Pay for performance in health care and teaching - we know how this ends

It seems pretty clear that if you want better quality healthcare, or better teaching, then you should pay professionals for the results they obtain. "Pay for Performance" is one of the mantras of healthcare reform. We saw the same arguments in 'No Child Left Behind', where paying principles to lower failure rates has worked so well.

There's been a lot of research in many industries about how well Pay for Performance schemes work in practice, but this historic statement from my archives says it best ...

(Thanks to Google, I didn't have to retype this ..)

... The planners tried various expedients,” wrote Alec Nove in his economic history of the Soviet Union. They issued instructions that user demand should be met; they modified bonus systems so that it was not enough to achieve purely quantitative targets; they experimented with value-added indicators. “Each of these “success indicators” had its own defect, induced its own distortions. Thus, insistence on cost reduction often stood in the way of the making of a better- quality product. A book could easily be filled with a list of various expedients designed to encourage enterprises to act in the manner the planners wished, and the troubles to which each of them gave rise...

Update 8/19/10: See also Fake graduation rates and other predictable outcomes of no child left behind

Reengineering the Corporation: A summary

I was browsing my archives, when I found a post where I promised to go through my old pre-blog blog-like web page fragments. I then forgot about them again.

Here's the second in the series. Sixteen years ago, as America tried to forget the dreary eighties, two consultants got rich "reengineering" corporations to be better suited to the high tech world ahead. Most corporations ended up using the concept as cover for big-time downsizings, so it got a real bad rap. I remember the book as being more interesting than that. If nothing else, it's a marker of a historic transition as corporations became fully dependent on networked computers.

So, in honor of our recent reenactment of the 1980s, here are my 1996 notes, copied and pasted from a web 1.0 page (btw, the Amazon link is the original from the late 90s. It still works.) ...

Reengineering The Corporation: A Manifesto for Business Revolution

Introduction and Citation

Michael Hammer and James Champy, Reengineering The Corporation: A Manifesto for Business Revolution. Harper Collins 1993.

I wrote up these notes when I was reading Hammer and Champy's book. They're reprinted here for public use. The notes are my own, and may bear no resemblance to the book. My comments are in italics, they focus on primary care. Hammer and Champy's ideas are not all original, and many people (myself included) disagree with their analysis of the costs and benefits of their particular approach to reengineering. Indeed, since I put these notes together (1996) reengineering has fallen from grace. I still think there's something to it however.

Reengineering Notes

Key Characteristics of Reengineering

• processes: process oriented (most important component)
• fundamental
• radical
• dramatic
• When I read this book, I felt that the "technocentric" reorganization of work was common to all of their successful examples. That is, changing work to organize it around inflexible but powerful technologies. It is an unfortunate truth that we humans are far more flexible than our technologies. Change for us is painful, but it is possible if the rewards are sufficient.

Themes for Reengineering

• process orientation
• ambition
• rule-breaking
• creative use of information technology: IT enables change

Characteristics of Reengineered Business Processes

• several jobs combined into one
• workers make decisions
• the steps in the process are performed in a natural order
• processes have multiple versions
• work is performed where it makes the most sense
• checks and controls are reduced
• reconciliation is minimized: reduce "accounting" procedures.
• a case manager provides a single point of contact. example: the primary care physician
• hybrid/centralized operations are prevalent. (I'm not really convinced by their arguments for this point.)

Characteristics of the Reengineered Workplace

• work units change from functional deparments (gastroenterology) to process teams (family practice).
• jobs change, from simple tasks to multidimensional work (a professional)
• roles change: "empowerment". and, inevitably, power shifts, ergo depowerment
• job preparation changes: from training to education.
• focus of performance measures and compensation shift from activity to results (what if the results are very hard to measure?)
• advancement criteria change -- from performance to ability. (How does one measure "ability"in clinical practice? By board scores? I don't think so ... By outcomes?)
• values change -- from protective to productive.
• organizational structures change -- from hierarchical to flat (Here again I'm not sure how well this applies to all settings, or how fundamental this is to the reengineering process. Does "equal" mean equally replaceable?)
• executives change -- froms scorekeepers to leaders

