Archive for July, 2012

TAX WARNING to DINKs: The marriage penalty is coming back …

July 31, 2012

One of the provisions of the Bush tax plan was to eliminate the so-called marriage penalty … the tax rules and rates that had a husband & wife pay more income taxes if they were married than if they stayed single.

I’ve been bemused that in all of the chatter about Obama’s obsession with jacking rates, I haven’t heard anything about the resurrection of the marriage penalty …  at least for evil rich people.

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Here’s the rub: Obama’s tax hikes apply to individuals earning more than $200,000 and families earning more than $250,000.

Let’s do a simple example: Sally and Bob – single and living together – each earn $200,000.

So, Obama doesn’t touch their wallets.

But, if Sally & Bob get married … then BAM !

Their income taxes go up about $6,000.

Huh?

Of their $400,000 combined income, the first $250,000 is immunized from Obama’s tax hikes.

But, the $150,000 over the $250,000 ceiling on fair earnings … gets hit with the roughly 4% increase in the upper bracket marginal tax rates (from 35% to 39.6%).

Simple arithmetic: $150,000 times 4% = $6,000.

Back to the key point: tying the knot costs Bob & Sally about $6,000 annually in added taxes.

On average, that accumulates to about $250,000 in added taxes over their expected lifetimes … just because they got married.

Is that fair?

Note: polls consistently say that singles lean more towards Obama than do married folks.

It’s called economic rationality.

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Remember GMAC? … GM going sub-prime (again)

July 31, 2012

According to IBD

Near the end of 2010, GM acquired a new captive lending arm, subprime specialist AmeriCredit.

Renamed GM Financial, it has played a significant role in GM’s growth.

Ken’s Note: Approximately 20% of GM revenues go thru GM Financial

The automaker is relying increasingly on subprime loans.

Potential borrowers of car loans are rated on FICO scores that range from 300 to 850.

Anything under 660 is generally deemed subprime.

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So, lots of fleet sales to the Federal & Blue state governments … lots of self-financed sub-prime loans to move the metal

Cue the repo man … for the deadbeats’ cars … and the stock-sliding company.

* * * * *
Note: GM shares are now about half of the IPO price.

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Pssst: Al Gore didn’t invent the internet … here’s who did.

July 30, 2012

The Orator-in-Chief touched a nerve with his remark “If you’ve got a business, you didn’t build that. Somebody else made that happen.”

Let’s explore another aspect of the Roanoke Reveal.

One of Obama’s points-of-proof: there wouldn’t be an internet (or internet companies) without the government.

“The Internet didn’t get invented on its own.  Government research created the Internet so that all the companies could make money off the Internet.”
Source

Great piece in the WSJ debunks that assertion.

It’s an urban legend that the government launched the Internet.

The truth is a more interesting story about how innovation happens—and about how hard it is to build successful technology companies even once the government gets out of the way.

For many technologists, the idea of the Internet traces to Vannevar Bush, the presidential science adviser during World War II who oversaw the development of radar and the Manhattan Project.

By the 1960s technologists were trying to connect separate physical communications networks into one global network—a “world-wide web.”

The federal government was involved, modestly, via the Pentagon’s Advanced Research Projects Agency Network. Its goal was maintaining communications during a nuclear attack, and it didn’t build the Internet.

Robert Taylor, who ran the ARPA program in the 1960s has set the record straight: ” The Arpanet was not an Internet. An Internet is a connection between two or more computer networks.”

If the government didn’t invent the Internet, who did?

Vinton Cerf developed the TCP/IP protocol, the Internet’s backbone, and Tim Berners-Lee gets credit for hyperlinks.

But full credit goes to  Xerox.

It was at the Xerox PARC labs in Silicon Valley in the 1970s that the Ethernet was developed to link different computer networks.

Xerox PARC researchers realized they couldn’t wait for the government to connect different networks, so they would have to do it themselves.

It’s important to understand the history of the Internet because it’s too often wrongly cited to justify big government.

It’s also important to recognize that building great technology businesses requires both innovation and the skills to bring innovations to market.

More details in the article.

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Hey, Millennials: Lower your expectations … say, what?

July 30, 2012

Couple of articles caught my eye in the past couple of days that together have me scratching my head …

First, an HBR blast which argued that the best way to reduce stress is to lower your expectations.

Don’t expect much out of life, your friends & family or your co-workers.

If you don’t expect much, you won’t be disappointed and your stress level will be kept in check

Say, what?

Then came a Newsweek article about the economic  jam Millennials are in … with student loans, a bad job market, etc.

Started with an interesting point:

Median net worth of people under 35 fell 37 percent between 2005 and 2010; those over 65 took only a 13 percent hit.

The wealth gap today between younger and older Americans now stands as the widest on record.

The median net worth of households headed by someone 65 or older is $170,494, 42 percent higher than in 1984

The median net worth for younger-age households is a paltry $3,662, down 68 percent from a quarter century ago.

OK, reason for the Millennials to despair, for sure.

And, the proposed  prescriptions?

There’s a  growing notion among economists that the new generation must lower expectations.

For example, the  millennial generation shouldn’t set its sights on homeownership … “because it’s going to be out of reach for so many of them.”

They are understandably more amenable to  government-mandated income redistribution … since so few young people pay much in the way of taxes.

All I can say is: YIPES.

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Attention Golfers: New Federal rules … level the course, increase “fairness”.

July 27, 2012

While it may have gotten lost in the “You didn’t build it” melee, new Federal golf rules will be in effect beginning Jan 2013.

