High-Pocket Pickpocket

Roll 'em, roll 'em, roll 'em. From the Bundy Ranch Web site

Roll ’em, roll ’em, roll ’em. From the Bundy Ranch Web site

Woody Guthrie was a favorite of my father’s. They both suffered through the Great Depression, and Guthrie’s music struck a sympathetic chord. Given the chance, I would vote this one to be the national anthem:

This land is your land This land is my land
From California to the New York island;
From the red wood forest to the Gulf Stream waters
This land was made for you and Me.

This land really was made for you and me.

Only some of us have taken to much to heart the “my land” part.

Showdown on the range: Nevada rancher, feds face off over cattle grazing rights

By Michael Martinez, CNN
updated 12:45 PM EDT, Sat April 12, 2014

(CNN) — A 20-year dispute between a Nevada rancher and federal rangers over illegal cattle grazing erupted into an Old West-style showdown on the open range this week, even prompting self-proclaimed members of militia groups from across the country to join the rancher in fighting what they say is U.S. “tyranny.”

What began as a legal fight between longtime rancher Cliven Bundy and the U.S. Bureau of Land Management has escalated as Bundy kept his cattle on the federal land, and the government has responded by beginning roundups of the livestock.

A confrontation teetered on violence Wednesday when Bundy family members and dozens of supporters angrily confronted a group of rangers holding Tasers and barking dogs on leashes near Bunkerville, about 80 miles northeast of Las Vegas.

Federal officials say a police dog was kicked and officers were assaulted.

Bundy’s family has been grazing cattle on the disputed piece of public land since the 1800s. The government allows private entities to use public lands for commercial purposes on a fee basis. The trouble with Bundy began in 1993 when the government changed the rules for grazing in this area, and Bundy quit paying the fees in protest. From all appearances, Bundy is getting a lot of support from locals and from out-of-towners who share a disdain for government regulations:

This week, Nevada Gov. Brian Sandoval told the bureau of residents’ criticism of the roundup.

What Sandoval said he found “most disturbing” was the BLM’s use of a “First Amendment area” that confined protesters to a designated area.

Such an area “tramples upon Nevadans’ fundamental rights under the U.S. Constitution,” Sandoval said. “No cow justifies the atmosphere of intimidation which currently exists nor the limitation of constitutional rights that are sacred to all Nevadans.” 
In response, federal officials are allowing the protesters to gather on public lands as long as they don’t impede the roundup, said Lueders, the BLM’s director in Nevada.

Bundy is digging in for a long fight.

I did a short Internet search on the Bundy Ranch to get an idea of the financials involved, but there was not much in the top three inches of the search area. Lacking complete details, I fall back on the sums in the public record. Bundy has not paid grazing rights in 20 years, and the unpaid bill now amounts to $1.2 million. This makes for an interesting business model. Like all other ranchers, Bundy sells his cattle on the open market, and in this free-market world he goes head to head against other business operations. Only, Bundy has an edge on the competition. His operating expenses for the past 20 years have been reduced by $1.2 million.

And this money is your money, this money is my money, from California, to the New York island. This money was meant for you and me. But Bundy has kept it for himself. He’s a corporate pickpocket. He’s got hundreds of people supporting his case, and at the same time he’s picking their pockets. What a guy!

And, for the moment, he’s winning:

Feds end roundup, release cattle after tense Nevada showdown

By Ralph Ellis and Michael Martinez, CNN

updated 10:54 AM EDT, Mon April 14, 2014

(CNN) — A tense, weeklong showdown appeared to end Saturday between the federal government and supporters of a Nevada cattle rancher battling the Bureau of Land Management (BLM) over grazing rights on federal land.

The BLM stopped rounding up rancher Cliven Bundy’s cattle and returned about 300 head of cattle to the open range to avoid the potential for violence, according to the BLM and CNN affiliate KSNV.

The Old West-style controversy — centering on a family that has been ranching in Nevada since the 1800s — drew armed militia groups from across the country to the cattleman’s side this week, especially after a YouTube video captured a tussle teetering on violence between rangers and protesters.

So, for the moment, Bundy has the money ($1.2 million) and the cattle. And I’m left wondering, where’s my share. After all, this land is your land, this land is my land, and Bundy has left the game with my 0.4 cents. What do I need to do to get it back? I may just have to write of this loss and skip my vacation trip this year.

Fronting The Brand


I am sure I just now coined this phrase.

When you have a business, when you have a product, you want a public face, a brand. Brand identification gives your product, your service, your business an association in the public mind. You want customers and potential customers to think of a need and to associate your brand with it. Well established, your brand becomes a valuable piece of property.

“Fronting the brand” comes about when you use your brand to front a personal advocacy. You are putting your brand out front, not to represent your product, but to represent your advocacy. It’s double-edged.

On the front side your brand gives your advocacy additional sway, a momentum your advocacy would not have on its own. The other edge is that fronting the brand can cut backwards. Here are some examples:

Chick-fil-A is a privately held corporation founded by S. Truett Cathy in 1946. The current CEO is Dan Cathy. The Cathy family hold sincere Souther Baptist beliefs, and the restaurants are traditionally closed on Sundays and also on Christmas and Thanksgiving. Beyond closing on Sunday, which founder Truett Cathy attributes as much to practicality as to religious inclinations. There has been more, however.

