Penchuk.com

It’s been a while since I’ve posted anything family related and the throngs of followers of this site have been clamoring for it. OK, maybe I’m exaggerating just a little. Regardless, here’s what’s happening with the boys.

Ben – Our oldest is a few months into first grade now and doing well. He’s reading more and more. Both Laura and I have been impressed at how far he’s come. Once in a while it’s a little jarring when he reads something you don’t expect him to (like an email you’re typing). Yesterday we went to the NC State Fair with some friends. Ben and Carter (his buddy) went on a bunch of rides, including a small roller coaster. Last year, Ben was terrified of it and refused to ride it. He’s definitely growing up and getting over some of those childhood fears. He’s also a big baseball and hockey fan – hard to believe he’s my son, huh? Right now he’s not playing any organized sports but come spring, I’m sure baseball will be back on the docket. Over the summer we put bunk beds in the kids’ room and Ben loves sleeping on the top bunk. Ben’s also become something of a card shark. We took a family trip to Lake Lure, NC, near the end of the summer and Ben was introduced to poker. Grandpa Duff is an aficionado and Ben fell in love with the game. He even took all of Duff’s chips in one game. Now, Ben wants poker chips for Christmas. How’s that for a judgment call? Do you get your 6-year old poker chips? Time will tell.

Jack – This kid makes us laugh. He’s hilarious. For example, he’s probably going to be a cowboy for Halloween, but he’s been wearing the hat and boots around the house for days now. He walks around saying things like, “Howdy, pardner.”  He’s also doing well in pre-school.  The other day he sang his ABC’s all by himself.  He’s also fond of telling us, “I had a bad day at school”.  We think he read a book about a kid that had a bad day and now Jack likes to play the sob story.  Of the two kids, this is the independent one.  Jack can go upstairs into our playroom and spend an hour up there with toys and living in his own world.  His brother always wants someone to play with, but Jack is alright doing his own thing.  He’s got such a good nature about him which is countered by the fact that he’s 3 years old.  The good news is that he won’t be three forever.  We’ve started playing hockey in the street now and he’s incredibly coordinated.  It’s been fun to see him grow up in the shadow of his older brother but still carve out his own way.

Check out the photos and see how big they’re getting.  Until next time…

State Fair

The other day I wrote about Dell receiving an incentive package from NC and Winston-Salem.  It’s still being discussed in the local press as evidenced in this article from Local Tech Wire (emphasis mine).

“They could have succeeded. It’s a gamble,” said Sen. David Hoyle, D-Gaston, the primary sponsor of the state incentives package targeting Dell that was approved hastily in a one-day legislative session in November 2004. “You take a chance, and you roll the dice.”

There are two issues I have with Sen. Hoyle’s approach here.  First, the money used to “roll the dice” isn’t his money.  Frankly, I’m not real happy with an elected state senator that deems it his place to “gamble” with hundreds of millions of dollars that aren’t his.  The people of NC could have used that money more wisely on their own than by giving it to a corporate welfare recipient.  If he wants to gamble, do it on his own dime.  Second, the government, in this case, endorsed a single company.  They essentially played favoritism by deeming Dell to be worthy of incentives aimed directly and specifically at Dell.  Why are they worthy but other companies are not? All companies, big or small, should have the same incentives to put up shop in NC.  That point is made lower down in the article.

I also love this statement (emphasis mine):

House Speaker Joe Hackney said he doesn’t regret the Dell deal, because it probably generated additional tax revenues from the jobs it created.

Isn’t that great?  It “probably” did what it was intended to do.  I “probably” won’t vote for Mr. Hackney at the next election.

The one good thing, which I haven’t been able to fully grasp yet, is how it appears Dell only used some $8.6 million of the almost $280 million in incentives available to it.  Perhaps in the long run, the finances of this deal will work out OK.  But, the principles remain the same.  The government shouldn’t “gamble” taxpayer money on corporate welfare.

Just got my annual subscription notice for the Wall St. Journal’s online edition. I’ve been a loyal subscriber for 12 years now and every October my credit card gets charged. Years ago I realized that if I got the paper edition, they would stack up and I’d probably never read them. For me, the online only option is the way to go.  I read it every day and love the email I get with all of the stories from that day’s paper.

This year’s subscription was $197, which is quite a hike from last year’s $119 (it’s a 65% increase). Rather surprised, I went to the “My Account” section of WSJ.com and looked at the billing options. There are two.

• Annual subscription: $197
• Monthly payments of $12.95 (annual cost of $155.40)

Fine. It’s a big hike in price and frankly, one that made me question whether or not to continue paying for it.  I like the WSJ and its coverage so I’ve decided to keep it but, of course, I’ve changed to the monthly option.

But what I don’t get at all is why in the world would they charge MORE for a one-time annual subscription than the monthly option?  Typically, a discount is provided when someone pays upfront for a whole year.  After all, the seller gets extra money upfront and reduced risk. With the monthly option, there’s more work involved (doing something 12 times versus once) and an overall higher risk level.  If that’s the case, why have the pricing disparity the way it is?  Shouldn’t the WSJ, the paper of record for business, understand this simple concept?

Even with the lower priced option, I’m still looking at an over 30% increase in price.  Frankly, I’m still questioning whether to continue subscribing, but now I’ll have a monthly reminder to consider pulling the plug.

A few years back North Carolina and Winston-Salem gave Dell some $280 million in incentives to build a plant in the Piedmont Triad.  Now, less than 5 years later, Dell’s closing that plant.  They’re probably going to have to give some of that money back to NC and W-S, but it won’t be all of it, it won’t be with interest and it won’t be profitable for NC and W-S, that’s for sure.

What it all boils down to is that I am not a fan of government incentive packages.  They don’t work.  Companies can be wooed with huge tax breaks and frankly, that’s nothing more than commercial welfare.  One of the biggest reason these incentives are given out is because neighboring states are doing it, too.  I have a much better idea:  create an overall tax structure that will encourage ALL types of businesses to the state.  Reduce corporate tax rates so that the total business climate in the state is friendly and inviting.  Companies will come on their own, no need for massive incentive packages.  All companies will benefit and the state won’t look foolish for making a major investment in a company that can just turn around later and leave.

This will be the fourth time that I’ve written about this (12/3/08, 12/11/08 and 3/17/09) and I’m thrilled to see it on the pages of the Wall St. Journal.  Senator John Thune of SD, wrote (emphasis mine):

Our financial markets are no longer in free fall and the crisis has receded. Yet we now find ourselves in a troubling situation where the federal government is a major owner of more than 600 U.S. financial institutions and banks, as well as two auto makers, an international insurance conglomerate, and numerous other businesses…It is time to bring an end to the TARP emergency measures and come up with an exit strategy to get government out of the business of running businesses.”

Hear, hear.  The US Government has no authority to own parts of private businesses.  It did what it had to do (even if I was uncomfortable with it at the time) to keep the economic system afloat, but now that time has passed.  It’s time to divest.