dmarney

You start an interesting new project, involving you and a handful of your friends and associates.  The project initially starts out small -- all we wanted was just to have this one, small community event -- but it starts to catch on.  Great!  Now there are 10 people who all need to start coordinating their work.  Time to get organized!

The geek in the group says, "hey, I can set up a Google Site and we can manage our project there.  It has a place for documents, a calendar, discussion threads, everything."  A few people nod their heads; yeah, they've used the web before.  The rest of the group is thinking to themselves, "ok, whatever, why are we creating this whole web site just for this little, tiny event; but, go along to get along, I guess."

Half the group starts putting things into the web site.  The other half ignores it completely.  Things start breaking down.  

"Did you get my email telling you we've change the venue?"
"What?  Did you post that on the web site?"
"No, I don't know how to use the web site."
"Well, OK, let me post that for you so the rest of the group will see it."
"Oh, no need, I'll just email everyone."
"Well, not everyone reads email; you better let me put it up for you."

 - - - - - -

A classic case of low efficiency caused by a clash of operational styles.  There are two very different styles of group participation, one based on following a particular, custom process, and the other based on using shared resources.  

Are you a "process" person or a resource" person?

• Process Person:
  • I am organized, but I don't expect anyone else to be
  • I have my own, customized system for managing work
  • I have my own, customized filing system
    • I use it to store my own works
    • I use it to store copies of other people's works, if they are important to my project
  • I live and die by notifications (email, etc.), to do lists, and my personal calendar
  • I am constantly updating my and other people's status

• Resource Person:
  • I expect that everyone on the project is as organized as me
  • There should be one, central place for everything important to a shared project, and everyone should use it.
    • (Implied) There is a common process for managing work
    • (Implied) There is a common filing system
    • (Implied) There is a common event calendar
  • I'll check the resource and synchronize my status when I need to
  • Notifications are nice to have, but only for truly important changes to status or events

There is a part of the Internet infrastructure that is a "natural monopoly" -- natural, because there is no way to physically deploy the lines, towers, and equipment on which the Internet runs without using public rights-of-way such as sidewalks, roadways, airwaves, and utility poles. We can't have each telco company "own" slivers of sidewalks and roads where their wires run. We can't have each telco "own" the spectrum of the airwaves through which they transmit data. No one company owns such things, we all own them, collectively.

There is another part of the Internet that is NOT a natural monopoly: the content that users -- businesses, governments, and individuals -- transmit via the Internet. This part of the Internet is like a public square; anyone can use it for whatever purpose suits them.

The technical people who know how the Internet works will tell you that there IS an urgent need to keep the Internet infrastructure non-discriminatory. As this part of the Internet is also a natural monopoly, it makes sense for governments to be given the responsibility of regulating it, since they are already regulating all the other natural monopolies we have.

Our laws at present do not separate these two aspects of the Internet cleanly. As a result, Internet operators who offer infrastructure services also offer content. As the controller of the infrastructure, they can physically control which content gets delivered. For example, they could favor the delivery of content they own or license, making their content download faster or more reliably than the competition's content. To guarantee good delivery, each content provider could be forced to make side agreements with all service providers.

This has not happened yet, but it is a distinct possibility, would be technically trivial to implement, and has obvious fee advantages to the service providers. It would be unwise not to close this avenue off while we can.

What is needed is for Internet infrastructure providers to be regulated as a utility, with a common fee structure open to any and all content providers, who could then charge separately for content in an open, competitive free market.

 The state of Virginia won summary judgment against the federal government in its landmark case opposing the "individual mandate" provision of the healthcare insurance bill (full PDF of the ruling.)  The judge ruled that,

"The unchecked expansion of congressional power to the limits suggested by the Minimum Essential Coverage Provision would invite unbridled exercise of federal police powers.  At its core, this dispute is not simply about regulating the business of insurance -- or crafting a scheme of universal health care coverage -- it's about an individual's right to choose to participate.

Article I, Section 8 of the Constitution confers upon Congress only discrete enumerated governmental powers.  The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the State respectively, or to the people.

On careful review, this Court must conclude that Section 1501 of the Patient Protection and Affordable Care Act -- specifically the Minimum Essential Coverage Provision -- exceeds the constitutional boundaries of congressional power."

It's a good day to be a Virginian.