In January 2011, the media reported that the American fast food restaurant chain Chick-fil-A was co-sponsoring a marriage conference along with the Pennsylvania Family Institute (PFI), an organization that had filed an amicus brief against striking down Proposition 8 in California (see Perry v. Brown). PFI had also lobbied against a state effort to ban discrimination in Pennsylvania on the basis of sexual orientation or gender identity. Responding on its official company Facebook page, Chick-fil-A said that support of the PFI retreat had come from a local franchisee, stating “We have determined that one of our independent restaurant operators in Pennsylvania was asked to provide sandwiches to two Art of Marriage video seminars.”

The WinShape Foundation, a charitable endeavor of Chick-fil-A founder S. Truett Cathy and his family, stated it would not allow same-sex couples to participate in its marriage retreats. Chick-fil-A gave over $8 million to the WinShape Foundation in 2010. Equality Matters, an LGBT watchdog group, published reports of donations by WinShape to various anti-gay organizations, including $2 million in 2009, $1.9 million in 2010 and a total of $5 million since 2003, including grants to the Family Research Council and Georgia Family Council. WinShape has also contributed to the Fellowship of Christian Athletes, and Exodus International, an organization noted for supporting ex-gay conversion therapy.

The Marriage and Family Foundation received $994,199 in 2009 and $1,188,380 in 2010. The Family Research Council, an organization listed as an anti-gay hate group by the Southern Poverty Law Center in Winter 2010, received $1000.

Tax filings for 2012 showed that Chick-fil-A created a new foundation, the Chick-fil-A Foundation, to grant to outside groups. It funded only one previous group, Fellowship of Christian Athletes. Other filings for WinShape Foundation showed no funding for groups opposed to LGBT rights.

There has been considerable stir over these events. Conservatives and conservative groups have cheered the company’s stance, but at the same time advocates for tolerance and sexual equality have lashed out at Chick-fil-A. My reading of Facebook friends over the past two hears has shown conservatives advocating throwing their business to the company, while liberals have been talking boycott. This is something that would be problematic for a publicly-held corporation.

Suppose you are the CEO of a big (or not so big) corporation, and you have a personal agenda, and you see some benefit to throwing the weight of your brand into the fray. Not so fast. At the next stock holders meeting there are going to be a bunch of share holders raising their voices. “Who gave you permission to use our equity to sponsor your pet project?” Besides that, if the bottom line suffers there will shortly be a new CEO to replace the one who forgot that the business of business is business.

But, in the case of the Cathy family, there are no stockholders to face each year. And with the Chick-fil-A business model, there may not be as much push back from franchise owners. The Chick-fil-A business model is fairly unique in the chain restaurant model. The company builds and owns the restaurants. An operator pays in the order of $5000 for a franchise—the right to operate the restaurant.

If you’re a McDonald’s franchise owner you possibly paid $2 million for the franchise, and you own the business. On the other hand, if you hold a McDonald’s franchise your restaurant is grossing on average more than $2 million a year. But if the McDonald’s CEO starts pulling some shenanigans that chew away at that $2 million a year you’re going to be thinking law suit. So a company like McDonald’s has more than just its stockholders to worry about.

As grim as Dan Cathy’s actions in the past few years have appeared to his opponents, it is not all that dark:

In September 2012, The Civil Rights Agenda (TCRA) announced that Chick-fil-A has “ceased donating to organizations that promote discrimination, specifically against LGBT civil rights.” According to the TCRA, Chick-fil-A officials stated in an internal document that they “will treat every person equally, regardless of sexual orientation.” In a letter from Chick-fil-A’s Senior Director of Real Estate, the company states, “The WinShape Foundations is now taking a much closer look at the organizations it considers helping, and in that process will remain true to its stated philosophy of not supporting organizations with political agendas.”

According to Chicago Alderman Proco “Joe” Moreno, Chick-fil-A has a statement of respect for all sexual orientations in an internal document called Chick-fil-A: Who We Are and has promised that its not-for-profit arm, WinShape, would not contribute money to groups that oppose gay marriage.

According to Focus on the Family web site, CitizenLink.com, “Chick-fil-A and its charitable-giving arm, the WinShape Foundation, did not agree to stop making donations to groups that support the biblical definition of marriage in exchange for being allowed to open a franchise in Chicago.” Mike Huckabee stated that he “talked earlier today personally with Dan Cathy, CEO of Chick Fil-A about the new reports that Chick Fil-A had capitulated to demands of the supporters of same sex marriage. This is not true. The company continues to focus on the fair treatment of all of its customers and employees, but to end confusion gave me this statement.” The statement provided by Chick-fil-A was posted on Huckabee’s website.

