Tuesday, October 13, 2009

Crime and punishment (or lack thereof)

On August 22, 2009, James Zupkofska, 45, a corrections officer in Norfolk County, was struck and killed while jogging. Proximate cause of death? The rather odd Massachusetts practice of criminalizing behavior without actually inconveniencing citizens with enforcement.

Case in point – “Lawmakers’ bills target drunken, reckless drivers,” Attleboro Sun Chronicle, 9/28/09 – in which new laws are described that “increase fines and criminal penalties for motorists who violate the right of way,” resulting in the injury or death of pedestrians or bicyclists.

It is odd that, when there is a problem with speeding, the response is to lower the speed limit. If they keep exceeding 30 mph, then let’s make it 25. Then 20. How about 12 ½? Boy, that sure slowed ‘em down! All it cost was to change the signs.

Or when littering becomes a problem, just increase fines to $1,000, then $5,000! Yes, the streets are much cleaner now.

The disconnect here is that Massachusetts politicians (state and local) just don’t get the relationship between crime and deterrence. Here, serious traffic charges are rarely levied unless an accident has occurred – after the fact and much too late. You can criminalize until the cows come home, but unless there is a cost to be paid for bad behavior, that behavior won’t change.

Instead of posturing and passing feel-good legislation, here’s a recipe for truly making a difference. Let’s fund state and local police departments to actually stop and ticket motorists for bad behavior – such as weaving, tailgating, and red-light running, prior to an accident.

That might have actually kept Mr. Zupkofska alive.

Monday, September 21, 2009

A reflection on 9/11

Block Island, RI - Southeast Lighthouse
Located in the greater Boston metroplex, our local newspaper elected not to feature 9/11 on 9/11, in spite of Boston being the locus of two of the 9/11 flights (American 11 and United 175).

Some front page recognition of 9/11 was clearly called for. It is fresh in our memory – I witnessed the second aircraft (United flight 175) strike the South Tower on live TV – inducing a sick feeling in my stomach that I will never forget. Later coverage chronicled the dreadful sight of people jumping to their demise rather than burn to death, their bodies making terrible thumps as they struck canopies, cars, and other objects on the ground. This is seared into my memory. 

My own journey home from San Francisco, delayed for six days because of the shutdown of the entire American air transit system, pales in comparison to those of the victims. A senior vice president of my firm, David Beamer, drove nearly non-stop across the entire country in two days to join and comfort his family following the death of his son, Todd, on United flight 93 in Shanksville, Pennsylvania. Todd, of “let’s roll!” fame. And David, his father, of calm comfort to his colleagues and family. Such courage.

The 9/11 attacks killed nearly 3,000 people. And the manner in which they died is more horrifying than the deaths of those who perished in the only other significant attack on American territory – Pearl Harbor. Yes, indeed, 9/11 must be remembered for many, many years to come. 

Because of the local Boston impact, there are many in my community who are suffering life-long trauma. I have many times departed from or arrived at Logan airport gate B32 since the event, and have always paused to whisper a prayer for all of those lost souls. 

On nearby Block Island, Rhode Island, there are two memorials to 9/11 victims. On the grounds of the Southeast Lighthouse near Mohegan Bluffs is a granite bench seat engraved with the name of Catherine Carmen Gorayeb, a much-loved daughter, friend, and mother, who had the unfortunate audacity to report to work at the World Trade Centers on a crisp, blue, beautiful Tuesday morning. And at the North Lighthouse, more memorial 9/11 benches, one engraved "To the memory of those who perished on September 11, 2001. We will never forget." Indeed. Those Rhode Island out-islanders take 9/11 seriously. 

My newspaper suggested that it couldn’t find a fresh story line. Here’s one for them… in spite of the import of 9/11, the current administration has banned the use of the term “war on terror,” and President Obama was unable to attend the ceremony in New York City this year (although he was able to journey twice to the same city in the following week for speeches and meetings).
There's your story.

