Friday, April 28, 2006

Don't cut the gas tax

One of the consistent refrains heard during times of high gasoline prices is that government ought to do its part and suspend gas taxes until the crisis is over. At the risk of losing my "conservative" credentials, I dare suggest that this is the very last thing that should be done.

For starters, today's "crisis" is merely the economic growth of India and China--and hence it's not a temporary crisis, but most likely a new reality. It won't "be over" anytime soon.

To continue, a suspension of gas taxes would likely lead to a suspension of road construction. We could save a little bit of money on gas, but pay a bundle on car repairs later.

And worst, a suspension of gas taxes would likely encourage Congress to think that they can "do something" to counteract market forces--a belief that nearly always leads to disaster.

I'm generally happy when government cuts needless taxes. As long as government's building roads, however, the gas tax is the last one we should remove. The cost is just too high here.

Thursday, April 27, 2006

Real freedom not in a suspension in gas taxes (watch out for what happens to road repair funds after that one gets on gas and pay double for new struts!), but in having children who read about Anne Bradstreet and want to experience Puritan poetry for themselves.

For the past 20 years or so, I've been reading the books that I read about, but did not read, in school. Maybe my children won't need to spend as much time forgetting textbook pap as I have.

Wednesday, April 26, 2006

An observation

Whether it's "here" or somewhere else, I've noticed for a while that talking about politics or business seems to be much more popular than talking about spiritual issues or family. What a pity. 'tis not your portfolio that you can take with you to Heaven, after all. (h/t Ken Ham)

On the other hand, if one derives enjoyment from insanity, I'd guess that you'd be talking about the business or political world most of the time, even if you have a two year old in your house. Some examples:

Leadership Secrets of Attila the Hun gives the obvious fact that the way to success is to rape, kidnap, and pillage your way across Europe. Or not.

The new business buzzword "unsiloing" shows that the way to business success is to let a tornado hit your grain storage buildings. Isn't that what "unsiloing" would literally mean?

A classic, The Art of War by Sun-Tzu, tells politicians and businessmen alike that the way to success is to repeat vague quotes about ancient military campaigns.

And of course, there's always those sensible folks in DC, thinking that the path to cheap, aboundant gasoline is paved with government regulations and price fixing. I bet Amtrak and the Post Office will deliver it to your home, too.

Gosh, this is fun, but wouldn't you rather have some Kaiserschmarrn?

Tuesday, April 25, 2006

Price gouging on gasoline?

$75/barrel oil plus 40 cents in taxes and 50 cents in refining costs adds up to about $2.60 before other costs and profits can be calculated. $10/barrel oil of about a decade ago (~45 gallons of gas/diesel per barrel after refining) costs about $1.10 before the same.

Gouging? No, just supply and demand. If you're tired of paying this, as I am, I'd suggest you might do well to look closely at one of these. Some nice side effects include increased strength, weight loss and being generally more pleasing to one's wife.

Monday, April 24, 2006

Hopeful rules for public buildings

I'm always struck by how the public sector always seems to "need" a nice new building only 20 years or so after a building for that purpose is constructed. It could be the high school, the fire station, or the Metrodome, and the story is the same. As soon as the old bonds are paid off, the campaign starts for a new building, or for major alterations of the old one. Of course, only the finest building materials--brick, granite, marble, and such--can be used for a public building. Or so they say.

I don't mind using good materials for a building that's going to be used for 80 years, but if they're going to gut everything and start over every couple of decades, I can suggest a more appropriate kind of building for that purpose.

Friday, April 21, 2006

Return on light rail

Evidently, the mayors of Minneapolis and St. Paul are asking for 840 million dollars to build 11 miles of light rail track to connect their fair cities. Let's take a look at the return, assuming that 12 hours per day, a train holding 200 people leaves one end every 15 minutes, each passenger paying a fare of $2.

