Minnesota explained: Rubio, Sanders and the President Gordon agenda.

My home state of Minnesota, most annoyingly, uses caucuses. I attend the Dem variety in the bluest of neighborhoods. They are crowded, disorganized and well meaning. When I ride my bike to caucus cars slam to a stop as though I were a family of 5 on foot. Which is wrong and dangerous, but I appreciate the sentiment.

The Dem caucus is not representative of the Dem voter. You have to be very persistent to fight through traffic and crowds to hit the narrow window for voting. Only the most committed can get there. The caucus system is a bad, bad idea. I think the same is true of the GOP caucuses here.

So the caucus results last night were not too surprising.

The GOP, as usual, went for the extreme right candidates. This year there were three of ‘em - Trump, Rubio and Cruz. Since we have one of the strongest economies in the US, with unemployment under 5% for years, Trump didn’t have his usual vote-of-despair left-behind advantage. So the three extremes ended up with fairly similar numbers, but the anti-Trump movement focused on Rubio and he won.

My team went, as usual, for the more left candidate. Sanders won by 20%, so he might even have won a primary. I voted for HRC, but the MN DFL is effectively to the left of me — which is saying a lot.

I’m backing HRC but, in truth, we need to go down some variation of the Sanders road over the next two decades. We’re going to have to bias the post-AI globalized economy to generate jobs for the non-college — even at the cost of economic efficiency. We have to build more social supports for people who aren’t working, with some kind of rethinking of what we do for disabled workers. We may end up with a non-binary definition of disability, or even some kind of guaranteed income.

We will end up taxing wealth in one form or another and we’ll do a  lot more government redistribution. We should also, and this is not so much Sanders, execute on the old Gore “reinventing government” mission, refactoring regulatory systems. We need to break the accounting, tax and regulatory frameworks the mega-corporations (“neo-Chaebol is a term I like) have built; the foundations of a great stagnation ecosystem wherein new companies are built only for acquisition.

We need to build supports that enable entrepreneurial types to pick business designs off a shelf and implement them. We need to strip benefits from employment completely, and both fix and finish the mission the ACA started — while breaking the corporatization of that great compromise.

Phew. It’s a big mission, but it is doable. We have to do it, or we get President Trump. Or worse. Sooner or later. 

So I don’t feel that bad that Sanders won Minnesota. It’s a good sign for the future. I don’t want him to go up against the GOP though. By the time their attack machine is done with him he’ll be hiding in a stone shelter in the wilderness. HRC’s great strength is she’s lived that machine for decades. Nobody short of Obama can equal that. (And, of course, I would love him to keep his job. Alas, even if our constitution allowed that I think he’s ready for a change.)

See also:

• The AI Age: Siri and Me 12/2011
• Causes of the Great Recession: China, GPSII and RCIIIT. Now for Act III. 4/2010. Holds up pretty well, but I now add a third somewhat related factor of a mega-corp created environment that’s toxic to the startups that historically create employment.
• Amerisclerosis? Why US underemployment (and probably inequality) persists 9/2013. Secular stagnation is the current term.
• Mass disability goes mainstream: disequilibria and RCIIT 11/2011. In the new age there jobs for the high EQ/IQ. Others are not so needed.
• Ants, corporations and the great stagnation 12/2011
• Causes of the crash of ’08 - how much fraud? 2/2009. Good to look back, but I know think these were secondary causes. For example, IT enabled complexity and complexity enabled fraud.
• Civilization is stronger than we think: Structural deficits and complex adaptive systems 5/2010. Trumpism is scary, but it’s also the way the “meta-mind” approaches big hard changes.
• Donald Trump is a sign of a healthy democracy. Really. 8/2015. The problem of the unwanted non-college (“working class”) isn’t going to be solved by more education. Remember, the non-sentient AI revolution will come for you too.
• For American adults are poverty and disability the same thing? 10/2013. I think this is true for white and asian men in America, for others racism also drives poverty. (I mention this at the end of the post but should have had it up front.)

Apple blogs: please stop confusing Apple shareholders with Apple customers

Apple made bazillions again. They won’t pay corporate tax on it. The share price has gone up.

That’s good for me in one way — I own index funds that hold Apple shares. On balance when those shares go up or Apple pays dividends I get more money. Yay for me, though I’d do just as well if the money went to, say, Microsoft or Google. My index funds own their shares too. So only a little Yay.

Whatever wealth I gain or lose from a change in Apple’s share price, however, is dwarfed by the money I spend on Apple products. Three laptops (one recently expired iMac), five iPhones, Airports, Apple TV, iTunes movies and TV shows and so on. That direct cost is exceeded by the life-time I spend managing Apple’s defects, quality issues, and nastily executed strategic killings. I think on balance I come out ahead — but some days I’m not so sure. The gap is smaller than it used to be.

As an Apple shareholder I’m mildly pleased with Apple. As an Apple customer though, I’m not so pleased. The Apple Watch leaves me cold. Using data lock customer retention while killing products (yeah, Aperture) without a replacement is just bad. The iPad should have been multi-user years ago. 3D Touch isn’t worth the cost, complexity and weight. The iBook mess. The nuttiness of putting a mechanical hard drive and a very expensive display in a non-serviceable iMac. Meanwhile Apple’s traditional 20% cost premium is turning into a 40% premium.

As an Apple customer I’d like to see Apple’s share price fall 20% - as long as one of my other funds gets the value instead. A falling share price might promote interest in existing customers.

So, Apple blogs, please stop paying so much attention to Apple’s share price. It’s just not that important to me.

Making of the modern pop song - fusion of the corporate and the anonymous individual

Bruce Springsteen and the E Street Band was the apex of my popular music connection. In a weird adventure of late childhood I attended Winterland's (San Francisco) last-but-one performance — featuring Springsteen.

These days my kids control the radio. So I hear a lot of country-pop and pop-pop. I assumed that music was made more or less the same way that Bruce did his work 30 years ago.

I couldn’t be more wrong. This month’s Atlantic Magazine included a short article that was the most surprising thing I’ve read in years [emphases mine]. It’s a review of John Seabrook’s book ‘The Song Machine’...

Karl Martin Sandberg, Mikkel Eriksen, Tor Hermansen and Other Songwriters Behind the Hits of Katy Perry and Taylor Swift - Nathaniel Rich, The Atlantic

The biggest pop star in America today is a man named Karl Martin Sandberg. The lead singer of an obscure ’80s glam-metal band, Sandberg grew up in a remote suburb of Stockholm and is now 44. Sandberg is the George Lucas, the LeBron James, the Serena Williams of American pop. He is responsible for more hits than Phil Spector, Michael Jackson, or the Beatles.

After Sandberg come the bald Norwegians, Mikkel Eriksen and Tor Hermansen, 43 and 44; Lukasz Gottwald, 42, a Sandberg protégé and collaborator who spent a decade languishing in Saturday Night Live’s house band; and another Sandberg collaborator named Esther Dean, 33, a former nurse’s aide from Oklahoma who was discovered in the audience of a Gap Band concert, singing along to “Oops Upside Your Head.” They use pseudonyms professionally, but most Americans wouldn’t recognize those, either: Max Martin, Stargate, Dr. Luke, and Ester Dean.

Most Americans will recognize their songs, however. As I write this, at the height of summer, the No. 1 position on the Billboard pop chart is occupied by a Max Martin creation, “Bad Blood” (performed by Taylor Swift featuring Kendrick Lamar). No. 3, “Hey Mama” (David Guetta featuring Nicki Minaj), is an Ester Dean production; No. 5, “Worth It” (Fifth Harmony featuring Kid Ink), was written by Stargate; No. 7, “Can’t Feel My Face” (The Weeknd), is Martin again; No. 16, “The Night Is Still Young” (Minaj), is Dr. Luke and Ester Dean….

