Economics & Taxes Archives

Morale and Complex Malfunctions

Commenter Boonton has on a few occaisons mused about complex industrial accidents and the avoidence of the same.

Complex project development, in a book which came out in the 80s (Have Fun At Work, by Mr Livingstone) was an interesting read. The main thesis of the book was that complex projects (those are too large basically to fit in one smart persons brain … and he gave specific concrete ways to recognize those projects) fail. They all fail (or at the best have horrible delays and massive cost overruns). Much of the book devoted itself to orienting tech/engineer personel to recognize if your project was one of those which would fail and how to prevent that from career or psychic injury to self. As a sidelight he noted the only way that complex projects succeed. Complex projects succeed if heirarchical information pathways are removed and replaced with a model in which everyone can talk (and does talk) to everone. The cannonical such project is the Lockheed Skunkworks, which developed the SR-71, the U-2, and stealth combat aircraft. In their working environment, aerodynamicists and systems engineers sat next to draftsmen and machinists. “Can this …?” questions didn’t filter up and down the chain but you would ask the guy who might know the answer directly.

Big systems with complex working parts are put in place all over the world. Refineries, airplans, chemical plants, nuclear power plants and so on are all complex working systems. One way in which one might approach minimizing the occurance of complex accidents is to follow the Kelly Johnson/Skunkworks approach and shift it from project development to ongoing system operations. Why isn’t this done?

One reasons might be tied to morale. The Skunkworks team was a high morale operation. They had an impossible (basically) cutting edge project. They worked rediculous hours because of their excitement and the demands of the project and the basic urge human urge for success and to win, defined in this case as completion of the project, to scale that technical mountain. How can this translate to a multi-decade task of keeping equipment running safely, a far more mundane and routine task? If one identifies a clear difference in the two tasks as one of morale. High morale is essential for the operation of a non-heirarchical task/team project. High morale might also be an essential telling point in the operation of a long term operational facillity if one were to attempt to shift it to a more skunkworks-like approach to management. You can’t do that without high morale.

Ultimately government “regulation” of industrial workplace might be better served not trying to pretend it knows better how to drill offshore, run nuclear plants, and so on. It can on the other hand, have a better shot a spotting any number of ways in which workplaces are poisoned by poor morale and other working conditions conducive to failure (reckless risk taking has its own signature on morale). The point is, inspectors might be better served watching dynamics of workplace (social) chemistry and less on technical questions which they have, likely, less (or captive) expertise (not to speak of other agenda).  

Friday Link Wrap-up

When the minimum wage goes up, low-wage jobs are lost. This isn’t a prediction, it’s an observation. The Wall St. Journal notes it’s happening again, at the worst time for it, and mostly for minorities.

Syria pulled out of the running for a seat on the UN Human Rights Council. The problem is that they pulled out rather than being pushed. Given the number of human rights violators on that council, they could have easily been approved.

"I am a scientist who was on the carbon gravy train, understands the evidence, was once an alarmist, but am now a skeptic." Read why here.

The headline says it all: "WikiLeaks Threatens Its Own Leakers With $20 Million Penalty If They Leak Elsewhere". Transparency for thee but not for me.

Green energy losing green: A solar farm in Texas is losing money because the property taxes are so high.

High-speed rail losing speed: "California’s much-vaunted high-speed rail project is, to put it bluntly, a train wreck." Of course, the solution, according to the LA Times, is do it over, throwing good money after bad ($43 billion of bad money).

What a shock! "Autotrader survey shows most motorists go green to ‘save money, not the environment’." Make green energy affordable, and the world will beat a path to your door.

A big reason health care costs are rising so fast is because of central planning (aka Medicare, Medicaid). The Democrats solution? More central planning.

Civility Watch: Wisconsin Attorney General releases 100 pages of threats against lawmakers during the budget battle.

The White House shut out a reporter from the Boston Herald because of a critical editorial that the Herald put on their front page. The issue with Obama is not Fox News; it’s anyone who disagrees with him. But if you didn’t know about this, it’s not your fault. The rest of the media, who you’d think would be all over this treatment of colleagues, were virtually silent on the matter.

The anti-war crowd has seemingly melted away into the woodwork with the election of President Obama. I mean, if George W. Bush had violated federal law by invading a country without, within 60 days, getting congressional approval, how loud would the outcry have been, from the Left and the Media? Instead, a collective yawn.

