Posts tagged ‘prioritization’

New Feature Here: Trend That Is Not A Trend

Some have asked me why I have not updated my climate blog in a while.  Frankly, the climate debate has become like the movie Groundhog Day, with the same handful of scientists releasing the same flawed studies making the same mistakes.  What used to be exciting is frankly boring.  I still blog here on updated climate news, and perhaps the IPCC will give us new things to write about soon, but for now most of my climate work will just be making appearances and presentations  (let me know if you have a large group, I don't charge any sort of fee).

For a while now I have been contemplating a new focus area, perhaps even a new blog.  I call this new focus "trend that is not a trend."  It refers to the tendency I find in the media to cite a trend without any supporting data, sometimes even when the actual trend in the data turns out to have the opposite sign.  Sometimes the reporter is motivated by conventional wisdom, sometimes by passion in advocating for a certain issue, and sometimes they are fooled by their own coverage, mistaking increases in coverage of a phenomenon for increases in the phenomenon itself (for example, this year everyone believes wildfires are up, when in fact this is a very low year).  We get a lot of this type of thing in climate, so it will give me a chance to continue to blog on climate but from a slightly different angle.

The best way to explain the phenomenon is with an example, and the Arizona Republic presented me with a great one today, in the form of an article by Joan Lowy of the Associated Press.  This in an article that reads more like an editorial than a news story.  It is about the Federal requirement for railroads to put safety electronics called Positive Train Control (PTC) on trains by a certain date.  The author has a pretty clear narrative that this is an absolutely critical piece of equipment for the public good, and that railroads are using scheming and lobbying to unfairly delay and dilute this critical mandate (seriously, I am not exaggerating the tone, you can read it for yourself.)

My point, however, is not to challenge the basic premise of the article, but to address this statement in her opening paragraph (emphasis added).

Despite a rash of deadly train crashes, the railroad industry’s allies in Congress are trying to push back the deadline for installing technology to prevent the most catastrophic types of collisions until at least 2020, half a century after accident investigators first called for such safety measures.

The reporter is claiming a "rash of deadly train crashes"  -- in other words, she is saying, or at least implying, that there is an upward trend in deadly train crashes.  So let's ask ourselves if this claimed trend actually exists.  She says it so baldly, right there in the first seven words, that surely it must be true, right?

Here is the only data she cites:

The National Transportation Safety Board has investigated 27 train crashes that took 63 lives, injured nearly 1,200 and caused millions of dollars in damage over the past decade that officials say could have been prevented had the safety system been in place.

Astute readers will note that this is not a trend, it is one data point.   Has the number increased or decreased over the decade?  For comparable decades, are 27 crashes and 63 deaths a lot or a little?  Is it a "rash", or a tapering off?  We have no idea.   As we get further into this series, readers will be surprised at how often the media uses single data points to "prove" a trend.

The only other evidence we get of a "rash" are three examples:

  • The July high speed rail accident in Spain, which killed scores of people.  Of course, readers may note that she actually had to go to another country for her first example, an example involving high-speed passenger rail which has very little in common with private railroads in the US.
  • A 2008 crash blamed on inattention of a Metrolink driver -- a government employee on a government train, which sort of undermines the basic thrust of the story that this is about evil private railroads using lobbying to endanger the public.  Few readers are likely to consider a 2008 crash to constitute a recent "rash."
  • A 2005 crash at a private freight railroad that killed 9 people from a chlorine gas leak.  Fewer readers are likely to consider a 2005 crash to constitute a recent "rash".

So let's go to the data.  It is actually very easy to find, and I would be surprised if Ms. Lowy did not actually have this data in her hands.  It is at the Federal Railway Administration Office of Safety Analysis.  2013 data is only current through June and seems to be set up on an October -September fiscal year.  So I ran the data only for October-June of every year to make sure the results were comparable to 2013.  Each year in the data below is actually 9 months of data.

By the way, when one is looking at railroad fatalities, one needs to understand that railroads do kill a lot of people every year, but the vast, vast majority of these -- 99% or more -- are killed at grade crossings.  People still do not understand that a freight train takes miles to stop.  (see postscript below, but as an aside, I would be willing to make a bet: Since deaths at grade crossings outnumber deaths from collisions by about 100:1, I would be willing to bet any amount of money that I could take the capital the author wants railroads to invest in PTC and save far more lives by investing it in grade crossing protection.  People like Ms. Lowy who advocate for these regulations never, ever seem to consider prioritization and tradeoffs.)

Anyway, looking at the data, here is the data for people killed each year in US railroad accidents (as usual click to enlarge any of the charts):

click to enlarge

So, rather than a "rash", we have just the opposite -- the lowest number of deaths in a decade.  One.  I will admit that technically she said rash of "fatal accidents" and this is data on fatalities, but I'm going to make a reasonable assumption that one death means one fatal accident -- which certainly cannot be higher than the number of fatal accidents in previous years and is likely lower.