… The illusion of creative control is maintained by the fig leaf of a songwriting credit. The performer’s name will often appear in the list of songwriters, even if his or her contribution is negligible. (There’s a saying for this in the music industry: “Change a word, get a third.”) But almost no pop celebrities write their own hits. Too much is on the line for that, and being a global celebrity is a full-time job. It would be like Will Smith writing the next Independence Day.

… We have come to expect this type of consolidation from our banking, oil-and-gas, and health-care industries. But the same practices they rely on—ruthless digitization, outsourcing, focus-group brand testing, brute-force marketing—have been applied with tremendous success in pop, creating such profitable multinationals as Rihanna, Katy Perry, and Taylor Swift...

.... “It’s not enough to have one hook anymore,” Jay Brown, a co-founder of Jay Z’s Roc Nation label, tells Seabrook. “You’ve got to have a hook in the intro, a hook in the pre, a hook in the chorus, and a hook in the bridge, too.”

Sonically, the template has remained remarkably consistent since the Backstreet Boys, whose sound was created by Max Martin and his mentor, Denniz PoP, at PoP’s Cheiron Studios, in Stockholm. It was at Cheiron in the late ’90s that they developed the modern hit formula, … Seabrook describes the pop sound this way: “ABBA’s pop chords and textures, Denniz PoP’s song structure and dynamics, ’80s arena rock’s big choruses, and early ’90s American R&B grooves.” ... music is manufactured to fill not headphones and home stereo systems but malls and football stadiums. … Session musicians have gone extinct, and studio mixing boards remain only as retro, semi-ironic furniture.

The songs are written industrially as well, often by committee and in bulk. Anything short of a likely hit is discarded. The constant iteration of tracks, all produced by the same formula, can result in accidental imitation—or, depending on the jury, purposeful replication….

… Hits are shopped like scripts in Hollywood, first to the A-list, then to the B-list, then to the aspirants. “. The most-successful songwriters, like Max Martin and Dr. Luke, occasionally employ a potentially more lucrative tactic: They prospect for unknowns whom they can turn into stars. This allows them to exert greater control over the recording of the songs and to take a bigger cut of royalties by securing production rights that a more established performer would not sign away...

… K-pop, a phenomenon that gives new meaning to the term song machine. Lee codified Pearlman’s tactics in a step-by-step manual that guides the creation of Asian pop groups, dictating “when to import foreign composers, producers, and choreographers; what chord progressions to use in particular countries; the precise color of eye shadow a performer should wear in different Asian regions, as well as the hand gestures he or she should make.”

In K-pop there is no pretension to creative independence. Performers unabashedly embrace the corporate strategy that stars in the United States are at great pains to disguise. Recruits are trained in label-run pop academies for as long as seven years before debuting in a new girl or boy group—though only one in 10 trainees makes it that far...

Of course it’s hardly surprising that pop songs have evolved to match the most common interests of the biggest audience. What fascinates here is the fusion of the modern corporate model with the peculiar talents of three Scandinavians and one American, and the purity of “star power” required of the modern pop performer.

I wonder when the nsAIs (non-sentient AIs) will displace those Scandinavians. Apple is famously vertical and AI-pop is the obvious next step after K-pop.

I’d love to read a Madonna essay on the topic, she seems now a bridge between the old world of Springsteen and the new world of Katy Perry. 

Crime and the enterprise

What do Seagrams, YouTube, Uber, Elon Musk’s PayPal, 1930’s McKesson, Jobs Rip. Mix. Burn, and Las Vegas have in common?

Many very successful enterprises have a history of unethical or criminal behavior. Sometimes there are convictions, sometimes not. The history is usually buried, sometimes it’s romanticized. Occasionally, as with Enron, the crime ends the enterprise.

I think if one wrapped the average CEO with Wonder Woman’s Lasso of Truth they’d confess to lesser versions of the kinds of sins that put Bernard Madoff in jail.

We don’t pay enough attention to this.

Reorganizations - did Petronius Arbiter really say that in AD 27? No.

John Halamka is unhappy with the direction of federal health computing initiatives. He’s not alone, just about everyone outside of Madison Wisconsin is unhappy. My prescription would differ from John’s, and maybe I’ll write about that one day, but that’s not what this post is about.

This post is about a quote he references:

As Petronius Arbiter said in 27 A.D., we have to avoid change purely for the sake of change as this creates frustration

“We trained hard—but it seemed that every time we were beginning to form up into teams we were reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing, and what a wonderful method it can be for creating the illusion of progress while actually producing confusion, inefficiency, and demoralization.”

On the one hand, this is perfect. I speak, of course, from experience. I’ve lived through reorg death spirals — when the reorg interval falls below 12 months the end is quite near.

On the other hand, it’s too perfect. It turns out we know very little about Gaius Petronius Arbiter except that he hung out with Nero. Even allowing for the slanderous and largely fictional descriptions of the Roman emperors, he was probably no pillar of virtue. This doesn’t really feel like something a Nero flunky would say.

Turns out, it’s a misattribution. The original was by Charlton Ogburn (1911–1998) in “Merrill’s Marauders: The truth about an incredible adventure” in the January 1957 issue of Harper’s Magazine …

We trained hard, but it seemed that every time we were beginning to form up into teams we would be reorganized. Presumably the plans for our employment were being changed. I was to learn later in life that, perhaps because we are so good at organizing, we tend as a nation to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralization."

Ogburn’s article isn’t freely available, but you can read about Merrill’s Marauders: "a United States Army long range penetration special operations jungle warfare unit, which fought in the South-East Asian theatre of World War II, or China-Burma-India Theater (CBI). The unit became famous for its deep-penetration missions behind Japanese lines, often engaging Japanese forces superior in number.” They had a blood and brutal story. I have no idea how that connects to Ogburn’s observation on reorgs. Anyone know?

Tech bubble 2015: Billion dollar acquisitions financed by the "rent" we pay MegaCorp monopolies?

Stratchery claims retail investors are shielded from latest tech bubble because MegaCorp and Finance are buyers, not retail investors.

But why are MegaCorp (0.1 trillion and up publicly traded corporations) paying billions?

Largely, I suspect, to forestall competition and enable monopoly rent earnings. Incidentally sweeping up disruptive talent [1] as well as aborting potential corporate competitors.

We usually think of this acquisition bubble as driven by “paying you to borrow” interest rates, but it’s also being funded by the monopoly rents we pay oligopolies in the new gilded age.

When does it stop?

The ultimate limit is probably the ability of consumers to pay the rent(s)…

[1] Talent doesn’t have to be put to good use, just kept out of job market until threat expires. (*cough* secular stagnation *cough*). The corporate acquisition is intentional, the talent lock is partly an “invisible hand” class “happy accident”.

IT and productivity - two noteworthy posts from Equitable Growth

Brad DeLong, as best I can tell, does not lead the Washington Center for Equitable growth. Along with Nick Bunker he does, however, produce many of their best blog posts (RSS icon proudly displayed) - like two from a Hamilton Project Future of Work conference (intro PDF, Brynjolfsson and McAfee [1]) that I recently posted back-to-back in my app.net feed.

The first is by Brad, taken from a Larry Summers speech which explains why Summers matters (emphases mine) …

Morning Must-Watch: Larry Summers and Friends: The Future of Work - Washington Center for Equitable Growth

… we have enormous antidotal evidence and visual evidence of [modern IT/AI] technology having huge and pervasive effects … On the other hand, the productivity statistics over the last dozen years are dismal. Any fully-satisfactory synthetic view has to reconcile those two observations…

… I think it is a mistake to think of the economy as homogeneous–as producing something called “output”. As we approach these issues, an aspect that doesn’t get enough attention is that sectors through progress work themselves into economic irrelevance. … candle-making was a major industry in the 1800s, illumination is a trivial industry today…. 

