foobarista

Websites with "sound" are evil...

2009-05-09T01:21:00.000-07:00

and anyone using them is guaranteed to have me click away instantly.

The "Obama-Conned"

2009-03-05T21:51:00.000-08:00

During the election, there were a lot of conservative pundits, especially of the big-think types who write for newspapers and magazines in New York and Washington, who decided to plump for Obama. Basically, their arguments were that he was "smart", was surrounding himself with smart people, and he wasn't a wild-eyed radical, despite his associations with Hyde Park 1960s lefties, his history as a "community organizer", and clear radical sympathies as expressed in his books.

I also was hopeful immediately after the election, even though I didn't go so far as to actually vote for him. I figured events would constrain him to find his inner Calvin Coolidge, as they did to Bill Clinton in his first term. But instead of the smart, reasonable guy we were hoping for, we're seeing the Hyde Park "community organizer" radical, channeling his inner Hugo Chavez.

These pundits are now withdrawing their support, and the ranks of the Obama-Conned are growing by leaps and bounds.

The economic problem with consumption...

2009-03-05T21:11:00.000-08:00

is that many products we have nowadays are actually quite good. A decently maintained car in a friendly climate can last 15 years or more. A modern PC can be used until it physically fails; unless you're a hard core gamer, you don't need to upgrade a PC every couple of years or so like we did in the 1990s. And many people can get away with cheap, micro-things like netbooks or tiny PC thingies that cost $300 or less.

Clothes are cheap, shoes are high quality, and all this stuff can last quite a long time if it's maintained.

So, many people can easily live "out of inventory" for several years before needing to buy much of anything beyond consumables.

This is why the "stimulus" won't do much; people will just save it. Even trying to loosen up consumer credit won't help much; the last thing any sane person wants to do now is go out and buy a new car on credit or go on a credit-card-powered shopping spree.

The US savings rate is up to 5% and rising, from near-zero in the middle of last year. I suspect most of this is non-savers paying down debt (which looks like economic savings), although many congenital savers are also saving even more.

Anyway, the Great Deleveraging continues, and will likely go on for a long time.

A word from my current work world...

2009-02-03T22:46:00.000-08:00

Now that I have a job, my current Big Project is to make our product, which currently falls apart under a load of about 20 million "sessions" (or about 60M records), to run with 500M sessions or about 1.5B records. Searches are ad-hoc on any combination of AND, OR, and NOT, on about 20 different search parameters. Also, I was to do this without needing fancy hardware support. To make things more interesting, the schema had to work on both Oracle and MySQL.

To solve this problem, I used a schema derived from "snowflake" designs from data warehouses, and broke up the data into "dimension" (search) versus "fact" (data display) tables. The dimension tables are denormalized in that they store some data that is also in FACT tables.

Queries are done by doing initial qualification on the search tables. The results of these searches are saved to temp tables. The final set of qualifying IDs is computed using SQL INTERSECT, UNION, or MINUS queries on the IDs in the temp tables, depending on the search logic. After we have the final set of qualifying IDs, the set is sorted using a computed value that is bound to all "sessions", and the top N records are joined with the FACT tables to produce the final result.

The fundamental problem with the old schema is it relied heavily on ID joins for secondary qualification, after "picking" a primary search qualification. Large-scale ID joins require full B-tree descent for every record in the join, and if there are hundreds of thousands of records being qualified this way, the query will take minutes or more. My new schema avoided this problem by simply qualifying each criterion separately, doing a single pass through the B-tree index per criterion, and doing the qualification logic without actually needing to visit the - very wide - FACT table.

A thing that helped hugely was using INDEX ORGANIZED tables in Oracle, which means that all table data is physically stored in the index - as opposed to the standard storage method of having the index records pointing at "real" table storage in a heap. This meant my qualification searches didn't actually have to traverse index recs to get at a base table - they were pure index scans. I haven't done MySQL yet, but InnoDB storage is basically identical to INDEX ORGANIZED tables, so this trick should still work.

One advantage that I have with our application is it has a magic number I can use to short-circuit searches, but even without this magic number, my new approach is still far faster than a more "standard" approach using simple joins.

The final results are that my new approach is nearly four orders of magnitude faster than the existing schema, and is completely predictable. We're able to go after much bigger deals than before now that we have a more scalable schema.

The Car "Format Wars"

2008-12-01T16:53:00.000-08:00

Everyone who owns DVDs or lived through Beta versus VHS knows all about Format Wars in the electronics industry. A similar problem is "related tech" wars, such as Plasma versus LCD in flat-screen TVs, etc. And, as a consumer - at least if you're a cheapscate like me who expect that things that cost $hundreds or $thousands will be useful for several years at least - is to wait until there's one or two clear technology winners that are well-understood and will be around awhile.

And one thing I often wonder about is whether we're seeing the beginnings of "format wars" reactions by consumers in the car industry? I suspect so - who wants to buy a Chevy sedan today if they can wait for the Volt (assuming GM lasts that long)? The credit crunch and the recent gas-price crunch are bad enough, but I suspect looming format wars aren't helping either.

Personally, I'm a techie who likes to buy "cool" stuff, but not enough to qualify as an early adopter. I want something that costs $20K+ to last for about fifteen years and 175K miles, as have my first three cars. I buy new, over-maintain, and drive it until the wheels fall off.

Where the format war issue comes in is I'm not interested in buying a "gas-only" car, and would like to "vote" for a good hybrid tech vehicle, but am hesitant about the various hybrid techs out there. I'd like a plug-in serial hybrid - at least - and would love to be able to buy a hydrogen car if one were available. The problem is there's way too many technology moving parts in hybrids for me to be interested in paying a premium for a vehicle which may need to be basically dumped if one element or another in the powertrain proves to need expensive replacement.

Also, will we have neighborhood mechanics who can fix these babies? Or do we have to the dealer, where everything beyond an oil change costs $1K?

And, ironically, most cars with ICE powertrains are so reliable nowadays that if they're decently maintained, they'll run nearly forever. (Note that this includes GM cars, as my 1993 Saturn demonstrated after running up 175K miles with little unscheduled maintenance before it was stolen (!) three years ago.)

Our eight year old Toyota and our three year old Honda should last awhile longer, but I'm hoping they'll last another half-decade or so while the powertrain format war plays out, and we'll start to understand what happens when hybrids and new-style powertrain cars get old.

Political discussions, trust, and logical argument

2008-10-04T12:51:00.000-07:00

As a basically conservative "small-ell" libertarian in Silicon Valley, I'm surrounded by Obamaphiles - when I'm not encountering people further to the Left - who basically want to grind those who oppose them into the dust. Needless to say, it's hard to have a political conversation without being thrust into a situation where name-calling or other "categorization behavior" begins, and any hope that you can actually have an interesting discussion ends.

This is particularly painful for me, since I like to talk about politics and ideas, and have always felt that one's politics is informed by one's life experience, and that the religious view that one's politics are Right and one's opponents are Wrong is silly. In a large, complex world, policies will always be unsatisfying, inelegant muddles, and perspectives of small-state types like me and gung-ho, let's Use The Government to Solve Social Problems types like most honest progressives will be useful.

One thing I do try to do is to avoid logical fallacies in political discussions. This is hugely difficult, since political arguments are always rhetorical, and driven as much by personalities (Bush/Cheney/Rove is Hitler! Obama is a Commie!) as by any actual policy or philosophy discussion.

One other thing that's even harder to deal with is political humor. At the risk of appearing humorless, my feeling is that political humor is hugely rhetorical and manipulative, driven by stereotypes and logical fallacies buried behind a veneer of "trying to be funny", which makes it all OK.

Sorry, I'm not laughing. Political humor, which is the way many people - especially younger people - shape their political opinions these days, is a very serious business and drives a lot of the political tribalism that I find so dangerous.

Another dimension is the use of rhetoric as argument. One of the key points of logical argument is separation of the argument from the person making the argument, so that it is a fallacy to say that "Policy X is wrong because Bush/Rove/Obama advocated it" (a variant of ad-hominem) or it flip-side "Policy Y must be good because Really Smart Guy Z that I Really Like advocates it" (argument to authority).

In ideal logical argument, proper names are simply not used. It's all about the arguments and the fact base underneath the arguments.

The Question of Hypocrisy

The most seemingly powerful rhetorical argument one can make is hypocrisy. And it can't be denied that if someone makes one argument one day and puts a completely opposite argument on the table the next day for the purpose of political convenience is being a hypocrite and should lose credibility in the world of political punditry. But their arguments themselves still stand and should be refuted - or not - as arguments, and not simply discounted because they were advanced by a hypocrite.

I am well aware that logical argument is seen by many post-modernists, post-structuralists, critical theorists, etc as being an invalid way to argue, because logical argument purposely ignores the reasons why someone advances an argument. But the "why" shouldn't matter! If the argument is invalid, it will be shown to be invalid by a better argument. It shouldn't matter whether the person making the argument is an Asian woman or a gay black man - or holds General Motors stock.

Once you toss logical argument, with its common set of rules and clear definitions of validity that are available to all sides of the argument, into the ditch, all that's left is a thousand variants of "might makes right". The Greeks figured this out 2500 years ago, and they're still right.

The pronunciation of "Beijing"

2008-08-23T00:49:00.000-07:00

As someone who spent nearly a year living in Beijing - and not being Chinese, although married to a wonderful lady from that part of the world - I've been annoyed at the tendency to pronounce "Beijing" like "Beige-Ing". It is (basically) "Bay-Jing", with the second syllable starting with a hard "J" like "Juice", versus the drawled "Ge" in "Beige".

One would think that Bob Costas would have figured this out by now...

On Software Tools

2008-08-22T00:38:00.001-07:00

In my new job, I'm in a largely Java shop for the first time. I'll be doing a "query cache accelerator" for them fairly soon, which will be done in C...

Anyway, one thing that I'm now highly exposed to is the Java world's proliferation of software tools. As a guy who figured that 20+ year old tools like make, vi, gdb, gprof, and purify are the cat's meow, it's hard to deal with tools that change every six months. Also, I hate wasting time learning the fiddly idiosyncrasies of yet another bunch of gooey-licious tools, who's main "advantage" over standbys like make is primarily their GUIness.

But, there we are. And I'm stuck with them, I suppose. The one thing I'm insisting on is that we pick a suite of tools, do all the customization we need to do, and stick with them and not change the world every few months as new tools appear.

I've always figured that software tools are like lawyers: you need to know a few good ones well for various purposes, but you don't want them to get in the way of living your life or doing your job.

Thoughts on "Coding Interviews"

2008-08-06T22:05:00.001-07:00

In my job search, I was asked to write code in a couple of interviews. Personally, I don't like asking coding questions in interviews, and if I have a question about a programmer's ability, I'll use a simple programming test that's emailed to them a couple of days before - and ask them to explain their code in the interview.

For me, the problems with interview code questions are the following:

1. It's a completely weird environment. No computer, no compiler, and extremely vague requirements. Few programmers do well in this environment.

2. Lots of room for silly "gotcha" pickiness that has little to do with actual programming skill.

3. The programming problem often involves too much code for a few minutes.

As an interviewee, my strategy for programming questions was the following:

0. Get the requirements, and state any assumptions. If you're wondering about a definition or something, go ahead and ask - it's better to do this than to get "gotcha'ed". Frankly, I also like to use the requirements discussion to "run out the clock" so that the coding lasts only a few minutes.

An aside: if the interviewer gets impatient at this point, they're probably not very good programmers themselves, or they're very junior.

1. Set up the data structures.

2. Discuss the main modules/classes/APIs you expect to use. Don't get hung up on the details of library calls or whatever; in real life, you'd look these up anyway, so go ahead and say so.

3. Only code the "top level" function that implements the main algorithm, using the data structures and APIs you outlined above. Bury stuff that's tedious and that takes a lot of code behind a module that you discuss but don't write, unless the interviewer insists.

Also, up front, state that you're explicitly skipping error conditions and error handling, but discuss how you'd code error handling if you were doing this "for real".

4. If you get gotcha'ed, go ahead and make the corrections. Don't get flustered.

If you expect to have this sort of "live programming" asked in an interview, it may be useful to have a practice session where you sit in front of a "friendly" and write some code on a piece of paper so you get used to the environment.

Technology observations from my job search

2008-08-06T21:21:00.000-07:00

For all that job searching is a pain in the butt, it gives you a chance to see what companies are doing and where their "pain points" are. Some observations from my search:

1. Companies are drowning in data, particularly small ones that can't afford to build a fancy glass house for racks of servers running Oracle. There's a golden opportunity here.

2. A few players are going after this opportunity, but they seem focused on the top of the market. This is probably reasonable from a business perspective, but my impression is that bowie-knives.com needs high performance stuff as much as Google.

3. The DB market may well end up splitting in two: high-performance query answering and search, and highly reliable archival and storage. The latter interferes with the former, and several places where I was interviewing definitely want high-performance query answering. (I'm building one of these puppies for my new company.)

4. There is lots of other movement going on in databases. With the end of Moore's Law, and data and the need for high-speed data processing growing quickly, new db architectures are appearing. Several companies are building various forms of "database appliances", and some new hardware stuff may help here.

5. Programming is about to get a whole lot harder as computer hardware changes intrude on programming in a way they haven't for at least 20 years. This is good for us old fogies who like hard "edge condition" problems, but Joe Java, who lives in a world where abstractions hide all the fun stuff, may have a hard time adjusting.

I saw this in a couple of companies: a bunch of smart young guys, steeped in the latest languages and alphabet-soup "skills", wondering how to get a factor of 100 performance speedup in their complex application without buying 100x more hardware. It can be done, but commodity approaches probably won't do it.

Adventures in job hunting...

2008-08-06T21:06:00.000-07:00

My company went belly-up in June, and I collected my last paycheck on June 30. After that came the Great Job Search, which ended this week.

A bit about me in advance: I've been a database engine developer for the past 20 years, and work as an individual contributor with some management responsibilities, and typically work at a "director" level (ie, reports to VP Eng) in a small company.

Some observations from the job search:

o A surprisingly large number of technology companies use pedantic "employment applications" of the sort one expects to see at Burger King. An experienced professional has a very different life history than these applications are built for. One example: they have trivial notions of compensation - they only ask for base salary, without the ability to enter bonus information, profit sharing, stock options, etc.

2. I had to rewrite my resume a couple of times to get it right. I had friends proofread it and this helped greatly. I maintained a MS Word version of my resume as well as a text version.

4. I worked with several recruiters. Two of them were "active" while the others were duds. I ended up accepting an offer from a company the most active recruiter found.

5. Interviewing is a skill that needs practice. I blew my first couple of phone interviews until I analyzed them and realized I talked too much about my last company and not enough about what I could do for them. A good interview is where you ask more questions than the interviewer.

6. Again with interviewing: I accepted a couple of "practice" interviews so I could hone my interview technique.

7. A couple of interviews involved writing code in front of the interviewer. I did well here, but I always hated this practice, especially for senior people. I always preferred offline coding tests to scrawling code on paper in front of someone trying to play gotcha. More on this later...

Anyway, enough of the job search. More on it later...

More weight loss info...

2008-06-13T11:15:00.000-07:00

My blog is in serious danger of turning into a "health" blog, but anyway...

I just lost my 50th pound and crossed Major Milestone #2. I had to increase the intensity of my workout to keep the calorie burn the same. My elliptical reports the calories burned, and they were going down as I lost weight even though the time and resistance was the same. I upped the resistance and increased the time a bit to get back to the calorie goal.

A crazy idea of mine is based on reading that many people lose weight to a point and hit a stubborn resistance point. I wonder if it isn't due to their workout burning less calories than it was due to their own weight loss; the math behind weight loss is quite unforgiving and once you hit an equilibrium point where calories burned equals calories eaten, you'll quit losing weight. This is why I'm trying to keep the calorie burn up.

