December 25, 2007

The Isolation of The Commute

Every December, NY Times columnist David Brooks names his favorite essays of the year, the Sidney Awards. He recommends this article from NY Times Magazine called "There and Back Again" about the social costs of commuting and extreme commuters. Here;s a sample:

Commuting makes people unhappy, or so many studies have shown. Recently, the Nobel laureate Daniel Kahneman and the economist Alan Krueger asked nine hundred working women in Texas to rate their daily activities, according to how much they enjoyed them. Commuting came in last. (Sex came in first.) The source of the unhappiness is not so much the commute itself as what it deprives you of. When you are commuting by car, you are not hanging out with the kids, sleeping with your spouse (or anyone else), playing soccer, watching soccer, coaching soccer, arguing about politics, praying in a church, or drinking in a bar. In short, you are not spending time with other people. The two hours or more of leisure time granted by the introduction, in the early twentieth century, of the eight-hour workday are now passed in solitude. You have cup holders for company.

“I was shocked to find how robust a predictor of social isolation commuting is,” Robert Putnam, a Harvard political scientist, told me. (Putnam wrote the best-seller “Bowling Alone,” about the disintegration of American civic life.) “There’s a simple rule of thumb: Every ten minutes of commuting results in ten per cent fewer social connections. Commuting is connected to social isolation, which causes unhappiness.”

It's what shows up at the office in the morning that drags the whole company culture down.

November 24, 2007

Why We Trade

Why We Trade:

"The United States has run a merchandise trade deficit every year since 1976. It has also added more than 50 million jobs during that time. Per capita income, corrected for inflation, is up more than 50 percent since 1976. The scaremongers who worry about trade deficits talk about stagnant wages, but they ignore fringe benefits (an increasingly important part of worker compensation) and fail to measure inflation properly

May 19, 2007

The Team

A great business team is like a great band. Surrounding yourself with talent and subordinating your own interests to those of the team is what it's all about.

AC/DC was a great band in the late 70s, and then their lead singer, Bon Scott, tragically died. But they kept going because the rest of the team was so strong. Their highest selling album, Back in Black, was released as tribute to Bon Scott with a new lead singer, Brian Johnson. His screaming vocals, along with Angus Young's guitar riffs, are the enduring characteristics of the band.

As my pastor says, "Show me your friends, and I'll show you your future"

Show me your business team, and I'll show you your business's future.

April 06, 2007

Jonah Goldberg on Rosie O'Donnell on National Review Online

Jonah Goldberg on Rosie O'Donnell on National Review Online:

Renowned metallurgist Rosie O’Donnell proclaimed on TV last Thursday that Sept. 11, 2001, was a more significant date than most of us realized. It was, in her words, “the first time in history that fire has ever melted steel.”

This, of course, came as news to steelworkers, blacksmiths, firefighters, manufacturers of samurai swords, and other fools who hadn’t realized that steel is forged in magic furnaces using dragon breath and pixie dust.

O’Donnell made this and other profoundly stupid comments on the daytime talk show The View, ABC’s update of the ancient practice of women chattering around the village well

December 27, 2006

Kuhn't Answer The Question

Finally reading through the copy of Thomas Kuhn's "The Structure of Scientific Revolutions" on my shelf and I am struck that Kuhn never answers the darn question --> What is the Nature of a Scientific Revolution?

He writes in very long and very thick paragraphs with endless sentences. But he does manage to introduce the world to the concept of "paradigm" (to the delight of business consultants and pop psychologists everywhere) and he tells us that "normal science" is different from a scientific revolution (thanks .. didn't know that) and he relates that when researchers find "anamolies," they may or may not cause a "paradigm-shifting crisis."

IMHO - here's the money quote from the whole book:
(paragraph 8; Section 8 "Response to a Crisis:")
It follows that if an anomaly is to evoke crisis, it must usually be more than just an anomaly. There are always difficulties somewhere in the paradigm-nature fit; most of them are set right sooner or later, often by processes the could not have been foreseen. The scientist who pauses to examine every anomaly he notes will seldom get significant work done. We therefore have to ask what it is that makes an anomaly seem worth concerted scrutiny, and to that question there is probably no general answer
His best answer that I could find is that a persistent anomaly often leads to a scientific revolution. Agree, but why is it persistent?

May 29, 2006

Does Do-Gooding help the stock Do Good?

The American Spectator

"Can CSR help a company's bottom line? Economist Wayne Weingarten analyzed the CSR index compiled by Business Ethics magazine, which looked at 28 prominent companies known to be CSR supporters.

He found that CSR was 'negatively or not correlated with compound annual net income growth, net profit margin, and stock price appreciation.'

I also looked at how Business Ethics magazine rates companies. In the category of 'total return to shareholders,' 48 of 100 companies had negative returns in 2005. The companies were compensated with high scores in such categories as 'diversity,' environment, and human rights. Pity the shareholder.

I also examined the charitable giving of the CSR companies highly rated by Business Ethics. Only 16 of the 39 companies that had corporate foundations gave to what might be called 'political advocacy' organizations, and much of that giving was small and consisted of 'matching gifts.' Even some conservative groups (the Heritage Foundation, Citizens Against Government Waste) received gifts. But lots of corporate foundation giving went to groups that are no friends of corporations -- environmentalist groups like the Natural Resources Defense Council, Greenpeace, Defenders of Wildlife, the Union of Concerned Scientists, Earthjustice, Environmental Defense, and so on. There also were grants to the ACLU, ACORN, Planned Parenthood, and Human Rights Campaign, groups that look to government solutions to social problems rather than to the market. For instance, the Prudential Foundation, the corporate foundation of the financial services giant, has made a grant of $665,000 to the Children's Defense Fund, a group well-known for demanding welfare state entitlement programs.

When I looked at giving by the corporations that are members of Business for Social Responsibility, I found the same trend. Only 40 companies had charitable foundations, but 23 gave to advocacy groups. Again, the giving tilted heavily to the left, especially to environmental groups. "

May 23, 2006


Glenn Reynolds has a great management article in TCS Daily about companies blocking internet use at work
"Well-run companies look at outputs -- how well people are doing their jobs -- rather than simply trying to make sure that employees look busy. And given that U.S. economic performance over the past few years, as Internet usage has boomed, has been excellent, it's hard to believe that this websurfing is really threatening productivity. Instead, I suspect, it's threatening management's sense of control. (After all, if they really cared about people wasting their time with computer technology, they'd ban PowerPoint, not Web-surfing.)
Amen ... and he shows a healthy disrespect for "managers"
Ultimately, this issue isn't about employees but about management. Managers tend to resist output measures because output measures require managers to take uncomfortable action: They have to tell the good employees that they're doing a good job (which tends to encourage the good employees to want more money) and they have to tell the bad employees that they're doing a bad job (which tends to make them resentful and unpleasant). Nonetheless, I think that measuring the work done, rather than just whether employees manage to look busy, is going to be the management trend of the future. Success in business, after all, usually has little to do with whether managers are comfortable or not."
He sounds just like Jack Welch
"I never associate passion with the word manager, and I've never seen a leader without it."

May 16, 2006

More Great Moments in the Objectivity of Science

What bothers me the most here, is that I'm not sure any of the 60% cared that they were doing something unethical.
A recent Ministry of Science study of 180 PhD candidates in China found that 60 percent admitted plagiarizing, and the same percentage admitted paying bribes to get their work published

Publish or Perish?

April 15, 2006

Free from Freedom - Review of Eric Hoffer's The True Believer : Thoughts on the Nature of Mass Movements:
"Unless a man has the talents to make something of himself, freedom is an irksome burden...We join
a mass movement to escape from individual responsibility, or, in the words of an ardent young
Nazi, 'to be free from freedom.' It was not sheer hypocrisy when the rank-and-file Nazis declared
themselves not guilty of all the enormities they had committed. They considered themselves
cheated and maligned when made to shoulder responsibility for obeying orders. Had they not
joined the Nazi movement in order to be free from responsibility?"
Is this why Big Companies struggle with innovation, growth, and creativity? - because the survivors and ladder-climbers like the "freedom from reality" that a large bureaucracy provides.

January 29, 2006

Successful Staff Meetings

I'm going to use this during my next meeting.
The principal, Andrew Buck, said it is always the same children who wave their arms in the air, while the rest of the class sits back. When teachers try to involve less-adventurous pupils by choosing them instead, that leads to feelings of victimization.


January 01, 2006


These three headlines should depress anyone who appreciates the vast contributions Germany has made to Western Civilization

Empty Maternity Wards Imperil a Dwindling Germany
Germany's falling birthrate is entering its second generation, with dwindling number of potential mothers failing to have enough children to reproduce population; reunification with eastern Germany, where birthrate is even lower than in west, has made matters worse; nation is running out of people it needs to sustain its advanced social systems and public infrastructure; low birthrate is rippling through society in unlikely ways, including sparking competition among hospitals for maternity patients; population experts note even Turkish and other immigrants tend to adapt to national birthrate of 1.3 children per couple within generation
Germans leaving country to escape unemployment
Germans are leaving their country in record numbers but unlike previous waves of migrants who fled 19th century poverty or 1930s Nazi terror, these modern day refugees are trying to escape a new scourge -- unemployment.