Please share with fellow golfers.

By Executive Order, President Obama appointed a Golf Czar and ordered major rule changes in the game of golf,

The rules  will become effective January 1, 2013.

The complete rule book is over  1,000 pages.

Here are a few of the changes.

Golfers with handicaps:

  • below 10 will have their green fees increased by 35%.
  • between 11 and 18 will see no increase in green fees.
  • above 18 will get a $20 check each time they play.

The term “gimmie” will be changed to “entitlement” and will be used as follows:

  • handicaps below 10, no entitlements.
  • handicaps from 11 to 17, entitlements for putter length putts.
  • handicaps above 18, if golfer’s ball is on the green, no need to putt, just pick it up.

These entitlements are intended to bring about fairness and, most importantly, equality in scoring.

In addition, a golfer will be limited to a maximum of one birdie or six pars in any given 18-hole round.

Any excess must be given to those fellow players who have not yet scored a birdie or par.

Only after all players have received a birdie or par from the player actually making the birdie or par, can the par-birdie player begin to count his pars and birdies again.

The current USGA handicap system will be used for the above purposes, but the term “net score” will be available only for scoring those players with handicaps of 18 and above.

These rule changes are intended to “re-distribute” the success of winning by making sure that in every competition; the above 18 handicap players will post only “net score” against every other player’s “gross score”.

These new Rules are intended to positively change the game of golf.

Golf should be about Fairness.

It should not be about ability, hard work, practice, and responsibility.

Importantly, these rules will not apply to President Obama, Congress or Democratic bundlers.

Thanks to JWC for feeding the lead.

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Amazing: BLS under-reporting streak continues …

July 27, 2012

Now we’re up to 71 out of 72 weeks — and, at least 12 weeks in a row —  that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on Thursday’s BLS report, the number for the week ending July 14 was revised upward from 386,000 to 388,000.

In itself, the 2k isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or .8% to your prelim forecast !

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Psychology is a science … or is it?

July 26, 2012

Gotta be honest, I didn’t know there was a burning question re: whether or not psychology qualifies as a science.

But, there’s been a flurry of editorials and op-eds over the past couple of weeks, set off by a psychology professor at the University of Virginia, who expressed resentment in an L.A. Times Op-Ed over the fact that most scientists don’t consider psychology a real science. He cast scientists as condescending bullies.

“There has long been snobbery in the sciences, with the ‘hard’ ones (physics, chemistry, biology) considering themselves to be more legitimate than the ‘soft’ ones (psychology, sociology).”

In a follow-up piece, also in the L.A. Times, it’s argued:

Psychology often does not meet the five basic requirements for a field to be considered scientifically rigorous:

  1. clearly defined terminology,
  2. quantifiability,
  3. highly controlled experimental conditions,
  4. reproducibility and,
  5. predictability and testability.

The failure to meet the first two requirements of scientific rigor (clear terminology and quantifiability) makes it almost impossible for most psychology research to meet the other three.

How can an experiment be consistently reproducible or provide any useful predictions if the basic terms are vague and unquantifiable?

Making useful predictions is a vital part of the scientific process, but psychology has a dismal record in this regard.

To be fair, psychology research often yields interesting and important insights.

But to claim it is “science” is inaccurate.

Hmmm.

Makes “marketing science” sound a bit oxymoronic.

Not good news for us marketers.

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The grammar of “You didn’t build that” …

July 26, 2012

Geez, I’ve been getting emails from folks explaining what the Orator-in-Chief meant by “You didn’t build that” …  all essentially repping the Obama Truth Team’s talking point:

“The President’s full remarks show that the ‘that’ in ‘you didn’t build that’ clearly refers to roads and bridges–public infrastructure we count on the government to build and maintain.”

Please.

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Let’s drill down.

Remember, it was Obama himself who lectured the world that “They’re not just words. Words have meaning”.

So, let’s look closely at an analysis of the words:

The word “business” is more proximate to the pronoun “that” and therefore its more likely antecedent.

“Roads and bridges” is plural; “that” is singular. If Obama was talking about roads and bridges in a grammatically correct way, he would have said, “You didn’t build those.”

I know, cut him some slack … it was only his second campaign event without using his trademark teleprompter.

No.

No slack.

Why”?

Because he self-proclaimed that he has a “gift” for oratory.

In an  interview with CNN , Senate Majority Leader Harry Reid discussed a 2005 encounter with then-Sen. Barack Obama.

Reid had praised Obama for a speech he had just given.

The  newly-elected senator declared to Reid, “I have gift.”

As the WSJ quipped

Barack Obama is supposed to be the World’s Greatest Orator, the smartest man in the world.

Yet his loyalists want us to believe he is not even competent to construct a sentence.

Hmmm.

* * * * *

P.S. Remember a couple of weeks ago when Obama kept up the Bain outsourcing riff even after the Wash Post gave his claims 3 Pinocchios?  For somebody who dishes it, he seems to have very thin skim.

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Cupcakes are so yesterday … now, it’s gourmet donuts.

July 25, 2012

Watch your back Georgetown Cupcakes …

According to Crain’s Business, In NYC, doughnuts are the new cupcakes.

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Homa Family Favorite

We’re talking gourmet doughnuts.

More sophisticated concoctions than the garden-variety glazed or cruller.

They come in a variety of shapes and exotic flavors, such as pistachio-encrusted with lemon curd or square peanut butter filled with banana cream.

And, oh yeah, they sell for up to $3.25 each.

Ouch.

Donut shops aren’t the only ones taking advantage of the surge in popularity.

