Sunday, December 31, 2006

New Years Eve

Happy New Year to everyone - don't get too boozed up like Carl is doing here.

Google Categories

After a long and arduous time I finally got all of our posts categorized, some 1200 plus of them.

I have to admit I am happy to have categories now, one of the things we sorely lacked in the previous blogger version. But the interface to "tag" our previous posts was designed by a third grader. Let me explain.

So you can put on your screen up to three hundred posts at once, which is great to knock down a bunch of posts that have the same category. But then if you want to advance past this, it will GO BACK to only fifty posts. You can see where I am going with this. For posts 651-700 for example, it took about 10-12 clicks of the mouse to scroll all the way back to them. Then lets say there is only one post from a category on that page. You tag that post, then have to SCROLL ALL THE WAY BACK to that same page again. Ridiculous.

I spent several hours doing this, a little at a time. Thank god it is done. Outside of that I don't have any real complaints about the new Blogger, with the notable exception that they aced the word interface. No spam attacks, and it is free so it is pretty hard to complain anyway.

Crack Chicago Inspection Services

We might pay high taxes in the City of Chicago but as citizens we can rest well knowing that our public servants are doing a salutory job. While walking to work in River North where a new restaurant named "Monda" I can see the repair replacement permit that is prominently displayed. Uh, notice anything slightly wrong with this? Someone didn't notice the difference between straight up and upside down. They did take the time to carefully duct tape this notice up, however, so you'd think a little detail like that might jump out at you...
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Saturday, December 30, 2006

Saddam

In this blog we usually don't talk about things that are "done to death" everywhere else. The death of Saddam was of course welcomed by all of the bloggers here at Life in the Midwest. He was able to compose a last letter and received more compassion than the multitudes that he killed using barbaric methods, as well as an open and reasonably fair trial.

The items that bothered me were as follows:

1) some photos of Saddam being killed were apparently taken officially
2) other unofficial or not-planned-to-be-released footage was also created, apparently

While I was working out today at the club on the big screen TV they repeatedly showed the grainy video / photo of Saddam hanging, although I really couldn't tell what was going on. It could be fake, but it is everywhere.

In today's age there is just no way that you can keep this kind of footage hidden; like photos of a celebrities privates (need to be oblique so we don't get bad traffic) this just flies around the internet at the speed of light. Either make sure that there are no cameras, or just release it yourself. There is no middle ground anymore.

And a shout down to the pathetic tools at YouTube who created the fake videos that everyone is watching... especially onerous are those that tie the supposed video to their 9/11 conspiracy theories. I do hope those people rot in hell.

Back to "cat blogging"...

Coal Fires

Coal is a key fuel, along with natural gas & uranium for the electricity industry. Immense efforts are made to mine coal and then to transport it along railways to the power plants to generate electricity.

Coal can also burn underground. These coal fires can burn for literally thousands of years and consume vast quantities of coal that could have otherwise been burned for economic purposes. In addition, these coal fires emit gases into the atmosphere that are commonly thought to cause global warming. I remember being a little kid and driving in a car through the Dakotas where a burning coal seem was visible from the interstate... but didn't think much of it.

I started looking into this topic when someone casually mentioned that the amount of CO2 released into the air from coal fires was greater than all of the vehicles in North America. This seemed astounding to me; here is a link to an article that is all I can find as a primary source for this factoid.

Putting out these coal fires is incredibly difficult. According to this article featured in the Wall Street Journal, to put out ONE fire in Centralia, Pennsylvania it is estimated that this would cost SIX HUNDRED MILLION DOLLARS. Rather than spend $600M, the government figured that it would be easier to just buy out the remaining residents and abandon the town, although a few residents refused to leave. Here is a site dedicated to the (sad) situation in Centralia that is very interesting. They also have other links to mine fires.

In China, where coal is a primary fuel not only to generate electricity but also to heat homes (which accounts for a significant portion of their horrible pollution problem) the problem is even worse, especially since many of their mining operations can best be described as hapazard. The wikipedia article discusses the Chinese problem along with "burning mountain" in Australia which it is estimated has been on fire for 6,000 years...

Perhaps rather than spending billions on arcane schemes to reduce emissions we could tackle this problem directly, at the source, in China and India, where new fires are arising all the time.

Thursday, December 28, 2006

Most Influential Americans

Top 100 Influential Americans

The Atlantic, a high quality monthly magazine, recently printed an article titled "The 100 Most Influential Americans of All Time" in their December issue. I recommend that anyone who is interested in insightful analysis and commentary subscribe to this magazine.

The top Americans in this list were as follows:
  1. Lincoln
  2. Washington
  3. Jefferson
  4. FDR
  5. Alexander Hamilton
  6. Ben Franklin
  7. John Marshall
  8. MLK Jr.
  9. Thomas Edison
  10. Woodrow Wilson
In any list, you can have controversy. I think that this list was generally pretty well-balanced - they aren't "forcing" someone into the top 5 or top 10 because they need to balance out the nationality, race, religion or sex.

Of all the above, I have the most conflict about Wilson. Wilson was the President as we went into World War I, and although he did recognize the danger of the German empire, he did little to prepare the US for war. He also failed in the post war peace, laying the ground for the rise of Hitler and the rebirth of German militarism, although an argument could be made that this was inevitable. He was also crippled and ineffective after his stroke; although once again it clearly wasn't his fault. His biggest US legislative accomplishment was the creation of the Federal Reserve; the question is whether it would have ultimately been created without him.

FDR made many blunders, and had a bona-fide communist sympathizer as his vice president until he dumped him in 1944. However, I still do admire his virulent enmity for the fascist enemies and die-hard focus on getting the US in the war against Germany & Japan, saving Britain in its "darkest hour". For this, many blunders are forgiven.

Influence in the Arts

There are "side sections" in the magazine where they look at the most important poets, architects, critics, musicians and filmmakers. What amuses me is that anyone cares who the most influential critics are; in reality the impact of the top critics isn't in the top ten thousand in America overall in terms of influence. Filmmakers aren't far behind; they don't consider "popular" filmmakers like Lucas (Star Wars), Scorsese, or Spielberg so they totally miss the mark (Warhol??). Finally, do I even need to joke about how irrelevant the Poets are? Who cares.

For music, there is a legitimate argument. The five most influential musicians are as follows:
  1. Louis Armstrong
  2. George Gershwin
  3. Aaron Copland
  4. Elvis Presley
  5. Bob Dylan
It is hard for me to comment dispassionately upon music because I have a strong personal interest. I either understand a genre or I do not. Plus, we are talking about AMERICAN musicians, so many leading lights are not eligible (the Beatles, Rolling Stones, Led Zeppelin, etc...).

If you look at the genres of music, you need to think of Jazz, Blues, Rock, and Rap (Hip Hop). You could say Armstrong is a jazz musician, but he was really a "pop" musician for his time. For true jazz, you'd need to select either 1) Charlie Parker 2) Miles Davis. These two are the giants of this style of music.

It is funny - Bob Dylan is lauded by critics everywhere; but aside from critics and their perpetual love of his early "folk" work, his influence is not great. No one cares about him except the occasional editor of Rolling Stone magazine or your hippie relative.

On the other hand, if you had to pick (American) people from the 60's who revolutionized the world, you'd pick 1) Jimi Hendrix for his amazing guitar skills and ability to transcend genres (Purple Haze might be the first heavy metal song, and there is jazz and blues across the spectrum) 2) Brian Wilson and the Beach Boys for their timeless surf songs and surprisingly complex melodies, which stand up to the passage of time far better than may have been anticipated.

They also missed the blues entirely, as well as Gospel. For this you'd want to consider Ray Charles, James Brown, Robert Johnson, Stevie Wonder or BB King. Personally, I'd argue for Stevie Ray Vaughan, but only for what I'd like to hear. His limited recorded output before his untimely death disqualifies him.

They ignore rap, when rap / hip hop is one of the few musical genres almost entirely invented by Americans. The most "classic" of rappers (they'd hate that term) and influential ones could be Jay-Z, Dr. Dre, Eminem, Run-DMC, Tupac, Snoop or someone else. I am not an expert but you'd have to select one of them because their influence on the world is flat-out undeniable.