We need to recognize that a sector that has rapid technological progress but of which the world can absorb only so much becomes ultimately unimportant in the economy….

…Consider two goods today: a television set, and a year at a university (or I could use a day in a hospital). The consumer price index for the latter two categories is in the neighborhood of 600. the consumer price index for the former category is 6. There has been a hundredfold change in the relative price of TV sets and the provision of basic education and health care services.

If anybody is wondering why governments can’t afford to do the things they used to do, I just gave you a big hint.

If anybody’s wondering where most people are growing to be working in the future, i just gave you a big hint.

If anybody’s completely confident we will have rapid productivity growth in the future, they should be giving pause–because no matter how much productivity we have in agriculture or illumination, it doesn’t really matter for the aggregate economy. Increasingly, that’s becoming true of a larger and larger fraction of what it is that we produce.

…  in the 1960s,= ,,,  about 6% of the men in the United States between the age of 25 and 54 were not working. Today, 16% of the men in the United States between the age of 25 and 54 are not working. It won’t be very different even when the economy is at full employment.

Something very serious has happened with respect to the general availability of quality jobs in our society.

… Whether you think it is due to technology or to globalization or to the maldistribution of political power, something very serious is happening in our society.

The second is by Nick Bunker …

What to worry about on the supply side - Washington Center for Equitable Growth

…  A new paper by economists Stephen G. Cecchetti of Brandeis International Business School and Enisse Kharroubi of the Bank of International Settlements argues that an over-bloated financial sector can reduce productivity. They contend that by drawing talented workers toward Wall Street, the finance sector lowers the total productivity rate….

From Summers we see that certain technologies have dramatically diminishing returns, so that they become a smaller part of a larger whole. Obvious, now that he’s pointed this out. There is only so much light that we can use. Is this also true of computing power? Is it true of energy?

Is Summers saying all employment will shift to expensive and inefficient health care and education? Isn’t that what Baumol said?

It’s a good exercise to consider how computational processing could follow the path of the lightbulb. There is, for me, no significant difference between a response time of milliseconds and picoseconds. Between modern processors and SSDs there seems no pressing need desktop performance increases. To some extent the human users is the rate limiting step. Only when one eliminates the human user does a millisecond vs. picosecond delay matter, as with high frequency stock “trading” (manipulation) — or the timescales of an AI.

Thinking of high frequency trading, we are reminded that vast amounts of modern economic activity transfer wealth without producing product. They have low to negative productivity, as found by Cecchetti and Kharroubi. Some of these are parasitic processes as would arise from any complex adaptive system, others are forms of more or less transparent fraud rooted in complexity exploitation. In our times information technology has been an essential enabler of both.

Considering failures of productivity enhancement, what do we make of Google Search? Ten years ago Google Search was miraculous, now it increasingly fails to produce much of value [2]. The web grew very quickly on an advertising based business model, but that model has failed and a new model is unborn. Progress is unpredictable in whitewater times.

Or consider email. We’ve been using it widely for almost 30 years, yet very few people use email well. Much time in routine corporate life is wasted by incompetent email [3]. Alas, email’s failures can’t compare to the disappointment of the “electronic health record” or “EHR”

Ahh, the EHR! What dreams we had in the 1980s. Dreams that took me from rural practice to another degree to a career in healthcare IT. It was so obvious how patients would benefit, and how all providers would become far more productive. 

The reality of the EHR has been a crushing disappointment. One day, perhaps, the dreams will come true — but nobody in 1990 would consider the state of clinical automation in 2015 anything but an appalling failure. A failure not of technology, but of business incentives, of markets, and of complex interlocking rigidities.

The list goes on. The same technology that enables location-based alerts also enables malware and adware.  Our economic landscape has been transformed; new technology causes vast wealth creation, but then wealth concentration drives the greater economy to a stagnant deflationary spiral.

Perhaps we’ve been here before. It took 60 years after the 1780 “start” of the industrial revolution for worker living standards to definitively rise. If our revolution started 70 years ago, maybe the rise will start any time now.

Or perhaps we’re headed in a different direction. An Economy is not a system for satisfying humans, or a system for producing goods or wealth or jobs. The “Complex Adaptive System” cliche truly applies. It is an immaterial ecosystem that produces things like wealth and jobs, but also emergent amoebacorp and brain sucking jobs in finance. The Economy is a beast of its own, slouching towards Bethlehem.

- fn -

[1] The PDF includes two killer graphs …

and

 

[2] While writing this post I often searched for prior posts in notes.kateva.org. Google did a poor job, Duck Duck Go constrained to “site:kateva.org” did much better.

[3] If you ever hear of a corporation that teaches employees to write effective email please let me know. I’d like to buy shares.

Related

• Global finance and parasites 9/2009
• Secular stagnation and the Beveridge curve - the role of frail boomer parents 6/2014
• Speculation: The corporate ecosystem and American stasis: corporations are players independent of their owners and managers, and they have changed our financial ecosystem the same way algae change a pond (Amaebocorp) 11/2010.
• The morality of markets - and a response to hunger 9/2010
• Baumol’s cost disease: medicine, education and post-AI disruption 10/2012
• Fraud, IT, Economics and the Depression: Galbraith is most impolite 8/2011
• Finance 2.0, Oil and Project Syndicate - entertainment 2012! 12/2011
• Fraud on Cyber: An annotated sample of Gordon’s Notes 8/2011
• Causes of the Great Recession: China, GPSII and RCIIIT. Now for Act III. 4/2010
• 21st century deception and the evolution of the emergent mind 6/2007
• The IQ of an ecosystem and other questions of emergence 5/2007 

Google and the Net 2015: The Quick, the Sick and the Dead - 7th edition

I first published a Google Quick, Sick and Dead list in January 2009, at the dawn of Dapocalypse. This was six months after the Battle of Latitude; we were well into the post-Android Google-Apple War I. By then the iPhone was big, but not as dominant as it would get.

Less than two years later, in July of 2011, Google Plus launched. Five months later Google Reader Shares vanished and Google 1.0 was declared dead. Looking back, a lot of software became ill in 2011.

Again with the damned interesting times! Since then many cloud services have been killed or abandoned. We’re growing accustomed to major regressions in software functionality with associated data loss (most recently with Apple’s Aperture). I am sure businesses struggle with the rate of change.

Looking back the 2009+ software turmoil probably arose from 2 factors, one technological and one external. The technological factor was, in a word, the iPhone. Mobile blew up the world we knew. The external factor was the Great Recession (which, in Europe, continues today as the Lesser Depression). 

Of course if you believe the Great Recession has its roots in globalization and IT (including IT enabled fraud and IT enabled globalization) [1] then it’s really all a post-WW II thing. I suppose that’s how it will look to the AIs.

Which brings me back to my Google Quick Sick and Dead series. It’s been more than four years since the 6th edition. I haven’t had the heart to update the list the way I once did — too many old friends have become ill. I’m doing an update today because I started a post on the Google Calendar iPad experience and it got out of control.

As with prior editions this is a review of the Google Services I use personally — so neither Android nor Chromebooks are on the list. It’s also written entirely from my personal perspective; I don’t care how the rest of the world sees Google Search, for me it’s dying.

With those caveats, here’s the list. Items that have effectively died since my last update are show with a strike-through but left in their 2011 categorization, old items have their 2011 category in parentheses. Items in italics are particularly noteworthy.