I'm only using the calorie goal as a measurement on the elliptical. It's only interesting for the changes over time.

Weight loss update...

2008-05-09T12:47:00.000-07:00

I just passed Magic Number 2 in my weight loss efforts. Things are rather bumpy, and weight loss appears to be a sort of "step function", but my homemade plan of increased exercise, less carbs, and no junk food appears to be working well.

My plan is as follows:

Lots of exercise; 3 90 minute sessions on my cross-trainer per week, and two walks of at least 5 miles per week. Usually, these are just walks around the neighborhood, but we often do big "bonus" walks or hikes where we go somewhere far...

Eat less junk; my only snacks now are sliced carrots (with no dip). These fill the stomach but aren't otherwise terribly interesting. This is the main "will power test" part of the plan.

Reserve good and interesting food for occasions. I love ice-cream, so we now have an ice-cream night once every two weeks. And we only have really good ice cream. Same with beer (which has a lot of calories and carbs): only a bit of good beer a couple times per week.

Otherwise, we eat a basically homemade Asian diet; we've cut down on the rice and noodles and increased the meat and veggies.

Other things; we take our lunches to work and eat fast food extremely rarely. We do go out to restaurants, but try to be more careful than we used to be.

Are the super-rich who advocate taxes really altruistic?

2008-04-19T18:45:00.001-07:00

With Obama's San Francisco adventure on Billionaire's Row, there's been a lot of discussion about "altruistic billionaires". With guys like Warren Buffett and other leftish billionaires advocating tax increases, one may well think they're doing it out of a spirit of altruism.

And maybe some, or even most, of them are.

But one point about these guys is that tax increases won't affect them or their lifestyles. They're already rich. In the US, taxes are on cash flow, not wealth, so even a massive income tax increase won't affect these guys' lifestyles in the least - while advocating tax increases will definitely enhance their "man of the people" street cred with the Davos crowd.

One other thing about guys like Buffett: while he may advocate higher tax rates, one can be certain he'll avail himself of the best tax lawyers on the planet to minimize his own tax bill.

Annoying "faux-official" sales pitches

2008-03-27T12:12:00.000-07:00

We just refinanced our house, and I've been getting a steady stream of annoying "faux-official" marketing pitches for "mortgage protection insurance". These lovely scams are massively overpriced life insurance that pays off your mortgage if you die. The fun part is they're way more expensive than simply getting non-earmarked term life for the mortgage amount, but I digress...

Anyway, these guys are a part of an annoying trend of "official looking" direct mail sales pitches. It's quite obvious that they're sales pitches once you read them, but they're official-looking enough that they make it in the house instead of getting tossed immediately into recycling.

One that actually got me was a magazine renewal pitch. It happened to be for The Economist, which I subscribe to, and which was coming up for renewal anyway.

I'm vastly more careful now...

My Tax Tweaks

2008-03-20T18:09:00.000-07:00

If I were God-Emperor, I'd do the following with taxes:

o I'm not sure about the "Fair Tax", but I do like consumption taxes over income taxes in general. I'd like to see more consumption and less income taxes over time.

o I'd have a fairly high new gas tax. This would strengthen the dollar by reducing oil imports, and would make it clear that gas is not going to get any cheaper, so people should react accordingly. You can still buy a big SUV for pulling your boat, but you probably don't want to use it for your primary commute vehicle.

o Since in most American cities, working people still have to drive, I'd have a front-loaded reduction in payroll taxes. So, for example, if the gas tax produces $2K per worker, the first $2K in payroll taxes, or payroll taxes on about the first $26K of income, would be skipped.

This reduction would be dynamic and would probably go down over time as people use less gasoline.

o I'd eliminate corporate tax and have corporate dividends taxed at the income tax rate. Corporate tax is simply passed through to consumers in the form of higher prices, although reducing it is easy to demagogue as a givaway to "corporate America". Also, one of the reasons the dollar is weakening against the Euro is Europe is reducing corporate taxes.

o I'm not sure what to do about capital gains. If you eliminate corporate tax and corporations don't pay dividends, you need a way to capture the part of a gain in a stock price that is due to undistributed earnings. But you also want something that's easy to account for and doesn't result in a double-tax (ie, the company saves up a bunch of money and then has a dividend.)

At the end of the day, I like the idea of the "Fair Tax", but I'm not sure its implementation is workable...

The "pain threshold" of taxes...

2008-03-18T13:31:00.000-07:00

OK, I'll admit it. I'm "greedy" and am driven, at least to an extent, by a desire to lower my family's taxes. My "pain threshold" on taxes is definitely exceeded and I'm actively interested in political approaches that lower my taxes and not positively disposed to those that would raise them.

My wife and I are professionals in our late 30s and early 40s, with a household income that would put us well out of most definitions of "middle class". We are probably "middle class millionaires" in that we drive old cars, live in a small house, and aren't visibly "rich" if you saw us walking on the street.

Since we have a high income and live frugally, our tax bill for Federal, State, Social Security, and Medicare taxes is nearly double our total living expenses. (I'm not counting sales taxes, gas taxes, or other taxes here - just the obvious ones.)

Also, our "perceived pain" on taxes is high because while I'm well-paid for what I do, my field - software - isn't noted for job security. I'm very good at what I do, and take the view that job security is best in small companies where a good developer can visibly "shine", but I doubt that I'd ever work anywhere for more than a few years. I fully expect that I'll have to execute a major career change at some point in the next five to ten years, and that career change will result - at least temporarily - in a significant drop in income.

Another part of the "pain" is the notion that higher taxes would delay our retirement. Since there's no pension in my future, and SS will certainly have to be reduced (I'm greedy, but not greedy enough to want the country bankrupted to provide me with a comfy retirement on the public dime), I'll have to retire nearly completely on our savings. Given that taxes versus savings is a zero-sum game at the micro level, higher taxes equals lower savings equals later retirement.

The Obama Bubble, and the Dot-Coms...

2008-02-13T16:18:00.000-08:00

One of my theories about the Dot-Com Bubble of the late 1990s was that, because the internet and web were clearly a new and important change in the world, but one that was extremely poorly understood at the time, there was an almost rational argument for the sky being the limit for anything associated with the internet in, say, 1998. After all, who could possibly predict who wins and who loses? Maybe it'll be email, maybe it'll be search, maybe it'll be selling dogfood on the web, maybe web TV, etc, etc.

By 2000, the business layout of the Internet began to be more visible, the winners and losers both began to be known, and the general outlines of the markets for the winners began to take shape. And like any radically new thing, most plays ended up being losers, or at least ahead of their time - and therefore losers in a business sense. And thus the air is let out of the balloon.

Oddly, the massive predictions for the Internet and commerce using turned out to be true, if a couple years too early and typically in the wrong places...

Anyway, this relates to Obama because his campaign, to this point, looks an awful like a dotcom business plan from 1998: a whole lot of "audacity", change-the-world stuff, and the political equivalent of a growth hockey-stick that shows how, somehow, he'll magically transform life as we know it.

This will work for awhile, possibly long enough for him to get past Hillary. But he's beginning to discuss actual policies, which will inevitably produce discussion and informed debate based on numbers. Will this lead to a popping of the "Obama bubble", or will he go through a brief moment of pain and end up sticking around because his policies make sense?

We'll see...

McCain shouldn't make Huckabee his running mate

2008-02-06T15:09:00.000-08:00

It looks like Senator McCain's going to be the Republican nominee for President. And he looks like the person most likely to beat the Democrat in November.

But he may well toss that away, by making Mike Huckabee his running mate.

This move would lose him the election. Huck hasn't gotten good numbers outside the South, and is even more radioactive to secular economic conservatives than McCain is to culture-cons. Huck made a strategically wise choice to champion the Fair Tax in his Presidential run - it gave him a boost as a tax-fighter that he doesn't merit based on his record - but his governing history in Arkansas was basically pro big-government. And, while secular Americans will vote for a religious President, Huck is the sort of culture warrior and "religious professional" that scares away anyone who isn't an evangelical Christian. As a standalone Presidential candidate, my guess would be that Huck would be hard-pressed to get over 35% of the vote nationally, and he'd be unlikely to win any states outside the South.

For me, Huck is everything I dislike about Bush - "big government conservatism" - and has none of the elements that I liked: Bush's steadfastness in the War on Terror.

Just going by life expectancy, McCain has a 50-50 chance of dying in office, and we'd have a President Huckabee. The prospect of this would be enough to send many independents to Hillary or Obama.

The Great Chinese Blizzard of 2008

2008-02-03T11:58:00.000-08:00

The biggest underreported story of 2008 is the Great Chinese Blizzard of 2008. Basically, what happened is a large series of snow storms, ice storms, and general unusual cold weather that has persisted for the past couple of weeks throughout the heavily populated areas of eastern China, from Beijing to Guangzhou.

The problem for China is many of these places rarely get snow - the winter is China's dry season - and when they do, they usually get an inch or so that goes away quickly. Shanghai's weather is similar to Atlanta, GA, although a bit colder. Guangzhou's weather is similar to Miami's. Another big problem has been big ice storms, particularly in Hunan Province, of the sort that occasionally hit Portland, Ore or Seattle, WA in several big cities in central China; pictures from the affected cities show several inches of ice, which is playing havoc with the power grid and telecoms. According to Chinese media reports, many of these cities have been without power for over a week, and are running out of food. Also, it hasn't warmed up so the ice isn't melting. This is similar to the ice storms that hit the American Northeast a few years ago; recall that many rural areas didn't have power for a couple of weeks.

And to top it off, this happened during the run up to Chinese New Year - basically Christmas, Easter, and Thanksgiving rolled into a single family-centric holiday - when hundreds of millions of people try to go home to be with their families. The main media accounts have focused on the Guangzhou train station, which has had several hundred thousand people camped outside waiting for trains that aren't running due to ice and snow. The problem is particularly bad in Guangzhou since that area is where much of China's export manufacturing is located, and tens of millions of peasants have moved there to work. Also, Guangzhou is the southern terminus of the main north-south rail line, which has been open and closed off and on as snow and ice are dealt with further north.

Things appear to be slowly recovering there, but it looks to be a cold, dark, lonely New Years in China this year for many.

Just saw a Tesla

2008-02-02T14:25:00.000-08:00

I just saw a Tesla driving near Old Middlefield Road in Mountain View. Very cool...

Just did a mortgage refinance

2008-01-23T13:14:00.000-08:00

from our old 30 year @ 5.875% to a 15 year @ 4.675%, with no points. Our payment will go up by about $300/month, but our mortgage term will be shorter by 8 years and our interest is over 1% lower. We're doing an "even-steven" refi; no cash out or cash in (although we'll probably get a bit of cash at closing depending on the timing of the closing)

We figured we aren't going to do much better interest-rate wise, so we decided to pull the trigger.

Managing one's software career

2008-01-20T21:57:00.000-08:00

Today, I was at a party with some friends, and one of the people there had been recently laid off from his job at HP. At the end of the day, his problem was he tried to stay a "web generalist", and ran out of gas trying to stay on the infinite "skilz treadmill". He's walking away from programming...

I've chosen a different career direction: getting to a high level in an extremely useful, if old, programming language - C - and mastering a relatively obscure application domain. A useful side effect is I don't have to retrain every two or three months or master yet another script language. I don't love syntax enough to play games with it over and over, and would much rather learn new algorithms and genuine new approaches to hard problems over mastering yet another bunch of syntactic gobbledygook.

My career pledge is to avoid any programming that involves a "color". It's worked well so far.

Losing weight...

2008-01-18T13:30:00.000-08:00

Yesterday, I hit Magic Number #1 on my attempt to lose a bunch of weight. Unfortunately, programming for a living isn't exactly something that works up a physical sweat, so I've accumulated rather too many pounds over the years.

Fortunately, I'm still quite healthy due to exercising on our crosstrainer machine, walking, and backpacking trips, but I'm still well above where I should be. I don't put much stock in silly BMI numbers, but I still want to "get down" by a fairly significant amount.

Anyway, Magic Number #1 is about 25 pounds less than my "zenith weight". Magic Number #2 is about 15 pounds more. Ultimately, my target weight is about 30 pounds less than Magic Number #2.

My big changes:

1. Eating less rice. My wife is Chinese, and we eat a basically (home-made) Chinese diet, with lots of rice and noodles. We've done what amounts to a "mini-Atkins" by upping the green veggies and downsizing the rice and noodles in our meals. We eat half the rice we used to eat. My wife now uses various stringy veggies like bean sprouts as a partial substitute for noodles in soups.

2. Less snacking. I used to always have a bag of corn chips handy. It's now gone.

3. A bit more exercise. For my three times per week on the cross-trainer, I've upped the workout from 1 hour to 1 hour 15 minutes (+ 10 minutes cooldown). (We also walk file miles twice per week)

Thoughts on emergency kits

2008-01-08T13:24:00.001-08:00

Some random thoughts on emergency kits:

1. As a Californian, my main "emergency" would be earthquakes. Earthquake emergency kits are somewhat different from most other kits, although they would tend to have the same "stuff" in them. The biggest difference is that an earthquake emergency kit probably should be in the back yard, away from the house. Since earthquakes can destroy houses, having an emergency kit in the garage or closet may not be useful. We keep ours in a small shed in our backyard.

2. The emergency kit contents would include the usual: a week's worth of MRE-type food, water (we keep 25 gallons and rotate it every six months), warm-weather clothes, blankets, a first-aid kit, candles, hand-crank flashlights and radios, batteries, etc. Good lists can be found in numerous places online. One other thing that's good to have is a shovel so you can dig an emergency latrine or do other emergency duties that involve moving dirt.

3. A temporary place to sleep is also useful. We keep our camping and backpacking gear with our emergency kit so we can have tents and sleeping bags if we need them.

Social Security: if I were king...

2007-11-17T17:18:00.000-08:00

If I were King of America, and could decree my favorite plan to fix Social Security, I'd go by the following rules:

1. No tax increases. SS taxes are already too high.

2. No "raising the cap". The "middling wealthy" already are taxed stiffly in the low $100K range, with a marginal tax burden over 40%, even without accounting for state taxes. A professional couple making $120K each is paying $24K/year in SS taxes already, on top of income taxes. (Note for pedants: I am including the SS "employer share", since it is part of one's compensation package. The fact that half of SS is not listed on paycheck stubs doesn't mean it isn't part of one's pay.)

Personally, I'd prefer that separate SS taxes be abolished and have SS funded out of general tax revenues.

My reform would start with the following:

1. Abolish the notion of "retirement ages", after a "zero" year in the early 60s. Instead, let people's SS starting basis increase with each year they defer collecting SS, so that if they start collecting at, say, 73, they get much more than if they start collecting at 63. If someone wants to work until they're 75, let 'em, and reward them with a bigger SS payout - instead of insisting on having them take both SS payment and wage income (oddly, they'd both pay SS taxes and collect SS at the same time, which is silly). If they choose to take SS while still working, that's OK, but they will have a lower payment and will pay more taxes on it because of their work income.

This would provide an "out" for people who haven't saved enough money for retirement: they could keep working and defer their SS, and have a larger amount per month when they do take it, instead of looking forward to 20 years in a single-wide somewhere.

The advantage for the government would be "actuarial": some people will lose the mortality stakes and won't collect SS. There is a bit of a risk here; if lots of people choose to defer collecting SS and live longer than expected, the government could end up being on the wrong side of the bet.

