Wednesday, March 31, 2010

Hot and Bothered

The Wall Street Journal’s influential tech reviewer, Walt Mossberg, praises the iPad:
I believe this beautiful new touch-screen device from Apple has the potential to change portable computing profoundly, and to challenge the primacy of the laptop.
BoingBoing’s Xeni Jardin sounded like he needed to get a room:
It strikes you when you first touch an iPad. The form just feels good, not too lightweight or heavy, nor too thin or thick. It's sensual. It's tactile. And it's a good way to spot a first-timer, too, as I observed with a few test subjects. The dead giveaway for an iPad n00b is pausing a few breaths before hitting the "on" switch, and just let the thing rest there against skin.
My tech purchasing “don’ts” will test my willpower during April: 1) Don’t buy version 1.0 of any piece of hardware; 2) Don’t crave a product so badly that I have to put my name on a waiting list; 3) Don’t buy a gizmo that has a good chance of being discounted within six months. I am a mature adult with self-control. But don’t let the thing rest there against my skin. © 2010 Stephen Yuen

Monday, March 29, 2010

Clean and Simple

In their never-ceasing effort to sound erudite and educated , writers dress up limp prose with big words and French or Latin phrases. I know, I know, pot calling the kettle black and all that---but one of my bĂȘte noires [:)] is when the attempt misfires and the reader is interrupted in his absorption by a jarring malaprop. Here’s an example from the sports pages:
[Stanford basketball forward Jayne] Appel, a standout water polo and basketball player at Carondelet High in Concord, has remained a tour de force in executing VanDerveer's triangle offense even as her scoring average (13.8) has dropped this season.
Tour de force is a French expression that refers to a feat or performance, like a Heifetz recital or an Olivier soliloquy, not a person. You can say “Appel was a force on the floor” or “her performance was a tour de force”, but “Appel…remained a tour de force”? Fingers on the chalkboard.

Please don't fancy up our sports pages. Most of your readers are guys who like it simple. Thanks, I feel better. © 2010 Stephen Yuen

Sunday, March 28, 2010

Palm Sunday, 2010

On Palm Sunday, as is our custom,we began the service outdoors. Clutching our palm crosses, we marched around the block in symbolic emulation of Jesus' entrance into Jerusalem two thousand years ago. I could see some new families glancing at each other in puzzlement: do they do this every week? No, just once a year. And this isn't your grandmother's Episcopal Church where you stand, sit, and kneel, eyes fixed front, and don't utter a word that's not in the prayer book or hymnal.

During Holy Week Christians remember the fleeting exultation of Palm Sunday, His betrayal, abandonment, and rigged execution, and astonishing triumph over death itself. From the highs to the lows to the ultimate high, it's a story that's hard to believe in an age where science rules more strongly than ever.

The fact that scientists have been shown to be fallible as other human beings and have changed their minds--even reversed their positions completely--should give pause to those who place their faith in science's direction. To believe or not is a choice, a gift that is nearly as great as life itself. In a world filled with portent and promise, choose wisely.

Tuesday, March 23, 2010

What About Our Mental Health?

Tigerhawk links to a Deloitte and Touche analysis of the health-care bill's impact on individual income taxes. In addition to higher marginal tax rates the mind-numbing complexity of the rules covering different types of income, the cost of compliance by both taxpayers and their employers, and the various phase-ins for different taxes will have a deleterious effect on economic activity.

The additional burdens on accountants and administrators shouldn't be taken lightly. I'll wager not one person in a thousand understands the following accounting-for-income tax issue. I've reproduced the passage in its entirety from the Deloitte analysis, just to give the reader a flavor for what happens when the government bull enters the financial reporting china shop.

ASC 740 implications – The employer’s promise to provide post-retirement prescription drug coverage (coverage) is recorded as a component of the other post-employment benefit (OPEB) obligation. When that coverage benefit meets certain criteria, the employer becomes eligible to receive the Retiree Drug Subsidy, which is then recorded as an offset against the obligation (the obligation is recorded net of the subsidy and the net amount is actuarially determined). In determining the deferred tax asset related to the OPEB obligation, companies have been required to “unbundle” the net amount into the “pre-subsidy” liability and the offsetting subsidy receivable. Since the obligation has historically been deductible when paid, a deferred tax asset has historically been recorded for the future tax deduction related to the grossed-up “pre-subsidy” amount. The unbundled subsidy receivable has not required a deferred tax liability since it has not been taxable when received. With the change in law, the subsidy “receivable” will remain not taxable, but a corresponding amount of liability will become not deductible. Therefore, the expected future tax deduction will be reduced by an amount equal to the subsidy and the corresponding deferred tax asset must be adjusted (reversed in this instance).

Under ASC 740, the expense or benefit related to adjusting deferred tax liabilities and assets as a result of a change in tax laws must be recognized in income from continuing operations for the period that includes the enactment date. Therefore, if President Obama signs the Act into law on or before March 31 as expected, the expense resulting from this change will be recognized in the first quarter of 2010 even though the change in law will not be effective until 2011 or later (however, the deferred tax asset is not adjusted for the part of the OPEB obligation that is expected to be settled prior to the effective date of the new law).

