A look at “The Issues”. Part 1: Social Security

I went out and checked out the glassbooth website today. You know on the surface this seems like a cool concept. Fill out some Q and A to find out which presidential candidate best suits you. However on closer inspection I found a few things I really didn't like. One, it did not just show you the complete candidate comparison list by default. Two, it really didn't seem dead on regarding some of the things I was looking at. But that aside I think it is a fantastic website for taking a look at some collected information about the various candidate about 'THE ISSUES”.

Of course... this look mostly confirms my suspicions that sound bites just don't make for good issues discussion. For example lets take a look at the social security debate. Based on the quotes listed Hillary and Obama are pretty far apart on the issue of SS. They both think privatization is a bad idea but they are diametrically opposed on the issue of extending the cap on SS earnings. Hillary thinks it is silly to consider the additional tax without first dealing with fiscal responsibility and doesn't like the idea of increasing taxes (how very centrist of her). Obama looks at the new source of revenue as a means to attain fiscal responsibility. If you ask me they both are a bit off center on this one.

First I just have to pick on Hillary. Who says you have to increase taxes if you extend the cap? You could just as easily reduce the rates but extend the cap such that it was a relatively revenue neutral choice... one which in my mind would be VERY favorable. It would be a real drop in the middle class burden and significantly up the SS contribution made by the top 5% who account for more than 50% of the wealth in the nation. Bam Bam... you get raised taxes on the wealthy in a fair way (paying SS on all income and not just the first 90k or so) AND you drop the load on the middle/lower class. Seems like a no brainer to me if ever there was one. I mean come on... you get to hand pretty much anyone making less than 100 grand a 1-5% raise... if that ain't a vote getter I don't know what is.

As for Obama? Well his stance is classic “Counting chickens before they hatch”. I always disapprove of spending money before it comes in. The current available Federal Budget is in excess of a couple of Trillion dollars. Frankly, I feel if the Government can't be fiscally responsible with that then I don't think a new resource is going to help much. I think Hillary is right that we should sort out the current mess without asking folks for more money... however as I said above, you don't have to ask for more money (overall) when extending the SS cap.

Regardless of if the move was made to alleviate the SS rates, or just to extend through all earnings I think SS is long overdue for a serious overhaul. I think it is time that SS stopped being viewed as an individual bank in bank out program and instead be viewed as a general purpose program in which the healthy working population pays to support those that cannot. I don't think SS should have scaled payout rates according to pay in. Benefits should be based on cost of living and tied to inflation much the same way Obama suggests regarding the minimum wage. In fact I think the Minimum wage and SS benefits should be largely connected at the hip. After all, they are fundamentally about the same thing, how much it costs to live. I think folks should receive SS benefits and additional retirement income up to double the base living income (poverty line). IE their SS payouts begin to decrease once they get more money on their own than they do from SS alone until they receive no SS retirement benefits if their private sources are double the poverty income level.

Lets look at a simple practical examples. Lets say the SS payout is 100 dollars a year. With no private retirement income you get your 100 dollars a year of SS. If you have 50 dollars of private income you get 150 (SS + your income). If you get 100 in private you get 200. But if you get 150 in private income then you still only get 200 total. So once you get 200 in private income you receive no more SS benefits. The idea being that at that point you are privately receiving double the current poverty line in retirement income. I think the dead zone in there is more than worth the safety net you get in return.

I don't think this means you have to throw out the basic concept behind the privatization of SS accounts either. The Gore idea of a Locked box is comforting but in reality money locked away is generally money not doing what it is best at (making more money). If you are of a biblical bent then go check out the parable of the talents. I certainly agree that the government needs to stop using SS as a slush fund for government programs that realistically will never pay back what they take out. It needs to be a responsibly managed investment setup run strictly on conservative reliable return ventures. For example I talked a while back about how we could establish a pure scientific research facility whos technological achievements could be spun off on a for profit basis and it would take only a small portion of the SS fund to put it in action. Done properly it might manage to create a self sustaining system in which a large chunk of corporate profits ARE government profits used to sustain programs like SS without asking for tax money but instead by reaping the rewards of products in the market place utilizing government funded/developed technology.