2. SS's index should be based on inflation, not wage growth, as discussed in this article.

"Stretch goals"

I'd probably have to be God Emperor and not simply King to get these done, but I'd prefer them:

1. Make SS more means-tested. You have to spend your own retirement money first before collecting SS. It is effectively means-tested now since it's taxed. And I'm not in love with the "solidarity" idea that Warren Buffett should collect SS because "he paid into it".

I'd rather see it be a safety net for people who genuinely need it.

2. Introduce personal accounts and move away from "pay as you go". This is the only way to get the government out a looming demographic trap.

Yet another aspect of SS that isn't often talked about: what if life-extension techs actually work and people live to be 150, or even unlimited? The idea that people will be collecting a government pension for fifty years or more is unthinkable, but could easily happen. You shouldn't be able to collect a pension for longer than you work, but if people work from 25 to 62 and live to be 100, they will do so. And the most rapidly growing demographic group in America is centenarians.

Last day: Hapuna Beach

2007-06-20T19:56:00.000-07:00

After our lava field adventure, we were ready for some quiet time - and as little movement as possible. We decided to go to Hapuna Beach, a bit to the north of Kailua-Kona, where we stayed in the Big Island. We basically did nothing at this beach, which can be a beautiful thing: we swam and floated in the warmest water we experienced in Hawaii - nearly too warm - and just enjoyed our last day in Hawaii.

Big Island: The Lava Fields

2007-06-20T18:40:00.000-07:00

Several years ago, we drove to the Hawaii Volcanoes National Park, went to the end of Chain of Craters Road, and walked on the lava fields, half-hoping to see running red lava. We didn't make it to the lava, but it was a fun trip. But I'd always wanted to go back and see some active geology...

This time, we were better prepared: we brought hiking boots, walking sticks, and several liters of water for each of us. We drove to the lava field at the end of the road, and set out, even though the signs indicated that it was a five mile walk across the lava field to see the "red lava". This lava field is extremely new, with new flows added daily. Much of it is ten years old or less.

Walking on lava is quite a challenge. Imagine the worst parking lot you've ever seen, make the blacktop chunks about 20 times bigger, have it rain beer bottles on it for awhile, and heat them until they all melt, and you'll have an idea of what a lava field looks like. You have to pick your steps very carefully, even without worrying about hot lava itself as there are lots of slippery and slick areas, and occasionally things move without warning when you put your weight on them.

But it is oddly beautiful in a way: the colors are very elemental, and there are lots of hidden rainbows and colors in what seems at first glance to be a uniform field of black. In cracks, you'll see yellows, reds, and greens, and even occasional rich blues, and the pahoehoe has a very cool ropy look. The land is clearly brand-new, with only scattered vegetation, and the only sound you'll hear is the wind and the nearby ocean.

We started walking at about 2:30, and after a couple of hours of steady walking, we started to see steam and smelled brimstone. It was getting near 5:00 PM, in an area where the sun sets by 6:00, but we had brought flashlights, so we pressed on. At about 5:30, we got to an area with lots of steaming and venting, experienced hot blasts from cracks and felt occasional squishiness under our feet. Rock isn't usually squishy, so we decided to watch our step. Unfortunately, we didn't see any "red lava" breakouts, but we figured we were definitely in "serious geology" here. I figured we were standing on active lava tubes with running lava only a few feet under us. At that point, discretion overcame valor, and we decided to turn back, although I carefully looked in some cracks to see if I could see Red.

The walk back was one of the more challenging walks we've ever done. We were already tired, and the sun was setting fast. But as it was getting dark, the darkening world revealed a cliff-face lit up with a vast area of red flows that must have been a mile wide. We could also see the glow from Pu'u O'o in the distance. This view made the strenuous hike worth it. One other thing: the lava was visibly moving and changing as you watched it - flashes would appear, and flows would brighten and darken over time.

But things got even tougher here. By 7:00 PM, it was completely dark, and we started to get rain showers. We broke out the flashlights, and tiptoed our way through the lava, trying to not get completely lost and trying to not break our necks. We did many "crack dances" where we teetered and flailed about on the verge of falling, but managed to avoid falling (except once). Fortunately, the rangers have set up flashing beacons along a "trail" to the parking area, which we followed back, slowly, step by step.

Out here, it is _very_ dark. The only light was the flashlights, the very faint flashes of the beacons, the glow of the lava cliff, and the glow of the lava falling into the sea at the other end of the lava tubes. There are no towns here, and since it was rather cloudy, little starlight and no moonlight.

After two more hours of lava walking, with a few heavy showers soaking us, we finally reached the road, which made a blessed change of "ordinary" walking. We finally got back to the car after 10:00PM, having been on our feet nearly eight hours, and drove back up Chain of Craters Road. The price for the trip: a nasty scrape on my right leg, and a big blister on my left foot. I figured this was a small price for this adventure in Pele's home.

POSTSCRIPT: It turns out that we were among the last people likely to do this walk for awhile. Two hours after we left Kilauea, a magmetic earthquake swarm damaged the road and forced closure of that area of the park. As of this posting, an active eruption is pumping out significant new lava flows in the area.

Maui Day VI: Kapalua Beach

2007-06-20T18:29:00.000-07:00

This was our last full day in Maui, so we did some research to see what the best beach would be. Since we wanted to do more snorkeling, we decided on Kapalua Beach. This is a very nice beach for snorkeling or swimming, since it is in a crescent-shaped bay with plenty of coral. My wife did her first serious snorkeling here: it was gentle enough for her to float above the fish happily and watch them do their various fishy activities. There were lots of wonderful fish here, of all sorts of colors and shapes, and one need not have fancy equipment to see them "up close and personal".

Kapalua Beach itself is a bit tricky to find, with its parking lot hidden amongst various timeshares and golf courses, but it's worth a few circles.

Maui Day V: Atlantis and Lahaina

2007-06-20T17:55:00.001-07:00

Today, we went to Lahaina, after a short trip on the Atlantis Submarine. The trip was interesting, more for the fact that it is an actual submarine than anything else - we didn't see any sharks or turtles. The Lahaina dive included a trip to a sunken ship that Atlantis bought and sank (with all environmental issues taken care of, we were assured): The Carthaginian. It had been a whaling museum ship that had fallen into extreme disrepair, so Atlantis bought it and sank it to turn it into a reef - and to give sub dives something to look at.

The strategy appears to be working. There were lots of fish around the ship, and the ship itself is getting enough coral crustiness to have a Pirates in the Caribbean Davey Jones's Locker look. Kids were fascinated.

My desire to recreate childhood trips on the Disneyland Submarine Ride satisfied, we strolled around Front Street in Lahaina.

Lahaina itself has a fairly typical beach tourist town look, with zillions of T-shirt and trinket shops, as well as lots of restaurants. I was questing for a good Haleakala T-shirt, but found only one store actually selling one that wasn't referring to the Bike Down The Volcano excursion that is somewhat popular. I'll admit that I'm somewhat of the wrong demographic for T-shirts, but I've always had an odd desire to buy a T-shirt for any natural place where I've walked and thought was cool and interesting.

There is also a fair bit of history in Lahaina, since it was the first capital of the united Hawaiian monarchy under King Kamehameha. The history is more interesting than the T-shirt shops, although we didn't have enough time to do much exploring of this aspect of Lahaina. Doubtless in our next trip, we explore Lahaina more.

Lahaina is also interesting in that parts of it get less than 10 inches of rain per year, or not much more than Las Vegas or Phoenix. The nearby Iao Valley gets well over 100 inches, which shows just how small changes in topography in islands can have massive effects on microclimates.

After our Lahaina visit, we went to Kaanapali Beach.

Maui Day IV: Northern Run

2007-06-20T17:19:00.000-07:00

Today, we went to the I'ao Needle, expecting a fairly decent hike. It turns out that there isn't much in the way of serious hikes there, although the walk to the viewing platform is pleasant. The Iao Valley itself is very cool, with a mountainous jungly feeling that reminded me of some parts of southern China.

After visiting the Needle, and walking around the creek in the park, we got onto Route 340 and went around Maui's northwestern side. It was even trickier than the road to Hana, but also beautiful. This part of Maui is quite a bit drier than the Hana area, with lots of grassland and dry forest, as well as deep valleys and sheer cliffs.

One thing that was interesting here was the geology was somewhat different (to my untrained eye) than other parts of Hawaii. There were deep pumice deposits here, which you don't see in many other places in Hawaii, so the nearby volcano must have been more of the exploding ash variety (like the Cascade volcanoes) than the relatively gentle runny variety that you see at Kilauea and other Hawaiian volcanoes like Maui's Haleakala.

We passed around the North, making our slow and winding way, to D. T. Fleming Beach, where we tried our first significant bit of snorkeling. Snorkeling is very cool; you can look at and swim with fish! The other thing is the fish seem to ignore you; they go about their business seemingly undisturbed by your presence. In my experience, this never happens on land...

The surf at DT Fleming is a bit rough for my wife, but she still swam a bit.

Maui Day III: Big Beach...

2007-06-20T16:57:00.000-07:00

Today, we went to Big Beach, south of Waimea. Waimea itself has become a hotspot for movie-stars and other Richistanis, and it has an oddly SoCal feeling. The main drag feels like the nicer parts of Pasadena, with a fair bit of Beverly Hills thrown in, with an oddly large number of golf courses - as well as the widest non-highway streets I've seen in Hawaii. Who goes to Hawaii to play golf? Someone must, but I'd rather spend time at the beach...

So, we went to Big Beach and spent the day swimming and recovering from our Haleakala hike yesterday.

Maui Day II: the Glory of Haleakala...

2007-06-10T23:35:00.001-07:00

...or What Goes Down Must Come Up - at least if you park at the visitor center trailhead...

Our day started early with a drive up Haleakala. You go up, and up, and up, and zig-zag still upward, and realize that you still have more "up". The plants change from dry tropical to rangeland with scattered pine to chaparral, and finally you get to stone with bits of grass and shrubs here and there. And the world gets further and further away, until you get above the cloud deck.

We finally reached the summit, which truly looks like the Roof of the World. From there, you can see most of Maui, and you can see the Big Island volcanoes as well. Lanai and a bit of Molokai are also clear.

After visiting the summit, we went to the "Crater" overview. The "Crater" is apparently not a volcanic caldera, although it is full of multicolored cinder cones and general volcanic coolness. There are at least a half-dozen big cinder cones in the Crater, and probably many more. If you are a geology nut, you can't possibly go anywhere near Maui without spending a day at the Crater.

We hiked down into the Crater, to the first cinder cone, named Ka Lu'u o ka' O'o. (No clue how to pronounce it - we called it "kay-lew".) After a fairly quick descent, oohing and aahing all the way - and trying to not pay attention to the return trip at 10,000 feet, we had lunch on Kay-lew's rim. Afterwards, I learned that Kay-lew is one of the newest volcanic formations on Maui, being only 900 years old...

The top area of the Crater has virtually no vegetation, and have the blasted look of hard-core vulcanism. Red, yellow, pink, orange, and black rock is everywhere, in streaks and stripes, with stones ranging in size from sand to car-sized boulders. Further down the Crater from the Shifting Sands Trail that we were walking on, you can see the greens that are on the Hana and eastern side of the mountain. The crater floor goes from a volcanic desert to lush tropical uplands in the space of a dozen miles.

In the area of the Crater where we were, the main plant was the Silversword. It was appropriate for such an otherworldly place: the plant looks like something that you'd find on another planet. It's silver, spiky - imagine a great big silver sea urchin - with only a faint greenish twinge, and its flowering stalk looks like some sort of alien pod-thingy that is beautiful in an unearthly way.

Kay-lew is against the western rim of the Crater, and has a nearby field of black sand with scattered boulders. I noticed that one of them had a clearly defined trail running out to it, and wondered if that boulder "walked" in a fashion similar to the Death Valley Sliding Stones. The trail on the sand looked quite similar to the sliding stones in the picture.

OK - now that we're in the Crater, we've had our fun and now have to pay for it by coming out. We had dropped about 1400 feet from the visitor center parking lot, and were at about 9000 feet - and weren't acclimated. We started walking, and had to stop every 30 or 40 feet to catch our breath. But step by step, we made our way back up the trail and out to the visitor center.

But there was one last surprise. In the visitor center parking lot, a Nene and her babies were running about. After a few pix of these guys, we cleaned up and went back down, and down, and down, back to Kihei.

Maui Day I

2007-06-10T09:49:00.000-07:00

We're now in Hawaii, staying in Kihei, and had a very nice first day here. We flew from SF to Kona on Friday, and finished the flight with an interesting, if a bit exciting, trip from Kona to Maui on a Cessna commuter plane.

This gave us excellent looks at several islands, and one thing that's interesting is how different volcanic landscapes look from non-volcanic ones. The big Hawaiian Shield volcanoes are particularly interesting in that they're very flat triangles in profile, with very shallow sloping sides that seem to go up forever. Unless you're quite far away, you don't so much see a mountain as much as you see the horizon tilted into the sky, often ending in a bank of clouds at the summit. There are few hills or peaks other than the top of the mountain itself, as these mountains are very young and erosion hasn't yet done much with any of them.

Unless you count carving out deep canyons for streams and small rivers; in the wetter parts of Hawaii, there are plenty of these. Yesterday, we drove to Hana, on the eastern side of Maui. The road there, aptly named Highway 360, since you sometimes feel your car has turned at least that much where making turns, winds along the coast on the northern and eastern skirts of Haleakala. The road, which is truly beautiful although quite tricky and which has an average - and appropriate - speed limit of 20MPH and less in many places - through many microclimates from quite dry to tropical rainforest that gets 400 inches per year, where Hana is.

Hana itself is interesting, in a beautiful environment with rainforests, the mountain looming above like a green cloud, and the bluest sea you'll find anywhere. The beaches are wonderful with black sand, intensely green rainforest, and the deep blue sea right up to the surf. Hana has lots of history, and the odd mix of prosperity and casual approaches to building maintenance that you see in much of rural Hawaii. Since we drove there as a day trip, we didn't have much of a chance to meet locals, but it looks very welcoming and cheerful, without much in the way of tourist kitsch. Next time, we'll try to stay in town overnight since the drive on 360 can't be done in less than three hours, even if it's only about 60 miles from central Maui.

We also went to a big lava tube near Hana. This tube is very interesting if you're into lava tubes (and we like them), and was much bigger and longer than tubes we've visited in California and the Big Island. It has lots of "runnies" that make the walls and ceiling of parts of the tube look like melting chocolate. Also, it has good hand-rails and is well-signed; the proprietor clearly takes pride in his work and knows a thing or two about lava tube geology.

We attempted to drive around the southeast side of Maui, but the road is closed due to an earthquake in 2006, so we returned to Kihei by retracing back through Hana.

More tomorrow...

Using frequent flyer miles to go to Hawaii

2007-05-26T23:19:00.000-07:00

We're about to go to Hawaii, and my wife carefully researched our tickets so we could use our frequent flyer miles to get there. She found that we couldn't get flights to Honolulu, but Kona and Maui had lots of choices. We decided to fly out of Kona since we are going to the Big Island and Maui this time (we went to Oahu last time). Also, she was able to use a promotion, so we got the tickets for SF to Kona for 35K miles versus the typical 70K. This saved us a cool two grand for the two round-trip tickets, and we also have nearly enough miles for another trip! Since we're going on our in-law trip to China next Spring, we'll run up some more miles and we'll have enough for another Hawaii trip if they run this promotion again...

On emergency funds, and our allocations

2007-05-01T22:15:00.000-07:00

Several personal finance bloggers, such as Lazy Man and Sun, have been blogging about emergency funds lately. Lazy Man basically runs without an emergency fund, preferring to use a HELOC; his argument for this unconventional strategy is that he doesn't want to hurt his returns by having a largish pool of cash earning lowish interest.

