Incenting execs: they're very good at gaming the system

Harvard's Philip Greenspun does a great job describing how EBITDA and other compensation schemes are readily gamed ....

Philip Greenspun’s Weblog Statins, cholesterol, health; fancy employee compensation, EBITDA, and company value:

... Conspiracy of Fools chronicles one of the discussions about EBITDA among Enron senior managers. One guy pointed out to Rebecca Mark, a Harvard Business School graduate star of the company, that EBITDA was meaningless because one could improve EBITDA simply by borrowing money at 10 percent and investing it in T-Bills at 5 percent and that was essentially what Mark was doing. She was borrowing money at X% to purchase businesses that would return no more than (X-4)% in a best-case scenario. This fattened her paycheck, but led the company towards bankruptcy....

.... if you’re on a Board and you decide to compensate a manager with anything other than cash or a long-term stock option, make sure that you’re not granting compensation based on a number that the manager can easily manipulate. Keep in mind that managers are often a lot more clever in doing things that will benefit themselves than things that will benefit the company.

Senior executives in large corporations may not be particularly honest, honorable, or bright -- but they are always good at playing the game. Greenspun's key observation is that only long term share price is difficult to game for a CEO. All other incentive plans will lead to undesireable choices.

Damn, but Hoover was an evil man

Damn Interesting » Operation Pastorius tells us some more lousy things about mid-20th century American justice, but most of all it reminds me how bloody evil J.Edgar Hoover was.

As we inch our way from surveillance state to the next step down (more on that soon), it's ever more important to remember Hoover.

I'd buy a nicely made t-shirt that said: "Remember J. Edgar Hoover. Protect your freedom."

Who's paying for the "Global Climate Scam" billboards?

There's a large billboard near my Saint Paul home advertising "GlobalClimateScam.com".

The url resolves to a typical denialist site -- all bluster and delusion. There's nothing unusual about the whacky website, but I was curious who's paying for the billboard, and what they want.

It turns out that "Minnesota Majority", a local right wing organization, displays the same content and is probably paying for the billboards. I haven't been able to discover where their money is coming from, and why they're suddenly keen to spend it on climate change denial.

Companies that have invested heavily in coal would be the obvious suspects. If we really have hit Peak Oil (I'm deferring judgment until August) then oil companies ought to be buying up coal reserves. The primary challenge to that strategy would be a carbon tax, or the regulatory equivalent. Coal produces so much carbon dioxide that any carbon-tax equivalent could do real damage to a coal-centric investment strategy.

It would be logical for these companies, assuming they are blithering idiots, to do everything possible to maximize their coal reserve value -- including climate change deniers.

So if I were a real journalist, I'd be looking for an Exxon connection to Minnesota Majority's new found fascination with climate change. I'd also look to see whether Exxon is putting its money into oil exploration or into coal reserve ownership.

Insanely bad decisions - the Dilbert example - and a wise correction

The primary Dilbert web site has gone to Flash. It doesn't work on Camino or the iPhone, and it's a mess on Firefox 3 (true, that's beta).

I assume Adobe paid United Media to do this.

The move has not been well received. Happily, there's an alternative non-flash link ...

Slashdot | Dilbert Goes Flash, Readers Revolt

... Good thing you can still get your Dilbert fix at http://www.unitedmedia.com/comics/dilbert/archive/ [unitedmedia.com]...

I'll change the link on our family news page to the non-Flash version.

This move deserves a Dilbert cartoon, but I don't think Scott Adams is going to satirize his own syndicate. He's a pretty careful businessman, despite the Dilbert persona.

Update 4/24/2008: United Media now redirects the archive to the Flash page. I sure hope Adobe is having to pay a lot for this! On the other hand Scott Adams has felt our wrath. A "plain" page is pending, and the RSS feed will show the strips chronologically without Flash.

Update 5/2/2008: A good solution, I've updated our news page to use it.

From Scott Adams blog:

.... if you promise to keep it to yourselves, we created a stripped-down Dilbert page with just the comic, some text navigation, and the archive: www.dilbert.com/fast. This alternate site is a minor secret, mentioned only here and in the text footnote to the regular site as “Linux/Unix.”

Lesson: Your data will be public

When you interact with a web page you're often interacting with a database of some sort. The simplest way to do this is to take text the user has submitted, put some SQL around it (standard database language), and the SQL will update the database, or get results back, etc. Some implementations even put the query string, including the SQL, in the URL.

The problem with this approach was discovered in the 1990s. You can write your own SQL in the URL, or, with a bit more work, you could type the SQL into the web field and the database would act on it.

