April 26, 2009

Faster: How To Deal With The Rat Race

There's more to life than increasing its speed.
--- Mahatma Gandhi

We don't notice slow change until we step back. Who has time for that? James Gleick, author of Faster: The Acceleration Of Just About Everything. Example after example, shows how our lives have been speeding up.
  • eating (fast food on the run or home delivery)
  • home cooking (pre-shredded cheese, pre-sliced mushrooms)
  • video (faster edits, digital editing)
  • mail (letters to couriers to email)
  • Internet (from dialup to always-on high speed)
  • search (from libraries to realtime with Twitter)
  • coffee (from brewing a cup to buying a cup from a drive-thru)
Quicker often means more expensive. We spend time to earn money. Then we spend money to save time. To save more time, we work more hours to earn more money. Circular. Earlier, we looked at how much we really earn, when we consider how much of our lives we pay. Maybe we got the coffee for the caffeine that keeps us going when our bodies shout STOP!

What Time Matters?
We look at time in different ways. Think of the airport. You can arrive early to reduce the risk of missing your flight. Or you can minimize wasted time at the airport by rushing to get on the plane mere moments before the doors close. What if you're an early bird travelling with a last minuter?

Too Fast Already
Have you ever noticed? Anybody going slower than you is an idiot, and anyone going faster than you is a maniac. --- George Carlin
Some things are already faster than they need to be. You can drive many vehicles well above the speed limits. Most times, traffic and road conditions limit your speed. The Porsche goes at the same pace as a Yaris. Adding more horsepower has little practical benefit (though a larger vehicle is generally safer)
Red light stop, green light go, yellow light go very fast.
--- Starman (1984), observing how we drive
So many factors affect travel time. I've decided to enjoy the journey, which is pleasant because I listen to audiobooks. Delays mean more time to enjoy. Pedestrian walking signals now have countdown timers. When a few seconds remain, rather than racing through the yellow, I slow down to stop.

Computers used to be compared by chip speed. As netbooks show, weight matters more than waiting. We can be happy with slower but lighter. Design also matters. 

Faster = More Wastage
WWW? Nice toy, but what a waste of time --- Bill Gates
Do you remember the days of dot matrix printers? Speed was measured in characters per second. Now we look at pages per minute. I laser printed 48 pages (four 12-page proposals) and accidentally dropped them on the floor. They scattered. I should have re-sorted them but time was limited. I tossed the jumble into the recycling bin and reprinted. The time saved vanished in traffic on the way home.

We're capable of doing more than one thing at a time. So we do. For example:
  • eating and talking
  • watching a movie and snacking
  • listening to a teacher and taking notes
  • driving and listening to the radio
  • walking and talking on the phone
  • jogging and listening to your iPod
  • cycling on an exercise bike while reading a magazine or watching tv
Sometimes we do too much: driving + listening to the radio + talking on the phone + reading billboards + watching people. 

Slowing Down
Time is what we want most, but what we use worst. --- William Penn
We kill the time we struggle to save. 

You'll see lines at Tim Hortons and Starbucks. Video games consume oodles of time. So does email, instant messaging, talking on your phone, web surfing, gardening, golfing, playing bridge, reading, ...

We scrimp here to splurge there. We distort the way we spend our money in similar ways, as described by Michael Silverstein in Treasure Hunt (an earlier blog post). 

Lily Tomlin says that if even if you win the rat race, you're still a rat. Lovely. The book Faster makes you much more aware of time. At first, the audiobook (who has time to read?) seems too slow. This leaves too much time to ponder. Hurry up! You soon realize that time spent reflecting isn't time wasted --- a valuable lesson as the rats race around us.


April 19, 2009

Small Cars: Is 'Safer Than Ever' Safe Enough for You?

