Ron Sims - Hang your head in shame.... SHAME!

While I usually like to take on more national issues; today I have to write about something that hits a little closer to home. This fall there is a huge initiative called "Transit Now" it will do much to expand the light rail line that already goes from SeaTac airport to downtown, will increase bus service and fund studies for even further expansion of light rail. Making Seattle much more efficient in terms of public transit.

I think this measure is great because it already builds onto the existing light rail, instead of some competing technology and increases the frequency of buses meaning less time waiting for your bus to arrive.

The funding for this will be a tenth of a percent sales tax increase and (maybe) a $80 per $10,000 vehicle value licence plate tax. That's fine, since the taxes come from a base that is most affected by the improvements.
So why the thumbs down? Why the title? As a co-worker mentioned to me, not all groups are in favor of this (no surprise there), but the surprise is that our King County Executive Ron Sims has withdrawn his support for the project. Ron has traditionally been in favor of mass transit projects and his lack of support is causing people to hesitate on voting in this initative.

Today the Seattle PI tells us WHY. Turns our Ron has drawn up the new 2008 budget for Seattle, and it turns out that Sims wants a TON OF TAX INCREASES including the same tenth of a percent tax increase that the transit now imitative wants. It doesn't stop there though, the list of increases is long:

• Sales Tax Increase = .1 %
• Property Tax Increase = 10 cents per 1,000 of assessed value
• Property Tax Increase (ADDITIONAL) = 5 cents per 1,0000 of assessed value
• Bus fare increase = 25 cents per trip

Of course Ron had to withdraw support for expanding transit service, how could you go before voters and ask for a sales tax increase when in a separate measure you're going to ask for sales, property, and fare increases just to maintain current service?

Clearly Sims was not interested in what's best for the working class of Seattle, this withdraw of the Transit Now initiative was clearly a political move to keep from looking like he's hiking taxes every which way.

The transit now initiative asks for a lot less taxes then Sim's general budget and would help a lot of people in the area., and worse yet, Sims wants to pay for a good chunk of it with more property tax which unfairly punishes homeowners. In fact, the additional $.05 cent increase is for financing of passenger ferries.

Now what does my being successful enough to buy a home have in common with passenger ferries? Why should you, fellow homeowner be punished for your success while you're lazy renting friends get a free ride. Taxes need to be at least somewhat related to the services they pay for.

Mr Sims.... Your ideas of backing off a better version of public transit to further your own budgetary agendas is clearly NOT TOMLAND APPROVED.

Peter, Peter - Promotion Eater

Hello folks,

I read a fascinating article today on howstuffworks.com. Ever work for a boss that you were convinced was an idiot? Have you every been pretty sure that you could do a better job then the person signing your paycheck?

A lot of people have, in fact someone back in 1967 wrote an article about it, it's called "The Peter Principle" and goes something like this:

"As a person continues his path of promotion, he's eventually promoted right out of his field of expertise and into a position where he's utterly and helplessly incompetent....At the point where his level of incompetence is reached, an employee's promotional trajectory usually ends, and he's stuck in a position where he no longer has confidence in his abilities and produces less work for the company than he did in the position in which he excelled. The problems created by this promotion are compounded by the idea that an incompetent manager will make incompetent decisions -- including deciding who to promote. Eventually....the higher levels of a bureaucracy become populated entirely by incompetent people.

Once an employee reaches his level of incompetence, in general, he won't be fired from the position, unless he's what Dr. Peter dubs a "super-incompetent" -- a person who's actually defined by his mistakes. Instead, the promoted employee is usually mediocre in his new position. He's able to cover up his incompetence....Since the bulk of the productivity within the company is generally carried out by the regular employees who form the base of the hierarchical pyramid, companies can operate indefinitely, so long as the incompetence of the higher levels doesn't present itself through catastrophic decisions.

I've been observing this principle almost from the day I started working at 15, but never thought to formalize what I had seen. Certainly I've never thought to put a name to it. But someone sure did... Dr. Laurence J. Peter, my hat goes off to you sir. Putting pen to paper so you can explain a often viewed but perhaps not well understood phenomenon and thus enlightening the masses just a little more; Tomland Approved!

Listen to this song... for $9,166 !!

Alrighty folks,
Today's Tomland article is brought to you by the RIAA (Recording Industry Association of America). Over the weekend the RIAA won a lawsuit against a single mother for $220,000. The crime?... Possibly sharing 24 songs over the Internet. If you do the math, that's an award of $9,166 per song.

First of all, I'd like to point out that I hate the RIAA. With only a few cents of every dollar actually going to artists, this organization represents all that is greedy, wrong, and stupid with big business.

Just look at the size of the award; $220,000?!?!?! iTunes sells songs for 99 cents. So for 24 songs we're looking at $23.76 plus tax. Now even if some people downloaded the song from her computer (which the RIAA did not prove in their case). It would have had to be downloaded over 200,000 times in order to come up with actual losses of $220,000. The RIAA did not prove this either.

Finally, only a fraction of people who download songs for free would buy them otherwise. So we're not even looking at a dollar-for-dollar loss here.

Sure copyright is important, and sure artists need to make money but IF you wind up doing something illegal and get caught the punishment needs to fit the crime....

Greedy corporations forcing people into bankruptcy for something that cost 99 cents.... NOT TOMLAND APPROVED.

Steve Jobs is Crazy... Like a fox?!?

I've always been a big fan of Apple, they make great computers, great software and great music players. I'm also a big fan of business and the entrepreneur. I find just about everything related to running a business fascinating. That's probably why I've had quite a few myself. But I'm not here to write about myself today..