The problem keeps returning, most recently in Oklahoma. Schneier describes the story (with an implied deep sigh), but I most appreciated one of the comments ...

Schneier on Security: Oklahoma Data Leak

... If you take the standard Google query for locating GET/sql servers (see http://www.memestreams.net/users/acidus/blogid10326823/ and further restrict it to .gov domains, several somewhat  sensitive websites from the District of Columbia government show up --- including "Alcoholic Beverage Regulation Administration --- Suspended and Revoked Licenses", and "Department of Health --- Food Establishment Closures".

It's nice to know a simple Google query can expose vulnerable sites so readily. Another comment mentions a similar problem last year with Germany's security services.

The real lesson here is that all of your data will be public one day. Sooner or later it will leak by one security flaw or another. If they gather it, they will lose it.

If you really don't want data to be public, don't provide it in electronic form. Happily, most data about most of us is so boring it's only of interest to the extremely rare individual who wants to steal our identity, credit card, etc. Oh, wait ...

Network biology and the holographic resilience of biological function - lessons from E. coli

A recent groundbreaking study on the genetics of schizophrenia found a varied pattern of large scale "sledgehammer" (as in whack the genes) mutations in many persons with schizophrenia. These are thought to affect varying stages of brain development.

Curiously, the researchers found the same problems in a minority of the "control" group of "normal" people:

Gordon's Notes: schizophrenia

One in twenty seemingly normal people have big, ugly looking mutations that ought to be messing up their brain development. Yet they seem "normal"...

Now another big study explains this strange normality (emphasis mine) ...

Zimmer - Wired 04.18.08

.... In the latest issue of Nature, scientists reported an experiment in which they wreaked havoc with E. coli's network. They randomly added new links between the transcription factors at the top of the microbe's hierarchy. Now a transcription factor could turn on another one that it never had before. The scientists randomly rewired the network in 598 different ways and then stepped back to see what happened to the bacteria.

You might expect that they all died. After all, if you were to pop open the back of an iPod and start linking its components together in random ways, you'd expect it to crash. But that's not what happened.

About 95 percent of the rewired bacteria did just fine with their new networks. They went on with their lives, feeding, growing and dividing. Some even performed better than microbes with the original wiring, under some conditions.

The tolerance these bacteria showed reveals something important about how evolution works. Humans can randomly rewire cells, and so can mutations. There's something about gene networks that allow them to thrive despite these mutations, and, in some cases, to even gain an edge in the evolutionary race.

But scientists don't quite know why a network like the one in E. coli can handle this rewiring so well. The source of their strength lies not in a single molecule -- DNA -- but in a complicated web of relationships. The network itself is the mystery for biologists in the 21st century...

This is of a piece with the discovery that DNA control system have complex topological components, my June 2007 essay on evolved circuits. and reading I've done over the past year on bioinformatics (systems biology) and the modeling of interacting protein networks (interactome) (example).

The blueprint for an organism is emergent. It "appears" through the interaction of the storage elements in DNA and DNA associated packaging, but, like a holographic image, it can "appear" even when pieces of the storage structure are absent or reorganized. This is a shared characteristic of evolved systems on every scale, we see hints of this even in evolved mechanical systems such as the freight train pneumatic braking system. Bacteria, of course, are the most "evolved" of all systems -- far more evolved than mere humans.

That's why major "controllers" of brain development can be disrupted, but, in many cases, the brain can still develop -- differently perhaps. In some settings, the differences might even be advantageous.

How will we understand this emergent control system? We will not be able to do perceive it directly. We will need computational systems to discern the emergent controllers, and to be able to relate a network level "control element" to the set of physical manifestations of the abstract control element in real-world DNA.

Sigh. It all looked so simple in the days of 'one gene, one protein' ...

Update 4/19/08: There's an obvious metaphor for the type of emergence we see here. An example that makes the problem transparently obvious for all of us.

Imagine that I want you to meet me by the science museum at 11:30 am. I could use English or French or draw a picture. In any spoken or written language I could use an enormous variety of words and word order and still communicate my meaning.

If we think of "the meaning" in cellular biology as that which arises from interacting protein networks, then by analogy we can understand that many different gene arrangements and even several somewhat different proteins could produce similar protein network interactions.

Marvelous Gail Collins editorial on Bush's greenhouse 2025 goal

Gail Collins channels the spirit of Molly Ivins...

The Fat Bush Theory - New York Times

...Suppose that two years after taking office, George W. Bush discovered that because of the stress of his job, he had gained 40 pounds and was tipping the scales at 220.