Approaching a Reengineering Project

1. Identify problem processes, other problems, challenges, puzzles (use standard systems analysis techniques). Look for known broken processes or symptoms of broken processes
   • data redundancy, rekeying, extensive information exchange
   • inventory, buffers, system slack
   • high ratio of checking-control to value added
   • rework and iteration
   • complexity, accretions, special cases
2. identify/note technologies: computers, systems
3. apply "inductive thinking"
   • recognize a "solution" (computer/systems technology) and seek the problem it might solve.
   • identify longstanding "rules" or limitations that a new technology can now break.
   • want to keep up on latest technologies, and evaluate opportunities. This is what has been long criticized as a solution in search of a problem!
4. start with feasible projects
5. Benchmark from the world's best, not the industry's best.

Understanding Processes

• Most companies have ten or so principal processes.
• Begin by understanding what the processes's customer does with the process output. What are the customer's real requirements? How does this compare to their self-identified needs?
• Learn the what and why rather than the how. The how will change.

How to Fail at Reengineering: Common Mistakes

• Try to fix a process rather than change it.
• Don't focus on business process.
• Ignore everything except process redesign.
• Neglect people's values and beliefs.
• Be willing to settle for minor results
• Quit too early.
• Place prior constraints on the definition of the problem and the scope of the reengineering effort.
• Allow existing corporate cultures and management attitudes to prevent reengineering from getting started.
• Try to make reengineering happen from the bottom up -- without strong top-level support.
• Assign someone who doesn't understand reengineering to lead the effort.
• Skimp on the resources devoted to reengineering.
• Bury reeningeering in the middle of the corporate agenda.
• Dissipate energy across many reengineering projects.
• Atttempt to reengineer when the CEO is two years from retirement.
• Fail to distinguish reengineering from other business improvement programs.
• Concentrate exclusively on design.
• Try to make reengineering happen without making anyone unhappy. (I think they could have said more here about identifying winners/losers and considering compensation for "losers"
• Pull back when people resist making reengineering's changes.
• Drag the effort out.

Comments now without captcha and without moderation

Blogger, long left for dead, tottered into the pub this week. Among other signs of life, there's a new comment spam filtering system.

I disabled comment moderation and the captcha on tech.kateva.org a few days ago, and I haven't seen many problems. So today I've removed it for posts less than 28 days old on notes.kateva.org.

It's good to get rid of the captcha. I really don't like those.

Passports for adopted children - can someone please fix this?

Getting a US passport for any child got harder when the State Department decided to "fight" international child abduction by requiring both parents and a child to appear together at the passport office. I'm positive there's never been any cost/benefit evaluation of this measure. I'd wager it's all cost, no benefit.

Getting a US passport for an adopted child is even worse. There are two typical road blocks. One is "name change", the other is proof of citizenship for international adoptees.

The name change problem applies to all adoptees. Under current practice US adoptees are issues a new "birth certificate" and, almost always, their birth names are changed to match the names of adoptive parents. So for the purposes of the passport application, have they had a name change? I think the answer is "no". Their current name is the same as the name on the birth certificate, which is legally their originating name. If you answer "yes" you may run into trouble with demonstrating the legal chain of name change evidence, since, legally, it's never changed.

The proof of citizenship is a pain too. In theory a prior passport is evidence enough, but officials can be puzzled by this and they can request other documents as needed. International adoptee "birth certificates" look like US birth certificates, but they have an added statement that declares they don't serve as proof of citizenship. They only serve as proof of parental relationship. For proof of citizenship there's another document that one is supposed to keep locked away and photocopies are meaningless, so you won't have it at the passport office.

Isn't there a senator somewhere with adoptive children? (McCain's adopted daughter is an adult now, so she's clear of most of this mess.)

Does anyone know what AT&T's smartphone data plan rules really are?

AT&T may add a data plan without approval if a US customer puts their GSM card in a smart phone (iPhone, BB, Windows, etc). They can do this even if the customer bought their own smart phone. They are supposed to send a text notification that the plan will change.

