Monday, 1 September 2014

An Icelandic Story

Sometimes, I'll write out a blog over a small piece of history......to make you sit and think.

For about a decade.....until 2008....Iceland was considered this marvelous miracle of sorts when it came to the economy.  They were booming.  Sixty Minutes went and did an episode to show the success of the banking system, and how many start-up companies were succeeding.  Reykjavik, the capital, home to 118,000 residents.....had become a great place to live.

In 2008.....the US economic stumble occurred with the housing market and these "investment-bundles" that various international banks had purchased....soured.

Reykjavik had three significant banks (Kaupthing, Glitnir, and Landsbanki).  All three had bought heavily into the US housing market, then marketed themselves across Europe as investment opporutnities.  For at least a decade.....they had Germans, French, English, Dutch, etc.....buying into the "guaranteed profits" scheme.  What they could say for this entire decade....is that this bundled package deal got you more percentage points than an average savings account. It made sense.....plus no one could really explain the risk in any detail (that kinda helped).

In October of 2008.....the fall occurred, and no one in the federal government of Iceland could imagine any method to saving the three banks.  Total cash impact.....three times the GDP of Iceland.

By the spring of 2009.....most Icelanders had come to realize the massive problem left to them.  You couldn't get a loan for anything.  Most business operations were suffering because they had to import, and the whole method of trusting the banking system to deliver or pay-off was screwed up.

You could say that the entire year of 2009 left a sour taste in the mouths of most Icelandic people.....and those around the capital of Reykjavik were amazed at the mighty fall of the local economy.  Even the McDonalds in town folded up and left.  It reached a point where people started to be more sarcastic and more cynical than what you'd normally expect.

On the whole.....Icelandic people have a pretty "Mayberry-like" sense of humor.  They can tell a long-winded comic story in a serious fashion, and you the listener or viewer.....avoid grinning but you are fairly amused at the outcome.

So by the end of 2009.....there's this Icelandic comedian....Jon Knarr.  Jon is fairly well known around Iceland.  With a island population of 320,000....it's safe to say that the vast number of comedians number less than fifty, and if you make to state-run TV....virtually everyone knows your act and your gimmicks.

Jon makes this decision for the Reykjavik city mayor's election in the spring of 2010.  Six months out.....Jon puts together what is referred to as a political party (to be called "The Best Party").  Yeah, I know.....it's a hokey name but Jon didn't really want a five or six-letter party tag, and best always means something positive.

Then, Jon went out and displayed himself as a mayor candidate.  He promised various thing: free towels at the city pool, a new polar bear for the city zoo, and a sustainable transparency (yeah, folks are still pondering that meaning).

It's safe to say as Jon traveled across the city...shook hands....did presentations....and was interviewed by the state-run radio stations.....he made an impression.

Reykjavik folks, after viewing the October 2008 economic fall, and the dismal period 2009.....were pretty tired and dismal on all political parties.  Whatever they were talking about.....just wouldn't work anymore.

Jon was the bogus candidate that they needed.  They wanted to send a message across to all political parties in the city of Reykjavik.....frustration with regular BS....wasn't going to work anymore.  They wanted a comedian....spouting bogus talk....to represent them.

So the Best Party went into the May 2010 election, and got around thirty-five percent of the vote.  This translated into six seats on the fifteen member city council, and Jon was elected mayor.

To be humble about this....I personally don't think Jon expected these kind of results and I suspect he was a bit shocked.

Jon has done the four-year 'tour' as mayor and quietly said that was enough for him.  The Best Party?  They've done OK.

My favorite political promise made by this group?  They sat there and promised free city-bus rides for students and disabled folks.  Then, in the same paragraph....they admitted that they will offer more promises than any other party.....because they don't intend to follow through with it.  They readily admitted that in the same comment.  They even made the comparison of free airline flights for women or  free cars for folks way out in the boonies of Iceland.

The truth is.....a majority of people in Reykjavik have grown tired of political promises and bickering. Their frustration is obvious.

So, we gaze around the US, and find the same crowd existing in a frustrated state of mind.

All fifty states will tell you that they have enough laws in place to prevent nutcases or comedians from getting on the Presidential ballot.  Just having a thousand folks in a state to support some comedian won't amount to any placement on the ballot.

But we've done a curious thing.  State by state.....we've been busy changing the method by which electoral college votes are rendered.  We are enabling this method of "winner-take-all" votes in various states.  The original gimmick was to ensure that large urban area political candidate could take massive votes in cities like Chicago, New York, Miami and LA.....and launch a guy to get more popular votes than electoral votes.....then he'd win the race.