In March 2014, new tax filings from 2012 showed Chick-fil-A stopped funding all but one organization which had been previously criticized. The company also created a new foundation, the Chick-fil-A Foundation, to fund outside groups. WinShape Foundation’s 2012 tax filings showed funding only for its own programs, a Berry College scholarship fund and Lars WinShape, a home for needy children in Brazil.

[Some links removed]

Once again the other edge of fronting the brand has started to cut:

Of all the right-wing reactions to Chick-fil-A CEO Dan Cathy’s quiet step back from the marriage equality debate, Scott Lively’s might just take the cake.

In a post on Matt Barber’s BarbWire today, Lively writes that although Cathy has not yet taken the “Mark of the Beast,” his decision to back out of the gay marriage debate “suggests he might be willing to take it if faced with that choice.”

“I am convinced that God is using the homosexual issue as a test of believers all over the world,” Lively continues. “What would it profit Mr. Cathy to gain the whole world (or a few more restaurants on college campuses), if his compromise of Biblical truth today makes him less able to resist the real Mark of the Beast tomorrow?”

“In my mind’s eye I used to see the Mark of the Beast as a black dot on the back of the hand,” he concludes. “Now it looks more like a Chik Fil A [sic] sandwich. I’ll never buy another one, and I hope you won’t either.”

Full disclosure: I am of older than the brand and have yet to eat at Chick-fil-A. This is not out of opposition to the company’s stance on religious and political issues. It’s just that whenever I have had a hankering for a chicken sandwich, such as right after getting out of church, the neighborhood Chick-fil-A always seems to be closed.

Dirty Jobs

This just in: Wal-Mart is promising to bring manufacturing jobs back to the United States:

How Mike Rowe became a lightning rod for Walmart

When it comes to dirty jobs, Mike Rowe is finding that hawking for Walmart (WMT) leads to plenty of mud-slinging.

Rowe, the deep-voiced host of Discovery Channel’s “Dirty Jobs,” sparked the controversy when he provided a voice-over for a heart-tugging Walmart ad touting the company’s pledge to bring manufacturing back to the U.S. The spot first aired during the opening ceremonies of the Winter Olympics, a prime night for advertisers seeking a large audience.

Sounds great, right? After all, who isn’t for a return of U.S. manufacturing? But the ad campaign took on a life of its own, with some consumers taking Rowe to task for championing what they view as an anti-union company that offers rock-bottom wages.

The ad might not have sparked such a fierce debate if another spokesman had been tapped. But Rowe, thanks to his seven-year run on “Dirty Jobs,” is viewed by many as the voice of the underdog, the overworked and the underpaid. In short, the champion of the types of people working in Walmart jobs. Rowe then threw a bucket of fuel on the fire by writing on his Facebook page in response to one consumer, “Who gives a crap about your feelings toward Walmart?”

This blog is not called Skeptical Analysis for nothing. I decided to do some skeptical analysis. Here is what I found out.

The big complaint against Wal-Mart seems to be they are buying foreign-made goods. Call me a bleeding heart liberal if you want, but I find that to be absolutely disgraceful. So I decided to investigate further (skeptical analysis). Here’s what I found out.

It’s not Wal-Mart that’s buying products from foreign manufactures. It’s you. Yes, dear reader, you are the guilty party. You are the one who’s buying foreign-made goods. And don’t try to deny it. I have photographic evidence. See the above photo that I took earlier this week. That’s your car parked in the Wal-Mart while you’re inside buying foreign-made goods. Shame on you.

So, readers, here’s the solution. Quit blaming Mike Rowe, and quit blaming Wal-Mart. I have not done a rigorous scientific study on this, but I feel deep down that if you quit buying foreign-made goods Wal-Mart will quit selling them. Like tomorrow.

Asset Depletion

I’m going to post this now, because I have another post that will need to link back to it several times. This is a bit of economics, a subject I have never studied, but when did that ever stop me from writing about something?

Industrial site on the outskirst of Salt Lake City

Students probably get this stuff the first year studying economics, but the subject is not taught so much in the public school system, and some of the concepts are hazy to most of us. This is apparent from conversations I have observed and also from many postings on Facebook and elsewhere. Here it is:

In the United States, suppose you are a wage earner, and let’s say you make $100,000 a year. Good for you. You have to pay the federal government taxes on all of that on a percentage basis. Not quite. They government will allow you to whack off a piece of that before you apply the percentage factor. How much you get to whack off depends. Depends on whether you have dependents. And medical expenses. And non-refunded employee expenses. Then you apply the percentage, and pay that amount.

Now suppose you are not a human being, but you are instead a company doing business. You, the company, take in $500,000 in a year. You do not have to apply the percentage to the full amount. You only apply the percentage to the business profit. How do you compute business profit? Glad you asked:

  • $500,000 gross revenues
  • – salaries and other employee expenses
  • – the electric bill for the entire year
  • –  cost of goods used in the business
  • – all other costs of doing business

If all the minuses are equal to the gross revenues, you pay nothing. If you were a human being your breakdown would be something like this:

  • $100,000 gross income
  • – food
  • – clothing
  • – rent
  • – cash dropped at the strip club

If your minuses equal your gross income (less the allowed deductions) you still owe the government money. There’s a benefit in operating like a business. In its wisdom the government does allow individuals to operate as businesses.

