Archive for October 2013

Today's "Sell" Indicator

The Arizona Republic says there is not stock market bubble.  Can't think of a better reason to sell.

This is Becoming the All Purpose Headline: Obama Was Unaware of [blank]

Don't Fire Sebelius

I am not sure why everyone thinks it would be a punishment to fire Sebelius at this point.  Three days after she is fired, she will have a handful of million dollar a year job offers from health care companies and lobbyists who want to tap her influence into this administration.  The Administration and Congress is actively picking winners and losers in 1/7 of the economy, so there are billions at stake.  Sebelius can name her price.

Instead I would love to see her stay in office three long years and answer every press question and Congressional inquiry about Obamacare, over and over and over.

Litigation Virgin no More, and Good News on Parks for the Next Shutdown

My company has been sued a few times for slip and fall type stuff but I have never in my life been the plaintiff in a legal action.  As is perhaps appropriate given my political leanings, my first ever suit was against the the Federal government, specifically against the Forest Service seeking an injunction against their closure of the campgrounds we operate in the recent shutdown.

Unfortunately, the case reached the court on the day the shutdown lifted, but the judge was still very helpful in giving the Forest Service a swift kick in the butt to hurry them along so they didn't drag their feet reopening us.,

I had feared that we would lose the opportunity to set a precedent.  Since the shutdown was over I though the Court might consider this issue moot.  But apparently one can continue with such litigation to set a precedent if there is reason to think the circumstances will recur.  And the government attorney was kind enough to make a statement right in the court transcript (granted in context of a different argument) that this same shutdown situation is likely to reoccur as soon as early next year.

The good news is that we appear to have an argument that the Court is willing to entertain.  In fact, the statement below was a statement by the judge in the hearing (it's from the hearing transcript and Q&A with the government attorney and not from any official opinion).  It is not in any way binding but it gives us some confidence to try to proceed to get a ruling on the legality of our closure now, so we have it in our pocket for next time.  Here is the Court's statement, addressing the government attorney:

Well, the basic problem is that the Forest Service never should have closed these that were permitted properties.  And they in fact violated the agreement they had with these plaintiffs in doing so without necessity and determining they had a right to do so, which I don't think they did....

[the Forest Service has] nothing to do with the administration and management of the campgrounds other than the inspections at any given time.

So, what they have done is unreasonably close these parks, preventing the concessioners who pay a premium in order to get this permit and lease the property under the requirements in this permit -- and the Forest Service was very ill-advised to make the decision to close these grounds under these circumstances, where you have given up the maintenance and administration of these campsites.

I understand the overall obligation for public safety, but you have delegated that to private entities.  And you took it away when it wasn't costing you a dollar to leave it as was.  And in fact, that's where  we get into the restraint of trade and the fact that there are losses which are most likely uncompensatable.

 

By the way the case was National Forest Recreation Association et. al. vs. Tom Tidwell.  My company, among others, was al.

 

Irony

It turns out that the US is one of the few industrialized nations to meet the terms of the Kyoto protocols (reduce CO2 emissions to 1997 levels) despite the fact we never signed it or did anything to try to meet the goals.

Thank the recession and probably more importantly the natural gas and fracking revolution.  Fracking will do more to reduce CO2 than the entire sum of government and renewable energy projects (since a BTU from natural gas produces about half the CO2 as a BTU form coal).  Of course, environmentalists oppose fracking.  They would rather carpet the desert with taxpayer-funded solar panels and windmills than allow the private sector to solve the problem using 50-year-old technology.

Total Fecklessness

If a city government cannot bring itself to end something so obviously abusive as pension spiking, what hope is there of any real reforms on tougher matters?  Government employees are increasingly running government in their own favor.

After nearly three hours of contentious debate, Phoenix city leaders were so divided over how to tackle pension “spiking” on Tuesday that they ended up doing nothing at all.

They walked into the City Council chambers prepared to make changes, but after splintering into three ideological factions, voted 5-4 against a plan to combat spiking, generally seen as the artificial inflation of a city employee’s income to boost his or her retirement benefit.

