial Gardens (620 Babcock Drive; www.horticulture.wisc.edu/allencentennialgardens), 2.5 acres surrounding a Victorian building. Stroll Allen’s 29 gardens from a path lined with day lilies by the dozens to a French garden where the shrubs are trimmed in the shape of fleurs-de-lis.

Well, I have never been to that Allen Centennial Gardens, but it sounds neat. I have spent a lot of time on the terrace drinking beer, and I will tell you that it is one of the best places to have a beer in the universe. Skip the garden, and relax on the terrace.

7 p.m.

3) PRAIRIE PROVISIONS
Madison’s growing culinary scene pulls diners in two very different directions: far from the prairie with dozens of ethnic restaurants and right back to it with an emphasis on the bounty of Wisconsin’s farms. Harvest (21 North Pinckney Street; 608-255-6075; http://www.harvest-restaurant.com/) offers sophisticated seasonal dishes and an extensive wine list in a soothing setting of soft lighting and buttery yellow walls. Try the porcini-salt-rub angus tenderloin with celeriac purée ($36) or the house-made tagliatelle ($18).

Harvest was a very good choice, I can't say a bad thing about it.

9:30 p.m.

4) WORLDLY REFRESHMENT
Restaurant Magnus (120 East Wilson Street, 608-258-8787; http://www.restaurantmagnus.com/) has a cocktail menu that spans the world, from the Viking, a tincture of port, vodka and Giffard Blackberry Liquor ($7.95) that pays homage to the Caipirinha ($6.50), the national cocktail of Brazil. The cuisine is Scandinavian, and live music, mostly jazz, plays weeknights at 7 or 8, weekends at 9:30.

The last time I ate at Magnus was probably five years ago. It was incredibly loud in there and this is NOT a cheap date. The food was marginal but the noise was insane. I don't know if it is because of the way the place is laid out or what. I haven't been back since. Maybe I should give it another try. The jazz bands they have are pretty cool, if that is your thing.

Saturday
9 a.m.

5) BIKING AMONG BADGERS
Centered on an isthmus between Lakes Mendota and Monona and surrounded by conservation land, Madison is a haven for outdoors types and one of the most bicycle-friendly cities in the country. For some easy exploring, join the Madison biking crowd by picking up a rental at Machinery Row Bicycles (601 Williamson Street; 608-442-5974; http://www.machineryrowbicycles.com/; $20 a day), which sits on the bike path around Monona. Ride around the lake or head over to the 1,260-acre University of Wisconsin Arboretum (1207 Seminole Highway; 608-263-7888; http://www.uwarboretum.org/).

A great activity. I have written extensively about how Madison and Wisconsin are biking meccas. But I have one issue with the above "bike path around Monona". They are talking about LAKE Monona, and the bike path does NOT go all the way around it. There is only path around about a quarter of the lake, from the southwest to the north. The rest you would need a pretty good internal compass since it is all side streets. But there are plenty of paths that hook up to the lake paths that are there. It is a popular thing to run or bike around Lake Monona and I have done it many times.

1 p.m.
6) THE ARCHITECT
These days Wisconsin wants you to know it was the first and favorite home of Frank Lloyd Wright, though in his lifetime the state wasn’t so sure. Wright’s vision for a sprawling civic center was rejected in 1938 by one planning-commission vote and though it later won approval, remained unbuilt. In the 1990s, Wright’s design was resurrected, and Madison built Monona Terrace (1 John Nolen Drive; 608-261-4000; http://www.mononaterrace.com/), a community and convention center, with a terrace that curves along the lake. Its open design and tinted windows reflect the water below, and its roof garden and cafe offer the city’s best water view. One-hour tours begin daily at 1 p.m. and are $3; $2 for students. One group in Madison that did appreciate Wright in his lifetime was the congregation that hired him to design the Unitarian Meeting House (900 University Bay Drive; 608-233-9774; http://www.fusmadison.org/), completed in 1951. It was built with native limestone, copper and glass. Tours, with a suggested donation of $5 to $10, are on weekdays and Sundays, but gawking from the outside is free anytime. It’s unmistakable, with a dramatic triangle roof. The building itself is a triangle, symbolizing hands clasped in prayer.

Can't argue with this. You can find many examples of Wright's work in and around Madison. I might suggest a nice drive to Spring Green and Taliesin as well. As far as the Unitarian meeting house in concerned, I waltzed in there one day and asked permission to take some photos and the people there were happy to let me. I posted many of these in February 2005.

3 p.m.

