Autobiography required by Commenters

I noticed that many Google News stories have gone from having hundreds of comments to one or two. I tried to post a comment on two stories today and find out why. The publications wanted me to register and give my life history (ABC News). I think I even have one of the accounts, but it has been so long I do not remember how to login. Though it appears even using that login was going to require several pages of additional detail (ZDnet). Do users not want to give out this information, spend the time involved in filling them out, or can’t remember hundreds of login profiles? So if you want to be at the top of the comment area now is the time, though you might want to find some software to manage the user ids and passwords.

California loves to pollute

The new California green initiative seems to be how much pollution they can add to the earth outside California. Perhaps they also have plans for a giant dome to encompass the state. All indications are this green initiative will reduce the standard of living and increase pollution; nothing for something. Since pollution credits become valuable there is more incentive to use them then not to, even if they are not needed. Corporations will control the pollution from hand outs from their political allies. New companies will have to pay previous monopolies to do business, so new companies that have green technology that produce significantly less pollution will be penalized because they are new. As the credits become valuable it will be cost effective to cash them in and move the polluting activities out of the state. Production of things like electricity requires more energy to transmit over distance. So the farther from the source the more pollution required to produce the original amount. Also standards in some states are not as rigid as California meaning more pollution is allowed for the same process. Any new enterprise that produces carbon byproducts is going to be discouraged from locating in California. More energy related services are going to move out of California requiring more energy to transport them to California. Expanding the transportation system is going to create even more industrial activities adding even more pollution. Running all of this is the government, which has a track record of inefficiency and bureaucracy. By locking in technology and a way of doing things they lock out small business and individuals and the ability to adopt new technologies. Maybe California is so vocal in trying to get other states to adopt this because they know otherwise their wealth, jobs, industry, and workers are going to follow the pollution.

Is the CEO of SAP out of touch?

In an excerpt from a blog printed in the Wall Street Journal yesterday SAP CEO Henning Kagermann sees no threat to current information technology from new online software. However this view is out of date in that the problem with traditional business software is that its strength is also its weakness. Current business enterprise software requires a large investment and is vibrant and balances both a rigid structure with adaptability. This means that for a new technology to compete it must offer a reward in excess of the cost of switching. None of the software on the market offers that. However this new Internet software has led to development of new niche architectures some of which can compete. It is not the content produced by the new offerings, but how it is being produced. In the past it took five or ten years for what is in the lab to make it to the consumer. Current enterprise software faces a major problem in about twenty four months. Perhaps Kagermann does see it coming. SAP works more like a rental store than a retailer. A new architecture means new software and is great for a retailer, like switching from VHS to DVD. But as a rental store SAP must unload their VHS stock. So SAP may be trying to keep the market strong for VHS tapes while internally adjusting to DVD. Google announced this week they are going to offer web statistics. Some think Google acting as both advisor and seller is a conflict of interest. So SAP finds itself in a conflict of interest. Once the new enterprise solutions make it to market the price difference is significant enough to make the old solutions completely obsolete. That window may be months or years, but once it closes it will happen rapidly. Given the statements in the blog maybe the viability of the current information technology is even shorter than it appears.

Greed Killing the Arts

The Columbus Ohio symphony orchestra has closed it doors. The group posted a $1.3 million deficit last year and failed to balance this years budget of $12 million. The board and artist were at an impasse on cuts. Sounds like too many hands in the cookie jar. With 53 full time musicians on the pay roll the questions is where did all the money go. Even if they each earned 100k a year that is only half the budget. Average pay for professionals is less than 50k as any teacher can attest. Even with all the other cost in running a symphony it sounds like they have too much money. In larger cities budgets are considerably larger, but many of them are also living beyond their means. Columbus could revert to volunteers playing in the park to keep the tradition alive. But to have so much money and not be able to make it work.