This is an AT&T policy, not an Apple policy. It applies to all AT&T's bandwidth consuming phones. AT&T put this policy in place in Nov 2009.

What AT&T representatives don't know, is the conditions under which AT&T will do this. In three interactions with service representatives I've gotten 3 different answers. The reps were all very certain of themselves, but they can't all be right. The documents I've been able to obtain don't help, though they do suggest the most negative interpretation.

Since my last aggravating interaction, I've done about four weeks of testing with an iPhone 3G I gave to my 13 yo (no Safari, no YouTube, no App Store, no iTunes store - only net apps I install). He has unlimited texting (SMS/MMS) but no data plan. Through AT&T's managed account option I've set his allowed data throughput to zero. During this time AT&T has updated his account to show that he has an iPhone 3G. They have not yet added a data plan. I don't think they will.

I'm guessing, based on interviews with AT&T service reps and my own experience, that these are the rules for mandatory data plan enrollment:

1. The customer has an AT&T subsidized phone contract without a data plan. When they signed the contract they received a subsidized phone (presumably not an iPhone!). They have put their GSM card in an iPhone or other smartphone that is not under AT&T contract.

In contrast my son has never had a subsidized phone. He used an old Nokia of mine. I gave him my iPhone (out of contract, but I suspect that doesn't matter), but since he's not under contract with a subsidy he is exempt.

I'll update this post if my son does receive a mandatory data charge, but for now he has an iPod touch that's also a phone with texting. It's a lot cheaper than a 3G data phone.

Note that AT&T's policy, even though it may not apply to us, is unfair in several ways [2]. Their customers are paying for a service they don't want, which is bad enough, but they're also paying the same amounts as people with a subsidized phone. Less obviously this hits all iPhone owners by reducing the resale value of their devices.

AT&T documents

AT&T “Talk of the Nation” Effective 7/25/10
AT&T reserves the right to add DataPro to your account …

AT&T Customer Service Summary 7/7/10

Internal AT&T document, not available publicly. Printed 7/25/10:


[1] (In iOS4 you can turn off data services but you can't lock this setting, AT&T will data lock a phone but this disables MMS services.)

[2] One rep claimed AT&T will discontinue data charges if someone breaks or loses their smartphone and can no longer make use of the data plan. If so they would lose money, since part of the cost of an iPhone comes from data services. I find it hard to believe they'd do this, but it's the flip side of the policy described above.

Update: I put up an informational post on this topic on Apple's Discussion list. They deleted it within an hour. That's fast! I think the community moderator confused this question with illegal unlocking.

Update 8/12/10: I asked about this on Macintouch.

Update 1/4/11: Five months later AT&T never kicked, never charged us. The answer appears to be that AT&T will support voice/text services on an iPhone for a contract free customer without a data plan. If you have a contract (subsidized phone) however, and switch to an iPhone before your contract concludes, you will be auto-enrolled in a data plan.

Telemark Lodge - RIP

I start quite a few posts that hang around in draft mode. I'm not sure how I lost this one about an old Wisconsin cross ski resort; it seemed about done. Maybe I wanted to add some links or photos.

So it was unpublished today when, while putting our winter plans together, I learned that the Telemark Lodge had closed on May 5th, 2010.

The Telemark Lodge was on its last legs when we stayed there last February, but for my screwball family, it worked.

Tonight anyone who loves skinny skis, should raise a toast to the old queen of the American Birkie, the Telemark Lodge. In honor of the man men and women who made it work, here's our memory of its last days in the exceptionally fine winter of 2010 (with a few photos) ...

Telemark lodge was built in 1979. Even then it was a crazy idea. The Trapp Family lodge has struggled in a picturesque region with millions in easy driving distance, the Telemark lodge is in the northlands of Wiscosin. How remote is this area? In the 1970s wolves were thick on the ground, and today they're coming back - along with cougars. There's still no cell service in these parts.

The Lodge had its good years. In the late 70s there were still young, active boomers who'd grown up in the cold snowy 70s. The combination of a young population accustomed to snow sports gave the year round resort some good years.