Flocking to places as far away as the United States, Canada and Australia as well as Norway, the Netherlands and Austria more than 150,000 Germans packed their bags and left in 2004 -- the greatest exodus in any single year since the late 1940s.
Where will the next Einstein, Leibniz, or Mozart come from?

December 10, 2005

Adaptive Technology Transfer

. Nicola Tesla got his inspriation for the AC induction motor from a Goethe poem and drew the first schematic in the sands of a Budapest Park.

This article about Bill Walsh is another gem
Digital Rules (By Rich Karlgaard)
Bill Walsh, Maverick Football Coach

Forbes hired me in 1992 to start a technology magazine called Forbes ASAP. How great was this! The job even came with a decent budget to hire top writers.

I immediately signed up three of my own maverick heroes to write articles and columns. Two were obvious picks:

• George Gilder, who could see around corners. And write better than anyone else.

• Tom Peters, the offbeat management thinker. Author of the pathbreaking, myth-busting, mega bestseller, In Search of Excellence.

My third pick was a surprise. Bill Walsh had no known writing talents, but I knew he was extremely well-read on football and military history. He had no obvious fit in a technology magazine, but I also knew Walsh was an innovator and a futurist.

Walsh took over the San Francisco 49ers in 1979. The team had gone 2-14 during the prior season. Three years later the 49ers beat the Dallas Cowboys in the NFL championship and the Cincinnati Bengals to win the Super Bowl.

Coach Walsh invented what is today known as the West Coast offense. This featured, and still does, short passes with a high percentage of completion.

Batting around column ideas with Walsh one day, I asked him to explain the origin of this offense. Basketball, Walsh said.

“One day I was watching a basketball game. A close game. One team was in a full-court press. Yet the other team was able to get the ball inbounds and up the court 90% of the time.

“I asked myself, how can they do that, when the defense is all over them?

“So I watched lots of basketball film to learn the answers. Then I applied the lessons to football.”

That's why Walsh drafted Joe Montana in 1979. Montana's huge success as a pro quarterback – three Super Bowl wins and a first-ballot Hall-of-Fame pick – now makes Walsh's draft choice look like a no-brainer. But it was a controversial pick at the time. Montana was only the fifth quarterback selected in the 1979 draft. The pro scout view of Montana: Too skinny. Arm not strong enough.

But once Walsh had his idea of applying basketball strategy to football, choosing an athlete like Montana made sense. Montana, you see, played basketball at his Pennsylvania high school. He played guard and made first-team, all-state during his senior year. In fact, Montana went to Notre Dame with the hope of playing both basketball and football.

Walsh picked Montana not for his rifle arm, but for his peripheral vision. For Montana's proven ability to improvise and dish the ball to an open man.

Bill Walsh liked to borrow ideas from military history, too. He had read On War, the classic written in 1832 by Carl von Clausewitz, the Prussian military thinker. Walsh liked to spend vacations walking the Civil War battlefields.

For three years, Walsh wrote a column for Forbes ASAP. He taught our readers a priceless lesson: If you want to be a innovator, look for ideas outside your own playing field.

It's still a great lesson

August 17, 2005

Forensic Evidence for Macroeconomics

First a woman gets trampled over a DVD Player and now this:
RICHMOND, Va. - People trampled, beaten with a folding chair. A woman urinating on herself. The police called, then themselves calling for backup. All to get a bargain.

The stampede erupted Tuesday when a crowd estimated at 5,500 showed up at the Richmond International Raceway to purchase 1,000 used Apple iBook laptop computers. The Henrico County school system was selling 1,000 of the 4-year-old computers to county residents for $50. New iBooks cost between $999 and $1,299.

Officials opened the gates at 7 a.m., but some already had been waiting since 1:30 a.m. When the gates opened, it became a terrifying mob scene. People threw themselves forward, screaming and pushing each other. Witnesses said an elderly man was thrown to the pavement, and someone in a car tried to drive his way through the crowd.

Blandine Alexander, 33, said one woman standing in front of her was so desperate to retain her place in line that she wet herself
Alfred Marshall would be proud.

August 16, 2005

Great Moments in Alternative Energy

Why did they think of this?
Researchers in Singapore have developed a paper battery that is powered by urine. Despite sounding gloriously silly, the breakthrough promises a cheap and disposable power source for home health tests for things like diabetes.

The battery is composed of paper, soaked in copper chloride, sandwiched between layers of magnesium and copper. The whole thing, once laminated in plastic, is just a millimetre thick, and 6cm by 3cm in size.

The researchers report that with just 0.2 millilitres of urine the battery will provide around 1.5 volts, with a maximum power output of 1.5 milli-Watts. The performance varies according to the geometry of the battery, and the materials used

Rodent Revelry

This begs the question
A Vanderbilt University research squad has illustrated what the Victorians and Mary Whitehouse knew all along: that smut sends you blind, albeit temporarily. The same apparently applies to blood and guts images, although of course eyeballing snaps of carnage does not carry the same penalty of eternal damnation as ogling smut.

Vanderbilt Uni psychologist David Zald and his team exposed guinea pigs to a barrage of 'disturbing' images interspersed with landscape or architectural snaps, telling them to scan the images for a certain target image. The press release explains: 'An irrelevant, emotionally negative or neutral picture preceded the target by two to eight items. The closer the negative pictures were to the target image, the more frequently the subject failed to spot the target. In a subsequent study, which has not yet been published, the researchers substituted erotic for negative images and found the same basic effect.
Who actually makes porno films for guinea pigs?

August 12, 2005

Speeding Up by Slowing Down

The Corner on National Review Online
Economically-literate readers might like to turn their hand to parsing these two paragraphs:

The European economy appears to be regaining some momentum and the indications are that things will continue to improve in the second half of the year, the European Commission announced yesterday (11 August)

Presenting its growth figures for the second quarter of 2005, the Commission said that the euro zone had grown by 0.3%, a much stronger performance than most analysts had expected, although weaker than the 0.5% seen in the first three months of the year.

Only in Brussels could 'regaining momentum' mean slowing down, and 'stronger than expected' mean worse than you would expect given the last evidence. By this metric, of course, the EU is militarily strong, its borders secure and its leaders stalwart, which is what they all appear to think."

July 17, 2005

Great Moments in the Objectivity of Science

Are you kidding me?
According to an eye-popping article in the June 9 Nature, about one-third of more than 3,200 polled U.S. researchers funded by the National Institutes of Health self-reported serious scientific misbehavior during the three years prior to being surveyed.

High responses for serious infractions came in categories such as "Failing to present data that contradict one's own previous research" (6% of respondents), "Changing the design, methodology or results of a study in response to pressure from a funding source" (15.5%) and for lesser categories such as "Dropping … data … based on a gut feeling that they were inaccurate" (15.3%). Because the answers are self-reported, the polling researchers think the results may be underestimated. The researchers speculate that misbehaviors are keyed to "perceptions of inequities in the [science] resource distribution" process, and argue that identifying those perceptions might aid the promotion of scientific integrity.
And given that the press OVER-reports the significance and depth of what "research suggests" or "scientists have proved" and it sure feels like more than half of what we read is just plain wrong.

May 11, 2005

Seven Trillion Dollars

An especially clear and informative Special Report on Oil in last weeks Economist (subscription only)
Official American estimates suggest that over the past 30 year OPEC's machinations transferred over $7 trillion in excess profit from consumers to producers. And the cartel's coffers are still overflowing: OPEC's oil-export revenues have shot up from about $100 billion in 1998 to perhaps $340 billion last year.
Feel good about that? What's the authors take on the biggest reason we may run out of oil? Not because we'll drain the Earth's supply but rather:
That points to the most explosive criticism levelled at the oil majors: that they no longer have the capacity to innovate. A few decades ago these firms were fiercely proud of their proprietary technologies, which they believed gave them a competitive edge. But during the 1990s most majors slashed funding in this area, leaving service firms such as Schlumberger and Halliburton to pick up the slack . Ten-dollar oil killed upstream research,” says one executive. Ivo Bozon of McKinsey, a consultancy, reckons that the majors slashed upstream R&D spending from $3 billion in 1990 to below $2 billion in 2000 (both in current dollars). Over the same period, the service companies increased their investment in research from $1.1 billion to $1.7 billion. The sharpest cuts, adds Mr Bozon, were made by American companies. These guys need to explore, but they don't know how to do it any more,” complains Roice Nelson of Geokinetics, which makes reservoir visualisation software for the oil industry. Mr Nelson helped found Landmark Graphics, an industry pioneer in imaging software, so his criticism stings. He notes that the industry sacked many of its best-qualified technical staff, and that relatively few college students now are going into petroleum engineering. “We'll be working till we're past 80,” he sighs
the innovation is now taking place a smaller, more nimble risk-tolerant firms.
The majors now realise that this shift away from technology, once their core strength, was a mistake that has benefited three groups of rivals: the service companies, the “mini-majors”, and the NOCs. Mr Lesar at Halliburton is delighted: “There's been a fundamental shift in ownership and development of technology from the majors to the service companies.” The problem is that the service companies are less capable of investing for the long term, because their balance sheets tend to be weaker than the majors'. Moreover, they need their customers to adopt those technologies to make them commercially viable—but the majors have proved gun-shy. The shift in innovation has been a boon to smaller oil companies, which are not so risk-averse. Especially since the wave of mergers, the majors need mega-projects with long lives to replace reserves. That has made them wary of trying new technologies. Chevron's Mr Robertson says that taking a flier on a project with a long lead time and high investment is simply too risky for his firm. Mr Farris, Apache's chief executive, takes quite a different approach: “We go to the service companies and say, ‘What have you got?' Hell, we'll spend money to try it.”
I'll buy the first part of the concern ... the smaller innovators can only go so far until a Major buys into the idea, if not, a good idea could die. But I still think large companies are inefficient at R&D, and discourage their own entrepreneurs by score-keeping and bean counting. Read Clayton Christensen.