Cause for optimism

There has been an abundance of pessimism lately; some might say a surfeit. An insightful article in the 9/19/09 Wall Street journal (“From Bear to Bull,” James Grant) argues that the coming recovery will arrive much sooner and be much more robust than the current economic consensus.

Grant does not claim to be prescient, but based on data from the past 120 years, observes that the deeper the down cycle, the quicker and steeper the recovery. He also notes that there are many variables at work, none the least from government intrusion, so the precise timing and form of the recovery cannot be known. Then how best to position and prepare for the upturn? Grant quotes Henry Singleton, former CEO of Teledyne: “…we’re subjected to a tremendous number of outside influences and the vast majority of them cannot be predicted. So my idea is to stay flexible.”

Having a well defined, thoroughly understood set of goals and objectives is the critical success factor, be it for individual investors or corporations. When opportunities instantaneously arise which are congruent with your objectives, you must immediately embrace them. For the corporation, that means empowering the members of the organization to do so, from engineering to accounting to sales.

All this is reminiscent of Maneuver Warfare, wildly successful and deeply embraced by the United States Marine Corps. Maneuver warfare posits that in the chaotic ebb and flow of battle, you must recognize opportunities and capitalize on them more quickly than the enemy. To outthink them is much more important than to outgun them. One way to understand this is in terms of USAF Colonel John Boyd who proposed the OODA loop – Observe, Orient, Decide, Act.. The OODA loop determines the time it takes an individual or entity to respond to an event, and to the quicker goes the spoils.

One consequence of this is that rigid bureaucratic organizations tend to be much slower in processing OODA loops than organizations having distributed intelligence and authority. Hence the Marine Corps concept of the “Strategic Corporal,” in which a fire team or squad leader, cognizant of his commanders' intent, can instantaneously exploit openings or weaknesses displayed by the enemy, and do so in support of the command's objectives.

For corporations, this implies that smaller, more agile firms with empowered employees stand to be more successful in the coming chaotic recovery. Large, ponderous firms, or worse, government entities, are almost guaranteed to lag behind. For individual investors, it will pay to search out those agile firms.

Tuesday, August 25, 2009

Risky Business

Chilling. After all we’ve been through (and it’s not over yet), a well-known mortgage originator on a Boston-area talk radio station is shilling such: “Low credit? No credit? No problem! We can get you an FHA loan! No income verification!”

Imagine the black sheep in your family. Nice guy. He’s family, so you love him. But you’d never lend him a buck that you expected repaid – he’s not the responsible type. Everyone knows someone like that. Would you give him a $300,000 mortgage with no income verification? No? Well, Uncle Sam will.

Thank you Barney. The mindset that foreclosure risk should be underwritten by the taxpayers is a staple of liberal, progressive philosophy. It got us where we are, and it’s difficult to believe that we haven’t yet learned our lesson.

Friday, July 24, 2009

Dear President Obama...

There have been multiple times since Mr. Obama became president that my hackles have raised, particularly in response to multiple apologies to the world for the sins of America. (America, the great bastion of democracy who freed the world from tyranny, but who have become somehow irredeemably evil). I have till now managed to smooth my own ruffled feathers. No more. I have finally submitted a comment to the White House via their website:

Dear President Obama:

Your recent statement that the Cambridge Massachusetts police "acted stupidly" made me angry. You admit that you are prejudiced (in the classic English sense) in favor of your friend, Prof. Gates, and that you don't know the facts of the matter.

In my opinion, your comment was ill considered and reflects poor judgment and immaturity -- not qualities that speak well of our chief executive.

I believe that you owe a sincere apology to Sergeant Crowley and all the police of our nation.

Now I must admit to my own prejudices -- I am a former Marine Corps sergeant and a former police (auxiliary) sergeant. So perhaps I tend to support sergeants. Doesn't matter to me what skin tone they have.

