Why Would I Want to Pay More?

Came across this pricing scheme at CVS. The “You Pay Price” is $3.29, it was $3.79 and it’s now $3.49. I’d prefer to pay the $3.29, but I wasn’t quite sure what price would have rang up.

The Myth of Water Scarcity – Developed Countries

I’m sure you’ve read an article on water scarcity, either online or in a newspaper or magazine. The article usually mentions that two thirds of the earth is covered in water, but only two percent is fresh water. The article was probably mentioning water shortages in a developed area in the world or a third world country. The main point of the article was probably focusing on the author’s position that there is a shortage of water. But is there a shortage of water? I’m going to go against the grain and say there is no shortage of water; only the lack of will to produce and supply the required water.

Take for example the central valley of California. Today the western portion of the valley is drying up, its main source of water dammed up, so to say, at the Sacramento River Delta. Successful environmental lawsuits have reduced the amount of water being pumped from the Delta to ten percent of what the system was designed for. This supposed water shortage is not caused by a lack of water, but a lack of wanting to allow water to be pumped further downstream and fierce opposition to a proposed canal in 1982. When the system was first built water was conveyed through the Delta. Water is discharged at the northern side of the Delta and then pumped out on the southern side of the Delta.

Back in 1982 it was proposed to finish the California Aqueduct by building a peripheral canal, moving water around the Delta, funded through bonds and requiring approval through a ballot initiative. Unfortunately, for Californians the United States as a whole, the measure was defeated. Today the peripheral canal is back on the drawing board with an estimated cost of $3 billion. There is no guarantee that peripheral canal will be built and the west side of the valley may go fallow due to a scarcity of water. The scarcity of water is not because there is a lack of it, only because there is a lack of will to provide the water. The central valley of California is important because it provides an estimated 25% of the United States food supply and large exporter to other countries.

Another example is the small community of San Simeon on the Central Coast of California. The seaside community has halted new home construction due to a lack of water. However the technology exists to provide as much water as the community requires. What the community lacks is the will to utilize the technology to provide the water. Why does the community not want to utilize the technology? Because a vocal portion does not want additional people moving into the town. For if the water is provided the empty lots located in the town would be allowed to be developed.Another example of not a water shortage problem, but a lack of will to provide the water.

If we take a look at most locations in the developed world I think you’d find the same thing. The claim of scarcity of water, but in reality the lack of will to provide the water a growing population requires to survive on this planet.

Next Apple Product: iWall?

Apple looks like its getting more transparent, while walking past the Apple Store in San Francisco I spied what must be their next product. I’m dubbing it the iWall. As you can see it comes with 3G and GPS and is quite a bit bigger than the iPad.

Not sure how portable it will be, but I’m sure it will be billed as the next must have product from Apple. No word yet on if it comes with Apple TV capabilities.

How Often Does This Happen?

Not quite sure what’s going on in San Jose for the gas pumps to require these signs.

Public Transportation

Yesterday I made my way from Arroyo Grande, CA (AG) to San Francisco, CA. The trip consisted of driving 218 miles from AG to the Fremont Bart Station, taking BART from the Fremont Station to the Montgomery Station and finally walking to the hotel I’m staying at. The public transportation, round trip, costs to me included $10 for long term parking, $11.20 for the BART ride and about three hours of my time (the difference between driving and taking public transportation). I did this to save the $46/day the hotel charged for overnight parking. So I saved $92.53 ($92+$21.73-$21.20), not including the money spent on printing the parking pass at FedEx Office or my time. I’ve read that the farebox recovery of BART is 58.4%, so the true cost of the trip is $19.18. Giving the total savings of $84.55. Since I’m adding 3 hours to my journey, I’m valuing my time at $28.18/hr. Google estimated my traveling costs at $21.73, based on the IRS tax deduction amount per mile.

Since my employer, and me sometimes, values my time at more than my savings per hour I probably should have driven to the hotel and paid for the parking.

All of this got me thinking on why isn’t public transportation better. I think it has everything to do with keeping the farebox recovery from coming even close to the 110% required to expand and grow the system organically. Due to the low farebox recovery rates public transportation is beholden to the government for funding expansions or providing better service. Budget priorities often delay or hinder the construction of system expansions. BART is currently in this situation because of the California budget problems. Its being forced to raise rates, or decrease service, due to cutbacks in the 41.6% of its budget that comes from gas tax money or the general fund.

If the farebox recovery rates covered the full cost of the trip BART would need to adjust fares based on ridership. If ridership goes up BART could choose between expanding service or reducing fares. If ridership goes down BART could adjust service to meet the current demand, by running trains less frequency. The true benefit of full farebox recovery is the ability to expand the system without requiring outside funds, except for issuing bonds to fund the construction. The tax payer would be relieved of having to pay for public transportation and the users of the system would have expanded service.

