Monday, May 31, 2010

Memphis mortgages, complexity attacks and long term consequences

Times are bad in the subprime mortgage neighborhoods of Memphis, home to recession wracked FedEx...

The black men and women interviewed by the NYT seem remarkably stoic about it all. Two aspects of one story caught my attention ...
... To turn into Tyrone Banks’s subdivision in Hickory Ridge is to find his dream in seeming bloom. Stone lions guard his door, the bushes are trimmed and a freshly waxed sport utility vehicle sits in his driveway.
For years, Mr. Banks was assiduous about paying down his debt: he stayed two months ahead on his mortgage, and he helped pay off his mother’s mortgage.
Two years ago, his doorbell rang, and two men from Wells Fargo offered to consolidate his consumer loans into a low-cost mortgage.
“I thought, ‘This is great! ’ ” Mr. Banks says. “When you have four kids, college expenses, you look for any savings.”
What those men did not tell Mr. Banks, he says (and Ms. Thomas, who studied his case, confirms), is that his new mortgage had an adjustable rate. When it reset last year, his payment jumped to $1,700 from $1,200.
Months later, he ruptured his Achilles tendon playing basketball*, hindering his work as a janitor. And he lost his job at FedEx. Now foreclosure looms....
Mr. Banks leveraged the real estate bubble to pay off the costs of the the higher education bubble. The real estate bubble burst, leaving him underwater. Now the higher education bubble is bursting, leaving him with high tuition loans for a product of declining value.


We might ask, however, how the heck Mr. Banks didn't realize he'd changed to an adjustable rate mortgage. I can't tell from the brief story, but I suspect that minor detail was omitted from the phone sales spiel. Later, when he signed the papers, he might have spotted it -- but by then he was well along the commitment path. It can be hard to back out then.

I'm betting he fell victim to a form of complexity attack, the same form of emergent fraud that defeated my family when assessing our health insurance options [2]. The resources of banks, mobile service providers and insurance companies ensure information asymmetry -- they can play the game much better than we can.

Complexity attacks have obvious direct costs to the "Marks" (which, in the GR, was most everyone). They also have less obvious long term effects that may be underappreciated.

Once buyers become aware of complexity attacks, they become far less trusting. Modern markets run on trust; when trust is lost markets suffer. Our bank recently hounded us to sign up for a lower fixed rate mortgage that should save us tens of thousands of dollars. As best we can tell this is motivated by a federal program; they need us in a bundle they can sell to the feds (we're "low risk"). It seems a no-brainer, but we delayed our decision because of deep distrust. Finally, when the Euro crisis dropped rates even further, we signed up [3]. We still wonder what the catch is.

The Great Recession will linger for a very long time. That is ... assuming it's really over ...

[1] If he was taking a quinolone at the time he might want to sign up with one of the class action suits.
[2] My brightness might be debatable, but I know some brilliant folk. None of the very smartest claim to understand our coprorate health insurance options.
[3] The bank wanted us to commit over the phone lest we lose the "incredibly low rates". We refused of course, which was easy since we know Greece isn't getting better any time soon. When we got the paper work it was remarkably clear and simple -- far more straightforward than the near-market-peak paperwork we completed when our home was rather more expensive than it is now.

Update 6/30/10: I wrote about our "no-brainer" refinance option. Even though it seemed simple, we were suspicious. Justifiably as it turned out. After our initial paperwork we received much more, then they bungled a prepayment of ours, then they stopped returning calls. Based on their recent share price, I'm guessing their coming apart. So we may still refinance, but probably with a different bank.

Saturday, May 29, 2010

From the archives - Sanford Weill before and after the crash

Before the Great Recession, times were good for some. No, not like Clinton's glory days of 1995 or so -- those times were good for most everyone. From Bush's 2004 to 2007 the times were good for the very rich.

Back then The Economist was launching a "lifestyle magazine" (it failed) and William McGuire of UnitedHealth Group had just received a $125 million paycheck. In those days the NYT wrote a paeon to Citigroup's Sanford Weill (which I just found in my archives, hence this post). It makes quite interesting reading now (emphases mine). In those days Citi traded for $55 a share. In Jan 2010 it was $3 a share ...
The Richest of the Rich, Proud of a New Gilded Age - New York Times July 15, 2007
The tributes to Sanford I. Weill line the walls of the carpeted hallway that leads to his skyscraper office, with its panoramic view of Central Park. A dozen framed magazine covers, their colors as vivid as an Andy Warhol painting, are the most arresting. Each heralds Mr. Weill’s genius in assembling Citigroup into the most powerful financial institution since the House of Morgan a century ago.
His achievement required political clout, and that, too, is on display. Soon after he formed Citigroup, Congress repealed a Depression-era law that prohibited goliaths like the one Mr. Weill had just put together anyway, combining commercial and investment banking, insurance and stock brokerage operations. A trophy from the victory — a pen that President Bill Clinton used to sign the repeal — hangs, framed, near the magazine covers...
That repealed Depression-era law was Glass-Steagall. The law designed to prevent the crash of 2007 and the subsequent the Great Recession. To continue ...
These days, Mr. Weill and many of the nation’s very wealthy chief executives, entrepreneurs and financiers echo an earlier era — the Gilded Age before World War I — when powerful enterprises, dominated by men who grew immensely rich, ushered in the industrialization of the United States. The new titans often see themselves as pillars of a similarly prosperous and expansive age, one in which their successes and their philanthropy have made government less important than it once was.
“People can look at the last 25 years and say this is an incredibly unique period of time,” Mr. Weill said. “We didn’t rely on somebody else to build what we built, and we shouldn’t rely on somebody else to provide all the services our society needs.”
Cough. Yes, we bailed out Citigroup.
... Only twice before over the last century has 5 percent of the national income gone to families in the upper one-one-hundredth of a percent of the income distribution — currently, the almost 15,000 families with incomes of $9.5 million or more a year, according to an analysis of tax returns by the economists Emmanuel Saez at the University of California, Berkeley and Thomas Piketty at the Paris School of Economics.
Such concentration at the very top occurred in 1915 and 1916, as the Gilded Age was ending, and again briefly in the late 1920s, before the stock market crash. Now it is back, and Mr. Weill is prominent among the new titans. His net worth exceeds $1 billion, not counting the $500 million he says he has already given away, in the open-handed style of Andrew Carnegie and the other great philanthropists of the earlier age...
The NYT returned to Mr Weill after the Crash ...
Citi’s Creator, Sandy Weill, Alone With His Regrets - Jan 2010
THIS is my final annual meeting as chairman,” says Sandy Weill, standing near the window of his office, peering at a grainy photograph of him and his wife on stage at Carnegie Hall more than three years ago. They are smiling broadly, and behind them is a packed house of cheering Citigroup shareholders. A huge banner dangling from the balcony reads “Thank You Sandy.”
On that day, April 18, 2006, Citi’s share price was $48.48. After studying the photo for a few moments, Mr. Weill says quietly, “I thought the company was impregnable.”...
... Over the last two years, Mr. Weill has watched Citi — a company he built brick by brick during the final act of a 50-year career — nearly fall apart. Although every taxpayer in the country has paid for Citi’s outsize mistakes, for Mr. Weill the bank’s myriad woes are a commentary on his life’s work.
.... Mr. Weill’s legacy has taken on a darker hue. Though he was once viewed as a brilliant dealmaker, some critics now cast him as the architect of a shoddily constructed, unmanageable financial supermarket whose troubles have sideswiped investors, employees and average citizens nationwide.
“The dream, the mirage has always been the global supermarket, but the reality is that it was a shopping mall,” says Chris Whalen, editor of The Institutional Risk Analyst, of Citi’s evolution over the last decade. “You can talk about synergies all day long. It never happened.”
Citi’s troubles are well chronicled: a failure to integrate its disparate parts worldwide or to keep tabs on risky investments and free-wheeling operations. These lapses led to billions of dollars in losses and multiple bailouts, and the government now owns a quarter of the company. Citi’s shares fell from a high of $55.12 in 2007 to about a dollar early last spring, and now trade at $3.31....
... Sitting in his office on the 46th floor of the General Motors building in Manhattan, he is surrounded by reminders of a lifetime on Wall Street. The space is breathtaking with floor-to-ceiling windows and views stretching out over Central Park. One wall is devoted to framed magazine and newspaper articles chronicling his career. A Fortune magazine clipping from 2001 declares Citi one of its “10 Most Admired Companies.”
On another wall hangs a hunk of wood — at least 4 feet wide — etched with his portrait and the words “The Shatterer of Glass-Steagall.” The memento is a reference to the repeal in 1999 of Depression-era legislation; the repeal overturned core financial regulations, allowed for the creation of Citi and helped feed the Wall Street boom...
Remember this story next time you read the praises of the Captains of Industry.