Wednesday, June 24, 2009

A funny thing happened on the way to the quorum

In a recent fascinating article (“Swarm Savvy”, Science News, May 9, 2009), we learn how swarms of ants, bees, fish, and primates (yes, that includes us) make collective decisions that are usually correct. Evolved over millions of years, with extinction at stake, an effective, quorum-based decision making process has emerged. It works wonderfully for honey bees, rock ants, and guppies. Humans? Not so much.


A quorum is the minimum number of deciders required to agree before an option is selected. In a monarchy, the quorum is one (the Queen). In a democratic parliament, it is a simple majority. For a swarm of bees searching for a new home, it might be as little as fifty out of ten thousand. In order to maximize the probability that the quorum will make a correct decision, three conditions must be met:

  1. The number of voters (quorum size) must be large enough,
  2. The votes must be independent, i.e., the individuals cannot copy the vote of another (who may be mistaken), and;
  3. An adequate number, or range, of alternatives must be considered.

The first two conditions are very important (and interrelated). For instance, if we assume that each decider has a 1 in 10 chance of selecting a really bad alternative, then the Queen alone has a 10% chance of monumentally screwing up. But if she accepts the counsel of her husband, their joint probability of failure falls to 1%. And in an independent parliament of 200 souls, the odds of selecting that awful option are a vanishing 1 out of 10,000.


But note the requirement of independence. If the King copies the Queen’s vote just to please her, there is really only one vote and the odds of failure jump back up to 10%.


It should be painfully obvious that the third condition is crucial as well. If for any reason the most desirable option is not among those deliberated, then it cannot be chosen. You might be asked to select the most desirable means of commuting twenty five mile to work from among two choices, roller blades or a bicycle. But your decision might be quite different if a third choice, a Ford Focus, were added to the list. (Ever so much better for those New England winters).


Human quorums can be very effective when the above conditions are met. Being judged by a jury of twelve is remarkably accurate. Population-wide votes (propositions or referendums) tend to accurately reflect society’s sense of what is right. But human quorums can go disastrously wrong, as exemplified by a number of our state governments (witness the morass in California). The culprit? One party rule.


One party rule nearly guarantees that conditions 2) and 3) are violated. Because of ideology, the party in power tends to vote in lock-step, violating the independence requirement. Also because of ideology, options which do not fit that party’s platform are not even considered.


Let us consider a real world example. The Democratic Massachusetts legislature just decided to raise taxes by over $1 billion in order to close a yawning budget deficit. Because of ideology, power politics, and fear of losing perks, the Democrats voted nearly unanimously with their leadership. There was little independence of vote among the Democrats, and the Republicans are so paltry in number as to be meaningless. It was as if there were a single, Democratic monarch casting a single, “supervote”.


Meanwhile, the feckless Republicans had offered up a series of five proposals which, in toto, reduced spending by over $1 billion -- balancing the budget in a different way. But these proposals were never seriously considered and hence, were not among the range of options considered by the legislature at large. Massachusetts Senator Scott Brown (R-Wrentham), sums this up quite nicely (“Reform before revenue”, Boston Globe, 6/16/09).


Whether Democrat or Republican solutions are better overall is for the ideologues to argue. But that the system is broken is undeniable. A quorum in name only, the Massachusetts legislature is sick and nearly guaranteed to churn out suboptimal decisions.


Alas, the situation shows little sign of improvement. In a recent election to replace the disgraced former speaker of the house, Sal DiMasi (hmmm – another outcome of one-party rule?), the Republican candidate garnered less than 5% of the vote. (“Ex-aide snares DiMasi's seatBoston Globe, 6/17/09). Massachusetts, you may continue on your course and become as bankrupt as California. Or, you may consider the true meaning of quorum and attempt to restore it.

Sunday, June 7, 2009

Equality or excellence?

It was with some concern we recently noted that, at five local high schools, the valedictorians and salutatorians were all girls. And in our own high school, twelve of fifteen senior honors students were girls as well. That boys are not represented in proportion to their demographics is starkly exposed. Boys are not achieving on tests that girls are knocking out of the park.