May 09, 2005

The Myth of the Executive Job

Just to be Fair and Balanced - I wrote here about the Myth of the Manufacturing Job. This was not an anti-manufacturing, anti-union screed per se, but I was trying to show the code-words used by politicians as well give some context to the discussion.

Now to pick on the other end of the corporate ladder: there are just plain too many Executives Positions in American business. We still have too much overhead. In this unbelievably sophisticated information age, why do we have more managers, more executives to manage (babysit) the real producers in a company?

We used to have a CEO, a CFO and, maybe a COO. Now we have all kinds of CxO's

CTO - Chief Technology Officer
CPO - Chief Procurement Officer
CPO(2) - Chief Privacy Officer
CMO - Chief Marketing Officer
CIO - Chief Information Officer
CGO - Chief Growth Officer
CQO - Chief Quality Officer
CDO - Chief Diveristy Officer

When you confer titles like that on people you are just asking for it. The first thing they do is stop doing actual work (the Chief Officer is above the fray, a strategy person) The second thing they do is work on their Org Chart and begin justifying more staff (Chief Officers need staff to tell them what's going on - and that staff growth is usually in the Corporate Office, not out in the real world as Chief Officers hate to be lonely at HQ). The last thing they ever do is get their hands dirty and drive change at the front lines of the business world, where it counts.

I evolved a personal business philosophy by working at the grassroots, working level of many different business operations, and I really believe that if you are not Selling, Designing, Making, Buying, or Fixing (service), you are an overhead cost burden to the firm that should be zero-base justified each year.

Why does your position exist?

Is it to coordinate, track, check-up-on, communicate, story-tell, or work on "process" issues? Some of these things may be necesssary evils in a modern corporation, but nevertheless, they still are evil.

Of course we need an executive staff to support the broad needs of the company. But these should be small elements, staff jobs -- not "Chief Officers." They should have a small group of support specialists serving the needs of the people actually doing business.

I think the growth in these Mythical Executive positions is a result of inexperienced senior leaders with no real depth in their market or trade. Jeff Immelt @ GE sees it this way:
Jeff, the Harvard Business School graduate, is out to banish Cordiner's ghost for good. "I absolutely loathe the notion of professional management," he told an MIT audience in September. Which is not an endorsement of unprofessional management but a statement that, for instance, the best jet engines are built by jet-engine people, not by appliance people. Rotate managers too fast, moreover, and they won't experience the fallout from their mistakes— nor will they invest in innovations that don't have an immediate payoff. "
He's right. This strange, tri-polar (US, China. India) global economy can ill afford know-nothing executives moving from job-to-job, industry-to-industry, faking their way through and escaping before disaster. Again, since they don't really know anything, they have to build a large staff to keep them informed enough to appear successful.

How do we cull the mythical executives? Well, the pendulum always swings the other way. Our system forces companies to re-trench and evaluate cost structures frequently. In time, shareholders will ask "How REAL are these executive positions? What do they actually do?"

April 16, 2005

EU Corruption Update

More from the The Economist ... talking about hanging on to the last fig on a dying tree.

Members of the European Parliament rejected reforms to clamp down on abuses of expenses and allowances. So MEPs will go on claiming reimbursement for bills they have not incurred, hardly a way of making their unloved institution more loved.
Gotta love those folks.


In the Great Debate concerning centralization vs decentralization, folks need to realize there is no one answer. I've long felt that current market needs should dictate how a business is organized. Certainly, McKinsey makes a lot of money telling people to centralize their purchasing to save money via consolidated, larger volume purchasing. (Why anyone with a 2nd grade education needs to pay someone to tell them that ... I do not know).

But conversely, there are times when folks need to be just plain entrepreneurial and feel empowered to go make things happen and meet market needs quickly, changing the world right where they stand.

Here's a great example from a "market" where creative, quick solutions should definitely win out over the plodding behemoth of a bureaucratized centralized procurement organization.
Around the same time, more troops became aware of the presence, and success, of SOCOMs (Special Operations Command) free-wheeling style of procurement. SOCOM personnel were given considerable freedom to find the best equipment and weapons for the job, wherever they could find it. When the Internet became widely available in the 1990s, more military personnel became aware of SOCOMs methods. At the same time, more and more new, relatively inexpensive technologies began to appear. Perhaps the most dramatic example of this is found in the development of micro-UAVs. New materials, digital cameras and wireless communications technologies combined to produce inexpensive (by military standards) UAVs weighing under ten pounds. It’s also no accident that many of these look, and perform, like the small, remote control aircraft, built and operated by hobbyists. The gadget geeks were also building “toy robots” that soon turned into battlefield tools for checking out caves, or possible booby traps. After September 11, 2001, some of these hobby projects were sent off to war. While the traditional military manufacturers scoffed at the idea of hobbyist remote control aircraft being used by the military, the troops had a very different idea. For an infantryman, or Special Forces operator, a five or ten pound remotely controlled aircraft, that could send back live images of what it was seeing over the hill or around the bend, could be a lifesaver.
Of course, matrix organizations claim to be able to provide the best of both worlds ... centralization for scale, decentralization for speed and service. But you do have to be able to pay for those extra folks.

March 14, 2005

Old Man River Watts

Verdant Power makes High Humidity Wind Turbines
My wind power brethren say their turbines generate more power when it's humid," said Trey Taylor, president of Washington-based Verdant Power, which makes underwater turbines. "I like to say, 'You can't get any more humid than water."'
and you can't get anymore dorky than this "helical turbine"

Here are specs ....
* Units designed to convert kinetic hydro energy to electric power in ranges from 25 kW to 250 kW depending on model size and water flow velocities (models planned; 25 kW, 50 kW & 100 kW)

* Units deployed in water currents with flow velocities of five feet per second (3 knots) or more, and in depths of at least six meters (20 feet)

* Significant electric power generated when multiple units are clustered into a "field" forming a group of generating units (each field producing power from 100 kW to 10 MW)
I think it can power my cellphone for about a week.

February 18, 2005

Not Exactly the Road to Serfdom

From Brother's Judd read the linked article in the San Frnscisco Chronicle about employees being fired because they smoked at home:

HOW DOES freedom slip away? It doesn't happen one day, all of a sudden, without warning. It erodes in stages. One day you read that an employer has fired four employees because they refused to follow the company's no smoking policy -- including not smoking in their own homes on their own time -- and that's OK, because you don't smoke. A year or two later, employers go after your pet vice -- eating, tippling, maybe snowboarding -- and then such a policy is an outrage.

So Americans should be wary of the news last month that a Michigan health- benefits administrator, Weyco Inc., sacked four employees because they wouldn't follow a company policy that required all employees to "maintain a smoke-free and tobacco-free status at all times."

That's right. They can't smoke at home. They can't smoke on their own time. To work for Weyco Inc. is to be owned by Weyco Inc. And the Weyco way may well be legal

Here's Bro Judds takeaway comment
The notion that your employer need not just stand by while you kill yourself but also pick up the tab bastardizes the concept of freedom beyond recognition. You're free to smoke or to work for Weyco. It's your choice

February 14, 2005

Do as we say, not as ...

Oops (courtesy Brother's Judd)
THE Kyoto Protocol takes effect this week but Japan, where the landmark environment treaty was sealed, is not fully prepared, its industry scared that a push to cut pollution will set back economic recovery.

The treaty aimed at curbing global warming - signed in 1997 in Japan's former capital, Kyoto - obliges the world's second-largest economy to cut 1990 levels of greenhouse gas emissions by 6 per cent within a timeframe of 2008 to 2012.