The real-world Bush would immediately barricade himself in the White House gym, refusing all human contact or nourishment until the issue was resolved. But imagine that he regarded getting fat as seriously as he regards melting glaciers, rising oceans and drought and starvation around the planet. In that case, he would set a serious, management-type goal — of, say, an 18 percent reduction in the rate at which he was gaining weight, to be reached within the next decade...

Gail reminds us that Bush's 2002 "goal" was a voluntary 18% reduction in the growth of greenhouse gas emissions by 2012 (we won't achieve this). His 2008 "goal" is a voluntary 100% reduction in the growth of greenhouse gas emissions by 2025. This "goal" is not to achieved by “raise taxes, duplicate mandates or demand sudden and drastic emissions cuts.”

So Bush's reach goal is that the US stabilize greenhouse gas emissions at an level consistent with the complete melting of Greenland's ice cap. This goal will be achieved by technology alone. (Bush does not rule out tax reductions to support technology development.)

John McCain would be not any better.

The Economist on the food crisis

How many people live on $1 a day?

Food | The silent tsunami | Economist.com

...Roughly a billion people live on $1 a day. If, on a conservative estimate, the cost of their food rises 20% (and in some places, it has risen a lot more), 100m people could be forced back to this level, the common measure of absolute poverty. In some countries, that would undo all the gains in poverty reduction they have made during the past decade of growth...

Did you guess a billion?

In addition to the editorial, the Economist has essays on Bangladeshi and Chinese responses to food concerns. In the past the Economist has criticized China's insistence on food self-sufficiency, but they seem to have forgotten that.

They don't have any answers except the most obvious -- we need a billion in food aid quickly and stop the idiotic biofuel subsidies.

We need to a bit more creativity here ...

The infamous fake-Springsteen Vista video: we think it's kind of sweet

An internal Microsoft sales team mock rock video was leaked to the net, to general mockery and derision.

I've seen it 1.5 times, including a full sitting with my wife.

We think it's sweetly silly, though it's just musical enough to be disturbing. My toes almost started tapping, even as my teeth ached. The critics seem to think this was a serious marketing video, but they need a bit of sympathy for the Devil. It's obviously 50% self-mockery and 50% fun.

I wonder what Springsteen thought of it. The man has a sense of humor, but ...

Of course true geeks all want Microsoft to fail badly enough to crack their monopoly, but I really don't see that happening. They've got more cash than ever, they'll fix the worst parts of Vista, eventually the hardware will catch up, and Vista is far more virus resistant than XP. Unfortunately brighter days lie ahead for the sales team.

Do the sheep dogs think they are sheep?

My best explanation for the inexplicable survival of the east african plains ape is that the shepherds are keeping us around. (For mutton or for wool? The Bible is silent on that distinction.)

Shepherds, of course, make use of sheep dogs, which falsely think of themselves as more sheep than wolf.

I thought of that as I described John Halamka for a lecture I'm giving on technology for health record interoperability. From my graphic:

• "John D. Halamka, MD, MS, is Chief Information Officer of the CareGroup Health System, Chief Information Officer and Dean for Technology at Harvard Medical School, Chairman of the New England Health Electronic Data Interchange Network (NEHEN), CEO of MA-SHARE (the Regional Health Information Organization), Chair of the US Healthcare Information Technology Standards Panel (HITSP), and a practicing Emergency Physician"
• sleeps 4-6 hours a night
• wears an RFID chip in his shoulder
• climbs ice-covered cliff faces to relax
• flies 400,000 miles a year
• tries to be nice

Sounds like a sheep dog to me. I'm sure he thinks of himself as human though.

PS. I realized after posting that I should clarify that I'm a major Halamka fan and read everything he writes. It's actually kind of nice to have "the bar" set so high that I can relinquish any competitive aspirations.

Proud to be a geek: stackoverlow.com

At moments like this, I feel an undeserved and irrational pride in being of tribe geek:

stackoverflow.com - Joel on Software

Jeff Atwood and I ...  build a programming Q&A site that's free. Free to ask questions, free to answer questions, free to read, free to index, built with plain old HTML, no fake rot13 text on the home page, no scammy google-cloaking tactics, no salespeople, no JavaScript windows dropping down in front of the answer asking for $12.95 to go away. You can register if you want to collect karma and win valuable flair that will appear next to your name, but otherwise, it's just free...

... Every week, Jeff and I talk by phone (he's in California, I'm in New York), and we're going to record those phone calls and throw them up on the web for you to listen in on, and call it a podcast. We have a lot of trouble keeping on topic, so the podcast may be interesting to you even if you don't want to hear about stackoverflow.com. The first episode is up right now. Eventually I imagine we'll figure out this newfangled "RSS" technology and you'll be able to actually subscribe and get fresh episodes delivered into your ears automatically. All in good time.