In its magnificent spirit of fairness, the government gives companies some slack. Some years their balance sheet will show red. They get to apply business losses in bad years against profits in other years.

So, you want to go into business. You need a store. You build a store. It costs money. You tell the government you didn’t make a profit, because you spent all your revenues building the store.

The government responds with a nice letter reminding you that you spent all that money (a minus) to build a store, but you now have the store (a plus) that offsets your minus for building it. You cannot deduct the cost of the building in the first year of business.

What the government will do is allow you to amortize the cost of the store over a period of years. You know about this if you are a home owner who has a house to rent out. You can amortize the cost of the house over 30 years and deduct 1/30 the cost of the house each year you have it rented. There’s more to this story, but this is all that’s important.

Let’s take the curious case of the depletion allowance used by oil companies:

Percentage depletion To figure percentage depletion, you multiply a certain percentage, specified for each mineral, by your gross income from the property during the tax year. The rates to be used and other conditions and qualifications for oil and gas wells are discussed later under Independent Producers and Royalty Owners and under Natural Gas Wells. Rates and other rules for percentage depletion of other specific minerals are found later in Mines and Geothermal Deposits.

Cost depletion Cost depletion is an accounting method by which costs of natural resources are allocated to depletion over the period that make up the life of the asset. Cost depletion is computed by (1) estimating the total quantity of mineral or other resources acquired and (2) assigning a proportionate amount of the total resource cost to the quantity extracted in the period. For example, Big Texas Oil, Co. discovers a large reserve of oil. The company has estimated the oil well will produce 200,000 barrels of oil. The company invests $100,000 to extract the oil, and they extract 10,000 barrels the first year. Therefore, the depletion deduction is $5,000 ($100,000 X 10,000/200,000).

Cost depletions sounds reasonable enough. A company invests $100,000 to set up a business (oil extraction from a field). It gets to amortize the costs over several years, as it recoups the cost by extracting and selling oil. Of course, the company also gets to deduct all other costs, such as operation of the wells, royalties paid to owners of the mineral rights, local taxes paid and also the cost of exploring barren fields, which have ended up producing no oil.

Pumping oil along side Interstate 20 in West Texas

Percentage depletion is another matter. Here is additional clarification:

The percentage, or statutory, method does not employ recovery of cost in the computation of the deduction. A percentage of annual income, rather than cost, is deductible each year, even if the owner has recovered all cost or discovery value of the depletable asset. The federal tax laws vary from year to year in regard to the percentage depletion allowable for oil and some other deposits, and the categories of producers entitled to such allowances.
[emphasis added]

This is the curious part. Even after an oil company has recouped all it’s development cost, it can continue to take a tax deduction for every barrel of oil it extracts. That is so neat. How wonderful it would be if I had cancer, and I had to pay $100,000 out of pocket expenses for the cure, and I got to deduct all the $100,000 from my earnings when filing my income tax return. Then if I were still not feeling so good, I would be able to deduct money year after year, because the cure was not complete. That does not make much sense, and neither does the oil depletion deduction described above.

This is from a story a few years back on CNN:

The percentage depletion allowance: This lets oil companies deduct about 15% of the money generated from a well from its taxes. Eliminating it would save about $1 billion a year.

The deduction essentially lets oil companies treat oil in the ground as capital equipment. For any industry, the value of that equipment can be written down each year.

But critics say oil in the ground is not capital equipment, but a national resource that the oil companies are simply using for their own profit.

The foreign tax credit: This provision gives companies a credit for any taxes they pay to other countries. Altering this tax credit would save about $850 million a year.

Foreign governments can collect money from oil companies through royalties — fees for depleting their national resources — and income taxes.

A royalty would be deducted as a cost of doing business, and would likely shave about 30% off a company’s tax bill. Categorized as income tax, it is 100% deductible.

Foreign governments long ago grew wise to the U.S. tax code. To reduce costs for everyone involved and attract business, they agreed to call some royalties income taxes, allowing oil companies to take the 100% deduction on a bigger slice of their bill.

Intangible drilling costs: This lets the industry write off about $780 million a year for things like wages, fuel, repairs and hauling costs.

All industries get to write off the costs of doing business, but they must take it over the life of an investment. The oil industry gets to take the drilling credit in the first year.

And that’s the story. Make sure you understand all of this, because I’m going to link back to it when I post a recent interview with my favorite congresswoman, Michele Bachmann of Minnesota.

Principles of Optics

You would not guess from the title that this post is about compact fluorescent lamps (CFL).
Surprise. Here’s some background for a start.

People were studying electromagnetic radiation and energy over 100 years ago. I’ve
studied this stuff before, but I’m not going to derive it all over again. Here’s a plot I posted

What you see in this graph is a series of plots of radiation intensity (energy flux) against
wavelength for black bodies of various temperatures. Remember that individual photons of
longer wavelengths have less energy than photons of shorter wavelength. That’s a basic
principle of quantum mechanics. The following equation is from Wikipedia and shows how
energy relates to photon wavelength:

E is energy, h is Planck’s Constant, a well known physical constant. The letter c is the speed
of light, and λ is the wavelength. That’s fixed. There are no two photons with the same
wavelength but different energies.