Several high-profile cases have come to light, pushing the effort to eliminate pension boosting to the forefront of the council’s agenda.

Former Phoenix City Manager David Cavazos, who retired last week to lead another city, was able to apply unused sick pay and other perks to spike his pension to an estimated $235,863, the second-largest retirement benefit in city history.

Earlier this month, a subcommittee of council members proposed modest reforms that they said would reduce pension spiking and provide transparency. They said the plan treated existing employees fairly and avoided potential litigation.

But the proposal fell apart Tuesday night, when a group of liberal-leaning council members joined the body’s fiscal conservatives in voting against it, though their rationales were vastly different.

After the motion to approve the proposal failed, the meeting ended. The result, greeted by cheers from employee unions in the crowd

More Obamacare Photoshop Fun

Using ads from the Colorado health exchange.

 

Start the Obamacare Photoshop Fun, Courtesy of the Colorado Heath Exchange

This may be an elaborate hoax (the ads are that goofy) but these appear to be actual ads from the Colorado health insurance exchange.  The potential for Photoshop fund is incredible.  I took a quick shot at a couple.  Here is the original.

Update:  more here

 

More on Health Insurance Cancellations

Many folks are getting the same cancellation letter I received.  Here is more, via Maggies Farm.

Obamacare Not Only Raising My Rates, But Making The Process Much Harder

On September 26 of this year, President Obama said this of the new Obamacare exchanges:

“If you’ve ever tried to buy insurance on your own,” he said, “I promise you this is a lot easier.”

Well, let's see.  Here are some notes on my previous health insurance buying decision

  • I was able to price shop policies online without creating an account, without giving up my social security number.  The websites to do so worked and operated quickly
  • A broker who had decades of experience in health care (rather than being a former Obama campaign worker with a few hours of training) walked me through the options and how they worked.
  • Once we chose a policy, the application process online was quick and easy

Here is one thing that was likely worse

  • I had to provide medical history information, which probably is not required under Obamacare because of community rating (though I am not sure)

And here is one thing that was better for me but I guess must be worse for the Left since they complain about it so much

  • There was a lot more choice.  If the process was "harder" in any way before, it was because there were far more choices.  It was harder in the same way that it is generally harder to shop in the US than, say, in the old Soviet Union.  Obamacare circumscribes policies such that a large package of benefits are mandated, not optional (I have to pay for mental health coverage and probably aromatherapy) and the size of one's deductible is capped.

It is also this latter difference that will make my next policy substantially more expensive.  In standardizing options, the Congress standardized on the most expensive options (broadest possible benefits, smallest possible deductible).

By the way, this is not proven yet but there is probably one other way my Obamacare policy will be worse than my last one:  the doctor network in my policy will very likely be a LOT smaller.  We could almost be sure this would happen precisely because Obama promised it wouldn't  (his promises on health care are pretty good "tells" that the opposite will happen).

Florida Audit: Total Amateur Hour

So the Flordia sales tax auditor presented her preliminary findings.  She believed that I had under-reported revenues and sales taxes by half!  Hundreds of thousands of dollars over three years.  I told her it was absolutely impossible.  No way we were off by that much.

And we were not.  It turns out that the FL sales tax report we fill out has five categories of revenue one must report in.  One is general sales.  Another is lodging.  We have revenue in both and report on both lines.  She had apparently only pulled the data from her system from the general sales line.  Total amateur hour.  Incredible.  (Several years ago there would have been a good "Bush League" pun but since the governor's office has turned over the opportunity is lost).

The other finding is that we had about 8-10 expense invoices (out of hundreds I had to pull yesterday by hand, ugghh) without any sales tax broken out on the invoice.  This may mean the vendor did not charge sales tax, or that the vendor just did not break it out.  Of course, she takes the former position, without any evidence.

This expense invoice audit is an irritating result of the "use tax" rules that states are imposing to try to make one pay tax on out of state sales.  But these were not out of state vendors, they were all Florida vendors.  I told her that if she thought they were not charging sales tax, to go audit them.  She said I had to pay.