The Quick (Q) 

• Google Scholar (Q)
• Chrome browser (Q)
• Maps and Earth (Q)
• News (Q)
• Google Drive and core productivity apps - Docs, Sheets, Present (Q)
• YouTube (Q)
• Google Profile (Q)
• Google Translate (S)

The Sick (S)

• Google Parental Controls (D)
• Gmail (Q)
• Google Checkout (S)
• iGoogle (S)

The Walking Dead (D)

• Google Search (S)
• Google Custom Search (D)
• Google Contacts (Q)
• Google Hangout (S): on iOS
• Google Voice (D)
• Google Mobile Sync (S)
• Google’s Data Liberation Front (S)
• Google Calendar (Q)
• Google Tasks (Q)
• Picasa Web Albums (Q)
• Blogger (D)
• Google Books (S)
• Google Plus (Q)
• Buzz (D)
• Google Groups (D)
• Google Sites (D)
• Knol (D)
• Firefox/IE toolbars (D)
• Google Talk (D)
• Google Reader (S)
• Orkut (S)
• Google Video Chat (S) - replaced by G+ Hangout

A lot has happened in four years. I was surprised to see I’d rated Google Search as “sick” in 2011 — but that was the right call. In my personal experience Search has moved into the Dead zone since; I am often unable to locate items that I know exist. I have to find them by other means.

 

I haven’t adopted any new Google Services since 2011. On the other hand hand many services I thought would die have simply remained “Walking Dead”. Google Scholar’s persistence is quixotic; I figure Larry Page is personally fond of it.

 

Google Calendar is the Canary case. Four years ago Calendar was due for some updates, but it looked healthy. My immediate family members each have 1 Google Calendar; with various other family and school calendars and event feeds our total number of subscribed calendars is probably in the mid 20s. We use Google Calendar with Calendars 5.app on iOS and Safari or Chrome elsewhere. We’re Calendar power users.

 

Since 2011 though Calendars has stagnated. Google’s only “improvement” has been a partially reversed 2011 usability reduction. Today, thanks to our school district’s iPad program, I got to experience Google Calendar on the iPad without the benefit of Calendars 5 

[2]. It’s an awful experience; the “mobile” view is particularly abysmal. Suddenly four years of stagnation leapt into focus. Google Calendar is now an Android/Chrome only product.

 

Looking across the list there’s a pattern. Google is abandoning its standards based and internet services, focusing instead on Android and an increasingly closed Chrome-based ecosystem. Presumably those two will merge and Google and Apple will become mirror images. It’s unclear if anything will inherit the non-video streaming internet, or if it will simply pass into history. Maybe our best hope is that smaller standards-friendly ventures like Fastmail, Pinboard, WordPress, and Feedbin may prosper in an ecosystem Google has abandoned.

  

Damn, but it’s been one hell of a ride. The take away for me is that I need to get away from Google, but that’s easy to say and hard to do. Replacing my family’s grandfathered Google Apps services with the Fastmail equivalent would cost over $600 a year and the migration would take a non-trivial chunk of my lifespan. History is better to read than to experience, and we’re still early into the AI age.

 

- fn -

 

[1] It’s a different blog post, but widespread hacking (governments included) and ubiquitous identity theft may yet kill Internet 1.0. As of as Jon Robb predicted in 2007 the Internet itself is ailing.

[2] I haven’t been able to get my own iPad purchase past Gordon’s Laws of Acquisition. Those same laws have stopped my iPhone 6 purchase. Maybe I can justify the iPad by keeping my 5s.

See also:

• Google Quick, Sick and Dead #1 (1/09)
• Google Quick, Sick and Dead #2 (11/09)
• Google Quick, Sick and Dead #3 (6/10)
• Google Quick, Sick and Dead #4 (10/10)
• Google Quick, Sick and Dead #5 (5/11)
• Google Quick, Sick and Dead #6 (9/11)
• AvantGo RIP - memories of the roaring 90s 6/2009
• Software died three years ago. Why? 12/2014.
• Apple kills yet another photo sharing service - and generally screws up iOS photo management 9/2014
• How quickly can businesses adapt? 7/2014
• Apple and the 2013 tech world - in the doldrums 8/2012
• Project Ducky - why I’ve stopped using new Cloud services 3/2013
• Fraud and Globalization: Toy Story III 6/2007

Where does all the time go - video training from SafeSports to corporate marketing.

A few days ago The Economics published a long fluff piece on the allegedly modern malady of feeling we don’t have enough time — even though, supposedly, we have more free time than in the recent past.

I think they’re nuts. The time I spend debugging Apple’s decaying ecosystem (latest iTunes bug) doesn’t show up in their accounting — and that’s a big chunk of my week.

There are worse things than Apple bugs though. There’s … there’s … video training. Its our latest life-sucking horror. Let me explain what I mean.

As I type this I have two computers running video training materials. One is running USA Hockey’s SafeSports 90+ minute training video on bullying, sexual harassment and sexual abuse, the other is running my corporate mandated medicare law training. Both computers are muted, my phone is streaming Thelonius Monk, I’ve got lemon scented tea by my side, the family is nearby, I can look out the window…

All I have to do is click one screen or the other when the video stops; between the two screens I click every 5 minutes or so. If I fail to click nothing bad happens, I’ll just need to spend more time listening to Jazz and writing a blog post. Every 30 minutes or so I have to wake up and take a quiz. If I make a mistake on the quiz, I get to immediately retake it knowing the right answer.

This is instead of doing a few minutes of reading, taking a meaningful test that requires me to review my material, and filing key reference information in my Simplenote archive.

What’s so bad about that?

If you have to ask, I don’t wanna talk to you. I have about 30 years left to live, of which 11 years will be spent sleeping or commuting. That means I’m spending 0.03% of my life as a lab rat. That’s not even considering that my corporate marketing training made me claw my eyes out.

That’s bad if only I had to do this, but across America tens of thousands of kid sports coaches are drinking their way through SafeSport training. Imagine the liver damage alone. Let’s say 20,000 people for 2 hours at $15/hour - $600,000.

For my corporate home the wasted time bill is probably $1-2 million. I’ve seen execs agonize for years over a spend like this. A million dollars is loose change for our CEO, but for mortals it’s real money. In some parts of the world a million could change lives.

Yeah, it’s bad. So how did we come to this?

It starts, of course, with good intentions. The SafeSports training, in particular, is extremely well intentioned. If you avoid hitting the Scotch, you can even spot SafeSport guides to “red flag grooming behaviors” (not hair care) and “travel policy” [1]. Some of the corporate training can keep one out of prison, and many of the SafeSport recommendations protect both coaches and athletes.

But the good intentions could be met with a handout and a quiz. So what went wrong?

I suspect badly written mandates play a role, but never underestimate the power of well intentioned incompetence mixed with corporate purchasing and enabling technology. It’s not hard to edit video these days and it’s not hard to buy or build a training toolkit. With a bit of luck and pluck a small firm can sell material to 100 firms at 30K+ a pop. What do you think they’d get for a 1-5 page handout? Without a budget of a few hundred grand, how would HR justify its headcount? Sure there’s a price to be paid, but its someone else’s price.

It’s just one of those things. I don’t think we can make it go away.

If you’ll excuse me, I gotta click a button.

- fn -

[1] One of the worst aspects of the SafeSport training is there are sensible tips buried in the morass. Such as having one’s own kid in the car when helping transport an athlete. It’s too easy to miss them in the burning need to get out of the chair.

Salmon, Picketty, Corporate Persons, Eco-Econ, and why we shouldn't worry

I haven’t read Picketty’s Capital in the Twenty-First Century. I’ll skim it in the library some day, but I’m fine outsourcing that work to DeLong, Krugman and Noah.

I do have opinions of course! I’m good at having opinions.