7) MAKE MINE CHEESY
The Old Fashioned (23 North Pinckney Street; 608-310-4545; http://www.theoldfashioned.com/), serves the food that “makes Wisconsin so Wisconsin,” so it’s no surprise that an entire section of the menu is devoted to cheese. The bar and restaurant is reminiscent of a late-19th-century saloon filled with Grandma’s antiques, but with a hipster flare. The cheese curds ($6.95) are a must for sampling, as is the spicy bloody mary ($7), which is served with at least three seasonal garnishes — one drink was festooned with a brussels sprout, a radish and an onion.

Can't comment on this one, never been there.

8 p.m.

8) ANDES EXPRESS
The Inka Heritage (602 South Park Street; 608-310-4282; http://www.inkaheritagerestaurant.com/) is one of the brighter spots on the city’s culinary scene, and it’s not just because of its fluorescent walls and lively art. Diners are transported to Peru via dishes like fire-roasted beef heart ($8) and fried yuca ($6). The sweet milk jam ($6), made with cinnamon and port wine, is a sinfully sweet way to end the meal.

Funny they mention this, my wife and I ate here just a few weeks ago and it was outstanding. We did have the beef heart for the appetizer and it was fabulous. The place is a bit spartan, but if you don't mind that, go for it. Cheesy music on in the background too.

10:30 p.m.

9) SWING TIME
Madison is a late-night kind of town, especially for fans of live music. Check out a show at the High Noon Saloon (701A East Washington Avenue; 608-268-1122; http://www.high-noon.com/), a large Western-tinged club with a balcony for catbird views of bands. The club opened in 2004 and is operated by the former owner of Madison’s well-known O’Cayz Corral, which was destroyed by fire in 2001.

Great place to see a band, as Carl will attest. This is where we saw the most important band in the world, The Electric Six, last fall.

10 a.m.

10) DOUBLE COMFORT SCORE
Any restaurant that spells out its name in large Scrabble tiles near the front door is bound to have a funky-nerdy-vibe. Lazy Jane’s Cafe and Bakery (1358 Williamson Street; 608-257-5263) becomes crowded and loud but exudes the coziness that comes with a lazy Sunday poring over the newspaper or catching up with an old friend. The food is similarly comfortable, with scones, grilled cheese sandwiches and a seitan scramble, filled with peppers ($6.50), onions and mushrooms and good enough to impress an avowed meat eater.

Never been there. But it would be good to get a little flavor of Willie Street before you leave. It is a pretty "eclectic" place, where many washed out hippies live, and you will see other strange sights as well.

11:30 a.m.

11) PADDLE OR SHOP
Lakes Monona and Mendota are usually the first choices for fun on the water in Madison, but Lake Wingra, tucked south of the university arboretum and the Henry Vilas Zoo, is also an option. Rent a canoe, kayak, rowboat or paddle boat at Wingra Boats (824 Knickerbocker Street; 608-233-5332; http://www.wingraboats.com/; starting at $12 an hour). Or for something landbound and livelier, stay downtown and stroll State Street, which links the Capitol with the university. It’s a pedestrian thoroughfare brimming with boutiques, restaurants, museums and bars. Many shops are open by noon on Sundays. Check out Anthology (No. 218; 608-204-2644; http://www.anthology.typepad.com/), a whimsical boutique filled with colorful crafts; the Soap Opera (No. 319; 800-251-7627; http://www.thesoapopera.com/), a fragrant repository of soaps, lotions and potions; and B-Side Records (No. 436; 608-255-1977; http://www.b-sidemadison.com/), a trove of vintage vinyl and CDs, and a showcase for many of the city’s bands.

If I had my choice I would pick the canoeing. Lake Wingra is pretty beautiful and very small. Our family has enjoyed canoeing there many times. State Street has a bunch of shops with stuff you really can find in a lot of other places.

In general, I think the NYT did a pretty good job. Of course, living here for 15 years now there are some things I would substitute, but you could certainly do worse in 36 hours here. Whatever you do, DO NOT come here in the dead of winter, unless you have some strange fascination with feeling what a -50 wind chill feels like.

Your (Wasted) Federal Tax Dollars At Work


One of the most basic concepts in real estate is TIMING. There is a time to buy properties (when the costs are low) and a time to sell properties (when the prices are high). This is such a basic concept that even a third grader could recite it.

How you can tell the difference between how the GOVERNMENT operates (with your tax dollars at risk) and how an INDIVIDUAL would choose, if it were their own money? Here is a classic example.