Well....you can sit now and imagine a race where a comedian puts himself up as a frustration-voter alternate candidate.  If the state had rules to prevent him from the ballot....fine, he'd just run as a write-in.  So, you could imagine a third-party guy suddenly taking the fifty states.....getting just enough popular votes and a limited number of  electoral college votes.....suddenly getting the "winner-take-all" vote states.

A Jon Knarr-character could suddenly be President of the United States, and shock both the Republicans and Democrats.  And he might be radical and popular enough to even win a second election.

If you had stood up a decade ago in Reykjavik and said that the city would fall apart in the economic sense, and some comedian and his political party would take over city politics.....no one would have believed you.  I think we are at the same stage in America.

We just need an American-style Best Party...promising free ice cream for minority students, water-slides in every under-developed community of America, ridding us of the designated-hitter rule in the American League, promising a tax credit for lawn mower purchases, and forcing up a law requiring all Senators to spend ninety days a year in their home state.  That's enough to get forty percent of the national vote, and force both Republicans and Democrats to some form of reality.

Sunday, 31 August 2014

Airline Food

There are at least fifteen things that routinely bother me about travel via airlines.

Just getting through the TSA security mess....usually gets me peppy and negative.  The idiot questions asked by the scanning my passport usually bother me.  The pricing of any food or drink at the airport bother me.  The uncomfortable seating arrangements and knee room bother me.  The delays which occur in good weather or bad weather.  I even get negative about the walking distance between leaving plane A at gate 6 in terminal one.....and trying to cross over to gate 12 in terminal two....in twenty-two minutes and just barely making it before they close the door (an often-repeating Atlanta and Philly issue).

Then I come to the food onboard planes today.  Since August of 1977 (when the Air Force sent me on my first trip to basic training) to today....I can truthfully say that I've only had two decent meals or dinners in that entire time frame.  The other two-hundred dinners were all crap.

The Air Force put me on a cargo plane one day, and rather than the traditional cheap meats or ham sandwich box.....they put in four big pieces of deep-fried chicken, from the local chow-hall operation.  It was some of the best chicken I've had in my life, and sipping a Coke as refreshment.....I still regard that dinner as one of the better ones.

The other one was a two-hour flight from Luxembourg City to Paris.....where Lux Air pulled out a box with five-star deli sandwich, a couple of great cookies, and some fantastic pudding.  An extra fatty situation?  Oh yeah.  But it was actually worth eating.

The problem with the whole airline food situation is that it has to be done for roughly $3, fit onto a tray, be heatable, and meet some basic nutritional guidelines.  Once you add all of these up.....it's impossible to come to a decent conclusion.

I get around this problem today....mostly by eating a dinner or lunch prior to getting onboard.  I've given up.  Yeah, I admit it......you can't get on the plane and have any expectations of a decent plate of airline food.  I've even gotten to bringing my own cookies with me.

Would it make any difference if suddenly some airline offered a mini Pizza Hut pizza with their travel deal?  I'm not sure.  Would it drive me to fly a certain airline, if I knew they all offered Domino's pizza slices?  Maybe.  I'd probably sit there and debate the cost of the ticket, and just how much it'd mean in value.

Are we improving any with these airline dinners?  No.  I can truthfully say after thirty-odd years of travel.....there's absolutely zero improvement.  That's the strange thing.  We have perhaps....peaked, and cannot get any better.  That....in some ways....ought to worry you.

Saturday, 30 August 2014

Fingerprinting?

I follow the business news a good bit, and there's this odd story that appeared there....which won't really be displayed on CNN, ABC or even Fox News.  It's about this screwed up business regulation in Venezuela....which will come into play shortly....requiring you as a consumer to display your fingerprint....to buy groceries and consumables.

Odd?

Well....here's the basic story.

Venezuela has been going down the tubes economically for two decades.  An irrational government....always on the push for wealth distribution....has gotten to the bottom of the barrel.  So if you were a storefront in any significant urban area of Venezuela....you've had government dimwits arrive and tell you what you can sell items for....unrelated to what you paid for the items to start with.

Naturally, you'd ask stupid questions about their knowledge over profits and operating costs.  They respond that they know better and suggest that they might be able to shut you down.

After a while....instead of offering five different toilet paper options in the store....you start to offer only one option.... some rough cheap paper.  Folks start to negotiate....buying stuff on the black market....creating a hidden market where taxation isn't working and common essentials aren't being sold.