Post-industrial employment: adjusting to a new world

Six years ago I wrote a review of Robert Reich's book Reason. Reason was a reaction to the GOP's loony rule, but Reich was also very concerned about the fate of the middle class. He was worried that only knowledge workers were going to have work. His answer was better education.

I disagreed. I thought knowledge workers were very much at risk in a "winner take all" world, and I was skeptical that education was really a universal solution (emphases added now)...
... Reich is persisting in the 19th century belief that humans are fundamentally malleable -- at least when young.
Most of the research of the past 10-20 years points to a more complex picture...
... the evidence is strong that humans are not endlessly malleable. This is an increasing problem, because 21st century America rewards a fairly narrow range of workers. In the new-world, many of the old-middle class may not have a happy home -- no matter how hard they retrain. In a fundamental way, many Americans may be "disabled" for the modern workplace.
Reich should not be so quick to write-off redistributive solutions. We will need some creative thinking to produce a healthy American when the true "disability" rate starts to top 30%.
I think the world is coming around to my perspective. For example (undated articles are recent):
I hope you've taken the time to scan at least a few of the above (esp. Rampell, Steinberg and the discussion of Baumol's Disease). Taken together they reflect a consensus that's emerged over the past six years. I'd summarize it this way:
  1. College has become insanely expensive. (The College Industry will be the next bubble to burst.)
  2. There's a growing disconnect between the costs of college and the value delivered.
  3. Many students would be better served by skills ("vocational") training rather than traditional scholarship.
  4. Technology and globalization have eliminated large numbers of office jobs and made some old skills obsolete. Many of the middle-aged middle-class people who lost their jobs in the Great Recession won't work again.
  5. In an age of outsourcing, knowledge work may be no more secure than factory work.
Ok, so the last isn't part of the consensus ... yet. It's still mostly a suspicion of mine.

So if we really are entering a world where many formerly middle-class adults won't be able to find stable employment, simply because they lack the skills for the jobs that do exist, what should we do?

College is probably not the answer. In 2007 and 2004 I suggested:
  • universal health care (astoundingly, this might happen!)
  • separate benefits from employment
  • intelligent retraining programs - based on individual skills assessments and locally available employment
  • As part of social security reform, eliminate the idea of age-specific retirement. Income has mandatory contributions to tax-deferred funds and non-work (study, vacation, job seeking, whatever) draws from those funds*.
  • rethink the meaning of disability in a post-industrial society
The last will be the hardest, but I think we'll get to all of these in time. Civilization is stronger than we think. One way or another, we'll figure this one out - including finding a future for those who don't seem to have a place in the modern economy.

* I first proposed something like this in a 1977 Women's Studies course essay. I just remembered that ...

Update 6/2/10: Robert Reich on "Entrepreneur or Employed". Excellent summary. The modern 50+ knowledge worker is not "unemployed" s/he is "self-employed". S/he is a masterless, "Ronin" contract worker. Reich's recommendations are very close to what I wrote above. There's one in particular I like: "... Since they can no longer depend on tax-free corporate matches to their 401(k)’s or I.R.A.’s, they should be entitled to tax credits that match them". This is one measure Obama might be able to squeak by the GOP loons in Congress.

Obama and the Gulf: Why I remain grateful - and puzzled

We're a long way from knowing what went wrong in the Gulf. It does appear, however, that we don't have the technology to cost-effectively extract this kind of oil (assuming cost includes environmental and commercial damages from accidents). So it makes sense to stop all further exploration and drilling while we reassess our true capabilities.

I like to think that's a common-sense observation. The astounding thing, for those of us who remember GWB, is that my President is saying the same thing ...
Obama Restates Need for More Oil Before U.S. Uses Less - Dot Earth Blog -

... So the overall framework, which is to say domestic oil production should be part of our overall energy mix, I think continues to be the right one. Where I was wrong was in my belief that the oil companies had their act together when it came to worst-case scenarios.

Now, that wasn’t based on just my blind acceptance of their statements. Oil drilling has been going on in the Gulf, including deep water, for quite some time. And the record of accidents like this we hadn’t seen before. But it just takes one for us to have a wake-up call and recognize that claims that fail-safe procedures were in place, or that blowout preventers would function properly, or that valves would switch on and shut things off, that — whether it’s because of human error, because of the technology was faulty, because when you’re operating at these depths you can’t anticipate exactly what happens — those assumptions proved to be incorrect...
I don't think Obama is Saint. We know he has to have a galactic ego, and we assume he lies about his smoking addiction.

Even so, I almost tear up when I read him saying this stuff. He makes sense. He's not insane, he's not frothing, he is a clear thinker. It's mind-boggling to have a President who's not a whack job.

We had Cheney/Bush. We could have had Palin/McCain. We got Obama.

That still puzzles me.

How the heck did we get Obama? We're not that smart ...

Good news on social security: Obesity

My family spent the afternoon at the neighborhood pool on a hot new-climate spring day. From the looks of things, we'd all do well in a famine. Minnesota has an average obesity rate, so I was seeing America.

We're not going to live as long as we expect. I wouldn't be surprised if average life expectancy began to fall over the next twenty years.

That's good news for social security of course. Now all we have to do is encourage smoking.

