Why the US can't separate benefits from employment

A recent post on Ron Paul and the anti-outsourcing movement reminded me of a host of past posts on outsourcing. Unsurprisingly this discussion was most active in the last election cycle. Back in February 2004 I even had something nice to say about Friedman. Emphases changed for this post:

Gordon's Notes: India and outsourcing: Friedman 1, Kristof 0

...Friedman wins this match. Great column. Reich's recommendations are mine as well, except I think wage insurance won't fly. I do think that the 401K and its equivalents need to become life-event rather than age driven, and all benefits need to be unrelated to employment. Employment should be wages, nothing else.

Friedman/Reich point out that outsourcing is a tax deductible business expense. The tax code should NOT be facilitating outsourcing. It shouldn't obstruct it, but neither should it encourage it. That can be changed.

The world needs China and India to be wealthy. These are two sources of extraordinary power and vigor, and the US is acting as a short-circuit between them. If we capture a fraction of that current we can share in the wealth, but we can't do it with our current social support network. We need another solution...

Protectionist measures, including trade and immigration restrictions, can make some jobs last longer than they otherwise would. The price is typically some complex mix of higher product costs, diminished economic productivity, and reduced value. Still, the cost may be worth paying to reduce extreme social disruption, as China's capital controls demonstrated in the Asian financial crisis of the 1990s.

A better approach, however, is to make it less painful to change employment or retrain by separating benefits, like healthcare and retirement savings, from employment. This is a true win-win, with both individual benefits and economic logic.

Except it ain't going to happen. The only serious move in this direction was a fake Bush proposal that turned out to have a poison core.

It hasn't come up since.

Why not?

I don't know the real confluence of special interests that ended the January 2007 discussion, but I can think of one good reason that employers might want to hold onto benefit control -- no matter what they cost.

It makes it very hard to employees to leave and ... do nothing.

My guess is there's a significant fraction of the US workforce that, if they had affordable guaranteed healthcare coverage, would stop working. Some would take early retirement. Some would go back to school. Some would take six months off and try something different.

Not everyone would want to do this, or could afford to do it. Those that would, however, would be disproportionately upper middle class, confident, and adventurous.

That's one hell of an expensive group to lose. It would be a hard hit for economic productivity, and in the near term there would be a sharp fall in economic productivity. Recession. Big time.

Sure, in the long run it might lead to increased economic productivity, and it could lead to increased happiness -- though happiness tends to be genetically determined except at the margins.

In the short term though, increased freedom could be very bad for business -- and for the global economy.

We're going to be in the employer-based benefits ankle chains for years to come ...

PS. I do note that we haven't done anything in the past four years to reduce the tax incentives that promote outsourcing of software development. I wonder why that is ...

Ron Paul explained: pseudo-libertarian populism and geek subculture

I hadn't been paying much attention to Ron Paul, but an article on the Ron Paul spam bot caught my fancy.

What, I wondered, would account for his popularity with a slice of American geekdom?

Hmm.

After about 15 seconds of idle speculation I decided the secret sauce would have to be some sort of pseudo-libertarian populism. It would use libertarian language, but it would also offer something that would have a very specific benefit to the software community. It would have to promise better wages by limiting the use of inexpensive foreign workers.

This is from Ron Paul's campaign web site...

Ron Paul 2008 › Issues › Border Security and Immigration Reform

As a member of the U.S. House of Representatives, Dr. Paul tirelessly works for limited constitutional government, low taxes, free markets, and a return to sound monetary policies...

• Physically secure our borders and coastlines...
• Enforce visa rules. Immigration officials must track visa holders and deport anyone who overstays their visa or otherwise violates U.S. law. This is especially important when we recall that a number of 9/11 terrorists had expired visas.
• No amnesty...
• End birthright citizenship...
  

Yeah, I aced this one. The unionized assembly workers of 1970s Detroit would sympathize.

It wasn't hard to figure out. We have a group of relatively young men who know they're talented and among the strong, but they also know they're falling behind. They assume true capitalism would guarantee a fair competition (they don't understand local minima traps), so we clearly don't have true capitalism. The current system must be some perversion of the ideal, and thus it's unfair.

Since one obvious way these men are falling behind is through competition with inexpensive foreign labor, then that must be part of the perversion.

Hence they're easy to capture by a combination of libertarian language and anti-immigration populism. So they fall for Ron Paul.

I sympathize. I'd dearly like to see us outsource our CEOs and replace our GOP senators with more talented foreigners. As a former primary care physician I also saw primary care being outsourced to low cost foreign immigrants, so I have a (mild) degree of emotional as well as cognitive sympathy.

