While the suggestion I liked the most was the one threatened a while back, which was to tax bonuses at 90% so that after state taxes the executive got very little of their ill-gotten bonus, I think what congress should really be doing is getting to the root of the problem to come up with a solution.
It's not the executives getting the bonus that's the problem, it's the availability of ridiculous amounts of cash available to pay bonuses with a straight face. These are publicly owned companies that manage to make shareholders happy with impressive gains while at the same time paying huge amounts to employees. Clearly something else is amiss because whenever any company is making outlandish profits they have some unfair advantage. That's why the government regulates monopolies and other unfair practices.
So here the government needs to step in and identify what's allowing the banks to be so profitable. The answer, of course, is that they were leveraging their investments. If they could use a dollar, borrow another $29 with that and invest $30 total, even a 1% return on the $30 was a 300% profit on the $1. Of course, when the investments went down they now owed $29 for something that may have been worth only $10-15, but they got bailed out. Eliminate the ability to leverage and you don't have the risky investing. Without the risky investing the money has to be retained inside the corporation for the shareholders and can't go to paying thousands of $1M bonuses. And then we're all in a much safer financial environment to boot!
Friday, July 31, 2009
Cash for Clunkers
Everyday we seem to get some reminder of how our government can't plan for anything. What better term can you use besides "having your head up your ass" when a program expected to take 4 months to run its course happens in 2 weeks? The true beauty is that since the cash for clunkers legislation is beholden to the dealers to handle the transaction, many started accepting cars early and most likely the reason they have 40k submissions yet another 200k anticipated is that the dealers realized they needed to pound through all the applications fast or else they would have accepted cars and not gotten reimbursed.
I would have gladly taken advantage of this program myself if my messed up Taurus didn't get an EPA 19 mpg instead of the mandated 18. I probably would have even traded up for a Prius and gotten 50 mpg, but alas, that isn't going to happen. It's pretty obvious that this legislation is doing very little to combat inefficient cars or help the auto industry. 250,000 cars later the program is over, some people traded in worthless cars for a taxpayer subsidy on a new hyundai, and the world moves on.
I would have gladly taken advantage of this program myself if my messed up Taurus didn't get an EPA 19 mpg instead of the mandated 18. I probably would have even traded up for a Prius and gotten 50 mpg, but alas, that isn't going to happen. It's pretty obvious that this legislation is doing very little to combat inefficient cars or help the auto industry. 250,000 cars later the program is over, some people traded in worthless cars for a taxpayer subsidy on a new hyundai, and the world moves on.
Thursday, July 30, 2009
Party Game Ideas
I'm tired of games unwilling to rip off an idea or put any additional effort into games. I refuse to believe that in all the genre of "mini-games" that the wii has, no designer can come up with a simple tournament system to really put the mini-games to good use. It's simple, pick from the games, allow people to work independently or in teams, keep some score, and declare a winner at the end. Every game that is designed to be played in short bursts should have this function without fail.
Tuesday, July 28, 2009
Parenting 101
If anyone is taking notes, this is how to be a good parent:
"We picked (Wii Sports Resort) up yesterday, and we had a hard time putting it down. We had a blast playing against one another as a family. So much fun, that we didn't bother to cook dinner, so we just ordered some pizza to avoid getting off the wii sports resort."
"We picked (Wii Sports Resort) up yesterday, and we had a hard time putting it down. We had a blast playing against one another as a family. So much fun, that we didn't bother to cook dinner, so we just ordered some pizza to avoid getting off the wii sports resort."
Friday, July 24, 2009
Unemployment
It's pretty obvious that the system is going to hell in a hand basket but some of the reports going around really make you wonder just how broken our system really is.
The linked article among other things says that 16 states have used up all of their unemployment funds already, and another 16 could run out by year's end. These states are now borrowing funds that will have to be repaid in the future by higher taxes... higher taxes on those employed since roughly 10% of people in the country are unemployed and getting benefits. And maybe when some of these people who were unemployed finally get a job, they'll step into an environment where they take home less of what they've earned.