As a to-go item, doughnuts are also helpful in generating walk-in breakfast traffic for restaurants.

The cost of making a doughnut is relatively low compared with other sweets — and profits are high.

The core ingredients — mostly flour, water, sugar and salt — are relatively cheap, and production doesn’t require a lot of heavy-duty equipment or skilled labor, leading to profits of 15% to 30% per doughnut.

* * * * *
Hmmm … 2 gourmet donuts or a dozen from Dunkin’?

A no brainer …

Thanks to MES for feeding the lead

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Tell my dad that he didn’t build this company …

July 25, 2012

The Orator-in-Chief is getting hammered for his remark “If you’ve got a business, you didn’t build that. Somebody else made that happen.”

It didn’t take long for Team Romney to pounce on the red meat.

I think the commercial is pretty well done …

       click to view

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Quip of the Week: Did Yahoo make Marissa the Mayer of Detroit ?

July 24, 2012

A couple of articles re: Yahoo’s new CEO – Marissa Mayer — caught my eye.

The first, in Business Week, included the quip of the week:

Jordan Rohan, an analyst at Stifel Nicolaus characterizes Mayer’s move from wealthy, tech-savvy Google to browbeaten Yahoo as “a little bit like the mayor of Palo Alto being asked to run the city of Detroit.”

A 2nd article titled “Marissa Mayer Stares Down ‘Glass Cliff’ at Yahoo” got my attention

Glass cliff ?

What’s that?

It’s a phrase coined by a couple of Brit researchers who noticed the tendency of troubled organizations to choose female leaders in times of acute crisis.

And, when women are recruited at times of crisis, the deck is stacked against them, and often the companies continue to slide.

“The data are pretty incontrovertible. These are often impossible situations where it’s hard to imagine anyone can succeed.”

So, why do foundering companies tend to bring in women when the going gets rough — and why do women accept such treacherous assignments?

According to the clinical psychologists, in times of crisis, people choose women leaders because they believe that such stereotypically male characteristics as intransigence and competitiveness won’t help in a turnaround.

OK, but why do women accept these impossible assignments?

Opportunity.

Mayer might have waited for a CEO spot in a less troubled company than Yahoo, but that could have taken years or never happened at all.

Some Silicon Valley observers have speculated that it made sense for her to take the job because she may have topped out at Google.

The CEO job at Yahoo may not be a great job or a doable job, but it’s the C-suite.”

Ken’s Take: A tough challenge taken on by a well qualified exec.  Unlimited upside and virtually no downside. Why not give it a rip?

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“Don’t tell me me that words don’t matter”

July 24, 2012

The Orator-in-Chief is getting hammered for his remark “If you’ve got a business, you didn’t build that. Somebody else made that happen.”

The Dem party line is that he’s being taken out of context and may have mis-spoke.

In effect, they’re saying that words don’t matter.

Hmmm.

Remember when Obama lecture us – using a speechjacked from  Mass Governor Deval Patrick – that words do matter?

My, how times have changed.

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Julia, meet Henry … a High Earner (who’s) Not Rich Yet … sound familiar?

July 23, 2012

A couple of months ago, the Obama campaign unveiled its “Life of Julia,” a website detailing “how President Obama’s policies help one woman over her lifetime” … by showering her with the benefits of the entitlement state, from Head Start to student loans to Obamacare.

In response, the Weekly Standard has resurrected H.E.N.R.Y. —  marketing slang, first used in Fortune in 2003, for High Earners who are Not Rich Yet.

Henrys run households with annual incomes between $100,000 and $250,000.

There are about 21 million of them.

Henrys make up the overwhelming majority of affluent consumers, who account for 40 percent of consumer spending — which in turn is 70 percent of economic activity.

Without the Henrys’ getting and spending, the U.S. economy would be much poorer.

One can find Henry and his family in the affluent suburbs and exurbs surrounding cities like Washington, D.C., New York, and Los Angeles, or in the counties of suburban Dallas-Fort Worth, Houston, Raleigh, and Philadelphia.

He owns his house. He plans to send his children to college. He shops at Target, Saks, Coach, Restoration Hardware, Banana Republic, and, on special occasions, Tiffany.

The Obama years have not been kind to Henry.

His economic fortunes have bobbed up and down.

He’s never been flush, but he’s never been broke, either.

So much to him seems dependent on forces outside his control — whether the Fed engages in another round of quantitative easing, whether the eurozone survives for another week.

Henry is the true swing voter in this Presidential election.

Read more about Henry

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Thud: Obama bridal registry fails to catch on with newly weds … or, anybody else.

July 23, 2012

A couple of weeks ago we posted that Team Obama had a novel idea:

For weddings, you shouldn’t give a bride & groom a toaster or impersonal cash … rather, you should make a donation – in their names – to O’s re-election campaign.

Well. according to the NY Post

So far, “the Event Registry” has been all but ignored on social-media sites — even though Facebook, Twitter and other networks have been a strong suit for the Obama campaign.

“The number of links and stories about the announcement is very low” said a spokeswoman for the social-media tracking firm Topsy.

Wedding industry pros called the ploy tasteless and divisive.

Brides-to-be commenting on her site’s message board called the initiative “gross!” and “tacky”

“We found that nearly everyone found this to be a bad idea.”

Surprise, surprise, surprise, surprise

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BLS streak shamelessly continues …

July 20, 2012

BLS bias continues

Now we’re up to 70 out of 71 weeks that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on Thursday’s BLS report, the number for the week ending July 7 was revised upward from 350,000 to 352,000.