I'd sympathize more if this group would express solidarity with the former blue collar workers of Detroit, but that's asking a lot.

There's oil in this well. We can expect the GOP to unify behind a stronger anti-immigration stance to try to capture some of that Ron Paul magic.

The irony is that I think the upper end of the IT-outsourcing trend has run into a brick wall. We're going to see the high-end IT skill market strengthen, though more mechanical work will probably continue to move overseas, albeit at a slower pace.

In any event, could immigration and, inevitably, trade restrictions really help IT workers? They might. The traditional US auto industry is slowly dying, but if not for controls on Japanese imports GM would have died ten years ago and we wouldn't have Toyota plants in the US. We don't manufacture computers in the US now, but if Congress hadn't blocked Japanese imports in the 1980s Panasonic would have crushed the nascent US PC market. (Nobody remembers now that Japanese PC clones were far superior and cheaper than US desktops before Representatives took sledge hammers to Japanese clones).

So trade and immigration restrictions don't change the way things go, but they can delay the process long enough for people to shift their educational programs and their work direction. The trick is to realize that whenever Congress restricts trade or immigration the end is about ten years away -- though I think IT prospects aren't quite as dim as those for primary care physicians or auto workers.

The Chinese zombie computer industry

HTWW has a nice summary of the active Chinese market in zombie computers ...

How the World Works: Globalization

"In China, the going rate for a flesh chicken is anywhere from 0.1 to 10 renminbi. (10 renminbi equals 1.34 dollars.) A flesh chicken is what we in the West call a zombie computer -- a compromised machine that does the bidding of someone other than the legitimate owner. In Mandarin, according to a fascinating new report on the world of Chinese malware, the words 'chicken' and 'machine' sound similar, thus the pun.

In other parts of the world networks of flesh chickens are put to use generating spam for penis enlargement pills or, as another equally riveting new report tells us, pro-Ron Paul propaganda. But in China, the main goal in gaining control of user machines is to capture the passwords and usernames that allow access to online game worlds or the virtual currency employed in China's hugely popular QQ instant messaging network. (Thanks to Boing Boing for the link.)...

Readers of Neuromancer knew about this almost 25 years ago.

I suspect the Chinese government considers these kinds of activities as a relatively harmless way to use the restless energy of millions of excess males.

The low cost of a zombie computer is reassuring. The price tells us there is such a vast pool of vulnerable machines that there's no need to invest in much more costly OS X attacks.

I'd like to see a futures market in Zombie machines; a price rise would give us advanced warning of an upmarket threat.

PS. The link to a securenet analysis of the Ron Paul botnet spam is well worth following. The coordinating host machine lived in US based co-location facility and was described as "well known" to botnet researchers. See my next post ...

Human evolution: a pillar falls

I wish "paradigm shift" were not so overused, because it's so well suited to the news that human evolution has accelerated since we developed agriculture and dense settled populations.

The idea that human evolution had stopped once we "conquered nature" was firmly accepted, outside of the x-men, throughout my formative years in the late 70s and early 80s. By the 1980s sociobiology, later rebranded as evolutionary psychology, assumed many modern dispositions reflected frozen adaptations to ancient hunter-gatherer life. Even in the 90s, when I did my cognitive science, everyone assumed that that the human species had changed little since "cro-magnon" woman (the term is obsolete).

Wrong.

The change shouldn't come as a surprise to readers of this blog. Of course I didn't invent any of this (except maybe the concept of evolutionary disorders of the mind). I'm a longtime reader of bloggers like John Hawks - who authored one of the papers in the news. Sure, Hawks claims he was keeping quiet about the topic while his paper waited to be released, but he's been dropping hints for years. Anyone reading Hawks, or knowing what it means to have such a massive population, could see this was coming.

That's the way these things happen. Twenty years from now popular books will claim radical papers swept away stodgy beliefs, but in fact the fortress had been falling for some time.

Still, we shouldn't understate the historic transition. Sure, now it seems so obvious that population density and culture would create vast new niches for variation to fill, but we used to think evolution operated over vast time scales. We didn't understand how fast a species can change.

So, in what ways are we different from the humans of 50,000 years ago? I'd recommend reading John Hawks and following his suggested links. In my reading thus far I've seen mention of far greater variation in skin and eye color, dietary adaptations, changes in teeth, smaller size (for a time, but now bigger), smaller brain (!) for a time, but now ?.

I've not read much yet about how different our brains are from those of pre-industrial humans, but I've posted previously about papers suggesting adaptations enabling reading and other language skills.