The old US post office in Chicago is a giant structure rising over I-290 (the main highway into the city coming in from the East) that has been abandoned since 1995, when a new post office was built.

While the Chicago real estate market absolutely boomed through the period from perhaps 2000 through the 2007-8 crash, the US government was unable to execute a deal of any sort. There were various plans to do so, but they didn't reach a deal, and anyone who knows a government bureaucrat knows it is better to be "safe than sorry". If the terms weren't perfect and there was some controversy, just let it lapse, and who cares, your pay is the same, either way.

So here we are - in mid 2009 - when the commercial real estate market is at an absolute and total nadir. I am not a real estate expert but I would have to say that it is the worst market, timing wise, in my entire lifetime.

So NOW, in the worst market in decades, perhaps since the Great Depression, the US Government is choosing to auction off this post office building. Here is a link to the auction site. The suggested minimum bid is $300,000, when they were entertaining offers as high as $300 million per this Chicago Tribune article that were never consummated.

While I don't know what they will get for the building (the auction is in late August) anyone with even the most basic sense of the real estate market will tell you that they are executing this auction at the worst time possible.

Ask yourself this question - will the government hold anyone accountable for the lost taxpayer revenues between what the building WOULD have reaped had they been able to sell it ANYTIME between 1995 and the real estate crash? Of course not. They don't actually care enough about your dollars to judge performance on that basis.

And this is why putting more assets and activities in the hands of the US government will inevitably lead to waste and lost opportunities on an ever grander scale.

Cross posted at Chicago Boyz

Health Care and Static Analysis



PANAMA AND ESCAPING HIGH US COSTS

One element that is generally not well considered in our health care debate is the fact that individuals will react (over time) to market signals and attempt to make rational financial decisions. A recent article from Business Week called "Panama - It's the New Florida" with the tag line
Quality health care and low costs are luring lots of U.S. professionals

is useful to provide some background on this issue.

This article uses hyperbole - the total population of Panama is a bit over 3 million and U.S. residents are a small fraction of that total, while Florida has a population of 18 million - but the thinking is spot on, long term.

They mention a US citizen who has Parkinson's disease and says
Researching rates in Seattle, she found that nurses run $25 an hour. In Panama City, where she has lived since 2007, they cost $25 a day.

Going overseas for medical work has a long tradition; generally it was the wealthy from Middle Eastern countries who came to Europe or the USA to receive advanced treatments. In recent years citizens of many nations featuring socialized medicine such as Canada travel overseas or to the United States to bypass waiting lists for critical procedures.

COST OF HEALTH INSURANCE

The most likely individuals to leave based on economics are those who retire early (like those in the article) and are ineligible for Medicare, which starts at 65. According to this survey (which is quite interesting, I recommend you click through and read it) - here are some numbers based on 2006 premiums and the survey was published in December, 2007:

- the average cost for a family aged 55-59 is $7881 / year
- the average cost for a family aged 60-64 is $9201 / year

HOWEVER, the average policy cost varies significantly, by state. The study doesn't break out what a family policy for ages 55-59 or 60-64 would be in a high cost state, so I am going to "guesstimate".

The average policy cost overall for a family is $5799 / year (across all age ranges). The lowest state is about 50% of the total (it was Wisconsin), and even throwing out Massachusetts (which had a change in 2007) the next highest was New York at about 250% of the average.

Thus if you extrapolate your age AND the fact that you come from a high cost state, you can figure the following:

- the average cost for a family aged 55-59 could be as high as $20,000 / year
- the average cost for a family aged 60-65 could be as high as $23,000 / year

Let's say you retire at 55 and are in good health and live in New York, where the weather is crappy and the cost of living is high (since I live in Chicago and the weather is even crappier, I can say that). If you are in decent health, why pay $20,000 / year when you could go away and "pay as you go" somewhere like Panama where they have decent health care options. Once you are over 65 and your health starts declining (and getting more expensive), you could always move back to the US and get on Medicare at which point you won't care much about the costs.

IMPACT OF BEHAVIOR ON FINANCIAL VIABILITY

For any kind of "all-in" group health insurance scheme to work financially, there has to be subsidization of the poor from the wealthy. The system needs the high earners to contribute more than they consume, especially if they are relatively healthy and thus not consuming expensive services.

However, these high income professionals who are NOT utilizing health benefits to an excessive degree would be ABSOLUTELY the ones most likely to look for alternatives to avoid being a captive individual subsidizing the system. This Panama article, while it does not focus on health care exclusively, is pointing out exactly those most likely to leave.