On rock, if you expand your definition beyond the 60's (which most critics don't do) I'd have to say that some of the most influential would be the Ramones, Nirvana, or Metallica. I can't compare them against the others... at this point my head is spinning.

I can't recommend the Atlantic Monthly highly enough and every time I read that magazine, I learn something.

I Get It

Wow I got a lot of good comments from my post of a day ago titled I Just Don't Get It.

I think pretty much everything there was right on. I also received a call from my brother-in-law, who has access to a gunsmith who has been in the business for over 50 years. Here is what the old smithy had to say.

His first question, like my cousin, was why the hell would I ever shoot shorts or longs in the first place and I answered him as before, for novelty's sake. "Just because" I guess.

After that was cleared up, the smith had the following to say. The forcing cone issue is a non starter. No matter the length of the casing, the bullet itself will just scream down the cylinder and enter the barrel - and I will lose accuracy with the shorter casings (.22 short and long).

Shooting a few shorts and longs now and then will have no real effect on the cylinder. However a steady diet of them will and here is why.

Remember that the one cylinder is for the magnums (tempered longer) and the other is for the "rest", which is .22 short, .22 long, and .22 long rifle.

If I shot a steady diet of shorts, for instance, there could occur some scarring on the inside of the chamber, right where the casing meets the bullet. This scarring is from the repeated explosions on the inside wall of the cylinder. This is not a problem in and of itself. The problem comes when after you shoot a BUNCH of shorts in there, and then shoot a longer casing such as a .22 long rifle. That scarring of the inside wall, no matter how slight, will allow a longer casing to bulge into that area, making it very difficult to eject the spent casing. Did I say that clearly enough?

I finally have my answer - and it makes sense. I think I will just put through a cylinder or two of shorts and longs for novelty, like I said, then stick with .22LR afterward.

Blogolution

Astro puts up some thoughts about his blog and blogging in general here - please read it, I am not going anywhere.

Seems like we started in the same place - putting up a few random thoughts about the worst of all possible subjects, politics. If you plow through the archives of my blog in the first few months you will see some truly horrific things there as far as my posting and writing are concerned.

But Astro has come around, like me, to not caring so much about politics. I think I posted something like that a few months ago but don't remember exactly when. I admit I am still amazed that some very awful blogs get thousands of hits per day, and some truly terrible sinkholes like Kos (no, I won't link) get hundreds of thousands of hits per day. Here, we get between 100 and 150 uniques per day, day in, day out unless we get linked by somebody else.

As Steve has said over and over, political blogging is dead. But "catblogging" as Astro calls it is most certainly not.

One of the rules here to post is that you are not allowed to blog about politics for the most part unless it is part of a larger point you are making - and no fisking of idiot New York Times columnists like Paul Krugman. My six year old daughter can do that.

As Astro notes, he learns a lot by blogging. Seems he is holding himself up to a higher standard than most blogs who block quote and say "see?" or "wow".

The essays you see there and on this blog most of the time take time to research because we want it to be right. For my essay on Trans Fats that I put up several weeks ago I pretty much took off a whole week of blogging to do research on that subject. So it isn't just the essays that are interesting to write - it is the research, and separating the wheat from the chaff.

We don't necessarily have to put up a huge, well researched essay every day either. I am writing this just before I go to work and all of what you see here is coming right off the top of my head in a rather stream of consciousness manner. It's fun to post photos of Bears games and Chicago and Madison and whatever.

And that last sentence sums up a lot of what I have been thinking lately. Besides the education we get from posting essays here, it is fun. Isn't that OK? I think so.

I have moved on from bagging on other blogs for the most part and am concentrating on improving my blog and myself. I would say that is mission accomplished, for this blog anyway.

Wednesday, December 27, 2006

Energy, Taxes and Expropriation

When I was back in the electricity industry there was a large movement to invest in assets overseas. The plan (on paper) was to invest in generation, transmission and distribution assets for electricity, gas and water around the world where infrastructure was poor and the local authorities didn't have enough money to make the necessary upgrades. Many of these countries lacked the rule of law and had weak capital markets, as well as uncertain political leadership. Some prime examples of this sort of investment include Dabhol in India by Enron and Endesa in South America.

These plans nearly brought the companies to ruin. Why? Because when you invest in "hard assets" overseas, you are at risk of Expropriation. What is Expropriation? The exact definition is disputed but what it typically means is that overseas investors have their local property taken over and aren't paid the market value for this property, or aren't paid anything at all. During a revolution assets are often expropriated. A key example is Cuba, where the dictatorship under Fidel Castro took over assets from their rightful owners, both companies and people. Ask any Cuban living in the US and you are likely to get a long discussion of how this worked.

Power assets are particularly susceptible to expropriation. Why is that? Because the assets physically sit on the ground and the local government usually requires that local labor be substantially involved with the construction and operations. Once the assets are sitting on the ground and operating, you can't just "pull up stakes" and leave, or the local country essentially just takes your investment for free.

Smarter countries can play games that essentially accomplish the same thing. If you have a power plant, it often has to sell power into the local grid. Instead of paying you in dollars, they can pay you in the local currency, which has depreciated in value significantly against the dollar. Russia recently accomplished this same goal in a semi-subtle manner with the huge investment that was made by Shell in Sakhalin by manipulating environmental claims against them and making Shell see the writing on the wall that they were going to control it no matter what Shell's contracts or negotiations with prior governments had indicated. In some ways Russia and Sakhalin represents a double-expropriation - first the Russians took this from Japan during the waning days of WW2 (no peace treaty was ever signed on this topic) and then they took the investment away from Shell (de-facto).

Now that I have gone through what expropriation means, the question arises - what does this have to do with taxes?

If you look at tax literature in the US the common assumption is that it is better to defer taxes paid to the government to some future date. The theory behind the 401(k) plan is that you put aside money today that is NOT taxed and it is able to grow tax-free for years and years. When you take this money OUT of your 401(k) it is taxed as income in the year you pull out the money, and the assumptions are 1) that your tax rate will be lower because you will be retired and making less current salary income 2) that all the tax free growth compounded for years and years provides significant growth.

However, this math works assuming future tax rates are stable. On the other hand, if the US is running significant deficits, there is nothing to stop the US government from raising taxes on 401(k) assets right when you need them, at retirement. The government would look at all these "captive" 401(k) assets sitting there as a giant honey-pot; let's say that you are a Democrat and for the most part (aside from Hollywood) your electoral voters are poor. Since the Republicans already hate you, you have nothing to lose politically by slapping a big tax on 401(k) withdrawals above a certain limit, maybe the limit that YOUR voters receive from social security. This is a pain-free method of the Democrats redistributing your wealth to their voters. And what could you do about this? NOTHING. Because your assets, just like the power assets overseas, are trapped; at some point you have to "blink" and withdraw your assets for retirement or they are useless to you; thus the government knows that it can out-wait you.

The Republicans, in one of their few pro-business moves, created the Roth IRA. The Roth IRA works in reverse; you pay taxes NOW and then it grows tax free forever, as long as you meet certain rules (waiting until you retire or using it for specified purposes). Unfortunately the Roth IRA is crippled with low income rules meaning that it is not usable by higher income individuals, the same individuals that would be most liable for expropriation. The Roth IRA shields you from tax rate creep; however, the government could still implement a "windfall" tax on Roth IRA's like they threaten to do on oil companies from time to time.

It is a bad assumption to make that future tax rates will be lower than current tax rates. Capital gain taxes are now low; for assets held for years the rate is only 15% while the ordinary income rate can be 28% or 33%. If you have an investment (i.e. land in Arizona) and it has appreciated, you may want to seriously consider selling the asset and taking the tax hit if it appears likely that the Democrats will abolish the capital gains tax breaks and treat it as ordinary income. The tax hit today means 1) money out of pocket 2) lack of future growth in the asset. However, the difference between growth and a 33% tax rate is very significant when you compare it to no growth and a 15% tax rate. For example, if you bought something for $100,000 and sell it for $200,000 at a 15% tax rate, your gain is $100,000 and your tax liability is $15,000, for a net gain of $85,000 after tax. If you buy that same asset for $100,000 but hold it longer so it is worth $230,000 and sell it for a gain of $130,000 but pay at a 33% tax rate you pay $42,900 in taxes and have a net gain of $87,100 so it is about the same. This is not to say that you should make "economic" decisions based solely on tax consequences; but if you are on the edge of a decision (i.e. to keep an asset or sell it) and you think that a tax change is coming that will be for the worse, it should factor into your decision.