In itself, the 2k isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or  .8% to your prelim forecast !

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* * * * * *

Increase in Unemployment Claims

And, don’t miss the big point: initial unemployment claims increased by about 10% to 386,000

I expect Team Obama to whine:

“Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.”

Safe bet since, as we reported before, that’s exactly what they’ve said each month for over 2 years.

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Profitable pricing is literally “shrouded” in mystery…

July 20, 2012

A couple of years ago, behavioral economists Xavier Gabaix and  David Laibson wrote a seminal paper on the concept of “price shrouding,” and “information suppression”.

Here’s a summary excepted from The Red Tape Chronicles

The principle is simple, and shows why cheating is rampant in our markets and why honesty is rarely the best policy.

First, a definition of shrouding:

In days gone by, price tags were simple.

An apple cost 10 cents.  A cup of coffee cost $1.

But today, the consumer marketplace is far more complicated, giving sellers the opportunity to create confusion.

Many items have follow-up costs that make the original price tag meaningless.

Computer printers are the classic example.

You might get a great deal on a printer, but if the ink is expensive, you lose in the end.

In fact, Gabaix argues that it’s impossible for consumers to intelligently shop for printers.

No consumer knows how much ink costs — the cartridges don’t come in standard sizes, the amount of ink used to print varies and ink costs are unpredictable.

That makes the true price  “shrouded” — not quite hidden, but not quite clear, either

So, it’s easy for printer companies to lowball printer price tags and overcharge for ink, enabling them to print money.

Shrouded price tags are everywhere.

The hotel website might say “$99 a night” but you know the bill will be more like $120 or $130.

Pay TV companies promise $30-a-month service, which ends up costing more like $50.

At its best, the maddening mixture of coupons, rebates, sales and fine print fees can feel like a game.

At worst, it’s being cheated.

You’d think shoppers would love a chance to buy from a store that doesn’t play these games, the way car buyers (allegedly) like shopping at no-haggle auto dealerships.

They don’t.

Shoppers hunt for the tricks that let them save money.

Stores hide booby traps that let them take money.

If a firm tries to educate consumers on tricks and traps, and tries to offer an honest product, a funny thing happens: Consumers say, “Thank you for the tips,” and go back to the tricky companies, where they exploit the new knowledge to get cheaper prices, leaving the “honest” firm in the dust.

Once you educate consumers on the right way to shop, they will seek out the lowest cost store, and that will be the one with the shrouded prices.”

“Shrouding is the more profitable strategy.”

Like it or not, hidden fees – and secret discounts – are here to stay.

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But, they still like him … not.

July 19, 2012

Couple of questions from the NYT/CBS poll caught my eye …

First, keep in mind that NYT/CBS bends left … and is known to oversample Dems.

The conventional wisdom is that folks may not like Obama’s policies, but that they like him as a person.

I’ve always thought that conclusion was overstated since there’s survey because of social forces and resulting survey bias …

Recently, Obama has been quite visible on the campaign trail … with negative attacks on Romney … sometimes repeating accusations that have been discredited by fact-checkers.

Well, guess what?

In the latest NYT?CBS poll, Obama is viewed UNFAVORABLY by 48%only 36% view him favorably … that’s only 4 points higher than Romney.

Perhaps negative campaigning isn’t as effect as the pundits have been saying,

 

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Are Mac users easy pickings?

July 19, 2012

Punch line: Online retailers are using sophisticated analytics and web tracking methods to tailor their offerings… and to get folks to pay higher prices.

To get  the lowest prices: (1) Use a PC (not  Mac or iPad), (20 don’t sign on from a ritzy location, (3) pass thru a price-shopping site on your way to the destination site, (4) ask to see items sorted by price — from low to high, (5) check out at least one cheap item — maybe even put in your cart — then delete it later

* * * * *
Excerpted from WSJ

Retailers are becoming bigger users of so-called predictive analytics, crunching reams of data to guess the future shopping habits of customers.

The goal is to tailor offerings to people believed to have the highest “lifetime value” to the retailer.

Online, seemingly innocuous information is available to predict shoppers’ tastes and spending habits.

For example, The average household income for adult owners of Mac computers is $98,560, compared with $74,452 for a PC owner.

Drilling down, Orbitz  has found that people who use Apple spend as much as 30% more a night on hotels, so the online travel agency is starting to show them different, and sometimes costlier, travel options than Windows visitors see.

More specifically …

  • Mac users on average spend $20 to $30 more a night on hotels than their PC counterparts, a significant margin given the site’s average nightly hotel booking is around $100
  • Mac users are 40% more likely to book a four- or five-star hotel than PC users,
  • When Mac and PC users book the same hotel, Mac users tend to stay in more expensive rooms.

Other factors that have influence over results include

  • A user’s location (e.g. geo-targeting high wealth zip codes)
  • A shoppers history on the site (e.g. purchases at list price or at discounts).
  • The referring site (e.g. Kayak delivers price-sensitive shoppers to travel sites)takes those properties into account.

Caveat emptor !

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Great moments in leadership: Obama ditches the prompter for note cards …

July 18, 2012

This is too good to believe …

The Hill reports that last week in Pennsylvania & Virginia — to “up the tempo” at campaign events” — President Obama switched  from using a teleprompter to using note cards.

Hmmm.

Isn’t that when Obama went on his impromptu rant about how government, not entrepreneurs  build businesses?

This will be fun to watch.

* * * * *
Flashback

This news flash provides an archives opportunity.