The tax-and-spend "compromise" reached between the Presidency and Congress proves that there are still bi-partisan issues.  The bi-partisan answer to being too deeply in debt is to spend even MORE money we don't have.  The only thing "compromised" here are the Republican Party's false promise of fiscal restraint.  We already know how the Democrats feel about our massive debt.

The two parties are different sides of the same coin -- the "Republicrat" Party.  Both are addicted to spending.  Neither has any fiscal discipline at all.  Both believe that the government is in charge of the economy, and must "fix" it when broken.   Neither understand the truth, which is that government is a sunk cost, and everything it does always increases the drag on the economy.

The Washington Post has a good graphic that explains where all the borrowed money will go.  $900,000,000,000 will be FRITTERED away on a second stimulus.  I predict that in the end, unemployment will be totally unaffected.  People will use the money to pay down debt.  Since the government is borrowing the whole thing anyway, the whole scheme is just one, massive, debt-shifting exercise.  Who will ultimately pay?  The middle class, of course, either in direct tax increases or in devaluation of the currency.  Say good-bye to the value of your 401(k) plans, friends.

To me, this is completely unacceptable.  I simply do not understand why the federal government cannot live within its means.  If you are going to spend $900,000,000,000, you need to either raise that much in taxes, or reduce that much in spending, or some combination of the two.  This is an inexorable law with utterly destructive consequences if ignored.

Why do we let our representatives get away with this?  They are literally destroying our way of life.

We hold these truths to be self-evident, ... that Governments are instituted among Men, deriving their just powers from the consent of the governed, -- That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

Dear Democrats,

Welcome to our world. We feel your pain of watching your elected leaders take positions opposite to those they ran on. In our case, it was watching President Bush abandon free market principles to "save" the free market by passing TARP. In your case, it is watching President Obama's unwillingness to veto any measure that includes continued tax relief for billionaires, and leaving the Bush-era tax cuts in place.

It should be clear by now that the similarities of the Democrat and Republican policies far outweigh the differences. Both parties are deeply enmeshed with powerful global corporations that are seeking to shape government to its business advantage, and vice versa (government seeking to shape businesses to its advantage.)

The net result is a collusion that leaves the individual citizen with very little actual choice in how to live his or her life. We can buy services and products, but only from a few companies; we can use our new services and products, but only in a closely-prescribed manner as defined by the government.

The health insurance bill is the poster-child for this level of cooperation. Only a very few insurance companies will be able to provide the services profitably in a way that the government will approve. Some may see that as a benefit -- at last, the government will take things over! -- but making this step will cut the nerve of free enterprise, and, ultimately, fair and open competition. No startup will be able to challenge the incumbent corporation, and therefore new ideas will never see the light of day.

So, what to do? What I decided to do was to abandon both parties and work towards building a competitive party.

Democrats, you need your own "tea party" to shake up your establishment.

Aside from the moral aspects of our permissive abortion policy in the United States, I think it is equally important to consider its economic cost. Without a doubt, one of the reasons we have a fiscal crisis in federal spending is not just because the cost of entitlement programs is increasing, but also because we are simultaneously reducing the number of taxpayers who can support such programs.

Entitlement spending spans generations of taxpayers. The people who are retired are paid out of the tax revenues generated by those who are still working. This is the real "trust" in the "social security trust fund".

We have had essentially unlimited abortions for the last 40 years, which is almost an entire working life of a generation. What is the economic impact of this loss of future taxpayers, those who would be paying for the retirement of today's baby boomers? Let's try to estimate an annual "uncollected" amount -- the average amount of employment taxes (Social Security + Medicare) that would have been collected, had we not aborted these future taxpayers.

Here is an annual estimate, using the latest official statistics I could find:

Factor	Value	Source
US population, 2009	307,006,550	census.gov
Employment tax collected, 2009	858,164,000,000	irs.gov
Average annual employment tax contribution, per person	2,795	(employment tax revenues / population)
Reported abortions, 2006	846,181	cdc.gov
Estimated uncollected annual employment taxes from aborted persons	-2,365,298,303	(# of abortions * average contribution per person)
Estimated uncollected annual employment taxes, as a percentage of total	-0.28%	( uncollected taxes / collected taxes)

The bottom line is that we would have roughly 1/5th of a point more money for entitlement spending each year for the last 40 years, had abortion not been legalized.

Something to think about.