I do see articles from time to time talking about the immense tax increases that will have to be imposed by both the states, local municipalities and the Federal government when you factor in their pension and medical promises for employees as well as social security for everyone. However, I rarely see the other side of this advice, which is that deferring taxes indefinitely and then hoping that rates will be lower in the future may not be a sound plan.

I don't have the certain advice but do believe that it is a consideration that should exist in your mind. Ultimately the "solution" for tax expropriation is to move money offshore and out of the reach of tax authorities; I abhor this solution because it is expensive and contains many risks of its own, as well as being unpatriotic. However, with the rise of world markets and tax free havens around the world it will be a growing consideration for more and more Americans. Sadly, the remaining burden will fall upon those that stay, which will make the problem worse.

In the grand scheme, the solution is growth, whether it is new investment, immigration, or productivity. This is the only plan that can save our finances. Waiting for the governments at all levels to "fix" their fiscal problems is pure folly. As a taxpayer, you need to watch for this and think about the total economic picture. Deferring may ultimately equal expropriation...

President Number 38

I hate to admit it, but I have been a student of history for a very long time and have a large hole in my studies. That period of time is from about 1955 up to about 1976.

So much went on during those years in our country and I know so little. Oh sure I know about the big things like the Kennedy assassination, the Bay of Pigs and other things like that. But I most certainly don't know enough about Vietnam, Watergate and more. Again, I know some facts, but just not enough. This will not be so in the future. I have a very long reading list.


I suppose I am the last on the blogosphere to comment on the death of our 38th president, Gerald Ford, and that doesn't really bother me too much. It does bother me that I don't have too much to say about his presidency because I simply have not read enough about that period of time to say anything intelligent.


Here is what I can say. Gerald Ford, in his post presidential years must be one of the finest people I have ever encountered on the national political scene. I have never one time seen him say anything inflammatory or write idiotic books like the worst president of all time, Jimmy Carter. No back biting or incendiary comments like Al Gore.


He and his wife were very involved in philanthropic work.


Here is my favorite part. He lived humbly, in a fairly small house, and has a small presidential library and museum. This relates to me - being from the Midwest like Ford (he grew up in Michigan) I think our mindset is similar. We are both come from humble places and personal possessions obviously don't mean all that much - rather making the world a better place does. Could I drive a Porsche 911? Sure. But I think it is a waste of money. Could Ford have lived in a huge mansion? Sure. But he didn't. In my humble opinion, Ford's Midwesternness played out in many ways.


The motto in the Ford house as he was growing up? "Tell the truth, work hard, and come to dinner on time". If that isn't Midwest, I don't know what is.


Most importantly I think it shows that an ex-President doesn't have to be a total idiot like Carter. Heck, even Clinton seems to be behaving. I guess the word I am looking for is class. Ford was a classy guy to me. This photo from 1988 is, I think very indicative of how I knew him - certainly not an emperor on his throne. More like a simple, Midwestern guy at his desk.

I Just Don't Get It

I have talked with several people about this subject and I suppose that the only way to find out the answer is to try it out myself. Take a look at this photo, click to enlarge:














From left to right we have my wedding ring for scale, .22 short, .22 long, .22 long rifle and .22 magnum.


For Christmas I bought myself this:


It is a Ruger Single Six, made in 1963. I don't have it yet but am reading up on it so I will be able to disassemble it properly to clean and inspect it before the sale is final. I bought it from the Guns America website - my first purchase there. I will let you know how that works.
Anyway, this single action revolver comes with two cylinders - one for the .22 magnum and the other for "the rest" you see in that first picture. I have asked Astro this question before. My question is, how does it "make the jump"?
You can see the difference in length between the short and the LR in the photo - I am going to assume that that distance will create a shiteload of gunk and crud in there if I am shooting shorts as that is more room for powder and residue to cake itself in. I am wondering one more thing - when the short makes the jump to the barrel from the cylinder will that damage the barrel or did the manufacturer take this into account and form a more conical shape at the opening of the barrel to compensate for it?
Inquiring minds want to know. Or else they will just find out on their own at the range.
UPDATE: I get it now.

Tuesday, December 26, 2006

Jerky Quest

I have been sucked in to a jerky contest, called the "Skaterat Memorial First Annual Jerk-off" with the inmates over at The Astronomicon. I thought I would share a few thoughts on what has worked and what hasn't so far.

For those not interested in reading about it, me and four other guys are going to make some jerky and send it to the other competitors, and each person ranks the others one through four. The winner receives lavish praise.

I have made one batch, with beef flank steak. JohnnyJ recommended that and I saw that advice elsewhere and it appears to be sound.

I feel as though I am at a disadvantage right from the get-go. I don't have a smoker, nor venison. I think venison makes damned great jerky and I prefer it to beef, but I don't have the time or gumption to go hunting so I have to use flank steak. More than the venison, not having a smoker is going to kill me in this contest, but I have to make do with the oven.

My first run I made two batches, one with a dry rub, one with a wet marinade. The wet marinade was far superior. I saw lots of techniques on the internet to make jerky in the oven. With the help of my wife, we split the difference on cooking temps and settled on 160 degrees. I set the beef strips in there for four hours, then turned them and kept examining them for each hour thereafter. Seems like 6-7 hours dries it out just about right, cooking and drying the beef out but not making thin plywood strips out of it. I prefer a jerky you have to work at a bit, but not all day.

The dry rub was a debacle. I use a dry rub on my ribs and they turn out perfect. These thin beef strips were dry, and the spices didn't really sink into the beef as I had hoped. The wet marinade, however was much better. Here is what is in it:
5 tb soy sauce
3 tb worcestershire sauce
2 tb brown sugar
1 ts paprika
1/2 ts pepper
1/2 ts garlic powder
1/2 ts onion powder

My wife and I agree that it ended up good, but way too much like teriyaki. I think next run (this weekend) I will reverse the proportions of worcestershire and soy and see what happens. I think I will also take that worcestershire/soy base and combine it with the spice rub for my world famous ribs - I KNOW that will be great. For those interested, my tailgate ribs series is here, here and here.

I still think I am going to lose to the dreaded venison/smoker combination, but I am going to give it my best shot.

The Reverend Cleophus James

Well, the godfather of soul has left us. He had a profound effect on rock and soul - I think it is interesting how he is being portrayed as some sort of peace activist by the media. They are certainly ignoring his ugly personal life filled with drug and alcohol abuse, not to mention his abuse of women. Anyway, thanks to the godfather for many good tunes - the above clip from the greatest movie of all time, the Blues Brothers.

Monday, December 25, 2006

The Spirit of Christmas

I went to the Daley Center a couple of days before Christmas to see the lights and train and the Annual Chriskindlmarket with German food, crafts and beer. My photo skills in the dark (with the bright lights) weren't that great as I was attempting to get a picture of the moving toy train.

I was going through my photos and was about to toss this one into the virtual recycling bin when I noticed that it really captured the spirit of Christmas... the pink hat and the pink mittens of a little girl right up against the fence to see the trains and all the decorations. Christmas is for the kids, and she is excited!

Merry Christmas!
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Saturday, December 23, 2006

Consumer Drives Business Technology

I recently read an interview with a computing manager for Arizona State University. Rather than using Microsoft Exchange or a similar service for student email, ASU switched to having Google host email accounts for their thousands of students (and alumni), using Google's service but keeping their ASU.EDU addresses (i.e. not @gmail.com).

The focus of this article was that the consumer is driving technology in this sector, not business. I can't find this quote anywhere on the web but the ASU manager said that connecting to Google's technology (as opposed to waiting for the next software upgrade from Microsoft Exchange) was like "receiving Technology from an alien race" because of the constant upgrades including instant messaging, integrated calendars, etc...