Notice in the graph how each plot starts out at zero, then peaks, then trails off toward zero
again. For each blackbody temperature the peak is in a different place. The peak
wavelength for a particular temperature is given by Wein’s Displacement Law:

The maximum energy intensity occurs at λ max, which is some (well-defined) constant
divided by the absolute temperature, T. What you should be seeing, children, is that as you
increase the temperature of the body, the peak, the place where the energy output is most
intense, shifts to shorter wavelengths. Here’s what this means in practical terms.

Any blacksmith knows this. You heat a horseshoe in the fire, and when it gets hot enough it
begins to glow red. Hotter and it glows yellow. I have watched a master glass blower at UT
Austin work with fused quartz. He did not use an ordinary fire. He had an oxygen-
hydrogen torch, and that is very hot. He lit off the torch, and it was bright. He had a tube of
fused quartz, and he plunged it right into the hottest part of the flame. Fused quartz is
good about this. It does not expand when heated, which is why we were using fused quartz.
Anyhow, the quartz tube quickly went from red, right past yellow and became blinding
white. When something gets hot enough it starts giving off all the visible colors in nearly
equal abundance.

So, here’s what I’m getting at. If you want to operate an incandescent lamp you need a
filament to get hot and glow. You put a tungsten wire into a glass bulb and run electricity
through it to get it really hot, and it will glow and put out light. OK, you need to take the air
out of the bulb, else the oxygen will burn up the hot tungsten. OK, you need to put some
argon in the tube, else the hot filament will evaporate too quickly.

Therein is the rub. Even tungsten, a metal with about the highest boiling point (lowest
vapor pressure) for a given temperature, will eventually evaporate at the temperatures
necessary to produce a usable lamp.

Here’s a problem. If you operate the tungsten filament at a low temperature it will not
evaporate much at all and will last almost forever. However, at this temperature its energy
output will peak deep in the red region. You will have a nice, red light source. You want
white. Also, at low temperatures (look at the graph) the filament will dump a lot of its
energy into the infra-red spectrum, nice for warming the room, but useless as a light
source. A lot of the electrical energy consumed by the lamp will be wasted. Your electric bill
will show this.

If you operate the filament at a higher temperature you will get a more efficient light
source, and your electric bill will show this. But what about filament vaporization?

Glad you asked. They solved this problem over 100 years ago. You put a bit of iodine
inside the bulb with the filament. Then you operate the filament at a very high
temperature. You have a nice, efficient light source. But the filament evaporates. But the
lamp envelope is made of fused quartz, and it gets very hot. The tungsten vapor combines
with iodine and does not deposit on the lamp’s envelope. The tungsten-iodine, I’m guessing

tungsten tetraiodide, soon hits the hot filament, where the tungsten is deposited back, and
the filament gets to live another day. These are called halogen lamps, because iodine is a
member of the halogen family of elements.

So, halogen lamps are more efficient forms of incandescent lamps. Here’s a comparison
chart from Energystar.GOV:

Technology CRI Efficacy (lumen/W) Lifetime (hrs) Color Temperature (K)
Compact Fluorescent 80-90 60-70 6,000-10,000 2700-6500
Incandescent 100 12-18 750-1,500 2400-2900
Linear Fluorescent 70 – 90 80-100+ 20,000 2700-6500
Halogen 100 16-29 2,000-4,000 2850-3200
White LED 65-90 20-50 Up to 100,000 2700-6500

This table shows that halogen lamps are somewhat more efficient (more light per your
electrical dollar) than regular incandescent lamps. They also last longer: 2000 to 4000
hours of use opposed to 750 to 1500 hours.

Halogen lamps are also more expensive, and they are more tricky to use. The envelop
must be operated at a high temperature, so it must be kept very small. You handle a
halogen lamp with you bare hands, and it will be ruined unless you are careful to clean it
before use. Modern automobile headlamps use halogen lamps. You do not have to change
them out very often.

You want to save more money? For your home lighting needs go to fluorescent tubes or
even to compact fluorescent lamps. Fluorescent lamps have been around over 70 years. I
know this for sure, because I watch old movies on TV, and I see factory settings that
incorporate fluorescent lighting. Commercial enterprises long ago went to fluorescents. In
business the bottom line may not be everything, but it’s way ahead of whatever is in
second place. In homes the use of fluorescents was not popular for a long time, because the
available applications were limited. Fluorescents were at first only used for ceiling fixtures.

Stop here for another technical update. Fluorescents are efficient because the process used
to produce the light does not also produce a lot of heat. They work this way:

You have a glass tube with a low-pressure gas inside and some mercury. Applying power in
the appropriate way induces an electrical arc the length of the tube. This arc does not
produce a lot of heat, and it produces electromagnetic energy mainly in the ultra-violet
region. You can see how this relates to Wein’s displacement law: lots of energy with a very
small fraction apportioned to the infra-red.