Remember when O’s prompter failed at a White House event?

click to view
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My computer’s algorithms tell me that you’re willing to pay higher prices …

July 18, 2012

I was interviewed by a reporter from the Economist a couple of week’s ago.

Though I served up some prime material (and some red meat), my quotes didn’t make the cut

Dear Ken:
Unfortunately I was not able to use the information you provided, as what we needed was specific confirmation of actual examples of dynamic/custom pricing. Thank you once again for your willingness to share your expertise

OK, enough whining … here’s the gist of The Economist’s article Personalizing online prices

(more…)

How productivity creates jobs … and how gov’t stifles productivity.

July 17, 2012

Nice piece in today’s WSJ … here are snippets:

Punch line: Productivity — the ultimate engine of growth and better living standards — always  swims upstream against those that fight it. Unions, regulations and a bizarre tax code  lock in the status quo.

But, doesn’t productivity — getting more output with less inputs — destroy jobs?

Sure, but it creates way more than it destroys by creating technological avenues and lowering the cost of business

So how does productivity result in more employment?

Some new technology comes along that allows something never before possible. Cash from an ATM, stock trading from an airplane’s aisle seat, ads next to Google search results.

Cheaper technology becomes a platform for others to create or expand businesses that never before made economic sense. Think, eBay and Amazon.

Productivity  attracts capital to satisfy new consumer demands. In a competitive economy, productivity—doing more with less—always lowers the cost of products or services:

And, private investment does a better job of allocating capital than any elite economist or politician picking pork-barrel projects and relabeling them as “investments.”

Entire WSJ article is worth reading

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Quick, pick one: a 33% discount or 33% more for free …

July 17, 2012

According to a study at the University of Minnesota’s Carlson School of Management, report in The Economist

When offered two deals on loose coffee beans: 33% extra free or 33% off the price, most shoppers considered them equivalent though he discount is by far the better proposition … it would take a 50% increase in quantity to be equivalent.

More generally, the researchers found, that shoppers prefer getting something extra for free to getting something cheaper.

For example, the researchers sold 73% more hand lotion when it was offered in a bonus pack than when it carried an equivalent discount (even after all other effects, such as a desire to stockpile, were controlled for).

The main reason is  “consumer innumeracy” … e.g. people can’t do fractions or simple math in their head.

* * * * *
How can retailers compensate for (or exploit) consumers’ math blind spots?

One way is to befuddle them with double discounting.

People are more likely to think that a product that has been reduced by 20%, and then by an additional 25%, is a better deal than one which has been subject to an equivalent, one-off, 40% reduction.

Similarly, when evaluating a car’s fuel efficiency, consumers understand the number of extra miles per gallon it gets, more so than the equivalent percentage fall in fuel consumption.

We’re not talking calculus, we’re talking fractions … ouch.

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Get a deal on Groupon …

July 16, 2012

I hadn’t noticed the slide in Groupon’s stock price … from the IPO price of around $25 to under $8 …  a drop of almost 70%.

Groupon is starting to look like one of its own deals …

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Source Business Week

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Divorce: MS splits from NBC … opts to be fair & balanced

July 16, 2012

According to Reuters

Microsoft is pulling out of the joint venture that owned MSNBC.com, freeing the world’s largest software maker to build its own online news service.

The online divorce stemmed from the two partners’ desire to gain greater control over their digital destinies as the Internet becomes an increasingly important part of their businesses.

Microsoft, in particular, had grown frustrated by contract terms requiring it to exclusively feature MSNBC.com content aimed at an audience with a liberal viewpoint.

The strategy fed a perception that material from MSNBC’s website was politically slanted, too.

“Being limited to MSNBC.com content was problematic to us because we couldn’t have the multiple news sources and the multiple perspectives that our users were telling us that they wanted,”

Anybody remember Air America — Al Gore’s liberal radio network?

Hmmm.

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The BLS streak continues …

July 16, 2012

No, we didn’t forget … just got busy yesterday.

Now we’re up to 69 out of 70 weeks that the BLS’s  “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on Thursday’s BLS report, the number for the week ending June 30 was revised upward from 374,000 to 376,000.

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS !

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Secret revealed … the DC lightning photo.

July 13, 2012

Earlier this week we posted:

Great picture, even if it’s a PhotoShop job …

A reader sourced the pic and how it was done: multiple sequential pics overlayed on one another using Photoshop.

Pretty interesting. Read about it in the Wash Post.

click the pic for bigger image
DC STorm
Thanks to DL for feeding the lead

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Some places require photo IDs, some don’t … now, I have a new favorite place that does.

July 13, 2012

Annually, I report how I have to show 3 IDs – including a photo ID – to gain entry to the county dump and throw a couple of bags of leaves onto the compost pile.

Dumb.

Last week, my family went to a down & dirty crab house for dinner.  They wouldn’t put us on the wait-for-an-hour list unless we coughed up and ID – and let them hold it as collateral.

Dumber.

But, possibly the dumbest and certainly the most ironic case was reported by Townhall

Believe it or not,  the NAACP required a government issued photo identification and a second form of identification … to get into their convention to hear Eric Holder speak.

You know, the Eric Holder who – along with the NAACP — stands firmly against photo IDs when it comes to verifying a voter’s identity.

C’mon man.

You just can’t make this stuff up.

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Seeds of a revolt: Legal tax avoidance is gaining momentum …

July 12, 2012

A hot topic at BBQs this summer is the impact of Obama’s tax increases … the elimination of the so-called Bush tax rates and, now, the increased likelihood of the ObamaCare hits.