As for the tax impact, at a high level if you are self-employed you can deduct your health insurance premiums against your gross income (which reduces it effectively by your overall tax rate, say 30%) but if you are not self employed then you can only deduct it to the extent that it exceeds 7.5% of your adjusted gross income.

Thus estimates that show the US health care costs (and revenues) and neglect to take into account that the most mobile and wealthy citizens have CHOICES of where to live will not predict accurately what will in fact happen.

While US citizens may not typically migrate overseas, this is an established solution to high taxes in other countries. The UK, for instance, has always had a large population outflow of retirees, especially to Spain. Much of this is due to the fact that UK taxes are punishing (and the weather isn't so great) and UK citizens are adventurous enough to leave the country of their birth in order to take improve their standard of living.

Countries outside the US also will respond to these opportunities. Panama and Costa Rica are attempting to be more friendly to US retirees because they know that they represent an opportunity for their economy. If health care can be brought up somewhere close to US standards (basically by walling off poorer locals or migrants) for at least preventative and maintenance care (if not for high tech procedures) then they will be able to draw in those individuals who can bring their wealth overseas and also bask in the beautiful weather and scenery.

I remember when I was traveling in Australia once and sitting on a plane next to an elderly gentleman and he looked over at me and asked me if I was emigrating. I honestly was taken aback - I had never thought about moving overseas. Perhaps the US citizenry will start taking a wider view of living outside of the USA if taxes and regulations become too punishing.

Cross posted at Chicago Boyz

Saturday, July 04, 2009

Big Flags and the 4th in Chicago



For the 4th of July Macy's (formerly Marshall Fields) puts a gigantic US flag in the lobby of their down town store. Here is a picture looking up from the main lobby.



And here is a picture looking down from one of the upper floors.



The Wrigley building had a giant flag on the side, too - you can see it adjacent to the Trump Tower. Maybe the Donald will want to put the greatest flag ever on the side of HIS building someday!

Friday, July 03, 2009

Oh Boy! A Whole Weekend Of Grilling...

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The 4th of July is my favorite holiday of all!



Most of my IED's will be reserved for detonation Saturday night.

Think I will kick this thing off tonight with the simple burgers on the grill.



No Lizzard Kings, just a homemade Burger Kings tonight. Tomorrow, who knows?
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The Face of Stupidity

At various times I have written about the "science" of project management, which claims vast increases in productivity and its new roots (mainly from the 1950's) but in fact compares unfavorably against many historical projects, such as this post on a railway built in Skagway, Alaska in a rapid fashion in a brutal climate over 100 years ago. This isn't to say that project management isn't important, or that it shouldn't be viewed as a critical skill set, but just to say that a proper historical perspective shows that project management has been around forever in various guises, even without mumbo-jumbo technical jargon created expressly for the field.

A recent article, with published photo, in the "PM Network", showed the extreme limits of someone swallowing the methodology hook, line and sinker. I kept the caption with the photo but here is the text:
Companies want specific industry or technical experience rather than project management experience, which surprises me.
Let's think about this astonishing statement, for a minute. When a company is hiring a candidate for projects, and they have multiple candidates to choose from (which is pretty much the norm with today's economy), why WOULDN'T they look for someone from their industry (say, energy), with a specific technical capability (perhaps engineering), along with project management experience.

Project management expertise is mostly a social skill (ability to communicate, lead) along with some tools (planning diagrams, checklists, budgets, and an overall plan) that can be picked up and refined over the years. However, specific industry skills often take years or decades to hone, and technical expertise is often acquired through college or through dedicated programs with direct experience.

The fact that this project manager felt he could just walk in the door at a company and pick up their entire industry and the technical nature of the project as an afterthought is just striking. This shows how desperate companies must have been for talent during the booming economic years - because this model of hiring and planning is clearly less efficient than finding someone with project management expertise AND technical and industry skills appropriate to the job.

I am not trying to "pick on" this guy - many people are out of work today through no fault of their own and the job market now is extremely difficult, or nearly even frozen. I am just surprised that he would say out loud that he is SURPRISED that companies would look for a candidate who had deeper and more relevant expertise and wasn't just a "generic" project manager.

Maybe "the face of stupidity" is too harsh, but at least "the face of naivete" or perhaps "a clear sign at how desperate managers were to hire staff in the last economic boom".

Cross posted at Chicago Boyz

More River North By Night



I took some advice and hooked up my gorilla tripod to the deck and was able to take this great photo of the Sears Tower (I'm not going to call it Willis Tower) decked out in 4th of July colors with the moon overhead. Looks good!



