What is a good response to failure? More failure!!

I've been reading a lot lately about policy failure. The main thrust of the book is that most policies are amazingly inefficient generating more costs then benefits. Some of the policy failures discussed are the drug review process, various EPA mandates, financial regulations, and highway funding.

I have a few issues with the analysis, the largest of which is that I don't know that all the costs and benefits have been appropriately looked at. This is an issue I have with classical economics in general, they only look at things that can be monetized and modeled leaving out a number of important considerations.

But the real thing that I wanted to talk about was that this article reinforced an idea that has been bouncing around in my head for a while. Performance based policy and vertical goal integration. While that may sound like two idea they are tightly merged in my head.

Performance based policy is the idea that any policy, government or private, should have a specific goal, a concept of how it is to be achieved, what the effects will be on other systems, a standard against which progress can be measured, and a review process to see how you are doing.

Doesn't this sound obvious and rational? Why do something if you don't have a goal, and a way to figure out if your getting there. Without measures and reviews you could waste time, money and energy on something that is totally fruitless.

I think this is especially important when it comes to public policy. I would think that if a politician could say "We were here and now, thanks to your taxes, we are here. And that means we are this much better off" then that person would do quite well in the next election. I suppose they kind of do this already with their earmarks, "Yes I brought $5 million dollars into my district for something completely useless!!"

That brings me to my next point, vertical goal integration. This is the idea that everyone is working towards the same goal at different levels, and knows what role they play. In a company the goal at the top level may be to make the shiniest widgets. The middle management would then have a goal to keep the factory floor clean to make sure no dust made the widgets less shiny. Does this make sense? Goals that work together based on the responsibilities of the person, or group in question.

I heard of one company where this was practiced so well that the janitor knew the company goals, region goals, local factory goals, department goals, and individual goals. He knew exactly where he stood, and how he helped the overall mission of the company. What a great thing not only for efficiency, but for morale as well.

Of course the above story works so well not only because they had goals, but also a way to measure them. If at any level there was consistent problems actions would be taken. Actions may include firing a person, maybe a policy change, or the introduction of new technology. It doesn't really matter what the change is, the point is a feedback loop was created so everyone could see where they were, where they were going, and how they were getting there.

It seems that there is a lack of this understanding all over the place. Almost every company I have worked for has had a hard time with this concept; a failure to recognize these concepts is endemic in government.

With ideas like this that seem so simple and intuitive to me I wonder why they are not practiced, is it because they are not obvious and simple, are other people just stupid, have other people just not been exposed to the idea, or are people threatened by these ideas and actively fight them off?

One thing a can predict, regardless of why these concepts aren't used, until someone starts making and keeping goals there will always be plenty of failure for everyone.

Don't Lynch Me, I do Roads

I just read a great article (here) about how urban planners are the true evil cause of the global recession.

In brief the author states that urban growth boundaries, an invention of urban planners, artificially restrict the supply of new housing causing a boom/bust economic cycle. This combined with new securitized mortgages brought down the the whole system.

Urban growth boundaries really do limit the supply of houses. They pretty much say that no one can build anything outside of a circle that a planner draws on a map. The primary reason that planners do this is to increase density, preserve open space, preserve agricultural land, and to limit commute times.

Now all of these reasons seem like good things right? Well, maybe not density. That is usually sacred to urban planners however because density to them also means that transit systems will work, more diversity, and more lively and walkable area; in short that they did something good.

So my question is which is more important, avoiding economic collapse, or getting all of these other good things. Actually the question is: do growth management policies provide the things promised? I don't know, but I read another interesting thing (here) about how cities that generate a sense of community have better economies then other cities. Then I read this article talking about where most young people want to live. The interesting part is that it list a number of cities that have urban growth boundaries.

I admit that the best research is done in the first article, but it was also written by the Cato Institute which is a very openly libertarian think tank. If it had said anything good about government it never would have been published. I don't know the biases of the other articles, and they are not as rigorous.

Really it all comes down to who you trust to give you the right information. That is why people love Glenn Beck, NPR, Billy Graham, or Billy Idol. There is no way to know everything so if we find someone we can mostly agree with we keep listening. This is why it is important every once in a while to question the assumptions underlying what we hear. If we don't we just become that jerk it spouts off about something they obviously don't know anything about, and I am sure we have all seen that guy at least once in our lives.

Determining Values

I keep wondering, hoping really that stock fall a lot more.
That sounds like a horrible thing I'm sure, but my reason isn't just to watch other people needlessly suffer; no I have much grander, nobler dreams for mankind, like actual change.