Originally a lot of Technology innovation was driven by, well, the dirty business (don't want to mention it by name or the blog will attract a lot of useless traffic). These people / businesses were the first to:
  • move from text to pictures on a large scale (for obvious reasons)
  • move to online payment mechanisms (people won't pay for recipes or travel advice, but this is something that people would pay for)
  • move to online video (once again, obvious)
  • move to online chat (duh)
I would also say (can't prove it) that this business pushed a lot of people to high speed broadband connections so that they could get all of the above faster...

At one point in time business innovated a lot of technology. Business set a lot of standards for technology behind the scenes, and companies that have a big business base (Microsoft) innovated a lot of the common user interfaces (yes, I know they stole it from Xerox, but they pushed it on a large scale).

As I mentioned previously, no one is holding their breath for Windows Vista, and the latest upgrades of Microsoft Office have not exactly been driving new traffic to the stores (I am still on an older version of MS Office and don't even notice the difference).

On the other hand, companies like Google and open source technologies like Firefox have been exploding in innovation. It seems like every other day something new comes out with the "Web 2.0" world of user generated content.

Most of this new explosion has been funded by advertising, rather than licensing and maintenance costs which fatten companies like Microsoft, CA, and Oracle. Advertising turns out to be the "killer app" on the web, and all of the innovation can ride on its coat-tails, and everyone gets lots of stuff for free (like Blogger) if they just sit through a few ads (not on this site, mind you).

Whether it is open source or funded by ads (Google), either way the consumer generally isn't paying for it (directly) and is getting new applications continuously, rather than the stale multi-year upgrade cycle.

Many, many businesses have woken up to the power of these new technologies, and often taken the cost / reliability trade off in stride. Not to say that Microsoft, CA or Oracle products are error free or not vulnerable to attacks; it is just that you can beat on a vendor that you are paying rather than just beating yourself up for getting something free in the first place.

In a strange way universities are way more advanced than other, hidebound government organizations. Universities too are strapped for cash but they have an army of cheap / free student labor with lots of time on their hands and the combination of limited funds / lots of brainpower means that you can drive some serious innovation. Don't wait for the State government of Illinois to lead anything here, but after all the University of Illinois has been the root of many web breakthroughs.

So if you had to graph out what is powering innovation today it would be the consumer, advertising, and open source technologies. The business I mentioned above indirectly that used to power innovation is now pretty old hat. And old line software vendors like Microsoft are generally way back in the dust.

Open Letter to any Surviving Nazis

Dear Nazis,

From the bottom of my heart I would like to apologize for my friends on the left.

I know you did your best to unleash mayhem and destruction on the earth during your short time in power. And boy, what a job you did!

There was that whole war thing and the mass destruction of entire villages and the attempted extermination of an entire people based on nothing more than their religion. I, for one think you did a damned great job in your mission of conquest, hatred and annihilation. Sorry we, the US, had to get involved. It is just that we didn't want EVERYBODY to die. Like I said, you were doing a great job for a while there.

That said, I would like to apologize for some of my friends on the left that have this annoying habit of comparing any perceived injustice to "Nazis" or Hitler. Can you believe that they actually compare people like Don Rumsfeld and Condi Rice to your fuhrer? And why only Hitler? Why don't they compare current day politicians to Himmler or Goering or maybe even they could compare our current army to the Einsatzgruppen? For some reason the left seems to fixate on Hitler and Nazis in general.

I, for one, feel the need to apologize to you, Mr. surviving Nazi. By comparing your leaders to ours, we most certainly diminish the job you guys did all those years ago attempting to annihilate whole peoples, destroying whole cities with the inhabitants inside and, in general committing the worst crimes humans could be capable of.

Except for maybe the Communists.

Have a Merry Christmas surviving nazi - glad we beat you all those years ago and Europe could survive. If you participated in any atrocities, I hope someday you are exposed, and hanged. And when you die, may you burn in hell for your participation in one of the most dastardly and incredible crimes against humanity.

Sincerely,

Dan from Madison - concerned American

Thursday, December 21, 2006

Zip cars

Posted by PicasaMy first advice to anyone moving into the city of Chicago is simple... don't get a car. This seems completely counter-intuitive to anyone who grew up in a small town or a suburb where you need a car to do anything (shop, work, have fun).

However, it is solid advice. For starters, even the crappiest of cars costs over $1000 / year in liability insurance. Liability insurance covers your medical bills as well as those whom you might strike, as well as covering for uninsured motorists. In true Illinois style, rather than enforcing laws on the books (think handguns) they just add a premium onto your expenses and make YOU pay for it.

From time to time, however, it would be nice to have a car, if you are going shopping and have a lot to carry (too much for the "L" or bus) or if you need to visit friends or family out in the suburbs. One option is to rent a car from one of the traditional rent-a-car outlets like Enterprise or Hertz. Another option is to use Zipcar, which lets you rent a car by the hour. Zipcar lots are scattered throughout the city in heavily trafficked areas such as this parking lot near the Merchandise Mart. I wondered what they were until I did a bit of digging around on the web.

Computerworld, a magazine I read from time to time at work, wrote an article about the technology that Zipcar uses to remotely run their car fleet. This technology allows registered users to swipe a card near the car which lets you in and then disables access when you have completed your errands. All of the reservations are done online through an interface and you don't need to deal with humans and customer service. The funniest part of the article is where a customer says that the hardest part is getting the car out of the lot past security...

Wednesday, December 20, 2006

The Posts that Write Themselves...

A lot of (crappy) blogs just point to stories with a pithy remark. This makes for crappy writing and boring, predictable outcomes.

However, sometimes it is justified.

Any even semi-regular reader of this blog can "phone in" how we feel about France, the country that thumbs its nose at the USA while acting like an enormous and pathetic hypocrite around the world.

The problem really isn't France acting like France - the real problem is people thinking that France has any real solutions to the world's problems or that having them as an ally will in any way mitigate a difficult situation, because it won't. France is just the bitter kid in the back of the class shouting out snide, semi-funny remarks without contributing anything of substance, making fun of you not having a girlfriend and then going home to masturbate.

You don't want to play to stereotypes, but here is an absolutely CLASSIC article from the BBC...

France pledged $79m and came up with just over $1m.

Really, nothing more to say. Just sit and wait for multilateralism to save us...

Well Worth $149

Due to some very unfortunate circumstances my laptop was a mess. I couldn't get online even though I could tell that my signal from wireless network was excellent. I spent a couple of hours dinking and dinking around with it to no avail. Things like this get me extremely mad and I stewed. Time to call the professionals, I suppose.
I had my wife take my laptop to the Geek Squad. They told me that my update to IE 7 and Norton Anti-Virus don't like each other too well and that they are seeing a lot of these types of problems. Also when I tried to add a repeater to my wireless network, that software had installed some not so good things on my settings also making my life miserable. They wiped Norton off at my request (I hate that product) and I had them install their recommended security programs, which were Trend Micro Antivirus and Webroot Spy Sweeper. They also fixed all of the settings on my wireless network that the stupid Linksys software had wrecked. They did a few other minor things as well. All of this was done for the price of $149 plus tax and that price included the software I mentioned as well as a Geek Squad t-shirt, suitable for working out in or wrapping fish.
This is money well spent to me - I simply didn't have time to deal with it, so I paid a professional. I suppose it is all up to who is working at your local Geek Squad as to how effective they will be, but for relatively simple issues like I had, I think they would be a sure bet. They do house calls too, and they are coming over next week to try to get that repeater set up properly so my PC in the remote area of the house can get the signal as well as my laptop.
If you have a computer issue, they may be a decent solution for you too.

Help Wanted

I put an ad in the paper because I need another shipping and receiving person. Now I understand that I am not going to be receiving the resumes of the best and brightest - but a SURE WAY not to get hired by me is to enclose your garbage - Ghirardelli chocolate wrapper to be exact.