Over a day, we have about 10,000 riders and revenues of $20,000. Over a year, we have revenues of approximately seven million dollars. In contrast, a reasonable return (5-10%) on 840 million dollars is 42 to 84 million dollars.

P/E ratio: 120, and we haven't even started to account for the cost of rolling stock, labor, and so on. If other light rail lines are any indications, day to day costs will exceed revenues. Ouch.

If you want to get a bad idea funded, you need only go to the government.

Tuesday, April 18, 2006

Whining engineers

In my experience as an engineer, I've found that we're nearly as bad as teachers when it comes to whining--and for the same reasons. Both groups think that it's a crying shame that other professionals get paid more and have better respect and job security. If you're not certain about this, go and visit Scott Adams.

Now, one might point out that an engineer (or teacher) with a BS has hardly worked as much as a cardiologist with eight years in grad school, and that's true. It might be rightly countered that a lot of lawyers and doctors are there because they didn't want to do higher math, and that many engineers and teachers also have graduate degrees.

However, I think that both arguments miss the main point; that extremely respected and well-paid professionals tend to be, or at least have the opportunity to be, entrepreneurs. Certainly this is the case for lawyers and doctors, who tend to work in partnerships, not corporations. It's also the case for financial consultants and businessmen.

And so it comes down, perhaps, to whether one figures out a way to get rid of your boss. It's not easy when a factory is needed to produce what you design, but maybe it's possible.

Monday, April 17, 2006

A blessed Easter....

started at my church with a short message on the need for active discipleship, which was very welcome, but somewhat disconcerting as I realized something very basic.

Endorsing discipleship should be something akin to endorsing butterflies or kittens, to paraphrase R.C. Sproul, Jr. That is, we have this awesome Savior, so why wouldn't we want to talk about Him, that others might also enjoy Him?

Is it wise, then, to preach on the need for active discipleship, or would we be better off to simply contemplate the goodness of Him who died and rose again?

Thursday, April 13, 2006

A timely way to love your wife!

Sharpen your knives before it's time to carve the Easter ham. If you don't have good knives that need sharpening, purchase some. Steel from Solingen, Germany, can say "I love you" to your wife every time she (or you) effortlessly cuts food for the family meal.

Wednesday, April 12, 2006

An ode to the income tax from Mallard Fillmore

Evidently, about 2/3 of the revenues from the income tax are offset by the costs of collecting it--and then the use of the revenues tends to cost the taxpayer even more by subsidizing poorly run enterprises. With friends like our government, we sure don't need enemies.

Tuesday, April 11, 2006

Who has been more destructive,

Hitler and Stalin, or Kinsey and Hefner? I'm serious here; consider that the war and genocide started by Hitler and Stalin took somewhere between 50 and 80 million lives over the course of about 20 years. In contrast, it's said that abortion and AIDS take a similar amount of lives annually worldwide. Divorce has risen from 10% or less to 40-50%, and our jails are filled with the children of parents who never wed.

And yes, Kinsey and Hefner told us that it was all normal and good fun. But, like rats of the Middle Ages, it looks like that bunny's carrying a plague. Make some Hasenpfeffer if it comes to your house.

Monday, April 10, 2006

P/E ratios for sports stadiums

I was struck recently by the cost of sports stadiums. For example, a new Mets stadium in New York City is to cost about $800 million, or about $15000/seat. The new football stadium for Minnesota's Gophers is to cost $250 million or more, or about $5000/seat. Let's consider whether these stadia meet a P/E ratio giggle test.

For the uninitiated, the P/E ratio is the price to earnings ratio--cost to profits, roughly speaking, and is a wonderful indicator of whether an investment is good or not. For an established business, a P/E ratio of below 10 is good, and above 20 is bad. The stock market is around 20 at this point--word to the wise.

