"I don't like spiders and snakes . . . and that ain't what it takes to love me . . . the way I wanna be loved by you."
So you want to protect your loved ones from creepy-crawlies. This is laudable enough. But read on before you launch into full-on death-to-everything-in-my-house mode.
Most spider-control calls are inspired by the sight of a single spider. It astonishes me how much fear these small invertebrates are responsible for. Most of this fear is irrational. A number of unfortunate myths about spiders survive to this day:
My Lesion is a Spider Bite.
People blame every suspicious mark on their bodies on spider bites. Look, folks, spiders aren't running around seeking people to bite. People aren't spider food. Spiders bite people entirely in self-defense (ignoring for the moment the exuberantly aggressive Asian tarantulas). Folks unwarily pinch spiders against their skin while dressing (as is often the case with the brown recluse) or place their fingers into hidden areas while moving old stacks of lumber (as is often the case with black widows). There isn't much you can do when something thousands of times your size is squishing your body . . . except to bite.
Furthermore, if you've got multiple lesions, you almost certainly have not been bitten by a spider. What, you think they have some kind of vendetta against you? If you foolishly insist to your physician that you've been bitten by a spider, when you have no such proof, you predispose your doctor to making an incorrect diagnosis. Believe you me, they don't need this kind of help. Other diagnoses, such as Lyme disease, may be overlooked, to your potentially fatal detriment. Yes, it can, and yes, it does happen.
I Can't Just Ignore a Spider!
Sure you can. Too infrequently, homeowner education classes fail to mention that most inexpensive of all pest control techniques: tolerance. A single spider is not an infestation. Sometimes a spider is just a spider.
Residual Insecticides Work Well Against Spiders.
Spiders walk on tiny tarsi, making the probability that they will contact and pick up residual insecticides much lower than that for insects. Species that sit and wait in webs rarely travel, thus making exposure impossible anyway. Stick to insecticidal dusts in areas inaccessible to people, and resign yourself to directed applications everywhere else (which may include the use of a vacuum cleaner!) There is no substitute for being thorough.
They'll Always Find a Way Inside.
Many exterminators get away with doing next to nothing and getting credit for spider control in homes where spider entry is unusual, because the homeowner's perception is that the spiders no longer came in after the exterminator left. This may well have been the case without any treatment at all (remember, I said that one spider is usually sufficient to inspire a call!) This underscores how effective exclusion can be. In older homes, exclusion may be impractical, granted; in newer homes, entry should be a great deal more difficult for spiders.
Insecticides Are the Only Effective Control Measure.
The most difficult situation to contend with is the home with the attached garage. Garage doors rarely seal well around the edges, frequently allowing even creatures as large as mice easy entry. Try poking your finger through the area where the bottom of the door and the side of the threshold meet - you can probably push your finger all the way through. Spiders will frequently follow edges, so glueboards are your best friend here - place them next to the wall on either side of the garage door.
And those glueboards that claim to be "prebaited?" Nonsense. That's just food coloring thrown into the glue. Just do a search for spider pheromones, and you'll see that this research is in its infancy.
Don't forget, your vacuum is a great bug-fighting tool, too.
Yes, pest control can suck!
Tuesday, September 30, 2008
Monday, September 29, 2008
Adventures in Boise
"Housekeeping!"
This announcement, preceded by a knock on the door, is the dread of every hotel occupant that has changed time zones.
Still, I have made my best of my most recent visit to Boise, Idaho. My brother took me up to Table Rock, where we dangled daringly from the outcropping. From Table Rock, it is possible to see more than 100 miles into Oregon. While the road up to Table Rock is hideous, it still retains the charm of an undeveloped wonder - this despite suggestions that safety railings should be put up.
Immediately below Table Rock lies Old Penitentiary, and if you've got a sturdy pair of binoculars, you can peer into the Idaho Botanical Garden nearby, thus saving yourself the entry fee to see it close-up.
For a fee-free adventure, head back down to the valley floor and check out the Morrison Knudsen Nature Center, next to the Fish & Game Department. Streamside windows allow visitors to stop and view an underwater snapshot of a riparian ecosystem. An interpretive center rounds out the visit, and supplies the all-important travel element: public restrooms.
This announcement, preceded by a knock on the door, is the dread of every hotel occupant that has changed time zones.
Still, I have made my best of my most recent visit to Boise, Idaho. My brother took me up to Table Rock, where we dangled daringly from the outcropping. From Table Rock, it is possible to see more than 100 miles into Oregon. While the road up to Table Rock is hideous, it still retains the charm of an undeveloped wonder - this despite suggestions that safety railings should be put up.