No one seems to know exactly what is going on here. Various cultural and social theories of the causes are proposed. Potential solutions are suggested – encouraging the boys, providing incentives, perhaps tutoring, or remedial studies.

But in the goal of equal results, there is another approach that can be taken. Let’s fiddle with the tests so that girls’ achievements are leveled and the boys are then seen to be equal.

After all, that was good enough for the City of New Haven (Ricci v. DeStefano), as confirmed by the Second Circuit Court of Appeals (Sotomayor, Pooler, and Sack). When equality is the goal, it is only excellence that suffers – a small price to pay.

Friday, June 5, 2009

A conflict of interests...

All that needs to be said about government involvement in the market was revealed to us by Barney Frank yesterday (6/4/09). GM (the newly formed Government Motors) had determined to reduce costs by rationalizing logistical needs in the face of foreseeable business volumes. To that end, GM decided to consolidate parts warehouses and a GM distribution center in Norton, MA, was slated to be closed.

Enter Rep. Frank (D – MA), a veteran of the auto industry, who issued an-offer-that-could-not-be-refused to GM executives. The executives understandably caved and GM has reconsidered that closing

Now, the relative merits of closing or not closing that warehouse may be argued. But what is not debatable is that GM made the original decision based on an analysis of business conditions, while Barney Frank’s intervention was wholly political, intended to enhance his power and extend his tenure.

That, alone, is reason enough to look askance at government programs that might be better served by the market. Single payer health care springs to mind.

Thursday, May 28, 2009

Summer safety -- myth vs. reality

With summer approaching and the end of the school year nigh, we must be vigilant regarding the safety of our children. Parents, rightfully, are concerned for the safety of their children. A popular parenting website offers this featured article: Gun Safety - Do You Ask About Weapons Before a Playdate? Skittish parents are warned that forty percent of homes with kids also have guns and that “eight kids die every day from guns” (emphasis in original).


Humans tend to be very poor processors of risk information, and that tendency is greatly exacerbated by downright bad information. The Centers for Disease Control (CDC) statistics for 2004 (last full year available) states that for children 5-14, a total of 41 were killed by accidental firearm discharges. (Unless you allow your child to play hopscotch on the drug war battlefields, your chief concern should be accidental death by firearm). While 41 deaths are tragic, that is a far cry from the 2,922 deaths asserted in the article (the yearly total of 8 per day).


So what should you, as a caring and responsible parent, be concerned about? While guns are popularly vilified, they are way down on the list. According to CDC statistics, here’s what you should be asking your playdate’s adult family (mom, dad, steps, uncles, aunts, etc.):

  1. Do you have a bad driving record? Any DUI convictions? In 2004, 1,453 children aged 5-14 were killed in transportation-related accidents (overwhelmingly in automobiles). Odds – 64.3%
  2. Do you have a pool, or will you be taking my child to the beach? Over 250 children died by drowning in the same period. Odds – 11.3%
  3. Is your home protected by fire and smoke alarms? How about a sprinkler system? More than 180 kids died from smoke, fire, or flames. Odds – 8.0%
  4. Are all of your household poisons (cleaning solutions, etc.) safely locked up? Nearly 60 kids died from poisoning in 2004. Odds – 2.6%
  5. Finally we get to the firearms question – with 41 accidental deaths. Odds – 1.8%











While it may be fashionable and politically correct to vilify firearms, a truly responsible parent will pay attention to the real probabilities. Maybe it’s time for a Brady Campaign to Prevent Traffic Violence. It would be much more effective in actually savings kids’ lives.

Monday, May 25, 2009

Let's end violence violence

This weekend’s Wall Street Journal (May 23-24, 2009) reports that community activists are begging president Obama to intercede in an epidemic of murders of young people (“Chicago student killings spark appeals to Obama”). Chicago has suffered the killings of 37 school age children so far in the 2008-2009 school year – which we can all agree is 37 too many.