Click for full size

Ski Magazine 1979 when men were men

Not too many good years though. The climate changed, air travel to Whistler, Snowbird and Denver became cheap, we boomers bloated, and, until this most marvelous winter, cross country skiing has been all but forgotten.

So the Lodge has been in decline for at least twenty years, despite valiant effors by staff and owners. When my family of five visited the resort web site had been seized by desperate owners sharing meeting minutes. (Yes, there's clearly not a geek among them or their extended families. They could have put up a link to a free blog and kept their customer-discouraging sorrow a bit less public.)

So what do we think of the place?

We like it.

Yeah, we're weird.

Thing is, we know how it all turns out. Everything gets entropic and dead - or just dies. All of human history becomes a thin layer of contamination in old crust. The sun runs out of the good stuff. The sky empties out. Only entropy wins, so it's all about the tale you tell in the time you get. The Telemark lodge made a good story of it.

The lodge is full of folk history and stories that end in the 1980s. The wall maps show a "colliseum" with indoor tennis that closed twenty years ago. Signs point to long closed retail areas and missing "waxing tunnels". The massive fireplace caught fire 3 years ago, and has been silent sice. The old waxing rooms are now game rooms and a viking-themed bar aimed at heavy drinking snowmobilers. There's net access in the lobby only, no mobile service anywhere, and 30 yo room phones that will outlast analog landlines.

It's a museum you can sleep in. As a place for our family to sleep, I ain't got no complaints. Sure the sliding patio doors don't always latch, but the hotel provides wooden security poles on request. The snow making ended two years ago, but this year nature's been atypically kind. The rooms are fine for the price (don't pay list though), the showers have hot water (though the bath plug is broken) and the swimming pool and hot tub are, honestly, just great. The friendly staff are old enough that I feel reasonably young, which helps make up for my 10 yo being surprised that I'm 50, not 60.

The trails this year are great. True, they are mostly groomed for skating skis and I'm a guy who prefers single track trails winding in the woods, but snowways are popular these days. Can't be avoided. The terrain is beautiful, and if you're lucky you might see a wolf (hopefully not cougar tonsils though).

The owners are trying to unload the place, to find someone who can put millions into the lodge and maybe make a business of it. The odds seem long, but I hope they pull it off. Maybe some eccentric billionaire will decide to give entropy a quick kick.

After all, the same trends that killed the old resorts may be going in reverse. Our increasingly chaotic climate means that even Whistler can't reliably host the Olympics, so living in the snow shadow of Superior is going to be important again. No matter what the climate does, Superior will be cold for centuries to come.

Air travel is much more expensive than it used to be, and distance matters again. Cheap oil is ending. Trains are returning. The boomers are expiring, and the children of the new northern immigrants are growing up in snow and ice. Even it this Telemark Lodge dies, a new one mar rise again...

I hope I was right about the last bit. I may have overestimated the resiliency of Superior -- this year it was swimmable.

Update 3/8/11: The Telemark Lodge rises from the grave. Hard to believe, but it may be back.

Update 10/17/11: Although it was supposedly resurrected months ago, there's now a web site. I think it was only open for events for a while.

Update 1/30/12: We dropped by while staying at a nearby resort. It's looking good. The old fireplace is working again, the pool looks fine.

Update 3/2018: It died again. I think for good this time. I saw the fading structure on a mountain bike ride in 2016.

Update 9/15/2021: The September 2021 issue of Silent Sports tells me the lodge has been demolished.

The college bubble goes critical

There's been a lot of talk about how retirement accounts have been devastated by the Great Recession. There's been less talk about 529 plans that are basically flatline over the past 10 years (though better than 2008).

Even as college savings have shrunk among the fortunately employed, undergraduate costs have continued to rise a zillion times faster than inflation (much less deflation).