We'll be digesting the implications of this for a while. Yes, race as a clinically or biologically significant idea has returned ...

... the new work indicates that variations tend to differ between races, and that these became more, not less, pronounced.

“Human races are evolving away from each other,” said Henry Harpending, Professor of Anthropology at the University of Utah, who led the study.

“Genes are evolving fast in Europe, Asia and Africa, but almost all of these are unique to their continent of origin. We are getting less alike, not merging into a single, mixed humanity.

“Our study denies the widely held assumption that modern humans appeared 40,000 years ago, have not changed since and that we are all pretty much the same. We aren’t the same as people even 1,000 or 2,000 years ago.”

The research is published in the journal Proceedings of the National Academy of Sciences. If the trend towards increasing genetic diversity were to continue, it could lead ultimately to the development of different species. Most scientists, however, think this is now highly unlikely.

"Most scientists" ... A few years ago it would have been every scientist. Still, classic speciation is unlikely ...

... The research identified evolutionary currents only in past times. In the modern era, greater movement and gene flow between the continents has probably slowed or even reversed patterns of increasing genetic difference, making the evolution of separate human species virtually impossible.

On the other hand these days geek neo-Liberals feel like a different species from theocratic social conservatives. There may be more than one way for a sentient animal to speciate.

Well, I'm off to catch up on the Hawks links. It's a big day for science, though I imagine it must be a bit rough on the fundies.

Update 12/16/07: Hawks quote (via Marginal Revolution):

We are more different genetically from people living 5,000 years ago than they were different from Neanderthals...

A problem with Megan's Law: the price of false inclusion

So what does Megan's Law say the penalty should be for erroneously including someone in a sex offender registry?

Slashdot | Online Sex Offender Database Leads To Murder?

...The LA Times reports on the story of Michael A. Dodele, a convicted rapist, found murdered in a Lakeport trailer park. He moved there after having been released from prison just 35 days before. A 29-year-old construction worker has been arrested in the attack, and explained that he killed Dodele to protect his son from child molestation. He found out on the internet about Dodele being a sex offender, via the 'Megan's Law' database. The public entry for Dodele in the database was wrong — though he was found guilty of committing crimes against adult women he was not a child molester. Dodele's entry in Megan's Law DB has been removed....

Wow, what a coincidence that a bizarre murder would coincidentally expose the only erroneous entry in this online registry.

Gee, there couldn't possibly be other errors, could there?

Your name couldn't be on the list, could it?

Terry Gilliam's brilliant and prescient movie Brazil (inspired by 1984), begins with a data retrieval "bug", that plunges the protagonist into a dystopian nightmare. That movie should be mandatory viewing prior to graduation from an American High School. (That's one more reason I'll never be elected to anything!)

To answer my original question, I suspect that Megan's Law specifies the same penalty for misidentification as the Homeland Security Act.

Nothing.

No price for falsely including a person in a list. A potentially high price for failing to include a person in a list.

Gee. I wonder what error will be more common.

The entity responsible for maintaining such registries (lists) should be required to:

1. Pay $10,000 for every false entry regardless of injury or lack of injury.
2. Be liable for triple damages in the result of injury or inconvenience, plus payment of legal fees.

That would reduce the false inclusion error rates significantly. In the case of Homeland Security's Do Not Fly list, I suspect it would eliminate the list.

Note, by the way, I'm not saying it's wrong to publish the details of a person's crime, and to mandate that they should notify the public of their whereabouts [1]. I am saying that we need to reflect on the consequences of the inevitable data entry errors associated with every form of profiling.

[1] That's for another post. This one is about errors in assignment.

1967 was a long time ago

We saw a children's play yesterday. It was written in the 1950s, and it reminded me of how much culture has changed in 50 years.

One of the curious comic anachronisms is that the "bad" kids smoke cigars in the school bathrooms. Of course at that time most adults smoked everywhere, including in school offices and teacher meeting areas. So high school students smoking cigars in the bathroom would have seemed a funny exaggeration of everyday life.

In 2007, when middle class grade school kids rarely see anyone smoking anywhere, it's mostly weird - a message from an alien world. I guess the modern comic equivalent would feature body piercings.

Our culture has changed more than we usually recognize. Consider this prescient corporate video ...