In the event that there is a valuation allowance recorded against the deferred tax asset, the reversal of the deferred tax asset will not result in an immediate deferred tax expense, as the decrease to the deferred tax asset will be offset by a corresponding decrease in the valuation allowance. However, the expense related to the change in the law has only been deferred, since the amount of valuation allowance that can be reversed to tax benefit at a later date (if and when the company returns to profitability) has been permanently reduced.
[Abbreviated translation: some employers provide prescription-drug benefits to retirees. Both these future payments and the future tax benefit of these deductions are recorded on today's balance sheet as a liability and an asset, respectively. The new law reduces the future tax deductions, i.e., lowers the "deferred tax asset", and the write-down is shown on this quarter's income statement and balance sheet.]

How many of the people who had a hand in drafting this new law ever gave a thought to the poor souls who have to administer and account for it? How many of them truly understand that the mission of a business is not to administer a Kafka-esque tangle of regulations but to deliver a quality product or service at a low price? I've heard much criticism of health-care and other businesses for spending too much on administration. Well, stop adding to the problem. © 2010 Stephen Yuen

Monday, March 22, 2010

No Appeal

There’s no question that our household will be better off under the health-care legislation passed by the House of Representatives last night. Without this legislation* and if we lose our current coverage, we would probably find it hard to obtain insurance because of pre-existing conditions. It’s also comforting to know that our under-26-year olds can remain on our policy. When surtaxes on investment incomes kick in, we should be able to arrange our financial affairs to minimize those.

[*At this point it’s unclear which provisions will finally make it into law. The House approved the December Senate bill, which becomes the law of the land when the President signs it. A separate bill containing amendments still must go to the Senate; the Democratic majority claims that the latter can avoid filibuster by the Republican minority through “budget reconciliation.” Whether or not reconciliation is successful , the odds are great that the House amendments won’t make it through unchanged. The health-care legislation we refer to is the Senate bill.]

Nevertheless, I wanted the no’s to win. The Senate bill mandates the purchase of insurance (or penalizes us if we don’t), one of the few times--another is registering for the draft--that the government requires its citizens to do something just for being alive. Other acts of good citizenship are not mandates: we don’t have to vote and we don’t have to give to charities. We are required to file tax returns and get a Social Security number only if we engage in economic activity. Volitional activities such as driving a car or buying a gun come with strings attached, and those are known upfront. But forcing people to purchase health insurance? I can already see the “Just Make Me” bumper stickers and T-shirts.

Another concern is execution. The delays and confusion in something as simple as last summer’s cash-for-clunkers program don’t bode well for an exponentially more complex project like the revamping of the health-care system. There will be even more confusion next month when an uninsured person shows up at an emergency room believing that he can now get treatment for his non-life-threatening condition. And, of course, where there’s more confusion there’s even greater opportunity for waste, fraud, and abuse.

Like most Americans, I’ve interacted with government agencies all my life. While I’ve met hard-working, knowledgeable civil servants, there are also enough job-protected losers and laggards to make government worse than most businesses that I’ve had to deal with. When I encounter problems in the private sector I write a letter of complaint and switch my business if necessary and my company’s business if I can. With the government, as with most monopoly providers, I’m stuck with wheedling and begging, often to the same person that turned us down in the first place. Frustrating as insurance companies are to deal with—and I have many frustrations—I’d much rather deal with them than an all-powerful government that controls both decision and appeal.

More later....

© 2010 Stephen Yuen

Saturday, March 20, 2010

Minds Concentrated

House Democrats have rejected, in my humble opinion quite wisely, using the procedural ploy of "deem-and-pass" to approve health care legislation. Besides there being a constitutional argument against this maneuver, nothing concentrates the mind so wonderfully as the possibility--even likelihood--that one will be in the minority in a few short months and living by the sword of parliamentary maneuvers will lead to, you know,...

Wednesday, March 17, 2010

Daylight Savings, Digital Thinking, and the Census

Early Sunday morning I padded through the house engaged in the semi-annual turning of the clocks. While I do appreciate the time-saving attributes of cellphones and computers that adjust the time automatically, I don’t mind spending the few minutes moving the minute hands on our old-fashioned clocks and watches.

Being analog in a digital world means that, although we are more comfortable with information in the form of pictures, we are too often forced to view information in numerical form. It takes me a split-second longer to recognize a digital “9:27” than the image on an old-fashioned clockface.

Worse, we must throw items into arbitrary buckets so that computers can sort them easily. The digital age can't have infinite shades of gray; about a dozen are all that the color wheel can handle.

Speaking of arbitrary categories, I just filled out the census form for the household. It took me only five minutes to complete, and the seven questions per individual (nine for the first responder, c'est moi) were simple enough for a third grader to answer.

The Census Bureau wanted to know our names, dates of birth (plus age this April 1st--are they surreptitiously checking whether I can do elementary math?), sex (hooray for not using "gender," an attribute of words, not human beings, but I'm afraid that ship has sailed), and race. As in the 2000 census we are allowed to check off more than one racial classification, a good thing for my extended family members, none of whom are "pure" anything.