Back in the 70s — before Reagan — tax shelters were the rage … finding ways to transform ordinary income into lesser taxed capital gains and generate paper losses from generous depletion & depreciation allowances.

I’m sensing a return to the 70s mindset.

In the past couple of weeks, I’ve heard of  or seen …

  • A Maryland family plan to relocate to Northern Virginia to dodge Maryland’s increased sales, income and estate taxes.
  • Five Maryland exec-families establishing primary residencies in Florida … to take advantage of Florida’s income and estate tax rates … according to CNBC, they’re a microcosm of rich fleeing MAryland
  • Savvy investors talking about buying municipal bonds as a way of avoiding higher Fed income taxes … especially if dividends start getting whacked at ordinary income tax rates.
  • People going across state lines and ramping up internet purchases …  to minimize sales taxes
  • Merchants and contractors encouraging payment in cash … sometimes with accompanying discounts … to get income “off-the-books”

Most of the tactics are completely legal.

My point: tax avoidance is becoming a popular sport … fed-up tax payers are starting to revolt.

Tax & spend politicos should take heed … their rosy tax hike projections might not materialize as planned.

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Great moments in science …

July 12, 2012

No, not confirmation of the so-called “god particle” … I’m talking about the NOAA’s refutation of the existence of mermaids.

According to the LA Times

There’s no evidence mermaids exist, and most people above the age of 6 probably realize it

To put the matter to rest, the National Oceanic and Atmospheric Administration has announced  that there is no evidence that mermaids are real.

“The belief in mermaids may have arisen at the very dawn of our species,” the post explains. “Magical female figures first appear in cave paintings in the late Paleolithic (Stone Age) period some 30,000 years ago, when modern humans gained dominion over the land and, presumably, began to sail the seas. Half-human creatures, called chimeras, also abound in mythology…. But are mermaids real? No evidence of aquatic humanoids has ever been found.”

Perhaps the most surprising aspect of this revelation is why NOAA, a U.S. scientific agency, would want to weigh in on these mythical creatures any more than they’d want to expound on the potential atmospheric perturbations caused by Santa Claus’ countless Christmas Eve flights around the globe.

Our tax dollars at work.

I guess this is one item that President Obama missed when he scoured the budget line-by-line to eliminate fraud and waste …

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GM offers no-haggle prices … and a money-back guarantee.

July 11, 2012

According to Bloomberg

Losing ground to Toyota and needing to clear out end-of-model-year vehicles, GM will offer no-haggle pricing on 2012 Chevrolet cars and trucks plus a money-back guarantee on all new Chevys .

The new promotions, which GM calls its Chevy Confidence program, address two things car shoppers dread: haggling and commitment.

Americans aren’t great at haggling and we are expected to do so on the two biggest purchases we face: real estate and autos.”

“This Chevrolet Confidence program alleviates the issue of haggling and eliminates ‘buyer’s remorse.’”

The no-haggle program pledges to offer 2012 vehicles at the “best possible prices” in addition to current incentives.

The no-haggle sales price, called Total Confidence Pricing … harkens back to previous sales programs offered by GM.

The company’s Saturn included no-haggle buying before the brand ended as part of GM’s bankruptcy reorganization in 2009.

Such programs are “marginally effective,” according to Dennis Virag, president of Automotive Consulting Group. “There will be some buyers, but I don’t think it’s going to attract a large number of new customers for Chevy.”

* * * * *
GM is trying to boost Chevy as the brand faces greater pressure from Toyota.

U.S. sales of Chevrolet, GM’s largest brand, rose 6.3 percent to 961,662 cars and light trucks in the first half, a slower pace than the industrywide increase of 15 percent; Toyota’s namesake brand gained 29 percent to 937,964.

Ken’s Note: Toyota faced what President Obama would call “headwinds” the past couple of years with a tsunami knocking out production for a few months, and Obama’s Secretary of Transportation calling Toyotas unsafe to drive … a hysterical charge that was never proven.

GM CEO Dan Akerson  is pushing the company to boost operating margins and strengthen Cadillac and Chevrolet as global brands.

Anybody see a trend?

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He wasn’t in MY class … lucky he’s not a CEO or a football coach.

July 11, 2012

Remember when Yahoo canned its CEO for “mis-stating his academic record” — claiming to have scored a computer science course that he hadn’t taken?  … or George O’Leary getting fired as Notre Dames football coach for for over-stating his academic credentials?

That’s fatal for CEOs and football coaches, but …

According to World News Daily the intrigue around President Obama’s college background continues …

Two separate database reports from the National Student Clearinghouse have contradicted President Obama’s claim he attended Columbia University for two years.

The reports have added to the intrigue generated by Obama’s unwillingness to discuss his time at the Ivy League institution, his refusal to release educational records, and the fact that many political science students and faculty there in the early 1980s say they don’t remember him.

More specifically …

Henry Franklin Graff, professor emeritus of history at Columbia for 46 years, has cast doubt on claims Obama attended classes at the New York City university.

I have no recollection of Barack Obama at Columbia, and I am sure he never attended any of my classes,” Graff says.

“For 46 years, I taught political history, diplomatic history and one of the pioneering courses on presidential history, and every future politician of note who went through Columbia in those years took one or more of my classes – every one, that is, except Barack Obama.”

Graff further says that no professor he knew could remember having Obama as a student at Columbia.

Nobody I knew at Columbia ever remembers Obama being there,” Graff insists.

Who cares?

I do, for 3 reasons:

(1) I’m amazed at how Obama has been immunized to vetting … even vetting of basic facts … like when & where did he go to college.