This is absurd.  If I am found to have under-collected taxes from my customers, then I have to pay.  She is not going to go to all my campground customers and charge them back use tax.  But when I am the customer and the vendor potentially undercharges me, I have to pay as the customer?  There is no consistent rule to explain why this makes sense, except for the general rule of government that they will take money from whomever they can whenever they think they can get away with it.

 

Obamacare Update: Letter From My Health Insurance Broker

My health insurance broker wrote me this in response to our telling him we got a letter from Blue Cross (BC) terminating our policy

Did  your BC letter say your policy ended 12/31/13 or 12/31/14.  If it ends in 2014 I strongly suggest you stay where you are until you are forced into Obamacare which will probably raise your rates substantially.

Given that I run a small business with fluctuating earnings, my last two years tax returns show zero net income.  If I had not honor, I probably could go into the exchange (if and when I could actually get into the exchange) and qualify for a large subsidy.  I could also probably go uncovered, and just sign up when I get sick, and pay the penalty, which is trivial if you are showing no income on your taxes.

Does anyone know if the exchanges do a net worth or asset check?  I don't see how.  If they only look at taxes, I will appear dirt poor.

Yep, the Current Economic Stagnation Must Have Been Due to the Sequester and "Austerity"

Monthly job additions, taken from Kevin Drum's site, who blames this on.... austerity and the sequester.  Yes, I can't prove that the PPACA helped drive the stagnation, but the Left can't prove the austerity link either, and at least I have correlation on my side.

 

So Much For Being Able to Keep My Health Insurance

Blue Cross just wrote me that our current health insurance policy will not be renewable for next year.  Unfortunately, I have actual health insurance rather than pre-paid medical care (meaning that it has a high deductible and pays for catastrophic things rather than aromatherapy visits).  Kathleen Sebelius does not think what I have is "real insurance" so she and Obama have banned it, despite promising that if I like my health insurance I would be able to keep it.

Audit Update

The Florida auditor sitting in my one-man office was shocked to learn I would not be in the rest of the week.  I said you scheduled the audit visit for today, so I changed my plans and am in the office today, but leave tomorrow.  Apparently she assumed that the audit schedule gave her the right to stay as long as she wanted.  She was planning to sit in my office for another 2-5 days.  I told her sorry, but if she wanted to book 5 days, she should have booked five days.  And by the way, if she had tried in advance to make me sit dormant in my office all week, I would not have agreed to the visit.

This is just insane in an Internet world.  Everything she asked for in advance was sent to her electronically.  Even though she is sitting right next to me, her requests to me for more data have come by email.  I can't figure any reason why she is even here, unless Florida finds it cheaper to fly her around and use other people's offices rather than provide her with one of her own.

By the way, this is fairly typical of a lot of government workers in my experience.  If they block a meeting on their calendar for the whole afternoon, they want it to last the whole afternoon.  There are a lot of jobs out there where people are most comfortable proving their worth by showing that their calendars are always full.

Nearly Two Centuries of Borrowing in One Day

It took into the mid-1960's for the Federal government to accumulate $328 billion in debt (yeah, I know, nominal dollars).  It rose that much in one day last week.

I Am Not Sure the State of Florida Understands This Whole Internet Thingie

Every three years I have to endure a sales tax audit from the State of Florida.  This year they actually sent me well in advance a list of all the paperwork they needed.  I sent everything to them electronically weeks ago.  So why do they have their auditor fly to Phoenix, stay in a hotel, and do her analysis of this paperwork on her laptop in my office?  In the hour since she has been here she has not asked me for one thing.  It is just bizarre.  Given that I have been audited by them twice in the past and never owed more than forty or fifty bucks in back taxes from computation errors, I am pretty sure her flight cost way more than the expected value of her trip, particularly since she had done nothing so far she could not have done (better probably) in her own office.

Another Trouble With Polls

The #1 trouble with polls is that the questions can be easily manipulated to shift the results quite a bit by small changes in wording.