Most of you will agree that this makes the author's opening statement a joke.  Believe it or not -- and this happens a surprising number of times -- this journalist is claiming a trend that not only does not exist, but is of the opposite sign.  But let's go further with a few other charts.  Maybe we just got lucky and there is a rash of accidents but just not fatal ones:

click to enlarge

Not only is there not a "rash" but the number of accidents have actually been cut in half.   But let's give the author one last try at a benefit of the doubt.  She says the technology she is advocating reduces human error caused accidents.  The FRA actually tracks these separately.  I wonder what that trend is?

click to enlarge

LOL, if anything it declines more.    The only thing I can possibly find in her favor is that number of train accident injuries spiked in 2013 after 10 years of declining, but since fatalities and accidents went down, the odds are this is a statistical anomaly and not part of any trend.

Postscript:  To my point above, 1 person died from train accidents in the last 9 months or so.  We don't know why or how they died, but let's just say it was preventable by PTC.  The author is therefore castigating railroads for not racing ahead with hundreds of millions to prevent one death, when the railroads know their chief focus for reducing preventable deaths should be on the 588 other people who died on the railroad in the same period, mainly from grade crossing and trespasser/pedestrian accidents.

Government Prioritization Fail: Adding Staff When It Is Least Essential

Matt Welch has a good article here about a self-refuting NPR piece, which was obviously supposed to be a scare story about the loss of Sequestration money but turned out to be an illustration of just how stupid the sequestration panic was.  It's funny listening to the podcast of this episode as the NPR hosts desperately try to support the Administration position.

But one thing I thought was funny was this bit illustrating pre-sequester government staffing prioritization:

NPR's David Greene brings on Yvette Aehle, director of the Southwest Georgia Regional Airport in Albany, Georgia, to talk about the terrible danger that passengers will face now that Aehle's airport stands to lose its air traffic controllers:

AEHLE: Well, I don't really want to say anything is less safe. It's just a better opportunity for people to listen and to be heard and to understand where they are. And also, I'd like to point out that we don't have 24-hour tower coverage here currently. Those air traffic controllers are only directing traffic between 8 am to 8 pm seven days a week. And most of our heavy traffic is outside of those hours.

So the government chooses to staff the control tower only half the day.  But they choose to staff the tower during the 12 hours of lightest traffic, presumably because the employees wanted day jobs rather than night jobs.

As an aside, I will confess that my business of running public parks benefits from this.  The biggest management load on parks is obviously on weekends and in the evenings (in campgrounds).  Most employees of public agencies only work weekday days.  Its incredibly typical that public parks employees will take their vacations in July and August, by far the busiest months.  One advantage  (other than the obvious cost advantage) we have over public operations is that public agencies can't or won't ask their employees to work weekends and defer their vacations out of the summer time.  We are perfectly happy to hire people with very clear expectations that the job involves work on weekend and holidays.

I will give you my reminder of how to understand most government agencies:  Ignore the agency's stated purpose, and assume that it is being operated primarily for the benefit of its employees.  One will very often find that this simple heuristic is far better at explaining agency decisions than relying on the agency's mission statement  (this does not mean that there are not dedicated individuals in the agency truly, even selflessly, dedicated to the stated mission -- these two notions are not at all mutually exclusive.  Government agencies do not act badly because they are full of bad people, they act badly because their incentives cause good people to do stupid things).

Where Did the Last Batch Go?

Obama and the Left want a big new infrastructure spending bill, based on twin theories that it would be a) stimulative and b) a bargain, as needed infrastructure could be built more cheaply with construction industry over-capacity.

Since this is exactly the same theory of the stimulus four years ago, it seems a reasonable question to ask:  What happened to the damn money we spent last time?  We were sold a 3/4 of a trillion dollar stimulus on it being mostly infrastructure.  So where is it?  Show us pictures, success stories.  Show us how the cost of construction of these projects were so much lower than expected because of construction industry over-capacity.  Show us the projects selected, to demonstrate how well thought-out the investment prioritization was.  If their arguments today have merit, all these things must be demonstrable from the last infrastructure bill.  So where is the evidence?

Of course, absolutely no one who wants to sell stimulus 2 (or 3?) wants to go down the path of investigating how well stimulus 1 was spent.  Instead, here is the argument presented:

Much of the Republican opposition to infrastructure spending has been rooted in a conviction that all government spending is a boondoggle, taxing hard-working Americans to give benefits to a favored few, and exceeding any reasonable cost estimate in the process. That's always a risk with new spending on infrastructure: that instead of the Hoover Dam and the interstate highway system, you end up with the Bridge to Nowhere and the Big Dig.

In that sense, this is a great test of whether divided democracy can work, and whether Republicans can come to the table to govern. One can easily imagine a deal: Democrats get their new infrastructure spending, and Republicans insist on a structure that requires private sector lenders to be co-investors in any projects, deploying money based on its potential return rather than where the political winds are tilting.