Immediately below Table Rock lies Old Penitentiary, and if you've got a sturdy pair of binoculars, you can peer into the Idaho Botanical Garden nearby, thus saving yourself the entry fee to see it close-up.
For a fee-free adventure, head back down to the valley floor and check out the Morrison Knudsen Nature Center, next to the Fish & Game Department. Streamside windows allow visitors to stop and view an underwater snapshot of a riparian ecosystem. An interpretive center rounds out the visit, and supplies the all-important travel element: public restrooms.
Wednesday, September 24, 2008
The Holiest of Covenants
If cash is king, then the customer is the high priest in the business world. Customers must be wooed, and oftentimes sacrifices must be made to appease them. Thus, goodwill is a priceless asset in business (even if it cannot be amortized or depreciated).
A sacred trust is placed in employees, in that they will not leverage their relationships with clients in order to one day take business away from their employer. It behooves an employer, then, to put some real effort into solidifying his or her relationship with each and every client so that this will not happen.
A shortcut to this approach is the Covenant Not To Compete. Such agreements vary widely in their enforceability and tests for validity from state to state. The largest advantage of the use of these agreements is generally the ignorance of the employee: employees generally lack an in-depth knowledge of the law. Thinking they will be successfully sued on the basis of the agreement they have made, however unconscionable it may be (working for a horrible employer and then being barred by agreement from working for a competitor is one example), the employee refrains from breaking the agreement.
A prudent businessperson circumvents this problem by treating employees and customers well, and acknowledges the volatility of business. A business owner may even encourage employees that wish to leave to start their own enterprise to do just that, as they take the view that everybody has a right to eat.
What does it say about an employer when he or she feels that a noncompete agreement is the only way to protect the business from losing customers to exiting employees? How tenuous is your customer loyalty when such an agreement is so important? How badly are employees being treated that this is such a big concern?
Many questions arise about this practice. It should be acknowledged, then, that there are other, more legitimate reasons to engage in such agreements. Protecting a company's intellectual property or proprietary methods, for example, is more than perfectly ethical and prudent; it is positively necessary. These are issues of a far different character than viewing employees or customers as property (and don't expect any customer loyalty from informing clients that you own them).
There is a simple basis for judging a person, and that is by the way he or she treats other people - particularly those that exchange their freedom of choice for a paycheck. Treating other people well is a no-brainer. The loyalty gained thusly is evident if we study other people that have obtained a following, yet treated others better than they treated themselves.
Take Jesus of Nazareth, for example. There's a guy that developed quite a following.
So for business owners worried about those that might bite the hand that feeds them, I offer the following advice:
Save the low-quality dog chow for yourself.
A sacred trust is placed in employees, in that they will not leverage their relationships with clients in order to one day take business away from their employer. It behooves an employer, then, to put some real effort into solidifying his or her relationship with each and every client so that this will not happen.
A shortcut to this approach is the Covenant Not To Compete. Such agreements vary widely in their enforceability and tests for validity from state to state. The largest advantage of the use of these agreements is generally the ignorance of the employee: employees generally lack an in-depth knowledge of the law. Thinking they will be successfully sued on the basis of the agreement they have made, however unconscionable it may be (working for a horrible employer and then being barred by agreement from working for a competitor is one example), the employee refrains from breaking the agreement.
A prudent businessperson circumvents this problem by treating employees and customers well, and acknowledges the volatility of business. A business owner may even encourage employees that wish to leave to start their own enterprise to do just that, as they take the view that everybody has a right to eat.
What does it say about an employer when he or she feels that a noncompete agreement is the only way to protect the business from losing customers to exiting employees? How tenuous is your customer loyalty when such an agreement is so important? How badly are employees being treated that this is such a big concern?
Many questions arise about this practice. It should be acknowledged, then, that there are other, more legitimate reasons to engage in such agreements. Protecting a company's intellectual property or proprietary methods, for example, is more than perfectly ethical and prudent; it is positively necessary. These are issues of a far different character than viewing employees or customers as property (and don't expect any customer loyalty from informing clients that you own them).
There is a simple basis for judging a person, and that is by the way he or she treats other people - particularly those that exchange their freedom of choice for a paycheck. Treating other people well is a no-brainer. The loyalty gained thusly is evident if we study other people that have obtained a following, yet treated others better than they treated themselves.
Take Jesus of Nazareth, for example. There's a guy that developed quite a following.
So for business owners worried about those that might bite the hand that feeds them, I offer the following advice:
Save the low-quality dog chow for yourself.
Tuesday, September 23, 2008
Currently Experiencing Technical Difficulties
Hot on the tail of a weekend plagued by login problems, the University of Phoenix's website is once again not allowing users to log on. Instead, an error page is displayed.