(Sorry, no cartoon this week.)

Other People’s Money

Socialism works as long as you have plenty of it. But when you run out of other people’s money to pay for it, look out.

Social Security will run a permanent yearly deficit when looking at the program’s tax revenues compared to what it must pay out in benefits, the program’s trustees said Friday in a report that found both the outlook for Social Security and Medicare, the two major federal social safety-net programs, have worsened over the last year.

Medicare’s hospital insurance trust fund is now slated to run out of money in 2024, or five years earlier than last year’s projection, while Social Security’s trust fund will be exhausted by 2036, a year earlier than the prior projection.

The trustees stressed that exhaustion of the trust funds doesn’t mean the programs will stop paying all benefits. Social Security could fund about three-fourths of benefits past 2036, and Medicare could pay 90 percent of benefits past 2024 under current trends.

And assuming no other financial surprises in the meantime. We could keep raising taxes in a down economy, but raising taxes has always been the way out of the problem of the day, but with no thought for the impact down the road. Well, here we are, down the road, with the same problem.

Friday Link Wrap-up, (Really) Late Edition

In addition to the doctor shortage the US is going to have when us Baby-Boomers hit retirement, Obamacare is going to make the problem even worse, based on current trends, how socialized medicine "works" elsewhere, and the government’s own numbers.

In 2005, when the press was enamored with Cindy Sheehan, Chris Matthews suggested she run for Congress. Yeah, how about now? Cue the crickets chirping.

Seal Team Six was an evil, secret, assassination squad manipulated by Dick Cheney. At least, that’s what it was when a Republican was President. Today, under a Democrat, they’re heroes, and not associated with Obama or Biden in the slightest. What a difference a "D" makes.

And speaking of contrasts, we have Nancy Pelosi on bin Laden, then and now.

Michael Barone notes that, to get bin Laden, Obama relied on policies he decried.

You know that kids that had George W. Bush in their classroom on 9/11? This is a good TIME magazine article on what they were thinking at the time when Bush was given the news, and what their reaction is now.

Over half of the country pays no income tax. But "the rich" still don’t pay "their fair share", eh?

While the bin Laden story stole the front page, the Conservatives in Canada won historic victories. Later, the Liberal Democrats in England suffered their worst losses in 30 years.

The conventional wisdom on salt intake may not be right after all.

Civility Watch: "So when does Seal Unit 6, or whatever it’s called, drop in on George Bush?"

"Democrats blame Bush for high gas prices"? No, not now; back in 2006. And in 2008, Nancy Pelosi blamed the "oil men" in the White House. They’re much quieter now.

A reform to watch: Indiana lawmakers OK broadest voucher plan in US.

It’s so very sci-fi-sounding, but some physicists believe that something from emanating from the sun is now causing radioactive decay to occur faster.

Worst of all, if the decay rates of matter are being mutated then all matter on Earth is being affected including the matter that makes up life.

The mutation may go so far as to change the underlying reality of the quantum universe—and by extrapolation-the nature of life, the principles of physics, perhaps even the uniform flow of time.

In fact, some evidence of time dilation has been gleaned from close observation of the decay rate. If particles interacting with the matter are not the cause—and matter is being affected by a new force of nature-then time itself may be speeding up and there’s no way to stop it.

And finally, a history lesson from Tom McMahon. (Click for the blog entry.)

Earthquake in the Great, White North

With all the talk about the bin Laden story yesterday, it would be understandable that Americans might have missed this story. If you felt the ground lurch to the right yesterday, it’s because Conservatives in Canada were handed a huge victory.

OTTAWA (Reuters) – Canada’s Conservatives stormed to a decisive victory in Monday’s federal election, winning 54 percent of the seats in Parliament and securing a stable four-year term in power after vowing to focus on the economy.

The Conservatives grabbed 167 seats in Canada’s Parliament, well above the 155 they needed to transform their minority government into a majority, according to provisional results. They won about 40 percent of the vote, beating expectations.

The victory, a relief for Canadian financial markets, left support for the separatist Bloc Quebecois in tatters and the party’s leader without a seat. Bloc Quebecois advocates independence for the province of Quebec.

The Liberals, who have ruled Canada for more years than any other party, were reduced to a dismal third place showing with their worst ever seat haul.