But 11 of Japan's 30 industry sectors, including steel and power, risk failing to meet their self-imposed targets in cutting carbon dioxide emissions, a Ministry of Economy, Trade and Industry (METI) study revealed this month.

It found that Japan's emissions were going up as the economy expanded from a 10-year slump.

The survey has led the powerful trade ministry to reopen talk of imposing government, rather than voluntary, targets on emissions with taxes to coax violators - an idea opposed by big business.
Can't you tell how excited they are?

January 17, 2005

You're Not Allowed to Say That!

From Bro Judd, you have to love the unintentional self-parody in this Globe article regarding Larry Summers recent speech:
The president of Harvard University, Lawrence H. Summers, sparked an uproar at an academic conference Friday when he said that innate differences between men and women might be one reason fewer women succeed in science and math careers. Summers also questioned how much of a role discrimination plays in the dearth of female professors in science and engineering at elite universities.

Nancy Hopkins, a biologist at Massachusetts Institute of Technology, walked out on Summers' talk, saying later that if she hadn't left, ''I would've either blacked out or thrown up."
Can you see a man fainting or throwing up over a speech?

Read the whole article, especially the context of Summers describing recent research, not voicing some hidden prejudice, and you can see how, um, sensitive Ms. Hopkins really is.
Summers said he was only putting forward hypotheses based on the scholarly work assembled for the conference, not expressing his own judgments -- in fact, he said, more research needs to be done on these issues. The organizer of the conference at the National Bureau of Economic Research said Summers was asked to be provocative, and that he was invited as a top economist, not as a Harvard official.
and I hadn't heard of this, but it feels right to me.
Summers' third point was about discrimination. Referencing a well-known concept in economics, he said that if discrimination was the main factor limiting the advancement of women in science and engineering, then a school that does not discriminate would gain an advantage by hiring away the top women who were discriminated against elsewhere.

Because that doesn't seem to be a widespread phenomenon, Summers said, ''the real issue is the overall size of the pool, and it's less clear how much the size of the pool was held down by discrimination."

''I believe that it's an important part of what I do to encourage frank scientific discussion," he said. ''I would hope and trust that no one could [doubt] that we are absolutely committed to promoting the diversity of the faculty."
Now we just need Corporate America to follow Harvard and embrace honest discussion of diversity instead of guilt-mongering, standards-lowering, and targeted-tokening.

January 14, 2005

TCS: From "Peace of Mind" to "A Piece of the Action"

Great article on the real origins of the Social Security Mess
Economist Paul Craig Roberts described these problems in detail in an article written in 1983. Here is -- literally -- the money quote:
"President Ford, at the apparent urging of his political advisors and with the apparent blessing of his chairman of economic advisors, Alan Greenspan, wished to appear more generous. Ford opted for the much more expensive wage-indexing procedure. This single mistake added well over $2 trillion in unfunded liability in present value terms to the system's long-run deficit. It accounts for more than 100 percent of [Social Security]'s deficit."
Since Roberts wrote this in 1983 consumer prices have risen by about 80%. So the $2 trillion in present value terms he referred to then would be worth about $3.6 trillion now. That's not too far from recent estimates by economists John Cogan and Olivia Mitchell that put the system's long-run deficit at about $3.2 trillion. And -- plus ca change -- the impact of wage indexing still accounts for more than 100% of the estimated shortfall.
Read the whole article to get the good insight on how the urge to "just do something" can be devasting in the long run.

January 02, 2005

Scary Fish

Found a great Website "Canstats" that has load of statistics and follow ups to bad science & bad reporting. Their list of "great media scares in 2004" is classic. I love the salmon scare most:
Farmed Salmon

From PCBs to sea lice, the media really beat-up on farmed salmon in 2004. It started in January when the journal Science released a report about the differences between PCB concentrations in wild and farmed salmon. But in The Great Salmon Panic of 2004, Kenneth Green pointed out that the levels reported were well below acceptable health standards. This bulletin had an interesting follow-up in November when Jeremy Brown and Kenneth Green in Good News is No News: Media Failure to Cover Salmon Study Skews Public Perception showed that an industry group, following the same methodology, found the PCB concentrations in wild and farmed salmon were much closer. Yet unlike a previous study that had alarming findings, this study received virtually no media attention.
Why would the media report an angle 180 degress from their preferred slant?

December 30, 2004

Hayek, Hospitals, and Healthcare

That NY Times, Gina Kolata article is really two articles woven together. The first (see my other post) is that Hospitals have just discovered the 20th Century regarding measuring performance. But the second idea, that socialized medicine creates this operational retardation, just proves the laws of unintended consequences and begs us to consider Einstein's great thought about the circle of insanity.
The federal government is now telling patients whether their local hospitals are doing what they should.
Feel Better?
For now, the effort involves three common and deadly afflictions of the elderly - heart attacks, heart failure and pneumonia - and asks about lifesaving treatments that everyone agrees should be given but that hospitals and doctors often forget to give.

Medicare expects that now that the hospitals' performances are public, many will try to improve. "People will begin to feel a little awkward if everyone else is doing better and they're not," Dr. Jencks said.

The next step, Dr. Jencks said, is "aligning payment with what you want people to do."

To that end, Medicare has a pilot program to pay hospitals for improving on a number of quality measures, including mortality rates and readmission rates for hip or knee surgery. Hospitals in the top 10 percent for a given condition, for example, will be paid an extra 2 percent. The agency will pay less if performance deteriorates. The project involves 278 hospitals affiliated with Premier, a nationwide organization of nonprofit hospitals..

"Basically, it was a flip of coin, whether you got good medical care or you didn't," Dr. Asch said. "It didn't matter where you lived. The shortfalls were constant."

"That challenged us to ask why these medical care problems were so pervasive," he said.

At least part of the answer, he and others say, is that doctors are unaware of their shortfalls and are rewarded no matter how well they do.

"That will be a bitter pill to swallow, and I'm not sure people will swallow it," Dr. Califf said. "There's a lot of money being made on things that don't work well."

Dr. Jencks agreed.

"I would say we are moving much more slowly on trying to prevent overuse than in trying to fix underuse," he said. "If I tell a physician he shouldn't do a surgery he wants to do, I personally would anticipate a lot more resistance than if I told him he should give a medicine he wasn't thinking of giving.

"Medical care is one of those very strange parts of the economy where you get paid no matter what the quality of the service you provide," Dr. Asch said. "It is like you went to a car dealership and your Mercedes is going to cost you the same as your Yugo.
So here's the question?

Why do we think the government should intrude more to fix this? Do we really discard the ideas from The Fatal Conceit and content ourselves that the government will get it right this time. Our big fat bloated Federal Health Care System will be nimble enough and smart enough to pick the right things to measure?

I'm sure they will reply that only those courses of treatment with "expert consensus" will be measured, and as the article states, only those treatments that "everyone already agrees on" (whatever that means).

Michael Crichton owns the Consenus Canard
I want to pause here and talk about this notion of consensus, and the rise of what has been called consensus science. I regard consensus science as an extremely pernicious development that ought to be stopped cold in its tracks. Historically, the claim of consensus has been the first refuge of scoundrels; it is a way to avoid debate by claiming that the matter is already settled. Whenever you hear the consensus of scientists agrees on something or other, reach for your wallet, because you're being had.

Let's be clear: the work of science has nothing whatever to do with consensus. Consensus is the business of politics. Science, on the contrary, requires only one investigator who happens to be right, which means that he or she has results that are verifiable by reference to the real world. In science consensus is irrelevant. What is relevant is reproducible results. The greatest scientists in history are great precisely because they broke with the consensus.

There is no such thing as consensus science. If it's consensus, it isn't science. If it's science, it isn't consensus. Period.

In addition, let me remind you that the track record of the consensus is nothing to be proud of. Let's review a few cases.

In past centuries, the greatest killer of women was fever following childbirth . One woman in six died of this fever. In 1795, Alexander Gordon of Aberdeen suggested that the fevers were infectious processes, and he was able to cure them. The consensus said no. In 1843, Oliver Wendell Holmes claimed puerperal fever was contagious, and presented compellng evidence. The consensus said no. In 1849, Semmelweiss demonstrated that sanitary techniques virtually eliminated puerperal fever in hospitals under his management. The consensus said he was a Jew, ignored him, and dismissed him from his post. There was in fact no agreement on puerperal fever until the start of the twentieth century. Thus the consensus took one hundred and twenty five years to arrive at the right conclusion despite the efforts of the prominent "skeptics" around the world, skeptics who were demeaned and ignored. And despite the constant ongoing deaths of women.