To battle this....Venezuela is going to start a new trend....finger-printing at all grocery and store-fronts.  You buy six jugs of milk....swipe your fingerprints as you buy them.....the government guy notes your purchase and knows your consumption level.  You go and buy forty jugs of milk....swipe your fingerprints.....a government guy comes by the house and asks how you are consuming this (you try to avoid talking about re-selling it at a higher cost and profiting off the dealing).  All of this....leading to fines or jail?

Upsetting?  Yeah, a number of Venezuela folks are asking stupid questions and wondering what company is involved....how they profited off this deal....how much the technology will cost at their local Piggly Wiggly....and where this will lead onto.

A silly use of technology?  You'd have to attach audit experts onto the mess.....consider judges and fines.....and have some expected outcome.  It's silly....but we've developed as a society where it's actually acceptable.

Splish-Splash

Near to where I grew up in Bama....is this town with an expanding population base.  Yeah, I know....it's kinda shocking that some towns in Bama are growing in these stagnant times.

This week, the town council kinda admitted that they are seeking a state grant...meaning tax revenue money and funding dumped into some pot and cities across Bama can request the money for various projects.

So, this town has submitted the paperwork, and awaiting approval for funding to build......a splash park.

Naturally, I've been out of America for a while and I'm not really familiar with the concept of splash parks.

You basically take some two acres of land (or smaller) and run up piping and some outlets....with a latex covered concrete area and drainage capability.  Then you toss in a fairly good pump and a bunch of water outlets....really fountains....and just spray water on folks.

Kids....mostly from sixteen down....get all excited....wet....and happy in such an environment.  No life-guard.  No fancy dressing rooms.  Perhaps a beverage shop and burger joint, and maybe a covered picnic area.

The town's mayor admits it'll be planned around 1,400 square feet....figure a half-acre lot.  Course, he's admitting everyone is excited about this (I kinda wonder why)......and there's a feeling that it'll all be concluded by spring of 2015.....IF they get the funding.

Being a Bama tax payer now....I kinda feel negative about money being tossed into a project like this, but if they didn't go after it for this stupid splash park......some other idiot would go after it to build a a covered picnic structure in a rattlesnake-infested creek area, or someone would put up a basketball court in a drug-infested crack neighborhood of Birmingham.

The curious thing about this whole deal?  They've only crossed the alcohol sales point in the past year (finally getting it passed in 2012).....which means the town now has regular taxation income off the booze sales.  In some ways....I think the city council is fairly surprised at how much rolls in each month off beer and booze (more so than the traffic ticket scheme of the past twenty years).  With various state and federal grants, and ample matching funds coming into play from the local taxation bucket.....they could start planning yearly splish-splash projects, attracting a whole new breed of local moving into the local area and pumping up property values.

As for standing out in the middle of some splash-park on a ninety-five degree day in Bama?  Man, I can't imagine standing there, with that much humidity and that much heat bearing down on you.  And at best.....you can only operate such a park from early May to late September.  But this is Bama, and you tend to appreciate just about everything of entertainment value.

Friday, 29 August 2014

Simply Observations

This morning's news indicates another recline-chair episode that occurred on some plane.  The stewardess got involved, and then got "touched" by some male passenger, which generally means she'll call an emergency.  Sky-marshall guys got involved and held the guy until they landed.  All related to another argument over someone trying to recline the seat beyond acceptance of the next row's passenger.  For two decades....I've been hyper about the seat business when flying.  American Airlines is one of the worst when it comes to depth of seats and knee allowance.  Iceland Air is one of the better airlines for "space".  "Seat-rage"?  Well....it's the best description of the mess.  It's bad enough now that they won't allow you to stand for an hour or two of the flight (as in the old days)....to give you some knee-relief.

I noticed in Billboard news that the record industry is admitting crossing another bad border.  For the weekly total....they went below four million....which is a pretty difficult point for the music industry to admit.  What's happening?  I think most folks woke up in the 1990s and realized that albums are sold with usually one decent song, two marginally good songs.....and the rest are garbage.  I reached a point in the 1990 timeframe where I just almost stopped buying albums because of the quality issue.  1979 was the last year where seven albums were released which had almost all four-star songs (The Wall, Highway to Hell by AC/DC, Rust Never Sleeps by Neil Young, Breakfast in America by SuperTramp, Rumors by Fleetwood Mac, London Calling by the Clash, Regatta de Blanc by the Police).  It makes more sense today to just isolate the one single good tune....pay 99-cents for it, and skip the rest of the album.