The global financial crisis has apparently made Canadians very tired of liberal solutions. The financial markets echoed this new-found optimism.

The market’s nightmare scenario of an unstable minority government headed by the pro-labor New Democratic Party never came to pass. Harper now has free rein to keep corporate taxes low in the nation of more than 34 million people and bring in a string of tax breaks once he balances the budget, projected within four years.

"It’s going to reinforce quite a bit of stability and confidence, and Canada is going to continue to be very attractive for foreign investors," said Youssef Zohny, portfolio manager at Van Arbor Asset Management in Vancouver.

"With a Conservative majority, you’re essentially assured a fairly business-friendly platform, low taxes, continued investment in energy and potential future energy projects. In terms of investment it’s definitely got a bullish bias."

Pro-business is pro-worker, because pro-business is pro-jobs. The liberal "solutions" have only made the problems worse by taxing the job-creators or pushing them out to look for greener pastures. Canadians have had enough of this, and it’s very possible they will beat the US out of the recession.

If they do, will Americans learn that lesson?

Friday Link Wrap-up

Question: What government program costs us 7 times what NASA does?
Answer: The department of Improper Payments.

Question: In a study looking at data from over 50 years, towards which political party does the NY Times lean? 
Answer: Well, do you really have to ask? And it’s more about what stories are covered than about bias within stories.

Question: Why do movements like pro-democracy or the Tea Party seem to balloon overnight?
Answer: The "Preference Cascade".

Question: What are 5 truths about Planned Parenthood that you’re not likely to hear in the media?
Answer: Read them here.

Question: How could you defend the use of sola Scriptura, "Scripture alone", to someone who objects on the basis that humans are fallible, so you just can’t be sure what is Scripture?
Answer: C. Michael Patton has a good response.

Question: Has Paul Krugman ever flip-flopped on an issue for politics’ sake? Not a little quibble, but on really substantial stuff?
Answer: Oh yeah, he has.

Question: Has Nancy Pelosi ever flip-flopped on an issue for politics’ sake?
Answer: Well, she blamed high gas prices on "two oil men in the White House" before. Wonder who she’s blaming now.

Question: Is Syria, a country that is killing its own citizens for protesting the government, really being considered for a seat on the UN Human Rights Council?
Answer: Oh yeah, it is. And the UN is divided on whether it should even investigate their recent human rights abuses.

Question: Was Stanley Ann Dunham punished with a baby.
Answer: No, the baby (Barack Obama) was not a punishment, even though Barack’s campaign rhetoric would tend to suggest otherwise.

Question: Has Hamas moderated, since it had to take on political leadership and run the Palestinians?
Answer: Oh no, it hasn’t.

Question: Did Fox News push the whole "birther" issue the most?
Answer: Oh no, they didn’t.

Question: Does Europe want us Yanks, with our neo-con aggression, out of their backyard?
Answer: According to this Norwegian liberal, oh no, they don’t.

Question: Shouldn’t the federal government be a limited one?
Answer: Click for a larger image.

Taking Note of Europe

Social benefits, long thought untouchable there, are now getting a second look. The combination of huge taxes with a financial crisis, makes that sort of spending unsustainable.

PARIS — From blanket health insurance to long vacations and early retirement, the cozy social benefits that have been a way of life in Western Europe since World War II increasingly appear to be luxuries the continent can no longer afford.

Particularly since the global economic crisis erupted in 2008, benefits have begun to stagnate or shrink in the face of exploding government deficits. In effect, the continent has reversed a half-century history of continual improvements that made Western Europe the envy of many and attracted millions of immigrants from less fortunate societies.

The envy of many only because it was made to look better than it was by borrowing from the next generation. Well, the next generation’s here, and it’s time to finally pay the bills.

In the new reality, workers have been forced to accept salary freezes, decreased hours, postponed retirements and health-care reductions. Employees at Fiat’s historic Mirafiori plant in Turin, rolling back a tradition of union privileges, even pledged to cut back on the number of workers who call in sick when the local soccer team has a match.

Unions have been a party to this deal with the devil, no doubt under the guise of "worker’s rights", including the right to watch soccer on company time.