Gophers first. They play six games at home per year, and the approximate share of the take that could be given for the stadium is 30%--40% goes to the visiting team, and some needs to fund the home team--though they don't have travel costs. Assuming $50/seat (probably about twice the actual amount), each game could result in about $750,000 of stadium revenues for a total of $4.5 million annually. P/E ratio: about 55. Ouch.

Now the Mets. Same revenue per game, but 81 home games per year. Annual take for the stadium: $60 million. P/E ratio: 13. Not too bad--at least if the stadium gets that cut. Somehow I doubt this is the reality.

Long & short of it; even if sports teams paid 30% of the gate in rent, public funding of them doesn't make much sense.

Postscript: when Wrigley Field was built 93 years ago, it cost approximately $250,000, or about $5 million in today's dollars to build a stadium with 14,000 seats. Like today's stadiums, it was built with brick.

Friday, April 07, 2006

On retirement, and another way to love your wife

Confused about how you're going to pay for retirement, and whether you'll have enough when you're no longer able to hold down a steady job? Skip the charts from your financial advisor and get yourself back to the Word and real money.

First, look at the Word for references to retirement. Interestingly, you won't find any, as Billy Graham famously pointed out. We appear to be told, rather, to work as long as we are able, and when we are not, our children (if applicable) and the church have primary responsibility for our care.

Which is to note that real money is not stocks, bonds, or even gold and silver, but rather children and church. Not that it's bad to save for a rainy day, but your entire portfolio won't buy much if there's nobody around to make it.

Oh, and about the fishing you had planned for retirement? Well, opener is May 13, and couples licenses are only $25. And yet another way to love your wife; learn to cook what you catch.

Wednesday, April 05, 2006

An argument for regressive sales taxes

The chief liberal argument against sales and use taxes such as taxes on gasoline, cigarettes, and so on is that they disproportionately tax the poor while sparing the rich. This is supposed to be a bad thing, and if they truly took food out of the mouths of the poor or clothing off their bodies, these taxes would be truly wicked. They'd violate God's command to make sure that the poor have food and shelter.

However, apart from property taxes, essentials like food, clothing, and shelter are not generally taxed. Sales and use taxes are levied on nonessentials like electronics, cigarettes and alcohol, vehicles and gasoline. It's well-known that one of the reasons many poor people remain poor is--they're paying for (and abusing their bodies with) electronics, cigarettes and alcohol, vehicles and gasoline.

On the flip side, nonregressive taxes like the progressive income tax reduce the rewards of work. So when we insist on "no regressive sales taxes" and fund our government with income taxes, we're actually making the situation worse for the poor (and everyone) by encouraging spending and discouraging work.

Nebraska joins the civilized world!

The remaining islands of superstition and idolatrous fear are now Illinois and Wisconsin. Huskers fans, it's time to celebrate by buying your wife her very own Kimber or Wilson. Nothing says "I love you" like the gift of a finely crafted 1911, and don't forget, Mother's Day is coming up! I can personally think of no better way of preventing firearm violence than by being ready to shoot back.

(to be fair to Nebraskans, open carry has long been legal there)

Tuesday, April 04, 2006

Next thing you know....

...they'll be charging 50 cents to go to the bathroom, and wondering why people don't want to fly. I don't miss airline food when I travel, but I'd hope that airline executives might consider how they feel when they're cooped up for hours in a tiny seat, and every basic amenity is offered to them at an exorbitant price--and there isn't even a game to watch!

They might also do well to remember that people left to their own devices in terms of food tend to forget that fish & garlic don't go well in an airline cabin. :^)

Monday, April 03, 2006

Isn't it appropriate?

...that the "spring forward" of Daylight Savings Time comes right with April Fools' Day? We "save" an hour of time "and tons of electricity" that we instantly proceed to give back by staying up an hour later each night, and by delaying closing time at bars.

It's time to give up Ben Franklin's joke at the expense of the French--he noted that Paris candlemakers could be put out of business if French elites were subjected to a clock that told them to party during the day. About a century later, Woodrow Wilson made it public policy.