Lately I've been giving some thought to Apple's decision to lower the price of their iPhone from $599 to $399 and give a $100 credit to people that originally bought the iPhone before the price drop. On the face of it, this seems like a crazy move. Apple has sold over 1 million iPhones. (just under 1 million prior to the price adjustment). Let's take a look at that.

=========================================
$599 x 1 million = $600,000,000 gross sales
$250 x 1 million = $250,000,000 rough cost of phone
-----------------------------------------------------------
$350,000,000 NET PROFIT
Cost of rebate = $100,000,000
-----------------------------------------------------------
= $250,000,000 REVISED NET PROFIT
=========================================

So Apple has just taken a 30% reduction in profits. That's pretty substantial. Plus at the new price of $399 Apple is only making $149 from each new phone sale. That means that in order to make the same hardware revenue that Apple made off the first 1 million in sales they would have to sell 2.34 million iphones.

When investors heard about the price drop (and later rebate) they were not happy. Clearly they ran the numbers and saw the same thing I did. But if we look at the longer term outlook maybe this isn't so bad... maybe it's downright GOOD. Let's look at the rebate first

$100 rebate is not a cash rebate, instead you get a credit at the apple store. With Christmas coming up this rebate should be huge for apple. Suddenly getting someone an iPod is a much cheaper gift, with ipod nano's going for $49 after the rebate is applied. Or the low end macintosh mini going for $499 after rebate. $499 for a mac computer.. WHOA! In a nutshell the rebate should really increase sales this holiday season.

But Tom.... doesn't that increase sales still result in decreased profit per item? Yes it does, and I'll get to that in minute. But first I want to discuss what the new lower iphone price means.

At $599 the iPhone was the most expensive phone by far on the market. By lowering the price to $399 not only will the phone become more affordable (and in line with other high end devices) to people in the USA, but should be very attractive to people in Europe where the euro is at an all time high against the dollar. Plans are for the iPhone to be release in Europe in the coming months and with some countries having wireless service as their primary phone service this market is huge. It should help Appple hit their published goal of 10 million iPhones sooner then expected.

That brings me to the decreased profit per item issue.... Sure Apple is making less on the hardware side of things, but Apple has a second revenue source, content and subscriptions. Each iPhone is locked into a 2 year contract and Apple gets revenue for each subscriber. I haven't been able to find actual numbers, but even if it's just $1 per month (and the general impression is that it's much higher) that's an extra $48 for apple over the course of a 2 year contract. And frankly probably an extra $100+ over the life of an average phone. More phones in use means higher licensing fees each month. Also more sales of ipods means more people buying music from iTunes also another generator of profit for apple.

In chess there's a little joke that a player can yell out.... "SACRIFICE THE QUEEN FOR POSITIONAL". In essence you're telling the guy to give away his most powerful piece now for a better setup going forward. It's almost never a good thing to do this in Chess, although once in a great while the sacrifice is worth it. Will the sacrifice of immediate profit for potential future profit and better market penetration be worth it for Apple. We'll know in the upcoming months..........Sacrificing the queen for positional? Tomland can't say just yet.

Welcome back to Tomland - You're as fat as your zip code!

Hello everyone,

I've taken the summer off (hey it's not like I get paid for this). So what brings me back? Today's top story in the Seattle PI. We're talking front page, above the fold. The article talks about how Seattle's property values beat out income and education as predictors of Obesity. You can read the full article here.

The strongest predictor of obesity rates wasn't income or education but property values, the study found. Each additional $100,000 in median home value for a ZIP code corresponded with a drop in obesity of 2 percentage points.

It's further evidence, experts say, that weight isn't solely about individual behavior and that the environment you live in matters.

"If you have this mind-set that obesity has to do with the individual alone, then ZIP codes or areas really should not come into this. But they do, big-time," said Adam Drewnowski, director of the UW Center for Obesity Research.

Really? The price of a house is the best prediction of obesity? The problem with the front page article is that the logic is flawed. Home value is not a predictor of obesity at all, rather it is the end result in a long line of other symptoms.

Relevant to this discussion, a fundamental economic reason for obesity is wealth. The poor eat more junk/fast food then the well off. This is because poor folk have a harder time paying $30 for that fresh fish special and an easier time paying $5 for the extra value meal and McDonald's. Of course often lack of money also leads to lack of education which can go hand-in-hand with choosing to spend the $5 on fast food, instead of spending it at the grocery store. This lack of education often means lower paying jobs which translates into cheaper housing.

So... is the value of your house really a predictor of weight? NO it's just a visible by-product of lower eduction and income. These are the real issues at hand.

What amazes me is that while Seattle has the most bachelor degrees of any city in the country, this flawed logic makes it to the front page of Seattle's paper. Bad writing, and bad logic... NOT TOMLAND APPROVED.

That'll be $2.... What! They don't make a $2 bill... do they?

In today's news a man was arrested by trying to pay his bill at best buy with $2 bills. You can read the article here. Apparently, the guy was protesting getting charged $114 for a car stereo installation.

He's a tour bus operator and has a lot of $2 bills laying around. But when he handed them to the cashier she thought the money was fake and called the police. The police noticed the bills' serial numbers were in sequential order and cuffed the guy to a pole while they tried to figure out if the bills were real.

Sure, $2 bills aren't common anymore but this is just silly.
Stupid people doing stupid things, never tomland approved.

Damm straight I want fries with that!

Hello Folks,

Turns out today is that today is the 67th anniversary of that great restaurant franchise.... McDonald's!

I'd like to give a big two thumbs up to this fine culinary institution for providing me countless dirt cheap but satisfying meals. My personal favorite is the double quarter pounder value meal, but of course I can't forget their fries. I'm not sure what horrible things go into them but they sure taste great... hot, salty ahhh....

Mmm McDonald's, seriously Tomland approved!