The problem is we cannot use the ultra-violet. In fact, the ultra-violet cannot even get out
of an ordinary glass tube. The glass stops it. If the ultra-violet did get out it would give
everybody a sunburn. You coat the inside of the tube with a fluorescent material that
absorbs the ultraviolet and re-emits the energy in the visible spectrum. Lots of light with
very little heat. You can comfortably put your hand on an operating fluorescent tube.

But what to do about your cute little table lamp? You nice, decorative ceiling fixture? Enter
the CFL. With CFLs they have just shrunk the fluorescent tube and coiled it around to fit it
into your cute lighting fixtures. They have also installed electronics into the base of the
CFLs to manage the voltage supplied to the tube, since the tube needs a high-voltage kick
to get the arc going, but then needs a lower voltage to operate the lamp.

CFLs are efficient. See the table. Linear fluorescents produce 80 to 100 lumens per watt,
compared to 12 to 18 for ordinary incandescents. CFLs produce 60 to 70.

And CFLs are butt ugly. That’s the complaint I hear from anti-environmentalists and even
from some others.  One such was reputed conservative Glenn Beck:

Glenn Beck Vows To Fire Employees For Buying Fluorescent
Bulbs, Recyclables

The light bulb wars are still on apparently.

Glenn Beck, the broadcaster who claims to fuse entertainment
and enlightenment, vowed on a recent show to fire any
employee for buying fluorescent bulbs.

“I am dead serious,” he said, admittedly while laughing. “I fire
the person that starts to purchase fluorescent light bulbs unless
that is the only light bulb for a specific reasons and I want to be
CC’ed on what that reason is.”

He further added “If you’re doing anything in this company
because of global warming, you’re fired…Global warming is a
pile of crap…a load of socialist, communist crap.”

He further added that recyclable spoons and recyclable
cardboard boxes are banished from Mercury Radio Arts, his

In addition, a conservative Facebook friend once posted a meme that depicted liberals
bowing down to an idol in the form of a CFL. It’s gone that far, people.

But wait! I’m not through. There’s something better than CFLs. Light Emitting Diodes
(LED) have been around for nearly 50 years, and they are an amazingly efficient source of
light. Their initial use was in portable device displays (digital watches and hand-held
calculators) because they are so power-stingy. The problem in the beginning was they only
put out red light. Now a new day is dawning, and we can get white light LEDs. See the
table. White LEDs approach CFLs in efficiency, but they last 100,000 hours. I now see
automobile headlights that I am sure are LED-sourced.

What’s also good about LEDs is they inherently compact. An LED is just a solid-state diode
junction, a small region on a silicon wafer. You want a tiny light source, the LED is the way
to go. Pick up a few LED night light modules at Home Depot and plug them into some wall
outlets and forget about them. You will never notice them on your electric bill. I have a
couple of modules that are always plugged in. they only put out soft indicator light when
plugged in. Until the power goes out. Then the built-in battery kicks in, and these become
emergency lights. I can reach down and grab one and use it as a flashlight as I roam about
my darkened house. The battery continually recharges when the unit is plugged in.

This post was inspired when I picked up this from a CNN news item:

Light bulb ban set to take effect

Light bulb manufacturers will cease making traditional 40 and
60-watt light bulbs — the most popular in the country — at the
start of 2014.

This comes after the controversial phasing out of incandescent
75 and 100-watt light bulbs at the beginning of 2013.

In their place will be halogen bulbs, compact fluorescent bulbs,
LED bulbs and high efficiency incandescents — which are just
regular incandescents that have the filament wrapped in gas. All
are significantly more expensive than traditional light bulbs, but
offer significant energy and costs savings over the long run.
(Some specialty incandescents — such as three-way bulbs —
will still be available.)

The end of old light bulbs will likely anger some consumers that
are already faced with higher prices for a variety of goods. But
it will also tick off tea party activists since the ban is the result
of the final phase of government-mandated efficiency standards.

Liberal as I am, I do not have a political interest in this controversy. In this matter I am a
John Jacob Astor capitalist. In certain respects I run my household like a commercial
enterprise—with an eye to the bottom line. At the end of the year I look at how much
change I have left in my pocket, and CFLs have been good to me. Please go check your
monthly electric bill and come back to finish reading this.

Done that? My house is all electric. There is no gas service in my neighborhood. The San
Antonio electric service, CPS, charges me $20 for picking up my trash. The rest is for
electricity. Taking that into account, my monthly bills are seldom more than $100 per
month. Eventually money is going to make an environmentalist out of each of us. But
maybe not Glenn Beck.

Institutional Advertising

I got introduced to institutional advertising a long time ago. It came about this way.

I was in a motorcycle club, and we were putting on this race. It was going to be a big affair, and we were printing programs. The person arranging the printing advised us we could include paid advertisements and defray the expense of printing the programs. For example, Coca Cola.

Now, why would Coca Cola pay to advertise in our handout programs? Did they expect to sell a bunch of pop at the race. No, the idea is called institutional advertising. Coca Cola and other large concerns employ institutional advertising just to keep their brand out front. That’s one of the strategies used to maintain market position.