Wednesday, May 26, 2010

Causes of the Great Recession: The Congressional Report

Via Economix, the Congressional Research Service report on proposed causes of the "financial crisis" (pdf). They have a long list of candidate contributing factors, several of my 2/2009 items make the list.

My April 2010 list is much shorter -- in recent times I've stepped back from the intermediate causes and looked to global economic transformation (China, India) and information technology as the true root causes of current and, I expect, ongoing, instability.

The CRS list isn't terribly interesting. They've basically rounded up all the suspects.

Monday, May 24, 2010

Apple vs. Google: I'm caught in the crossfire

John Gruber is a fan of the Apple-Google war ...
Daring Fireball: Post-I/O Thoughts
... It’s exciting, vicious, fun to watch, and ultimately should prove to be excellent news for consumers. Competition drives innovation and innovation raises the bar for everyone. And the bar, for smartphones, is rising quickly.

Like any great rivalry, there are striking differences between the two competitors. Apple and Google are jostling to shift the comparison between the two platforms to their very different strengths. Apple’s strengths: user experience, design, consistency. Google’s strengths: the cloud, variety, permissiveness..
Me? Not so much.

I have made two big vendor bets for my family and me in the past decade. Yes, Google and Apple. Google made me smarter, Apple provided us a relatively hassle free personal computing solution. When I bought my 3G iPhone I experienced the perfect union of the technology giants of 2007.

Then it all came apart. The Apple-Google war sucks. There's nothing fun about it for me.

I have large Apple investments, but if I were single I'd go with Google, drop the iPhone, and run Chrome on my Macs. Yes, I love the elegance of the iPhone, but Google delivers the services I really need for my mobile life - and to be personally productive. Google is sometimes a bit evil, but Apple is the Singapore of computing. Efficient, but ultimately tyrannical. Bereft of Google, Apple is now running with Facebook. Talk about embracing the Dark Side of the Force.

I'm not single though. I have three children, one dog, and today's my 24th wedding anniversary. Google does not get families, Google does not, not, not get children. (I think the Gmail EULA has a teen or young adult age cutoff.) I could live with the rough edges of the gPhone (though my dental grinding would be expensive), but my family could not.

There's no way I'm supporting two platforms. Apple's FairPlay DRM allows up to five users per app or product -- we're a family of five. That's a big advantage for Apple.

So I can't leave Apple. On the other hand, I can't live without Google and Apple's boy-toy Facebook is a bizarro clone of 1990s Microsoft.

So I get hit from both sides. Each time I use Google's crummy, miserable, slow, balky HTML 5 web 2.0 Google Voice app I take a bullet. (Gruber sings the praise of iPhone web apps. I bet he doesn't use Google Voice on the iPhone.)

I don't have a solution. Anyone wanna find a bar with bad country music and drink bad whiskey?

Thursday, May 20, 2010

Google TV, Flash, iPhone and Curated Computing - it's all about the DRM

Imagine that Drexler'sengines of creation were real. Imagine we all had devices that could make diamonds, phones, cars and the like on demand. All we needed were some raw materials and energy.

This would be disruptive. DeBeers wouldn't last the day. Economies would collapse. Hellfire would rain down.

Eventually, however, I suspect our complex adaptive world would return to a balance. A new generation of improved replicators would replace the old ones. The new ones would come with controls that made it, for example, impossible to replicate currency. Civilization wants to survive.

We saw this with VCRs. The first recorders were amazing at capturing movies, but later generation devices incorporated "macrovision" copy protection. Recording features became less common, VCRs became largely playback devices. The rebel was subverted.

We're seeing it now with the digital replicators of our era. First generation devices made perfect copies of CDs and even DVDs. Slowly, however, the market is moving from general purpose computers with computers that won't replicate some DRMd video to iPad-style "curated computing". Surprise -- the iPad won't rip a DVD. It won't even rip a CD. (If record companies aren't buying 2nd hand CDs and destroying them they deserve to perish.)

In 20 years, it will be fairly hard to replicate many things. In a world with limited local storage, you may find your purloined media won't survive long in the cloud. The system is strong, It wants to live.

If you think about DRM, a lot of things make sense. Why are Apple so virulently opposed to Flash [1]? Why is Adobe dissembling when they say Flash is open (they published the specs)? Because the video codecs in Flash are not nearly as important as the DRM (Digital Rights Management) technology in Flash. That is most assuredly not open; it's as closed as Apple's FairPlay. What's Google up to with Google TV and their app stores? Check out the DRM to understand. Why are Hulu and Netflix reluctant to sign on the iPad? Because they'd have to substitute FlashDRM for FairPlay. That means Apple would own them.

This battle will rage for a time, but in 20 years it will be largely forgotten -- and the digital replicators will have been tamed. Resistance is futile.

See also:

[1] Personally, like virtually all Mac geeks, I despise Flash and consider Adobe to be as decrepit as Microsoft. I agreed with pretty much everything Jobs wrote about Flash in his open letter. I think, however, that even if none of those things were true Apple would be at war with Adobe. Part of Jobs evil genius is that he's a master magician -- he distracts with one hand while he moves with the other.

--My Google Reader Shared items (feed)

Civilization is stronger than we think: Structural deficits and complex adaptive systems

The more humans you know, the harder it is to imagine that civilization can endure. Billions of consumers. Environmental collapse. Climate change. Peak Oil. China's gender wars. The falling cost of havoc. The GOP. Skynet, sooner or later.

It looks hopeless, but on the other hand it's been 58 years since the first fusion weapon was detonated - and we're still here. That's surprising.

It's not just technology that we've survived. It seems impossible that democracies can manage their finances, but they do ...

Adam Smith's Money World - Onc is not Enough

... Greece has its debt bail-out, or appears to have, but there’s still that riot-inducing issue of government budget cuts. Is it even feasible for a government to cut its budget by as much as the International Monetary Fund has demanded of Greece? Yes it is very possible -- all too possible, in fact -- according to the IMF’s own study. In the past three decades there have been at least nine instances in which developed nations have cut their structural deficits by at least 10 percent of GDP...

It's true that some nations do better than others, but it's impressive that, faced with doom, even troubled nations like Greece and the US draw back. For example, to our great shame we reelected George W Bush and Richard Cheney. We did not, however, elect John McCain (now sadly demented) and Sarah Palin.

How does reason emerge from chaos?

We don't know, but many suspect it has something to do with the properties of a complex adaptive system. In our case it's a system built of economics and politics and the noise of the disconnected and, perhaps, the cumulative influence of the rational individual. It's a system that is self-sustaining, a system that "wants to live".

The system is hard to measure, but it's strong. It's also a fractal response -- just as civilization is surprisingly robust, so too are its components. Consider the digital economy. Perfect, near zero cost replication was very disruptive -- but the systems is responding. The iPad, the Flash wars, Google TV, "curated computing" -- it's all about the system responding to the disruption. It's all about the Digital Rights Management (DRM). Of which I will say more ...

--My Google Reader Shared items (feed)

Wednesday, May 19, 2010

Unanticipated cloud app problems: The child

I've written about several issues with cloud apps. Here's a novel one.