There is a back door to the classroom forums, but even that link won't let me in today. The error message claims that the problems will be repaired by 2:00 PM Arizona time, but naturally that doesn't help me out right now.
This has been one of the more frustrating aspects of earning my degree online. I still maintain that UoP is not a degree mill, as the work is just too hard to put forth that argument (I can't speak for the other programs, of course), but it is disheartening to see, now that I have started my next class, that other students are already blatantly plagiarizing online content to answer discussion forum questions posted by the instructor.
This isn't a huge point value in the class, and these students are primarily ripping themselves off. Other students do a great deal to make up for this non-participation by adding their own critical thinking to the discussion thread. But to a certain extent, these students are ripping off the other students as well as themselves: by avoiding real, qualitative participation, they detract from the possible synergy achieved through a larger number of viewpoints.
There is another loss to these students. Ctrl + C and Ctrl + V are not useful jobs skills. In the event that they manage to score the minimum GPA - and I will not deny that it is in the UoP's best interest that they do, otherwise profits are lost to the school - they will fall on their face when they try to leverage their degree in the real world.
How much this will impact the perceived value of the degree for those that lost sweat and blood earning it, I don't know. If I hadn't seen well-established public schools likewise bestowing degrees on undeserving idiots, I might be a great deal more concerned. State colleges and universities are subscribing to a disheartening philosophy that is slowly devaluing the degrees they offer: more enrollment is better. Deans have realized that students that flunk out don't pay tuition in future semesters, and schools have been shaped by this realization in recent years.
Watching the mess on Wall Street, it is evident that this may have always been a problem. A degree is no guarantor of fitness for any given position. I am reminded of an entomologist that was hired to work for my employer not too long ago that was consistently identifying carpenter ants (specifically, Camponotus essigi and Camponotus vicinus) as field ants (Formica spp.) He had single-handedly solved the region's carpenter ant problems by unilaterally reclassifying them!
Whether the problem lies in using ocelli as the distinguishing character of an ant when one should be using the shape of the thorax, or repackaging bad mortgages as a collateralized debt obligations, one thing is clear, to quote the words of a wise man:
You can't fix stupid.
There is a back door to the classroom forums, but even that link won't let me in today. The error message claims that the problems will be repaired by 2:00 PM Arizona time, but naturally that doesn't help me out right now.
This has been one of the more frustrating aspects of earning my degree online. I still maintain that UoP is not a degree mill, as the work is just too hard to put forth that argument (I can't speak for the other programs, of course), but it is disheartening to see, now that I have started my next class, that other students are already blatantly plagiarizing online content to answer discussion forum questions posted by the instructor.
This isn't a huge point value in the class, and these students are primarily ripping themselves off. Other students do a great deal to make up for this non-participation by adding their own critical thinking to the discussion thread. But to a certain extent, these students are ripping off the other students as well as themselves: by avoiding real, qualitative participation, they detract from the possible synergy achieved through a larger number of viewpoints.
There is another loss to these students. Ctrl + C and Ctrl + V are not useful jobs skills. In the event that they manage to score the minimum GPA - and I will not deny that it is in the UoP's best interest that they do, otherwise profits are lost to the school - they will fall on their face when they try to leverage their degree in the real world.
How much this will impact the perceived value of the degree for those that lost sweat and blood earning it, I don't know. If I hadn't seen well-established public schools likewise bestowing degrees on undeserving idiots, I might be a great deal more concerned. State colleges and universities are subscribing to a disheartening philosophy that is slowly devaluing the degrees they offer: more enrollment is better. Deans have realized that students that flunk out don't pay tuition in future semesters, and schools have been shaped by this realization in recent years.
Watching the mess on Wall Street, it is evident that this may have always been a problem. A degree is no guarantor of fitness for any given position. I am reminded of an entomologist that was hired to work for my employer not too long ago that was consistently identifying carpenter ants (specifically, Camponotus essigi and Camponotus vicinus) as field ants (Formica spp.) He had single-handedly solved the region's carpenter ant problems by unilaterally reclassifying them!
Whether the problem lies in using ocelli as the distinguishing character of an ant when one should be using the shape of the thorax, or repackaging bad mortgages as a collateralized debt obligations, one thing is clear, to quote the words of a wise man:
You can't fix stupid.
Monday, September 22, 2008
Everybody Loves Wal-Mart
Local politicians seem to falling all over themselves to give Wal-Mart tax breaks to locate in their area. In a small town very near my home, a Super Wal-Mart is being built soon, despite the fact that there are already two Wal-Marts, and more being built, within a thirty-mile radius.
What is the customer base, you ask? My dear and loyal reader(s) should know that the towns falling within this radius boast a population between 10,000 and 30,000 people.