I believe Picketty is fundamentally correct, and it’s good to see our focus shifting from income inequality to wealth inequality. I think there are many malign social and economic consequences of wealth accumulation, but the greatest threat is likely the damage to democracy. Alas, wealth concentration and corruption of government are self-reinforcing trends. It is wise to give the rich extra votes, lest they overthrow democracy entirely, but fatal to give them all the votes.

What I haven’t seen in the discussions so far is the understanding that the modern oligarch is not necessarily human. Corporations are persons too, and even the Kock Brothers are not quite as wealthy as APPL. Corporations and similar self-sustaining entities have an emergent will of their own; Voters, Corporations and Plutocrats contend for control of avowed democracies [1]. The Rise of the Machine is a pithy phrase for our RCIIT disrupted AI age, but the Corporate entity is a form of emergent machine too.

So when we think of wealth and income inequality, and the driving force of emergent process, we need to remember that while Russia’s oligarchs are (mostly vile) humans, ours are more mixed. That’s not necessarily a bad thing - GOOGL is a better master than David Koch. Consider, for example, the silencing of Felix Salmon:

Today is Felix's last day at Reuters. Here's the link to his mega-million word blog archive (start from the beginning, in March 2009, if you like). Because we're source-agnostic, you can also find some of his best stuff from the Reuters era at Wired, Slate, the Atlantic, News Genius, CJR, the NYT, and NY Mag. There's also Felix TV, his personal site, his Tumblr, his Medium archive, and, of course, the Twitter feed we all aspire to.

Once upon a time, a feudal Baron or Russian oligarch would have violently silenced an annoying critic like Salmon (example: Piketty - no exit). Today’s system simply found him a safe and silent home. I approve of this inhuman efficiency.

So what comes next? Salmon is right that our system of Human Plutocrats and emergent Corporate entities is more or less stable (think - stability of ancient Egypt). I think Krugman is wrong that establishment economics fully describes what’s happening [2]; we still need to develop eco-econ — which is not “ecological economics”. Eco-econ is the study of how economic systems recapitulate biological systems; and how economic parasites evolve and thrive [3]. Eco-econ will give us some ideas on how our current system may evolve.

In any event, I’m not entirely pessimistic. Complex adaptive systems have confounded my past predictions. Greece and the EU should have collapsed, but the center held [4]. In any case, there are bigger disruptions coming [5]. We won’t have to worry about Human plutocrats for very long….

See also

• Princeton Study: U.S. No Longer An Actual Democracy
• Justice Stevens Suggests Solution for ‘Giant Step in the Wrong Direction’
• Economist Receives Rock Star Treatment
• Transcending Complacency on Superintelligent Machines. Hawking, Russell, Tegmark and Wilczek
• The Piketty pessimist | Felix Salmon
• Frustrations of the Heterodox - Krugman

and from my stuff

• Ants, corporations and the great stagnation 12/2011
• Speculation: The corporate ecosystem and American stasis 11/2010
• Corporate growth and the unexpected triumph of central planning 11/2012
• The debt ceiling: Can Goldman Sachs win if the US defaults? 4/2011. 
• Mass disability goes mainstream: disequilibria and RCIIT 11/2011
• The limits of disaster predictions: complex adaptive systems 2/2007
• Fermi Paradox: The solution set is stable 3/2013
• Apologetics: God and the Fermi Paradox 11/2010 (Sort of related :-)
• Sympathy for Economists 8/2013
• The new history is deep history 4/2010. Democracy is but the blink of an eye.

- fn -

[1] I like that 2011 post and the graphic I did then. I’d put “plutocrats” in the upper right these days. The debt ceiling fight of 2011, showed that Corporations and Plutocrats could be smarter than Voters, and the rise of the Tea Party shows that Corporations can be smarter than Voters and Plutocrats. Corporations, and most Plutocrats, are more progressive on sexual orientation and tribal origin than Voters. Corporations have neither gender nor pigment, and they are all tribes of one.

I could write a separate post about why I can’t simply edit the above graphic, but even I find that tech failure too depressing to contemplate.

[2] I don’t think Krugman believes this himself - but he doesn’t yet know how to model his psychohistory framework. He’s still working on the robotics angle.

[3] I just made this up today, but I dimly recall reading that the basic premises of eco-econ have turned up in the literature many times since Darwin described natural selection in biological systems. These days, of course, we apply natural selection to the evolution of the multiverse. Applications to economics are relatively modest.

[4] Perhaps because Corporations and Plutocrats outweighed Voters again — probably better or for worse.

[5] Short version — we are now confident that life-compatible exoplanets are dirt common, so the combination of the Drake Equation (no, it’s not stupid) and the Fermi Paradox means that wandering/curious/communicative civilizations are short-lived. That implies we are short-lived, because we’re like that. The most likely thing to finish us off are our technological heirs.

Why do corporations do lifestyle "wellness" programs?

Even with rather generous tax breaks, wellness programs cost corporations money. So why pay companies like South Africa's Vitality Group to run them?

It's not because they save money on health care expenses. A Rand study of long tenure employees found that over 7 years PepsiCo got 48 cents in savings for every dollar in expenses. Other recent studies have had similar results; better results with older studies may reflect higher smoking rates back in the 80s.

So why do it?

One reason is that current implementations do a great deal of cost shifting from the young and/or healthy to the older and/or sicker. With Vitality programs a low cholesterol healthy slender non-smoker pays less each month for health insurance than the average employee. (A "3000 point" gap -- enough to qualify for @$1000+ yearly insurance cost reductions.)

These programs follow the same logic as a briefly infamous 2005 Walmart healthcare memo. They shift costs to employees with family or personal health risks....

Wellness programs don’t save money | The Incidental Economist

Horwitz, Kelly et al ....Our evidence suggests that savings to employers may come from cost shifting, with the most vulnerable employees—those from lower socioeconomic strata with the most health risks—probably bearing greater costs that in effect subsidize their healthier colleagues. ..

Is that enough of a shift to make wellness programs covertly cost-effective? Or are corporations just being irrational? I suspect a bit of both, but we gotta remember that Walmart memo. At the very least, they shift costs from the blessed to the unblessed.

The Incidental Economist has covered this topic in some detail ...

• The Feel-Good Promise of Wellness Programs - Bloomberg
• Wellness programs aren’t ready for prime time | The Incidental Economist 9/13 - link to white paper on Penn State program
• Wellness programs don’t save money | The Incidental Economist 5/13 - previous studies on
• On wellness programs: Part 1 | The Incidental Economist 9/13 - earlier RAND study
• On wellness programs: Part 2 | The Incidental Economist 9/13

See also

• Hey Republicans: If you want to cut ObamaCare, try wellness programs 11/2012
• Corporate wellness programs: Not quite the cost savers Wonkblog 3/13

How to evaluate a publicly traded corporate employer

There are many articles on how to judge employees, and many on how to manage typical employee interviews. What I don't see are blog posts or articles on how to judge a corporate employer (The "fear economy" may explain that deficit.)

Since I have lived most of my professional life in a what I think of as a representative 21st century publicly traded behemoth, I have some ideas on what one should look for when considering corporate employment. Remember, I'm not talking about Apple, Google, or Facebook -- not the cutting edge PTC. I'm also not writing about a privately held corporation, much less a startup. This is pure PTC.

Recently I took a look at another position in a different behemoth PTC. That led me to quickly write down some of the things I could look for -- though many are difficult to uncover without inside information. (OTOH, large PTCs employ thousands, so odds are there's an insider friend you can interview).

In no particular order and with minimal editing, here's my list for an IT corporation, but most of it applies to any PTC.