But another problem in interpretation is that "opposition" to certain public policy goals is not well parsed.  Kevin Drum gives an example where "opposition" to Obamacare includes a lot of people who don't like it because they wanted it to be even more radical, believing the government should have gone even further or stopped short of the full policy prescription required.  But these numbers are typically just lumped in as "opposed" and the conclusion is frequently that all opposed thought the law went too far or should not have been passed.

My gut feel is that this is a non-partisan issue.  Just as easily folks could be opposed to, say, tax cuts or the government shutdown because they did not think it went far enough.

As far as Obamacare goes, it will be interesting to see what those numbers look like in 2 months.

This Minimum Wage Conversation is Not a Hypothetical -- I Have It All The Time

Don Boudreax writes:

Here’s a project for all unemployed young people – say, ages 18 through 21 – in America today.  Go to a nearby supermarket or restaurant or lawn-care company or pet store and ask for a job at the minimum wage.  If you are denied, offer to work for $4.00 per hour.  The owner or manager will almost surely decline, saying that it’s against the law.

“Would you like to hire me at $4.00?” you ask.

“Well yes I would” is the answer you’re likely to get in reply.

“So, hire me at that wage.  I’m an adult, I’m sober, and I have no mental issues.  I’m willing to work for $4.00 per hour.”

“You don’t get it, kid.  I can’t hire you at that wage.  I’ll get fined, or worse.  Go away.”

“Ok, I’ll leave.  But no one – including you – will hire me at $7.25 per hour.  What am I supposed to do?”

“Look kid.  That’s your problem.  I’m sorry.  I don’t make the laws, but I gotta follow them.  Go away now.”

I know that this is a realistic scenario because I have this conversation with employees all the time.  Except in my case, applicants are generally not 18 years old but 70 years old.

A bit of background:  My company operates campground and other recreation areas mainly using retired people who live on-site in their own RV's.  Few of my 400+ employees are under 65 and several are over 90.

There are several reasons this conversation occurs:

  • As my employees get older, and perhaps sicker with various disabilities, their work slows down to the point that it falls under our productivity expectations.  Employees may come to me saying they want to stay busy but they know they don't work very fast but they would be happy to work for $5 or $4 an hour if they could just keep this job they love.  (There is a Federal law that allows waiving of minimum wages for disability situations.  We tried it -- once.  The paperwork was daunting and the approval came 7 months after the application -- 2 months after the seasonal employee had already gone home for the year).
  • Many people like to stay busy but face wage caps where they begin to lose their Social Security.  They want to keep their total income under the wage cap.  We try to create some jobs that require fewer hours so they can get their wages down that way, but in many cases we have a limited number of on-site living spots and a fixed amount of work such that each person occupying a living spot must do a certain amount of work to make sure it all gets done.  So at some point we can't give them fewer hours, and then they will ask for lower pay.

I frequently have to tell people I simply cannot pay them less.  They ask if they can sign a paper saying they want to be paid less, and I tell them something like "no, the law assumes you are a gullible rube and that I am evil and infinitely powerful so that if you sign a paper, it just means I forced you to do it."  Which is all true, that is exactly the logic of the law.

People look at me funny sometimes when I say the minimum wage law limits employee rights by putting a floor on what they may charge for their labor.  This is an odd way of putting it for them, because minimum wage laws are generally explained in the oppressor-oppressed model, but it makes perfect sense from my experience.

Lessons That Are No Help

You know how someone does an amazing trick, and then they show you how, and you say, "Oh, I see, that was easy once you know the trick."  Well, that is not the case with this art, at least for me.  

One problem with art books is they will have some exercise to draw a face, and step one will be an oval and step two will be a few more ovals, and I am following along well, and then step three the whole face is suddenly drawn in where the ovals were.   Art books all do this and it drives me crazy.    Well, at least the guy in the linked video shows every single little step.  And it still seems a miracle that the picture emerges.

 

This is a Scandal??

How is this a scandal?

While fans can also purchase pink [NFL Branded] clothing and accessories to support the cause, a shockingly small amount of the fans' money is actually going towards cancer research.