There is no shortage of other examples. In the 1920s in America, tens of thousands of people, mostly poor, were dying of a disease called pellagra. The consensus of scientists said it was infectious, and what was necessary was to find the "pellagra germ." The US government asked a brilliant young investigator, Dr. Joseph Goldberger, to find the cause. Goldberger concluded that diet was the crucial factor. The consensus remained wedded to the germ theory. Goldberger demonstrated that he could induce the disease through diet. He demonstrated that the disease was not infectious by injecting the blood of a pellagra patient into himself, and his assistant. They and other volunteers swabbed their noses with swabs from pellagra patients, and swallowed capsules containing scabs from pellagra rashes in what were called "Goldberger's filth parties." Nobody contracted pellagra. The consensus continued to disagree with him. There was, in addition, a social factor-southern States disliked the idea of poor diet as the cause, because it meant that social reform was required. They continued to deny it until the 1920s. Result-despite a twentieth century epidemic, the consensus took years to see the light.

Probably every schoolchild notices that South America and Africa seem to fit together rather snugly, and Alfred Wegener proposed, in 1912, that the continents had in fact drifted apart. The consensus sneered at continental drift for fifty years. The theory was most vigorously denied by the great names of geology-until 1961, when it began to seem as if the sea floors were spreading. The result: it took the consensus fifty years to acknowledge what any schoolchild sees.

And shall we go on? The examples can be multiplied endlessly. Jenner and smallpox, Pasteur and germ theory. Saccharine, margarine, repressed memory, fiber and colon cancer, hormone replacement therapy. The list of consensus errors goes on and on.
Feel better about Government involvement here?

This same Federal Gov't that itself can't account for billions in expenditures each year is the best, most flexible and knowledgable place to decided what procedure to track?
In the two-volume report, "Government at the Brink," issued in June by the Senate Committee on Governmental Affairs, it is reported that the figure is significantly higher. The report states, "The Education Department reported in its financial statements that it had $7.5 billion in the bank, when it actually owed that money to the U.S. Treasury." This amounts to a discrepancy of $15 billion. The books of the education department were actually off by a total of $15 billion — about one-third of what the department spends annually.
What do you think our patron saints would have to say? ... ask him, him and watch this.

Look, if the government measures it, rewards it and punishes those not complying, they'll get results. Hospitals will follow those requirements to a "T". All industrial processes organize and adapt to to the metrics; make the numbers. But where does that ultimately lead?

I'm glad the government woke the hospitals up and now they check whether they actually do what they prescribe, but it was the government's intrusion into this market that caused the lax controls in the first place. We are insane to think that long term they won't make it worse still.

Hospitals Arrive at the 20th Century

Virginia Postrel notes this article in the New York Times on a radical concept ... measuring your performance. Really, millions of people, hundreds of """"""experts"""""" will read this and consider it some sort of big deal.
And it is a response to a sobering reality: lifesaving treatments often are forgotten while doctors and hospitals lavish patients with an abundance of care, which can involve expensive procedures of questionable value. The results are high costs, unnecessary medicine and wasted opportunities to save lives and improve health.

For example, the hospitals were asked how often their heart attack patients got aspirin when they arrived (that alone can cut the death rate by 23 percent). When they were discharged, did they also get a statin to lower cholesterol levels? Nearly all should, with the exception of patients who have had a bad reaction to a statin and those rare patients with very low cholesterol levels. Did they get a beta blocker? (No)

Once hospitals learned their score, it was up to them what to do. Over the next year, ones that improved in these measures saw their patient mortality from all causes fall by 40 percent. Those whose compliance scores did not change had no change in their mortality rate, and those whose performance fell had increases in their mortality rates.

"Those are the most remarkable data I have ever seen," said Dr. Eric Peterson, the Duke researcher who directed the study and has reported on it at medical meetings.

The new efforts to improve care came about because the time was right, health care researchers say. "It's really an accumulation of scientific knowledge about what quality means," Dr. Califf said. And there was a growing realization that quality care was not always being provided

The new initiatives have one thing in common - they abandoned the traditional assumption that if doctors know what works, they will provide it
What a bunch of BS. This is not "scientific knowledge." This is basic industrial quality control. Nobody in Real Business makes those "traditional assumptions." Who in the world thinks in such naive terms - that a prescribed course of action just magically goes forward without monitoring and control? Where were these people during the 1980s Quality Revolution?.

This next part is priceless.
The solution, Dr. Gross said, was to assign specially trained nurses to see what care was provided and remind doctors when important steps were omitted. The result was immediate improvement, Dr. Gross said, even in items not on Medicare's list
You've got to be kidding me. I'll take a 3rd Grader with a checklist and do just as well.

Again, the articles goes one to describe the root causes..
Doctors do know what works, said Dr. Steven M. Asch, a health care researcher at the V.A. Greater Los Angeles Health Care System and the RAND Corporation in Santa Monica. But, he found, Americans got just half the tests and treatments they should be getting.

"Basically, it was a flip of coin, whether you got good medical care or you didn't," Dr. Asch said. "It didn't matter where you lived. The shortfalls were constant."
This kind of operational performance would bankrupt your average free-market industrial company. We all learned a long time ago that you have to do both things well: Design (diagnosis & prescription) and Manufacturing (treatment). This analogy holds very well.

For half my career, I have been on the operations/execution side of Corporate America. The best design, the best diagnosis to a customer problem, the brightest engineer in the world ... these things are worth NOTHING if they aren't actually implemented and executed at a high rate of quality.

Why am I even writing about this? Why is the New York Times? This is CLASSIC Deming, classic Juran, classic TQC, and of course mainstream Six Sigma.: Measure what you say you'll do.

Of course chaotic creativity, intelligence, innovation, still need to go into the what you do and how you do it. What's the best design approach, what's the best course of treatment?. But this article isn't even referring to that ... it assumes that has already been decided (decided by 'consensus' and the government -- good grief, what will free-market folks say about this ...see the companion post)

No, this whole article is telling us that our high priced health care system ... the best in the world, needs the Federal Government, of all things, to incentivize hospitals to check whether we receive the prescribed treatment Well I guess "better late then never" applies here, but I truly believe government intrusion into healthcare shielded hospitals from a Free Market that would have forced this on them a long time ago.

So the government is now trying to fix a problem it created. What's their record on that...0 for 10,000?

December 27, 2004

Hindu Hotdogs

Why There's No Escaping the Blog - FORTUNE (Hat Tip: Instapudit)
Just as Rathergate was breaking, corporate America got its clearest sign of blogger muscle—in this case, brought on not by memos but by a Bic pen. On Sept. 12 someone with the moniker "unaesthetic" posted in a group discussion site for bicycle enthusiasts a strange thing he or she had noticed: that the ubiquitous, U-shaped Kryptonite lock could be easily picked with a Bic ballpoint pen. Two days later a number of blogs, including the consumer electronics site Engadget, posted a video demonstrating the trick. "We're switching to something else ASAP," wrote Engadget editor Peter Rojas. On Sept. 16, Kryptonite issued a bland statement saying the locks remained a "deterrent to theft" and promising that a new line would be "tougher." That wasn't enough. ("Trivial empty answer," wrote someone in the Engadget comments section.) Every day new bloggers began writing about the issue and talking about their experiences, and hundreds of thousands were reading about it. Prompted by the blogs, the New York Times and the Associated Press on Sept. 17 published stories about the problem—articles that set off a new chain of blogging. On Sept. 19, estimates Technorati, about 1.8 million people saw postings about Kryptonite (see chart).

Finally, on Sept. 22, Kryptonite announced it would exchange any affected lock free. The company now expects to send out over 100,000 new locks. "It's been—I don't necessarily want to use the word 'devastating'—but it's been serious from a business perspective," says marketing director Karen Rizzo. Kryptonite's parent, Ingersoll-Rand, said it expects the fiasco to cost $10 million, a big chunk of Kryptonite's estimated $25 million in revenues. Ten days, $10 million. "Had they responded earlier, they might have stopped the anger before it hit the papers and became widespread," says Andrew Bernstein, CEO of Cymfony, a data-analysis company that watches the web for corporate customers and provides warning of such impending catastrophes.

Those who have tried to game the blogosphere haven't done much better. Mazda, hoping to reach its Gen Y buyers, crafted a blog supposedly run by someone named Kid Halloween, a 22-year-old hipster who posted things like: "Tonight I am going to see Ministry and My Life With the Thrill Kill Cult.É This will be a retro industrial flashback." He also posted a link to three videos he said a friend recorded off public-access TV. One showed a Mazda3 attempting to break dance, and another had it driving off a ramp like a skateboard, leading in both cases to frightening crashes. Other bloggers sensed a phony in their midst—the expensively produced videos were tip-offs—and began talking about it. Suddenly Mazda wasn't being hailed; it was being reviled on widely read blogs. "Everything about that 'blog' is disgusting," wrote a poster on Autoblog. Mazda pulled the site after three days and now says it never intended it to have a long run. "It was a learning experience," says a spokesman. Tig Tillinghast, who runs the respected advertising industry blog, calls Mazda's blogging clumsiness "the moral equivalent of doing an English-language print ad that was written by a native French speaker."