(2) I want to see if his GPA was higher or lower than George W. Bush’s … since the press says Obama is a genius and Bush is a dunce.

(3) I want to know if Obama has ever taken a course in economics or business … I’ve bet the under on that one and want to collect

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The 3.8% solution … here comes the tax pile-on.

July 10, 2012

Taxes will be going up … thanks to  ObamaCare and Justice Roberts.

Flashback: ObamaCare’s initial $1 trillion cost projections (which have already doubled) … were funded (on paper, that is) roughly half by cuts to Medicare and half by tax increases.

One of the tax increases is a 3.8% tax on investment income … essentially slapping payroll taxes on so-called “unearned income”.

“Unearned income” is more than dividends and capital gains.

According to the WSJ

The tax applies to:

  • dividends;
  • rents;
  • royalties;
  • interest, except municipal-bond interest;
  • short- and long-term capital gains;
  • the taxable portion of annuity payments;
  • income from the sale of a principal home;
  • a net gain from the sale of a second home;
  • passive income from real estate and investments, such as limited partnerships.

The tax does not apply to:

  • payouts from a regular or Roth IRA, 401(k) plan or pension;
  • Social Security income; or annuities that are part of a retirement plan.
  • life-insurance proceeds;
  • municipal-bond interest;
  • veterans’ benefits; Schedule C income from businesses

Also, the tax does not apply to  non-resident aliens.

Couple of mega-takeaways:

1) Municipal bonds benefit … not subject to the ObamaCare surcharge … and don’t count towards the $250k AGI trigger.

2) Renters lose … landlords are likely to pass along the surcharge to higher rents

3) Housing prices pressured … double-whammy … higher cap gains taxes make houses less attractive as investments … rents tax decreases motivation for investors to buy and rent homes.

4) Seniors lose … if they shifted their retirement portfolios to fixed incomes … since interest and dividends get hit … dividends especially since they’ll also get hit with an increase in income tax rates — from 15% to as high as 39.5%

At least our health insurance premiums are going down … NOT !Could be worse … our health insurance premiums could be going up … oops, they are.

Oh well …

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No job? Maybe you’re just disabled …

July 10, 2012

According to OBD

More workers joined the federal government’s disability program in June than got new jobs..

The economy created just 80,000 jobs in June … also during June, 85,000 workers left the workforce entirely to enroll in the Social Security Disability Insurance program.

While the economy has created 2.6 million jobs since June 2009, 3.1 million workers signed up for disability benefits.

In other words, the number of new disability enrollees has climbed 19% faster than the number of jobs created during the sluggish recovery … even after accounting for people who left the disability program because they died or aged into retirement.

imageIn

Also in June, almost 275,000 put in applications for disability benefits.

Experts say that more people try to get on disability when jobs are scarce.

You think ?

My question: given the ever tightening OHSA regs, how could the workplace have gotten so dangerous?

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What are you going to believe, the facts or our rhetoric?

July 9, 2012

Reported by Chris Moody of Yahoo News

When the Bureau of Labor Statistics announced the nation’s latest national employment last week, the Obama administration stressed that people should not “read too much” into the data.

Mitt Romney’s campaign pounced, and flagged the fact that the White House has repeated that same line nearly every month since November 2009.

See below for the roundup of articles from WhiteHouse.gov that Romney’s campaign posted on its site. In many of the posts, the authors for the administration do acknowledge that they repeat themselves:

June 2012: “Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.”

May 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.”

April 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.”

March 2012: “Therefore, it is important not to read too much into any one monthly report, and it is helpful to consider each report in the context of other data that are becoming available.” (LINK:)

February 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.”

January 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.”

December 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

November 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

October 2011: “The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. There is no better example than August’s jobs figure, which was initially reported at zero and in the latest revision increased to 104,000. This illustrates why the Administration always stresses it is important not to read too much into any one monthly report.”

September 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

August 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

July 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

June 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

May 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

April 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

March 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

February 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

January 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

December 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

November 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

October 2010: “Given the volatility in monthly employment and unemployment data, it is important not to read too much into any one monthly report.”

September 2010: “Given the volatility in the monthly employment and unemployment data, it is important not to read too much into any one monthly report.”

July 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.  It is essential that we continue our efforts to move in the right direction and replace job losses with robust job gains.”

August 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

June 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.”

May 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.”

April 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

March 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

January 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

November 2009: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

In other words, it’s important not to read too much into the Obama administration’s past 3-1/2 years of performance.

So much for accountability …

Thanks to SMH for feeeding the lead

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ZAP: The storm that (didn’t) hit DC …

July 9, 2012

Great picture, even if it’s a PhotoShop job …

 click the pic for bigger image
DC STorm
Thanks to DL for feeding the lead

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Your cell phone provider knows where you are and where you’ve been … and spreads the word

July 6, 2012

Excerpted from Real Clear Technology

Cellphone companies hold onto your location information for years and routinely provide it to police.

At least tens of thousands of times a year, they hand cellphone location information to the FBI or police officers who have a court order.

They also analyze your information to send you targeted ads for their own services or from outside companies.

But, there is one person cell phone companies will not share your location information with …

You.

Click to see how your cell provider’s policies stack up

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The BLS streak continues …

July 6, 2012

We’re up to 68 out of 69 weeks that the BLS has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on yesterday’s BLS report, the number for the week ending June 23 was revised upward from 386,000 to 388,000.

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS !

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Hmmm … some interesting polling results.