I'm a bit older than many PF bloggers, and have come to realize that the desired size of one's emergency fund can actually change over time. I ran with a small fund when I was young (obviously, I didn't have much savings yet, and could live very cheaply). Later, after more responsibilities, I increased the fund to its present - rather large - level of 1 year of living expenses assuming zero income. I'm now considering reducing it since our investments now generate nearly enough income by themselves to cover our living expenses, so our e-fund would actually cover several years of expenses. We'll still keep a larger e-fund than some, since we carry maximum deductibles on insurance and use insurance purely for wealth preservation as opposed to cash-flow preservation, but it probably _is_ too big at the moment.

Our e-fund is in two parking places. The short-term piece in a credit union savings account that pays as much interest as the internet banks and has a nearby branch. The bulk of it is in I-bonds, which are nearly mature and which pay 4.22% at the moment, but have paid up to 6.5% at various times, and aren't subject to state tax.

Viola! More pet peeves from around the internet

2007-04-09T12:12:00.000-07:00

One expression getting very popular on the Internet is "Voila!", followed by an exclamation. The problem is it's almost always mispelled "Viola!".

Now, this is a Viola.

And Voila! Here's the actual spelling and meaning!

Odd things I believed when I was a kid

2007-03-20T20:46:00.000-07:00

Tyler Cowen at Marginal Revolution has an interesting thread going concerning odd things people used to believe when they were kids.

Here's some of mine:

That firemen started fires; after all, they were always wherever fires happened to be. And why else would they be called firemen?

That there was nothing on the eastern side of "the Mountains" (ie, the Sierra Nevada) since I had never seen them. I figured it was some sort of Communist plot, since that was what my uncle said about anything unexplainable.

That there was some cool place called "the West" where John Wayne lived and you could see those interesting mesas. It took me awhile to deal with the idea that "the West" was east of us.

That Texas was to the west of California, where I lived, since Texas had lots and lots of cows (as well as my aunt and numerous other relatives). We only had a few cows that I smelled when we drove down I-5 to Disneyland. And since there was nothing to the east of California, and Texas had no excess of Communists, I figured it had to be to the west.

That "In Saigon" meant "Inside a Gun". There were always guns involved whenever the TV guys talked about "In Saigon" when I was a little kid in the early 1970s.

That Red Chinese were literally red. I actually drew pictures of red-faced Asians as a kid...

Biz Broker marketing...

2007-03-13T03:36:00.000-07:00

Biz Broker Wife has several methods for marketing her services. After trying cold-calling, she realized she doesn't have the elephant-skin that one must have to make it work; besides, we despise telemarketing and she felt awful trying to be a telemarketer. Lots of the grizzled veterans in her office swear by cold-calling, but few of them actually do much of it anymore. The world has changed and emphatically moved against cold calling.

So, she found that direct mail flyers work well; she gets a free quota of 100 mailers per week at her brokerage. These have about a 0.5% "lead generation rate", which is pretty good.

Her best lead-generation rate comes from nightly drop flyers that are put on or under doors of businesses after working hours. Her lead generation rate on these is something like 2-3%, and since we can usually do about 50 flyers per night, this is by far our best marketing effort.

Last night, we had our most productive night, walking two big business streets in our area around midnight; we dropped over 100 flyers. This will likely produce 2-3 leads over the next few months if our past observations hold. We do this a couple times per month.

The key to her business is staying in the biz long enough to get a critical mass of referrals; she's been in this field for four years now, and gets about 1/3 of her deals from referrals. The old timers in her office do basically all referrals. But it's hard to start; her field is commission-only, and the first couple of years is very hard. But once referrals start happening, things get easier.

Servin' up subpoenas...

2007-03-09T01:17:00.000-08:00

Today Biz Broker Wife and I went to serve a subpoena on a guy who stiffed her out of her fee. He already lost the lawsuit, but disappeared into the void, only to be found by the brokerage's lawyer. Since my wife is the only person to have seen this guy - he didn't bother to show up in court - she had to ID him for the server. Figuring this may be a bit dangerous, I went too.

The lawyer had hired a private investigator who tracked the guy down; he was working in his relative's restaurant; his brother is actually running the restaurant he bought.
We met the process server near the restaurant, walked in, and found him working in the kitchen, which was open to the front of the restaurant. He accepted the papers, and then one of the other cooks ran out and chased down our server, and tried to return the subpoena. The server walked back in and handed it to them again, and said the "service" is now complete; he handed the paper to the guy and had witnesses (us).

I'm not entirely clear as to what the subpoena is for, but it had to be done quickly. It's done now, and this stuff is part of the reason why my wife's job generates far more interesting table talk and blog entries than my programming work :)

Factions in the American conservative universe

2007-03-06T13:19:00.000-08:00

When you read some posts in more left-oriented blogs, one notices that conservatives are generally lumped together in a rather unpleasant mass: they're basically European fascists who are somehow joined-at-the-hip with Karl Rove and Bushco, beholden to the Christian Right and Big Business. Even more centrist and supposedly right-leaning outfits like The Economist do this on occasion.

For my part as something of a conservative, I've always thought this was odd, and definitely wrong - there are numerous factions in the conservative world, with vast diversity of thought and opinion. Here's some I can think of, in no particular order:

1. Libertarians. They're generally socially liberal and are usually economic Classical Liberals. Non-extremist libertarians tend to come in two political flavors, defined more by their fears than anything else: those who are more afraid of big-government welfare-statists, or those who are more afraid of religious conservatives; few libertarians are religious. The former are the libertarians of the Right, while the latter are libertarians of the Left. There are lots of libertarians, especially in Silicon Valley and California generally, and as far as I can tell, whether they are left-libs or right-libs is driven by whether they see religious conservatives as a big threat or not.

I'm purposely ignoring "radical libertarians" of the abolish-the-State type from this discussion since they aren't terribly numerous or politically all that interesting, but want to point out that those they'd likely call "weak libertarians" are quite numerous.

2. Paleo-conservatives. These are the group most like European "Right-Wing" Blood&Soil parties in their thinking; they're more friendly to "rooted conservatism" and "tradition" arguments. In American politics, Pat Buchanan is the best example of this type. Their hot-button issue is immigration.

3. Religious conservatives. These come in many flavors, but are generally politically driven by their religious convictions. They aren't particularly opposed to government approaches to social questions as long as these approaches are in line with their principles, but they're quite hostile to government actions that go against their principles. They were the group most attracted to Bush's "Compassionate Conservatism" ideas.

Paleos and Religious Conservatives and Libertarians are generally mutually hostile ideologically, although they can make common cause on occasional issues such as opposition to gun control.

4. Big Business. I don't regard big businesses as particularly conservative; they're actually politically agnostic, as long as they make money. Contrary to the beliefs of many lefties, corporations aren't devotees of Adam Smith, unless it suits their rhetorical purposes; they're just as likely to ask for competition-stifling regulation, protection from foreign competition, or out and out handouts from government in the form of corporate welfare as they are to champion free markets and open competition. But more Lefties than Righties are hostile to Big Business, so many people regard Big Business as part of the "conservative universe".

5. Neocons. These people are often 1960s activists who shifted the focus of their activism from leftist causes to more right-aligned causes as they grew aware of the intellectual bankruptcy of many of the leftist ideas.

6. The "Old Wise Ones". These are people who are deeply suspicious of government activism of all sorts, having seen it be worse than useless over and over, and they have a healthy respect for tradition. These are probably the most "pure" conservatives.

Libertarians and Old Wise Ones are most mutually sympathetic, but they are distinct groups in that Old Wise Ones are typically less socially liberal than libertarians and are more sympathetic to the social concerns of religious conservatives.

There are doubtless groups I've missed, but my point is there is vast complexity in the conservative universe, and many liberals, in particular, misunderstand it.

Personally, I'm probably a "right libertarian", with a weak streak of neocon and strong streak of "old wise one". Most others in the conservative universe have other "streaks" in their personalities as well, so there's large overlap in the above "factions".

"Amazing Race" Game Theory

2007-03-04T19:33:00.000-08:00

One of our guilty night-owl pleasures is watching Amazing Race reruns on the Game Show Network. They're currently running Amazing Race 5, and an interesting situation developed in a recent episode.

The situation is that there are five teams left; it's fairly late in the race to win $1M. The teams are in India, and the first task involves making mud bricks at a brick yard. There is also a "fast forward" task that allows the first team to accomplish it to skip the rest of the race tasks and go directly to the "pit-stop" finish-line for that heat of the race.

All five teams are at the brick yard, so it's clear that nobody has gone for the Fast Forward. One team decides to use it as they're not having much luck making mud bricks (it's harder than it sounds): a man and woman team that are models. They go to the fast forward site and realize that the task is to have their heads shaved!

Now, they have one of those "net gain" choices that economists love. If they shave their heads, they complete the fast-forward task and likely win this heat. If they don't, they have to go back to the brickyard and finish the bricks, and likely finish last and be eliminated. Also, since they're models, and their hair is clearly part of their "professional appearance", they could win the heat, but lose the overall race, and be unemployable as models for several months while they grow their hair back.

If they win the heat, their "expected gain" for each of them is $125K ($1M split in half, with 4 teams left). It is probably higher than that; they'd also be in first place and likely with a several hour lead over the next team. OTOH, since they'd lose precious time in their modeling careers, they also have nontrivial actual loss.

At the end of the day, they actually bailed on the Fast Forward and lost the heat. Also, it happened that it was a "non-elimination heat" so they weren't eliminated, but they are significantly behind the other teams.

Since I'm conservative on such things, I probably would have bailed as well; losing my livelihood for several months, especially in a career as ephemeral as modeling, wouldn't be worth it.

So, what would you do?

Are web companies all "high tech"?

2007-02-27T14:58:00.000-08:00

In a follow-up to the Silicon Valley discussion, I've been cruising around various entrepreneur blogs. One thing that I detect is an assumption that all ventures that make heavy use of the web are "high technology companies".

As a hardcore techie, I'm somewhat annoyed by this idea. As technologies go, the web is fairly mature, and much web infrastructure is based on even more antique technologies like client-server SQL databases (little real changes in the past quarter century), Linux or Windows (both fairly mature in their recent incarnations, and, with Linux, little different in practice than the BSD Unix I used at Berkeley in the early 1980s), and various scripting languages (PHP, Perl, Java, Python, C# and the various .Netisms, etc) that arose in the 1990s. Very few newer web companies, including most "Web 2.0" companies, are doing anything more technically interesting than IT-level back-office application work. The applications themselves are obviously new and involve many technical challenges, but these companies usually aren't creating any primary-level technologies that can be heavily leveraged for IP or barriers-to-competition purposes. Their differentiators are in new business and marketing approaches, not in technology.

This relates back to the "Silicon Valley question". Silicon Valley has a vast pool of advanced tech talent, but it is expensive and probably best deployed in primary technology startups versus web application startups.

That said, there are many other reasons to do a startup in the Valley other than its technologists, especially its startup culture and other professionals with startup experience. But someone doing a startup needs to consider whether their company is truly a technology company or an application company? If they don't, their investors will...

An important speech for libertarians

2007-02-26T00:58:00.000-08:00

This speech by Whole Foods founder John Mackey is very important if you're someone with libertarian sympathies. He points out one of the biggest weaknesses of libertarian approaches and libertarian "marketing": its lack of passion and emotion. These are owned by the Left, and this is why the Left, despite losing every argument again and again, still exists as a vital force in the world.

The oscars: more barf...

2007-02-26T00:21:00.000-08:00

I watched the Oscars - well, popped in occasionally while my wife watched as I was busy debugging - and endured Al Gore's attempts at jokes, and global warming, all the time. I suspect their ratings will be even lower this year than last.

Now, I own a rather vast DVD collection, but there's pretty much no movies in the Oscar list that I've cared about since The Lord of the Rings series finished its run. The only Oscar-nominated movie I saw in a theater was Cars, which didn't win in Best Animation.

My advice to Hollywood: quit making "important" movies and concentrate on making "good" ones. Leave the Gulfstream squishy-left politics at home, and make movies that specialize in people doing interesting things, and you may get me to get off my duff and go to a theater. Hit me over the head with anti-American leftoid politics, or celebrations of Communist murderers, and I won't even watch it when the movie comes up in free movies-on-demand. Explorations of the awfulness of war can work, but if the message is "we should all love each other and make policy based on John Lennon quotes", I'll pass.

Oh, and real people watch movies. Art-house snobs watch "films".

And here's one movie I'll watch...

"North" America: another pet peeve entry...

2007-02-22T16:19:00.000-08:00

A common lazy writing technique, similar in spirit to "only a fraction", is adding "North" to America when someone wants to make a point about the US. This allows the person to sound "international" or "politically correct". But last I checked, Mexico is in North America as well, but their point is rarely something applicable to Mexico.

Entries in the Pet Peeve File:

Expressions I don't like
The Number 23

Taxes can be quite taxing...

2007-02-22T01:24:00.000-08:00

Last year was the first year I had my taxes done by a CPA. He charged $850, and came highly recommended. But he didn't know about self-employed 401Ks, so I had to teach him about how to do ours, and he was rather impatient with my wife when she asked questions. So, we decided to give tax software another try.

We went with Turbotax Home & Business, which we downloaded and used. It was far cheaper than the CPA and did all the same stuff; the general numbers are the same as last year, and it didn't give my wife an attitude. I was careful to use the same structure as he did regarding things like depreciation so we have proper continuity, so I did "leverage" his work a bit...

The software was straightforward, if you were patient with it and followed its steps in order. I got everything inputted and it happily calculated my taxes and set up the forms, and things went reasonably, although I was worried for awhile that I wouldn't find where it handled SE401Ks. It does, and even has a "401K maximizer" feature, but you have to wait until the right part of the "interview".

My only complaint about "interview-style" tax software is there's no way to get help on "if I have Situation X, where and when do I deal with it?" You have to wait until the part of the interview which covers that step, and infer that Situation X applies in that case. In this case, the software handled self-employed 401Ks perfectly, but I didn't see that part until after I completed inputting my wife's business tax numbers for her Schedule C. (This makes tax sense since you don't know how much to use for the "employer's share" of the SE401K until you know your profit after expenses and depreciation.)

The help available in the software directs you to IRS info, which is helpful if it's a tax question, but not so helpful if your question is related to the structure of the software itself.

But in general, it was a good experience. I'm not sure I'll still be able to use tax software next year as we'll probably have some income property by then, but I like knowing what's going on with my taxes, so I'll keep doing them if I can.

Silicon Valley's secret...

2007-02-20T12:34:00.000-08:00

Over at Chris Yeh's blog, there's an interesting discussion about startups and Silicon Valley.

I'll be the first to admit that Silicon Valley has a lot of negatives: real-estate is ferociously expensive, and if McMansion living is your thing, you won't do it here unless you hit a serious home-run. By American standards, it's fairly crowded (although having lived in Beijing and Shanghai, I always laugh when people complain about the crowds here), and most people here aren't "well-rooted", so the sense of community can be rather lacking. (Another of my wierdnesses is I'm a rare native son of the Valley, born in San Jose.)

But Silicon Valley has been counted out after many busts, and has come back every time; even as a kid in the early 1980s, I remember hand-wringing articles in the San Jose Mercury about whether the Valley can get its mojo back. But it somehow always does: in addition to "natural" and obvious strengths such as good weather and top universities, a big and usually overlooked strength of the Valley is a large number of people who've spent much of their careers in startups, and are professionally and personally accustomed to dealing with startup ups and downs. These people make up the early startup team and help to get it from vision to early funding, and if they do well and have a bit of luck, to the stage of being a profitable company doing something useful in the world.