Maybe they need a break, you say. Well, Wal-Mart's EBIT has hovered around a whopping $20,000,000,000 in the last three years. It is tough to buy the idea that they need tax breaks. Their most recent growth is starting to smell like Starbucks - they are putting more stores than is prudent in the same area. I remember seeing a Wal-Mart in Hinesville, GA, then driving a few blocks down, turning left, going up a block and seeing another Wal-Mart! What were they thinking? The tiny possible increase in sales due to customer convenience can hardly justify the considerable increase in overhead. As I noted, the same thing is happening to communities within a thirty-mile radius of my hometown: the number of Wal-Marts locally are doubling. It is clear that Wal-Mart will take any breaks it can get to mitigate the effects of capital expenditures on cash flows (and who wouldn't?) Whether or not it is a good idea, local governments are eager to supply tax incentives for Wal-Mart to build.
Is Wal-Mart showing signs of a Starbucks redux? While the last three years don't appear to have changed greatly with respect to cash flows from investing activities, the overall change in cash flows would be troubling to me as an investor, particularly in light of the picture from the ground.
For now, I'm forced to concede that the market appears to disagree with me. Wal-Mart's stock has seen a 50% gain in the last twelve months. I'll be greatly interested in seeing what the cash flow statement has to say about things come January, and what the income statement has to say in the next couple of years that follow.
Watch out for falling prices.
What is the customer base, you ask? My dear and loyal reader(s) should know that the towns falling within this radius boast a population between 10,000 and 30,000 people.
Maybe they need a break, you say. Well, Wal-Mart's EBIT has hovered around a whopping $20,000,000,000 in the last three years. It is tough to buy the idea that they need tax breaks. Their most recent growth is starting to smell like Starbucks - they are putting more stores than is prudent in the same area. I remember seeing a Wal-Mart in Hinesville, GA, then driving a few blocks down, turning left, going up a block and seeing another Wal-Mart! What were they thinking? The tiny possible increase in sales due to customer convenience can hardly justify the considerable increase in overhead. As I noted, the same thing is happening to communities within a thirty-mile radius of my hometown: the number of Wal-Marts locally are doubling. It is clear that Wal-Mart will take any breaks it can get to mitigate the effects of capital expenditures on cash flows (and who wouldn't?) Whether or not it is a good idea, local governments are eager to supply tax incentives for Wal-Mart to build.
Is Wal-Mart showing signs of a Starbucks redux? While the last three years don't appear to have changed greatly with respect to cash flows from investing activities, the overall change in cash flows would be troubling to me as an investor, particularly in light of the picture from the ground.
For now, I'm forced to concede that the market appears to disagree with me. Wal-Mart's stock has seen a 50% gain in the last twelve months. I'll be greatly interested in seeing what the cash flow statement has to say about things come January, and what the income statement has to say in the next couple of years that follow.
Watch out for falling prices.
Thursday, September 11, 2008
Turning a Tanker Truck on a Dime
My employer became quite excited about rolling over our SIMPLE IRA plan to American Funds a couple of weeks ago (he is very excitable). I wasn't terribly impressed by the rep's sales patter (the representative was billed as a "Financial Advisor" on his business card, but he didn't have any designations on it, like CFA or CFP), so I did my own research. As it turns out, it was undeniably a great fund family to get into some years back. Now it is a matter of some debate if it is wise to invest in these funds.
I did the best apples-to-apples comparison I could and stacked up their growth fund against the one I already own. One of the criticisms of American Funds that has been consistent in the financial press is their bloat. This became readily apparent looking at the numbers. You may be familiar with the idea of inventory turnover, and holdings turnover is similar in concept (though the analogy quickly falls short, as we'll see). An aggressive fund should see fairly high holdings turnover - stocks are being sold more frequently. I hasten to add that there are legitimate reasons not to do this too much, as buying and selling incurs trading fees, and stocks should be held for an optimal length of time in order to profit from them while avoiding selling them so soon that short-term gains taxes figure in. So there is a good reason to expect some deviation from the norm with respect to holdings turnover. Some deviation . . . the American growth fund I looked at currently turns over at 26%, in contrast to the category average of about 98%. Whoa! That's some stagnant pond water right there.
Let's continue with the bloat issue. This fund has billions of dollars in holdings. American is the biggest fund family now - which is a great selling point to the naive. The savvier among us ask: how in the world can they trade efficiently when they are that large? They run up against the limiting effects of trading volume on any given stock. In other words, a teeny-tiny portfolio like mine is quite liquid, but theirs is not, even though one might normally consider equities to be a liquid asset. It is far easier for me to sell my handful of shares in the space of a few minutes, if not seconds, but a gargantuan fund like one run by American can't move in response to market opportunities because there just aren't that many buyers for them to unload on. As we saw, this is evident in the holdings turnover.