For a recent cubs game a blimp was hovering low over River North... I tried to get decent photos to no avail so just took a brief movie on my camera.

Just Because I Like It

Milo put a link to this photo up over at James's place. Click for bigger. Don't know if it is real or not, but I love it and think it quite appropriate for a great looking weekend for grilling. Annie probably won't find it as funneh as me, but there is always a spare veggie kabob on the side of the grill for her.

Thursday, July 02, 2009

TGMPCBC, Part Five - Region Two

Here are parts one, two, three and four.

Carl has been chomping at the bit for another Crappy Beer Challenge post and I have a couple in the can, so here we are with the 4th of July edition. Today in Region Two, we have a battle of the behemoths, as two of the beers with largest market share in the US square off. We have LaBatts Blue vs. Miller Lite, and Coors vs. Bud Light, with the winners facing each other for a spot in the coveted final four.
This is the pour of the LaBatts vs. Miller Lite. Almost all of the beers I have been tasting pour like this, then within about 30 seconds lose their head.
The first battle came to be called the battle of the beers with no flavor.

Beer 1 - smells a bit musty (so many of them do), with a weak, watered down flavor. No aftertaste.

Beer 2 - smells a bit more moldy, with almost zero flavor or aftertaste.

The winner, by virtue of having just a small amount of flavor vs. no flavor is Miller Lite! And a cheer goes up from Carl's condo in Chicago. In my haste to dump these losers out I forgot that the winner of this contest moved on, and was to be tasted again!
No matter, I remembered that I had bought Carl some Miller Lite in the plastic bottle as a reward for completing his quarter marathon here in Madison. I still had some left that I was using up as brat hot tubs. Whew!

On to the second contest, Coors vs. Bud Light.

Beer 1 - A slight tinny smell, had a little fresher flavor, but with a dreadful alcohol like aftertaste.

Beer 2 - had a lot of STANK, but a not horrible taste.

This one was very close, and eventually I had to decide if I was marooned on a desert island and had to pick one, which would it be.

The winner was Bud Light, and we do indeed have our battle of the behemoths for the place in the final 4!
My taste buds were still in shock after this tasting, so I took a few minutes to regroup and then did a tasting of Miller Lite vs. Bud Light. I knew that moldy stank would prove to be Bud Light's undoing, and Miller Lite gets the highly desired photo with me as our second representative in the final four. Lite will face Milwaukee's Best Ice in the semifinal.
Two more regions to go before the semifinals.

Wednesday, July 01, 2009

Weird Chicago


I usually carry my camera as I pass around Chicago on foot and try to capture anything that seems different or odd. Since my photos are famously low quality I try to make up for it with a high quantity.

In the upper left - this is a photo of a house in a VERY expensive part of River North, an old brownstone. But looking in the window I see... one of those "skull" vodka bottles - It is called "Crystal Head Vodka" and the link, strangely enough, comes to a sales pitch by Dan Akroyd.

In the upper right, a photo of Coyote Ugly, in River North, now defunct. Their web site mentions that many of their bars closed across the USA, but they still seem to be around in others. Strangely enough, someone walked up to me on the street and asked if I knew where Coyote Ugly was, and I did, and I also told him it was closed and directed him and his buddy to Hooters nearby. Very odd that I was the one of one thousand people who would know the answer to that question. Even funnier is the fact that at first the Coyote Ugly sign in the window said it was "closed for remodeling" - Ha Ha how would you even remodel that crappy place? Would you perhaps clean the floor or something? It was just benches and a bar. Maybe they'd fix that dentist chair that the girls spun guys around in.

In the lower left, a photo of perhaps the worst remodeling job I have ever seen. This is a main street, Ohio in fact, and someone put the crappiest addition ever atop a brick building, and then festooned it with antennas. Why do we even pretend to have zoning laws? Worst yet, it looks awful from above, and unfortunately I can see it in all its glory every day right outside my balcony.

In the lower right, we walked by the Lincoln Restaurant, on the corner of Lincoln and Irving Park Road, and they have BANJO MONDAYS! Now that is a demographic I didn't think was that popular in Chicago, but what the heck do I know, after all people drink PBR, too, and think that is cool nowadays.

Cross posted at ChicagoBoyz

The Blame Game

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CUBS RULE! And rule #1 is – never ending futility will fill the seats. Mission accomplished!


Here’s my bi-annual (not a gay slur, I swear) anti-Cub rant so grab your ankles you die hard Cub fans.