The reason that I want the stocks to drop is because I don't think that many people will change their behavior over this, so far, fairly short recession. And I think that America would probably come out of this stronger and faster if we truly rushed to the bottom and then started climbing back out of this financial pit of despair.

It seems to me that people are still not letting stocks drop to a real value. Instead people continue trading, buying and selling with the hope that the recession will soon end and they will make money.

I think, however that by not letting the stocks fall people are prolonging the recession, lengthening out the inevitable decline. If everyone would sell off ,and not continue to falsely inflate values, we could get to the bottom of the recession and get back onto a path of growth. Sustainable growth.

My fear is that we may be entering an era akin to Japan's lost decade. A time of little to no economic growth.

Then again, maybe everything is fine, or will be soon like a number of experts are saying.

Post Conflict Reconstruction

I just listened to a great talk given at the Technology, Education, Design (TED) conference; here is the link.

The talk is about what works and what doesn't when it comes to rebuilding countries torn by violence. The primary reason that I like it is because it makes a lot of sense, and because he says some things that I have been thinking about for years (being validated by smart people is good for my overfed ego).

My idea for reconstruction is to focus on the economy. The rational being that if people have the opportunity to work (be busy) and be able to buy stuff, the are more likely to work then join insurgency groups. That is about as far as I got with my own thoughts. People like stuff, and they don't usually like doing nothing for an extended period of time.

The primary reason that populations switched from hunting and gathering to agriculture was so they could have stuff. Prior to agriculture people lived longer more healthy lives do to a diversified diet, and small living groups. There were times when there wasn't much to each but it was cyclical and expected. Once farming started dietary options were limited, most food was high in sugar so there were more cavities, drought or flood destroyed all hope of food for most of the year, and higher density provided a nice home for endemic disease. The point is that life got kind of crappy, but for people it was worth it because you could have stuff and status.

Those primary desires haven't changed in millennia and using them as primary motivators to get a country back on tract I believe will be much more effective then focusing on strong arming a political puppet into a newly democratized political system.

I mean really when it come to work for a month to get a new plasma TV, or training for a suicide bombing mission the plasma looks more appealing, but there has to be a sense of hope and opportunity for the plasma or bombing is the only real option.

Anyway the talk is great and more thought out then my little rant so check it out.

Also if anyone knows of a job where someone with a masters in urban planning can get involved in international development and reconstruction let me know; that is really what I would like to do for a career. Thanks

People Helping People

I read about a great idea the other day, paying teenage girls to not get pregnant.
Brilliant eh?

I really like the idea, but when I told my sister in-law about she found the concept repugnant. "You want to pay people to do nothing?" she asked incredulously. "Well it's better then paying them for lying on their backs and doing nothing" (I didn't really say that, but should have).

Anyway, the full idea is that you pay high risk teen girls a dollar a day for every day that they are not pregnant. This equals $365 dollars a year per teenage girl; while this may sound like a lot compare it to whatever you think it would cost per year per pregnant teen and child, who doesn't have much education, training, or familial financial support for the rest of their life. Sounds like a bargain to me.

The theory at work here comes from behavioral economics, and that many people don't act in their own self interest, or at least the way that classical economists describe self interest.
I thought that this concept was fairly well known. One of my wife's favorite topics is behavior modification, this type of reward system is a continuous reinforcement schedule with a fixed ratio, aimed to maintain a certain behavior.

It reminds me of a childrens book I read a long time ago where in order to stop a girl from bitting her nails they tried to pay her up to ten cents at the end of every day, one penny for every nail not bitten. This strategy didn't work so well because the reinforcement came at the end of each day. After a while the tactic changed to the girl getting ten pennys at the beginning of the day and at the end of the day she would be able to keep a penny for each unbitten nail. The presence of a constant reminder was able to shift her behavior.

As I understand it the money works in the same way, as a more constant reminder of the goal or desired behavior.

Now this isn't the best reinforcement type, that is an intermittent reinforcement schedule, with an unfixed ratio, meaning the target has no idea when the reward will come, or how big the reward will be. The uncertainty generates the best results. I wonder if the government would consider that instead. The problem I see with that is that bureaucrats have a hard enough time trying to maintain a stable schedule, and teenagers don't have the ability to process consequences very well.

I read an article on teenagers brains that was great, but to long to talk about here; suffice it to say that brains are like teeth, your baby brain falls out around 12 and the adult brain comes in around 25. So a couple of bucks for high risk girls sound like a good investment for them and for the economy as a whole.