According to data obtained from the NFL by Darren Rovell of ESPN, the NFL "takes a 25% royalty from the wholesale price (1/2 retail), donates 90% of royalty to American Cancer Society."

In other words, for every $100 in pink merchandise sold, $12.50 goes to the NFL. Of that, $11.25 goes to the American Cancer Society (ACS) and the NFL keeps the rest. The remaining money is then divided up by the company that makes the merchandise (37.5%) and the company that sells the merchandise (50.0%), which is often the NFL and the individual teams.

How is this "shockingly small"?  A donation of 11.25% of the retail price, and 22.5% of the wholesale price,  of a piece of clothing is a pretty hefty.  What do they expect?  All the author is doing is demonstrating his (her?)  ignorance of retail and clothing net profit margins.  In particular, how can you try to make the NFL the bad guy for donating 90% of the money they actually get?  It's their program, they can't donate the clothing manufacturer's money.

And besides, the NFL should be congratulated for being open about the numbers -- there is often zero transparency in such charitable promotional programs.  How much of the money in the last charity gala you attended do you think actually made it to the charity rather than just help fund the self-aggrandizement of their socialite sponsors?

USA Today: Shutdown Has Trivial, Unmeasurable Impact on Economy

OK, actually, they did not use the words "trivial" and "unmeasurable."  But they could have.  What they actually said in a story splashed across the front page:

The 16-day government shutdown cost the economy jobs, delayed mortgages and lost retail sales — at least $12 billion worth, and maybe as much as $24 billion

$12-24 Billion is between 0.08% and 0.15% of GDP.  This is for a shutdown of the government for 4.4% of the year (16 days divided by 365).   That hardly seems like a substantial impact, and not at all in line with the scare stories in advance of the shutdown.  (And this is coming from someone who was impacted a lot, though due to illegal actions by the administration).

iOS7 Problems

The day of the launch of iOS7, I warned my whole family in an email not to upgrade until it had some time to prove itself.  This is why.  Apparently it is a mess, at least for some users. 

The sort of funny part is that they defend themselves by saying "at least it is not as bad as Microsoft OS launch."  We certainly have latched onto a new form of accountability in the Obama age:  "Don't criticize me because I am not as bad as the other guy."

By the way, as someone who is had been royally pissed off at Microsoft many times in the past, Microsoft has to accommodate thousands of hardware configurations and a much more loosely controlled development community.  There are fewer excuses for Apple, which develops for a single hardware platform that it totally controls.

Also, there is one other difference -- when I am unhappy with a Microsoft OS, as I was with Vista, I can simply roll back to the previous version (in that case XP).   Apple does not give users any way to roll back their iPhone OS.

Let's Send Kathleen Sebelius to Run the NSA

We can't seem to get Congress or the President to ban domestic spying on our emails and phone records, so let's let Kathleen Sibelius run the NSA.  Let's make sure she takes personal control of the development of new computer systems.  We will be safe for decades.

The Difference Between Private and Public Governance, Part Number Whatever

Let's suppose a Fortune 500 company went through a rancorous internal debate about strategic priorities, perhaps even resulting in proxy fights and such (think Blackberry, HP, and many other examples).  The debate and uncertainty makes investors nervous.  So when the debate has been settled, what does the CEO say?  My guess is that he or she will do everything they can to calm investors, explain that the internal debate was a sign of a healthy response to adversity, and reiterate to the markets that the company is set to be stronger than ever.  The CEO is going to do everything they can to rebuild confidence and downplay the effects of the internal debate.

Here is President Obama today, talking about the budget battle

“Probably nothing has done more damage to America’s credibility in the world than the spectacle we’ve seen these past few weeks,” the president said in an impassioned White House appearance.

Good God, its like he's urging a sell order on his own stock.   I was early in observing the Republican strategy was stupid and doomed to failure, but you have to show a little statesmanship as President.

Postscript:  

Standard & Poor’s estimated the shutdown has taken $24 billion out of the economy.

If this is true, this number is trivial.  0.15% of GDP (and this from someone hurt more than most) loss from a government shutdown about 4.4% of the year (16/365)