Tuesday, December 19, 2006

Retiring the Rat

Posted by PicasaAs you walk around town in Chicago you can see the "Target - Rats" flyer tacked up on poles to indicate that the area has been recently doused with poison. I wrote a post on this distinctive, iconic poster this spring.

But now there is a new sign in town... this sedate, boring photo of a guy walking a dog with a couple of rats in tow. Let's go back to the scary rat! That rat will not just follow you meekly, that rat will take a big bite out of your face!

Maybe I just need more drama in my graphics...

Monday, December 18, 2006

Valet Madness

Posted by PicasaThere are an amazing number of restaurants in River North in Chicago. We have all types of cuisine, from French to everything in between. There are also a large number of bars in the area, too.

While the boom in the hospitality industry is occurring, land values are also increasing. As a result of this land boom, the number of open air lots typically used by valet parking firms has significantly been reduced.

The net of this is that the valets have nowhere to park the surplus of vehicles that arrive every night, mostly from the suburbs. This is a view looking north on Wells street, north of Grand Avenue. Note that there is NO official parking on the right side of the street, but not only are they SINGLE parked, they are DOUBLE parked, as well. It is not showing up clearly in this photo, but most of the cars have their hazard lights on.

2 items - 1) if you valet your car in the city, remember that it isn't really being valeted anywhere that is protected, it is typically sitting on the street with the hazard lights on 2) these double parked cars are causing a terrible mess in an area that is already very crowded.

This situation will likely exploded in future months as the problem gets worse; I can't even imagine what it will be like in the summer. I am going to keep the newspapers and the aldermen appraised...

Sunday, December 17, 2006

Guns, Bears & Chicago

Posted by Picasa With the new Blogger Beta we can "tag" posts by topic. Unfortunately, this blog hits three blog topics at once:

- The Bears
- Chicago (River North)
- Guns

Tank Johnson, the defensive lineman for the Bears, was out after 1am at the Ice Bar after his arrest in Gurnee and having been told that he wasn't going to play in the Bears / Tampa Game. I guess he figured he'd use the "Toga Party" plan from Animal House - the Delta house was going to get shut down by Faber University regardless of what happened, so they might as well go out with a bang and a futile gesture.

But it got even worse for Tank. His childhood friend and bodyguard was shot and killed defending Tank in the nightclub. First Tank apparently lied to the police and said he wasn't there, and then he 'fessed up. Police said he wasn't a suspect.

This bar is only a few blocks from my house. It is one of the "hipster" bars frequented by non-neighborhood types who show up with bling and girls on their arms that look like out-takes from "Girls Gone Wild" videos. It is right next to the Clark Street Ale House, a place I do go to, and they have a nice beer garden out back for the summer months.

Doesn't Chicago ban handguns? Then why was no one surprised that some thug shot Tank's bodyguard in the club. Why isn't that the lead story - Chicago Tribune surprised that the city's gun ban was ineffective for the ten thousandth time. As always, these sorts of bans leave the criminals armed and law abiding citizens defenseless, although it is hard to say how many law abiding citizens were in the Ice Bar after 1am on a Saturday night.

The Bears sure could have used Tank in the 2nd half tonight, when about the worst offense in the league shredded their defense like swiss cheese and made a blowout go into overtime.

A sad story all around - for the Bears, for Chicago (black eye in terms of publicity), and showing our continued fiasco of a handgun ban policy.

Saturday, December 16, 2006

Electricity Innovation

This summer I went to Italy. One of the first things that struck me (I'll admit, I am a little bit odd) were these key cards in every hotel room.

The key cards got you into your room, just like in the United States, but then as soon as you entered the room you put them into a slot near the door. These cards controlled the lighting and electrical power in your hotel room; if you didn't put them in the slot within 15-20 seconds or so of entering the room the lights would go out and leave you fumbling in the dark.

If you are in the room, you just leave the card in the slot. When you get up to leave your room, you take your key with you (obviously, or you couldn't get back in) and then the lights dim down, even if you left everything on.

This card leads to obvious savings. The lights are only on when you are in your room, and electricity is saved as a result. I am not sure to what extent heat / air conditioning are tied to this card, as well, but the applications are also obvious; they could allow the temperature to fluctuate to a larger degree (hotter in the summer, cooler in the winter) than they would otherwise, knowing that their hotel guests weren't being impacted because they weren't in the room at the time.

I had forgotten about these cards until I read an article in the Economist on December 16th titled "Going Metric - Italy's Enel leads the way in the adoption of "smart" electricity meters". The article describes how the major electricity company in Italy, Enel, installed these real-time customer meters in homes and businesses throughout the country. Per the head of Enel and the article:

"They (smart meters) are not a means of managing demand so much as a tool to improve customer service. Thanks to smart meters, Enel now claims to respond to 98% of requests or complaints within 24 hours. It can detect and repair outages more quickly, preventing revenue loss. Customers who fail to pay their bills can have the power switched off or their consumption limited, further shielding Enel from losses"

The United States has generally failed to invest in "smart meters". In Italy and in the US utilities are still essentially monopolies; it is sad to see that the US has fallen so far behind in this matter. My opinion is that siting new generation in Italy and transmission lines is insanely difficult; the country is small and terrain is very difficult. Thus it pays to reduce demand at the source even more than it does in the USA.

We need to seriously look at this type of investment in the United States. With these real time meters we could significantly reduce power consumption without impacting customer happiness; after all, who cares if the lights are out if no one is home. I think that US houses are bigger and complex than in Italy since space there is so scarce, but there are many areas (apartments, hotels, businesses) where there would be immediate applications.

It is sad that our utilities don't see the applications for this technology and divert their investment from non-productive uses to this type of device. However, it is consistent with the first thing I learned when I got into the energy and utility industry; the first casualty of a monopoly is innovation. And lack of innovation is the worst form of business neglect.

Ikegwuonu "Reinstated"

Today it is announced that Jack Ikegwuonu, defensive back of the Wisconsin Badgers, will in fact play in their bowl game, the Capital One Bowl in Orlando on New Years Day.

The fact that he would hit the field that day was in doubt as he just got arrested for breaking, entering and looting an apartment with his brother in DeKalb, IL.

Rather than suspend this player for just one game, the athletic department of the University of Wisconsin has boldly decided to let him play. I love how they say he was "reinstated". Reinstated from what? He didn't even miss one game.

Look at these powerful statements from the head coach of the Badgers, Bret Bielema:


When asked if Ikegwuonu's return meant he had been exonerated, Bielema replied: "There are certain things going on now that I can't comment (on). That's why Jack won't be available for comment all the way until this thing is cleared up."

"One of the reasons we have the student(-athlete) discipline policy is exactly as it laid out (Friday)," Bielema said. "It's not in my hands, it's in people's hands outside this football program. The athletic department . . . came to a decision to reinstate him. That's all I need to go by."

So Bret, good enough for you. God forbid you actually take it upon yourself to suspend him for just one game. You are the coach for gods sake, you could show the kids that this type of off field behavior will simply not be tolerated.


But I won't really pick on Bielema here for doing what he did. Any major college football coach would have probably given the media, fans and everyone else the finger at this point, just like Bielema did. Hey, if the athletic department says it is OK, then Bielema is off the hook - in his own eyes.

Major college football is totally corrupt and only one thing counts - winning at any cost. Don't ever try to fool yourself into believing anything different.

Meet the New Boss

Same as the Old Boss

I am typically loathe to write about politics because most in the blogosphere that do it are total hacks that know nothing about what is actually going on. I would estimate that 99.9% of the posts that you read that are related to politics on blogs are simply a quote from an article and a few words that basically say "right on" or "told ya" or "can you believe this?".

That said, I have written before on what a twisted web we now have in our daily discourse over politics. It has all boiled down to Liberal = Democrat and Conservative = Republican. The reality is, of course, that most "liberals" would be stunned to look at the campaign contributions of their Democrat heroes (or would they) and that most true Conservatives have already called the Republicans out on the carpet for their misdeeds in the last several years.

Take a look at San Fran Nan's donation list - even the CBOE gave her $10 grand. It is quite an odd collection of donors - every large industry plays BOTH sides of the aisle.