"If you fudge or lie on a blog, you are biting the karmic weenie," says Steve Hayden, vice chairman of advertising giant Ogilvy & Mather
Being a rabid blogger and a Corporate Executive, I've certainly sensed the "transperency" aspect of blogging as very threatening. Companies do a lot to suppress bad news...I don't find it as sinister as the sensational cases (Enron-WorldComm-Adelphi etc). I'm thinking of the bland-ass Company Newsletter (now Website) that wreaks of Orwellian happy news. I do find good companies unbelievably self-critical, but they rarely do it publicly. You don't see a Fortune 100 Harvard MBA CEO blubbering through a bitten lower lip re-hashing his failure in front of the world.

So when it comes to the immediate impact on new products, unhappy customers, and "getting real', I see corporate leaders very generationally challenged. They will be caught with their pants at their ankles. If there were a serious blog for every Fortune 500 company...a group blog like Command Post..look out. You could say that we've had whiny hysterical message boards for years and they done nothing much, but blogs are different and they have real traction and many times, real accountability. The message boards never took downs a News Anchor.

The Ultimate Skunk Works

Worming Into Apple is a story about a programmer who not only kept working on a project after it was canceled, but even after he was laid off.

Avitzur sneaked into Apple's California HQ for six months to write a software program that, through luck and hard work, is still included on every Mac sold today.

Unemployed and living on savings, Avitzur worked 12-hour days, seven days a week, to create Graphing Calculator in the unlikely hope that Apple would bundle it with new computers.

Not only did he toil for free, Avitzur persuaded another unemployed programmer, Greg Robbins, to sneak into Apple with him. He also paid subcontractors out of his own pocket, and eventually convinced entire teams of testers and researchers to refine his software.

Meanwhile, Avitzur and Robbins worked in vacant offices, avoided Apple security and gained access to the campus by tailgating employees as they showed up for work
I love this line
The best part is the kids who have been using it," said Avitzur "We were building toys for young nerds."

But he added, "Even now, I look back and wonder if I was horribly taken advantage of, or whether I was in control. I can't honestly tell."
And here's the classic paradigm that Big Big Companies (HP, IBM, GE) never ever will allow.
Skunkworks projects are a long-standing tradition in Silicon Valley. Many engineers work on personal projects in the hope they will be turned into products, even if they've been previously canceled. Companies like Google recognize the tradition, allowing staffers to spend 20 percent of their time on private projects.

If everyone is special, no one is.

Great quotes from Dell CEO Kevin Rollins Here's Classic Dell
Rollins also said Apple Computer's iPod could suffer the same fate as the Macintosh computer line if Apple continues to keep iPod technology proprietary. (Macs have a devoted following, but they garner only a small percentage of yearly global PC shipments.)

"I think they're doing a fantastic job" with the iPod, he said. But "Apple runs the risk of having the same failure with the iPod as it did with its traditional PC business" if the company continues to keep the device proprietary. In Dell's view, standard technology, which tends to be cheaper and more readily available, will win the day in most markets, including PCs, servers, storage, networking and even consumer electronics
Dell & WalMart have the same definition of failure ... selling anything other than craploads of cheap commodities
And although 90% or more of Dell's Cost of Goods sold is sourced (design, sourced components, and sometimes assembly), he pulls the spin of have "onshore" manufacturing.
Although he joked about outsourcing Dell's catering service, Rollins said the practice of outsourcing can cause a company to lose critical knowledge, in the case of areas such as information technology, or raise costs in areas such as manufacturing
"Philosophically, I'm opposed to outsourcing,"

Rollins said. Because he said outsourcing can remove essential skills such as IT expertise, it "seems nuts," he said. "I don't like it for Dell, clearly, because I think it makes us higher-cost, not lower-cost." Dell keeps all its manufacturing in-house. The company plans to build another manufacturing plant in the United States soon, in order to serve U.S. and Canadian customers. It has been eyeing a location in North Carolina, which is roughly in the middle of the southern and northern tips of the populous East Coast
Dells definition of manufacturing = light assy, load software, put on Dell stickers, pack and ship

And what's classic is that naive analysts, reporters, and politicians will look at the plant and call it "high tech". Just like they view Dell as a "technology" stock, instead of a retail/wholesaler stock.

December 26, 2004

The Must-est of Must Reads

Foreign Affairs - The Global Baby Bust - Phillip Longman: Foreign Affairs - The Global Baby Bust - Phillip Longman: "Japan's population, meanwhile, is expected to peak as early as 2005, and then to fall by as much as one-third over the next 50 years -- a decline equivalent, the demographer Hideo Ibe has noted, to that experienced in medieval Europe during the plague.""In nations rich and poor, under all forms of government, as more and more of the world's population moves to urban areas in which children offer little or no economic reward to their parents, and as women acquire economic opportunities and reproductive control, the social and financial costs of childbearing continue to rise."In the United States, the direct cost of raising a middle-class child born this year through age 18, according to the Department of Agriculture, exceeds $200,000 -- not including college. And the cost in forgone wages can easily exceed $1 million, even for families with modest earning power. Meanwhile, although Social Security and private pension plans depend critically on the human capital created by parents, they offer the same benefits, and often more, to those who avoid the burdens of raising a family.Fertility rates are falling faster in the Middle East than anywhere else on earth, and as a result, the region's population is aging at an unprecedented rate. For example, by mid-century, Algeria will see its median age increase from 21.7 to 40, according to UN projections. Postrevolutionary Iran has seen its fertility rate plummet by nearly two-thirds and will accordingly have more seniors than children by 2030.Countries such as France and Japan at least got a chance to grow rich before they grew old. Today, most developing countries are growing old before they get rich. China's low fertility means that its labor force will start shrinking by 2020, and 30 percent of China's population could be over 60 by mid-century. More worrisome, China's social security system, which covers only a fraction of the population, already has debts exceeding 145 percent of its GDP.The appeal of radicalism could also diminish as young adults make up less of the population and Middle Eastern societies become increasingly dominated by middle-aged people concerned with such practical issues as health care and retirement savings. Just as population aging in the West during the 1980s was accompanied by the disappearance of youthful indigenous terrorist groups such as the Red Brigades and the Weather Underground, falling birthrates in the Middle East could well produce societies far less prone to political violence.Although at first the fact that there are fewer children to feed, clothe, and educate leaves more for adults to enjoy, soon enough, if fertility falls beneath replacement levels, the number of productive workers drops as well, and the number of dependent elderly increase. And these older citizens consume far more resources than children do. Even after considering the cost of education, a typical child in the United States consumes 28 percent less than the typical working-age adult, whereas elders consume 27 percent more, mostly in health-related expenses.Population growth is a major source of economic growth: more people create more demand for the products capitalists sell, and more supply of the labor capitalists buy. Economists may be able to construct models of how economies could grow amid a shrinking population, but in the real world, it has never happened.Current population trends are likely to have another major impact: they will make military actions increasingly difficult for most nations. One reason for this change will be psychological. In countries where parents generally have only one or two children, every soldier becomes a "Private Ryan" -- a soldier whose loss would mean overwhelming devastation to his or her family. In the later years of the Soviet Union, for example, collapsing birthrates in the Russian core meant that by 1990, the number of Russians aged 15-24 had shrunk by 5.2 million from 25 years before. Given their few sons, it is hardly surprising that Russian mothers for the first time in the nation's history organized an antiwar movement, and that Soviet society decided that its casualties in Afghanistan were unacceptable.In 2000, the cost of military pensions amounted to 12 times what the military spent on ammunition, nearly 5 times what won't technology be able to make up the difference? Perhaps. But there is also plenty of evidence to suggest that population aging itself works to depress the rate of technological and organizational innovation.the Navy spent on new ships, and more than 5 times what the Air Force spent on new planes and missiles.London School of Business released their latest index of entrepreneurial activity. It shows that there is a distinct correlation between countries with a high ratio of workers to retirees and those with a high degree of entrepreneurship.This correlation could be explained by many different factors. Both common sense and a vast literature in finance and psychology support the claim that as one approaches retirement age, one usually becomes more reluctant to take career or financial risks. It is not surprising, therefore, that aging countries such as Italy, France, and Japan are marked by exceptionally low rates of job turnover and by exceptionally conservative use of capital. Because prudence requires that older investors take fewer risks with their investments, it also stands to reason that as populations age, investor preference shifts toward safe bonds and bank deposits and away from speculative stocks and venture funds. As populations age further, ever-higher shares of citizens begin cashing out their investments and spending down their savings.The Center for Strategic and International Studies has recently calculated that the cost of public benefits to the elderly will consume a dramatically rising share of GDP in industrialized countries. In the United States, such benefits currently consume 9.4 percent of GDP. But if current trends continue, this figure will top 20 percent by 2040a highly efficient, global financial market could lend financial resources from rich, old countries that are short on labor to young, poor countries that are short on capital, and make the whole world better off. But for this to happen, old countries would have to contain their deficits and invest their savings in places that are themselves either on the threshold of hyper-aging (China, India, Mexico) or highly destabilized by religious fanaticism, disease, and war (most of the Middle East, sub-Saharan Africa, Indonesia), or both.General Motors (GM) now has 2.5 retirees on its pension rolls for every active worker and an unfunded pension debt of $19.2 billion. Honoring its legacy costs to retirees now adds $1,800 to the cost of every vehicle GM makes, according to a 2003 estimate by Morgan Stanley. Just between 2001 and 2002, the U.S. government's projected short-term liability for bailing out failing private pension plans increased from $11 billion to $35 billion, with huge defaults expected from the steel and airline industries.if the United States hopes to maintain the current ratio of workers to retirees over time, it will have to absorb an average of 10.8 million immigrants annually through 2050. At that point, however, the U.S. population would total 1.1 billion, 73 percent of whom would be immigrants who had arrived in this country since 1995 or their descendants.Just housing such a massive influx would require the equivalent of building another New York City every 10 months.Some biologists now speculate that modern humans have created an environment in which the "fittest," or most successful, individuals are those who have few, if any, children. As more and more people find themselves living under urban conditions in which children no longer provide economic benefit to their parents, but rather are costly impediments to material success, people who are well adapted to this new environment will tend not to reproduce themselves. And many others who are not so successful will imitate them.