We know how this movie turns out. Emily and I have been expecting the bubble to blow (weddings and houses too - 2007) sometime in the next five years. So today's commentary is right on schedule (emphases mine):

Glenn Harlan Reynolds: Further thoughts on the higher education bubble | Washington Examiner

Back at the beginning of the summer, I had a column in this space in which I predicted that higher education is in a bubble, one soon to burst with considerable consequences for students, faculty, employers, and society at large...

... Assume that I’m right, and that higher education - both undergraduate and graduate, and including professional education like the law schools in which I teach - is heading for a major correction. What will that mean? What should people do?

Well, advice number one - good for pretty much all bubbles, in fact - is this: Don’t go into debt...

Right now, people are still borrowing heavily to pay the steadily increasing tuitions levied by higher education. But that borrowing is based on the expectation that students will earn enough to pay off their loans with a portion of the extra income their educations generate. Once people doubt that, the bubble will burst.

So my advice to students faced with choosing colleges (and graduate schools, and law schools) this coming year is simple: Don’t go to colleges or schools that will require you to borrow a lot of money to attend. There’s a good chance you’ll find yourself deep in debt to no purpose. And maybe you should rethink college entirely.

Many people with college educations are already jumping the tracks to become skilled manual laborers: plumbers, electricians, and the like. And the Bureau of Labor Statistics predicts that seven of the ten fastest-growing jobs in the next decade will be based on on-the-job training rather than higher education. (And they’ll be hands-on jobs hard to outsource to foreigners). If this is right, a bursting of the bubble is growing likelier.

What about higher education folks? What should they (er, we?) do? Well, once again, what can’t go on forever, won’t.

For the past several decades, colleges and universities have built endowments, played moneyball-style faculty hiring games, and constructed grand new buildings, while jacking up tuitions to pay for things (and, in the case of state schools, to make up for gradually diminishing public support).

That has been made possible by an ocean of money borrowed by students -- often with the encouragement and assistance of the universities. Business plans that are based on this continuing are likely to fare poorly.

Just as I advised students not to go into debt, my advice to universities is similar: Don’t go on spending binges now that you expect to pay for with tuition revenues later. Those may not be there as expected...

... Finally, for the entrepreneurs out there, this bubble-bursting may be an opportunity...

But a college degree is an expensive way to get an entry-level credential. New approaches to credentialing, approaches that inform employers more reliably, while costing less than a college degree, are likely to become increasingly appealing over the coming decade...

Reasonable advice. John Hawks seems to agree. On the other hand, when I first saw pre-Netscape Mosaic in 94 I thought the storm was just years away. Bubbles can grow for a long time.

See also:

Other places

• Plan B - Skip College - Jacques Steinberg - NYT
• The New Poor - In Job Market Shift, Some Workers are Left Behind - Catherine Rampell
• College Education, Good Jobs: Why Degrees Are Overrated - TIME
• Your Money - Another Debt Crisis Is Brewing, This One in Student Loans - Ron Lieber - NYT
• In the Basement of the Ivory Tower - The Atlantic

Gordon's Notes

• Post-industrial employment: adjusting to a new world (2010)
• Employment in the Great Stagnation (2010)
• The cost of weddings, college education, homes (2007)
• Why college tuition continues to increase: Mankiw (2006, before Mankiw fell)

Pumping gas

Shorter version of my essay on Employment in the Great Stagnation: Thirty-five years ago people could get a job pumping gas.

 

See also: Philip Greenspun - unemployed = 21st century draft horse.

Star Wars makes sense if ...

If you know R2D2 is the true mastermind. Yoda and Palpatine are merely pawns.

Employment in the Great Stagnation

Lester Thurow wrote "The Zero Sum Society" in 1980…

Written during a period of acute economic stagnation in 1980, The Zero-Sum Society discusses the human implications of economic problem solving. Interpreting macroeconomics as a zero-sum game, Thurow proposes that the American economy will not solve its most trenchant problems-inflation, slow economic growth, the environment-until the political economy can support, in theory and in practice, the idea that certain members of society will have to bear the brunt of taxation and other government-sponsored economic actions.

Thurow is 72 now, and out of the public sphere. History was not kind to many of Thurow's speculations, but if I still had my copy I'm sure it would be interesting reading today.