Down with Zoning!!

I think that land use zoning is an idea that has outlived its usefulness, mostly.

The rational for zoning was to separate land uses that could be a hazard for people. The example is that you don't want a brick making plant, in a persons back yard because the noise, air, and water pollution is detrimental for human health.

This is the good part of the idea; the part that needs to be continued.

The bad part is that the different land use zones have gotten ever more restrictive and reactionary. When an individual does something that a city council finds offensive (like put a giant statute of a fish on their roof) all of a sudden the zoning laws are changed so no one else could do something similar.

The result is the development of ugly monotonous sprawl. Zones have been so tightly controlled that little variation is possible, even if it is a good idea. Also developers can use the zoning codes to do things that are not part of the cities desires or best interest (like a lot of big-box retail stores).

I think that a lot of the reason that zoning has gotten this way is because it's easy for the bureaucrats. Once a zoning law is in place, planners behind the counters look at a developers plans, go down the check list to see if it meets code and then approve or disprove as the law requires. Simple, safe, and mindless.

I say safe because doing it in this fashion prevents (in theory) lawsuits being filed for the city being arbitrary and capricious. However, zones get changed all the time. Also most times if a developer threatens a lawsuit cities will just give the developer what they want.

So now for my grand solution, ready?

Get rid of zoning.

I bet you didn't see that one coming. The system is often overly burdensome and complex in its mindlessness. So lets toss the whole thing out.

Apparently this is what some Texas city did. I forget if it was Houston or Dallas. Unfortunately both those places area also very sprawlly (I was listening to a lecture a week ago that compared the no-zoning city to LA; they blamed it on similar parking requirements).

So just getting rid of zoning doesn't actually make anything better. Fortunately my plan continues.

What would replace zoning would be a mandatory visioning process that was updated every 15-20 years.

Visioning exercises have become more popular in the past decade, they consist of a series of public meeting and a set of alternative land use, transportation and economic scenarios for a period in the future. the public vote, argue about, and recommend things that need to be included in the scenarios. Then the city has an understanding of what the population wants there city to be in the next few years, the issues of greatest importance to the citizens.

Armed with this knowledge budgets can be properly allocated and development can occur in a shape and form consistent with the character of the individual city.

The planners would no longer sit behind desks and run down their check lists, but would engage in discussion with all developers to make sure that what they proposed is in line with the vision and long term goals of the community. If no consensus can be reached between the developer and the planner then no development is approved. If this was law then the developer would have no recourse but to leave or capitulate.

Now above I mentioned that this would be a mandatory process every 15-20 years. The reason for this is to capture cultural shifts in the cities population. As you may have noticed technology and culture can change very rapidly. Things that were unheard of years ago are now normal (I'm thinking of a population shift back to the cities, cell phones, Wi-Fi, and mixed-use development).

By going through a visioning process every 15-20 years many of those shifts can be dealt with in an orderly way.

For this all to happen a few things need to change. First, city councils need to be willing to try something new, take a bit of a risk instead of being reactionary codgers. Second, city planners will need to get brains.

That may sound unfair, and it is a little bit. There are some very smart dedicated city councils and municipal planners; I haven't met many.

Politicians, well, do I really need to say anything more?

As for the planners some are just mediocre. City jobs offer a low, but stable salary, not necessarily a lot of work and an ability to be fairly comfortable. Other planners are smart and dynamic folks, but how much mediocrity can a person be around before they leave or succumb?

Anyway, that is another one of my thoughts for making cities better. Sounds doable in theory, and some planners that I have run this across are all up for it. If only the politicians would allow it.

Flexibility

A baby daughter joined my family this week; which along with a move into a new neighborhood has me thinking about, what else, demographics and city structures.

The neighborhood we moved into is fairly close to downtown. Most of the homes are 70 - 100 years old, small little bungalows. A few weeks ago I was talking to a guy who has lived here for quite a while and he was telling me that most of the old timers don't understand what is wrong with the young couples who move into the area. They move in, then move out in a couple of years after they have a child or two to a larger home. The old timers raised four to ten kids in houses this size, it just doesn't make any sense to them.

The area is going through a period of demographic transition. The cycle works like this: young people couples move into affordable homes. They begin to have children and a decent amount of the families stay in the neighborhood. Although some people leave they are replaced with others in a similar stage of life. The neighborhood as a whole ages together, children leave and the parents start to retire. The stability of the neighborhood, with rising incomes raises property values and younger couples are priced out, until the older generation start to die leaving room for new young couples to enter the area, starting the cycle anew.