For good reasons, I want my son to have access to email and calendaring, but not to Google search. We use Google Apps for our family domain.

It doesn't work. One feature of the cloud is there are few or no parental controls. One might try OS X Parental Controls, but it has serious issues with https sources. There are workarounds for these limitations, but the workarounds all require full access to Google search.

Desktop apps are a good fit for controlled access, cloud apps are not.

Tuesday, May 18, 2010

The hungry city

Paraphrased from In Our Time, The City - a history: "Pre-modern cities had death rates that were vastly greater than birth rates."

Monday, May 17, 2010

Organlegging Neuromancer style – China’s liver trade

Organlegging was Larry Niven’s 1970s term for trafficking in human organs. Gibson’s fiction, including the fabulous (1984!!) Neuromancer, featured Chinese organ shops. Cross organlegging with Neuromancer and fast forward to 2010.

How do people not raised on science fiction get their head around the modern world? It’s really a disability of sorts.

Since my 2006 organ trade post (see also) the market has continued to mature …

Blood & Treasure- the liver trade

Type in Baidu and search for “looking for liver, kidney” and so on words, tens of thousands of results show up, including QQ numbers*, cell phone numbers, some even operate like a company. They not only look for people willing to sell their livers and kidneys, at the same time they also advertise to provide livers and kidneys that match the patients. Reporter contacted number of organ trading brokers and found that they had a clear set of requirements, and the business also formed “one shop stop” service…

Liver segment and single kidney donation is usually survivable.

Is anyone in the US paying attention?

No, I didn’t think so.

* tencent QQ

… is the most popular free instant messaging computer program in Mainland China, and has over 856.2 million users. In April 2010, ranked 10th overall in Alexa's internet rankings. The program is maintained by Tencent Holdings Limited (HKEX: 0700), owned in part by Naspers…

I’d never learn this stuff if I didn’t have my Chinese-focused blogs to read. The mainstream media is hopelessly lost.

Update: After posting this, I revisited a link in my 2006 post to a 2004 NYT article. There I found mention of "Organs Watch" - an organization tracking the global organ trade. The web site, however is "under construction"; the notice refers to an August 2009 update that never happened. Nancy Scheper-Hughes led Organs Watch, but the last news of her is from 2008. Reading between the lines of the Wikipedia article, I wonder if she might have gone a bit off the rails ("Israel" and "tentacles" in the same sentence is a bit of a red light). She was still teaching at Berkeley in Fall 2009.

Science fiction and ocean acidification

Zimmer tells us we'll be able to recognize the human era by the sedimentary evidence of ocean acidification and mass extinction.

Sounds plausible. So what should we think of why we find a similar catastrophe 55 million years ago?
An Ominous Warning on the Effects of Ocean Acidification by Carl Zimmer: Yale Environment 360
... Scientists have been scouring the fossil record for periods of history that might offer clues to how the planet will respond to the current carbon jolt. They’ve found that 55 million years ago, the Earth went through a similar change. Lee Kump of Penn State and his colleagues have estimated that roughly 6.8 trillion tons of carbon entered the Earth’s atmosphere over about 10,000 years.

Nobody can say for sure what unleashed all that carbon, but it appeared to have had a drastic effect on the climate. Temperatures rose between 5 and 9 degrees Celsius (9 to 16 Fahrenheit). Many deep-water species became extinct, possibly as the pH of the deep ocean became too low for them to survive...
I'm sure I read this in a science fiction story once. Something to do with smart dinosaurs.

I'm just joking of course. We'd easily recognize the evidence of long extinct prior technological civilization from 55 million years ago. After all, we won't be just a peculiar layer of pollution in 55 million years, will we?

(I really am joking. Though if had been over 200 years rather than "10,000 years" with no volcanic explanation one would have to wonder.)

Krugman discovers humans are not rational

Paul Krugman is a fan of behavioral economics. He’s also fabulously well read, he must have read some anthropology, history, and political science at some point in his life. At heart though, Krugman is an economist. It’s hard for an economist to escape the prejudice that humans are fundamentally rational self-interest optimizers. It’s baked into their culture.

Alas, humans are only partly rational part of the time*. Obama, like every politician, knows this in a deep way. That’s why he ignores Krugman’s political advice.

Krugman can learn though. I’ve read him religiously since he became a byte-stained wretch, and he’s changing. He’s learning politics (emphases mine) …

Krugman - The G.O.P. - Going to Extreme -

… Right-wing extremism may be the same as it ever was, but it clearly has more adherents now than it did a couple of years ago. Why? It may have a lot to do with a troubled economy.

True, that’s not how it was supposed to work. When the economy plunged into crisis, many observers — myself included — expected a political shift to the left. After all, the crisis made nonsense of the right’s markets-know-best, regulation-is-always-bad dogma. In retrospect, however, this was naïve: voters tend to react with their guts, not in response to analytical arguments — and in bad times, the gut reaction of many voters is to move right.

That’s the message of a recent paper by the economists Markus Brückner and Hans Peter Grüner, who find a striking correlation between economic performance and political extremism in advanced nations: in both America and Europe, periods of low economic growth tend to be associated with a rising vote for right-wing and nationalist political parties. The rise of the Tea Party, in other words, was exactly what we should have expected in the wake of the economic crisis…

Better late than never. The new Krugman will be even more interesting than the old one was.

* I suspect on average, over time, the system in which we are embedded is more rational than it seems, but that’s another post. (Yes, sounds like “psychohistory”, and, yes, Krugman, like me, grew up on Asimov.)

Jean-Louis Gassée on Cloud 2.0 – post of the month

Jean-Louis Gassée blogs on Monday Note. He’s been doing it since Feb 4, 2008.

Gassée has done many things, but he’s best known for having been Apple’s CEO for a time. These days he’s a VC “general partner”. It’s safe to assume he’s rich beyond my paltry dreams of avarice. Why does he bother writing a not-terribly-famous blog? I don’t think it’s for the adword revenue.

My best guess is that he’s helping out the blog’s co-author, and that he writes for love. Alas for those who write to live, his free stuff is better than the best of the WSJ. Such is the curse of early 21st century journalism.

Today he takes on the Google-Microsoft cloud apps war. It’s fantastic stuff (emphases mine) …

Cloud 2.0 - Monday Note

… Last year, Microsoft’s total sales were $58B, down 3% from 2008 … Note the Operating Profit, 35%. The company spends 15% of its revenue in R&D and 28% in Sales, Marketing and General Administration….

… Compare this to Apple’s 29.5% Operating Profit, 3% R&D, and 9% SG&A [selling, general and administrative expense] with a comparable revenue level, in the $50B to $60B range annually…

… Microsoft’s Net Income is 25% of revenue, Apple’s is 22%….