We don't remember the 80s now. Those were the days when Japan was going to take over the world, when a block in Tokyo was worth more than Manhattan. My 1987 Panasonic 8086 was better in every way than any other comparable PC. It was obvious that the entire PC industry would move to Japan, so panicky tariff threats forced Japanese companies to give up the desktop market (they went into laptops instead). Congressmen smashed a Toshiba radio with sledgehammers. In 1989 Sony's Akio Morita co-authored "The Japan That Can Say No" (Do follow that wikipedia link. Morita's criticisms of the 1980s US are particularly interesting.)

Then it all changed. The 90s were good for America, but not for Japan. Concerns about structural unemployment, and about American losing manufacturing, were forgotten until the Great Recession, when it all came back again. I wonder, in retrospect, if the structural unemployment of the 1980s will be seen as the beginning of a trend that resumed with the tech crash of 2000. The picture now is even grimmer than it was in the 80s ...

How Bad Is It? | Talking Points Memo

Last month I showed you what kind of private sector job growth was needed to get us back to pre-Great Recession employment levels. For example, at 200,000 new net private sector jobs per month, it takes 12 years to close the jobs gap, according to Laura Tyson.

The numbers out this morning put July private sector job growth at 71,000. As you can see from this chart, 71,000 jobs per month is literally off the chart on the low end. The Brookings researchers figured it wasn't worth charting anything less than 150,000 net jobs per month because the time horizon for that sort of 'recovery' is too distant to even contemplate....

Or perhaps, even as the gloom deepens, the wheel will turn again. Even though I am a student of Krugman and DeLong, I do wonder how well our economics can model this whitewater world. I honestly don't know what will happen next. I really shouldn't try to make a prediction.

But I will, because, hell, this is the blog where I predicted $5/gallon gas by 2011 -- just before the world economy went off a cliff.

My prediction is that we are seeing a continuation of a secular trend that started in the 70s with the rise of Japan, was transiently interrupted in the 1990s, and resumed about 10 years ago.

This is a trend driven by technology (cheap computing primarily) and by the extremely rapid industrialization of most of the world. These developments are creating prosperity around the world, but they're also producing turbulence and dislocation. When changes are too fast, our economy blows up. Then we put it back together again (sooner with Obama, later with the GOP) until it blows up again.

This turbulence isn't going away. Even as China runs short of labor, India has a vast supply. IT innovation isn't slowing down, and the robots are coming (from Japan, interestingly. The Sun shall rise again.) Heck, Skynet is probably coming too, not to mention our transiently deferred Peak Oil (I'm holding to my sunk costs!).

In America this turbulence favors those with substantial resources, with the capacity to adapt, and with the talents to compete. It is hard, however, on non-wealthy Americans with less than 70th percentile cognitive and social skills. It is exceedingly hard on the bottom 20th percentile. They are the mass disabled.

It's easy to think of solutions to America's problems (see also - 2007, 2004). Health Care Reform was the first troubled step towards separating benefits from jobs. Even without encouragement the market will find new ways to absorb low skilled labor. We can even figure out ways to emulate the Japan of 1990, when the staff/customer ration seemed to be about 1 to 1.

It's easy to think of solutions, but hard to make them work when people like Glenn Beck are cultural heroes.

This is going to be tough.

Public references

Robert Reich (The Great Decoupling of Corporate Profits from Jobs)

Krugman - it's not 1982, it's 2001 on steroids

FiveThirtyEight: Politics Done Right: Labor Force Realignment and Jobless Recoveries

FT.com / Ed Luce - The crisis of middle-class America

… The slow economic strangulation of the Freemans and millions of other middle-class Americans started long before the Great Recession, which merely exacerbated the “personal recession” that ordinary Americans had been suffering for years. Dubbed “median wage stagnation” by economists, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973 – having risen by only 10 per cent in real terms over the past 37 years. That means most Americans have been treading water for more than a generation. Over the same period the incomes of the top 1 per cent have tripled. In 1973, chief executives were on average paid 26 times the median income. Now the ­multiple is above 300.