A lot of areas experience this cycle. Personally I don't understand it because I would prefer to move every couple of years. But for those who stay in an area for a long time you can see this happen. 

Since this is a known concept I think that public buildings should take this into account, build flexibility into the system so that every 20 years the city isn't closing elementary and high schools only to face over crowding 10 years later. My example idea is joining elementary schools with senior citizen centers. As a neighborhood ages the elementary school enrollment tapers off around the same time people start getting their AARP cards. If there was a shared structure for the two groups the seniors could take more space as their numbers grew. If there was a standard ratio declining elementary age kids and growing seniors the building itself would be able to function at its prime capacity, and reverse just as easily when the cycle started over. 

It seems to me that we live in an era where we consider almost everything disposable, including tax funded buildings and infrastructure. Doesn't it make sense to plan and design systems to last longer and easily convert from one use to another and back. 

A few years ago when a light rail transit project was being built a friend of mine on the board of directors for the local transit agency saw a large pile of creosote logs next to all of the construction  machinery. His thought was "I know we're cheap, but I didn't think we were that cheap." The logs were not for the new track, but from the old trolly line that had been there 60 years earlier. Over and over again we destroy part of the city, only to build it back again after the older generation dies off.

Really, there must be a better way; my bet is that it is a flexible one.

Cost Effectiveness

So I am no longer in school, which pains me ever so much. Instead of paying to learn cool stuff, I now have to try and apply some of the stuff learned while people pay me. I am not sure about this system.

One of the up and down sides is learning about corporate management. What a bizarre world. My colleagues and I have been discussing our company's insane management structure and coming up with solutions. 

One idea that comes up a lot in our discussion is the use of students. I have had a few internships in the past few years, and the one thing that has been constant is that the firms have made a lot of money off of me.

Students often, in my experience, have been learning new and often innovative ways of doing things, are versed in new time saving technologies, and generally have more energy than older more seasoned workers. All of these things are good because students very often have no clue about what they are doing. 

The internship experience allows the student to be taught in how to apply all of the new theories and gadgets they have learned about. When they return to school the topics discussed have more meaning because the student can figure out how it could be applied in real world situations, can ask more intelligent questions, and become a boon to a classroom.

The company on the other hand gets really cheap intelligent labor. Most internships are part time, at lower than normal rates, but they still bill clients at full rates, roughly three times what the intern is getting paid. So even if it takes the intern twice as long to get something done, if it still gets out on time a profit has been made.

Another bonus is that once the intern does figure out what is going on their productivity skyrockets and they still are making the company lots of money.

So why aren't more companies doing this? My current position had to be fought for by my manager. Most of my company's employees are people who have retired from state government. They have limited technical skill, moderate management skill and were hired mostly for their contacts.

It seems that the smart way to go would be to hire limited people with contacts, and with good management/mentoring skills and a lot of good students to maximize productivity and profit. 

Now this is obviously coming from the mindset of student, but doesn't it make a lot of sense for long term company sustainability?

Intelligence

The question du jour: what is intelligence?

I was talking with my aunt the other night, and she told me a couple of times how smart she knew I was. I'm not saying this to brag; I hope that all aunts think their nephews are smart, but it raises an interesting question: what is intelligence? Really my question is how and why intelligence is perceived as it is and why people think that I am smart when I perceive myself as a slacker.

Now I don't think that I am dumb by any means; I am quite arrogant in my intelligence, I just think that I don't do much worth while with my brain, and that there are many people who are much smarter than me. 

The reason that I consider myself smart, is that I have no doubt that I can understand anything if I have the desire and am given the time to learn. What I wonder is, can't anybody?

I really do wonder if this is something that is particular to a few or if all have the ability.

This question of ability is one of the fundamental tenets of US society and is the foundation of most policies aimed at education. If someone tries hard they can learn and do anything; this concept is part of the American self-mythology.

But what if it is wrong? What if some people, for whatever reason, lack the ability to learn certain things. Should we denigrate these people, change the educational structure for them, sit back and think, "Hmmm, how very interesting."  

I don't really know, but I think that if there were some changes made there might be a little more hope and happiness in education and subsequent employment.

A few years ago I took a very in depth aptitude test. The results said that there were a few specific areas in which I excelled. These tests planted some ideas in my head that eventually shaped my career choices. One of the areas in which I scored very highly was in something called ideaphoria. I think the test makers made up the word to sound smart, but people who posses this ability can rapidly generate ideas. And this is where I think others get the idea that I am smart.