I'm one of those people. I've done two of my own startups, extensively consulted for another, and been an early-stage employee in three others over the years. My "startup niche" is what I call "Number Two in Engineering": I'm the guy hired after the VP-Eng or CTO, whose job is to get the early coding done, set up initial engineering processes such as version control, QA, and release management, early IT stuff (which I get out of as quickly as possible), hiring early team members, etc. I'm not a "suit guy" who talks to VCs or hangs out in strategy meetings; I'm more of a "sergeant" who "faces inward" to get the product up and shipping. My particular technical specialty is complex data management on small systems and devices.

Would I move to Colorado, Boise, or wherever? Maybe if the price was right, and I was convinced it was a can't-miss opportunity. But probably not. Since most startups fail, I'd be wondering about my next gig, which would be far easier to find here in the Valley than elsewhere. The chance to own a big house, likely for a relatively short time, wouldn't be worth the price of uprooting myself professionally, so I'll stick around...

More global warming rants...

2007-02-20T01:17:00.000-08:00

Over at The Economist blog, the various blog posters are in a tizzy over global warming, and seeming American non-action. They're realizing that it'll be truly hard to get Americans to buy into an approach that favors grand policies, vast bureaucracies, new "Pigovian" taxes, and lots of pain.

But, as we say in software, that's a feature, not a bug! If AGW is truly real, and climate mitigation policies can be shown to have a chance of dealing with it, and it doesn't cripple the American economy or damage American power, steps to deal with it can probably be done. But otherwise, why bother? And such extraordinary claims will require extraordinary proof at every level - and not just the "precautionary principle" hand-wave.

As I've mentioned, I'm generally skeptical but willing to consider "two-fers" that reduce CO2 emissions while accomplishing other useful goals such as reducing dependence on foreign oil and "real" pollution. But I'm not interested in bankrupting the country to do it, or in donning a hair-shirt while China and India get a free pass.

And there's no way I'm interested in the UN or any other collection of transnationals imposing "tax harmonization" on us, for whatever purpose; this wonderful idea was floated in the 1990s to supposedly "help Africa", and has returned in the guise of various "green taxes". The "need" keeps changing, but the "cure" stays the same: magic taxes going to mysterious transnational entities that supposedly will do Great Things.

One aside: US CO2 emission change performance during the Bush administration has been surprisingly good - in fact, better than much of Europe during that time.

XinNian KuaiLe

2007-02-18T12:56:00.000-08:00

or Happy (Chinese) New Year! We had several guests over for a party, featuring homemade jiaozi and other dishes, both Chinese and American. After the food, we did what is a tradition in any household with someone from China: we watched a five hour variety show. The show is done in Mandarin, so my very bad Mandarin was given a workout. My wife and our Chinese friends were happily watching the show, or ignoring it and chatting, for the duration.

The show itself is always interesting; this is the seventh year I've watched it. It has various comedy acts, song and dance numbers, pop singers, "ethnic solidarity" numbers (with at least one skit featuring happy Tibetans - oddly, the Dalai Lama wasn't invited), with a fair bit of red flag-waving.

Some interesting aspects of the show: they clearly spare no expense, and there are probably several thousand people on stage at one point or another. This year, they had big rear-projection TVs that allowed for "live" sets with running water, etc. My wife said this show was particularly conservative, although there was one interesting departure: a group of peasant kids whose parents work in the city lectured the crowd on the need to improve the schools available to them.**

This show is also interesting for its politics. The audience shots are obviously done for political reasons, and occasionally some Big Guy will be shown. However, this year, no leader got a special front-row seat.

One odd thing: this is probably the only show of this kind where the live audience is actually smaller than the number of performers. I've seen Vegas lounge acts with bigger crowds. It was odd seeing a huge song and dance number with dozens of beautifully dressed performers finish and hear what sounded like ten people clapping in the distance. But the performers are well aware that a billion-plus people are watching them on TV; a good performance by a rising pop star can make a career.

Happy Year of the Pig!

**An aside: China has an odd arrangement where one needs a residency permit to live in a city. Getting these is complex and often involves bribery or other - expensive - trickery, and many people, especially peasant workers working in big Chinese cities don't have them. This creates a sort of "illegal immigrant" problem in China, with lots of workers working off the books.

The pay is far better than it would be in the countryside, but not having a residency permit means the peasant kids can't enroll in the city schools. There are unofficial private schools where peasant kids go - if their parents pay - but these are very low quality. The kids in the show were attracting attention to their school situation, clearly showing a sort of "officially approved" dissent.

A techie, but something of a Luddite...

2007-02-17T14:02:00.000-08:00

I've spent my career in technology, and have worked on things that became major open-source projects and commercial software products that many tens of millions of people (indirectly) use daily. This is Very Cool, and I'm always happy to think that over the years, billions of people have used stuff I wrote or helped to write in one way or another to do something that improved their lives in some trivial way.

That said, I realize that I'm something of a Luddite in my personal life.

1. I don't love cellphones, PDAs, etc.

The only reason I have one at all is because I worked in a startup that sold them! My cellphone is pretty much always off unless I need to make a call, expect one, or need my car towed. As for PDAs or other "things that beep" that people tend to carry on their person, I could do without them, even though my software is used in several PDAs.

As far as I'm concerned, email is more than enough "personal connectivity" for me.

2. I have several computers, but they run Windows 2000 or Linux.

Windows XP, much less Vista, is not getting anywhere near any machine of mine. When I need to use Windows, Win2K is adequate to surf the Web or play most games, and I use Linux for serious work.

And before Macophiles attack, I'm not getting one. I'm frankly too cheap, and have never gone for the "insidery cool" Apple marketing.

3. I'm not a big fan of social networking websites.

I'm well aware of them, but why do I care about a zillion people I don't know? Blogs are different - I'm not a link whore, but writing in my blog satisfies the dreaded "pundit itch" that must be dealt with. I also don't use most other "let's get connected" stuff like instant messaging (probably for the same reason I don't like cellphones).

The only social networking site I pay much attention to is LinkedIn.

4. I pretty much ignore all music tech.

No Ipod, no music downloading, etc. I listen to music occasionally, but not while driving - oddly, I'm far less distracted by talk radio than by music while driving - and I mostly listen to classical or "classic rock". The most high-tech music playing device I own is a dusty ten year old boom-box in my office that has a CD from Wagner's Ring cycle in it at the moment.

Tech things I do own: a fairly good TV and home theater setup; not top-of-the-line, but fun for watching movies and sports.

Speaking of stock markets...

2007-02-16T16:16:00.000-08:00

Like most people, I hate being wrong. Last spring, I figured that the market was due for a big correction, so I sold out my index funds and put them into boring (but decent) money-market funds that paid about 4.5% at the time. That was a big whoops: the market, after a small drop that made me briefly feel like a genius, took off and hasn't stopped climbing. Part of me figured there'd be a couple more big hurricanes and gas-price scares; I made good money the year before by taking some contrary positions post-Katrina when MSM Chicken Littles were talking about $7 gas.

The only good thing that happened in 2006 was a big Microsoft play that worked out: I bought a bunch at 22 and sold at 28. (It would have been nice to ride it to 31, but MSFT never stays above 30 for long, and often doesn't get that far.) That, along with partnership income, made my overall portfolio show about a 9% gain for the year; under the S&P gain, but not that awful.

So now I'm stuck with a bunch of cash, and need to figure out what to do with it. Jumping into the market right now seems rather stupid, given that it's hanging around record highs, but there aren't any obvious bargains at the moment. I don't love the 5%-ish it's earning, but I'll keep my powder dry.

Global warming versus the Dot-Com Boom

2007-02-16T15:33:00.000-08:00

I left this comment on this discussion thread on Winds of Change.

For my part, the AGW fight reminds me of another recent episode: the Internet stock bubble of the late 1990s. You've got the following:

1. Something that is poorly understood by most, but will Change the World in unpredictable ways (although unpredictably good in the case of the Net, unpredictably bad in the case of GW).

2. A sense that there's trillions of dollars at stake.

3. Lots of turbulence on all sides. Business models, government forms, and whole economic and political systems are seen as threatened.

4. Those who "get it" versus those troglodytes who just aren't hip to the whole thing, and ask unpleasant questions such as "can anyone see how this will actually make money" or "what about that whole Maunder Minimum thing"...

5. Obvious historic precedents: the railroad and telegraph boom of the mid 19th century, the Tulip Bubble, and with AGW, the climate-cooling scare in the 1970s, the Club of Rome, and the whole litany of bigthink disasters dating back to Malthus. And "advocates" claim that "this time, it's different".

6. Celebrity promotion and media advocacy. Being hip with AGW is cool and trendy, while being a skeptic is just so Big Oil. Al Gore as the new Maria Bartiromo.

Local real-estate observations

2007-02-15T01:44:00.000-08:00

Like anyone who owns a house these days and has an internet connection, I can't help to bird-dog the real-estate sites to see what the world thinks my house is worth. Prices have definitely dropped, and things are far "cooler" overall than they were about 18 months ago. But the market is still moving: the local MLS website shows many houses in contract, and a small development of new houses just sold out a few blocks away; construction on these houses finished a couple weeks ago.

It helps that the development is probably the only set of new single-family houses that will exist within an easy bike-ride to Google HQ, unless the area around Shoreline Park is rezoned to allow residential and some old office parks are torn down. (Even then, I can't see single-family properties being built there; it would almost certainly be condos.)

We also saw a small apartment complex go for sale a few blocks away at what looked to be a bargain price for Mountain View: about 1.6M for a 1/4 acre with ten apts. (We've been investigating investing in apts for awhile, although they're generally far too expensive to buy for cashflow in this area.) But at that price, it would cashflow positive with 30% down commercial financing as apts, and the apts could be condo-ized and sold for at least $350K each. This math occurred to faster people than us; we called the agent and he said there were 15 offers on the place. According to him, it was going to go for well above the asking price.

We declined to get in the offer queue...

Accounting for real estate in one's net worth statement

2007-02-14T12:39:00.000-08:00

While I'm not a "personal finance" blogger per se, several personal finance blogs are places I frequently visit. One ongoing topic on those blogs is how to account for residential real estate in one's net worth calculations.

This is an area where personal finance meets High Finance, and where lots of fancy financial concepts hit personal reality. The choices vary greatly, from using a relatively conservative approach of going with your real-estate tax assessment, to bird-dogging comparables and using Zillow estimates to track your house price as if it's a stock.

Personally, I don't like using highly volatile measures to account for real property in the net worth statement, so we use a conservative approach: we use the appraised value of our house as of our last refinance. In the net worth spreadsheet, we regard "equity" as the difference between the appraised value and our mortgage principal. This ignores unrealized costs like the cost of selling the house, but this refi was several years ago and our house has appreciated enough since then (even accounting for recent price drops) that there's definitely enough "headroom" in our actual equity to cover this sort of thing.

This approach has the advantage that we capture monthly mortgage principal paydown, but other than that the real-estate part of our net worth stays fixed. This means the main contributor to our net worth changes is investment appreciation and savings.

401K: why roll over one 401K to another?

2007-02-13T12:25:00.000-08:00

When you leave one company for another, one important choice is what to do with your old 401K. Should you roll it over into a some sort of IRA (either Traditional or Roth) or should you roll it into your new employer's 401K?

Personally, I've always rolled old 401Ks into IRAs, and never understood why anyone would roll an old 401K into a new 401K. As far as I can tell, the only reasons to roll an old 401K into a new 401K (versus into an IRA) are the following:

1. Laziness - you only want one retirement fund. But at a minimum, you should have a 401K and a Roth IRA.
2. Many 401Ks have loan features, which aren't available in IRAs.
3. The 401K has superior investment options that aren't available in the open market.
4. You want to avoid trading fees.

Point 1 is acceptable, but should be recognized as laziness, and not a truly valid "reason".

Point 2 is OK, but dangerous - 401K loans are a good way to get yourself into trouble.

Point 3 is valid, but extremely rare. Pretty much all employer 401K plans invest in publicly available mutual funds; if you like the fund, you can find out its symbol and invest in it directly in your IRA if you so prefer.

Point 4 is probably the most valid, but this can also be avoided by parking your IRA at Vanguard or some other good mutual fund company, where you can invest and trade in the company's funds for free.

The reasons for rolling a 401K into a traditional IRA include the following:

1. You can invest in any stock, mutual fund, or any other investment available in the market. In an employer 401K, you're limited to the portfolio they make available.

2. You can Roth-ize the rollover when convenient.

3. Your rollover money is not encumbered by your employer's financial issues. This actually became an issue for me once: I didn't bother to roll over an old 401K, and my old employer croaked and went Chapter 7. My 401K was held up in the bankruptcy court for awhile. I got it all out, but it was scary.

23: The devil flunked decimals?

2007-02-12T01:07:00.000-08:00

The premise of the movie The Number 23 is that 2 divided by 3 produces the digits 666, or the mark of the beast. The problem is that, skipping the decimal point issue, it's actually .667 when correctly represented using three decimal places. One would think that after all these years, the devil would be better at math...

On "political irrationality"

2007-02-09T12:02:00.000-08:00

Jane Galt posted a link to an interesting paper called Why People Are Irrational about Politics. It's interesting, not only for its comments, but for its own biases:

o The political universe is filled with "problems" that lend themselves to "solutions". (The Technocratic Bias)

o These "problems" can be studied, and "solutions" can be identified, by "studies", which, if done carefully, can reveal objective truth.

o All that matters is data and analysis. If only people would set aside their own experiences and histories - which are what ultimately inform their political beliefs - the truth will out. The problem here is that many political beliefs and positions are informed not just by "biases" (which are held to be a Bad Thing and invalid), but by wisdom and experience.

For example, I don't believe that a vast global treaty infrastructure will help to reduce CO2 emissions because they've been ineffective in everything else they've tried, particularly if large numbers of countries are involved. All the arguments about why it's important to reduce CO2 emissions won't help convince me that such a thing will actually work, if only we "tried hard enough".

o There are two sides to every issue. There are as many "sides" as there are people looking at a problem - sometimes more; I know I'm on many sides sometimes :)

o Irrationality is "wrong". It isn't wrong, it's just irrational, unless you think rationalism is the sole description of "truth".

My take on global warming and carbon taxes

2007-02-07T14:49:00.000-08:00

My overall take on global warming is basically similar to instapundit's.

On carbon taxes: Lots of economists love the idea of carbon taxes, or at least higher gasoline taxes, but these sorts of "Pigovian taxes" are awful for the working poor. About the only way I'd ever support such a tax is if it's revenue-neutral and the tax is paid for by a front-loaded elimination of the "worker's share" of social security and Medicare taxes, up to the "revenue neutral" point. This would give the working poor a 7% raise without cost to their employers, and give them a chance to deal with the increase in the cost of living that these sorts of taxes would impose on them.

Some argue that the poor can always ride the bus, or move closer to work, but moving costs significant money, and many working poor don't have steady employment so it often isn't clear where they will work over time. They also often work several part-time jobs and need reliable transportation to get between them, so depending on public transit is difficult.

Insurance: wealth vs. cashflow preservation

2007-02-07T14:20:00.000-08:00

There are two general types of insurance:

o Wealth preservation insurance. This is a hedge against big, unknown expenses like getting sued or enormous medical bills.

o Cashflow preservation insurance. This is a hedge against "bump in the road" issues like car repairs or replacement of electronics or appliances.

Life insurance is the ultimate form of wealth preservation insurance: the point of it is to "capture" at least some part of the aggregate earning power of the insured if they die untimely.

Other examples of wealth preservation insurance are auto liability insurance, homeowner's insurance, or high-deductible "health savings account" health insurance. An example of cash flow preservation insurance is pretty much all auto insurance other than liability; the amount it will pay is bounded by the replacement cost (or sometimes the new price) of the car. "Combination" insurance would be most employer-based health insurance.