One more perfunctory question about whether individuals live in the household the entire year or called away for educational, military, or criminal reasons, and we were done. I was happy that the questions weren't more intrusive; on the other hand, if census data were going to be used to make decisions about government programs, why this preoccupation with race? The ingredients in the American pot continue to melt, and IMHO race is much less important than education, income/wealth, politics, religion, and, of course, the blogs that one reads. The U.S. Census: another example of a digital program that finds it difficult to adapt to an analog world. © 2010 Stephen Yuen

Wednesday, March 10, 2010

The Right Drummer

My former co-worker, T, is between jobs, but don’t pity him; instead, feel envious. His wife’s time has been consumed by her business, and he has shouldered the joyful burden of caring for their 13-month-old daughter. Most parents realize too late that future compensatory efforts will never make up for lost time with their children, but T will not have those regrets. The price is having to live on one income, but the family is not cinching its belts too tightly—Potrero Hill is one of San Francisco’s picturesque districts.

I met father and child at a Vietnamese restaurant near his home. Over the course of the meal and our stroll to a coffee shop we were constantly interrupted by women who fawned over the baby. There’s something about the father-daughter pairing that’s catnip to the ladies, more so than any other parent-child combination. Guys, if you’re looking for a date, take your baby niece for a walk in a restaurant or shopping district.

T has re-activated his CPA certificate by taking the required 80 hours of continuing professional education. His example reminded me that I should do the same. I gave up the pursuit of credentials decades ago, but some, like the CPA, are worth maintaining for business reasons. (It will be tough to catch up, though; there were only 13 FASB pronouncements when I took the exam, and now there are over 160.)

Just straws in the wind, perhaps, but business activity seems to be picking up. My out-of-work friends are getting calls from potential employers, and headhunters are contacting us again. If he chooses, T will be back at work soon enough, but I can see why he’s not rushing. © 2010 Stephen Yuen

Tuesday, March 09, 2010

A Story With No Legs

Sarah Palin, speaking to a Canadian audience, talked about the irony of how her family chose a Canadian hospital when confronted with a health-care emergency. (Gov. Palin has spoken out against Democratic health-care plans, which critics and even some supporters claim will make the U.S. system resemble Canada's.)

As a six-year-old child she obviously had no input to her parents' decision, and equally obviously a lot of things have changed since the 1960's. The important question is, what would Gov. Palin do today?

In a medical emergency most people place their top priority on speed, with quality and cost being secondary considerations. If the nearest hospital is Canadian, every American parent I know would head there without hesitation. Ideology goes out the window when our kids are involved.

A word about the policy issue: if the Canadian system produces decent health care and short waiting periods at lower cost than ours, we shouldn't close our eyes to adopting its elements.

At this point we should again dust off the project triangle.

Only two of the three objectives are simultaneously possible.

The very best organizations try to hit the mark with all three. With government programs we're lucky to get two. (In some cases, e.g. the DMV and post office, Americans would take one.) One of the best government organizations, the U.S. military, is quick to respond and is extremely competent, but controlling cost has defied half a century of effort.

A government that rarely achieves two points of the good-fast-cheap triangle is asking us to believe that for the first time it can get to all three. IMHO, Governor Palin, Tea Partiers, and for that matter the majority of Americans are quite justified in their skepticism. © 2010 Stephen Yuen

Sunday, March 07, 2010

The First Senior Moment

This cartoon struck my funny bone (Hat tip to friend Rita for sending it via e-mail.)

I’ve been spending more time looking for things that I’ve misplaced, wondering why I entered a room, and trying to remember the original purpose of an Internet session. My mental lists cannot be too long; more than three items and I’m in trouble.

My loved ones look at me sideways and wonder whether my recent impulsivity is a harbinger of erratic surprises. No, I’m simply compensating for worsening memory and have to act immediately before the thought vanishes.

Why don’t I write things down? Well, that would mean remembering to carry a pencil.

Only One Direction They Can Go

The iPad is "magical" and "revolutionary"...and late (delayed till April). Hey, Apple, it's under-promise and over-deliver, not the other way around.

Apple's home page this Sunday morning.

Wednesday, March 03, 2010

Highest and Best Use

Years ago Caltrain shuttered most of its stations. The station agents were retired or let go, their ticketing function replaced by vending machines. While costs have indeed been reduced, the value of the old buildings and other real estate has largely remained untapped.

At Hillsdale Station the old wooden building has been leased to Luke's Local, "a commuter 'market' that sells fresh produce and prepared dinner meals."

The economics that the new tenant faces are daunting. Non-commuters won't go out of their way to shop at the station because Caltrain riders have filled all the parking spaces by 8:30 a.m. The shopping center across the street has a Starbucks, and nearby restaurants and fast food outlets already offer breakfast and dinner fare.

In a minor show of support I bought some garlic heads for $1 each (50 cents at Lucky's). More than half of the time I don't see any other customers. It would be surprising if they're still here next year.