In a recent issue of Time magazine there was an article about bosses and perception. The study put people into groups and had them solve a problem, then asked the groups to rate each other on intelligence and leadership skills. The results were that the people who had the most ideas and were the loudest, most dominant, scored the highest. These people scored high regardless of whether or not their ideas were any good, just talking about them generated the perception of intelligence. 

This is what makes it so hard to define, intelligence is more often then not a personal perception. There are other standard measures of intelligence like IQ, SAT scores or other tests, but more often then not, these test only test a single aspect of a very complex and often elusive concept. 

Recently some psychologists have written about multiple intelligences: emotional, physical, social, and so on. I think that this sort of concept makes more sense (I also just read an article that women with higher levels of emotional intelligence reach climax more often, just an interesting side note). 

I wonder if instead of the current standardized tests that are given in school, there was more of a focus on aptitudes and different kinds of intelligence,  individuals would be introduced to avenues of study that fit their own unique blend of skills, leading to increased efficiency, productivity and job satisfaction. 

Look at all that drivel, I'm such a sap; talking about mass happiness. The world is a cold hard place, and beer, I mean work, is the cause of and solution to all of life's problems.  So why change the system?

Instead, those of us who are smart should just weasel  our way into power and live comfortably on the labor of those not intelligent enough to work the system.

Yeah, that's the ticket.

The financial world is ending, am I the only one who is OK with that.

So today the DOW closed a decent bit below 7,000. Newspapers and talking head are  bemoaning  the fact that this is the lowest the DOW has been since 1997. Personally I'm ecstatic.

1997 is the year right before the tech bubble really started to expand. You could say that it was a normal place for stocks to be at, a baseline of a healthy economy. After 1997 there was the tech bubble and subsequent burst when stocks fell from an inflated high to just below 8,000 before getting buoyed up by the housing bubble. This housing bubble then took stocks up ever higher before the collapse a year and a half ago.

Since that time I have been waiting for the DOW to drop below 7,000. If that was the number at a time when the market was in a non-bubble state and healthy, and we are currently in a recession than now we are getting close to being at a non-inflated stock market value. I am not saying that I think that it will get much better any time soon, but I can now say that the market is a whole lot closer then it was when it hovered around the 8,000 and then 7,000 mark.

So I am happy with the recent slide in the market indices. This is also because I am in a great position. I have yet to invest anything in the market, stock or housing. Now that price are dropping to reasonable levels I will probably be able to enter the market and see a decent return on my investment. For people who bought at the hight, or who were banking on continued ridiculous growth, well sucks to be you, but that is the market and it exists with risks.

This topic also makes me think of another thing I have noticed, news comparisons. Has anyone else noticed how the news media always makes a comparison with economic or disaster news to the past. Today it was "the DOW is as low as it was in 1997." Sometimes it is "the greatest drop in employment numbers since the 1970s." These comparisons make some sense, giving perspective on the last time that we had problems and getting people to think about what life was like during previous hard times.

Sometimes however the comparisons are just dumb, like "Gas prices are the highest since last week!!" I am all up for perspective, but really it should actually give some perspective.

New Economic Base

I hope I don't offend to many people by saying this, but I think Nevada and Wyoming are pretty worthless.

By that I mean that Nevada and Wyoming don't have a whole lot of revenue generated, except by whores, gambling and sheep. Not that I necessarily have anything against those industries, but I think that there is an underutilized resource, energy.

Wyoming is amazingly windy and Nevada has a whole lot of sunny deserts. I think that an investment in solar and wind farms in areas with little population could be a major boon in times of economic uncertainty, and all other times.

I was watching a show about Germany and there strategy for becoming more energy independent. The legislature passed a bill that guaranteed people who put energy into the grid twice the money that it costs to take out of the grid. So for anyone who wanted to invest in putting solar or wind generators on their houses they would start making a profit in just a few years, and continue making money until 2020 or so when the bills life will end. The program showed solar panels everywhere, just off the highways, on houses, and in pasture land with sheep grazing in between the panels.

I don't know what the problems would be with transmission, but with the new president and the money that he wants to pump into "green" jobs the infrastructure could be built.

I just think that now would be a good time to change the foundations of our economy, since it's broken. I was talking to an economist friend of mine and she said that 70% of our economy depends on internal consumer spending. With that much of our economy based in one sector it anything that disrupts the consumption hurts a lot. A more diversified economy seems to make sense, and why not diversify in part with energy exports.

It just works on so many levels.