The lunatics over at Kos sincerely align themselves with the Democrats when, by the way they talk, they should be aligned firmly with Greens, Socialists or something else FAR to the left of the Donks. It is unfortunate for the Dems that they have so many loons in their party like Dennis Kucinich and others. Or maybe it is fortunate.

Without delving into this too much, as I abhor it all, I just wanted to tweak my left leaning friends a bit to show them that NOTHING is going to change for the most part as to the conduct in Washington. Read THIS. Here is the money:

Senate Democratic Leader Harry Reid, who has pledged to stop "dead-of-night legislating,'' did a little of his own in the final hours of this year's congressional session. Reid slipped two home state projects into the last major bill Congress passed last week: a transfer of federal land in Nevada to state and private control that's almost two-thirds the size of Rhode Island; and a $4 million grant for a hospice. Neither had been approved by any congressional committee.

The article is pretty good and if you took the time to dig into who actually would benefit from this deal, I am sure the money trail would eventually lead back to one Harry Reid. Congratulations liberals! Congress is reformed!

Friday, December 15, 2006

Worst Job

Posted by Picasa Like everyone else, from time to time I get down about my job. However, most days in Chicago I spy someone who has a worse job - the window washer.

Rain, shine, freezing cold, or blazing sun, the window washer is out there. For my building, a 25+ story condo building, the cost to get all of our windows washed was approximately $2500! Think about that - $2500 will buy you approximately 1 days' worth of emails from an Accenture consultant, or 1/2 day of a good lawyers' time.

A friend of mine said he was in NYC and a window washer walked thru his office and climbed out the window and onto the ledge, without a safety harness, clutching the masonry with his fingertips. He was on the 14th floor. My friend asked the window washer if he was scared. No, he said. The scary floors are those from around 6 on down. At that level, you aren't sure that you'll die if you fall. Above that, if you fall, you are dead. Thus those floors aren't scary.

Back to my day job...

Google Hits

We get a lot of hits here from google searches. I like to list them here once in a while for everybody to get a kick out of. Here are the last 20 people that searched Google for something and arrive at this blog - I copied and pasted so the spelling and everything is as in the original form entered into that Google box:

Dad buzzed my head
pastry-of-the-month
buzz cut hair products
bears quarterbacks
illinois electricity generation built
stupid mbna bought by bank of america
match grade air pistols
SHAVED SHORT BUZZ MENS HAIRCUTS
life in 1914
art sales tax avoid chicago
used air pistol
AMERICANSTANDARD VERSUS AMANA GAS FURNACES
ducane court hitler
natual gas market in chicago
goodman furnaces consumer report
Life in the Midwest blog
psl bears playoff face value
smith & wesson model 17
S&W Roy Jenks
barber woman haircut photo

I can figure out why we got all of these hits except for the last one. Don't ask me either.

The Road to Hell...

My favorite saying of the past several years is "The Road to Hell is Paved with Good Intentions".

Two sparkling examples of this have come to pass in my life in the last few days.

No more than a couple of days after I write an essay about trans fats the people here at work decided to eat at Culvers. Everyone got the usual burger and fries horror show, but Dan, always trying to eat healthy, gets the bleu cheese pecan chicken salad. So who gets food poisoned?

Yes, that would be me. I swear to god that is the most ill I have ever been in my life. I had periods of unstoppable chills and I was even delirious for a little while. My wife tells me that I was speaking but not making sense for a short while. The nausea I had literally shook my whole body - the quick and easy to lose weight I always say.

By eating the "healthiest" thing on the menu I am penalized while the folks who ate the burgers are rewarded by being able to function as normal humans.

On another front, Kathleen Falk, our Dane County executive, has decided that the farmers in her county would be better off burning their manure instead of spreading it on the fields. But what do you get when you burn manure? METHANE. If you google "global warming methane" you get all kinds of useless information that shows the connection between the two. So which is worse? A small bit of runoff of manure into our lakes or global warming?

Not that global warming is an open and shut case, mind you.

Like I said, the road to hell...

Thursday, December 14, 2006

Chicago Leads The Way

Chicago recently had a completely farcical series of events regarding the election of the Cook County Board. John Stroger (the elder) ran this critical post (Cook County is one of the largest counties in the United States) for years as his personal fiefdom; even by Chicago standards, Cook County is a cesspool of poor management and patronage woes.

Right before the election, John Stroger was incapacitated by a stroke. His family and supporters insisted that he was fine, that he could govern, and that he was going to fully recover. Amazingly enough, he won the election as an invalid. With the election safely behind him, he eventually stepped down (using that term with irony) and in a moment sad even by Chicago standards, he was succeeded by his son, Todd Stroger.

Since Chicago is such a deep-blue city, the only potential conflict was which Democrat would win the County Board Chairman seat. The Republicans didn't put up much in the way of credible opposition. However, the chutzpah of the Democrats was unbelievable, insisting that John Stroger could govern when, it turns out, he was completely unable to do so. Lying is not a cause for concern among Democrats in Chicago.

While this type of sad governance is all too typical of Chicago, it has now spread to the Democrats in the US Senate. The Democratic Senator from South Dakota, Tim Johnson , suffered from a brail ailment and is in critical condition. This is a terrible situation and we wouldn't wish it upon anyone; hopefully he has a full recovery. The interesting point was made by Harry Ried, the minority leader who stands to become majority leader when the Senate comes back in session, as follows...

"Reid, who visited Johnson at the hospital Wednesday night and again Thursday morning, told reporters the senator "really looks good." However, Reid declined to provide any details of Johnson's medical condition."


Um... the guy is in critical condition. We all hope for the best, but I doubt he "really looks good."

Maybe Mr. Ried ought to run for Cook County Board President, instead...

An Excellent Article on Tax Policy

The Wall Street Journal is an excellent source for information on financial and tax policy, particularly their editorial page. They ran an article today entitled "The Top 1%... of What?" about tax policy.

There is a frequent discussion of how much money the top 1% earn. A lot of this information comes from IRS filings, since this information is publicly available. The assumption is that the rich are getting richer while the poor are getting poorer, and this is a general failing of our country and capitalist system.

I can't speak for the "fairness" of our country but this article points out a key fact - changes in our tax structure after the 1986 (TRA) Tax Reform Act (nothing was reformed, but it is their title) made "C" Corporations less efficient tax vehicles and caused more individuals to shift taxes onto their personal income tax return.

As I listed in my post on corporate taxes here , the United States today has the least appealing corporate tax policy of any industrialized country. In addition, the Republicans did pass legislation to reduce the double taxation on dividends as well as improving capital gains taxes which primarily benefit individual filers (check here for how the Democrats will likely gut these policies). These policies, along with the 1986 TRA, encouraged individuals to file income on their personal returns and not their corporate returns.

Thus the debate about the top 1%, in addition to being pointless (is "fairness" something we can legislate?), is factually inaccurate, a point that was effectively made by the WSJ in today's article. When you take into account the tax switching from corporate to individuals and other tax breaks (401k's, which pull income off the tax rolls for the middle class), there really hasn't been a distribution overall to the wealthy 1%.

A good article from a solid paper.

Tuesday, December 12, 2006

Testing Google's New Features


For this blog we use Blogger which is owned by Google. Recently Blogger was updated to Blogger "Beta" which contains a number of essential improvements, especially the ability to categorize posts.

While the "Beta" version seems improved, they removed the feature that allowed you to upload posts directly from Microsoft Word into Blogger. I liked this feature a lot because it let you work off-line as well as format the blog post and then when you got back on-line you could upload the post with a minimum of fuss.

In its place they added a feature that lets you use Google Docs & Spreadsheets. These tools apparently compete with Microsoft Word for word processing (duh) and Microsoft Excel for numerical analysis. Since the average person uses only a fraction of the available capabilities of MS Word, it seems like this replacement should be pretty good as long as you have a good internet connection. Microsoft Excel will probably be a tougher sell, because a lot of people (like myself) use some of the more sophisticated analysis capabilities such as "pivot tables" that will take longer to replicate.

Google now requires to sign on with a google password. This google password links up gmail, blogger, and the other Google tools. I guess that is a reasonable price to pay for using all their stuff for free.