My vocation is software architecture, and one problem we constantly face is keeping executives properly informed with the technical facts needed to make the right business decisions.  Information technologies are complex and constantly changing, and a decision that made technical sense 18 months ago may not make sense at all for the next 18.  It is a struggle to find the right balance of technical detail, without prejudicing the business decision (or boring your audience to distraction.)

The fact is, execs can only afford the time to learn a very little information, yet they have to make big decisions on that basis.  In the worst case scenario, an executive can acquire a thoroughly false confidence that they understand the technical issues, and will make bad choice after choice.

We architects love to think in terms of patterns, so let's try to generalize this situation.  The problem is information starvation:  the facts needed to properly select among competing choices cannot be obtained, yet the choice must made, regardless.  Almost by definition, any decision made without having all the facts at hand will necessarily be sub-optimal.  (Well, there is one exception:  the decision-maker may just get lucky and make the right choice.)  The larger the scope of the decision-maker, the more dangerous this effect.  Strongly hierarchical organizations can literally become "too uninformed" to succeed.

The classic mitigation strategy is to move decision-making closer to information-holders, and to increase the availability of information analysis capabilities.  By giving the "boots on the ground" good analytical tools and the power to make choices, one can usually arrive at the most optimal choice.

The Problem With Centralized Planning

Centralized planning attempts to use the theories of macroeconomics to control an entire economy.  It should be immediately obvious that centralized planning falls afoul of the information starvation pattern -- and in the biggest possible way.  You can't get any higher up the economic hierarchy, so the cost of making a bad choice is maximized.

As Warren Meyer writes in his Forbes article, "Why Keynes Was Wrong",

This resonates deeply with my own experience.  My objection to the takeover of industry by government is that government is too uninformed to succeed at such a task.  The only way to properly optimize the trillions of daily economic decisions is to bring decision-makers closer to information-holders:  the free market.

In a nutshell, this is what makes small-l libertarianism so appealing.  It starts with a presumption that people ought to generally be left alone to make their own choices, and that if group decisions are going to be made, they must be done with the consent of those affected.  As an architect, I conclude that authoritarianism, both Democrat and Republican, is clearly inferior to the loosely-coupled federalism upon which our country was founded, and from which we have drifted afar, especially over the last century.

Those who favor running up the government debt during a recession believe that government spending is the same as private spending.  One often hears the argument that government is "creating" jobs, for example.  But is this correct? 

All government spending is financed by the taxpayers.  Even if government borrows the money, it is still future taxpayers who will pay it back.  And if government just flat out prints the money it wants, it is taxpayers who absorb the loss of a devalued currency.  Whatever multiplier effects government spending induces ultimately are balanced out by future increases in costs; just as there are no perpetual-motion machines, there are no perpetual-growth borrowing schemes, either. 

In short, government is always on the "expense" side of the ledger, from the taxpayer's point of view.  Some expenses are necessary, and one has no choice but to fund them.  Likewise, some expenses are good investments, and others are poor.  Regardless, it is unarguable that keeping one's expenses as low as possible is key to prosperity.  Since the taxpayer is funding government, we have a duty to ask whether this is money well spent.

Whenever I consider spending money, my first thoughts always lead towards the issue of trust.  Do I trust the institutions I'm giving money to?  Do I think they will spend my money wisely?  What kinds of assurances are there that they will perform well?  What types of people do they have running the operation and setting policy?  What kinds of internal controls have they put in place?

I think any fair judgment of the federal government would be that it is particularly un-trustworthy in the matter of money.  First, there are hundreds of executives (Congress), and they are liable to change frequently.  They pursue all kinds of goals, many in opposite directions, simultaneously.  There is no enforceable fiscal accountability.  For the past century, the institution has encumbered itself with mountains of debt and future spending obligations taken over from private businesses and individuals.  By its own admission, it is on an unsustainable path of ever-increasing spending and debt obligations.

Clearly, the federal government is not a very trustworthy institution when it comes to spending money.  As currently constituted, it is a guaranteed loss.  Thus, the only rational economic response should be to divest our over-investment in the federal government, and reduce the institution to just its mission-critical tasks.

I say this is an unarguable conclusion from the taxpayer's point of view.  It never makes economic sense to pay more for something than it is worth.  Sure, the carnival barkers are calling for more and more investment in government spending, and they may catch another rube or two, but the wise taxpayer knows a bad deal when he smells one.

Let's use the fuss over the Governor's proclamation of a Confederate History Month serve as a teachable moment.