I kinda noticed that some Utah judge did a unhooking of the polygamy law....suggesting that not only were gays getting denied opportunities to marry....but real Mormon-enthusiasts....who want two or more wives.  Course, it'll go to the Utah state Supreme Court, and likely onto the US Supreme Court.  But I'm guessing within three years that you as a guy....just might be able to marry two women....or two other guys, if you desired that situation.  Yep, opening vast doors....that no one considered a decade ago.

Finally, Census numbers show around thirty-three percent of America is on some type of welfare or social program.  Yeah.....all-time record.  Who is paying and how long can we sustain this type of deal?  It might be interesting to ask the President or his administrative players what the magic numbers are, and if the nation could sustain forty-percent of folks on welfare or a social program.  The answer might shock folks.

Thursday, 28 August 2014

Modern-Day Pandoras Box

Yesterday, there was an odd announcement by the Department of Transportation.....suggesting potential regulations coming up shortly, and forcing cars manufactured in the US....to have a broadcast capability.

Yeah....this means your car would broadcast out your speed, direction, and location.  Acting with a GPS satellite.....it'd tell a network where you were....ID your car by some method (maybe the tag number or the serial number of the car).....and note your progress.

Speeding?  Well....it wouldn't take an idiot to filter out the location and figure that you were in a 45-mph zone and doing 51-mph.  Ticket from a network viewer?  Very likely.

Why they need to move in this direction?  They weren't exactly talking about in the announcement.  I suspect they have the capability and simply believe it's the best direction in the future to go.  Kinda like me knowing what's best for my neighbors, my peers, and my buddies.

What the article didn't really discuss.....was how the government would receive the data....from across 3.79 million square miles.

First, you'd have to consider the transmission capability onboard a car.  Unless you were sending signals back to a satellite....it'd be practically impossible to cover more than fifty-percent of the US.  Vast areas of Alaska, Montana, California and Idaho simply wouldn't be covered.  Maybe ninety-five percent of Maryland and Delaware might be possible.  Maybe sixty-percent of Alabama might be put under some collection device.

Second....all of this would have to go into some giant data collection system.  Just getting a contract generated to cover this requirement.....you can figure a twenty-billion-dollar contract to set up the initial stage, with receivers on all interstates and US highways.  State highways and county roads?  Maybe down the road with stage two.

Third...how would they control the privacy of the data?  All it'd take is one idiot kid from Wales breaking into their database, and suddenly a hundred-thousand cars could disappear from the display in a matter of seconds.

A Pandoras Box?  Yeah.  Happening shortly?  I can see this delayed for a year or two, but by 2020....it's likely going to be implemented.....with thousands of Americans figuring ways to disable their car's beacon, and facing some kind of fine by the state cops for violating federal law.  Pretty sad way of society evolving.

Wednesday, 27 August 2014

How White Flight Occurs

The news media throws around various terms and just figures that most folks understand what they mean.  When they do give a basic definition....it's so marginal in terms of description, that I think most folks are still puzzled.  So I'll throw up the term....."white flight".

These are the basic steps that create white flight.

You start with one key event.  It might be a murder....an assault....or some vicious robbery gone-wrong....that triggers a town of twenty-thousand people to start to evaluate their safety.  It might have nothing to do with blacks, whites, Latinos, or any minority. It might involve the big-name school principal firing a favored teacher or football coach.  It might involve a massive change in the city council where you find that your council member openly stole thousands each year and gave contracts to his brother-in-law.

So instead of a ratio of five-people-moving-out and six-people-moving-in as the standard for your town....you quietly find over a two or four year period that it's now ten-people-moving-out and seven-people-moving-in.  Some houses are now sold at a discount price....say $15k less than the average, just for the owners to vacate and leave.

Then you start to notice at Sunday School.....as your peers discuss they are looking at properties in a development sixteen miles away and might be leaving this church.  You ask for reasons and you end up wasting an entire hour listening to one guy dump on the local politics, the local cops, the local crime, and the local economy.  He might have excessive reasons, and acting on impulse, but his facts are what is reported in the local paper.

You start to notice that your local grocery has a few new people on the staff....because the old crew have moved onto a new operation just outside of town, near the new development.

The school has some troubles with discipline.....fights and drugs start to get mentioned more often now.

So ten years into this episode....the town is now assessed at 18,500....having lost 1,500 residents over a decade.  The mayor wants infrastructure programs....which means more taxes and more fine generation (by your friendly cops).  The mayor thinks if they can just fix up this park....widen this road....or renew this part of town.....things will change.

The increased taxation simply irks the remaining residents of town.  A new police chief arrives because the old guy wasn't given a pay-raise like he expected and he found a better job elsewhere.  The fire chief does the same deal.