Government wants to increase regulation on commodities

In response to high commodity prices Congress is working on laws to tighten regulations. They believe prices may be caused by speculation and not demand. This plan has two major flaws. Increases in Tax and regulations generally cause a product price to increase. The second problem is future trading. At one time commodity trading was of physical commodities. If the commodity is apples there are so many apples currently on the market. During growing season there are also apples in the trees. These may or may not make it to market and represent future product. The government allowed trading of these future commodities, but had strict limits. Commodity prices during the 90’s and early 00’s stayed low because the government expanded the years futures can be traded and relaxed the trading rules. Some oil companies found themselves trapped in contract for oil at a much lower price then the market. Courts decided this was not fair, and let the oil companies out of these contracts. The result is oil no longer trading for as many future years, reduced supply, and higher price. For commodities like silver there are now more futures trading than physical silver in the world. So the Democrats face the possibility of creating a commodity crash much like the housing market. Only in this crash prices go both up and down. The value of futures declines while the price of physical commodities skyrocket and are in short supply. This is even more complicated by Berkshire Hathaway. Realizing that silver futures are now unrealistic the company bought a billion dollars in physical silver. The government response is a law that limits the amount of physical commodities that can be traded in a single month. China has a trillion dollars and has used some of that money to buy futures for things such as wheat. China is exempt from the government limits. So they are currently first in line.

2008 not 1934

Our 2007 weather patterns mimicked 1933 with La Nina and record crops in the mid-west. The dry winter did not materialize and we did not see dust storms roll across the mid-west this spring. In fact the wet weather from last year continues, and threatens to reduce crop yields because of too much rain. So the drier year after La Nina may be next year or maybe we just miss it this cycle. What would have happened to corn prices if the weather had actually been bad? A few weeks ago when it roared through five dollars a bushel it seemed high. Yesterday it closed at $7.65.

Same Sex Marriages more Permanent

California began issuing marriage licenses to same sex couples yesterday. The unions may more permanent than the couples realize. Unlike a real marriage these unions will not be able to use traditional divorce proceedings. Some states such as Vermont require the individuals become residents before divorcing. When they do divorce the law in place is for separating a business partnership and thus more complex. Maybe divorces should be that hard to get too?

China Uses Stupid Defense

In response to claims they hacked into congressional computers China responded is there any evidence they have such advanced technology? A lot of spam and hacking originates from Russia. So are they claiming Russians are smarter? A lot of famous hacks were by kids and the real deterrent in the US are harsh criminal prosecution. It has been long known that China illegally duplicates movies and software. They have come up with elaborate ways to acquire some movies even before they are released. Based on the seen side of hacking I would say china is more sophisticated in their hacking. But Russia has them beat for volume of scams and spam.

A Wave of Inflation?

The Wall Street Journal today (June 13, 2008) says that manufacture of heavy and bulky items is returning to the US. The reason is skyrocketing transportation costs. Shipping cost from China to the US has quadrupled since 2000 for a standard shipping container. The cost passed on to products has risen from 3% to 9%. If inflation is confined to fuel prices then this is good news for the job market in the US. However in the 1970’s inflation was not evenly distributed. If this is the case then transportation cost will eventually return to the 3% level. This means a major spike in price. This seems to be confirmed with overseas cost of everything from Starbucks coffee to game boxes. The cost to buy the same product in Europe or Asia is significantly higher than the US. This is blamed on the weak dollar. But eventually overseas prices must come down or prices here go up. Otherwise it will become profitable to take imported goods and export them.

Obama and McCain on Taxes

Yahoo has an article comparing the two candidates on taxes. McCain would cut the income tax rate. This would benefit high-income taxpayers most. Since the middle and upper class pay more in taxes I think that is obvious. Obama would only cut taxes for the low income household, which means a small cut since they pay little in direct income tax. Both want to increase the tax on single adults. Single adults have been lumped with smokers as easy tax targets. If you marry for tax reasons will you go to jail since the IRS considers actions taken primarily to avoid paying taxes illegal? I think it is funny how the Yahoo article glossed over Obama’s massive tax increases. They fail to mention most of them. Obama plans several energy taxes, which the energy companies have already said will be passed onto the consumer. His other business and investment taxes will either be passed on through higher prices or fewer jobs. Both candidates have no plans to reduce government spending. Obama does not discriminate on his tax increases. He is however vocal about his increases for the middle and upper class while careful to hide the ones for the lower income groups. Congress will ultimately decide which taxes pass, but without any pressure to reduce spending someone will be paying for it sooner or latter.