… Microsoft Office represented 90% of the $19B Business Division sales, with a nice 64% Operating Profit … Roughly 60% of all Microsoft’s profits come from Office and a little more than 53% from Windows OS licenses (or what MS calls its “Client” business):

So… Office + Windows, 60% + 50% = 110% of Microsoft’s Operating Profit? The math is complicated by the losses in something called “Corporate-Level Activity”… …and, more importantly, by the hefty 73% operating loss in the company’s Online Services Business:

If I’m interpreting Gassée’s writing correctly, Apple’s numbers are only comparable to Microsoft’s because Microsoft “wastes” a huge percentage of revenue. Microsoft’s R&D percent spend is 5 times Apple’s and Microsoft spends 3 times as much on selling, general and administrative expense – not to mention “corporate-level activity”. If Microsoft were as stingy as Apple, their profits would be mind-blowing. Microsoft Office is a money-factory.

I’m reminded of an old Cringely column, in which he opined that Microsoft could have any profit number it wanted to have.

Gassée continues from numbers to user experience, saying the same things I’ve whined about but that, honestly, I never see mentioned anywhere else

.. Google Apps aren’t Office killers. I’ve been using Gmail in both the free and paid-for accounts. The basic email functions work well, but managing contacts is awful. (Months ago, I heard Google had an internal project called Contacts Don’t Suck. I’m still waiting.)…

… I’ve tried to use Google Docs to write, share, and edit these Monday Notes. Failure. Compared to any word processor, Google Docs feels clunky and constrained, and hyperlinks die when you download the document…

… Google Apps aren’t “there” yet. They’re still clunky, to say nothing of managing the “stuff behind the desk”. They’ve been quickly upgraded–perhaps too quickly– at the expense of the user experience. If managing Google Apps is as complicated as running an Office DVD install program, an important part of the Google theory falls apart. We see the trumpeted announcements of large organizations and governments that have turned to Google Apps, but what we don’t see is a courageous journalist going back to the proud early adopters a year later to tell us what actually transpired.

So why is it that only cranks like me and outliers like Gassée ever point out where Google fails? It’s a bit hallucinatory. Gmail’s contacts function has been terrible for years (starting with the weirdly isolated link to “contacts” in Gmail). Google Docs are still very weak (though about to move up a notch), and things are worse when you look at the channel confusion around Blogger, Google Doc, Buzz and Google Sites.

Really, I do love a lot about Google, but they have to give up on the idea that good design is emergent.

Go and read his Cloud 2.0 post and the “related columns” he references at the end. Don’t forget to marvel at the strange age we live in, where some of the best journalism is done for love*.

* P.S. As a bone to the pros, Gassée drops a broad hint on how they could write something interesting – go to the early adopters of Google Apps and tell us what happened.

Sunday, May 16, 2010

My top two blog posts - lessons in markets and humility

I have written over 10,000 blog posts (well beyond Google's 9 month old 5000 post bug), largely for myself and proto-skynet. I imagine some are clever, at least to me.

Of those 10,000, 0.02% get 99% of the comments. Those two are not the clever ones ..
I'm happy with the first one, though bemused that of all my tech posts this is the one that caught on. It is a more than annoying OS X limitation that a device driver can overheat machines for months or years -- and that Apple store employees sell batteries or replace machines rather than kill a stuck job ...
Thank you, Apple store couldn't fix the problem, they just sold me another battery, the new battery power was 50% of what it should be-the roaring fan being all consuming! Once I deleted the Canon printer and a dozen jobs stuck in the queue the fan stopped immediately after blowing for 6 months!
The second is embarrassing. Warts are fascinating, but we really don't know if duct tape does anything special, or anything at all. This kind of unfunded research is, in its own way, as subject to publication bias as very well funded antidepressant research.

Of course I am, as ever, compelled to apply a learning pattern to these findings ...
  1. I am very bad at judging what a large number of people will find interesting.
  2. If I were trying to attract readers, I'd write more wart posts.
  3. Apple needs to revamp their retail training and their technical support algorithms.

Friday, May 14, 2010

Identity: Legion is a character defect?

Last February I wrote The Buzz profile problem: I am Legion.

It surprised me that I had to write the post. I thought it was self-evident that adults have many identities. Google's Buzz flop made me realize I was wrong. Obviously a lot of Googlers missed the obvious.

Google may be catching on. Not so Facebook's master - Mark Zuckerberg ...
An Internet Where Everyone Knows You’re a Dog — Crooked Timber

...While searching for evidence of Zuckerberg’s broader philosophy of information, a passage from David Kirkpatrick’s forthcoming book, The Facebook Effect, is quoted:
“You have one identity,” he emphasized three times in a single interview with David Kirkpatrick in his book, “The Facebook Effect.” “The days of you having a different image for your work friends or co-workers and for the other people you know are probably coming to an end pretty quickly.” He adds: “Having two identities for yourself is an example of a lack of integrity.”

Zuckerberg is famously young, and famously wealthy. He has not had to grow up; he may never have to grow up.

Adults have complicated lives. Adults have parents, and children and grandchildren, patients and students, employers and colleagues and staff, friends and neighbors. Adults live in a crowded world where wisdom and compassion means muting the self, juggling the complexity of contextual identity. What we used to call, in medical school, being professional.

Zuckerberg is not an adult. I know where he's coming from. As an aspergerish teenager I might have made the same mistake.  He'll likely grow up one day and realize he goofed.

Problem is, we can't wait. He's rich enough that growing up may take a very long time, and for that time he'll be running Facebook.

I'm winding down my Facebook presence; I'll let it die a natural death. If Google or someone else provides a smarter alternative, I'll encourage friends and family to switch.

Thursday, May 13, 2010

Verizon iPhone – Can you hear us AT&T?

The WSJ is on board. The CDMA Verizon iPhone is expected after September (Sprint,also CDMA, too?). The AT&T iPhone will be shown in early June, probably available end of June.

My wife’s iPhone AT&T contract should be up in the Fall of this year, my contract expired last January. We have no reliable AT&T iPhone voice service in our St. Paul home. This is a big change from a year ago when iPhone service in MSP was fair to good. We’re paying for services AT&T can’t deliver – because they oversold their capacity.

We’re ready to switch.

If AT&T wants to keep our $2,400 plus/year family fees they need to do one or more of

  1. Fix our home voice service.
  2. Provide a free MicroCell for home use with some extra benefits.
  3. Dramatically reduce our phone bill.

It will be a great relief to have Verizon on board no matter what we do.

If we stay with AT&T, the combination of a likely 10% drop in AT&T iPhone users and a large decrease in new AT&T iPhone customers will improve service quality and dramatically reduce the cost of a used AT&T iPhone.

If we switch to Verizon (Sprint?) we’d get 3 new 4th generation iPhones and our old devices will become iTouch-equivalents.

Can’t happen soon enough.

Hours worked per year: Greece in #2 spot

Sure, South Korea is #1 at 2,256. We knew that. (China isn't on the chart, it would presumably be in the SK range.)

But who's #2?

Ok, so I gave it away. Would you have pegged Greece at 2,120 hours? Greece, home of economic collapse and rumored early retirement? Yes, there are lots of caveats about data quality, measurement definitions, etc. Still.