Indirect measures

• Bicycle parking/showers
• WiFi and personal device support
• Offices, privacy -> what is the workspace like for developers/analysts?
• Are there places to meet, chat, interact? Is the kitchen/eating area popular and comfortable? 
• Surveillance strategy
• All employee access to email, calendar mobile vs. executive-only
• Exec vs. non-exec privilege and support: do Execs enter expenses? Do they track time? Do they do the same idiotic training programs non-execs do?
• Yammer or equivalent social business use
• Quality of systems for entering time and expenses. Beware SAP.
• Travel expense procedures 
• Investment in corporate IT infrastructure
• Anything but SharePoint
• Is IT outsourced? What is policy for local machine/productivity support?
• Do workers have admin rights on machines
• What kinds of phones and machines? iPads? Macs?
• Any open source contributions
• Standards activity and participation
• Community participation
• Flex time, remote worker, how maximize productivity of distributed teams
• Telepresence implementation (ex: google hangout vs. Cisco telepresence)
• Balance of employee productivity vs. corporate security
• Can employees fast forward through training videos? (tells you a lot)
• Local division/BU autonomy
• Energy, desire to change/improve vs. wish to keep current state
• How people dress
• Employee retention vs. new employee addition
• Employee morale
• How many shakers/disruptors can corporation tolerate?

Direct measures

• profitability
• growth
• value chain health
• customer-centric vs. vision centric
• market: penetration, competition, business lines
• divisional vs. functional -- where is the P&L
• collaboration vs. competition between divisions and product lines
• quality of the leadership -- esp CEO's reports and one level down (which tells you quality of CEO)
• measurement of product metrics and product lifecycle management
• cost management approaches
• travel and travel restrictions, telepresence
• how is responsibility tracked and managed
• technology innovation: mobile strategy, AI strategy
• training and development how innovative? MOOC? 
• recruitment and diversity including age distribution
• accounting methods: how are business units evaluated and measured, how are teams and employees measured
• PTO and holiday
• development methodology (Agile, other ...) approach to quality, defect management, timelines

Strange loops - five years of wondering why our corporate units couldn't cooperate.

Five years ago I tried to figure out why we couldn't share work across our corporate units.

This turned out to be one of those rabbit hole questions. The more I looked, the stranger it got. I knew there was prior work on the question -- but I didn't know the magic words Google needed. Eventually I reinvented enough economic theory to connect my simple question to Coase's 1937 (!) theorem, 1970s work on 'the theory of the firm', Brad DeLong's 1997 writings on The Corporation as a Command Economy [1], and Akerloff's 'information assymetry'. [2]

Among other things I realized that modern corporations are best thought of as feudal command economies whose strength comes more from their combat capacity and ability to purchase legislators and shape their ecosystems than from goods made or services delivered.

Think of the Soviet Union in 1975.

All of which is, I hope, an interesting review -- but why did I title this 'Strange loop'?

Because I used that term in a 2008 post on how Google search, and especially their (then novel) customized search results, was changing how I thought and wrote. This five year recursive dialog is itself a product of that cognitive extension function.

But that's not the only strange loop aspect.

I started this blog post because today I rediscovered DeLong's 2007 paper [1] as a scanned document. I decided to write about it, so I searched on a key phrase looking for a text version. That search, probably customized to my Gordon-identity [3], returned a post I wrote in 2008. [4]

That's just weird.

 - fn -

[1] Oddly the full text paper is no longer available from Brad's site, but a decent scan is still around.

[2] There are at least two Nobel prizes in Economics in that list, so it's nice to know I was pursuing a fertile topic, albeit decades late.

[3] John Gordon is a pseudonym; Gordon is my middle name.

[4] On the one hand it would be nice if I'd remembered I wrote it. On the other hand I've written well over 10,000 blog posts. 

See also: 

• Gordon's Notes: The Modern Firm - a review 4/2012 ties some of this together. That 2008 paper was a gift that kept on giving!
• Gordon's Notes: Browsing the blog backlist - we need a new app 6/2012. Reading that old blog posts of mine reminds me that we still need a tool for resurfacing old blog posts.

We do not understand the world in which we live

It is always this way, on the micro and the macro. I didn't understand high school until college. I didn't understand medical school until I was halfway through. I was deep into the corporation before I recognized my surroundings.

Did hunter-gatherers understand their context? 

Three links that tell us we don't understand ours (all via DeLong):

• The Singularity in Our Past Light-Cone 11/2010. " ... An implacable drive on the part of those networks to expand, to entrain more and more of the world within their own sphere? ... the radical novely and strangeness of these assemblages, which are not even intelligent, as we experience intelligence, yet ceaselessly calculating ..."
• Twentieth Century Economic History - DeLong: "... What do modern people do? Increasingly, they push forward the corpus of technological and scientific knowledge. They educate each other. They doctor each other. ... They provide other services for each other to take advantage of the benefits of specialization. And they engage in complicated symbolic interactions that have the emergent effect of distributing status and power and coordinating the seven-billion person division of labor of today’s economy...
• Algorithmic Rape Jokes in the Library of Babel | Quiet Babylon: " ... The Kindle store is awash in books confusingly similar to bestsellers... Icon’s books are created by a patented system... products that generate unique text with simple thesaurus rewriting tools called content spinners... Amazon ‘stocks’ more than 500,000 items from Solid Gold Bomb. These things only barely exist. They are print on demand designs... Talk about crapjects and strange shaper subcultures still gives the whole threat a kind of artisanal feel. The true scale of object spam will be much greater..."

In our work, our hive like human world, we seek those who know and do. Some hide themselves, some advertise. Some are specialists, some are generalists, a few are omni-talented. A very few are powerful, a few are powerless, most are in-betweeners. All are enmeshed in systems of symbiosis and parasitism, all embedded in the "novel assemblage".

This world seems strange to me.

It will seem quaint to whatever thinks in 2113.

Michael Church's model of the corporate worker - a short critique

Michael Church makes me look like a corporate fan. In a recent post he focused on startup culture ...

Gervais / MacLeod 4: a world without Losers? | Michael O.Church

…. This is a continuation of last week’s analysis of various work cultures and the patterns of degeneracy. I’ve analyzed hierarchies that form in organizational cultures and the relationship between ascendancy and bad behavior (in particular, psychopathy).

… In these small, agile companies, does the MacLeod classification apply? Or has this dysfunctional and unfair arrangement been rendered obsolete? If so, then how? If not, then who are the Sociopaths, Clueless, and Losers? I’ll answer that. Today, I’m going to focus on the sociology of VC-istan, perhaps the first truly postmodern corporate body...

Short version -- he likes VC-istan even less than he likes conventional corporations. (Warning - he writes long form. Feel free to skip to the end.)

Church, and Gervais and MacLeod as well, model a corporation as made up of 3 groups of people (my preferred label is at the end)

• Sociopaths [4]: Power-seeking amoral individuals who care nothing for the fate of others. They rule. (Rulers)
• Losers: Balance-seeking moral individuals who know the rules of the game and work within them. (Workers)
• Clueless: Low to middle status individuals who believe they owe the corporation their loyalty and that it will protect them. (Faithful)

Church sometimes adds a fourth, the technocrat. This is a more or less good version of the sociopath, seeking power but also benefits for the masses and society.

The theory has a certain appeal. Even if it's not a perfect match for the corporations I've lived in for 19 years, it's a good match for the Cults I used to visit in the 80s. [1]. They invariably featured Clueless believers at the base, and Sociopaths at the top. That matches Church's description of VC-istan.

Corporations feel more complex though. I'm not sure I've ever met the "Sociopath" Church describes [3], and I've known some wealthy executives and entrepreneurs. The ruling class I've known is usually a mixture of Church's "technocrat" and "sociopath"; with more of the former than the latter. It is true that belief in the 'goodness' of the corporation is pretty rare in the executive class, but even there I've seen (naive) exceptions.