The media blame game has begun and it isn’t even the All-Star break. Odd for a Chicago sports media that spoons feeds the masses from a quart of Ben & Jerry’s Triple Cubbie Butterfinger Crunch.

It doesn’t look too good for Chicago Cubs manager, Fat Lou Pinella. As the team slips back into traditional Cubbie mode after two years of complete post season failure he appears to have lost the players respect without even knowing it. Lou’s oblivious to the term “June Swoon” and this year it started in April.

Even the local sports hack “homers” are turning on the Cubs. One suggests the team trade amateur boxer Carlos Zambrano.

Not a bad idea. Big Z is unhappy for a guy hauling ten mil a year from the Tribune basement vault. It just shows you money is everything. He flaunts his lack of respect for Fat Lou with dugout tirades, beating up Gatorade containers and not following orders on the field. I think Zman has figured out that Fat Lou is a tired old slug who can’t control or communicate with his players therefore the Cubs will be going nowhere in October. So why not go through the motions while collecting ChiTrib millions? Go for it Z!!!

Last Sunday Zambrano threw a wild pitch during a sacrifice bunt and followed that up by hitting the batter (second time in one game). He threw an embarrassing 6-0 loss against the White Sox allowing the Sox to win their homestand against the northside underachievers. HOLEECOWWW!

Here’s another local sports hack calling for Fat Lou to be fired.


With the club currently in chaos, having an 0-9 past playoff record and a classic Cubbie June Swoon underway launching Fat Lou would be the right thing to do. On top of that, last Friday he kicked the biggest flop of the year, Milton Bradley, out of the clubhouse after calling him a piece of sh!t. If I were Fat Lou I would have choked that bastid instead of verbally labeling him with the obvious.


Problem is Fat Lou to upper management is what Lovie Smith is to Bears upper management. It would be admitting a huge mistake a bit too early for their liking. Better to flounder. Sell the dream, deliver the turd. It’s the Cubbie way.


So what can we expect from a $135,000,000 payroll (third highest in MLB)? Selling a lot of beer to a fool house.

Here’s another wag blaming Cubs GM Jim Hendry.

Quote from Jim Morrisey,” The Cubs' general manager is responsible for signing the .238-hitting, currently benched Bradley to a three-year, $30 million contract before the season.

He is responsible for signing "leadoff" hitter Alfonso Soriano, who is in the third year of an eight-year, $136 million contract. He's responsible for giving Kosuke Fukudome a four-year, $48 million deal in December 2007. Soriano and Fukudome have responded with batting averages of .232 and .260, respectively, this season.”

He really tees off on Hendry.

The Cubs have the worst outfield in MLB with Soriano, Fufudome and Bradley. Catch no evil, hit no evil and throw no evil would be more like it. Soriano is not a big game player period, he’s proved it. Fufudome is a true bust after signing with the Cubs, to much fan and media fanfare. A few weeks back Bradley caught a high fly ball thinking there were two outs against the Twins. There was only one out. After catching the ball he busted a move, looked toward the fans and tossed the ball into the bleachers…while a Twins runner scored from third base. He’s a real major leaguer, no?

The infield isn’t bad if they could hit. Counting on Ramierez as the comeback spark won’t do. Bet they wish they still had DeRosa, hottest player in the league who is now with division rival St.Louis. Heh.


Finally there’s this little gem.

A Cub fan from Buffalo Grove IL threatens a hunger strike IF the Cubs don’t start winning and his name isn’t Dick Gregory. Get this, he won’t begin his fast until AFTER the All-Star break. And this deserves a story with a photo in the Sun-Times? Who starts a diet today? It’s always next Monday next month. In true Cub fan style he should wait until next year.

Pardon me for gloating. The Sox are hardly having a stellar year but they seem to be putting it together lately and providing some professional MLB entertainment. I have to live with Cub fans who taunt me whenever I wear my Sox cap in public. Wrong team, they say. Why can’t your team fill the stands? is another.

I just smile and say, “It don’t mean a thing if you ain’t got that ring”. That shuts them up right quick.


Will Zambrano get traded? Will Fat Lou be back in the booth next year? Will the fan go on a hunger strike? Their record after the All-Star break will tell all. But count on one thing. The drunks will still fill the stands.
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Tuesday, June 30, 2009

Is it Art?


Although I am far from an expert on art periodically I like to look at least through the window at the myriad art galleries that populate River North in Chicago. And right in the window is some art?

It appears to be two baseball bats in a blue felt-lined box.

Hmmm...

Dan Bunyan

Ever chop down a tree? I will get back to that in a minute.