The trend has only been getting stronger. Most economists see the Great Stagnation as a structural problem – meaning it is immune to the business cycle. In the last expansion, which started in January 2002 and ended in December 2007, the median US household income dropped by $2,000 – the first ever instance where most Americans were worse off at the end of a cycle than at the start. Worse is that the long era of stagnating incomes has been accompanied by something profoundly un-American: declining income mobility.

Andy Grove on the Need for US Job Creation and Industrial Policy « naked capitalism - the return of tariffs, and the editorials of the 1980s

Bob Herbert - A Sin and a Shame - NYTimes.com

Comparing This Recession to Previous Ones: Job Changes - Catherine Rampell - NYTimes.com

David Leonhardt on the Ratf*^#: Understanding the U.S. Reponse to the Great Panic - Grasping Reality with Both Hands

How to Make an American Job Before It's Too Late: Andy Grove – Bloomberg

The Ant Tribe - Schott's Vocab Blog - NYTimes.com

The Speculist: What if the Jobs Are Never Coming Back?

Robert Reich (The Future of American Jobs)

China’s Industrial Heart Facing Acute Shortage of Factory Workers - NYTimes.com

The New Poor - The Economy Shifts, Leaving Some Behind - NYTimes.com

Plan B - Skip College - NYTimes.com

Robert Reich - Are Today’s ‘Entrepreneurs’ Actually the Unemployed? - NYTimes.com

Shaken and Stirred - The Atlantic 2005 - predicting upheavals

Robert Reich: Obama, China, and Wishful Thinking About American Jobs

Philip Greenspun - unemployed = 21st century draft horse.

Gordon's Notes related

Apple's battery charger, occult inflation, and the future of American industry

How could Krugman be wrong?

I, Robot. The alternative to Foxconn.

Post-industrial employment: adjusting to a new world (lots of interesting links)

Causes of the Great Recession: China, GPSII and RCIIIT. Now for Act III.

American crisis – imagining a way out

The paradox of 21st century prosperity

Why the US can't separate benefits from employment

Mass disability and Great Depression 2.0

Where has the money gone? To the very American oligarchy.

The day of the American engineer has passed

Neo-Feudalism: Return of the Trades (2004)

On redistribution

Jared Bernstein & Brad DeLong on "Outsourcing": a dialog with interesting discussions

Signs of the end times? Or just new times ... (2005 - conspicuous consumption before the crash)

Krugman on globalization: how to manage the losers (2007)

Resolution 242 - discounting sunk costs

When I was new, one of my hobbies was visiting cults. The recruiters loved me; I suppose I had a credulous face. It was a surprisingly educational hobby, but these days the cults are suspicious. My face is worn.

Now my hobby is self engineering. Resolution 242 is to discount sunk costs in everyday life ...

Sunk Costs - Wikipedia

... In economics and business decision-making, sunk costs are retrospective (past) costs that have already been incurred and cannot be recovered....

In traditional microeconomic theory, only prospective (future) costs are relevant to an investment decision. Traditional economics proposes that an economic actor not let sunk costs influence one's decisions, because doing so would not be rationally assessing a decision exclusively on its own merits....

Evidence from behavioral economics suggests this theory fails to predict real-world behavior. Sunk costs greatly affect actors' decisions, because humans are inherently loss-averse and thus normally act irrationally when making economic decisions.

Sunk costs should not affect the rational decision-maker's best choice...

If you look for sunk costs, you will find them.

When I make a wrong turn, I value the time I've lost. I try to find a route that will conserve it. I ought to discount my lost time and turn around, and take the shorter route. I prefer Pepsi to Coke, but I like the first half of a can of Diet Coke. I don't like the last half, I should throw it out. If my food is no longer tasty, I should throw it away (the calories, in my world, are a harm, not a benefit).

And, of course, there are all the sunk costs of corporate strategies, of long campaigns, of hours of argument. Costs that are very hard to ignore when times change.