Maybe after working 2,120 hours a year early retirement is mandatory. FWIW I have read that Chinese employment beyond age 50 is very challenging. In many nations "early retirement" is really "early termination". I suspect effective "retirement" age in post-industrial nations is going to fall, not rise.

Germany is way, way down at 1,430 hours a year. Poor impoverished Germany.

Oh, wait.

The US, Japan and average OECD are all at about 1,760 hours. Indistinguishable.

Canada and the UK are a bit lower at about 1,600 hours. In general, the more sane and wealthy the nation, the fewer hours worked per year. I'm looking forward to some interesting infographics illustrating those comparisons.

Wednesday, May 12, 2010

Google's DLF - The data privacy connection

Facebook has zero-forwarding email. Google has the Data Liberation Front -- and they take requests. There's no comparison.

DLF fan that I am, though, I was puzzled by an alleged connection to customer privacy ...
google's letter to privacy commissioners. DLF cited as "[an effort] to protect customers' privacy and promote transparency."
What does data freedom have to do with customer privacy? Sounds like PR-speak. I could think of only one connection, and the DLF confirmed it for me:
Data Liberation gives people a way to revoke their trust in a company if they're not pleased with the way the company is behaving.

Whitewater age: Nashville edition

Over 1.5 million people live in the Nashville metropolitan region. Median urban family income is $50,000. Vanderbilt university is a major player. Nashville is a significant American city.

About a week ago it was devastated by flooding. It's a federal disaster area now. I only know because I've visited there on business, and I have colleagues living there. Maybe it got some TV time, but it didn't get much notice in my media stream.

In the 1990s the Nashville floods would have received full spectrum coverage. Now, between market chaos, historic oil spills, the collapse of Greece, and the rest, it's just background noise. If Katrina hit today, it would probably get coverage for a week.

The world has changed a great deal in 15 years. Admittedly the 90s were an anomaly, a time when people could talk, with a straight face, about the "end of history". The early 20th century was not exactly placid. Nineteenth century America was flat out turbulent.

So these are not unusual times -- except in the context of our generational memories.

White water is the new normal. Ahead lies Peak Oil, climate transitions, immense environmental and sociopolitical change across the globe, and, perhaps, far worse.

We will become accustomed to the chaos; just as Beirutis seemed to grow accustomed to urban life in a war zone. Today's college students, however, will have to endure the boomers mourning the golden age of the (Bill) Clinton years.

I miss the 90s.

Tuesday, May 11, 2010

Sunday, May 09, 2010

Social Fail: Room for one more

Buzz is still floundering. The alternatives aren't any better. The big three all have problems (caveat: I know FB best, Twitter least):
Twitter: Missing multiple "account" (identity/stream) management. SMS based string limitation.
Buzz: Missing identity/pub stream management, overpowering ties to critical Google identity (heavy baggage, gmail, etc). Public profile by design. Lazy "if it sticks" design. Cross-Google coherence problem (Reader notes, Orkut, etc).
Facebook: Malign business model. Zuckerberg.
Of course there are other alternatives to consider. There's AOL, Yahoo!, Microsoft, Myspace, the Wall Street Journal, IBM, Oracle, Walmart, Newsweek ... Right. All equally irrelevant.

The big three are, amazingly, missing the target.

There's room for one more.


What would Apple do?

Saturday, May 08, 2010

Gallery of 56 Chinese ethnic groups

This gallery of 56 Chinese ethnic group portraits is both marvelous and overwhelming. Dienekes has organized them by group (interesting comments).

I wish the images were much higher resolution. There's so much more I'd like to see.

Friday, May 07, 2010

Jackpot: Leonard predicts oil spill in 2008

There should be a blogger prize for best medium term prediction. Leonard gets my vote for his 2008 prediction, quoted by him in today's article...
How to guarantee a Gulf oil spill - How the World Works - Andrew Leonard

... Try, if you can, to ignore all the lurid coke-and-sex bombshells contained in the three Department of Interior Inspector General reports about the shenanigans at the U.S. Minerals Management Service (MMS). The program director who snorted speed off a subordinate's toaster oven, and made her give him a blow job while driving around the neighborhood. The two "MMS Chicks" who were notorious for getting plastered at conventions and having one-night stands with oil industry employees.

Try -- and yes, I know it's hard -- try even to ignore the allegation that one program director told a subordinate that if she could score him some coke during the MMS performance appraisal period, he would increase her performance award. What's the big deal? Who wouldn't be motivated by such an incentive? And what's a little drunken sex and coke binging on government time among friends? It happens to the best of us.

The significance of the three reports delivered by the inspector general to Congress on Wednesday lies not in the prurience of some of the indiscretions, but in the symbolism. The Royalty-in-Kind Program of the U.S. Minerals Management Service is where offshore drilling meets the U.S. government. And gosh, is it ever one heck of a mess. You want a toxic oil spill in the Gulf of Mexico? Just read the reports.
That was the Bush modus operandi. Government must be destroyed, so turn it over to the incompetent and the corrupt.

How the Google Reader team decides what to do

Google teams are annoyingly driven by user requests. I prefer Jobs-style tyranny myself, but that's not the Google style. Different teams seem to follow different procedures.

Now they claim it's all forum and twitter...
Official Google Reader Blog: A little bit of polish
... The way we prioritized these tweaks and fixes was based on forum and Twitter feedback, so please keep it coming....
Right. I think they just make it up and talk to their buds.

Why don't they use GR comments?

Twenty minutes on the Deepwater Horizon

Deepwater Horizon.
Oil riggers on ship that exploded in Gulf of Mexico describe fateful night
... We're waiting to get everyone here before we go!' a supervisor yelled to Eugene and the other men who were waiting near the lifeboats....
They waited 20 minutes on the exploding platform. One hundred and fifteen lived, eleven died. A few jumped and swam to rescue boats, most took the two remaining lifeboats.

Twenty minutes waiting for survivors to run, crawl and be carried to the lifeboats.

Awesome courage.

Radical notion - the missing al Qaeda A team

The eternal post 9/11 question. Hamas has an A team - despite a very high mortality rate. Why did one operation kill off al Qaeda's A team?
Daunting Question | Talking Points Memo
... Jon Stewart asks a genuinely worrisome question: what happens when the terrorists start sending in their A-Team, as opposed to the goofs who've tried the last couple operations?...
Why can't al Qaeda keep recruiting killers?

Maybe it's a problem with their ideology. Maybe there's something about it that doesn't appeal to murderous engineers. Maybe deeply religious Islamists really aren't all that in to murder.

Thursday, May 06, 2010

Welcome to the wild times...

I expected this ...
Robert Reich (The (Almost) Crash of Wall Street)
.... Ninety minutes before the end of the trading day today, the U.S. stock market almost melted down. The Dow Jones Industrial Average dropped nearly 1,000 points. The market regained ground before the end, like a giant 747 narrowly averting a crash landing, but the questions of the day are: What happened? And What does it mean?"
It's not going away. Might as well get used to it.