How does one even measure liquidity for a fund versus a corporation when real-world problems like bloat apply? I sure don't know. Most business measures can still be used to analyze a mutual fund, in much the same way a manufacturing corporation, retail store, or bank would be sized up. But weird things seem to happen at many billions of dollars. And although American likes to dismiss the naysayers with their unique "management team" approach, it seems to me that more managers, coupled with the largest fund in existence, only guarantees a regression to the mean - in this case, they will behave no better than an index fund. I find it unlikely that American is, of all known entities in the universe, somehow immune to the law of averages. I guess index performance is okay. But frankly, I see little reason to invest in "professionals" that are bound to deliver no better than average performance.
Call me unpatriotic, but I'm staying out of American.
I did the best apples-to-apples comparison I could and stacked up their growth fund against the one I already own. One of the criticisms of American Funds that has been consistent in the financial press is their bloat. This became readily apparent looking at the numbers. You may be familiar with the idea of inventory turnover, and holdings turnover is similar in concept (though the analogy quickly falls short, as we'll see). An aggressive fund should see fairly high holdings turnover - stocks are being sold more frequently. I hasten to add that there are legitimate reasons not to do this too much, as buying and selling incurs trading fees, and stocks should be held for an optimal length of time in order to profit from them while avoiding selling them so soon that short-term gains taxes figure in. So there is a good reason to expect some deviation from the norm with respect to holdings turnover. Some deviation . . . the American growth fund I looked at currently turns over at 26%, in contrast to the category average of about 98%. Whoa! That's some stagnant pond water right there.
Let's continue with the bloat issue. This fund has billions of dollars in holdings. American is the biggest fund family now - which is a great selling point to the naive. The savvier among us ask: how in the world can they trade efficiently when they are that large? They run up against the limiting effects of trading volume on any given stock. In other words, a teeny-tiny portfolio like mine is quite liquid, but theirs is not, even though one might normally consider equities to be a liquid asset. It is far easier for me to sell my handful of shares in the space of a few minutes, if not seconds, but a gargantuan fund like one run by American can't move in response to market opportunities because there just aren't that many buyers for them to unload on. As we saw, this is evident in the holdings turnover.
How does one even measure liquidity for a fund versus a corporation when real-world problems like bloat apply? I sure don't know. Most business measures can still be used to analyze a mutual fund, in much the same way a manufacturing corporation, retail store, or bank would be sized up. But weird things seem to happen at many billions of dollars. And although American likes to dismiss the naysayers with their unique "management team" approach, it seems to me that more managers, coupled with the largest fund in existence, only guarantees a regression to the mean - in this case, they will behave no better than an index fund. I find it unlikely that American is, of all known entities in the universe, somehow immune to the law of averages. I guess index performance is okay. But frankly, I see little reason to invest in "professionals" that are bound to deliver no better than average performance.
Call me unpatriotic, but I'm staying out of American.
Wednesday, September 10, 2008
Plagiarism at the UoP
Recently in one of my classes, a student made the remark to another student that "it seems that you found and used the same source I used on my original answer [on the online forum discussion question]."
Now that's a strange thing to say. So I scrolled back through the thread, and, to my surprise, what did I find but a word for word reproduction of the other student's post. Suspicious, I copied the entire post and pasted it into Google.
Sure enough, the entire post the student had submitted as a discussion question answer was none other than a Wikipedia entry regarding the statement of cash flows. Both students had copied the entry, submitted it as their own work without quotes or citations to indicate otherwise, and then the one incriminated the pair by remarking on the similarity of their posts!
Obviously, no bad intent was here, just an abysmal ignorance about plagiarism. For fun, I showed the blatant plagiarism to my wife, and then ran another student post through Google, which came back once again, word for word, as the precise text from another website. Wow!
I don't expect to see a great deal of brilliant prose from anybody in the accounting field, but some originality would be nice. It is disappointing to see that the rampant plagiarism on the Internet has transferred itself to academia in such a commonplace fashion. My experience evidently isn't unique, reinforcing my belief that plagiarism has become more common rather than less so.
It appears that everybody, my dear and loyal reader(s), cannot be both original and brilliant. There simply aren't a lot of possibilities to remedy this problem. And that's okay.
Because I'm not sure I'd be comfortable with seeing myself cloned.
Now that's a strange thing to say. So I scrolled back through the thread, and, to my surprise, what did I find but a word for word reproduction of the other student's post. Suspicious, I copied the entire post and pasted it into Google.
Sure enough, the entire post the student had submitted as a discussion question answer was none other than a Wikipedia entry regarding the statement of cash flows. Both students had copied the entry, submitted it as their own work without quotes or citations to indicate otherwise, and then the one incriminated the pair by remarking on the similarity of their posts!