Last Sunday I spent the better part of the day at my farm property doing odd jobs all around the place, on the seemingly never ending quest to get the joint in order. The previous owners really let it go.

I took down some ugly fiberglass off a door and put two coats of primer on it. I gathered all of the firewood from all over the property and stacked it nicely in one area. Why were there so many little piles all over the place? Also, I watered many of the flowers that we have planted and did a few other odd jobs.

We have been looking at a sick apple tree for quite some time - it is only about 1/4 alive and we were told by an arborist that it didn't have long. I decided today was the day.

I fired up my chainsaw and warmed it up. For whatever reason I decided to do a few other odd jobs first.

When I went back to fire up the chainsaw, I. Could. Not. Get. It. Started. No matter how hard I tried. So I decided to fell that crappy tree the old fashioned way and went to work "Paul Bunyan" style.

I bought a decently sized ax a while ago for just such an occasion. This tree was only a foot in diameter. I am here to tell you, it is a lot of work cutting down even a small tree such as that with an ax. My hands and side muscles are still sore from all of the swinging. After I got it down, limbing the small stuff was easy as most of it was rotten, but the live parts, of course, were harder. When I got down to the trunk and larger branches I almost gave up. But then I decided to give the chainsaw one more go and thank GOD it started. I made short work of the rest of the tree and that apple wood will smell nice as it burns over a bonfire later this summer.

At times like this I think of how hard people like lumberjacks and pioneers of old worked. True, my cutting technique was probably not optimal when cutting the tree down, but even so, without power tools it is amazing that those folks that lived all that time ago were able to make ends meet.

Monday, June 29, 2009

Iran and Prognosticators



One of my favorite quotes (I don't even know if it's true) is supposedly from Jack Welch and it is about how he got rid of his forecasting department:
We might be surprised, but we won't be surprised we're surprised
Businesses are often surprised by changes to the environment, even while they tout their ability to master the situation. One company I used to work with had a joint venture with CISCO in the dot.com era - at the time CISCO was touting their advanced financial capabilities, their ability to close the books a few days after quarter end, and most importantly their supply chain mastery that allowed them to accurately forecast demand. Almost immediately after that period of boasting, CISCO had a big inventory write down since they built too far ahead of demand and had to scrap the unsold goods and materials.

To some extent the entire economic situation that we are currently embroiled in relates to a failure to predict the future or forecast accurately - demand was over-estimated, pricing power was over-estimated, and liquidity that was taken for granted vanished in an instant.

While businesses have to face up to their failures (by publishing financial results filled with losses, getting acquired, or going out of business), what about the journalists and "talking heads" on TV who cover foreign affairs?

How many of them predicted that Iran would break out into a mini-revolution? The Iranian regime seemed solid and their hold on the electorate strong; I don't remember talk of widespread unrest, and also of the potential of new communication tools like Twitter to widen the impact of these protests.

Failing to predict critical events is commonplace; less frequent is the media owning up to their limited powers to see the future and the fact that many of their talking heads don't provide much insight. The 24 hour news channels are a void of chatter, scrolling news tickers, and loud updates.

They should take a cue from the Jack Welch quote above and either get much better at what they do (unlikely) or more importantly note their inability to provide much more than real time (at best) views of what has already occurred.

Cross posted at Chicago Boyz

State Tax Review - California

State Tax Review:

Given the recent financial events that have hit Wall Street, real estate, and the average American consumer, the purpose of this post is to look at how our largest states have responded to this fiscal crisis with regards to tax policy. Let's start with California.

For some background - here is a high level overview of state income taxes (circa 2006, hasn't changed much since then on a relative basis). If you go to this section at LITGM you can see all of the tax posts we have put up over the years that cover similar topics.

California:

California is governed by a solid Democratic majority with a Republican governor. The California situation is different than most states in that a 2/3 majority is needed for tax increases, meaning that tax increases are difficult to pass through the legislature. California also has a "proposition" culture, where items are put directly to the voters (such as the famous "Proposition 13" which limited growth in property taxes).

California has a very high "graduated" state income tax (meaning that it is tied to the Federal tax liability, with some exceptions) and this forms a significant portion of their total tax collections. Per this very helpful site, in 2008 47.5% of their total tax revenues came from the state income tax, above the average of 35.7% for all states as a whole. However, this percentage is lower than its total impact - some states (like Illinois) have an essentially "flat" 3% state income tax (at 32% of Illinois state tax burden), but California's is graduated so that they are taking 9.3% on all "taxable income" > $47,000 and another 1% on all income > $1,000,000, making their total tax burden at 10.3% for the highest earners. California is proposing to increase this rate (highest in the US of major states) by an additional 0.25% with their latest budget proposals, to a high of 10.55% (the 0.25% increase was part of Proposition 1A, which was defeated).