We're big savers, so we run with "wealth preservation" insurance and figure that cashflow preservation will be managed by emergency fund savings. Following this logic, we never buy extended warrantees on electronics or appliances, and have high deductibles on everything that permits deductibles.

Typically, wealth preservation insurance is cheap compared with cashflow insurance, so this is a reasonable strategy for us, and shows how having an emergency fund can save money in other ways than needing to use debt to cover cashflow hiccoughs.

Car insurance requote

2007-02-07T14:14:00.000-08:00

We just redid our car insurance, dropping our older car to "liability only", and getting our insurance agent to otherwise knock a hundred bux off of the quote for insurance renewal. These two actions saved us about $250 for six months.

This was an interesting exercise, and it appears that insurance companies do the same "trick" that magazines and other "subscriber-oriented" businesses: have low "teaser" rates for new customers, probably subsidized by higher "sucker" rates for ongoing customers. You can get a discount off the "sucker" rate by making a fuss, but otherwise, it'll go up silently.

Interesting electric cars

2006-12-14T18:09:00.000-08:00

Even though I'm something of a human-caused global warming skeptic, there's enough other reasons to be in favor of getting off fossil fuels for me to pay close attention to developments in that area. One interesting new all-electric car is being developed in Detroit, and appears to compete with existing GM electric vehicles.

Even though these golf-cart-class electric cars aren't quite ready for cross-country road trips, they could be useful in a lot of settings, such as short-distance errand-running, nearby commutes, and, with a bit of creativity, longer commutes if they could be somehow integrated with subways or commuter railroads; these guys would get you to and from the station.

And if going 25 mph isn't exciting, you may save enough money with your little electric car to afford one of these.

(h/t: Instapundit)

Networking for introverts...

2006-12-13T12:06:00.000-08:00

When it comes to networking, I've always had a problem. I hate trivial chitchat! And my networking abilities aren't helped by being a wingnut in a sea of Silicon Valley moonbats. But maybe this article will help...

The Feel-Good Axiom of Economics

2006-11-30T20:31:00.000-08:00

I have a rule that is based on my observations about economics over the years: the economic policy or action that makes people feel good is guaranteed, nearly without exception, to be the most harmful to those it is intended to help. Some examples:

1. The minimum wage hurts the poor by driving up unemployment, and pushes some number of the poor - as well as their employers - into the underground market. A better way to help the poor is with the EITC.

2. "Fair trade" and most things trade-related hurt poor countries more than they "help". But they do make you feel good about your latte...

3. If you're a Chinese peasant, your employment options typically include a threadbare existence scraping food out of the ground, or a hope of a better future by working in a Walmart-supplying factory. Going after Walmart hurts far more poor people than it helps, both here and abroad.

4. Want to improve education? Support vouchers. Want to feel good about it? Support pumping more money at the educational establishment; they're doing such a good job...

The fundamental reason the feel-good axiom holds is that there ain't no free lunch. If you add conditions and regulations to things, no matter how well-intentioned, they get more expensive and result in unintended consequences.

Being a Cheapscate in Silicon Valley

2006-11-21T17:15:00.000-08:00

One of the refrains on many personal-finance blogs is that one should move "Somewhere Cheap" if one intends to do well financially. The problem for us is that "Somewhere Cheap" is usually somewhere with awful weather, a bad economy, and a generally uninteresting cultural environment. And as a rare Silicon Valley native, much of my extended family is here, so it's unlikely that we'll move anytime soon.

So, we "live below our means" by doing Other Things:

1. We pay cash for cars and drive them until they disintegrate. One nice thing about the mild weather in this area is cars last forever - no rust, excessive heat or cold, sand, or other nastiness. So a reasonably maintained car should run at least 10 years or more - ours all have.

2. We do lots of day trips and adventures in nearby areas. Yosemite is only three hours away, and Lake Tahoe is about 4 hours away, so a tank of gas and $75 in winter makes for a nice weekend of Yosemite hiking. Add another $100 for Lake Tahoe and we can have a nice dinner and see a show at one of the casinos. We also go on at least one multi-day backpacking trip each year. Good museums are everywhere, and there's plenty of good city walks, from Cliff Drive in Santa Cruz to The Embarcadero in San Francisco - as well as numerous hiking trails in the Santa Cruz Mountains.

3. Utility rates here are not low, but total utility costs are relatively cheap, due to smallish house sizes and mild weather. Our gas, electric, and water costs are rarely over $100/month total, except for a couple months in midwinter. In months when we don't run the furnace, the total is rarely above $70. We don't have AC, and miss not having it for about one week per year.

4. We shop carefully. My wife is extremely good at figuring out where the deals are for particular types of food: she buys spices at a Korean grocery, a few other things at an Indian grocery, many other items at the Chinese supermarket (she's Chinese), bulk stuff at Costco, and loss leaders at Albertsons and Safeway.

5. We make do. Unless we get obscenely rich, we aren't likely to live in a place much bigger than 1500 square feet or so. Our current house is on a lot that's about 4000 square feet. So, we have learned to live "small and well", making full use of our living space and being careful about avoiding clutter.

6. I frequently telecommute, which saves quite a bit on gas and wear&tear.

7. We both take our lunches to work. This saves at least $10-$15 per workday.

8. Other LBYM standbys work just as well here as they do anywhere else: we don't run up credit card debt, fully leverage our 401Ks and Roth IRAs, and generally don't throw money around.

MLMs considered harmful

2006-11-16T21:16:00.000-08:00

To paraphrase Edgar Djikstra...

Ramit's post is wonderful - one of the best things I've read on any blog in a long time.

Full Paycheck Disclosure

2006-11-14T21:21:00.000-08:00

One of my standing gripes with our tax code is that many taxes are hidden. One, in particular, is the "employer's share" of Social Security, as well as unemployment insurance, etc. If you're an employee, you pay these taxes, although they are hidden from you since they come out of your share of the gross payroll, not out of your visible salary. The employer doesn't pay them; calling them the "employer's share" is a fiction to make it seem that there's some mythical "burden-sharing" taking place.

My proposal: print the entire cost of an employee on his paycheck. Include the "employer's share" of social security and medicare, as well as all other government-related taxes and costs of hiring the employee. Also, if you want serious medical insurance discussions, print the per capita cost of employee medical insurance on the paycheck as well.

Discussions of taxes will be far more intelligent if people don't imagine that "someone else" is paying taxes that they are in fact paying.

Expressions I don't like

2006-11-07T13:24:00.000-08:00

1. "Only a fraction". This one annoys me on many levels, since it's mathematically meaningless. 1/1 is a fraction, as is 33/22 or 7/5. Even in its typical use, meaning "less than the whole", it's quite unhelpful since 999/1000 is also a fraction, so it's quite correct to say "only a fraction of Indians live in India" since some Indians live in other countries, although over a billion Indians actually do live in India. This expression is used when someone wants to sound mathematical but can't be bothered to look up the numbers. At least say something with a pretense of precision, like "a small percentage".

2. "Spiraling", meaning "going up". This is usually used in reference to some economic indicator, ie "inflation is spiraling". It's either going up or going down, but it's definitely not spinning - although it's likely that politicians will be doing plenty of spinning around it. Even a more generous definition, ie "spiraling out of control", is derived from observing out of control airplanes crashing _down_ after they've been rendered inoperable somehow. Please say "going up".

3. "Hello?", said in a singsong voice with a trailing inflection, followed by some statement. This is used when Person A is calling Person B an idiot for neglecting some detail that Person A regards as profoundly important. I've rarely heard this expression used when Person A isn't the actual idiot...

I'll doubtless think of more...

Extra mortgage payments versus taxable investing

2006-10-15T00:04:00.000-07:00

One question I've often had: does making extra mortgage payments make sense, versus saving the money for (taxable) investing? On the one hand, mortgage paydown has a guaranteed gain - the interest rate of the mortgage - that is typically higher than money market returns, and is a reasonable strategy if someone would otherwise spend the money. Also, many people are "debt haters" who can't abide debt and feel better if they're working the debt off rather than "juggling" both debt and investments.

On the other hand, mortgage interest rates are typically lower than longer-term interest yields on even fairly conservative investments, and since mortgage interest is tax deductible** and is being "eaten" by inflation, its real rate is typically even lower.

Let's run some numbers: consider a $100,000 30 year fixed mortgage at 6%, and an investment plan that yields 8% over time. For simplicity, we'll ignore tax deductibility and inflation, and assume the investment plan behaves like a savings account, even though most plans paying this much would likely involve investments that vary over time, like stocks.

Now, let's say we have a spare $100/month to use for either extra mortgage paydown or for deposit into our investment plan.

The $100K 30 year fixed mortgage's payment is $599.35, according to calculators on bankrate.com. If the loan is paid down over the course of 30 years, a total of $215,833 will be paid.

Paying the extra $100/month will cause a total of $175,937 to be paid, and the loan will be paid 9 years earlier. This will save $39,896 over the life of the loan, and will be paid off 9 years earlier.

Now, let's see what would happen if we put the $100 into the investment plan.

As mentioned above, we save $100/month into the investment plan that pays 8%. If we do this for 30 years (here's the calculator I used) - instead of paying down the mortgage with it - we will have $149,035 saved.

Now, let's say you did the early paydown and paid the mortgage off in 21 years, and then saved the mortgage payment and the $100 into the investment plan, for a total of $699.35/month for 9 more years. After 30 years, you'd have paid off your house and saved $110,098.

One more scenario: Let's say you chose to save the $100 into the investment plan, and paid the mortgage down on schedule. Now, at some point, you have enough money in the investment to pay the mortgage off, and decide to do so, and after this, you save . A bit more calculator work indicates that this point is reached 19 years and six months (234 months) into the mortgage, when you have a balance of $55,946 on the mortgage and have saved $56,013. Now, let's save $699.35/month for 10 years and six months into the investment account. After the 30th year, we've saved $137,413.

So, to summarize (sorry, my HTML table skills are nonexistent):


Option                  Month mtg is paid off    $ in 8% after 30 yrs

Pay extra $100 to mtg   252 (9 years early)      $110,098


Save $100 to plan,      234 (10 yrs 6 mos early) $137,413
prepay mtg when ready

Pay mtg to term, save   360 (paid to term)       $149,035
$100 to plan every mon

As mentioned, this example simplifies things in that taxes and inflation are ignored, but since ignoring them is the pessimal case for the investment plan versus the mortgage, it should be clear that paying the mortgage to term and investing the savings at the same time is the strategy that maximizes net worth.

**The tax deductibility of mortgage interest is much less useful than it once was, especially if you live in a state with no state income tax, because the personal exemptions are much higher nowadays than they once were. But for us at least, state income tax and property tax are high enough by themselves to make it worthwhile to itemize, so we consider the full mortgage interest to be tax deductible.

Useful Chinese unpowered "crock pot"

2006-08-15T15:09:00.000-07:00

On our last trip to China, we bought what could best be described as an oversized thermos bottle, which is the size and shape of a Crock Pot. But unlike a Crock Pot, it isn't powered.

It has two main parts: the external thermos part, and an inner pot that holds the item you're interested in cooking. The idea is you take the inner pot out, put in the ingredients, heat the whole bunch on the stove, put the inner pot back in the thermos, and let it cook in its own heat. Since it can hold heat for many hours, it probably saves electricity and is more versatile than a crock pot; you can pre-make soup or other slow-cooked recipes to take on picnics or road trips.

I have no clue what this gadget is called in English - the only English on the device itself is "Cook Pot" - but it is highly useful.

Class warfare, Aspirants, and the Democrats

2006-08-05T16:03:00.000-07:00

This very important article discusses why a traditional "class warfare" strategy is no longer working for the Democratic Party. The author works for a "progressive" think tank, and is clearly not a Republican wolf in sheep's clothing.

One crucial point the author makes is the idea that many workers are more aspirational nowadays, and less likely to regard themselves as stationed in a particular class, particularly if it is a lower class. So, even if they may be able to get government benefits at the moment, even poor aspirants are likely to oppose tax increases and regulations - particularly on small businesses - which bring about these benefits. This is because they aspire to be business owners or high-income managers and professionals, and see little economic or social upside in being wards of the state.

Another problem for Dems: who are the poor? The article points out that income is quite variable, and that going by yearly income is quite deceptive as you get a lot of what I'd call "elective poor" in yearly income such as students, people starting new businesses, new immigrants, etc. The author determined that the "real poor" as those who had 15 years of family income under $40K, which is less than 25% of the population. This group is more likely to be interested in traditional government benefits than aspirants would be, and less interested in tax cuts.

So, the next question, not covered by the article, is what government policies would impress aspirants? My guesses:

o Real education reform, particularly if school choice is on the table, as aspirants are typically fanatic in wanting good educations for their kids. However, throwing more money at existing educational bureaucracies won't impress aspirants.

o Making it easier to start small businesses and legitimately hire employees.

o More portable health and retirement approaches. Aspirants often don't work for a single employer for very long, and may shift from self-employment to business ownership to salaried employment several times during their working life. Flexible health and retirement strategies would be attractive.

o Policies that shake up big corporations, such as ending "corporate welfare". This may seem counter-intuitive, but most aspirants are fans of small and medium-sized businesses and hard-charging entrepreneurs, not "institutional" corporations who are looking to milk the government cow. Aspirant dreams are to be the family that runs the corner Chinese restaurant or the founders of Google, not the CEO of General Motors.

Things that won't impress aspirants:

o "Soak the rich" income tax increases, especially in the crucial $100K-$200K income range where many small business owners and self-employed aspirants reside. People at this level are not "rich" - especially if they live in expensive areas - but can have a 50% or more marginal tax rate, especially if they live in a high-tax state and pay self-employment tax. Marginal rates are actually lower once you get over $200K and leave the self-employment "tax shadow" behind.

o Government handouts. Aspirants who are working hard to move up in the world, for better or worse, are unimpressed by those who live off of charity.

My crazy 401K improvement strategy

2006-08-03T17:17:00.000-07:00

A confession: I love the idea of 401K plans. But the implementation, for employer 401K's, is typically abominable, particularly for plans available at smaller companies (where I've spent my career). On the other hand, the self employment 401K is wonderful: it's a standard brokerage account that makes available everything supported by a normal brokerage account: stocks, mutual funds, ETFs, even things like CDs and directly purchased T-bills.

My idea for a radical revolution of the 401K is to abolish the employer account strategy, and have a 401K be a special account like an IRA that is managed by the employee. At a high level, the idea is that you open it, at your brokerage, give your employer a direct deposit number, and your 401K gets funded - just like direct deposit to a bank account.

Things like vesting schedules and such for employer match could probably be worked out by some sort of "vesting account" that is parallel to your main account, and which would move funds (or equivalent stocks, etc) to your main account once the funds vest, and that would revert unvested funds back to the employer when you quit. There are lots of issues with the vesting, but they could be worked out.

This would probably be much cheaper than the existing setup, especially for smaller companies that can't afford - or won't pay for - good 401K plans and end up providing employees with the "four expensive, underperforming garbage funds + money market" that I usually end up being stuck with.

More tales from Biz Broker Wife...

2006-08-02T20:51:00.000-07:00

One of my wife's standing peeves is sellers who can't realize that they're selling a business, not hitting up their buyer as an ATM to rebate all the money they spent on the business. A typical would-be seller:

"I paid $70K for this biz a year ago, which made $40K/year at the time. I spent $30K upgrading everything and putting in new floors. Last year, it made $20K as the biz had a falling off of business due to the ownership transition. Now I want to sell for $150K, which includes my $70K original price, my $30K of upgrades, your commission, something extra for my troubles, and a bit of headroom for negotiation."