Too Poor for the Economic Stimulus Check

According to the IRS I will not be receiving the Economic Stimulus Check because as a small business owner I did not make enough money in 2007. I would think that would be a good reason to get the check. I would be satisfied to receive back the federal income tax I paid last year. That would be significantly more than the stimulus check. I wonder if internet based businesses will be able to survive inside the US. Not only do I pay a greater percentage of my income in taxes than I did before, but I do not get most of the benefits the taxes are used for. I complain, but I can only imagine how businesses that need a physical location must feel. They get hit with a lot of local taxes that I avoid in not having a physical shop.

Are Air Fares Getting Cheaper?

UAL (United Airlines) announced they are retiring 70 jets because the routes they fly are no longer profitable despite increases in fares. Inflation is a drop in the value of currency. The goods usually cost the same in trade or when using other currencies, though during high inflation not all goods adjust in price at the same rate. Obviously fuel prices have been a leader in the inflation run up. True or not airlines are saying that air fares are not keeping up with inflation. Inflation is mainly caused by extra money printed by the government in substitution of new taxes. With the Iraq, hurricane relief, new social welfare spending, and Home Land Security the government has had plenty of reason to flood the market with dollars. The air lines have been hit with higher fuel prices and new taxes and are not known for good management decisions. The result is a shake up. But are air fares really cheaper when compared to the price of other goods? I checked the price of a flight I have taken several times in the past. The rate has tripled. In the last three years few things I buy have tripled in price. Obviously one route is not a very good analysis of prices. I do believe the airlines claim that fares are a bargain compared to what they will be in the future.

Washing Post Local Site a Flop

In today’s Wall Street Journal (June 4, 2008) the article “Big Daily’s ‘Hyperlocal’ Flop” is about the Washington Post failing with a local news web site. The problem was the logistics of providing it. In this case an outside team with plenty of experience took it on. So software was not at the heart of its failure. They were not allowed to tie into the resources of the larger paper and failed to find out what the viewers wanted. It sounds like the head of the project was given just enough power to go big on the project, but not enough to make it happen. So the project thought they had resources that they did not. And when they finally realized they were smaller scale than the hype of the project, it was too late.

The Coming Management Shakeup

This morning I was reading a series of on-line articles based on the May 5, 2008 Wall Street Journal Article “New Breed of Business Gurus Rises”. In Gary Hamel’s (now considered the most influential person in business) new book "The Future of Management" he says; The need for large, expensive & highly trained information technology departments will have disappeared because reliable, robust & highly configurable solutions will be available via the Internet. I came up with my own comparison last week The companies that make DVD players and disks don’t make the content. But right now IT departments produce the medium and the content. I find his insight amazing. Few large technology companies, other than Google, are concentrating on this type of future. This must really be hard for companies like IBM, as they must continue to supply software to IT departments, who do not plan to give up any power. As I write this I am noticing that the last update from Microsoft broke spell check in Word. Good thing I have access to an on-line Yahoo spell checker. Though Yahoo does not recognize the word Google. So as IT loses power who gains it. Given that corporate level management is already overwhelmed I expect those close to production could see more work headed their way and eventually funding and responsibility. This could be a messy transition. For example I wrote this blog in Word even though I now notice that the Google interface has spell check. I wrote an online database application last year, but not until this Spring did I finally find the functionality superior enough to stop using Microsoft Access. I think IT departments will see early adopters leave quickly and they may be surprised to find they do not have a complete following of late adopters.

Y2K for Gas Pumps

A Wall Street Journal Article says that a company, PMP, is being overwhelmed with business to convert the mechanical dials in old gasoline pumps to allow prices over $4 a gallon. So years ago gasoline pump manufactures did not see it as cost effective to build in that ability. In many ways they were right. Most pumps are now digital. I am reminded of years ago when gasoline prices first breached the dollar mark. Many gasoline stations had to find ways to modify signs that did not go higher than 99 cents. I guess the next problem will be ten dollars a gallon.