Obviously, no bad intent was here, just an abysmal ignorance about plagiarism. For fun, I showed the blatant plagiarism to my wife, and then ran another student post through Google, which came back once again, word for word, as the precise text from another website. Wow!
I don't expect to see a great deal of brilliant prose from anybody in the accounting field, but some originality would be nice. It is disappointing to see that the rampant plagiarism on the Internet has transferred itself to academia in such a commonplace fashion. My experience evidently isn't unique, reinforcing my belief that plagiarism has become more common rather than less so.
It appears that everybody, my dear and loyal reader(s), cannot be both original and brilliant. There simply aren't a lot of possibilities to remedy this problem. And that's okay.
Because I'm not sure I'd be comfortable with seeing myself cloned.
Monday, September 8, 2008
Medical Monday
Okay. I'll admit it. I'm not qualified to dispense medical advice.
You've had your warning.
All the same, I have become decidedly unimpressed with the bulk of the medical community - those that are qualified to dispense medical advice. Perhaps you have become likewise disappointed. Apparently the medical types drink themselves silly through college, just like everybody else does. A few brilliant minds make it through as well, but therein lies the problem - a few.
Each message we get from these folks often conflicts with the last. When will they ever get their crap together? I remember going in with an earache and having my ears cleaned out - some very hard wax had accumulated right next to my eardrums. I asked the doctor why this was so. She replied that I must not be able to clean all of the wax out of my ears like most folks.
Now wait a minute. I thought the medical establishment put out the message not to insert anything larger than a fist in our ears. In other words, we aren't supposed to put anything in our ears! And the warning on a pack of Q-tips says not to stick them in your ear, right? Let's look . . .
Yup. That's what it says. So when is everybody going to get on the same page?
You've had your warning.
All the same, I have become decidedly unimpressed with the bulk of the medical community - those that are qualified to dispense medical advice. Perhaps you have become likewise disappointed. Apparently the medical types drink themselves silly through college, just like everybody else does. A few brilliant minds make it through as well, but therein lies the problem - a few.
Each message we get from these folks often conflicts with the last. When will they ever get their crap together? I remember going in with an earache and having my ears cleaned out - some very hard wax had accumulated right next to my eardrums. I asked the doctor why this was so. She replied that I must not be able to clean all of the wax out of my ears like most folks.
Now wait a minute. I thought the medical establishment put out the message not to insert anything larger than a fist in our ears. In other words, we aren't supposed to put anything in our ears! And the warning on a pack of Q-tips says not to stick them in your ear, right? Let's look . . .
Yup. That's what it says. So when is everybody going to get on the same page?My intention this evening wasn't to write about Q-tips, but rather, the wide world of antacids. I have some wisdom to share. Specifically, regarding their inhibitory effect on the acid-loving bacteria that cause mouth ulcers to fester. I don't actually know this to be true, but during my lifelong battle with mouth ulcers - canker sores, as some call them - I found that if I chewed a few Tums right before bedtime when a new one began forming, it would get no farther, and disappear within about two days. In the absence of an experimental study confirmed by yet another independent experimental study, this is all I have to offer to you, my loyal reader(s). Until I write a longer piece on pathology, that is.
In the meantime, gather strength from my experience, and enjoy all those spicy and acidic foods you've longed to love all over again. Just keep those chalky tablets handy.
I recommend the berry-flavored ones.
Sunday, September 7, 2008
Accounting Hanky-Panky
Today is Science Sunday. I should be blogging about pathology today. But I'm too tired to focus. The new policy at work is to hire new help at a dollar per hour less than starting wages were at the company twelve years ago. The result has been predictable.
The parade of disillusioned or incompetent employees has resulted in an expanded workload for me. Combined with the constantly changing hours and the resultant interference with my sleep patterns, I've been alternately ill, tired, or demoralized. Not exactly the kind of fuel one needs for writing.
My displeasure with myopic corporate types has thus lead to inspiration for a post about a little-known (among business laypersons) practice for avoiding taxes: using the most expensive inventory to deduct against taxable income - even though the inventory hasn't sold.
Here's how it works: a business is subject to inflationary pressures when it purchases inventory. The most recently purchased inventory is likeliest to be the most expensive. So a company elects to use an inventory accounting method called LIFO. Short for Last In, First Out, this method expenses the most recently purchased inventory for tax purposes, artificially reducing net income to reduce a company's tax liability.
Nobody enjoys paying taxes. But when one person or corporate entity gets it over on the tax man, that individual also gets it over on the rest of us. That's why this practice is not permitted in other countries. Here, however, where "the business of America is business," it is no surprise that business interests have convinced the government to allow this practice.