Two thirds of the murders were drug or gang related, others may involve cases of mistaken identify. Activists decry gun violence and are calling for stricter gun control. This focus may be dangerously wrong headed in that it doesn’t address the root cause of the problem.


The Reverend Michael Pfleger (of “America is the greatest sin against God” fame) urged his congregation to sell and wear t-shirts emblazoned with an upside-down American flag (a sign of distress) and the exclamation “Gun Violence – An American Emergency.” Reverend Pfleger also asked them to wear American flag pins upside down. Reverend Pfleger thinks that America is sick.


Imagine that Mr. Obama could cause all of the guns in Chicago to be magically atomized. Do you think for one instant that the violence would end? That guns are the underlying cause of violence and, that by “disappearing” them, the violence would leave with them? If guns are the source of violence, then I must have had a blessedly lucky childhood. We had guns down on the farm and in all of my friends’ homes, too. None of these guns ever forced one of us to murder a classmate. No, there is something else at work here.


There are creatures in Chicago (hard to call them human) who do not blink to kill in cold blood. The willingness to pull a trigger would transfer with ease to the willingness to swing a baseball bat, crushing a skull, or wield a knife to stab the heart, or slice a throat, or rip open an abdomen. It is that willingness that is the problem. That is our enemy, and that which must be eliminated. Magically atomizing guns won’t make that willingness go away.


But from where does it arise? Much has been written on this, but I suggest that it is lack of boundaries, skewed values, and distorted social and cultural norms. The willingness to kill in cold blood is evil incarnate. So it is not gun violence, or knife violence, or brickbat violence, or dynamite violence, or motor vehicle violence that is the issue – it is violence violence. And until we address the root cause, we are tilting at windmills.


In this, I side with Dr. William Henry “Bill” Cosby, not with Reverend Pfleger. I wonder whom Mr. Obama favors.

Thursday, May 21, 2009

Freedom's just another word...

In early May, a monumentally irresponsible MBTA driver crashed his trolley into the rear of another. Proximate cause? Texting while operating a public conveyance. In typical fashion, the Massachusetts legislature is now debating whether to ban texting for all Massachusetts drivers on all public roadways. (That this arose as an MBTA disciplinary matter is apparently not a material issue).

Don’t get me wrong – I do not text while driving and do not support it. But this micromanagement of human behavior is precisely what earned Massachusetts its abysmal 44th place ranking in personal freedom (“Freedom in the 50 states, an Index of Personal and Economic Freedom”, February 2009, Mercatus Center, George Mason University). Given our existing laws and proclivities, here is the Massachusetts version of proscribed behaviors while driving:

  1. Do not drink
  2. Do not take drugs
  3. Do not text
  4. Do not watch DVDs
  5. Do not eat pizza
  6. Do not read the newspaper (except the Globe – that’s OK)
  7. Do not shave or apply makeup
  8. Do not shampoo the dog
  9. Do not sauté food items on a hibachi
  10. Do not weed your window planter boxes

It is possible to take an entirely different approach, one based on outcomes rather than behaviors. Outcomes are countable while behaviors are infinite. For instance, the entire traffic safety code could be replaced with:

  1. Keep your vehicle under control at all times.

If you can drink, or text, or shampoo the dog while keeping your vehicle under control at all times, more power to you. (But you can’t – that’s the whole point). This approach would be elegant, efficient, and consistent with the principles of freedom on which our nation was founded. As a matter of fact, all of our laws could be re-crafted in this fashion. Thousands of pages of stultifying laws, regulations, and restrictions could be reduced to a few principled paragraphs.

But it will never happen – and here’s why. There would be no need for a full-time legislature. We would not need fancy offices and big salaries and retirement benefits and perks and multi-million dollar budgets for aides. Can you see your legislature giving up this cushy life they have crafted for themselves? No way – and it is you, dear citizen, who keeps voting (or failing to vote) and thus sustains the status quo. You must be satisfied with it.