So now I’m watching the news on cable TV, and I see a lot of ads by Norfolk Southern. And these are really glitzy productions. There’s a cute jingle playing over the video (“Helping this here country move ahead as one”), and there are beautifully choreographed sequences of products being moved and trains and powerful locomotives moving in perfect harmony. Steven Spielberg, you need to watch this.

Products moving

Locotomotive ballet

And it’s all so fascinating. But what I find even more fascinating is…

I’m not a Norfolk Southern customer. I never have been. I never will be. If I had 250 thousand tons of barbed wire to ship to North Dakota, I might pick up the phone and make a deal with Norfolk Southern. Except that Norfolk Southern does not serve my location. The closest their line comes to me is Dallas, Texas, 300 miles away. As far as I know Norfolk Southern does not even have a passenger service in case I wanted to go to, Norfolk for example.

And that, dear readers, is what institutional advertising is all about. There is more.

I see wonderful ads by Lockheed Martin. This giant defense contractor makes high-performance fighter airplanes. I have decided to forgo purchasing a high-performance fighter this year, so Lockheed Martin’s ads, though attractive to the senses, do not as yet tug on my purse strings. Same for Northrop Grumman. Keep up the good work, guys, but I’m still not buying.

Wait! I see. I really am buying their products. I just mailed in a tax payment to the United States government, and they are going to use that money to purchase a bunch of B-2 stealth bombers. Or at least an ejection seat handle for one B-2 stealth bomber, which handle I hope never gets used, else the government will be coming back to me with its collective hand out wanting money to replace the B-2 stealth bomber the two pilots just bailed out of.

Anyhow, institutional advertising is used by defense contractors to keep their name in front of the voters, so the next time the appropriations bill comes before your local congressman you will urge him to sign off on it, because you so loved the cute ad on TV. Or at least you can tell your congressman, “Yes, I know who Lockheed Martin is. I saw their ad on TV”

It’s all about institutional advertising.

Insurance Explained

Smile, you have Medicare.

Occasionally I take a little time off to explain stuff that everybody already knows. This is one of those.

Over the past three weeks (actually the past four weeks) there’s been a lot of swirl over Obamacare, otherwise known as the Affordable Care Act. Lots of Republicans don’t like it. Maybe I could be safe to say that all Republicans don’t like it. Well, it’s here now, regardless of who doesn’t like it. And I am not going to discuss it. Just now. I figure I first need to explain insurance before getting even close to explaining Obamacare. Here’s insurance.

A little personal history. I am dead sure that when I was born at home in a small house (shack) in Tolar, Texas, my father, barely employed, had to personally pay the doctor, who drove the nine miles from the county seat to attend my birth. There was no health care insurance.

In fact, I never became aware of health care insurance until quite late in life. I will get to that.

Seven years later, when my father went to work at a defense plant, we likely had health insurance provided through the defense contractor. That’s where health insurance really took hold in this country.

This started during World War II. The United States came out of its worst economic depression and straight into a major war. Unemployment, which had peaked at 25% during the depression, now reversed. The United States government committed to building 50,000 airplanes (they ultimately built a multiple of that number) and to building thousands of ships. Plus there was ammunition, uniforms, mess kits, the whole works for an armed force of millions. And there were men disappearing off the unemployment lines and into uniform. Defense employers were competing for workers.

Except, the government, in its great wisdom, foresaw this. The government was not prepared to pay inflated prices for war materials, and it put caps on the wages defense employers could pay. Still the employers had to compete for the few available workers. But what else could they offer besides wages? They could offer health insurance, which was not restricted. And they did, and defense employees got insurance paid by the defense contractors.

Except… Except what? Except that employers never pay for employees’ insurance. The employee always pays. In this case employees were receiving insurance (not capped) instead of higher wages (capped by the government). Nothing changed after the war was over and won.

Employers still provided health insurance, and employees still paid the premiums. Which they do today, those who can get health insurance through their employers.

Back to my personal history.

I never noticed health insurance. As I passed through childhood I suffered a number of self-inflicted prangs that resulted in trips to the doctor or to the hospital, just a block from my house. I never paid.

Then I graduated from high school and started my active duty in the Navy Reserve. The Navy has doctors, even aboard ship, and the eye doctor on my ship decided I needed eye surgery. He scheduled me for a visit to a Navy hospital ashore. Later that year I took a few days off from my ship and checked into a Navy hospital, where a Navy doctor performed the eye surgery. I did not pay. And all this time I was getting medical checkups and immunization shots. And I did not pay.

Off active duty and on to college, and I had to pay a health center fee. My first week at college, when I bent my ankle during a college prank, the health center fixed it up and gave me crutches. I did not pay. I already had through my health center fee.

Off a summer from college I had no health insurance, and when the emergency workers scraped me off the street one sunny afternoon and rushed me to the hospital I still did not pay. The woman driving the car that collided with my motorcycle paid. Rather, her insurance company paid.

