A star project management consultant proposes a means to prevent contractors from getting wind-fall profits, and seems to deny learning the lesson that incentives matter after hundreds of millions in cost overruns, and not even the slightest hint of irony that there may be wind-fall profits in his 300K+ per year salary.
We had a outage at my place this morning and my PC, laptop,
TV, DVD, iPad and my new surround sound music system were all shut down.
Then I discovered that my iPhone battery was flat and to top it off it
was raining outside, so I couldn't play golf.
I went into the kitchen to make coffee and then I remembered that this
also needs power
So I talked with my wife for twenty minutes. I have to say, she seems like a nice person. But then the power came back on, thank God.
Yesterday in Raleigh was like a badly conceived horror movie. Here is a picture from US 70, a road Bill Keech and I usually take to get home (yes, we carpool. Don't hate me because I'm green!)
That's not a road out in the country. That's a major highway about 2 miles from RDU airport, and the main connector for Durham and Raleigh.
We chose a different route, on the theory that a longer trip on the interstate would avoid having to stop at lights on hills, and that the plows were more likely to be out on the interstate. So we avoided ....whatever that is, in the picture.
Because of the ice storm on eastern seaboard, someone sent me this.
I was struck by several things.
1. VI stole the "Under Pressure" riff so blatantly. What happened with that? I had forgotten. Settled out of court, apparently.
2. VI stole Justin's Bieber's hair-do and embarrassingly fake swagger 30 years before Justin even had the idea. That's good stealin'. Okay, fine, Justin stole from VI. VI has some advice for Justin.
3. "My Five Point Oh"? Seriously, that was the cool car? I vaguely remember that. But it seems impossible now.
UPDATE: Jackie Blue sends this. As he should have.
Pelsmin provides this commentary, via email. I have underlined some points that made me giggle:
I've been following the NYTimes' coverage of drug shortages. I'm sure you've seen the stories about how critical drugs are running out, even generics. The lack of understanding of the most basic economic principles is funny, or maybe sad or pathetic.
To me, there was only one POSSIBLE reason why widely manufactured on-patent and generic drugs could be running out; government interference.
Sure enough, the reasons I've seen include factory shutdowns imposed due to failure to meet gov't quality standards and restrictions and hurdles placed on "over-prescribed" drugs like Adderal and certain pain killers. There is now a shortage of saline solution (!) and critical cancer drugs.
The Times' coverage not only misses this but presents the government regulators as acting heroically to fix this. For example, the FDA proposed that a company with physical contaminants in a product FILTER the product and then sell it, instead of shutting down the factory, as if the company wouldn't have proposed this themselves. Now, not imposing a draconian restriction or condition on a company is considered innovative problem-solving by the government.
Better is their feeble stab at the evil thinking by the drug companies. First, they blame "narrow profit margins" as one reason companies won't make vital drugs that are in short supply. I'm trying to picture the curve that explains this (currently reviewing some Escher drawings for inspiration...) The writer also states that "in a peculiarity of the generic drug industry, a drug is often made by only a few producers, making it difficult to mitigate the effects of a shortage".
Think about that one; generic drugs are only made by a few producers, whereas on-patent drugs are -- what, made by hundreds? No, made by one company, typically, except for license deals. Other reasons indicate that either the writer understands factory production line optimization better than the companies, or maybe doesn't have a clue what she is talking about.
Of course, the only way the wackier ideas of high-demand/low-supply/low price are possible is if the FDA has caused this (e.g. Medicare sets and enforces prices that have no bearing on costs or utility.) Yet the article cites praise for the government and "acknowledged that [the FDA] could not ultimately force drug companies to produce." Not yet, until the new five-year quotas are issued under executive order through the medical commisar.
1. Wind power=Ponzi scheme? Perhaps. I like the commenter who says that "The problem is not wind power; the problem is capitalism! The insistence that investments actually pay a return!" (In fact, sir, the idea of a return just means that the investment saves more resources than it uses up. That seems like the very definition of "sustainable," right?)
3. As with any Ponzi scheme, the Girl Scouts can get nasty. Whoever actually has to SELL the cookies is left holding the bag. What you want to do is get orders for cases of cookies from your "associates" down the chain. And if they try to return them, you attack.
Let's begin with a classic case of confusing accounting identities for causal relationships:
LOST in all the debate last week about whether or not the Affordable Care Act will hurt the economy is the fact that health care is already imposing a drag on growth. The health care sector has repeatedly helped to pull the economy from recession in recent decades, but this time around it is lagging behind the recovery. Health care spending grew more slowly than the economy in 2011 and 2012 and will probably be found to have done so again in 2013.
People, health care spending growing slower than overall spending does NOT mean that the sector is "imposing a drag on growth". I know people say stuff like that all the time, but it's just not true.
Nor is it true that, "the health care sector has repeatedly help to pull the economy from recession in recent decades.
Look, we can always ex-post measure spending growth by sector and compare them. But the idea that if only health care spending could be made to grow more rapidly, nothing else would change and overall economic growth would rise is risible. Those numbers are simply ex-post accounting and they PROVIDE ZERO INSIGHT into the potential outcomes of various counterfactual scenarios.
The world would be a much better place if we could just stop from abusing accounting identities in this manner.
OK. Let's take a break to pass the collection plate and then proceed to the second theme of our homily, namely that your opinion does not constitute evidence.
Thank you for your generous contributions, Now let's return to our text:
But there is evidence that moderate inflation can help to stimulate economic activity. Rising prices spur people to borrow and spend more quickly. Rising prices also tend to raise nominal wages, making it easier for borrowers to pay fixed debts like mortgage loans. And sluggish inflation can be self-perpetuating. Inflation is rising slowly because the economy is weak, and slow inflation is restraining faster growth.
People if you click on the link purporting to give this "evidence", it's another opinion piece by the same author! And here's an example of the level of evidence being provided:
“I’ve always said that a little inflation is good,” Richard A. Galanti, Costco’s chief financial officer, said in December 2008. And then there's this gem. "Executives at Walmart, Rent-A-Center and Spartan Stores, a Michigan grocery chain, have similarly bemoaned the lack of inflation in recent months."
People, your opinion is not evidence. Empirical models with a convincing identification strategy produce evidence. Richard A. Galanti's mouth produces hot air, and, at least on this topic, Mr. Appelbaum's word processor produces gibberish.
There is a theoretical case out there that a credible promise of seemingly inappropriately high levels of future inflation can help lift an economy out of a liquidity trap. This is Krugman's "credible commitment to be irresponsible" argument. There is another theoretical case that a higher inflation target may reduce the frequency at which the economy may hit the zero lower bound on nominal interest rates.
But neither of these cases have empirical support, and even if they did, they are a far cry from the simple minded notion that, "moderate inflation can help to stimulate economic activity".