Update 6/17/2010: See also - Charles Stross - Living through interesting times.
... There's a graph I'd love to plot, but I don't have the tools for. The X-axis would plot years since, say, 1950. The Y-axis would be a scatter plot with error bars showing the deviation from observed outcomes of a series of rolling ten-year projections modeling the near future. Think of it as a meta-analysis of the accuracy of projections spanning a fixed period, to determine whether the future is becoming easier or harder to get right. I'm pretty sure that the error bars grow over time, so that the closer to our present you get, the wider the deviation from the projected future would be. Right now the error bars are gigantic. I am currently guardedly optimistic that the USA will still exist as a political entity in 2023, and that the EU (possibly under a different name; certainly with a different political infrastructure) will do so as well. But in planning the background for that novel set in 2023, I can't rely on the simple assumption that the USA and the EU still exist. We're living through interesting times; I just hope (purely selfishly, wearing my SF author cap, you understand) the earthquake is over bar the aftershocks by next March, or I'm going to have to go back to my editor and suggest she markets the new novel as fantasy.

50 million Neandertals living today

Or 50 million Neandertal equivalents ....
NEANDERTALS LIVE! | john (Neandertal) hawks weblog
... In genetic terms, we can ask, how many times has the average Neandertal-derived gene been replicated in our present gene pool? Those aren't Neandertal individuals -- that is, a forensic anthropologist wouldn't classify them as Neandertals. They're the genetic equivalent.
The answer to this is also simple: In absolute terms, the Neandertals are here around us, yawping from the rooftops.
There are more than five billion people living outside of Africa today. If they are one percent Neandertal, that's the genetic equivalent of fifty million Neandertals walking the Earth around us.
Does that sound minor? If I told you that your average gene would be replicated into fifty million copies in the future, would you be satisfied? Maybe your ambition is greater, but I think the Neandertals have done very well for themselves.
Does this mean that Neandertals belong in our species, Homo sapiens?
Interbreeding with fertile offspring in nature. That's the biological species concept.
Dogs look a lot more diverse than modern humans and neandertal humans, and they interbreed happily. We are one with Neandertal. Tell the BBC, Walking with Cavemen needs an epilogue.

Hawks has written a long, excited, essay with the occasional sentence fragments. He's probably been hitting the champagne. Today's Nature articles on the Neandertal genome are a validation of his research and his enthusiasms.

There's more (emphases mine).
... Burbano and colleagues put together a microarray including all the amino acid changes inferred to have happened on the human lineage. They used this to genotype the Neandertal DNA, and show that out of more than 10,000 amino acid changes that happened in human evolution, only 88 of them are shared by humans today but not present in the Neandertals.
That's amazingly few.
Green and colleagues did a similar exercise, except they went looking for "selective sweeps" in the ancestors of today's' humans. ... They identify 212 regions that seem to be new selected genes present in humans and not in Neandertals. This number is probably fairly close to the real number of selected changes in the ancestry of modern humans, because it includes non-coding changes that might have been selected.
Again, that's really a small number. We have roughly 200,000-300,000 years for these to have occurred on the human lineage -- after the inferred population divergence with Neandertals, but early enough that one of these selected genes could reach fixation in the expanding and dispersing human population. That makes roughly one selected substitution per 1000 years.
Which is more or less the rate that we infer by comparing humans and chimpanzees. What this means is simple: The origin of modern humans was nothing special, in adaptive terms. To the extent that we can see adaptive genetic changes, they happened at the basic long-term rate that they happened during the rest of our evolution.
Now from my perspective, this means something even more interesting. In our earlier work, we inferred a recent acceleration of human evolution from living human populations. That is a measure of the number of new selected mutations that have arisen very recently, within the last 40,000 years. And most of those happened within the past 10,000 years.
In that short time period, more than a couple thousand selected changes arose in the different human populations we surveyed. We demonstrated that this was a genuine acceleration, because it is much higher than the rate that could have occurred across human evolution, from the human-chimpanzee ancestor.
What we now know is that this is a genuine acceleration compared to the evolution of modern humans, within the last couple hundred thousand years.
Our recent evolution, after the dispersal of human populations across the world, was much faster than the evolution of Late Pleistocene populations. In adaptive terms, it is really true -- we're more different from early "modern" humans today, than they were from Neandertals. Possibly many times more different.
Now take a look at my recent post on deep history...
... Even after the development of agriculture and writing we see thousand year intervals of relative stasis in China, Egypt and Mesopotamia. How could this be when our fundamental technologies change in decades. Are the minds of modern Egyptians radically different from the minds of only 6,000 years ago? Why? Why do we see this graph at this time in human history?...
Why do we go from steam engines to iPads in a few human lifespans? Why do we have so much schizophrenia and autism? Our brains have been rewired at top speed; accidents are common.

A big day in science, a big day for Darwin, a bad day for creationists. The Neandertals, of course, must have had souls ...

Update: More from Carl Zimmer. When I wrote the above sentence about autism and schizophrenia, much less the original post some years ago, I didn't know this ...
If you believe the difference between humans and Neanderthals is primarily in the way we think, then you may be intrigued by the strongly selected genes that have been linked to the brain. These genes got their links to the brain thanks to the mental disorders that they can help produce when they mutate. For exampe, one gene, called AUTS2, gets its name from its link to autism. Another strongly-selected human gene, NRG3, has been linked to schizophrenia...
So the brain changes that occurred after Neandertal, in the time of deep history, have associations with the disorder of schizophrenia and autism.

In 2007 I wrote: Is schizophrenia the price we pay for an evolving brain? and I speculated that we could consider autism and schizophrenia to be "evolutionary disorders".

Update 10/6/2010: Clearly prescient: Your Mother Was a Neanderthal #4 (Time Warp Trio). Also, Robert Sawyer must be feeling cheerful today. Lastly, do read the whole Hawks essay. There were a lot of hominin-variants roaming the world 50,000 years ago, and they were likely "dynamic" (or at least - kinetic). We need a word with less historic baggage than "breed" to replace "species" in this discussion.

Update 10/7/2010: The Economist has a good summary, with more on what I've been calling evolutionary disorders.
... But an examination of the 20 largest regions that have evolved in this way shows that they include several genes associated with cognitive ability—and whose malfunction causes serious mental problems. The presence of an extra copy of DYRK1A is linked to Down’s syndrome; mutation of NRG3 is linked to schizophrenia; mutations of CADPS2 and AUTS2 are linked to autism. These four genes therefore look like good places to start the search for modern humanity’s essence...
Incidentally, I did a google search on "evolutionary disorders" and the term has been in use for a year or two. I had the earliest hit I saw though!

Zimmer's article has the clearest overview so far, with a balanced review of the scientific debates.

Steam Hammer vs. John Henry 2.0



Steam hammer vs. John Henry 2.0.

Tuesday, May 04, 2010

What do we need to give Rupert Murdoch to save civilization?

Rupert Murdoch owns News Corp, including Fox news and the Wall Street Journal. Glenn Beck is his tool, the Tea Party is his tool, the WSJ editorial pages are his tool.