Robbery occurs more often and neighborhood watch groups are now becoming the norm.

The city council flips over one year with almost all new players....talking of "change".  They can't define the change but they will bring it to the city.  Naturally, this all revolves around more taxes, more expenditures, and more programs funded by the city, the county, the state, or the federal government.

A decade later, the city is now 14,500....having lost 5,500 over a twenty-year period.  Several neighborhoods are now crime-infested and heavily connected to drugs.  The cops come out to the school once a month to arrest one or two students for selling weed.

By this point, you kinda add up the statistical average for whites and "others".....finding that sixty-percent of the white population from twenty years ago have left.  Your Latino population has now taken over eight-percent of the city population and figures heavily into any city election.  Minority political figures into every election now.

Big-name business operations that used to bring in substantial city tax revenue?  Gone.  You depend on gas stations, drug stores, and your local Wal-Mart.

The development urban area that attracted a number of the white population over the past two decades?  It's got it's own Wal-Mart, and it's own gas stations.  The new urban development now has people with decent jobs....who buy items involving taxation, and generate funding for the new urban area to grow and put in new parks and infrastructure.  They hire better qualified cops and routinely prosecute anyone of a serious violation.  They keep their new urban area under constant review....making the folks who moved there happier than the folks who remained in the old town.

Stagnation settles into the old town.  They can't attract better business operations or better pay.  At this point, white flight has reached an epic proportion.  You can't reverse this trend.  You can't solve this trend.  Staying in the white flight town?  That ought to be your least of choices.  You ought to actually think of packing up and moving your family away....maybe to a whole new state....and just start fresh.  But you won't do that....because you are anchored to a dream of living in the place where you grew up.  Those who move on....survive.  Those who stay....accept stagnation as the norm.

That's white flight, and it's going on daily in America.  

Tuesday, 26 August 2014

The Burger King Story

When I joined the Air Force in August of 1977....the finance guys asked me what I wanted for a state of residence.....which translated over into state taxes.  I didn't really grasp the question, but just naturally answered Alabama.  So for the next three years, I paid Alabama state taxes.  I doubt if I ever paid more than $300 a year....because a young airman just doesn't make that much anyway.

When I got to Tacoma, Washington in 1980, they let me know right away that Washington was one of those states without a state income tax, and it'd be smart to change your status.  I didn't really think much about it......but around a year later as I was getting ready to leave the region, I changed my status to a Washington resident.  For the remainder of my career, I was a Washington resident and paid no state taxes.

Around 1989, I came to arrive in Arizona, and this topic came up in a finance briefing.  They tossed up a slide of what a E6 and a O3 would pay per year for various states.  For Bama, I would have paid around $950.  For Kentucky, it was closer to $1300.  They were encouraging folks to figure some method of getting Texas residency (that was popular then) and pay no states taxes.  It simply made sense.

While at the Pentagon in 2010 to 2013.....I came to work around a number of Army personnel, who mostly all claimed Texas as their state of residence.  So they paid no state income tax.

I bring this up....because today.....Burger King announced that it was buying Hortons of Canada....a Bar-B-Q chain....and moving their headquarters to Canada.  The US corporate rate of taxation is around 38-percent, while Canada is around 15-percent.  Various news idiots are giving two or three different rates for each, which makes it awful confusing.  The bottom line is that BK will save millions by shifting the headquarters there.

Naturally, on the Business Channel....a couple of congressmen and senators are all upset and talking about business operations not being patriotic and paying their fair share of taxes.  I kinda sat there and wondered who blessed them to come up with a "fair-share" number and say that's ok and fair.

I don't have much of a problem with this corporate mentality.  It's their right.  If you want to make it a legal mess....just tell them they can't move anywhere, period.  While you do that.....also make up a rule that congressmen and senators need to keep their residence back in their home state and actually just maintain a hotel room while living in DC.

If you look around....there's around five or six states which are deemed as harsh places for any company to set up a headquarters.  There's around a dozen states (like Texas and Alabama for example)....where the state goes way out of its way to talk folks into moving their business operation into their states....mostly by lowering all corporate taxation at the state level.  I don't see congress or the senate jumping into this business or trying to put a fist down on Texas being openly friendly to attracting new companies.

Where does all this lead onto?  I sat there one day and figured that over a twenty-two year career.....I probably saved around $20,000 that went into my pocket.....rather than the state tax revenue bucket of Alabama. Basically a new pickup.  For a company like Burger King, what they'd save over twenty years....probably would amount to way over a billion dollars.  It means a good bit if you think about it.