Unlike in the United States, where conservatives are so resolved to cut spending that they threatened a government shutdown, Western Europe’s generous welfare programs had generally been embraced by the right as well as the left. Against that background, the new wave of cutbacks seems to signal a dramatic shift in attitude toward benefits that many Europeans had come to see as a birthright and that politicians of any stripe could challenge only at the risk of their careers.

Apparently, "conservatives" over there found, too, how easy it was to buy votes with promises of wealth redistribution. The politician who robs Peter to pay Paul can count on Paul’s vote.

The social welfare system no longer plays its role, said Claude Bernard, a union organizer at Renault’s struggling car factory in Sandouville, a suburb of Le Havre in western France. The very system of redistributing wealth through taxes and welfare programs has been called into question.

In a measure of the shift, Manuel Valls, a presidential hopeful in France’s Socialist Party, challenged party doctrine recently by declaring that it should not make an issue of preserving the 35-hour workweek if French factories have to compete with Chinese factories where the workweek starts at 60 hours and goes up from there. In Denmark, Prime Minister Lars Loekke Rasmussen rattled many in that icon of Scandinavian cradle-to-grave welfare by suggesting Danes should work longer before retiring, to peel back the deficit by $2.8 billion.

Britain’s Conservative-led government decided in the fall to attack deficits by cutting more than $130 billion over the next five years, hitting welfare benefits hard and setting off protests by raising university fees.

But deficit pressures have forced leftist governments to seek savings as well. Some of the most painful cuts — pensions reduced, wages stalled and retirements pushed back — have been imposed by two Socialist prime ministers, George Papandreou in Greece and Jose Luis Rodriguez Zapatero in Spain.

If even socialists are calling their founding principles into question, why, then, are we trying to run off the same cliff, and at one of the worst possible financial moments in our history? Let’s learn from their mistakes instead of repeating their failed history.

The American Poor

For perspective, as budget issues continue to take center stage in Washington, and welfare programs are considered sacrosanct by Democrats, here is information from a US Census Bureau report in 1990:

* 38 percent of the persons whom the Census Bureau identifies as "poor" own their own homes with a median value of $39,200.

* 62 percent of "poor" households own a car; 14 percent own two or more cars.

* Nearly half of all "poor" households have air-conditioning; 31 percent have microwave ovens.

* Nationwide, some 22,000 "poor" households have heated swimming pools or Jacuzzis.

"Poor" Americans today are better housed, better fed, and own more property than did the average U.S. citizen throughout much of the 20th Century. In 1988, the per capita expenditures of the lowest income fifth of the U.S. population exceeded the per capita expenditures of the median American household in 1955, after adjusting for inflation.

Emphasis mine.  Now, 14% isn’t a whole lot, and 22,000 even less so, but when Democrats talk about not paying for tax cuts or programs "on the backs of the poor", just realize what "poor" means in the US. I’m sorry, but if you have a swimming pool or Jacuzzi, you aren’t poor, and money can be saved on these programs. This was 20 years ago, and spending has only risen.

As an aside, I’ll bet that people getting assistance from, say, The Salvation Army, don’t get hot tubs from them.

Friday Link Wrap-up

Kenyans have been winning marathons all over the world. The Dutch have decided to try and keep them out by only giving 1% of the prize money to any foreigners who win the Utrech Marathon. I don’t think that’s racism, but I do believe it’s wrong anyway.

Don’t bet your life on outrageous claims by proponents of embryonic stem cell research. Someone  has, though.

Civility Watch: The Left has been sending death threats to the eeevil Koch brothers. The wrong Koch brothers.

Civility Watch 2: Who said, "Civility is the last refuge of scoundrels" and "Let’s not be civil"? (And said it in the same paper that blamed the Giffords shooting on incivility from Republicans.)

Civility Watch 3: If a Republican had said this, he would have been called "racist" or "Islamophobic". But a member of the Obama administration said it, so no outcry.

Do iPads cause unemployment? Does Jesse Jackson, Jr. think we should have banned cars to keep the buggy builders in business?

Hanging a small cross inside your company van is a firing offense in the UK, apparently.

A death panel in Canada pronounced their sentence on a baby in Ontario by saying that life support should be removed, against the parents’ wishes. Instead, they brought him to a country that, so far, does not have a fully socialized system (that would be America), and the child did so well that he was weaned off the ventilator and is now back home.  It’s still touch and go, I imagine, but critics said he’d never get off mechanical breathing. Way to go, baby Joseph! (Which begs the question; if the US goes fully socialized, where will Canadians go for good health care?)