My biggest split from Church however is that he treats Corporations as the sum of their people.  I think the complex modern publicly traded corporation is an emergent entity in its own right - more than the sum of its people (see below). It's a mindless entity to be sure, but it wants to live and grow as intensely as the average ant colony. It resists Church's 'Doom of the Clueless' [5], even if It isn't aware that it's resisting.

That said, Church's model has the advantage of parsimony, and it does explain a lot about middle manager life.

 - fn -

[1] It was a hobby of my early years. Cults loved me for some reason, I must have looked like a great candidate then.

[2] Even if it's only contributing to the "health" of some abstract Good represented by a "functioning" market.

[3] Ok, maybe the people who make a living downsizing divisions or managing major purges. They are hard people.

[4] I think Church is wrong about the etymology of psychopath/sociopath btw. It all got horribly mangled when Americans and Brits used the same two words in precisely opposite ways.

[5] Which is a bit like this Technology Review article.

See also:

• The Economist: what makes a murderous zealot? 2005
• Visiting the first church of scientology and Hubbard's offices 10/2005
• Corporate growth and the unexpected triumph of central planning 11/2012
• Why do corporations (firms) exist? Beyond Coase's theory of the firm 10/2010
• The corporation as psychopath In which the corporation is the psychopath. 2004
• The origins of corporate mediocrity - promoting the best 2009
• Ants, corporations and the great stagnation 12/2011
• Self sustaining entities: corporations and the Spanish Inquisition 6/2006
• Rule 34 by Charlie Stross - my review Stross is not fan. 1/2012
• Speculation: The corporate ecosystem and American stasis 2010
• Emergent computation -- the thinking world (Nature) 1/2004

Apple: What it would take for me to like you again.

I'm an Apple customer. If Apple makes a hardware product, I buy it from them. I use most of their Mac and iOS software.

That doesn't mean I like Apple. I just dislike them less than the alternatives.

Which makes me reflect on what Apple needs to do to make me like them again. This has nothing to do with APPL's share price btw, it's completely personal. As my friend Andy used to say, I'm not Apple's customer. (Though I do have influence on people who ARE Apple's customers. I still advise buying Apple if asked, but I no longer volunteer that opinion.)

• iBook for MacOS. Not all books are novels; I want to be able to read textbooks and non-fiction on my Macs.
• iCloud is a 1970s Jaguar. Shiny, expensive, and unreliable. Talk to me about this. Admit that there are problems and explain how the fixes are coming. Back off on driving everything and everyone to iCloud when it doesn't work (Mountain Lion default save to iCloud?).
• Apple, stop basing all of your marketing on things that aren't ready. Just stop.
• Fix your Apple ID problems. We all have multiple Apple IDs, and most of us don't know what they are. Our DRMd transactions and our product and support information is distributed among Apple IDs. Admit there's a problem. Work it.
• iWork was never finished. I run across features that are half-completed or that cause big performance issues. I don't trust it to scale to serious projects. It doesn't need a big UI change or a lot of new features, but it needs serious investment.
• Aperture crashes. It should never crash. It's too buggy. Apple is taking the right path to making Aperture 'iPhoto Pro' but they are only 80% done. They need to invest and fix it.
• Calendar and Contact apps are a bit better in Mountain Lion than Lion, but they are not serious products. They don't scale to my life. It's crazy that Contact to Group relations is MacOS only.
• I know how to use Google Calendar to share calendars across my family. I can even use Google Apps to share Contacts. I can publish calendars and others can subscribe to them. None of this works properly in the iCloud/MacOS world.
• Detox on the luxury addiction. Remember how incredibly important the iBook was. The Mac Mini should have been priced under $300 -- even though that would have resulted in serious shortages. It's insane that the new iMac is so hard to manufacture -- nobody needed that super-thin edge. Personally, I still wanted the built in DVD. (I said I wasn't going to talk about share prices, but I think the Mini's price point had repercussions.)
• If you're going to break the iOS connector ecosystem, then don't sell your A/D converter device with a fat margin. That's stupid greed.
• Look at what worked with RSS (pub/sub) and what didn't. Come up with an open Apple solution.
• Remember the AT&T and Verizon are not our friends. If you can find a way to shaft them, do it.
• Think hard about the problem of bandwidth costs and net access. Look at what Google is doing with Google Fiber. Think big and think small - from partnering on fiber to enhancing iOS to manage bandwidth use.
• Think about people who aren't wealthy. I can afford Apple products, but not all of my family can. Remember the iBook.
• Support your damned developers. Damnit.

I'm sure I could come up with more examples, 

These are fixable problems. They come down to "Talk to me", and "invest in the hard things that don't return glory" and "remember we're not all rich". I've seen a lot of improvement in iOS Maps.app, and it's encouraging that Apple has opened iOS to Google products.

Fixing the problems though may require a change to Apple's famously brutal internal culture. That may take some significant executive turnover. Cook's huge bonuses to the inner circle, and his secrecy obsession, are not reassuring.

So I'm only guardedly optimistic.

Hey Republicans: If you want to cut ObamaCare, try wellness programs

Few people will have noticed new rules around corporate "health-contingent wellness programs" (emphases mine):

Administration Defines Benefits Under Health Law - NYTimes.com

... The rules also give employers new freedom to reward employees who participate in workplace wellness programs intended to help them lower blood pressure, lose weight or reduce cholesterol levels. The maximum permissible reward would be increased to 30 percent of the cost of coverage, from the current 20 percent.

The rules would further increase the maximum reward to 50 percent for wellness programs intended to prevent or reduce tobacco use.

Rewards could amount to several thousand dollars a year, officials said, because total premiums in employer-sponsored health plans now average more than $5,600 a year for individual coverage and nearly $16,000 for family coverage...

The Hill's Healthwatch has more details. It is remarkable that CNBC can have a general freakout about an increase in marginal federal tax rates for persons earning over $250,000 a year, but say nothing about a program that costs middle-class workers $2,000-$3,000 a year.

Let us take a moment to contemplate this curious silence.

Yes, I said costs, because the money for these programs has to come from somewhere. In this case it comes out of take home pay - either as a direct benefit cost or as a reduction in future income. In some cases the money might come out of ACA mandated health insurance premium rebates ...

Health Insurance Refunds May Stall in Employers’ Hands - NYTimes.com

... while some employers are returning the money directly in paychecks, or planning “premium holidays” that increase take-home pay, others are weighing different options, benefits consultants said, like reducing next year’s premium, or spending the refund on so-called wellness programs that reward workers who lose weight or quit smoking.

Yeah, that's a bad sign.

In theory the money we're losing now might be offset by reduced healthcare costs over time, which might in theory reduce insurance costs and maybe one day the lost income might trickle back down again.

*cough*

Right. That's not going to happen.

It is also possible that, regardless of impact on health care costs, and after considerable administrative overhead is deducted, these programs will make some workers healthier than they might otherwise be. In that sense they might be considered a form of social transfer; all employees pay for improved health habits for some employees.

That wouldn't be so bad - if we knew the programs worked. But we don't know that; these programs were launched with very little research. What little I could find showed some surprises ....

New Research Shows That Prevention Is Key To Reducing Health Care Costs For All Employees, Even Those With Chronic Conditions - New York Times

... while a reduction in employee health risks leads to immediate cost savings, the accumulation of additional health risks soon leads to substantially higher medical and pharmacy costs...

I don't know why corporations are so keen on these programs, but I suspect there are sound business reasons. They may not be obvious; I'm reminded that Walmart liked defined contribution plans because they discriminated against unhealthy (and costly) spouses. I have read that some states offer tax credits for the programs, and I assume that the $2,000 a year or so I'm paying for our corporate program is treated as a tax deductible health care benefit.