Toronto Star: ... previous crash ratings for small cars are misleading

Wall Street Journal: Many small cars perform well in safety tests but appear, intuitively at least, to be at a disadvantage in collision with larger vehicles. Now a series of crash tests indicate the disadvantage is substantial, even when small cars collide with vehicles that don't seem that much larger. (emphasis added)

Forbes: ... no amount of airbags, electronic stability control or roll cages can defeat the laws of physics.

Though much safer than they were a few years ago, minicars as a group do a comparatively poor job of protecting people in crashes, simply because they're smaller and lighter. --- Adrian Lund, President, Insurance Institute for Highway Safety (IIHS) (emphasis added)

So all things being equal, if you're concerned about safety, you want a bigger, heavier car. --- David Zuby, senior vice president of vehicle research, IIHS

Scary words.

Cars have been on my mind this week. Fellow blogger Squawkfox and her husband were hit by wheels that came off a truck. Fortunately, they were not seriously hurt. Or worse.

Then the IIHS took three small cars rated tops in barrier tests and crashed them into midsize cars from the same manufacturer.
  1. Daimler: Smart fortwo vs Mercedes C300
  2. Honda: Fit vs Accord
  3. Toyota: Yaris vs Camry
Each small car dropped to lowest possible rating even though the collision speed was only 40 mph (64 km/h). The rating of Poor means a high probability of serious injury or death.

The following videos show what happened.

Daimler: Smart ForTwo vs Mercedes C300

Honda: Fit vs Accord

Toyota: Yaris vs Camry

How Much Safer Are Large Vehicles?
The Wall Street Journal reported that for minicars
  • in multi-vehicle crashes: "The death rate ... is almost twice as high as that of large cars"
  • in single vehicle crashes: "... three times as many deaths as in large cars"
In the case of Squawkfox, the flying truck wheels were like a smaller vehicle.

The Dilemma
In collisions with bigger vehicles, the forces acting on the smaller ones are higher, and there's less distance from the front of a small car to the occupant compartment to 'ride down' the impact. --- Toronto Star
We're buying smaller vehicles to save on fuel and to help the environment. Enviable goals. But we're increasing the chances of injury to ourselves. I've never been on the road in a minicar but did talk to a Smart Car representative. She explained how safe the vehicles were --- much like sitting in the shell of a walnut. How customers in accidents felt the vehicles saved their lives and returned to replace them. Seeing the crash test provides a rather different perspective.

How Safe?
There's a limit to large, though. In a collision with a truck or tractor trailer, even a big gas guzzling, road hogging SUV is at a disadvantage. If you're driving at highway speeds, the odds are against you too.

You can't have it all. If you're after fuel economy then you want a smaller, lighter vehicle. You're compromising with safety, though. If you drive in city gridlock, speeds are low thanks to volume, cyclists and buses. I average 20-25 km/h in "rush hour". That provides additional insurance.

We may have forgotten our high school physics, but those laws still apply. 


direct download | Internet Archive page

April 11, 2009

Mope, Gloat or Move: How Tax Compares by Province (Personal and Corporate)

I got something now to think about.
I'll work all day but not to pay it out.
--- Pete Townshend, Keep on Working

Tax. Tax. Tax. Like the weather, something we talk about but can't do much about. 

How do taxes compare from one province to another? We can find out from timely new report entitled In Search of Tax ExcellenceWhere Provinces Rank in Creating a Tax Climate for Small- and Medium-Business Success.   This research comes from the Canadian Federation of Independent Business (CFIB).

Smaller businesses use about half the country's workforce to produce about half the GDP. They face specific tax worries, worth understanding.

The full report runs 51 pages packs in many details and contains many references for further reading. The analysis considers 65 indicators encompassing the five key areas of tax
  1. premiums and payroll tax
  2. corporate income tax
  3. property and capital tax
  4. personal income tax
  5. sales and excise tax
We'll look at high level results for businesses and individuals. 

Gloat: The Best Province
I'd rather be here than any other place.
--- Pete Townshend, Keep on Working
The best province for smaller businesses is Alberta. That's probably no surprise. You can enlarge the chart below by clicking on it. 

