Carl from Chicago – Page 107

WSJ and Music

November 21, 2009 by Carl from Chicago

A recent WSJ article about Tom Petty and how he is perceived relative to his rocking “peers” caused me to instantly grimace thinking about the time a couple of years ago when I saw The Strokes open for Tom Petty in Chicago at Northerly Island and The Strokes just blew Petty off the stage. We left after a couple of Petty’s songs… it was about as exciting as watching paint dry.

Well then the WSJ put together a matrix ranking Petty’s peers that made me almost throw up in my mouth a bit. Everyone on that list was ancient, and very few were even creating new music anymore (or at least music that anyone was listening to). Of the individuals on the grid I wouldn’t even cross the street to see 90% of them for free. And this is “rock”?

Real Medical Innovation, and Closed Systems

November 21, 2009November 21, 2009 by Carl from Chicago

One of the biggest follies in the health care legislation is assuming that America is a “captive system” or a “closed system”. In these sorts of models (probably Hawaii is a good example) you can implement change and individuals don’t have a lot of choices and thus fees or taxes can be used to subsidize wholesale change.

The truth is much more complex; individuals are intelligent, many choices exist, and people respond to incentives. In addition, companies and even entire countries take different approaches to profit from opportunities that arise from these sorts of captive assumptions.

This article from the Wall Street Journal titled “The Henry Ford of Heart Surgery” analyzes a company in India that is pioneering economies of scale in heart surgery by 1) building huge facilities, 2) focusing on reducing all costs throughout the system from medical equipment to sutures, 3) hiring surgeons and having them perform the same types of complex surgery over and over to become experts on that specific task and 4) changing the hours of use and of doctors so that expensive medical equipment has a higher utilization rate which reduces the average cost / use.

A Profoundly Depressing Book

November 17, 2009 by Carl from Chicago

I enjoy perusing bookstores and recently saw this book that caught my eye – The “SAS Urban Survival Handbook”. Readers of the blog know that the SAS are the British equivalent of the US special forces military units.

Since the book’s theme is intentionally downcast and “worst case” (i.e., urban survival) I was prepared for a list of disasters and potential bad things that could happen to you. The book spares no situations, focusing on getting attacked and what to do when everything goes awry.

Through the book they also offer “sensible” solutions to avoid getting in harms way in the first place, such as not frequenting dangerous areas and particularly for women and the elderly, who are likely to lose in a typical encounter with an angry urban male, to practically stay at home or only go out in groups. And why is this? Because no one is armed, so in Britain if something goes wrong and you are smaller or outnumbered you are in big trouble. There are certainly clubs (the mayor of London recently went after someone with an iron bar) and knives and similar-type weapons but no firearms.

State Tax Policies

November 18, 2009November 17, 2009 by Carl from Chicago

Tax rates vary significantly by state. The states with the lowest income tax rates, and most importantly the lowest “marginal” rates (the tax rate on your last dollar of income) tend to attract the wealthy and entrepreneurs and have higher rates of growth. Florida, Texas and Nevada in particular benefit from this type of tax regime. As an Illinois resident, virtually the only positive element of the tax situation in Illinois is that we have a “flat”, non-graduated state income tax rate at 3%. In all other areas (property taxes & sales taxes in particular) our rates are onerous and damaging to the business community. To see the income tax rate on a state-by-state basis, check out this site here and put in your state to see the tax brackets and the marginal tax at the highest income rates.

As states get into financial trouble, the situation is getting even worse. California has very high marginal rates, and continuous attempts to raise taxes (although the fact that tax increases must be approved by 2/3 of the legislature gives Republicans some say in that state), at a top rate of 10.3%! Admittedly this is a bit of a simplification, because states with progressive tax brackets like California typically allow for more deductions, while Illinois at 3% pretty much just takes your Federal taxable income and applies the rate with few distinctions. Changing Illinois to a graduated rate requires changing the state constitution, which is a big barrier to never ending schemes to move to this type of arrangement. Another factor on state taxes is that they are deductible against Federal taxes, although in fact the amount of the deduction is lower than it may appear because you have to cross the standard deduction before you can deduct the taxes, and there may be other income limits on deductions.

For wealthy individuals, the problem is acute. If you live in California, you may be taxed at up to 10.3% on your last dollar of income, while across the state border in Nevada you face ZERO state income taxes. This can be a big difference.

Wind Energy

November 4, 2009 by Carl from Chicago

Recently when driving in Western Illinois near the Iowa border I noticed a vast field of wind turbines off Route 20. On the way back to Chicago I got off the highway and started driving on the rural dirt roads to get a closer look.

These are the wind turbines near Lena, IL. The turbines are part of the “EcoGrove” project. A firm called EcoEnergy was the project manager for this effort, and here is the web site describing the project. The project has a capacity of 100 MW and the turbines are between 1.5 and 2.5MW each… so there are at least 40-50 wind turbines at the site. The project cost $200M (per the web site). Per the wind FAQ’s section of their site:

How big is a wind turbine?
EcoEnergy’s turbines typically measure 262 feet (80 meters) to the hub height (where the blades meet) and rotor diameters in the range of 246 to 295 feet (75 to 90 meters)..

As you can see from the photos, these wind turbines are huge. They were all turning slowly the day I was there in the wind, with three blades.

Because they don’t produce all the time, aren’t wind turbines an inefficient way to get our electricity?
Wind turbines actually generate electricity most of the time (65 to 80 percent), though the output amount is variable.