Which brings me to the GOP. They're looking to cut money from the ACA. Why not do something useful and ask about corporate wellness programs?

Right. I bet this is one of those things that made it into the ACA as a sop to the GOP...

See also:

• Gordon's Notes: The Walmart healthcare memo: You DO need to read the original 11/2005
• Wellness Tax Credit (a curious unlaunched astroturf site)
• Workplace wellness - Wikipedia, the free encyclopedia
• Corporate Wellness Programs | American Institute for Preventive Medicine

Corporate growth and the unexpected triumph of central planning

The American Economic Review tells us large corporations are taking up a larger share of our GDP ...

The American Economic Review, Vol. 21, No. 1, pp. 10-42

The Growth in the Relative Importance of the Large Corporation in American Economic Life

...  If recent rates of growth were to continue, 80 per cent of non-financial corporate wealth would be in the hands of 200 corporations by ...

... Six industries can boast of one or more "billion dollar" companies ...

Yeah, that said "billion", not "trillion". The article was published in March 1931, so it was presumably written after the crash of '29 but before the full horror of the Great Depression was recognized.

81 years later the Economist has an update:

Free exchange: Land of the corporate giants | The Economist 11/2012

... Businesses have also been getting bigger. A snapshot of the American economy shows huge dispersion in firm size: around a third of American workers are employed by one of the 6m small firms with fewer than 100 workers, and another third are employed by one of the 980 large firms that have over 10,000 workers. But the long-run trend seems to be towards bigger companies. In a 1978 paper Robert Lucas of the University of Chicago documented how average firm size in America had increased over a 70-year period (see left-hand chart)...

... In the past 15 years the assets of the top 50 American companies have risen from around 70% of American GDP to around 130% (see right-hand chart). All of the top ten American firms have been involved in at least one large merger or acquisition over the past 25 years...

...  If size does not keep driving down costs, why do big firms keep expanding? One possibility is that they are seeking to boost profits not by driving down costs but by raising prices. Buying up rivals softens competition and enables firms to charge more...

Accelerated consolidation seems like a predictable outcome of very low interest rates and very high risk aversion [1]; an unintended consequence of economic stimulus and at the zero lower bound. If so, it's a winner-take-all result in a political-economic tax, law and accounting environment fashioned by large corporations for large corporations.

Size can be used to purchase competitors, but it has many more non-market advantages. Size allows, for example, the capture of regulators and the purchase of legislators. Those advantages allow corporations to grow beyond the bounds of classic microeconomics.

And that,  surprisingly, is how we end up with the unexpected triumph of central planning. 

Central planning triumphs because, even if we ignore regulatory capture and senatorial acquisition, corporations are only capitalist on the outside of the cell membrane. Inside the corporation there are no contracts, no currencies, and no markets. Inside the corporation, we have the hallmarks of Soviet central planning - goals and quotas and commissars and imaginary numbers and dictates from the central commission.

Central planning, of course, has its issues. Persistent and eventually fatal issues. When very large corporations fail though, they take a lot of things down with them. If there are truly systemic dysfunctions associated with corporate size, and if large corporations now subsume a large portion of national economic activity, the impact of these weakened monsters may be considerable. 

See also:

• The Modern Firm - a review 4/2012
• Why do corporations (firms) exist? - Coase and the theory of the firm 10/2010
• Gordon's Notes: Global finance and parasites 9/2009
• The origins of corporate mediocrity - promoting the best 7/2009 - game theoretic limitations to corporate competence
• The Corporation - what next? 8/2010 - links to prior posts
• Troubled capitalism: The corporate entity 8/2010 - science fiction socialists attack
• Ants, corporations and the great stagnation 12/2011
• Speculation: The corporate ecosystem and American stasis 11/2010
• After the crash: The future of the publicly traded corporation 8/2008
• Self sustaining entities: corporations and the Spanish Inquisition 6/2006
• Malice, incompetence, and happy accidents 5/2011 - Classic Dilbert
• Kristof: The market failure of CEO Compensation 3/2004
• SBA.GOV document on small business recover (pdf) 1/2012

[1] Given the way American health care has worked, an aging population may also support increased corporate size.

RIFty Fifty

It's not personal, it's just that wages are sticky ...

Poorer but Wiser After a Year of Unemployment - NYTimes.com

They are skilled workers who should be at the top of their games, their incomes peaking as they approach retirement...

... For the last 20 years, after each recession, workers have been hired back at lower salaries, with the baby boomers losing the most income. Unfortunately, it makes sense. People that age hold the most senior jobs and make the best salaries. Lowering their compensation saves the most money, or, as the financial analysts say, increases productivity...

Not everyone in their 50s is equally vulnerable to the RIF. [1] Senior leadership, for example, is expected to be between 40 and 60 years old. From a short term return-on-RIF perspective the most at risk targets are highly paid "senior" workers who are at the high end of their pay grades. Even if these workers are currently valuable, they're not going to make the leap to the next level -- that has to happen in the 40s or earlier. They're not going to get more productive either; most corporate knowledge workers are probably maximally productive around ages 45-50. So there's a pretty good return on the RIF.

Kind of sad if you're the one wearing the arrow, but that's the nature of the hive. In the ancient world wages rose until retirement, in the less sentimental world of 2012 they're likely to peak around 50 and fall from there.

So what should we do about it?

One reasonable response is just to gather ye rosebuds while ye may. After all, none of us gets out this alive. Take the family vacation, spend the money, enjoy it while you can. Winter will come, but Fall is sweet. When the RIF comes, expect to dye hair, chop all dates from your resume [2], and find a lower paying job.

There are other responses of course; but at this age circumstances vary a lot. Sometimes it might, for example, make sense to switch employers and trade current income for a better long term employment picture. I like to get the house paid off, so income loss need not mean house loss. Most of the time, though, it makes most sense to ride the horse until it dies. Then live more simply.

[1] Reduction in Force. Nobody is fired any more, they're simply part of a 'reduction in force' that just happens to catch the expensive or the unwanted (best of all - both at once). Many corporations, perhaps most, routinely "RIF" about 6-10% of their workforce every year on the principal that a little bleeding strengthens the body.
[2] LinkedIn profiles are the worst. They require years of attendance to be attached to schools, which makes age calculation pretty trivial. FWIW, i just chopped all schooling from my resume and all positions > 10 years past. 

Tom Cook's great test: the response to Apple maps.

Contrary to Joe Nocera's impression, Steve Jobs' Apple screwed up a lot. MobileMe wasn't the only disaster; even iCloud was a regression. OS X Lion was nothing to write home about. Apple did better under threat, worse when they felt confident. Ultimately, of course, Jobs cruel genius coupled with unprecedented power over a public company meant Apple escaped mediocrity.

Post-Jobs most of us expect Apple to behave more like a typically dysfunctional publicly traded company. We expect more products like iOS maps and Siri -- heavily marketed but only marginally useful. (Under Jobs Apple buried flops quickly.)

Of course there's still a chance Cook can find a way to escape this mediocrity. I'm watching for how Apple responds to user submitted map corrections. 

Historically Apple seems to ignore users. Even respected developers have a hard time getting their bug reports reviewed. Google, to their credit, has responded to every map correction I've made. Sometimes I get a response in a week or two, sometimes in a month or two, but I always find out which corrections were accepted and which were rejected. (So far 5/6 accepted, I think the other one had already been fixed.)

This is something Cook can change. If Apple provides feedback to users on the fate of their corrections, then I'll be hopeful that Cook can chart a new post-Jobs course. If they don't then they're on the fast track to Microsoft-land.