Just to show how ingrained this LIFO practice is, I'll share something else. One of my accounting textbooks calls the income that results from using the FIFO method "phantom income"(FIFO stands for First In, First Out, which is how inventory is actually sold in the overwhelming majority of cases). The complaint is that replacement costs for the inventory will be higher.
My view? Tough crap. Future costs aren't relevant to currently reported net income. But the perception of authority has reinforced this rhetoric with the next generation of accountants.
Because you, my loyal reader(s), may not be versed in accounting, I offer the following example of how inventory accounting methods for the very same business offer different outcomes (shamelessly self-plagiarized from my own post in an online class at Phoenix):
LIFO Inventory Table
Units - - Cost
100 - - - $4
100 - - - $5
100 - - - $6
year-end units 150 (this means 150 units were left over at the end of the year)
LIFO value $650 (we used the most recently purchased units to determine the value of the inventory sold, even though we may not have sold those units, so we use the earliest values to price remaining inventory - the cost of what we bought first)
We sell our inventory at a retail price of $6.67, yielding a gross income of $1000 for the year. Our end of year figures look something like this:
Gross sales - - - - - - - $1000
Less: COGS - - - - - - -$850
Net sales - - - - - - - - -$150
Less: income tax (5%) $8
Net income - - - - - - - $142
Beginning cash - - - - - - - -$1000
Add: gross sales - - - - - - -$1000
Total - - - - - - - - - - - - - -$2000
Less: inventory purchases $1500
Less: income tax - - - - - - $8
Ending cash - - - - - - - - - $492
We ended the year with $492 in cash (yeah, we didn't do too well). Remember that number and compare it to the same business year below, using a different inventory valuation system:
FIFO Inventory Table
Units - - Cost
100 - - - $4
100 - - - $5
100 - - - $6
year-end units 150
FIFO value $850
Gross sales - - - - - - - $1000
Less: COGS - - - - - - -$650
Net sales - - - - - - - - -$350
Less: income tax (5%) $18
Net income - - - - - - - $332
Beginning cash - - - - - - - -$1000
Add: gross sales - - - - - - - $1000
Total - - - - - - - - - - - - - - $2000
Less: inventory purchases $1500
Less: income tax - - - - - - -$18
Ending cash - - - - - - - - - -$482
Due to income tax savings incurred using LIFO, the business made more in the first example than in the second. No mystery, then, why so many businesses use this valuation method. Now extrapolate these figures to the millions or billions that large enterprises make . . . see how much more your share of taxes becomes when businesses are permitted to engage in this accounting hanky-panky?
The trickle-down crowd will argue that we end up getting paid more if the corporation keeps more, but that is hogwash. CEO compensation has outpaced everybody else's pay in absolute and comparative terms in the last two decades, putting that economic theory firmly to rest. Capitalism works because people are greedy. Acknowledging this makes for better economic policy - which means adhering to capitalism, but mitigating its effects.
Disagree if you must. But break out your wallet in the meantime - you and I have tons of government debt to pay for.
The parade of disillusioned or incompetent employees has resulted in an expanded workload for me. Combined with the constantly changing hours and the resultant interference with my sleep patterns, I've been alternately ill, tired, or demoralized. Not exactly the kind of fuel one needs for writing.
My displeasure with myopic corporate types has thus lead to inspiration for a post about a little-known (among business laypersons) practice for avoiding taxes: using the most expensive inventory to deduct against taxable income - even though the inventory hasn't sold.
Here's how it works: a business is subject to inflationary pressures when it purchases inventory. The most recently purchased inventory is likeliest to be the most expensive. So a company elects to use an inventory accounting method called LIFO. Short for Last In, First Out, this method expenses the most recently purchased inventory for tax purposes, artificially reducing net income to reduce a company's tax liability.
Nobody enjoys paying taxes. But when one person or corporate entity gets it over on the tax man, that individual also gets it over on the rest of us. That's why this practice is not permitted in other countries. Here, however, where "the business of America is business," it is no surprise that business interests have convinced the government to allow this practice.
Just to show how ingrained this LIFO practice is, I'll share something else. One of my accounting textbooks calls the income that results from using the FIFO method "phantom income"(FIFO stands for First In, First Out, which is how inventory is actually sold in the overwhelming majority of cases). The complaint is that replacement costs for the inventory will be higher.
My view? Tough crap. Future costs aren't relevant to currently reported net income. But the perception of authority has reinforced this rhetoric with the next generation of accountants.