Biz Broker Wife informs the guy that a buyer is only getting 13% ROI at that price and would probably just keep his money in the bank, and asks him: would he buy the biz at that price? He replies that selling the biz is her job...

My "Hundred" list

2006-08-02T10:00:00.000-07:00

Here's my "Hundred Things about Me" list...

0. I'm enough of a geek that lists start at zero, not one
1. I was born in 1964
2. I have gray eyes
3. I am a rare native Californian
4. I live about fifteen miles from where I was born
5. My mom lives about 1 mile from where I was born
6. I pay attention to the Oakland A's
7. But I'm more of a SF Giants fan
8. I was in the left field bleachers at the World Series in the 1989 earthquake
9. I lived in Beijing for eight months
10. I speak "survival-level" Mandarin Chinese
11. My wife is from Anhui, in central China
12. I understand much more Mandarin than I can easily speak
13. I grew up in an immigrant neighborhood
14. Most of my friends from my kid days are Vietnamese
15. I have spent my career in tech startups
16. A couple worked out - the rest didn't
17. I ran a computer store business for a year
18. I'm a C programmer
19. My advice on programming is irrelevant to 99% of programmers
20. ...but the 1% to whom it applies find it very useful
21. My software is in several million small devices, mostly in Asia
22. The fact that millions of people are using my software daily makes me happy
23. I use Windows for web surfing
24. ...but Linux for working and software development
25. I helped to develop a major open-source database engine
26. It is currently in wide use, which I also think is cool
27. I'm an INTJ
28. I'm close to my mom and brother
29. We also go to Shanghai to visit the in-laws fairly frequently
30. I like Shanghai and wouldn't mind living there, except in the summer
31. My wife and I backpack once or twice per year
32. My wife makes wonderful Chinese food
33. I can no longer eat Chinese restaurant food outside of China
34. I'm horribly spoiled foodwise
35. My wife and I take long (5M+) walks together, four or five times a week
36. We also work out on an exercise machine twice or three times a week
37. Despite all this exercise, I still can't lose weight
38. ...but I don't need advice - or lectures - on this point
39. Even though it's expensive, I love the SF Bay Area
40. I sometimes toy with the thought of moving
41. ...except that I'd be Somewhere Else
42. I'm not a big fan of yardwork or housework
43. ...and I don't mind outsourcing it
44. For some reason, I'm not a big music fan
45. Probably because it's usually highly distracting
46. I do like classical music
47. I like opera, and will someday watch the full Ring Cycle
48. I'm a "small ell" libertarian
49. I'm pro-defense, and would rather be a live hypocrite than righteously dead
50. I am not religious, but I'm not anti-religious
51. I can't abide trivial conversation
52. I have a few close friends
53. I like discussing a few topics deeply
54. I have little patience for people who can't say "I don't know"
55. I am painfully blunt, to the point of being impolite
56. I have a dangerously sharp "BS detector"
57. Which occasionally gets me into trouble...
58. I was married on 22 Dec 1999
59. ...which was a week after my wife-to-be arrived in the States
60. I met my wife on the Internet
61. We are very happily married
62. My wife is very kind - and also quite blunt
63. Her family always said she was very American, even when she was a kid
64. This was not a particularly good thing during the Cultural Revolution
64. She speaks perfect English and writes better than I do
65. We are both honest to a fault, which sometimes gets us into trouble
66. My sister-in-law and her husband are both Chinese Communist Party members
67. ...but live like Republicans
68. I get along very well with both
69. I drink tea, diet coke, and water, in that order
70. I am relatively frugal, but not obsessively so
71. I am too lazy to be a good stockmarket investor
72. I invest in things that are a bit odd, but they've done well over the years
73. I avoid technology stocks, because I work in it
74. ...so I missed the Great Boom. Thankfully.
75. I knew several people who had eight-figure paper net worths
76. ...but most of them rode their options all the way down
77. I like giving advice and helping people
78. ...but having been burned, I'm careful to avoid people with "issues"
79. I don't like snobs, poseurs, or painfully "nice" people
80. ...which is a problem here in the uber-nice SF Bay Area
81. I wear shorts to work in the summer
82. ...and know I get away with it because I'm a darn good programmer
83. But I will wear "appropriate attire" (ie, a suit) if need be
84. I had a dog growing up, and hope to have one again
85. ...along with a house with a proper yard
86. I've been using the Internet since 1984 (yes, that's eighty-four)
87. I actually remember when many called it the "ARPAnet".
88. I got obscenely drunk once
89. ...and woke up in a strange apartment. In Beijing.
90. Since then, I've been careful not to drink beer followed by hard liquor
91. My whole family was chased by Chinese troops out of Tiananmen Square
92. ...but the reason for it was quite boring.
93. I like to put kimchee on homemade hamburgers
94. I love hot food, especially Hunan and Sichuan (Sze-chuan) food.
95. I don't particularly like Japanese food, except sushi
96. I can't read most self-improvement books. Too earnest and preachy.
97. I am a big history fan
98. I think too much, and occasionally "go angst"
99. I celebrated my "Life, the Universe, and Everything" birthday recently

(And since the numbering started with zero, that's it...)

SEP-IRA versus Self-employed 401(K)

2006-03-03T11:54:00.000-08:00

Last year, I set up a self-employed 401(K) for my wife, who is a business broker. I considered two options: the older and more well-known SEP-IRA, or a Self-employed 401(K). Self-employed 401(K)s are fairly new, and many professionals don't yet know much about them. Also, while my experience was that a self-employed 401(K) wasn't any harder to set up than any other brokerage account, many people think "setting up a 401(K)" is Really Hard, so you have to be clear that you're looking at a self-employed account, not a generic 401(K) for multiple employees, which is rather troublesome to set up.

Like any tax-associated thing, there's lots of niggling detail that may be relevant in some circumstances, but I'll ignore that and say that anyone investigating these for themselves should do the relevant research.

In our circumstances, we live on my income and save my wife's income. So, maximizing the amount we could set aside and defer taxes on was the primary concern, since my wife's income is taxed at a rather scary rate somewhere between 45% and 50%:

15.7% Self-employment tax
28% Federal tax ($120K+ bracket)
9.3% California state tax

Calculating the exact percentage is tricky, because some taxes are deductible from others (half the SE taxes are deductible from Fed and CA taxes, and the CA taxes are deductible from Fed taxes if you itemize deductions with Schedule A, which we do), but it's definitely scary, so we wanted to shovel as much of my wife's income into a tax-protected account as we could legally get away with. And for the tax watchers out there, we know that we don't avoid self-employment taxes this way, but we do avoid the other taxes.

For us, the best way to maximize the amount we put into the account was with the Self-employed 401(K).

Anyway, this comparison does a good job of comparing SEP-IRA versus Self-employed 401(K), particularly the "Higher contribution limits" a bit down on the page. (I don't have any connection with Fidelity other than having the 401K there; they were one of the earliest big brokerages to set them up. I like their charts since they're clear and have numbers.)

The main point is you can put your first $15000 of self-employed profit (20K if you're over 55), after SE taxes, directly into the 401(K), while with a SEP, you can only put $3750 of the first $15K into the account. After this, you can put 25% of your profit after SE taxes as your "employer profit-share". So, while the maximums you can set aside are actually identical at $42,000, you can set aside more at a lower income level with a self-employed 401(K). So, if you have $50K of self-employed profit and are, say, 40, you can put $24293 in the 401(K), while you can only put about $9293 into a SEP. (Numbers from the calculators on Fidelity)

Some important asides:

o Unlike self-employed 401(K)s, SEP-IRAs can be used even if you have a regular job with an existing 401(K) or pension plan. So, if you are an employee and have additional self-employed income, you may want to look at the SEP-IRA.
o Self-employed 401(K)s can't be used if you have any employees outside your family in your biz.

The Roth option:

This year, the Roth 401K has become available, and the law does allow a Self-employed Roth 401(K) as well. As of my last check, Self-employed Roth 401(K)s aren't available from Fidelity yet, but I'll keep checking and hope to set up one this year.

These would have the following useful properties:

o The first $15K (or $20K if you're over 55) could be put into the "Roth part", which has the same tax treatment as a Roth IRA.
o The "employer match" part would go into a "normal" 401K, which has the same tax treatment as existing 401Ks or Traditional IRAs.

Civilization 4 blogging...

2006-02-16T15:59:00.000-08:00

I've been a life-long "Civilization" addict since I got the original PC game in 1993 or thereabouts. I played the game continuously for a week, and was glad it didn't exist in college or I may not have graduated!

Anyway, I got the newest incarnation for Christmas, and it's a much better game than Civ 3. Unfortunately, it needs a maxed-out computer, and still can crawl late in the game if you're playing a huge world with lots of opponents, particularly if there's several wars going on. My 3Ghz P4 with 1GB RAM and a 256MB video card is barely enough, and I still have to turn the graphics settings down late in the game.

My favorite strategy is a fairly expansive but largely peaceful strategy emphasizing religious and cultural techs and buildings early, followed by a heavy focus on economics and building up trade. My "Moneybags" strategy seems to work reasonably; on "Prince" level (where the human player and the computer players are on an equal footing), I can get to the industrial age by about 1600 or thereabouts, with modern techs appearing around 1750.

I've found a few useful combinations:

o Sistine Chapel + Mercantilism. The Sistine Chapel gives cultural output from specialists, and Mercantilism gives a free specialist in each city. This helps when you're colonizing new continents in midgame as your new cities will crank out culture. Getting the Statue of Liberty up doubles this strategy.

o Another useful thing is to shoot for Representation (+3 research per specialist), until later in the game; if you have two specialists per city, you'll get a bunch of aggregate research.

o I haven't quite figured out "Caste System" (can make as many specialists as you want using population) and rarely use it.

Things I like about Civ 4 (versus Civ 3):

o Civil disorder and corruption are much better handled than in any of the earlier versions. Big empires are just more expensive, not oppressively squashed by corruption. Also, disorder doesn't croak your empire anymore - it just impairs the city's production.

o Democracy isn't always the best form of government. In midgame, Representation + Mercantilism are better at producing research than Universal Suffrage + Free Market. Later in the game, the various pieces of Democracy are good, but not completely the best.

One comment: Environmentalism as an economic form is pretty useless. I usually stick with Mercantilism, switching to State Property once my empire is over about 25 cities or so.

Back in the blog saddle again...

2006-02-16T15:57:00.000-08:00

My mom had open-heart surgery late in January, and it was successful, so I'm back to the daily world, thank goodness. She's recovering nicely...

Pronounciation of "Oregon"

2006-01-18T20:37:00.000-08:00

Every so often, I hear someone pronounce "Oregon" "o-re-GON", with the stress on the last syllable, like "Polygon". This is always rather jarring, since I've never heard someone from the state pronounce it that way. My grandmother lives in Grants Pass and pronounces it "OR-eg-en", as does pretty much everyone else I've met in the state.

So, if any Oregonians are reading the site, what is the official pronounciation of "Oregon"?

Two important articles about the economics of marriage

2006-01-18T13:36:00.000-08:00

This City Journal article is quite profound; basically, it says that while educated, upper-class women may talk the talk about not needing men to raise children, etc, they don't walk the walk - and live married lives that would be quite recognizable to their grandparents in the 1950s. And well they do: their sisters at the other economic end of the universe walk the walk, having children out of wedlock and getting divorced frequently, and live broke and can do little to improve economic prospects for their children because of it.

This article is less profound, but points out that divorce is a good way to fry your net worth and enrich lawyers.

h/t: AllThingsFinancial, Real Clear Politcs

Credit Union Plug

2006-01-14T02:19:00.000-08:00

Since my mom was virtually a founding employee of the Star One Credit Union, I have to give them a plug every so often. So, if you live in the South Bay, you should check them out.

Anyway, their info:

o The savings account rate is 3.815% - not quite the highest in the universe, but darn good for a place with live, human tellers.
o You can access your money free at any credit union ATM, or any ATM at 7-11 stores.
o They have free checking if you keep a balance of $300 or have $5K in a combination of savings accounts and outstanding loan balances.
o They have two branches in the South Bay: one on the Lockheed campus by Moffett Field, and another in Cupertino. They also have one in Austin, TX.
o They do wire transfers and other fancy banking stuff without any problems; we've had no problems moving moving overseas and getting wires.

They were the old Lockheed Sunnyvale employees' credit union when I worked there, and I still keep them as our "bank". Other credit unions are good as well; I always wonder why people insist on using a Big Bank that charges a zillion fees just so they can have a few more "free" ATMs.

In any case, if you have a credit union nearby, you may want to check it out; here's a locator.

Freedom of speech

2006-01-12T15:55:00.000-08:00

Enemies of freedom of speech have been using the notion of "corruption" under the guise of campaign-finance reform to silence primarily conservative voices. The First Amendment is clear:

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

Clearly McCain-Feingold contradicts this. One doesn't need a law degree to see this, although unfortunately the Supremes haven't struck it down as yet. Hopefully Alito will help to get rid of this awful law.

As an American, I interpret freedom of speech to mean I can say anything I want to anyone I want, at any time I want, using any medium I can get at, within a few limits imposed by libel, slander, decency, and treason. Any other restrictions - particularly where political speech are concerned - are contrary to the intent of the Framers and must be fought against by any true American.

The Martian Rovers

2006-01-12T13:39:00.000-08:00

Still trucking after all this time...

I wonder how many people realize that we have not one but two little SUVs four-wheeling (actually six-wheeling) their way across the Martian landscape, and have had them up there for close to two (Earth) years now? They've done lots of wonderful science, discovering evidence for water in Martian rocks among other things, and taking lots of great pictures.

401K: To Roth or not to Roth?

2006-01-12T12:31:00.000-08:00

My wife is self-employed, and we already have a Self-employed 401K. This year, Self-employed Roth 401Ks will be available, and I'm wondering if we should invest in one, particularly since our combined income this year will likely be above the ceiling for Roth IRAs. Roth 401Ks are cool, particularly for the self-employed:

o You can put up to $15K in the Roth 401K. (We aren't old enough to worry about catch-up contributions; they'd be another $5K if we were). Like a Roth IRA, the money appreciates tax-free, and also like Roth IRAs and unlike traditional 401Ks, the contribution itself is after-tax.
o The "employer match" part - which is up to another $30K or so if you're self-employed - is still available, although it's still a "traditional" 401K for tax purposes.

Anyway, the question: should we do a Roth 401K and pay the extra 40% or so marginal taxes (effectively costing us about $6K in extra taxes this year on the $15K contribution), or should we stick with a traditional 401K? I don't have the answer yet, but I'm looking hard and will post later.

Fear Fads

2005-12-29T14:30:00.000-08:00

When I was a kid, I was always interested in the latest "fear fad", which in those days ranged from global cooling to population explosions to the world running out of coal/oil/copper/food. The big fear fads of the 1970s and 1980s faded, and were replaced by new fear fads: global warming, "peak oil" (now available with a bonus 1970s "Greatest Hits" CD), the obesity epidemic, bird flu, and a whole host of economic gloom & doom.

My tests for a "fear fad" include the following:

1. It's BIG. It will destroy civilization as we know it, or at least wipe out millions.
2. It's coming tomorrow and time can't be wasted in further study. ACTION IS DEMANDED NOW.
3. Those who question it are IN DENIAL. Psychological arguments as opposed to scientific arguments are always at the core of a fear fad.
4. It requires GOVERNMENT ACTION, at both the national and international level.

Like a broken clock being right twice per day, eventually one of the fear fads may come to pass. But until then, this post is worthwhile reading. As FDR said, the only thing we have to fear is fear itself.

Merry Christmas...