Tuesday, May 19, 2009

Unintended consequences

Boy, we really gave those bankers a good drubbing! Many greedy captains of finance have given back their ill-gotten bonuses under threat of confiscatory 90% taxes. Many others have been fired. Doesn’t it feel great to be winning the class warfare battle?

Meanwhile, things are getting dicey in Providence (“RI gang mediators bracing for violence,” 4/4). Seems that the nonprofit Institute for the Study & Practice of Nonviolence is facing a huge budget shortfall. Teny Gross, the institute’s executive director, says “Everyone is sending an apology. It feels a lot more desperate. There are VIPs of banks and investment places that used to donate… are now out of a job.”

Too bad we can’t learn from our mistakes. An attempt in 1990 to tax the luxuries of the evil rich resulted in “the loss of 330 jobs in jewelry manufacturing, 1,470 in the aircraft industry and 7,600 in the boating industry” (George Will, JWR Insight, Oct 28 1999), disproportionately devastating to little Rhodie. It was blue collar workers who suffered, not the rich.

Imagine that – the rich actually do something with their money – like spend it in the broader economy or make charitable donations. I always thought that they hunched over huge piles of cash in a darkened room hissing “Yessss, my precious…”

Politics abounds with unintended consequences. Sometimes the simplest solutions are best. It might do to tone down the class warfare rhetoric and allow the productive, entrepreneurial, and creative among us to make and spend their money. We would all benefit.

Monday, May 18, 2009

The Grapes of Wrath -- do-over

An article in the weekend Wall Street Journal (“’Youth Magnet’ Cities Hit Midlife Crisis”, 5/16/09) describes the migration patterns of some of our most prized citizens. College educated, single people between 25 and 39 years old are the basis for economic rejuvenation, high pay (and high tax revenue) jobs, and cultural vibrancy that make them greatly sought after. A study of these patterns reveals the top 20 cities which are the beneficiaries of this net, in-migration. Because these productive citizens are motivated both by climate and the “cool” factor, it is not surprising that Phoenix and Seattle top the list.

Question: what do Boston, Providence, Hartford, Portland ME, Burlington VT, and Concord NH have in common? Answer: they are not on the list. As a matter of fact, neither is any other city in New England, nor the top three megaplexes: New York, Chicago or Los Angles. No, these places are all donors of the young, cool, educated, productive workforce; not recipients.

How does one explain this phenomenon? There are many factors, but here’s something to consider – freedom.

Earlier this year, the Mercatus Center at George Mason University published an analysis, “Freedom in the 50 States: An Index of Personal and Economic Freedom.” This study ranks the 50 states in terms of social, personal, and economic freedom. The aberrant New England “live free or die” state of New Hampshire ranked first, with the greatest overall freedom, whereas New York state ranked dead last by a country mile. The other New England states (MA, RI, CT, VT, ME) averaged a stultifying 42nd. The megaplex states (NY, CA, IL) averaged 46th overall. The land of the free isn’t very much so in great swathes of the country.

How did the top-20 destination cities mentioned above fare? Two of them are in California (Sacramento and Riverside), a bow to climate and “cool” in spite of California’s 47th place freedom ranking. The remaining 18 destination cities are in states whose average ranking is 15th – much better than average. And the top destination state (Texas, with 4 of the top 20 cities) ranks 5th. Hmmm – there may be something to this theory.

Recent news item – Rhode Island, with a total population just over 1,000,000 people, has about 400,000 people employed. Let’s put this into perspective. Imagine a prehistoric tribe of 10 persons including children and the elderly. The survival of the clan rests entirely on 4 individuals. For every rabbit snared, the 4 workers must feed themselves and 6 additional mouths. They must, at times, feel a bit put-upon and wonder if the others might at least gather some berries. In fact, they might just be tempted to pull up stakes and move to Texas.