I also use Picasa to edit my photos. I don't know if Picasa is somehow linked with everything else from Google; if it is I am not aware of exactly how.

Back In 1995


I remember when Windows 95 came out it was a BIG DEAL. Microsoft paid the Rolling Stones to use "Start Me Up" to kick off the new start button, as they moved away from the blinking cursor of MS DOS. Applications were much more seamless with the operating system, which was a big improvement since it always took a while to figure out how to use a new application because the buttons and commands were all in different places.

Now everything is pretty old hat. For this Google document, for example, I spent ZERO time thinking about how to use it; I just signed in and started working. It is pretty obvious where the buttons are and what to push, although I haven't figured out the collaboration capabilities yet.

Microsoft Vista is coming out and no one is talking about it. No one really cares that much about the operating system; Google certainly doesn't. This Google tool works through Mozilla, the browser I use nowadays, and would work just fine off a PC running Linux if I had one laying around.

I bought a PC recently and for household political reasons I had all the software installed and configured at Best Buy. The "Geek Squad" guy was astonished that I wanted to PAY him for Microsoft Office and get a legit copy; he kind of looked bewildered before skulking off and finding one. Apparently most people are buying PC's without Office included, which is a revenue trend that you ought to watch if you are an owner of old "softie" MSFT the Microsoft stock.

Back to the blog, let's see how this works...

PRETTY GOOD FOR FREE!!!

Bank of America's Terrible Customer Service Victimizes MBNA Holders

Recently credit card giant MBNA was taken over by Bank Of America, doubling Bank
Of America’s credit card count from 20 million to 40 million.

I had a bad experience with the handover and am looking to escape my MBNA credit
card, which now is tied to the miserable Bank of America customer service “experience”.
As a result of this experience, I wrote a letter to Bank of America included below.

MY LETTER TO BANK OF AMERICA

December 5, 2006

Dear Bank of America,

I am an MBNA credit card holder. Recently you took over MBNA.

I attempted to pay my credit card bill online. It didn’t work. I kept getting the error
message “please try again later, the system is busy”.

I called your help center on 12/4/06. I talked to a nice person who couldn’t pull up my
account. This is odd because my credit card works and I could sign in to the account
online.

Finally he transferred me to someone in the credit card group. After messing around for
a while they figured out the problem, that I was attempting to pay online but didn’t have a
Bank of America bank account.

She told me to go to www.myeasypayment.com where I have to pay online. At this site
the current balance doesn’t move over (can only make minimum payments) so I had to
retype the amount and all of my bank routing information. Then I realized that this
payment isn’t scheduled (happens right now) so now I need to scramble to move some
money into checking from savings.

This stinks. You made the following terrible customer service blunders:

1) your web site lets me in but doesn’t tell me anywhere that I can’t pay anymore
online
2) your error message tells me to keep trying rather than directs me to a solution
3) your people on the phone don’t know what is going on, can’t even pull up my
account, until I spend an hour trying to figure out what is going on
4) you send me to a different site with lousy features including A) not remembering
my current balance B) making me put in my banking information C) not allowing
me to schedule a payment (it pays now)

The sad part of all this is that I used to have a Bank of America account when I lived in
Texas and it was a complete fiasco so I shut it down and that was a disaster, too.

Why is your customer service always so terrible? Are you trying to drive me away?

Thanks,
Carl

WHAT I AM GOING TO DO ABOUT IT

I am going to look for another credit card to use as a primary credit card. I will probably
get one that is tied to my bank, but I am not certain. There are a number of good “cash
back” cards that pay a minimum of 1% cash back, with more for certain types of
purchases (gas, groceries, etc…). I am favoring these sorts of cards over “reward” cards
that pay in mileage because I have difficulty using miles and they just pile up. Cash,
however, is king.

Sunday, December 10, 2006

Party Like It's 1998

I like cars. I like to look at cars and think about buying a new, nice, and fancy car.

However, I am too practical for that. For that reason, I drive a Nissan Altima.

Why a Nissan Altima? I can't speak for the newest versions, but I bought a 1999 Altima (in 1998). It is a 4 door with air bags (not every car had them back then) and automatic transmission, plus the usual stuff like air conditioning, power windows, remote, etc... The car lacked anything beyond the basics, however - it isn't very fast, didn't have a fancy stereo, and was about as far from "pimped" as you can get.

The Altima is a big car. You can fit five full size adults in the car. 2 adults in the back don't have problems, even for a long ride.

Our experience with our 1998 Altima has been amazing in terms of reliability. We have driven the car over 75,000 miles WITHOUT A SINGLE MECHANICAL INCIDENT. At one point my friend John replaced the battery which died, and I bought new tires & changed the oil, but that is ALL. From a reliability perspective, this car is an A+. You can't expect more than this out of a car.

And the price we paid for this car back in 1998 - $16,995. With tax (remember we are about 9% here in Chicagoland) and fees the car came in around $18,200 or so (I have quicken so I can loo this up). Assuming I sold the car today (which I am not going to do) and got $3000 for it on a trade in, my monthly cost would be $158 / month. If you add in the tires, oil changes, and the battery, the monthly cost is probably around $180 / month (this ignores 1) the opportunity cost of investing $18,200 for 8 years 2) insurance 3) gas).

What is the price you'd pay for a similarly equipped Altima today - $16,995. Is there anything else that has stayed FLAT in pricing for 8 years, while (hopefully) improving? About the only thing I can think of are consumer electronics such as cameras, TV's and computers.

Sad to say, I will probably buy another one of these damn things when my current one gets too long in the tooth. I will look at a lot of flashy cars, and dream about buying a fast one, but there doesn't seem to be any way to beat the value of a Nissan Altima if you want a practical car and don't have a lot of special demands to put on it (i.e. off road driving, heavy loads, extreme performance). Their reliability record is exemplary, as well.

Back to boring.

"Environmentalism" or naked self-interest?

I like to read "Parade" magazine as part of the Chicago Tribune. It is a little magazine that has fluff like celebrity interviews and pictures of cute animals. One of the better parts is the front page, where "readers" submit questions about movie stars and the like and the magazine answers them. Usually the questions are blatantly planted by the publicists, such as "what is so and so doing now?" And the answer is "Oh they have a big new movie coming out soon!" Well, who could have guessed???

I don't mind this kind of mindless celebrity following... but the part that gets me going is as follows:

"Now that he's relinquished his 007 license to kill, what is Pierce Brosnan up to these days?"

"Pursuing his two great passions - enviornmentalism and movies. Brosnan, 65, recently led a protest against building a liquid natural gas terminal near Malibu"

Here is a link to a biased and crappy site that covered the dopey actors involved in this protest.

Let's step back a bit. The left supposedly loves natural gas, just like they love wind power, because it emits less greenhouse gas an airborne pollutants than coal-powered plants. I agree that natural gas burns cleaner, and if cost weren't an issue, it would be a fuel of choice. However, the US only has a certain amount of natual gas that we are allowed to drill for (remember, huge portions of the US are off-limits) so the supply is limited. Thus, an LNG terminal is the preferred method of bringing in natural gas from overseas, where it is brought in under pressure and then connected to our pipeline grid and brought in for the US market.

So, the left loves natural gas, EXCEPT WHEN BRINGING IT INTO THE US IMPACTS THEM. What they really mean to say is, we like natural gas, but we don't want to be impacted in any way in order to obtain this energy. Please place this LNG terminal nearer to the poor people, so that we don't bear any costs for the energy that we use every day. This is just like the protests by the East coast liberals
(including Walter Cronkite, that supposedly middle of the road newsman) when wind turbines were proposed near their field of vision; we want the power, we want to get off coal and nuclear power, but for God's sakes we don't want to be negatively impacted in any way by these new methods for generating or distributing power.

This isn't environmentalism, stupid Parade, it is blatant self interest.

NIMBY.

Saturday, December 09, 2006

Property Taxes

This is the latest tax article out of a series that I am writing for the blog. Previous posts include 1) the Alternative Minimum Tax or AMT 2) tax withholding 3) Democrats and taxes 4) state income taxes 5) social security 6) corporate taxes and 7) sales taxes.