Today there is a strong correlation between religious conviction and high fertility. In the United States, for example, fully 47 percent of people who attend church weekly say that the ideal family size is three or more children, as compared to only 27 percent of those who seldom attend church. In Utah, where 69 percent of all residents are registered members of the Church of Jesus Christ of Latter Day Saints, fertility rates are the highest in the nation. Utah annually produces 90 children for every 1,000 women of childbearing age. By comparison, Vermont -- the only state to send a socialist to Congress and the first to embrace gay civil unions -- produces only 49.

Does this mean that the future belongs to those who believe they are (or who are in fact) commanded by a higher power to procreate? Based on current trends, the answer appears to be yesCurrent demographic trends work against modernity in another way as well. Not only is the spread of urbanization and industrialization itself a major cause of falling fertility, it is also a major cause of so-called diseases of affluence, such as overeating, lack of exercise, and substance abuse, which leave a higher and higher percentage of the population stricken by chronic medical conditions. Those who reject modernity would thus seem to have an evolutionary advantage, whether they are clean-living Mormons or Muslims, or members of emerging sects and national movements that emphasize high birthrates and anti-materialism.To cope with the diseases of affluence that make older workers less productive, rich societies must make greater efforts to promote public health. For example, why not offer reduced health care premiums to those who quit smoking, lose weight, or can demonstrate regular attendance in exercise

How can secular societies avoid population loss and decline? The problem is not that most people in these societies have lost interest in children. Among childless Americans aged 41 years and older in 2003, for example, 76 percent say they wish they had had children, up from 70 percent in 1990. In 2000, 40-year-old women in the United States and in every European nation told surveys that they had produced fewer children than they intended. Indeed, if European women now in their 40s had been able to produce their ideal number of children, the continent would face no prospect of population loss.

The problem, then, is not one of desire. The problem is that even as modern societies demand more and more investment in human capital, this demand threatens its own supply. The clear tendency of economic development is toward a more knowledge-based, networked economy in which decision-making and responsibility are increasingly necessary at lower levels. In such economies, however, children often remain economically dependent on their parents well into their own childbearing years because it takes that long to acquire the panoply of technical skills, credentials, social understanding, and personal maturity that more and more jobs now require. For the same reason, many couples discover that by the time they feel they can afford children, they can no longer produce them, or must settle for just one or two.

December 25, 2004

Cloning's Killer App

More from that wickedly interesting Asian Demography Essay by Nicholas Eberstadt - Policy Review, No. 123
It does not seem wild, however, to propose that the emergence and rise of the phenomenon of the “unmarriageable male” may occasion an increase of social tensions in China — and perhaps social turbulence as well. Exactly how China’s future cohorts of young men are to be socialized with no prospect of settled family life and no tradition of honorable bachelorhood is a question that can be asked today, but not answered. (Questions may equally be raised, without any good answers, about the bearing of China’s rising and not necessarily celibate bachelor class on the risks of hiv transmission in the decades ahead.) And it is hard to see how Beijing will be able to mitigate China’s escalating “bride deficit” through any deliberate policy actions for at least a generation (unless of course Beijing stumbles upon a method of manufacturing full-grown Chinese women on demand).
Let's hope they don't look to the Ancient Roman Solution

Those Disappearing Russians

Power and Population in Asia by Nicholas Eberstadt - Policy Review, No. 123
The most radical and dramatic shift in the relative population weight between major countries in the region, however, involves Pakistan and Russia. In 1975, Russia’s population was nearly twice as large as Pakistan’s (134 million vs. 70 million). By 2025, under medium variant projections, the situation will be virtually reversed: Pakistan will be just over twice as populous as Russia (250 million vs. 124 million).

The most conspicuous — indeed, startling — health and mortality setback in contemporary Eurasia is, of course, the one currently underway in the Russian Federation. Modern Russia has given the lie to the ameliorative presumption that literate, industrialized societies cannot suffer long-term health declines during times of peace. According to Moscow’s official calculations, the country’s life expectancy was lower in 2001 than it had been in 1961-62, four decades earlier. For Russia’s men, life expectancy had dropped by almost five years over that interim — but female life expectancy was also slightly down over that period. This anomalous circumstance could not be entirely attributed to the deformities of communist rule, for both male and female life expectancy were lower in 2001 than in 1991, the last year of Soviet power.

In absolute arithmetic terms, this Russian mortality crisis qualifies as a catastrophe of historic proportions. Over the extended period between 1965 and 2001, age-standardized mortality for Russia’s men rose by over 40 percent. Perhaps even more surprising, it also increased for Russia’s women by over 15 percent. Against the hardly exemplary health patterns of Gorbachev-era Soviet socialism, Russia has suffered a surfeit of “excess male mortality” since 1991 on the order of 3.5 million deaths — the equivalent, for Russia, of twice the deaths suffered in World War i. (Add “excess female mortality” and the post-1991 death toll rises by almost another million.)

Russia’s mortality crisis is concentrated on the population traditionally construed as “of working age.” For Russian men in every age grouping within the 20–64 spectrum, age-specific death rates in 2001 were at least 40 percent higher than they had been three decades before. In some cases (viz., men 45–54), they were over 60 percent higher. As for women between the ages of 20 and 59, their death rates were at least 30 percent higher in 2001 than in 1970-71. Russia’s cause-of-death statistics are far from perfect, but if overall reports can be trusted, the proximate explanations for these dismal trends were an explosion of deaths from cardiovascular disease (cvd) and injuries.

Reversing Russia’s long-term deterioration in public health will be a more difficult task than might at first be supposed. Throughout low-income Asia after World War ii, significant health advances were achieved through new, inexpensive, and relatively easy interventions to control infectious disease (e.g., sulfa drugs, ddt). Russia’s burden of illness today, however, is not primarily communicable and infectious, but instead overwhelmingly chronic and/or behavioral — the sorts of problems that are seldom susceptible to quick, cheap medical fixes. Moreover, death from such chronic illnesses as cvd tends to be due to an accumulation of offenses against the physiological system over the course of decades — and, to judge by mortality statistics, today’s Russian adults have been more assiduous than their parents in accumulating those offenses. Indeed, in 2001 Russian men in their late 20s had higher death rates than did men in their early 30s three decades earlier; men in their late 30s suffered nearly the same mortality rates as men in their late 40s from that earlier generation; and so on. At any given age, in other words, today’s Russians are more likely to succumb to fatal risk than their parents.

For broad segments of the current Russian population, simply returning to the health patterns of the early 1970s would be a formidable public health challenge. If Russian men in their early 40s were to reattain, by their late 40s, the same survival chances their fathers faced at that age, they would have to improve on the mortality rates of today’s 45–49 year olds by over 40 percent — and they would have to reduce their own future mortality rates to just five-sixths the level they currently experience. From today’s vantage point, that is a pretty imposing task. Success in that quest, moreover, should be evaluated in context: Male life expectancy in the Russian Federation in the early 1970s, after all, was just over 63 years — about the same as in India today.

According to unpd estimates, male life expectancy is lower today for the Russian Federation than for the world’s less developed regions. The unpd envisions that Russian male life expectancy will catch up with the less developed world’s levels by 2020-2025 — but for reasons just reviewed, such projections may prove too optimistic. It is hard to see how Russia can hope to develop a First World economy on the backs of a work force with a Third World health profile, and a Third World health profile is almost certainly Russia’s lot for the foreseeable demographic future. Consequently, it may not be too much to suggest that unfavorable mortality trends constitute a tangible factor that will constantly impede Russia’s recovery of economic potential, and restoration of influence on the world stage, in the decades just ahead.