At any rate the old saw goes “It takes money to make money” And it takes a lot of money to make a lot of money. Individual privatized accounts are not 'a lot of money' but there are few sums of money that match just the yearly income of SS... much less any kind of long term accrual in times when input outstrips payouts. The idea of individual money management is pretty absurd though attractive concept. Bet the whole pile and reap the benefits of large scale investments rather than throwing all the little peons to the wolves individually. Just whatever we do we have got to stop this raiding of the piggy bank with nothing but worthless agency iou's to show for it.

Ok I think I have ranted long enough....

The VW Golf MKV GTI with DSG Review

I want to talk about a new car that is a real piece of work. It seems to combine the impossible. Practicality, Affordability, and Performance. Of the three affordability is probably its weakest link since there are several very practical cars for well under 20k… but not so many hot performance cars. This is the gold standard car of the Euro Hot Hatch. After all, the introduction of the Golf GTI birthed the class. While VW abdicated their throne for a couple of generations, the MKV has reclaimed it with a vengeance. Simple, Purposeful interior, Everything is at the drivers fingertips. Hatchback practicality for hauling people or gear (choose one mind you) and the ability to cruise sipping gas at 30mpg with every airbag possible on a car these days. Tight suspension, Alphabet Breaks and an out of this world power box mated to the emerging standard in performance transmissions gives you some serious giggle inducing performance…. All for ~25k. Not cheap, not expensive. Its peers are the Mazda 3, RSX-S, Civic SI and several other multipurpose front wheel drive rockets. The DSG sets it apart. Some call it boring… I call it technology. Finally I can have a car that is fun to drive and has a clutched transmission that my wife can drive since she doesn't have to work a clutch pedal. I get my crisp high performance shifts and real gear/engine control while she gets boring drive to the grocery store ease.

How fast does this transmission shift? When it guesses right? By the time you register the noise it makes, the next gear is fully engaged and the revs are rapidly climbing to the next bfffft gone click. Even a bad shift where it is guessing wrong is pretty crisp… slow for a good clutch artist, about par for your typical joe schmoe just punching the clock and not trying to click and go. I won't say anything silly like it is more enjoyable than a clutch job… but for performance it is pretty damn hard to question it. I know every one of you that has ever loved a clutch pedal has also had those days/times where you just wish you could throw the damn thing into drive and forget about it for a little while. Of course the feeling passes, and you know you would never give it up for the pain that is a slush box. But the DSG isn't a slush box so most of the fun is there in the paddle shifters. The mental game is all the same… you just have to leave your left foot on the sidelines.

How good is the performance? Well… I drive by the seat of my pants. The seat of my pants going around my favorite twisties in my roaring 89 5 speed Mustang GT says 55-65 is pushing it.. and if its raining the posted caution sign is probably much closer to being right than wrong. Driving the GTI… 75-85 feels right and my stomach does flip flops imagining what I would have to do to get that same sensation I used to have squealing tires in my stang at 65 through a nice curvy section of mountain road. I don't believe It is ever going to give me that same raw feeling. But if I want to experience some sideways Front wheel drive mayhem I have just to click off the traction control program, use my DSG launch program and go for it… for the most part I think I will pass. It is a nice change of pace to throw far more than is legally allowed at a road and have a car that is yawning at me and calling me a pussy for not going at it harder. Going fast in the GTI vrs an older car like my mustang is like comparing the DSG to your typical 5/6 speed row action… it does it so well for you that it does a good job of making it boring. But no so boring I didn't sign on the line to trade in my Mustang.

As for practicality? That one is well established. This is just a dressed up Rabbit/Golf. Hatchback bliss. But here you go. I am 5'10 and a smidgin.. and I am Husky (if you are being nice). The salesman was about 6'2 or so. I had him sit in the front passenger seat and place the seat where he had a good inch between his knees and the glove box while I sat in the back… I had a good inch or two myself from the back of the seat. The back seats have air vents (directed center console and under seat) and cup holders as well as through access to the trunk. Color me surprised. The trunk/boot whatever you want to call it isn't large, But it will haul a load of groceries or enough crap for a couple on a weekend jaunt. For any more you need to fold down the seats or go for the roof rack. I think a roof rack and bag would suit a family of 3 best, and be a tad tight for 4… but forget Fido. If you are there you are looking bigger than this class anyway. Golf clubs require at least one of the seats down. All in all a very capable small car.