With a little bit of practice I'm finding it fairly easy to discount sunk costs in everyday life. Against the pain of turning the car around, I have the satisfaction of defeating nature's programming.

It feels to me like the practice scales. Throwing away a snack when it stops being delicious seems to make it easier to discard obsolete strategies.

Discounting sunk costs is indeed a useful discipline.

After Wave, who will Google kill next?

In my 3rd edition of Google - The Quick, The Sick and the (near) Dead I had Wave on the Walking Dead list ...

Gordon's Notes: Google: The Quick, the Sick and the Dead - 3rd edition:

... The Walking Dead

Blogger (because Google can't fix the #$!$!$ draft editor, there's still no mobile view, and the 5000 item limit goes unfixed)
Google Groups
Google Sites
Google desktop (search)
Google Base
Gmail Tasks (forgotten, useless)
Knol
Google Wave
Firefox/IE toolbars (killed by Chrome)
Google Talk (neglected, Chat confusion)
Google Parental Controls

Now that Wave has died, what's next? I just checked Google Base, and it's now worse than walking dead. On the other hand, Google quietly fixed Blogger's 5000 item list, so it's moved up to the merely Sick list.

My votes for the next four to die ...

• Google Base - though arguably it's dead now.
• Google Desktop (widgets)
• Google Groups
• Knol

Profile of the tech giants – some surprises

In the midst of an unremarkable summary of the state of the Microsoft-Intel alliance, The Economist has a remarkable graphic (click for full size):

 

I was surprised by …

• IBM’s net income: Do they really deliver that much value?
• Apple has a lot more employees than I’d imagined. They’re more than 1/3 of Microsoft’s head count!
• How many people work for Apple, Google and Intel (non-consulting companies). In each case I’d have guessed a fraction of this total. (I knew Microsoft had a huge head count)

It takes a lot of people to run a tech company …

Pole of inaccessibility

This morning I listened to the excellent IOT program on Antarctica. I didn't know ice flowed like molten meta.

Because of that, for the first time, I noticed "Pole of Inaccessibility" on a world map that included the Antarctic ...

Pole of inaccessibility - Wikipedia, the free encyclopedia

... The Southern Pole of Inaccessibility is far more remote and difficult to reach than the Geographic South Pole. On 14 December 1958, the 3rd Soviet Antarctic Expedition for International Geophysical Year research work, led by Yevgeny Tolstikov, established the temporary Pole of Inaccessibility Station (Polyus Nedostupnosti) at 82deg 06′S 54deg 58′E. A second Russian team returned there in 1967. Today a building still remains at this location, marked by a bust of Vladimir Lenin that faces towards Moscow, and it is protected as a historical site. Inside the building there is a golden visitors' book for those who make it to the site to sign.

Wouldn't you love to be able to sign that book? I mean, really.

Whitewater world - the insane numbers of iOS and Android

Tim Bray works for Google, so he's not a great source on the state of Android phones. (He's a smart critic of the iPhone though.)

On the general mobile market though, he's very credible ....

ongoing by Tim Bray - The Great Game

... The Numbers Are Really Big · Insane, I mean. The billion-plus phones sold per year. The number of active subscriptions, which is greater than half of the human population. The number of new Android devices that check in with Google every day. The line-ups outside Apple stores for every new iOS device. The hundreds of thousands of apps. The ridiculous number of new ones that flow into Android Market every day. Everywhere I look, I see something astounding.

This is the big league; bigger today than the computer industry ever was, and growing fast. This is as fierce a concentration of R&D heat and manufacturing virtuosity and distribution wizardry and marketing mojo as humanity has ever seen...

Robotics will be huge over the next decade, but today this is where the revolution is. The numbers are insane. Within seven years most of the world's population between the ages of 20 and 60 will have a net connected high powered computing device in their household. [1]

This is not business as normal. This is the whitewater world. The Great Disruptors of technological innovation and the rise of China and India aren't going away.

Expect severe turbulence.

[1] Moore's Law. Within 3 years it's so cheap to put an app phone together that there's not much cost advantage to build a dumb phone. Then it's all about software, and that price will fall to zero.