Furthermore, Russia’s health future may look rather worse than we have so far suggested, for our analysis has as yet taken no measure of the possible impact of hiv/aids. hiv/aids has already made major inroads in Russia and could turn out to be a major cause of death nationwide in the years to come. Reliable estimates of hiv prevalence in Russia today are lacking — but in October 2002 a study by the U.S. National Intelligence Council (nic) suggested that as many as 1 million to 2 million Russians might be hiv-positive, and in May 2003, Dr. Vadim Pokrovsky, head of the Russian Federal aids Center, indicated that Russia’s hiv population might be as large as 1.5 million. By such figures, as many as 2 to 3 percent of Russian adults aged 15–49 could already be infected with hiv. Our limited understanding of hiv/aids means that we have no terribly accurate methods for predicting the future trajectories of the pandemic — but for what it is worth, the nic study suggested that adult hiv prevalence might reach 6 to 11 percent by the year 2010. Even presuming a less virulent spread of hiv through Russia, however, the impact of aids would be utterly devastating. A demographic-epidemiological modeling exercise for hiv in Russia undertaken by the author indicated that even with an epidemic stabilized by 2025 at 2 percent adult prevalence — a level possibly lower than Russia’s actual existing burden of hiv infection — life expectancy progress in Russia might be cancelled for the next decade. If hiv prevalence ends up closer to 6 percent, Russia’s life expectancy in 2025 would be a decade lower than otherwise anticipated — meaning it would be distinctly lower than today — lower even than at the time of Stalin’s death. And a 10 percent hiv prevalence rate would knock 16 years off Russia’s prospective 2025 life expectancy, pushing it into essentially sub-Saharan coordinates.
This is an intersting factoid.
To be sure, there are historical instances in which the shift of demographic weight between national actors seems to have been invested with real strategic significance. In the “struggle for mastery” in modern Europe, one thinks of the role of population in the ascendance of Germany over France during the nineteenth century. (The nineteenth century commenced with 11 French for every 10 Germans and ended with about 15 Germans for every 10 French.)

December 24, 2004

I love the word "canard"

John Tamny on the Savings Rate on NRO Financial
To begin with, 401(k) accounts have become highly popular investment vehicles for Americans over the last 20 years. Since 401(k) deposits come out of pre-tax income, the significant savings built up within those accounts would not factor into government calculations of money saved over outlays.

As for home ownership, mortgage payments are not deducted from pre-tax income, and often are paid out of disposable income. While no one would deny that home ownership is a form of saving, Commerce Department math would put money used to pay down a mortgage into the same basket as money used for everyday consumption

Despite all of the above evidence suggesting a strong culture of saving in the U.S., it can be expected that the "“Americans as bad savers”" canard will continue to be thrown out by the major media
So let's all sell our homes, drain our 401Ks and put the money in 1% interest-bearing savings account.

December 21, 2004

It's the Worst! (except for ...)

Great Observation by Chris Horner in the TCS COP coverage
What's more, under the Marrakech amendments of 2001, Kyoto implicitly classifies generating electricity through nuclear power as a greater threat than climate change, since it excludes it as a permissible method of satisfying the treaty's CO2 reductions. Nukes are the sole known 'GHG-free' technology capable of providing our energy needs.

What else is a greater threat? How about biotechnology? Genetic modification of trees to make them absorb more carbon would be a good tool to use in reducing the threat of climate change. Not according to anti-technology greens, however. 'Genetically modified trees must be banned from the Kyoto Protocol' blared Monday's joint press release of the Friends of the Earth International (FOE-I) and the World Rainforest Movement.

Another green group, the International Rivers Network, has deemed hydroelectric power verboten when considering reductions of greenhouse gases, even though hydro power releases no CO2. Again, it's difficult not to conclude that they believe some things -- in this case, dams -- constitute a bigger threat than climate change

December 20, 2004

President Dashes Hopes for Millions in Vegas.

President Holds Press Conference and comments on restrictions to the proposed "private accounts" in Social Secrity reform:
And that is, the people could set aside a negotiated amount of their own money in an account that would be managed by that person, but under serious guidelines. As I said, you can't use the money to go to the lottery, or take it to the track. There would be -- it's like the -- some of the guidelines that some of the thrift savings plans right here in the federal government
Dang it!

December 17, 2004

Fun with Climate Change Part 1

I found this very amusing weblog by a UK professor via TCS: EnviroSpin Watch

Here's a sample...
And how do all the gorgeous, pouting French ladies in their little black numbers stay so chic? "Most French women smoke instead of eating," says Mathilde. [An eco-slip there, shurely, Ed?]

"'Zac [Goldsmith] and I laugh sometimes because we say we'll spend all these years planting trees and so on, achieving this, then we'll die, and the children will go 'Let's chop down the forests or get some GM seeds in.' She watches the sheep making their way up to some young trees they planted..." [Baaa! Go for it kids!]
Once the shi-shi crowd and low IQ celebrity circle embraces something, you know it has jumped the shark.

My Homemade Charts on the Bush Budgets

Chart 1: Clinton Recession/Bush Tax Cuts

So Spending Rates Increased During Bush's first term, but if you dig into the details at the Gov't Website, you'll see that if was largely defense and unemployment benefits

Chart 2: Domestic vs Defense as a share of the Total Federal Budget or Why Nixon Stinks as a Conservative

To be fair, Nixon inherited the costs of Johnson's Great Society, but isn't it staggering to see the rise of entitlement/social spending in the 1970-74 period as a % of the total federal budget.

You also have to admire Reagan. His budget record tracked his rhetoric: Social spending (as a % of total budget) actually declined during his tenure, while defense spending rose.

The Clinton Legacy? It clearly is one of inheriting a peace dividend to slash defense spending (declined as a % of total throughout his tenure) and accelerating social spending nearly as fast as Nixon. He lucked out with a great economy to pay for it all.

The first Bush Term? Similar to Reagan..Defense is growing as a % of total, while social spending is leveling off and falling after the increases due to unemployment to help folks who suffered from the Clinton Recession.

Chart 3: Not Great, but we've been here before:

I worry about the Deficit as a Share of the GDP. Bigger economies can handle bigger deficits in the same way that a $50,000 credit card bill would impact Bill Gates a whole lot less than it would bother me.

The US GDP has more than doubled since 1976.

But I'd like to see it move the other direction...that's what a good economy should do for us.

December 15, 2004

Jose Padilla Meet Otto Skozeny

Went on an X-Files induced cyberbinge recently regarding Uncle Sam's radioactive testing on human subjects. Among the most interesting thing was this first clip about our early worries about a Nazi Dirty Bomb
Ideas about radiological warfare surfaced even before the U.S. began its atomic bomb program. Key atomic scientists Ernest O. Lawrence and Arthur Holly Compton proposed a top priority program to develop radioactive weapons in 1941. An atomic bomb program was actually given a lower priority at that point, in part because it was far more complex than producing fission products for use on a battlefield or an enemy city. While most attention soon shifted to the bomb program, anxieties persisted that Germany might develop radiological weapons for use against American or English cities. The Manhattan Project even sent radiation detection instruments to Washington, New York, Chicago, and other cities to prepare for such an attack.

Serious consideration was given to radiological warfare after the war. There was concern that a foreign power, frustrated in its attempt to develop an atomic bomb, might instead turn to radiological warfare. In 1947, the Armed Forces Special Weapons Project of the Department of Defense (DOD) asked the AEC to form a committee to study the subject."
Otto Skorzeny would have been Nazi Agent to pull off such a daring mission.

Do as I Legislate, Not as I Do

How can it not be a giant joke that Germany and, especially, France don't live by the rules they impose on the others through the EU?
The European Commission froze its threat of fines against France and Germany on Tuesday, granting the two biggest economies in the euro zone an extra year to bring down their bloated budget deficits.

The decision will help heal the relationship between the European Union's executive arm and the finance ministers of the member states, which has been tense since the commission first tried to punish France and Germany a year ago for failing to play by the budget rules.

The procedure ultimately ends in a fine, though how large or punitive has never been made clear.
I seem to also recall that the Alstom bail-out and the continuing protection of EDF aren't exactly rule-friendly either.

December 14, 2004


Is this weird or what
European companies may be outsourcing work to Indian firms but in one Delhi-based call centre it's Europeans who make up a fair number of the workforce.

"It's so different from Europe - the culture and the way you live - and I think it's fantastic," says Marie Blomquist from Stockholm.

"People are so friendly and the food is awesome, everything is great."
So, it must be the food...
Mr Sahni says the European employees are recruited for a minimum period of a year, but many extend their stay.

And although the employees are paid local salaries, they receive other compensation in the form of free housing, a furnishing allowance and subsidised meals.

Sylvia Sethi, another Swede, says: "We live very well. We have a nice guest house. It's better than we thought before I came here."

She says the job also provides a great opportunity to travel around India.

"Our schedule is done in a way that we can travel around and do things in our free time.

"Also, we get picked up and dropped off for work, a privilege we don't have in Sweden. We also get snack coupons."
So Arab-Muslims go to Europe to work and the Europeans go to India. Why don't the Muslims just go to India? Oh yeah, they already tried that.