And finally, the same old song. (Click for a larger image.)

The Standard & Poors Downgrade

If this doesn’t wake up Democrats, and the Americans that vote for them, to the real, actual unsustainability of more and more spending, what will? If the last remaining superpower can’t keep its financial house in order, then what comes next? Are we "spreading the wealth around" so much now, that too many are unwilling to give up their government dependence?

Should the rich pay more? If so, please say how much more, specifically? Should we go back to 91% rates? The problem is, when more that is taxed, it isn’t used to pay for existing debt and spending; it instead spurs on new spending. Our problem is not how much revenue the government is getting; it’s the amount of spending going on.

This is a bi-partisan problem; both parties have contributed to this. The Republicans, however, spurred on by the Tea Party, are making the first real effort in decades to do something about the problem. Nothing was done on this until Republicans won a majority in the House, and even now, Obama and the Democrats are making only token gestures.

Man oh man, I hope the independents are watching, and will remember in 2012. I hope some fiscally responsible Democrats are, too.

OK, lots of questions above. I would love to hear any answers in the comments.

A Scintillating Post on Budgets

Well, no, it won’t necessarily be, as there’s very little scintillating about that topic (unless you’re an economist, but maybe not even then). But I just wanted to weigh in on the big topic at hand in Washington; the battle over the budget.

Understand that this is the current year’s budget we’re talking about. When the Democrats held majorities in both houses of Congress, they couldn’t pass a budget. And now that the Republicans have been swept into the budgetary side of the legislature, it’s even more difficult. But the Dems have no one to blame but themselves for this situation. If they’d passed a budget, Republicans, and especially the Tea Partiers among them, would have little to say on real spending until the fall. But free-for-all spending without a budget is sort of liberal utopia in a nutshell, so being hoist on their own petard elicits some satisfying schadenfreude.

OK, enough clichés. Moving on.

Both sides say they want to be responsible with the budget, but the tsunami of red ink the Democrats have drowned us and our grandchildren in doesn’t speak to any real underlying principle of restraint. Things were bad when Republicans held Congress and the Oval Office, but, as predicted, the Democrats were orders of magnitude worse. The Tea Party was a response to both issues, and some of the Republican leadership sees this and is doing something about it. Not nearly enough, mind you, but a more concerted effort than we’ve seen in quite a long time.

Yet both sides have their sacrosanct programs. For Republicans, this is generally the military, and for Democrats, this is generally entitlements. Let’s start with the latter. A blogger I know from the Left asked an open question on how to cut $300 billion. His answer was, of course, stop the wars in Iraq and Afghanistan (though Libya went interestingly unmentioned; perhaps because that’s a "kinetic military action" and not a war) and cut military programs. Viola. He asked for other ideas, with one stipulation being that it shouldn’t be done "on the backs of the poor, sick, elderly and otherwise marginalized". That kind of phrasing generally means "entitlements are untouchable, and if you even look at them sideways, we have a demagogue script all ready to go." Thus, for liberals, entitlements can only ever go up, period. Yet that is the 800 pound gorilla in the room. Entitlements are eating up so much of the budget that much of the rest is just a case of nibbling around the edges. One suggestion I heard was to just take the 2008 budget and pass it. It would cut spending, including entitlements, and somehow, with that budget, we didn’t have rampant homelessness and the elderly starving to death. (And don’t talk to me about inflation; that was just 3 years ago.)

Which brings us to the Republicans. If entitlements are an 800 pound gorilla, the military is it’s 600 pound cousin. But here’s are the differences:

  • The military is a constitutionally-enumerated power of the government. Wealth redistribution is not.
  • While the rest of the world look down their collective noses at the size of our military and the money we spend on it, this is the same world that asks, "Where are the Americans?" anytime we don’t show up to an atrocity or a despot or any other international incident. Europe wouldn’t handle Kosovo. The Arab League wouldn’t handle Libya. Everyone sneers at our military, but wouldn’t know what to do if we didn’t have it.