Mope: the worst provinces, Ontario and Quebec, came as a surprise.
"It is alarming that the two biggest provinces, which make up 60 per cent of the total economy, are the weakest links in the provincial tax chain."
--- Catherine Swift, CFIB President
Move: I'm not ready to return to Alberta where I lived from ages two to five. Or to New Brunswick or Saskatchewan. But I'm disappointed as an Ontario resident.

Personal Income Tax
Let's look at how much income tax we pay, provincial and federal combined. In the heat map, green means the lowest tax. British Columbia and Alberta have the lowest taxes, depending on the income. Quebec is at the other extreme. 

Corporate Income Tax
Alberta and Manitoba have the lowest corporate tax, depending on the level of income. The worst provinces are Ontario and Quebec. 

We can't do much about tax levels but our governments can. In tax worries for smaller businesses, you'll see they have been adding jobs --- unlike larger companies. Where would tax savings go? Smaller businesses say they would invest in new equipment, pay down debt, increase employee wages, hire more employees and train employees better. Wouldn't that help the economy?

direct download | Internet Archive page

April 4, 2009

Dumb Money 2009: What Went Wrong? Thoughts from Daniel Gross

The financial services industry tends to get exactly the amount of regulation it wants.
--- Daniel Gross

Ideas often move from innovators to imitators to idiots. What if the innovators turn out to be idiots too?

We love stories and simple explanations of complex happenings. Looking back, we see causality that may not exist or that we did not see at the time. Journalist Daniel Gross helps make sense of the latest financial crisis in Dumb Money: How our Greatest Financial Minds Bankrupted the Nation.

There's not one culprit or cause. Blame (in no particular order, Wall Street ("smart money"), the US central bank, the rating agencies, the regulators, the politicians, the media, ... All the way down us (also known as "dumb money"). 

Dumb Money feels more like a long magazine article (or series of blog posts) than a book. It was released on Feb 23, 2009 in ebook and audio formats. That allowed much quick publication than print. And saved trees. Until April 14, when the print version becomes available.

Four Optimistic Assumptions

Is a dream a lie if it don't come true
Or is it something worse?
--- Bruce Springsteen, The River

Daniel identifies four problematic assumptions
  1. interest rates will stay low forever: the death of inflation
  2. asset prices will increase forever: especially real estate, which turned houses into bank machines, letting consumers spend money they didn't have through mortgage equity withdrawals
  3. debt will be serviced forever: no defaults or missed payments, especially on home mortgages
  4. markets for packaging debt will remain strong forever: securitization and derivatives to control and spread risk ... any risk
Unfortunately, nothing lasts forever. 

As long as the music is playing, you've got to get up and dance.
--- Chuck Prince (Summer 2007), former CEO of Citigroup

Unfortunately, we don't know when the music's going to stop.

What About Canada?
The book is written for an American audience, as the following interview question shows.
Q (from Ottawa): What are your thoughts about Canadian banks and the regulations that control them? They are still very profitable and none have failed.

A: Don't know that much about Canadian banks.
That doesn't mean that people outside the United States should be smug. The world is suffering.

Mixed Marketing
This book has not attracted much attention. A Google search for "dumb money" currently shows these top five hits
  1. 2005 article by the author (Slate magazine)
  2. 2000 book with similar title from Gary Wolf (amazon.com)
  3. definition (stock-market-crash.net)
  4. unrelated article (Time magazine)
  5. article about mutual funds (Yale University)
Not even an ad appears. A Twitter Realtime Search for "dumb money daniel gross" currently shows only 12 results.

In contrast, search for "outliers" and four of the top five results are for Malcolm Gladwell's newest book (which I discussed earlier). There's a lesson here: avoid using generic words in a title unless you're really popular. 

In an extreme case of self-marketing, you'll see that all these links come from the author!?! Maybe there will be more attention when the print edition becomes available. You may find these links give you enough information, letting you save your money.