Jeff's Announcement

PS I'm still CEO of Fog Creek full time. StackOverflow.com is a joint venture between Fog Creek and Jeff Atwood. He's the full time CEO which means he's calling the shots. I'm sort of a consultant on this one.

From Jeff's description we see how inspiring 'experts-exchange' has been ...

Stackoverflow is sort of like the anti-experts-exchange (minus the nausea-inducing sleaze and quasi-legal search engine gaming) meets wikipedia meets programming reddit. It is by programmers, for programmers, with the ultimate intent of collectively increasing the sum total of good programming knowledge in the world. No matter what programming language you use, or what operating system you call home. Better programming is our goal.

I've followed Joel Spolsky's blog on business and software for several years, and Jeff Atwood's blog for over a year. They're both great writers and teachers with the geek compulsion to advance the world -- as well as their part of the world.

It's the bit about advancing the world that marks the noble geek. Karma counts. Fairness matters. You get and you give.

These two have millions of readers. By virtue of their considerable reputations earned through their writing, they may be able to make this work.

If it does work that will say something interesting about the power of the geek tribe, and of reputations developed entirely online.

Joel has a full-time job, but Jeff has only recently quit his programming job to work on independent projects. I wish him and stackoverlfow.com every success. At the moment the site is entirely audio oriented, so the best way to follow its development will be to subscribe to Jeff's blog.

Kateva.org may be blocked by some corporate filters

A reader tells me that she can't access Gordon's Notes following migration to kateva.org:

Blogger: Gordon's Notes - Post a Comment

My workplace blocks kateva.org (don't know why, I thought they only blocked porn and gambling sites) so I'll have to follow your adventures on my own time. Bummer.

This is indeed odd, since the only pages I've had at kateva.org have been my tech pages, which are pretty plain.

One workaround is to read the blog through a web-based blog reader, which is really the right way to read these things. I use Bloglines, and I also like Google Reader. So if you can get to them, just add http://notes.kateva.org to the reader, choose any feed, and read that way.

Kateva is a made up name we gave our dog, but maybe it's impolite in some language? Or maybe your employer is using a fairly dumb filter that gets fooled by spammers faking the domain name.

I'll ask around ...

Dyer - 4 new articles

Dyer has 4 new articles out:

• Maliki blinked: Sadr came out ahead, but it doesn't matter anyway. Soon America will leave and Iraq will be forgotten.
• Zimbabwe: I'd skip this one, nothing much in it.
• Olympics: The running of the torch was a Hitler invention. (!) Look for trouble in India, and mockery in Australia.
• Nepal: The Maoists won the election.
• Berlusconi; The best of this batch, see below ...

For example:

http://www.gwynnedyer.com/articles/Gwynne%20Dyer%20article_%20%20Berlusconi%20Is%20Back.txt

...To elect Berlusconi once, as Oscar Wilde might have put it, may be regarded as a misfortune. To elect him twice looks like carelessness. But to elect him THREE TIMES is beyond a joke, for he is the most transparent fraud to have held high public office in a major European country since the Second World War. He even makes the late Boris Yeltsin look serious and competent by comparison...

...

My country re-elected George Bush, so I have some sympathy for the shame and horror intelligent Italians must feel today. Between Italy electing Berlusconi, and Nepal electing Maoists terrorists, Democracy is looking a bit peaked.

Gordon's Notes: move appears to have succeeded

The move to notes.kateva.org worked this time. Now we'll see if the feeds are redirecting properly ...

Update 4/15/08: Of course it didn't really work. Google changed the format of RSS feeds from blogspot to the custom domains, and so old RSS feeds don't work. I'm not sure any feeds, Atom or recent vintage RSS subscriptions, are forwarding correctly. Blogger is showing a very odd set of "recent" posts even with the new Atom feed.

Gordon's Notes to move to notes.kateva.org: Take II

The last time I tried to change the url for this blog the move failed. Google says the problem is fixed, so as before ...

Gordon's Notes: Gordon's Notes to move to notes.kateva.org: In theory, no changes required

... The address, however, is about to change to notes.kateva.org, where it will join Gordon's Tech which has been tech.kateva.org for about a year. It will still be published through Blogger, kateva.org is a Google "custom domain"...

... In particular Google doesn't redirect for some legacy Blogger (working) feeds, only for the current feeds.

So if you find this post in your Feed, and then no "it worked" post after it, you should be able to find Gordon's Notes at notes.kateva.org. The Kateva.org main page will also have news of the move.

Most blog readers will reset your "unread" count to 10 posts.

Wish me luck, I'll make the 2nd attempt to relocate tonight April 15th.