I am a white, middle-class man who has lived in the South most of the 50+ years of my life. I consider myself to be a proud Southerner. As far as I can tell, I have never in my life consciously passed judgment on someone on account of their skin color. To me, that would make about as much sense as judging people based on the length of their noses. This is the way I was raised by my grandfather and my father, and that's the values I passed onto my sons.

The Confederacy was a failed state dependent on the tyrannical enslavement of living, human beings who were equal in God's sight to their oppressors. The number of Southerners who actually owned slaves was very small, but the number who benefited from their enforced labor was nearly universal.

After the Civil War, there was a brief period of freedom for the former slaves as the states were accepted back into the Union. But this was soon crushed by vengeful, powerful Confederate sympathizers who bitterly suppressed the newly liberated blacks, and forced them to live in poverty as second-class citizens. The harm done by Jim Crow laws and the KKK has never gotten the attention it truly deserves. The living conditions for some former slaves may even have been worse than when they were enslaved, hard as that is to believe.

So there are real debts that the South owed to its former slaves. It owed a debt for the criminal act of enslaving them. It owed a debt for living off of their labors. And it owned a debt for allowing them to be so unfairly oppressed for generations after Reconstruction.

In my view, the deaths of the Confederate soldiers in the Civil War paid the debt of enslavement. Hundreds of thousands of Southerns paid the ultimate price to protect their way of life. They may have not been defending slavery specifically (my Scots-Irish descendants from East Tennessee certainly weren't), but they were defending a society that was dependent on them.

The rights recognized by the Civil Rights movement of the 1960s, and the affirmative action policies put in place from the 1970s to today has, I believe, paid the debt of living off the labors of the former slaves, and some of the debt of living under the forced poverty of Jim Crow.

In the 150 years since the Civil War, there is no doubt that those descended from former slaves have prospered and are becoming more integrated into society all the time. The vestiges of racism are still around, however, and it is up to all of us to bring the hammer down whenever it rears its ugly head. When mistakes such as the Confederate History Month proclamation are made, we need to speak up.

However, by far the bigger threat to the continued success of the black middle class in America is the breakup of the family. There is one, sure ticket to economic success in America and that is to get a good education, get a good job, and get -- and stay -- married. The benefits of a stable, intact family can hardly be overestimated. We may scoff at "Ozzie and Harriet", but they are right about the importance of family.

There's no amount of government spending that can fix a broken family. There is no replacement for a parent is involved in his children's education, and who makes sure they succeed, every day, There is no substitute for a loving family and a steady life.

As I was reading about Google's recent refusal to self-censor its search results in China, I was struck by the fact that China has a "One Country, Two Laws" policy.  Hong Kong is part of China, but it does not have the same laws as the mainland.  Specifically, Google's servers in Hong Kong do not have to be self-censored.  Google took advantage of this fact and redirected all search requests coming from the mainland to their servers in Hong Kong.  Mainland China still blocks and censors content that may be linked to by Google, but now users can see for themselves that the government is doing the blocking, not Google.

And I thought, Hey, this is America!  We're always willing to try out new ideas and see what really works.  Why don't we apply the "One Country, Two Laws" pattern to entitlement programs?  The country is evenly split between two visions of America, so why not let people choose for themselves!  Let's have two versions of entitlements: one for those who believe that the government should provide universal coverage, and one for those who believe that government governs best which governs least.  May the best team win!

Team Blue, the universal coverage believers, will continue under the existing entitlement laws of the U.S.  They will continue to pay into Medicare, Social Security, and the new health care assurance programs. 

Team Red, the limited government believers, will not pay any Medicare or Social Security taxes.  If their employer provides health care and retirement as a benefit, they will get its cash value instead, each month.  They will be free to create new social programs such as voluntary cross-border health exchanges, health savings accounts, retirement bonds, etc.

We would still need to solve the problem those who are not paying taxes, but receive government support.  Naturally, anyone living off of government today would want to be on Team Blue!  But that wouldn't be balanced.  We could simply divvy this population up, and assign half to each team.

Each team would then come up with its own solution to the problem of supporting those who don't or can't support themselves.  Team Blue will likely want to continue its current policies, adding even more people to the rolls.  Team Red will likely want to innovate, perhaps offering free higher education in return for community service, helping the poor to become self-sufficient, and, more to the point, taxpayers.

Hey, this is America!  If China can do it, so can we. Game on!