I guess the downfall of my idea is that a vocal portion of the public feels that people shouldn’t be forced to pay full fare for their trips. I just don’t get the logic in that. You force them into a bad public transportation system and limit their access to locations and places without providing a means for them to help improve their transportation options.

And if you are wondering I feel the gas taxes funding transportation projects should be inflation adjusted and meet all of the costs of maintaining and expanding the roadways.

$25 Stimulus Payments

Wow, today I realized that there is a $25 Stimulus Payment/week included in my unemployment benefits. I’m not quite sure if this a joke on the government’s part. What am I supposed to do with this $25/week. It’s not enough to make my car payment, pay any of my utility bills or mortgage payment. I figure if the local County government is willing to wait 200 weeks I’ll be able to pay my property taxes which are due in April. I doubt the County is willing to wait that long. Well if I do spend all of my unemployment tax on taxable items it will almost pay for the sales tax I’m charged by the state and county ($37.13 v. $25).

I guess the best part is that I get to pay taxes on this stimulus amount. Or maybe that its that the money is being paid out with borrowed money so the true cost of this $25 is going to be quite a bit more than the original amount paid out.

I guess for some it’s even more of a problem. I’ve read some reports where people receiving the stimulus checks no longer qualify for food assistance since they now make too much money from unemployment.

This whole thing smells of buying votes by politicians. I’d settle for the government delaying the implementation of the new EPA regulations to help spur economic growth. This wouldn’t cost the government any money and provide an incentive for economic activity instead of a deterrent.

Its Not the 1930’s

You’d think that politicians would recognize that today is not the 1930’s and they have tools available today that don’t have to increase the national debt. The basic theory utilized today, and from the 1930’s, is that the government should step into the void and replace the spending of the private sector. In doing so the government runs a deficit, pumping money into the economy. The problem is that this doesn’t generate sustaining economic activity.

During normal times a developer develops a project, hiring contractors, architects and engineers. Hopefully he makes a project and takes some of the profit to start a new project or takes the success of the last project to solicit investments from investors for the next project. The contractor does a good job and is assured of getting future jobs and buys equipment or resources to reduce down time. Other people see the success of the developer and develops their own projects or invests in developments. The system provides hope of a better tomorrow.

If the system breaks down at some point, through a bubble, government regulations or a scarcity of resources the system breaks down. The developer doesn’t move on the next project, the contractor doesn’t buy new equipment and makes due with their current equipment and higher maintenance costs, fishing boats are put out of business, etc. Sometimes the slow down happens slowly like in the 1980s and sometimes it ends in a large crash like it has recently.

The problem with government stimulus is that the government decides the winners and losers and doesn’t provide much visibility in the future. If your a contractor working on stimulus funded projects would you buy equipment with a 5 year lifespan or overhaul your 5 year old equipment. Currently, based on Caterpillar sales, I would say many contractors are doing the cheaper overhauls.

There is still money out there ready and willing to invest in projects. Unfortunately it’s sitting on the sidelines, most likely in government treasuries used to pump money into the economy. Ironic isn’t it. The government has tools at it’s disposal to get the money on the sidelines to jump back in. Mainly they have the ability of extracting the government out of the way of projects already planned. Sometimes it’s projects the government is funding themselves.

While working at the County of San Luis Obispo on bridge replacement projects, the main impediment was the permitting process. There are still bridges working through the permitting process ten years after they were started. Imagine all of the bridge projects that could be done if the government stepped out of the way of its self and had those projects started? Imagine if the government said they were streamlining the permitting process for bridge replacement projects for a period of 5 years and that it would take no longer than 3 months for the necessary permits to be processed. The bridge contractors would have the visibility to purchase new equipment for those projects.

Another example may be found up and down the coast of California in the form of the Coastal Commission. I think the Coastal Commission was set up to protect the coast, but it mainly operates as an extortion ring. Want to build your house on your property, well you’ll have to pay for stairs so people can go through your property and make it to the beach. Want to get a permit to relicense your nuclear power plant? That will cost you a trail along the road to the main gate of the power plant. There are some desalinization water plants planned along the coast of California funded with private financing. Many of these projects are being delayed going through the permit process. How about streamlining the process to get these projects built? It doesn’t cost the government anything, except for providing good services to the people. Imagine if the Coastal Commission was put on hiatus how many investors would get off the sidelines and invest in projects before the extortion agency was reinstated.

Numerous people are out of work in the San Joaquin valley of California. You’d think it was a product of the current economic malaise, but it’s because a court ruling regarding pumping of water from the California delta. Many farmers who are the beneficiary of the pumping of the delta water have had to make their fields fallow, putting many people out of work. You can take a look at the area in this unemployment video. Its the dark area in California at the start of the video. The government could provide a solution to this problem or restart the pumps putting people back to work. The ruling in question was to protect an endangered species, unfortunately the ruling puts at risk around 20 other endangered species who benefited from the pumping of the water.

My point is the government has the ability to fix the current economic problems without spending money they don’t have. They could simply get out of the way and let people get back to work.