Indeed, I would like to see some saving in military spending by, for starters, shutting down all those bases in Europe that were there to protect it from Soviet aggression. Turn them over to the locals and let them man the battle stations, or abandon them, whatever. But before you start cutting military spending on current hot spots, let’s get rid of the spending on spots that haven’t been hot for decades. There is money to be cut from the military if you’re willing to look. I’m sorry that manufacturing jobs may be lost, but if you’re keeping the jobs for the jobs’ sake and not for what’s being produced, how is that any different than socialist/communist make-work jobs?

The sacred cows need to be put on a diet. All of them

Friday Link Wrap-up

Six out of ten politicians in don’t think you know enough about the issues facing Washington to form a reasonable opinion. More telling to me is that, broken down by party, most Republicans trust you but way more Democrats don’t.

Another example of why it’s hard for government to cut spending (and why conservatives try to hard to hold back increases); Between 400,000 and 500,000 protest against government spending cuts in the UK.

Media Matters becomes a parody of itself, ignoring the media in general and concentrating solely on Fox News. James Taranto wonders:

Does a group that proclaims its purpose to be industrial sabotage qualify [for tax-exempt status]? It’s hard to imagine the answer is yes. Could, say, AT&T set up an organization to sabotage Sprint and do the whole thing free of taxes?

Did you know that opting out of Medicare (not asking for your tax money back, just not taking advantage of it and paying the tab yourself) will cause you to forfeit Social Security? Big, big government, anyone?

The European Union has an idea for clean air; ban all cars.

Irony Alert: President Obama accepted a transparency award from the open government community, in a closed, undisclosed meeting at the White House.

Barack Obama was against wars against brutal dictators that did not directly threaten the United State or its interests, before he was for them.

A salute to the men and women of Japan — the Fukushima 50 — who are putting their health and, indeed, lives on the line to bring the reactors under control.

Speaking tearfully through an interpreter by phone, the mother of a 32-year-old worker said: “My son and his colleagues have discussed it at length and they have committed themselves to die if necessary to save the nation.

“He told me they have accepted they will all probably die from radiation sickness in the short term or cancer in the long-term.

And finally, "regulating relationships". (Click for a larger image.)

Unlike Bush, Obama is not to blame

At least if you judge by media coverage, or lack thereof, of rising gas prices. Funny how nobody mentions that gas prices have doubled since Obama took office. Gas prices rising while a Republican is president equals big news. Gas prices doubling while a Democrat is president equals nothing to report.

Friday Link Wrap-up

The death panels have begun, deciding which newborn babies live or die. Don Surber says, "Under President Obama the purpose of the greatest medical system ever developed has been subverted from saving lives to saving money." To be fair, insurance companies could be accused of that as well. But they could compete on customer service. When the government tells them what they can and can’t do, and co-opts them into a national health system, the government then decides on what and will not be paid for. And there’s no competing with the government.

Eight years ago, the media was deeply concerned over whether Bush would go to war without Congressional approval. Today, when Obama actually does it, a collective yawn (with one small exception).

Running out of things to tax, politicians are now trying to push a toilet paper tax in Washington. No, really.

Hamas terrorists in Gaza broke a cease-fire to toss 50 rockets at Israel last Saturday, while the rest of the world’s gaze was diverted to Libya. Essay question: Did you hear about this in the media, and if not, why not?

And finally, speaking of the media covering for the President (click for a larger version):

"Where Are The Americans?"

Roger Kimball writing at Pajamas Media contrasts the big differences in the world’s response (and by "the world’s" he means "America’s") response to two earthquake/tsunami combinations; the 2004 Boxing Day one in Indonesia and the 2011 on in Japan. George Bush, who supposedly hated brown people, sprang into action, getting the US military (mostly the Navy, with its carriers that have huge desalination plants and bakeries, among other things) involved in the relief. Barack Obama sprang into action, on the golf course and at ESPN.  Kimball notes that, in this and other situations around the world, people everywhere are wondering, "Where are the Americans?"

Is this the kind of new diplomacy Obama said he would bring? Supposedly, we squandered all of the the goodwill we’d ever built up. And yet, now the world is wondering why were so aloof. To be sure, American relief organizations are helping out in full force, and that is one of the beauties of the American culture. We don’t expect the government to bear the full burden of charitable help, because frankly there are things the government just can’t do as efficiently.

But what government can do, and has done in the past, it’s not really doing that as much as it used to. Hope and change.

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