Because you, my loyal reader(s), may not be versed in accounting, I offer the following example of how inventory accounting methods for the very same business offer different outcomes (shamelessly self-plagiarized from my own post in an online class at Phoenix):
LIFO Inventory Table
Units - - Cost
100 - - - $4
100 - - - $5
100 - - - $6
year-end units 150 (this means 150 units were left over at the end of the year)
LIFO value $650 (we used the most recently purchased units to determine the value of the inventory sold, even though we may not have sold those units, so we use the earliest values to price remaining inventory - the cost of what we bought first)
We sell our inventory at a retail price of $6.67, yielding a gross income of $1000 for the year. Our end of year figures look something like this:
Gross sales - - - - - - - $1000
Less: COGS - - - - - - -$850
Net sales - - - - - - - - -$150
Less: income tax (5%) $8
Net income - - - - - - - $142
Beginning cash - - - - - - - -$1000
Add: gross sales - - - - - - -$1000
Total - - - - - - - - - - - - - -$2000
Less: inventory purchases $1500
Less: income tax - - - - - - $8
Ending cash - - - - - - - - - $492
We ended the year with $492 in cash (yeah, we didn't do too well). Remember that number and compare it to the same business year below, using a different inventory valuation system:
FIFO Inventory Table
Units - - Cost
100 - - - $4
100 - - - $5
100 - - - $6
year-end units 150
FIFO value $850
Gross sales - - - - - - - $1000
Less: COGS - - - - - - -$650
Net sales - - - - - - - - -$350
Less: income tax (5%) $18
Net income - - - - - - - $332
Beginning cash - - - - - - - -$1000
Add: gross sales - - - - - - - $1000
Total - - - - - - - - - - - - - - $2000
Less: inventory purchases $1500
Less: income tax - - - - - - -$18
Ending cash - - - - - - - - - -$482
Due to income tax savings incurred using LIFO, the business made more in the first example than in the second. No mystery, then, why so many businesses use this valuation method. Now extrapolate these figures to the millions or billions that large enterprises make . . . see how much more your share of taxes becomes when businesses are permitted to engage in this accounting hanky-panky?
The trickle-down crowd will argue that we end up getting paid more if the corporation keeps more, but that is hogwash. CEO compensation has outpaced everybody else's pay in absolute and comparative terms in the last two decades, putting that economic theory firmly to rest. Capitalism works because people are greedy. Acknowledging this makes for better economic policy - which means adhering to capitalism, but mitigating its effects.
Disagree if you must. But break out your wallet in the meantime - you and I have tons of government debt to pay for.
Monday, September 1, 2008
Gustav and Katrina
An anthropology professor of mine was fond of saying that no self-respecting aborigine would build in a flood plain. He made this remark during the Mississippi floods that drove so many people from their homes.
One might reasonably expect peoples with more advanced technologies to exclude not just flood plains, but earthquake zones, tornado alleys, and hurricane-prone coastal areas as well. United States citizens, for example, ought to fit the bill here. We know darn well where areas prone to natural disaster lie.
And if some folks choose to live in such areas, then fine - they simply should not expect everyone else to bail them out. Hot on the heels of Katrina, then, Gustav seems like a case of déjà vu twice over. Once as it makes landfall, and once again as taxpayers foot the bill to clean up. What will the end tally of federal monies be when it is all over? Gustav looks to be a lot less expensive. And not as tragic. But it need have been neither.
Some will argue that there are those of little means who were born and have lived their lives in these areas. We should consider how difficult it is for them to move.
Let us consider, then. I'll bow to the logic here and suggest that, instead of rebuilding for these folks, we should offer them relocation elsewhere. Politicians should not gamble with the chance of another hurricane during their term of office and bend to the demands to pour taxes into a futile rebuilding effort. To do so is . . . well, dicey.
Craps, anyone?
One might reasonably expect peoples with more advanced technologies to exclude not just flood plains, but earthquake zones, tornado alleys, and hurricane-prone coastal areas as well. United States citizens, for example, ought to fit the bill here. We know darn well where areas prone to natural disaster lie.
And if some folks choose to live in such areas, then fine - they simply should not expect everyone else to bail them out. Hot on the heels of Katrina, then, Gustav seems like a case of déjà vu twice over. Once as it makes landfall, and once again as taxpayers foot the bill to clean up. What will the end tally of federal monies be when it is all over? Gustav looks to be a lot less expensive. And not as tragic. But it need have been neither.
Some will argue that there are those of little means who were born and have lived their lives in these areas. We should consider how difficult it is for them to move.
Let us consider, then. I'll bow to the logic here and suggest that, instead of rebuilding for these folks, we should offer them relocation elsewhere. Politicians should not gamble with the chance of another hurricane during their term of office and bend to the demands to pour taxes into a futile rebuilding effort. To do so is . . . well, dicey.
Craps, anyone?
Subscribe to:
Posts (Atom)