By the actions of his properties, we can assume Murdoch has little sympathy for science, democracy, or an enlightenment agenda. On the other hand, he is no fool. He will act to achieve his ego's ends.

His goals to date have been wealth and power. Perhaps he has dreamed they would give him immortality. If so, then science has disappointed him; he will likely die within ten years. Now, perhaps, his focus will shift to crafting a lasting myth, and perhaps a genetic legacy.

If so, he may contemplate the world that lies ahead. He may even reconsider his apparent antipathy to science and reason. Perhaps all he needs is an excuse, some sop to his massive ego.

So let us say to Mr Murdoch - "You win. You are powerful; perhaps powerful enough to injure human civilization. Do you want a statue? We can build you one. Do you want to be worshiped? We will make you a temple. Do you want a title? We can ask the English to give you one. Now, Mr Murdoch, please let civilization live."

How to end the orange alerts

In a response to the Times scare car bomb attempt [1] James Fallows comments on the alerts that have given orange a bad name ...
... for eight and a half years now, the dominant federal government response to terrorist threats and attacks has been to magnify their harm by increasing a mood of fear and intimidation. That is the real case against the ludicrous 'orange threat level' announcements we hear every three minutes at the airport. It's not just that they're pointless, uninformative, and insulting to our collective intelligence; it's that their larger effect is to make people feel frightened rather than brave...
Are alerts red today, now that there might have been yet another (one of ten since 2001) terroristic action in Manhattan?

No, I didn't think so.

I see the "orange alert" sign every time I drive by the MSP airport. I keep hoping some kids will have vandalized it, but of course that would be a federal crime probably punishable by summary execution. It is an endless reminder of how stupid we are.

The entire "orange alert" class of security theater is politically hard to undo. Fallows puts it well ...
... A politician who supports more open-ended, more thorough, more intrusive, more expensive inspections can never be proven "wrong." The absence of attacks shows that his measures have "worked"; and a new attack shows that inspections must go further still. A politician who wants to limit the inspections can never be proven "right." An absence of attacks means that nothing has gone wrong -- yet. Any future attack would always and forever be that politician's "fault." Given that asymmetry of risks, what public figure will ever be able to talk about paring back the TSA...
If Obama were to do anything obviously rational about these delusions, Cheney/Murdoch would be frothing at the mouth the next morning.

There is hope, however. Obama could use some terrorist act to declare that the nation must consider "orange" to the the new normal. We will never return to whatever the color below orange was. (That is likely true; the forecast is stormy forever). He can also say that cognitive science teaches us that unchanging things become invisible to us. So we will randomly make announcements and activate the orange alert signs to make them more perceptible, with an average frequency of once an hour. Over time the frequency will diminish.

The signs will dim. Some will fail. Repairs will slow. One day we will turn them off.

[1] I wonder if bomb instructions are harder to find now than they were fifteen years ago. I suspect so.

Sunday, May 02, 2010

Arizona and immigration - an inarguable response


Gwynne Dyer, to the bemusement of anyone who has read his past columns, seems to support Arizona's immigration policy ...
Gwynne Dyer: Arizona bucks belief illegal migrants have rights - Gwynne Dyer - NZ Herald News

The President of Mexico was furious. "Criminalising immigration, which is a social and economic phenomena, opens the door to intolerance, hate, and discrimination," Felipe Calderon told a meeting of Mexican immigrant groups.... 
... But suppose I went to Mexico as a tourist and then stayed there illegally, taking work that might otherwise have gone to some deserving Mexican citizen. I would not be treated more gently by the Mexican authorities.

Why does Mexico believe that its own citizens who are illegally in the United States deserve better treatment? ...

.... Some argue that they are doing jobs nobody else wants, but that is only a possible reason for letting them stay. It certainly does not give them the right to stay.

Yet the Mexican government reacts with outraged indignation whenever the US government, or in this case an American state, talks about enforcing the law against illegal immigrants.

It has come to think of the nod-and-a-wink arrangement that allows large numbers of illegal immigrants to cross the border each year as the natural state of things.

Arizona is calling time on that system, and intends to seek out and send home people who are in the state illegally.

In most parts of the world, that would not be regarded as unreasonable. What is different in Arizona's case?...
Hmmm. Sounds reasonable. Surprising to see Dyer on the side of the GOP though.

Except then he skewers Arizona and its supporters in the penultimate paragraph. Do read the essay, it's brilliantly done.

Teachers, doctors and pay for performance

In one paragraph, Gail Collins summarizes an important issue with basing teacher compensation on student performance:
Gail Collins - Teachers Always Show Up -
... while it’s important to make teachers accountable, telling them their jobs could hinge on their students’ grades on one test is a terrible idea ... The women and men who go into teaching tend, as a group, to be both extremely dedicated and extremely risk-averse. The stability of their profession is a very important part of its draw. You do not want to make this an anything-can-happen occupation, unless you are prepared to compensate them like hedge fund traders...
The same is true of physicians by the way.

The real problems aren't simply incompatible personality traits however. The real problem is that these systems are dominated by Goodhart's law.

As Texas demonstrated many times, the easiest way to improve outcomes is to game the system. With both students and patients this is done by changing the denominator -- either by reclassification (change who takes tests) or by purging the problems (zero tolerance discipline) and filtering the candidates (programs appealing to elite students, wealthier families).

The same things happens in health insurance (risk assumption). Rescission is one way to change the denominator, another one is to promote (inexpensive!) alternative therapies that appeal primarily to health people. Putting the enrollment office on the second floor of an elevator free building is the classic approach to denominator bias.

These effective strategies don't have to be consciously applied. The "invisible hand" will reinvent them time and again.

There are many ways to improve the performance of teachers and physicians that reduce the appeal of system gaming solutions. They don't have the simplistic appeal of "pay for performance" however.

So we'll suffer through a lost decade before, once gain, letting these mistaken policies quietly die.

Saturday, May 01, 2010

Anthrax - a cautionary tale

I wasn't blogging when, one week after the 9/11 attack, mailed anthrax killed five people, seriously injured 17 others, and paralyzed much of American commerce.

If I had been blogging back then, I'm pretty sure I would have joined in the general attack on an innocent man. It was a heck of an attack; this month The Atlantic tells the story of how the FBI got the wrong man. He (and his lawyers) ended up with various settlements totaling millions of dollars.

Later the FBI turned on Bruce Ivins, a troubled man. Turns out biological warfare research attracts unusual people. Ivins committed suicide. Since the post 9/11 FBI has well deserved negative credibility, nobody is fully convinced that Ivins was the murderer.

The FBI was never reformed. It staggers on today.

What have some of us learned from the anthrax story? We learned that the FBI is institutionally troubled. We learned that government can break the rules and get away with it. We learned that when crisis hits, we lose our bearings. We learned that defense lawyers are a good idea. We learned that massive security failures can be easily forgotten.

There was never a full evaluation of all the ways the FBI failed, and why. Bush/Cheney had too much dirty laundry of their own to go there, and Obama has way too much Bush/Cheney dirty laundry to clearn.

So the FBI is going to do this again.