Warming and the Right - New York Times

... This week, though, a short, uncannily accurate clip from “1999 A.D.,” a film made in 1967 by Philco-Ford, got lots of attention online when it was posted to the Ultimate News Flash blog (ultimatenewsflash.blogspot.com). The film’s depictions of electronic commerce and e-mail are about as spot-on as they could be, though the filmmakers failed to forecast changes in attitudes toward sex roles. “What the wife selects on her console will be paid for by the husband on his counterpart console,” the narrator declares. She is in the kitchen, buying clothes; he is in the den, paying bills....

When we were kids in Quebec (Napoleonic legal code) I think my mother wasn't allowed to give permission for medical procedures. Only the male could do that ...

The story of leaded gasoline

The Philip Morris ("Altria") story is pretty familiar. Buy off scientists, lie, addict children, etc. If there's a Hell, Philip Morris has meetings there.

I didn't know the story of leaded gasoline though, not till I read DI's review. By the 1920s the science was very clear that lead was a dangerous neurotoxin. Europe was restricting its use.

America put lead in gasoline, and kept it there until the 1970s...

Damn Interesting » The Ethyl-Poisoned Earth

... Upon learning that automotive fuel was the source of the contamination, Dr. Patterson began to publish materials discussing the toxic metal's ubiquity and its probable ill effects. In order to demonstrate the increase of lead in the environment, Patterson proposed taking core samples from pack ice in Greenland, and testing the lead content of each layer– a novel concept which had not been previously attempted. The experiment worked, and the results showed that airborne lead had been negligible before 1923, and that it had climbed precipitously ever since. In 1965, when the tests were conducted, lead levels were roughly 1,000 times higher than they had been in the pre-Ethyl era. He also compared modern bone samples to that of older human remains, and found that modern humans' lead levels were hundreds of times higher.

The Ethyl corporation allegedly offered him lucrative employment in exchange for more favorable research results, but Dr. Patterson declined. For a time thereafter, Patterson found himself ostracized from government and corporate sponsored research projects, including the a National Research Council panel on atmospheric lead contamination. The Ethyl corporation had powerful friends, including a Supreme Court justice, members of the US Public Health Service, and the mighty American Petroleum Institute. Nevertheless, Patterson was unrelenting, and the resulting rise in scientific and public awareness eventually led to the Clean Air Act of 1970, and a staged phaseout of leaded gasoline. Ethyl and Du Pont sued the Environmental Protection Agency, claiming that "actual harm" must be demonstrated rather than just "significant risk," an effort which successfully prolonged lead additives' life by another decade...

Alas, it doesn't sound like Dr. Patterson got a Nobel for his work ...

Steal a movie for all the scared children

My son's copy of Barnyard starts with a RIAA drm commercial. It reminds me of the "this is your brain on drugs".

It's supposed to scare kids straight I guess, flashing "downloading is stealing" with painful sound and visuals.

My 8 yo has to leave the room every time it comes on.

Gee, what a way for the RIAA to make some friends. If I could, I'd make a donation to 'united pirates of america'.

In the meanwhile, please steal a movie for all the scared children of the world.

Slouching towards Skynet

What drove the development of human sentience?

We didn't need fusion bombs to become earth's dominant predator.

The most popular justification of human cognitive evolution is that it was driven by deception. The need to detect deception, and the need to deceive. Deceive other humans, deceive ourselves.

So it makes sense that nonhuman sentience is also driven by the deception wars ...

Rough Type: Nicholas Carr's Blog: Slutbot aces Turing Test

Russian crooks have unleashed an artificial intelligence, called CyberLover, that poses as a would-be paramour in sex chat rooms, enticing randy gentlemen to reveal personal information that can then be put to criminal use. Amazingly, the slutbot appears to be successful in convincing targets that it's a real person...

War, games, and financial instruments, are the other modern AI drivers. Search is the classic motivator.

We're toast, but then we always were.

Good thing I can't explain why we're still around - otherwise I wouldn't be so optimistic!

Burn the Kindle

Not the books mind you. Just the Kindle. Virtually, since we don't need toxic smoke.

dougscrptr:

... If you are a Macintosh user, you need to connect your Kindle to a Windows-based computer running AudibleManager to authorize your Kindle...Once authorized with your Audible credentials, you can then use Audible files downloaded through AudibleManager under Windows or iTunes by copying them to your Kindle.

So if Jobs does deliver a slate at MacWorld, as the wildest rumors have it, there will a book-friendly device that works with both Apple and Microsoft.

So, was this an accident, a desperate deadline-driven move, or by design?

Resisting the temptation of web services

It's so appealing to move software to a web services remote hosting model.

I lived through that era in the 90s. Among other things, we discovered that the internet fell a few orders of magnitude sort of the optimistic predictions of 1990. (We were all supposed to have fiber to the desktop by 2000.)