Out of college and married and looking for a job, I had no health insurance. Fortunately no accidents. Immediately I went to work for the same university I had just graduated from, and my wife said I should definitely check “yes” and sign up for the health insurance. And that was my first real encounter with traditional health care insurance. I was paying premiums, and the university was paying premiums, and we had health coverage.

So it worked thereafter. When I worked for an employer, health insurance was available through the employer.

So, why not just go out and buy insurance on my own? A real problem here. You walk into an insurance company’s office (figuratively) and ask to sign up for insurance. They’re going to look at you. Really hard. There’s an adage in the industry. You never insure a burning house.

Insurance companies make their money the same way a bookie makes his money. They play the losers off against the winners. You know some people are not going to need health care, yet they pay premiums (suckers). Others are going to pay the same premiums, and they are going to cost the insurance company thousands. They are the real winners. If you can consider having major surgery of other life-saving procedures performed to be some kind of winning.

Insurance companies are going to make these kinds of arrangements with employers, especially with large employers, because they know you are getting the insurance because your employer is offering it and not because you’re already sick (in most cases). You’re not going to get any kind of deal like that on your own with an insurance company, for two reasons.

First, the insurance company is going to look you (and your family) over very closely, and they’re going to sell you insurance only if you don’t need it.

Second, when you walk into an insurance company office on your own you’re already costing the company more than the group policy member. Having to deal one-on-one costs insurance companies more, and they are going to charge more.

I have not yet explained what insurance is. Although the concept of insurance as a form of risk management traces back thousands of years, I like to cite Lloyd’s of London as the founding model for modern insurance:

Some forms of insurance had developed in London by the early decades of the 17th century. For example, the will of the English colonist Robert Hayman mentions two “policies of insurance” taken out with the diocesan Chancellor of London, Arthur Duck. Of the value of £100 each, one relates to the safe arrival of Hayman’s ship in Guyana and the other is in regard to “one hundred pounds assured by the said Doctor Arthur Ducke on my life”. Hayman’s will was signed and sealed on 17 November 1628 but not proved until 1633. Toward the end of the seventeenth century, London’s growing importance as a centre for trade increased demand for marine insurance. In the late 1680s, Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships’ captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd’s of London remains the leading market (note that it is an insurance market rather than a company) for marine and other specialist types of insurance, but it operates rather differently than the more familiar kinds of insurance.

When Benjamin Franklin initially proposed insurance in colonial America, the religious colonists opposed the idea as a form of gambling. As mentioned previously, gambling is exactly what insurance is—as in a casino, with the odds stacked in favor of the house.

So, why and when should you acquire insurance? My answer is you should only insure against monetary losses, and then only against ruinous losses. You might not carry theft and collision insurance on your car if you can afford to replace it. Not the case with your house. If you have a mortgage on your house, the holder of your loan will insist you maintain casualty insurance, at your expense of course. If you do not have a mortgage, you would be unwise to drop casualty insurance, since the cost of rebuilding would likely be financially crippling.

How about insuring your life? You’re never going to collect. You should purchase life insurance only if you have people financially dependent on you. Beyond that life insurance is absurd. However, insurance companies, for mendacious purposes of profit only, will write life insurance policies on children. Examples: Years back a Texas dentist took out a life insurance policy on his son, then murdered his son with poisoned Halloween candy. The insurance company refused to pay, and the dentist was executed. A Texas mother took out life insurance policies on two pre-school children and knifed them to death. Again the insurance company declined to pay.

So, what should you pay for a health insurance policy? If I were running the insurance company I would carefully examine the life style and health history of each prospective insured and set the premium to match my expected loss. Of course with some margin of profit for me. Once again, insurance companies take on group plans, and for these plans they set premiums based on expected claims from the group demographics. They generally do not look at individual histories.

Health insurance premiums have been on a steady march upward for years. Why? Three things:

1. Health care costs are increasing. There are procedures now that did not exist before, and these new procedures, e.g., MRI, are expensive.

2. People are living less healthy life styles. We have grown immensely fat in the past 50 years, and this has precipitated health conditions requiring more and more expensive treatment.

3. We are living longer. See item 2 above. We are smoking less and living longer. Typically you cease to incur health expenses when you die, so if you previously died in six weeks after developing cancer, new treatments now allow you to live six more years, all the while receiving pricey treatments for your cancer. Truthfully, your insurance company would prefer you died after a couple of days. I have long suspected that’s why some carriers will cover “alternative medicine.” People receiving these treatments based on pseudo science are not likely to live so long.

What is a Cadillac plan? I’ll answer that. Suppose you make $500,000 a year. You have to pay a lot of taxes (or not). You can afford it, and you purchase a Cadillac plan. All of this has caused you a lot of stress. Your plan covers means to manage this stress, including a week off in Hawaii. You spend a week in Hawaii, paid for by your Cadillac plan. But you paid premiums to cover this type of treatment. What have you gained? The premiums are tax-deductible. You have just taken a Hawaiian vacation and written the expense off on your tax return. You have received a vacation discount, and other tax payers have made up the tax shortfall. Pretty neat.

All of this leads to the ACA, which is all about insurance and not about health care. Check back next week when I cover Obamacare.