Reliance on a high, graduated state income tax is a two-edged sword - during "boom" times (such as the latest economic expansion) high income payers contribute a disproportionate amount to the budget (relative to other states) - but when the stock option gains evaporated starting in 2008, this portion of the state receipts is hit harder than other sorts of taxes (sales taxes, property taxes, gasoline taxes) because income and gains can fall rapidly which immediately reduces collections.

California immediate reached for the lever of increasing sales taxes as soon as the recession hit, raising the state portion from 7.25% to 8.25%, with local additions rising it up to 10.25% in some areas. Raising sales taxes is generally viewed as a "regressive" tax measure, because it hits the poorest hardest because they consume a higher percentage of their total earnings than the rich (the 1% increase was also defeated with proposition 1A).

California also has a very high corporate tax, at 8.84%, which makes up 10% of their total tax receipts. This rate is the highest in the nation, making it a dis-incentive for businesses to move into the state (unless they are able to reduce their Federal tax burden, which will result in tax relief, through various tax strategies).

The Tax Foundation (a non-profit group) wrote an excellent analysis of the California tax situation here. Per the Tax Foundation:

These tax increases are estimated to raise $10 billion, with the extensions from Proposition 1A generating a further $6 billion. California has been struggling to close a $40 billion budget gap between desired spending and expected revenues in its $92 billion 2009-10 budget.

Proposition 1A was defeated, leaving the state's finances in a precarious state as far as balance of payments, although the state faced a huge budget gap in any case.

The overall California situation for taxes is as follows:

1) California is extremely unfriendly to businesses, with the highest Corporate tax rate in the nation. As the Tax Foundation noted, Nevada is next door with a Corporate tax rate of zero, as opposed to 8.84%, along with an infinitely friendlier overall business climate
2) California depends on extremely high individual earners and a high income tax rate for their budget - but these earnings can change rapidly with the evaporation of capital gains and those earners can move their domicile to other states (Nevada, Florida, Texas) with much more favorable state income tax rates
3) the California state sales tax is very high and regressive, since this falls disproportionally on the poor
4) one area of relative favor for California from a state tax revenue perspective is that state property tax collections are low, a legacy of Proposition 13. California was ranked #10 (in 2006) in overall property tax collections, still high relative to other states but less than half of the New Jersey costs

Even with these extremely burdensome tax levels, state government spending galloped far in advance of collections, leaving a gigantic budget deficit. A recent string of proposals to "fix" the budget gap were defeated in May 2009. As of today, the Democratic assembly has decided to push forward a budget that contains tax increases without the required 2/3 votes, which the Governor says he plans to veto, or the state will start issuing IOU's. Per the article in Business Week
The main culprit is the recession, which caused a 34 percent plunge in personal income tax revenue during the first five months of the year.
California now has an "A" rating on their debt, lowest in the nation, per this Reuters article. The state has $57 billion in bonds outstanding, and one way that they may pay bills in the short term is to go into the bond reserves for debt, which is likely to reduce their debt rating further (particularly for those issues), which also increases their long term interest rate burden since they will need to raise rates to raise the same amount of debt. Per the article, the debt rating agencies (Moody's and S&P) are on an alert for a "multi-notch" downgrade, if these events occur.

Generally it is safe to summarize that the state has installed an unsustainable array of programs balanced on very high state income, state corporate and state sales taxes. These rates are amongst the highest in the nation and from all outward indications (to prospective businesses or residents) they are going to continue to rise. Their debt burden, per above, appears to be unsustainable and they have the lowest ratings in the nation, with rates subject to fall further should they take steps that amount to "raiding" their pre-funded debt to pay current obligations.

Keep watching to see how this turns out. For US competitiveness, this is a grave threat, because California used to be a driver of entrepreneurship and great companies. While there are many reasons for the decline, an intentionally non-competitive tax policy (driving away businesses and high-income residents) and loading the state with debt to support a massive array of public programs that are unsustainable.

It is also safe to say the for future potential residents the Democratically controlled legislature continues to push for tax increases, meaning that the future will look more and more like the past, and flashing a big red warning light to anyone contemplating an investment or move to the state.

One favorable kudos for California is that they have a great web site and a series of PDF's and charts for their 2009-10 state budget - go here and read through it if you have the time.

Cross posted at Chicago Boyz