Joel Spolsky (over 40,000 subscribers on Bloglines alone, millions of readers) reminds us why a new generation should think twice about abandoning installed software (emphases mine):

Where there's muck, there's brass - Joel on Software

... For us, the installable option gives us five times the sales. It costs us an extra salary or two (in tech support costs). It also means we have to use Wasabi, which has some serious disadvantages compared to off-the-shelf programming languages, but which we found to be the most cost-effective and efficient way, given our code base, to ship software that is installable on Windows, Linux, and Mac. Boy, I would love nothing more than to scrap installable FogBugz and run everything on our servers... we've got racks and racks of nice, well-managed Dell servers with plenty of capacity and our tech support costs for the hosted version are zero. Life would be much easier. But we'd be making so much less money we'd be out of business.

The one thing that so many of today's cute startups have in common is that all they have is a simple little Ruby-on-Rails Ajax site that has no barriers to entry and doesn't solve any gnarly problems. So many of these companies feel insubstantial and fluffy, because, out of necessity (the whole company is three kids and an iguana), they haven't solved anything difficult yet. Until they do, they won't be solving problems for people. People pay for solutions to their problems...

Actually, people often pay for dreams unrelated to their real problems, but that's another story. (Informed customers are a blessing, but in some domains they are rare.)

One day, the web services dream might work. In the meantime, my prior DSL service was unavailable at least once a week...

CIA Torture tapes destroyed

The CIA videotaped their torture sessions, now they've destroyed the tapes.

Evidently they are unsure that the GOP will win in 2008.

There's nothing to say, but I think we need to mark these events.

Indentured servitude in the modern world -- the noncompete

My employer can fire me at any time.

That's fine, I can also leave at any time.

Except, I theoretically can't work after I leave, but my employer can stay in business. I knowingly signed a non-compete ...

Techdirt: Noncompete Agreements Are The DRM Of Human Capital

... Much of this discussion kicked off with AnnaLee Saxenian's 1994 book Regional Advantage that tries to understand why Silicon Valley developed into the high tech hub it is today, while Boston's Route 128 failed to follow the same path -- even though both were considered at about the same level in the 1970s. Saxenian finds that the single biggest difference in the two regions was the ability of employees to move from firm to firm in Silicon Valley. That factor, ahead of many others, caused Silicon Valley to take off, while the lack of mobility in Boston caused its tech companies to stagnate and make them unable to compete against more nimble Silicon Valley firms....

Ronald Gilson found this to be interesting, and followed it up with his own research suggesting that that it had much less to do with cultural reasons and much more to do with the legal differences between the two places, specifically: California does not enforce noncompetes, while Massachusetts does. Gilson looks at a few of the other possible explanations for the difference and shows how they're all lacking, leaving the difference in noncompetes as being the key difference between the two regions in terms of the flow of information and ideas leading to new innovations. He also explains the history of non-enforcement in California, showing that it was mostly an accident of history more than anything done on purpose...

I think that the single biggest thing Minnesota could do for its economy would be to limit non-compete agreements.

PS. In fact non-competes are rarely enforced, they're mostly about intimidation. The way to break them, I'm told, is to get a job in a state where they are not enforceable and to bring suit there.

The only kind of change management that works

At least outside of a tyranny:

Life as a Healthcare CIO: Leading Change

...My decade of experience executing change suggests that Kotter was right. Building a guiding coalition, broadly communicating the vision, and celebrating a series of short term successes really works. I've watched projects without vision, resources or communication cause pain and anxiety throughout the organization. The good news is that we now know how to execute change and it is the role of senior management to enforce Kotter's principles in every change project...

Excellent details in Halamka's full post.

I read this stuff and I think about how much it used to cost to get advice like this. There's a generation emerging that will be accustomed to finding and tracking freely available wisdom.

Freedom requires religion

So atheists can't be free, but Wiccans can?

Romney: President needs prayers of people of all faiths - CNN.com: "

... Romney said religion is essential to freedom, without pointing to any specific faith.

'Freedom requires religion, just as religion requires freedom. Freedom opens the windows of the soul so that man can discover his most profound beliefs and commune with God. Freedom and religion endure together, or perish alone,' the GOP contender said.

On another front Huckabee, who's even more explicit than Bush that Creationism should be taught in science class, is emerging as a GOP front runner.

Proclamations of the 'end of the religious right' appear to have been a bit premature.

Predictions of a rationalist victory, or at least a Democrat as president, are equally premature. The nation that reelected George W Bush has not changed radically in the past three years.