2005-12-23T23:37:00.000-08:00

Slow blogging lately; been getting geared up for Christmas. Yesterday, the last of the packages arrived in the mail, late enough to make me somewhat worried but not too late.

As for the "war on Christmas", three co-workers wished me a Merry Christmas today: one is Muslim, one is Hindu, and one is an athiest. Everyone else did the "happy holidays" thing; I guess these three should be flogged for their refusal to observe proper PC piety.

As for my bit of political incorrectness:

MERRY CHRISTMAS and HAPPY NEW YEAR!

The history of the Western world...

2005-12-19T15:03:00.000-08:00

as told by extracts from various essays and term-papers...

Are Europeans really so scared of the future?

2005-12-17T22:06:00.000-08:00

This article is about a woman who immigrates to the US from eastern Germany, and who grew up under Communism. It's a basically nice human-interest sort of story, but one quote in the story is quite revealing about the mindset of Europeans who don't have kids:

On the topic of the fall of the Berlin Wall, and her inability to find work as a kindergarten teacher: "The whole society had changed. We turned from socialism to capitalism, and people didn't know what was going to happen in the future, so they stopped having babies."

This is rather profound. Under communism, they "knew what was going to happen in the future"? I guess there's some truth to the notion that in cradle-to-grave socialism, one has a fair degree of "knowledge" about what will and won't happen. In a more dynamic system, there's more uncertainty, but life is uncertain! And the really sad thing is that the assumption is because they didn't "know" what's going to happen in the future, that unknown future must be bad, or at least bad enough to not want to raise kids.

I've always had a sort of wierdly cynical optimism. I'm never sure what the future will bring, but it's always been better than I imagined, although the path to get there is always messy. We didn't nuke the world, which was the big fear when I was kid, and pretty much every gloom and doom prediction about the future has either proved false or been averted.

Message to Europe: buck up! The future will only be bad if you let it be...

What the heck is saving?

2005-12-14T19:59:00.000-08:00

This article about relative savings rates in the US is interesting reading: San Jose, CA, where I grew up, is the highest-rated "saving city" in the US. This isn't surprising: San Jose is a fairly rich city with a household income around $70K, and has a large population of high-saving immigrants.

Anyway, I digress. The question I want to ask is "what is savings?" This dictionary definition has the personal savings rate as disposable income minus personal consumption expenditures.

In my own example, my wife and I max out our 401Ks, and she has a self-employed 401K. In total, we put about 20% of our gross income in these 401Ks. We also max out Roth IRAs, and have other taxable savings.

As far as I can tell, 401Ks and possibly IRAs aren't considered disposable income, so they wouldn't count towards our own savings rate. I wonder how much of the low savings rate in the US is due to people saving into these sorts of vehicles?

For our part, we use a relatively expansive definition for our own calculations: savings is the increase in net worth that results from setting money from wage or business income aside. This would include putting money in a 401K, mortgage principal paydown, putting money in a savings account, or our monthly deposits to investment accounts.

$1.99 gas in SF Bay Area

2005-12-12T12:02:00.000-08:00

It's official - an Arco in central San Jose has gas for $1.99/gal. Given that Bay Area gas prices are routinely 20 to 50 cents more than anywhere else, this is a good thing.

Oddly, during the Katrina gas-price runup, the Bay Area had cheaper gas than many other places, although it still topped $3/gal.

It's official: I'm a geek

2005-12-10T21:38:00.000-08:00

according to the results of another silly test:

You're a scientific intellectual.

What Sort of Intellectual Are You?
brought to you by Quizilla

Objectivity versus Caring and Blogging

2005-12-09T17:43:00.000-08:00

This discussion of a review of Joanne Jacobs' new book Our School is interesting. One point in particular: Drum clearly wants a more "objective" observer, as opposed to Jacobs, who is closely associated with the Downtown College Academy (DCA) project and supports charter-schools in general. This brings up an ongoing question about "objectivity" versus "depth and caring", and is why I like to read opinionated blogs versus more "objective" sources. Jacobs obviously cares about DCA in a personal way, and this caring lies behind her motivation to write a book about it. In addition to the care brought by an "insider", she also has lots of information that an objective outsider would have a hard time finding.

Finding an objective observer who cared enough to do the legwork and such to write a book would have been difficult to impossible. I find this with blogs as well: a soldier blogging from Iraq cares far more about the subject matter than a typical reporter, who would cover this story as a "story" and not as a personal mission. This will obviously slant his blog reports, but it will also mean that a vast store of knowledge and passion is brought to the subject matter that simply can't exist for someone who will move on to another story at the end of the day.

Similarly for other subject-matter blogs: you want detailed opinions about legal matters of the day, ask lawyers, not journalists, who will themselves talk to lawyers and report their findings to you as secondhand information. The same holds true for just about every field. Maybe the writing will be rougher, and you will get strong opinions versus "objectivity". But if you read three or four blogs on a particular topic - particularly if they are on different sides of the topic - you'll know far more than about the topic than you would if you went to most journalistic reports.

Not to sound geeky, but this is a real-life manifestation of the "abstraction pyramid" problem that occurs in big software projects. The more layers between the data and the user of the data (which may be another computer program in this context), the more "cooked" the data will be - and the less useful it will be.

Random crazy thoughts on CA state government...

2005-12-09T00:05:00.000-08:00

Being a native of the crazy state of California, I like to play with crazy government ideas from time to time; there is little that seems worse than our current system, particularly in this state...

Some crazy ideas:

1. Our state Legislature term limits are overly severe, attracting political careerists who see their tenure in the Legislature as a brief detour on the road to Bigger and Better Things. So, the strategy is obvious: serve the special interests well, and they'll grease your way to higher office. So, I'd keep the term limits, but make them longer and possibly increase the length of time between elections. I also think either the Assembly or the Senate should be abolished; there seems to be little need for a bicameral system if they're both elected and aren't particularly different in numbers or representational areas.

2. Out there on the fringe: keep a bicameral legislature, but make service in the Assembly subject to a drawing among all citizens. Service could not be refused unless one is on active duty in the military or some such, and the pay would be increased to be high enough to compensate for the inconvenience of a life interrupted. These citizens would serve a single 6 or 8 year term, with 25-33% of the seats replaced every two years. It's possible that the first two years could be a "candidate" period, during which they can't vote while they learn.

This sounds utterly insane, but we already do something like this with juries and grand juries, and nothing would create a more "democratic" legislature than simple random selection. Keep a Senate that is elected. A true "government of the people" can't help but be more centrist and reasonable, and less prone to random moonbattery and capture by special interests.

3. Abolish school districts and make all schools charter schools. Or introduce vouchers for all students. Getting rid of the teacher unions and the ed schools would be a bonus.

4. Rather small-bore, but would save tons of $$: schools and other government agencies should be able to operate on rented commercial property. There is no reason for government entities to do their own property management, janitorial services, etc.

5. Allow the government to use non-union contractors for construction projects. I don't see how the state benefits from overpaying on construction and maintenance.

Our money-handling strategies

2005-12-06T15:05:00.000-08:00

Part of the reason I have a blog is to write posts where I clarify things in my own head. This will be one of those posts...

In handling money, we're fairly frugal, although we definitely aren't sandwich-bag recyclers. Between 401Ks, Roth IRAs, and taxable savings, we save about half our income, and much of it is earmarked for retirement; we won't get any sort of pension and we figure Social Security is a bonus if we get it at all. My wife is self-employed, so to deal with taxes we withhold enough of my pay to hit the withholding safe harbor, and we save half her income into an account that we pay extra taxes from when they're due. The rest of the money is our "refund", which we use to fund retirement accounts.

In daily life, our general rules are as follows:

o Things which save lots of time but are relatively cheap, or save us from work we'd really hate doing on an ongoing basis, we pay for. So, we have a gardener and house cleaning service come every two weeks. We figure this "buys" us at least four weekend days per month - as well as a trim yard and a clean house. Total cost: about $250/month total.
o We take our lunch to work, and don't do Starbucks. Since eating out would cost a minimum of $8 or so each day for each of us, this is a big savings.
o We pay cash for cars, and drive them until they are no longer reliable.
o We eat out about once per week.
o We fix things that are easily fixed.
o We carry no debt other than our mortgage.
o We review our recurring expenses about every six months and reorganize them as things change. For example, we're about to drop our DSL, get a cable-modem, and switch to VOIP, since VOIP + cable modems is cheaper than DSL + landlines, even though DSL itself is cheaper than a cable modem. Also, the $8/month that SBC charges for voicemail really annoys the heck out of me.
o We like to go on vacations, but are more backpacker types and don't need five-star accomodations, although we're happy to stay in nice places if they can justify the expense.
o We aren't afraid to talk about money and finances.

A silly little test

2005-12-05T20:37:00.000-08:00

A fun little test. Here's my score...

King Edward I
You scored 68 Wisdom, 73 Tactics, 52 Guts, and 59 Ruthlessness!

Or rather, King Edward the Longshanks if you've seen Braveheart. You,
like Edward, are incredibly smart and shrewd, but you win at any
costs.... William Wallace died at his hands after a fierce Scottish
rebellion against his reign. Despite his reputation though, Longshanks
had the best interests of his people at heart. But God help you if you
got on his bad side.

My test tracked 4 variables How you compared to other people your age and gender:

You scored higher than 62% on Unorthodox
You scored higher than 59% on Tactics
You scored higher than 37% on Guts
You scored higher than 88% on Ruthlessness

Link: The Which Historic General Are You Test written by dasnyds on Ok Cupid, home of the 32-Type Dating Test

Bush does believe in timetables

2005-12-05T12:09:00.000-08:00

In Iraq, the political timetables have been repeatedly met, as this Chalabi interview points out. These political timetables have been the elections, which President Bush has pushed hard for - unlike John Kerry and others in the punditocracy. Their arguments can be boiled down to this: a sort of Mazlow's Hierarchy of Needs exists at the national level which demands the complete defeat of the enemy before democratic forms can be considered. Incidentally, this is a typical argument of dictators the world over, but that's a topic for another post.

The thing these guys don't realize is a thing that anyone who has ever managed a project knows fully well: deadlines which apply positive pressure are your friends. The election deadlines put pressure on our enemies as well as the political process, and force those involved with the political process to avoid the problem of the perfect being the enemy of the good. The elections weren't a "bonus" that comes after "establishing security" - they were, and are, a crucial weapon in defeating the enemy.

On the other hand, deadlines which exert negative pressure are your enemies. Calendar dates for an Iraq troop pullout put unnecessary pressure on US and Iraqi armed forces, and give the enemy an obvious tactic: lie low and wait until we leave. The only strategy which makes sense is for us to defeat the enemy and finish the job.

Ten hard economic truths

2005-12-02T13:38:00.000-08:00

These are ten "economic truths" that I use to define how I think about this or that policy. And in general, they are "liberal" in the classical economic sense of the word. Sorry if they seem a bit random.

1. In general, the best way to help the poor is to let the rich get richer.

2. The economy moves forward by inconviencing or harming smaller groups of people so the great mass of people is helped in a marginal way. Stopping this process leads to economic stasis and decline. Examples: Walmart, Voice over IP telephony, which are hurting existing telcos and causing layoffs there.

3. The most obvious way for government to help people rarely works as expected, and often ends up hurting them.

4. In an economy, you will get either low unemployment or artificially high salaries, but not both.

5. Corrolary to 4: a minimum wage, living wage, or other artificial minimum constraint on wages will increase unemployment among those it's supposed to help. Additionally, these will drive jobs into the underground economy.

6. Regulation helps established businesses, especially big business, by freezing business models and slowing down creative destruction. This is why big business isn't always opposed to regulation. But excessive regulation hurts new businesses and hinders the creation of new business models. (For a particularly silly example, see North Dakota's restrictions on Ebay auctioneers.)

7. Regulation and restrictions on land use drive up real-estate prices. If you want truly affordable housing in your area - particularly for the lower middle class as opposed to the poor who can qualify for "Section 8" - fight to let builders build and developers develop.

8. Restrictions on land use enrich existing landholders, creating a constituency for regulations. This constituency fights and defends regulations in the form of people fighting for the environment or "quality of life", but the result is that the lower-middle and middle class is driven out of the market. (See 6)

9. "Big Pharma" helps far more people than it hurts. Weakening or destroying "Big Pharma" will hurt untold billions by denying them the fruits of ongoing medical advances.

10. The most direct way for people to enforce their will on a bureaucracy is to make the bureaucracy compete with other similar bureaucracies for its funding. All other control mechanisms are easily captured by the bureaucracy.

Bathroom Window Democracy

2005-12-02T12:33:00.000-08:00

This post by Sandmonkey on elections in Egypt is journo-blogging at its best, particularly the pictures of significant numbers of people climbing through bathroom windows to evade the police blocking the entrance to the polling place. Somehow this didn't make the NYT or AP.

But I suppose they aren't ready for democracy...

The US: more Kyoto than the signers?

2005-11-28T18:43:00.000-08:00

While not a signatory to Kyoto, the US has actually done better in CO2 emissions than many green-oriented Kyoto signatories, according to this article. What the article doesn't point out is something I discussed in my first post to this blog: the US's population - and economy - have increased greatly during the 1990-2005 timeframe.

Since I'm skeptical about Kyoto's effectiveness and the notion that human-caused CO2 can be managed in such a way to influence climate change, I'm quite agnostic on these numbers. But it's interesting to compare: the evil US, led by an oilman, is beating such paragons of greenism as Spain and Canada without really trying - and is only slightly worse than New Zealand, for crying out loud.

If this doesn't proclaim the futility of state-mandated CO2 management through the temples of greenism, I don't know what will.

This post on The Brussels Journal discusses Europe's Kyoto adventures.

Old 403(b) found money: does this happen often?

2005-11-28T12:32:00.000-08:00

This weekend, a check from UC Berkeley showed up in my mailbox. This was odd; it is far from typical for the University, my alma mater and my employer for a few years in the early 1990s, to send me any sort of check - as opposed to vast amounts of junk-mail and phone calls asking for money.

But apparently I had a 403(b) account while I was there that I had completely forgotten about. According to the statement, it had started with $300 in it, and it had grown to $2000 (!) over the past twelve years. Maybe I should put all my investments there! After thinking about it, I vaguely recall that the university had put me into the 403(b) plan just before I quit - two years after starting work there and enrolling in the plan.

Anyway, the University was switching plans so my old one was being closed. I happily put the money into my rollover IRA, while writing a check to cover the tax withholding as the university had withheld some state and federal taxes. I did some quick research and discovered that if I didn't cover the taxes, I'd get socked with more taxes on the taxes and a 10% penalty. (Odd that the dreaded Regents of UC find yet another way to get me to cough up a check, but I shouldn't look a gift horse in the mouth.)

Had this check not showed up, I would have never known this money existed. I wonder how many people have little piles of money sitting around the world that they don't know about?

On the inheritance tax

2005-11-27T20:22:00.000-08:00

My own feeling is that the inheritance tax is a bad thing, but completely abolishing it is also a bad thing. My "plan" would be to simply declare that death is not a taxable event, but that all existing tax obligations pass through to the heirs of the estate along with the property they inherit. This would eliminate the need to liquidate property to pay taxes, and inherited property would be managed like any property, to be sold - or not - as desired by property owners.

An example of an existing tax obligation is a house. Let's say the now deceased owner payed $10K for a house, and it's now worth $100K. The person inheriting the house should inherit the capital gains tax due on $90K, instead of having the "capital gains clock" reset "for free" to $100K. If the person chooses to keep the house, they don't pay anything. When he decides to sell, his "tax basis" should be $10K. This rule would be similar for stock, interest in a business, etc.

On the other hand, if the guy inherits a bank account with $50K in it, he shouldn't need to pay any taxes, other than any that happen to be otherwise due on the money.