July 5, 2012

The most recent CNN/ORC Poll results caught my eye.

Specifically, the demographic breakdown of President Obama’s job approval – disapproval.

Overall, CNN says that 51% approve of the job Obama is doing; 47% disapprove.

Here’s where it gets interesting:

90%  of Dems approve; 85% of GOPers dis-approve

75% of non-whites approve; 58% of white dis-approve.

62% of urbanites approve; 55% of rurals dis-approve.

57% of folks under 50 years old approve;  55% of the over 50s dis-approve.

55% of folks making less than $50k approve;  50% of those making more than $50k dis-approve.

54% in non-battleground states approve; in battleground state, 52% dis-approve

44% of independents approve; 53% disapprove

So, the Obama composite: young non-white urbanites making less than $50k.

The dis-approvers: older non-urban whites making more than $50K.

Hmmm …

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Campaign 2012: Awakening a sleeping giant?

July 5, 2012

I understand that Team Obama wanted to make contraception a wedge issue, but it’s not obvious to me why they chose to give the Catholic Church’s a stick in the eye.

I guess that they just assumed Church leaders wouldn’t have much staying power.

I would have bet with them on that one.

But, it appears that Catholic groups are. in fact, rising up.

Our local church staged a Fortnighi to Freedom rally this week … reminding parishioners that the Feds are stepping in to dictate actions and restrict religious liberty.

And, some  Catholic lay groups have  produced slick ads that are starting to go viral.

Here’s one called “Test of Fire”.

My bet: These guys may not be as impactful as the Swift Boaters … but they aren’t  going away …

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More on the higher education bubble …

July 3, 2012

Interesting video making the rounds …

Author Glenn Harlan Reynolds says:

Bubbles form when too many people expect values to go up forever. Simply put, the cost of higher education has far outpaced its actual value. The bubble is going to burst.”

His punch line: The Higher Education Bubble Is Going To Burst.

Frightening, but worth watching …

click to view video
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“Prosecutorial Discretion” … the chickens will come home to roost on this one!

July 3, 2012

Long ago … you know, the week before last, King-O ruled by Executive Order that Illegal “dreamers” wouldn’t be deported (though the law says they should be), that illegals ID’ed in Arizona won’t be processed by Feds (though the law says that they should be), etc.

Setting the politics aside, the legal justification is called  “prosecutorial discretion”.

That means that not all laws are to be enforced … only those that the executive branch of government judges to be worthy of enforcement.

While Dems are cheering Obama’s “bold stroke”, I’m betting they’ll rue the day.

Let me give you a couple of examples why …

The Individual Mandate

OK, un-conservative Chief Justice Roberts ruled that the penalty — err, “tax” — is constitutional and has the force of law.

Fast forward to January 2013 … and, imagine a President Romney.

Now, imagine a President Romney issuing an Executive Order to the IRS that they should not enforce ObamaCare’s individual mandate.

Better yet, imagine him reversing the executive action to add 16,000 IRS agents to enforce the individual mandate … or for that matter, any ObamaCare provisions, say the 3.8% surcharge tax on investment income.

Boom.  Gone !

“Prosecutorial discretion” in action.

Think Dems will refer to it as Romney’s bold stroke?

* * * * *
Taxes on Dividend Income

For decades — maybe centuries — economists have argued against the double taxation of dividends … once at the corporate level, once at the individual level.

What if President Romney declares — by Executive Order — that the IRS should stop collecting taxes on dividend income and stop chasing down folks who don’t pay the taxes voluntarily.  So what if the law is on the books?

Boom. Gone.

No Congressional action required.

Just garden variety prosecutorial discretion.

* * * * *
I bet you get the picture …

My instincts tell me that the principle of the executive branch cheery-picking the laws it likes isn’t a long-term winner.

As old Rev. Wright would say: “The chickens will come home to roost on this one.

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AT&T sets the standard for disruptive education innovation

July 2, 2012

Punch line: If corporations really want to make a difference in the American education system they need to rethink their philanthropic giving. By reallocating monies to initiatives such as gamification they can facilitate the foundational transformation that the education system truly needs.

* * * * *
Excerpted from Fast Company Co.Exist: Big Corporations Can Disrupt Our Antiquated Education Model

AT&T recently announced that it had made one of its single largest grants ever to the small nonprofit GameDesk, a pioneer in game-based digital learning for at-risk kids.

The signal to educators, consumers, and legislators alike is that the company has a transformative role in the education arena.

Without question, this is a departure from the “tried and true,” philanthropic grant which … is not the disruptive or innovative approach that the education system needs. Unfortunately, most private investors–and educators–tend to be risk averse when it comes to investing significant dollars or time in disruptive approaches to teaching.

The kind of partner strategy we see from the AT&T/GameDesk partnership is exactly how senior leaders from Fortune 500 companies and their foundations need to be thinking …

Why? Because when it comes to the future of our children and country, taking a risk and investing in “game changing” technologies … sends a clear message to parents, consumers, students, and educators that the status quo must change.

Edited by JDC

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Ridin’ the Hot Dog …

July 2, 2012

The “Hot Dog” has always been a crowd pleaser among students who have survived my courses … some have ridden it hard, many have gotten tossed off (by a wild driver), others have cheered (and jeered) their friends, some have just heard tell of the good times.

Well, I had a chance to take a couple of laps on the Hot Dog this summer …  with my daring 3 year-old granddaughter Anna …  in the picture, she’s signaling “go faster” … wonder where she got the competitive spirit?

image
Thanks to SGC for forwarding the pic

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