But how can these systems get like this? How can so many promises of funding be assured and guaranteed with no actual knowledge of where the money will come from? Let's consider unemployment in California. At the most, each employed person will pay about $700 into the unemployment fund each year. We obviously are in a tough economic time but assuming 10% unemployment means 9 employed for every 1 unemployed then that's $6,300/yr. Even if you assume half the unemployment you'd have 9.5 employed for every .5 employed, you have about $13,300/yr. Whatever the benefits actually are, someone should be able to arrive at a formula for a safe cushion of cash or not promise anything at all and encourage good planning.
Same goes for retirement, where the 401k has taken over because private company pensions lacked certainty. But government still happily offers pensions 1) because government employees wouldn't give them up and 2) because the government has to pay for the pension guarantees no matter what, which means more taxes at some point to make up the difference. State governments don't even have the flexibility of the social security system to say you may only get 75% of your promised benefits. Taxing is their only recourse, but they happily continue to make promises that may be difficult to impossible to honor.
All around us, from every economic angle, it appears that all decisions are being made to break even and to have an immediate satisfaction without looking towards a long term consequence. And even in big business, our banks were frivolous with their money, leveraging their investments 30:1 and paying big bonuses with the great payout and sticking their hand out when the bet didn't pay off. One year later, things are looking better and banks are paying higher salaries than they were two years ago. There's no sense of retaining money to capitalize the bank and avoid overleveraging... why should there be? There's no consequence!
The linked article among other things says that 16 states have used up all of their unemployment funds already, and another 16 could run out by year's end. These states are now borrowing funds that will have to be repaid in the future by higher taxes... higher taxes on those employed since roughly 10% of people in the country are unemployed and getting benefits. And maybe when some of these people who were unemployed finally get a job, they'll step into an environment where they take home less of what they've earned.
But how can these systems get like this? How can so many promises of funding be assured and guaranteed with no actual knowledge of where the money will come from? Let's consider unemployment in California. At the most, each employed person will pay about $700 into the unemployment fund each year. We obviously are in a tough economic time but assuming 10% unemployment means 9 employed for every 1 unemployed then that's $6,300/yr. Even if you assume half the unemployment you'd have 9.5 employed for every .5 employed, you have about $13,300/yr. Whatever the benefits actually are, someone should be able to arrive at a formula for a safe cushion of cash or not promise anything at all and encourage good planning.
Same goes for retirement, where the 401k has taken over because private company pensions lacked certainty. But government still happily offers pensions 1) because government employees wouldn't give them up and 2) because the government has to pay for the pension guarantees no matter what, which means more taxes at some point to make up the difference. State governments don't even have the flexibility of the social security system to say you may only get 75% of your promised benefits. Taxing is their only recourse, but they happily continue to make promises that may be difficult to impossible to honor.
All around us, from every economic angle, it appears that all decisions are being made to break even and to have an immediate satisfaction without looking towards a long term consequence. And even in big business, our banks were frivolous with their money, leveraging their investments 30:1 and paying big bonuses with the great payout and sticking their hand out when the bet didn't pay off. One year later, things are looking better and banks are paying higher salaries than they were two years ago. There's no sense of retaining money to capitalize the bank and avoid overleveraging... why should there be? There's no consequence!
Tuesday, July 21, 2009
Miracle Fruit Update 7-21-09
No picture at the moment since nothing really stands out but recently the plant must have liked the climate because it has sent off numerous shoots like the two I circled earlier. By current count I see 5 young shoots and 6 main stalks with new vertical growth, including the main stalk which hadn't had any growth since I started raising it. All in all it's a bushy plant with lots of new growth but probably a long ways away from any fruit, but hopefully one day that will change.
Wednesday, July 08, 2009
It was a swell run (RIP Shrimp #4)
After not quite 2 years my last shrimp passed on to the big aquarium in the sky (sea?). I could actually see the signs over the last few days so I wasn't too surprised. I'm also fairly confident no shrimp are hiding anywhere, so now it will just be time to see how wild the ecosystem can get when there is no longer a natural balance.
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