HOW PROPERTY TAXES ARE CALCULATED

Property taxes are levied by local cities on property owners. Property taxes are conceptually simple and are charged as follows:

1. The city sets the local property tax rate for that year

2. The city determines the fair market value (FMV) for the property

3. The city multiplies the tax rate by the “assessment ratio”

4. The net of TAX RATE times FMV times Assessment Ratio = property taxes owed that year

Most areas use a 100% assessment ratio, but some areas use a different percentage (less than 100%, say 10% in Arizona). If the city uses an assessment ratio less than 100%, then the difference is made up in a higher property tax “rate”. The assessment ratio causes confusion but you get to the same basic answer in the end. In Chicago the assessment ratio on residential property is 16%.

Property taxes are paid to the city. Often property taxes are added into the mortgage payment and paid automatically. The mortgage company holds the dollars in escrow and pays the city directly as it is due. Property taxes are usually paid twice a year.

UNIQUE ELEMENTS OF PROPERTY TAXES

Property taxes generally increase every year. The property taxes increase either because 1) your city increases the property tax rate 2) the city re-values your property at a higher rate. Local municipalities often say that they are “holding the line” on tax increases (keeping the rate the same) while re-valuing property upward, which ends up costing more.

Property taxes are assessed differently for business and residents; generally businesses pay a higher rate (they don’t vote). In Chicago the issue is particularly bad; businesses pay among the highest rates in the country – according to this link Chicago businesses pay 24% more than New York City and 72% more than Los Angeles. Farmland is taxed at a much lower rate (in Illinois it is based on the productivity of the farmland) – there are even instances where owners create “hobby farms” and pay people to plant crops in order to save on property taxes (or just misclassify land being held for future use as agricultural land).

WHAT PROPERTY TAXES ARE USED FOR

Property taxes are mainly used for local schools. Depending on the state, property taxes can be the primary funding source for schools. In general, this method allows richer cities (i.e. suburbs of Chicago) to tax themselves locally to pay for good schools, which in turn increases the value of their property.

There is a lot of controversy about funding schools in this manner. Some states fund schools via an income tax and reduce local property taxes, and there is a lot of discussion of the optimal manner to fund local schools. Generally, the Federal share of education funding has fallen which leads to greater pressure on local property tax roles.

Property taxes are also used to fund local fire, police and other essential city services. Thus a decline in a property tax base usually bodes ill for a city. In New Orleans, for example, property tax revenues declined from $80M in 2004 to $68M in 2006, causing declines in available funding and requiring cutbacks in city services.

PROPERTY TAX COLLECTIONS

Property taxes are some of the easiest taxes for municipalities to collect. You own your house; it has a fixed address; your information is on file with the city. It should be very simple to send a correct bill to every owner.

For owners that fail to pay, there is a simple solution; put a lien on the house, and then sell the house at auction to recoup the amount owed to the city. Since houses are not generally mobile, you cannot escape the property tax unless you abandon your house and all of its equity; in this case the city will take the money out of the new owner.

Per this article, the national collection rate for property taxes is 98%. As a sad side bar, the city of Detroit is collecting only 87% of its property taxes, among the lowest rates in the nation. This article does a good job of showing the poor processes and methods and understaffing that leads to this debacle. Detroit is also suffering from the fact that property values have plummeted in the city, leaving many owners in the unenviable position of deciding whether it is worth paying the taxes or just walking away from their homes.

PROPERTY TAX RATES

Per the Tax Foundation, a fantastic organization that I heartily support, property taxes are the highest in the Northeast, Illinois, Wisconsin and Texas. Property tax collections increase as the value of housing increases, which means that high valued property such as New York City will have the highest collection amounts in absolute dollar terms.

Property taxes as a percentage of value average about 1.5% / year across major metropolitan areas, with Houston among the highest at 2.99% and Denver the lowest at 0.53%. The city of Chicago is about 1.74%, thus a home / condominium valued at $400,000 would pay about $7000 / year in property taxes.

Some smaller cities have very high rates; upstate New York around Syracuse has some of the highest rates in the nation at almost 3% / year; collections are less because of the relatively lower value of this property, but this is probably of little consolation to the residents in these cities.

PROPERTY TAX AND THE AMT

As I pointed out previously in my AMT posts, property taxes are NOT deductible on the AMT. Thus when people are calculating the “after tax” impact of buying a home and figuring on the mortgage interest deduction (which IS deductible on the ATM) AND the property tax deduction in order to justify buying an expensive home or condo, their calculations are incorrect.

This is a critical point of analysis due to the high costs of property taxes. If you are spending $7000 / year on property taxes here in Chicago, the “lost” tax deduction if you use a rate of 28% is valued at almost $2000 / year. Note that this is an ongoing cost, and it rises every year, so the impact, if anything is increasing.

Beyond just the AMT, note that other tax policies increase real estate values. The fact that mortgage interest is deductible while interest on other items (such as student loans or car payments) is not deductible shows how the Federal governments’ policies de-facto increase real estate valuations. If the government ever decides to pare back the tax subsidy given to residential real estate, valuations would crater and then local governments would have to jack up the tax rate in order to recover the same amount of revenues (because it is a given that they would never cut back on services in order to live within a budget).

PROPERTY TAX AND THE REAL ESTATE BOOM

There are many measures of property tax rates. One measure that is frequently used is the percentage increase in property taxes against the percentage increase in personal income growth. Property taxes increased much faster than personal income growth over the last several years. This increase is probably unsustainable.

In recent years soaring real estate values have effectively increased property tax collections (even if the tax “rate” itself stayed flat). This boom has boosted state and local coffers. However, it is likely that the real estate bubble is bursting. Depending on where you live, real estate values are typically either flat or falling.

Municipal governments, however, are loathe to “give back” the extra boost in local revenues that came from inflated property tax rates. They will have many people appealing their valuations, which will likely result in them inflating the tax rate to get back the revenues lost due to falling home prices.

IMPACTS OF PROPERTY TAXES

As land and housing values increase, local governments raise assessments and then the property tax burden increases. For the elderly, the poor, and people on a fixed income, these increases cannot be borne indefinitely. Even if housing values have increased, that increase cannot be realized (in hard dollars) for the owner unless they sell the house. Thus property taxes are a primary cause of “gentrification” in poorer neighborhoods, where the local (often minority) residents are driven out as land values increase and property taxes rise. This property tax impact is compounded by the fact that, as land values rise, apartments and lower quality housing that is typically used by the poor is torn down and replaced with condominiums and high-priced housing favored by the wealthy. Even if a landlord decides to keep smaller apartments for poorer residents, he has to raise rents because the landlord faces the higher property tax burden, too, and must pass this along or run his business at a loss.

Property taxes are also used to fund local schools, and school districts are obviously a cause of much “white flight” and residential changes across the United States. If schools were funded by a central authority and not locally raised property taxes, there wouldn’t be an incentive to move out of one city and into another for better schools (assuming that the LEVEL of funding is a primary driver of quality, which isn’t necessarily true since some of the worst schools in the US have high funding levels relative to rural schools that score much higher, on a lower tax base). However, this is a complicated social issue beyond the pale of this article, which is focused on property taxes as a collection device and their general impact on behavior.

For someone in Chicago, it is hard to see the value received for property tax dollars. Our schools are amongst the worst in the nation, crime is high, and city services are not great. Individuals such as myself basically subsidize the poorer neighborhoods, which would otherwise resemble “bombed out” Detroit if not for riding on the assessments of the downtown areas. I am sure that I would be even angrier if I had children and was stuck paying the tab for private schools on top of the large property tax bill for the notoriously bad Chicago public schools.

Property taxes are also subject to abuse in the form of tax assessments; in Illinois the Democratic Governor Blogo famously received a lower assessment increase than neighboring dwellings; I’m sure his status as governor had nothing to do with this.

It will be interesting to watch how property tax collections are hit with the real estate swoon and the rise of the AMT. The fact that property taxes are not deductible for the AMT is really going to hit a lot of people hard, as their equity values decrease, and local tax authorities will be slow to implement the decrease into their assessments.