As for style? That is in the eye of the beholder. I rather like the 3 door hatch look… and with the factory 17" wheels, clean lines (read no crazy wings and intakes) and subtle trim details, the car stands apart from its less capable chassis mate the Rabbit, but brings a much needed understated air to the class of performance compacts. To the initiated, the GTI stands out… to others it just looks like a compact car. That is good for some and not so good for others. To each their own and all that.

All in all this car is one hell of a ride and the grin is still firmly stuck on my face a week after I drove it home.

Game Changers

You know people talk about game changing technology a lot…. So I find it funny when the real thing comes along to relatively little fan fare. Nobody really paid attention when the I-pod launched. Sure the apple heads were thrilled but at that time mp3 was not a household term and the idea of your computer being the central element to your music collection was pretty well reserved to those of a pretty geeky bent. Today's game changers have had some press sure. But I just am not sure folks really realize the full potential impact of two products that just started to ship.

The first is the new Toshiba Batteries. First story I saw about it was a couple of years ago when it was fresh out of the labs. The past week saw the announcement that they were starting to ship. The quick and dirty? 5000 recharge cycle lithium ion batteries able to be effectively re-charged in 5 minutes. That is 13 years and change at a full charge everyday from a battery technology proven to give 100-200 mile range in electric vehicles. And that is just to the battery maintaining 90% original charge. In other words these babies can last the life of a car through multiple owners and it can be recharged fast enough to be used on extended trips. The only two things missing now are stations with a high capacity recharge capability and some cars that use the technology. 9 gets you one the new flush of plug in hybrid vehicles and even a couple of electric only cars are on the fast track to incorporating these batteries. Charging stations should be relatively easy to install. These batteries can charge and discharge at a high rate. That means a station could house a bank of them that charge off a standard (commercial) outlet and then provide the high capacity needed to fast charge smaller car packs. Stations can charge up overnight during low utility rate periods and as needed during the day… perhaps even off of solar panels though you would need a lot to really make much of a dent in the kind of power storage you are talking about to charge up even a single car with these, much less a line of them. The really nice thing about this? Small installations could be fairly inexpensive to roll out and then they could be very easily expanded as more cars came on line. This really is about as easy an infrastructure change as we could hope for. The hardest transition would be if the cars really take off and the basic power delivery capacity has to be upgraded to deliver more juice to replace gas at the pumps. Make no mistake folks. This battery marks the entrance of practical all electric vehicles. The only real question remaining is will the cost of them make those practical cars luxury items, or an everyman choice? Of course this is not to mention the nice bonus of laptops and cell phones that can be quickly charged from a standard outlet. Are these perfect? No, odds are they will be pricey to start with and the capacity/ energy density is still lower than it ultimately needs to be. But these are a very big deal.

The second game changer to launch is the new nanosolar product. 1$ a watt. Not fiction, not some day. But shipping now and production is bought up for a year and counting. Current Solar panel installation ROI tends to be about 20 years. This cuts that by 75%. Combine it with the above technology with a battery that could have an effective life of better than 10 years and you might manage to improve the ROI time even further. Existing installations tend to use SLA batteries and need to be replaced every 5-8 years…. Granted the added cost of the lithium might more than offset that but if those make it into massive production to support electric vehicles then you will have a high likely hood of mass produced high capacity packs designed to be safe in car wrecks. Think of it this way. You are a housing contractor. If you look at current solar options for grid tie sell back systems your selling point to the owner is that the added cost starts showing ROI after 20 years. With these you get to pitch 5 years… or in other words less time than some car financing options. Again this is truly game changing technology. While I doubt it will usher in an era of universal solar installations, this will do a great deal to shift the decision to 'go solar' into the territory of financially intelligent (if somewhat long sighted) rather than the current 'eco morality feel good' choice it primarily is. IE companies currently install solar for the PR value much more than any potential financial benefit, private installations are often choices of conscious or even made for independence in spite of the added cost. Combine it with tax incentive programs for alternative energy sources and this panel is poised to get solar installations changed from the exception to the expected in new build properties.

Like it or not I think the true 'green' revolution is here. This is the start of the nitty gritty details on how it actually happens. Two imperfect but practical new products which are shipping. Perhaps I am jumping the gun here, but I doubt it. For once the numbers are starting to tilt in the favor of some alternative energy products. Finally, real products instead of marketing pipe dreams and hype. Give these another two years and I doubt anyone will not know about them.