This is bizarre for a number of reasons.  First, he implies the problem is that Republicans are not "coming to the table to govern"  In essence  then, it is up to those who criticize government incremental infrastructure spending (with a lot of good evidence for believing so) as wasteful to come up with a solution.  Huh?

Second, he talks about requiring private lenders to be co-investors in the project.  This is a Trojan horse.   Absurd projects like California High Speed Rail are sold based on the myth that private investors will step in along side the government.  When they don't, because the project is stupid, the government claims to be in too deep already and that it must complete it with all public funds.

Third, to the extent that the government can sweeten the deal sufficiently to make private investors happy, the danger of Cronyism looms large.  You get the government pouring money into windmills, for example, that benefits private investors with a sliver of equity and large manufacturers like GE, who practically have a hotline to the folks who run programs like this.

Fourth, almost all of these projects are sure to be local in impact - ie a bridge that helps New Orleans or a street paving project that aids Los Angeles.  So why are the Feds doing this at all?  If the prices are so cheap out there, and the need for these improvements so pressing, then surely it makes more sense to do them locally.  After all, the need for them, the cost they impose, and the condition of the local construction market are all more obvious locally than back in DC.  Further, the accountability for money spent at the Federal level is terrible.  There are probably countless projects I should be pissed off about having my tax money fund, but since I don't see them every day, I don't scream.  The most accountability exists for local money spent on local projects.

What Joe Arpaio's PR Activity Has Been Displacing

While Sheriff Joe was pursuing a vendetta against County officials, chasing down Mexicans with broken tail lights, and raiding dry cleaners demanding immigration papers, over 400 sexual assaults were going under-investigated.  According to the article, this was not an accident -- there was a real prioritization that put few resources in the special victims unit and put more and better staff on things like counter-terrorism (Phoenix being a well-known hotbed of terrorist activity).

The understaffing in the special-victims unit was due in part to the Sheriff's Office's priorities -- and the special-victims unit was not one of them, according to a half-dozen current and former sheriff's employees.

Despite a Maricopa County hiring freeze prompted by the faltering economy, the Sheriff's Office from 2005 through mid-2008 was hiring 45 to 50 new deputies annually and tackling initiatives that included counterterrorism and homeland-security enhancements. The office also embraced immigration enforcement, sending 60 deputies and 100 detention officers through a federal immigration-training program and creating a human-smuggling unit with at least 15 dedicated deputies.

Staffing in the special-victims unit remained unchanged during those years: four detectives....

The Sheriff's Office was allocated more than $600,000 in fiscal 2007 for six full-time positions for "investigating cases involving sexual abuse, domestic violence, abuse and child abuse." The Sheriff's Office now says the six new positions were to focus solely on child-abuse cases. In any event, they cannot say where those deputies went to work.

"We don't know," Chief Deputy Sheridan said. "We've looked, and we can't find any of those position numbers which were allocated for child-abuse cases."

This is due in part to the acknowledged misallocation of roughly $100 million in agency funds that had patrol deputies being paid out of an account designated for detention officers.

The department was almost certainly spending more on Joe Arpaio's PR than it was on the special victims unit.  Dozens of cases showed no investigation at all, and hundreds showed that no contact had been made either with the victim or the suspect.   Piles of case files were found random file cabinets and even one officer's garage.

Government Pollution and Risk Prioritization

A number of times in the past I have pointed out that government bodies in the US tend to be among the worst polluters.  While we sit around and argue about parts per billion of CO2 in the atmosphere, billions of gallons of raw sewage are being dumped into rivers.  I remember when I lived in Boston, the city just piped sewage out into the harbor.  When it got to disgusting and finally garnered a bit of negative media attention, they solved the untreated sewage problem by ... building a longer pipe and dumping it further out in the  ocean.   I worked at an Exxon refinery for a few years and it was always frustrating the regulatory attention we got on the smallest discharge (in general, the water we discharged had to be cleaner than the body of water we were discharging into) when local municipalities were dumping untreated sewage during storms into the same water, without consequence.

Anyway, here is a post from John Hanger via the Unbroken Window blog

A main goal of this blog is to help its readers prioritize the biggest threats to water quality and to understand that, though gas drilling impacts are real, they are well down the list of the most serious causes of pollution of Pennsylvania’s waters.  A must read is yesterday’s Pittsburgh Post Gazette front page story about the massive amounts of sewer overflows that reach rivers in the Pittsburgh region multiple times each year.
http://www.post-gazette.com/stories/local/region/alcosan-sewer-project-gets-little-public-input-653713/.The annual volume of untreated sewage reaching rivers and streams is reported as 9 billion gallons per year and occurs in 30 to 70 storms annually, according to the Post Gazette.  And the bill for stopping this pollution and cleaning up is a staggering $2.8 billion.To make matters worse, the same problem of untreated sewage flowing into rivers and streams that the Pittsburgh region is confronting is found in many communities across Pennsylvania as well as in New York and other states.  While America’s sewage overflow problem dwarfs the impacts of gas drilling on water quality, it normally attracts little media attention or sustained public concern.  There are no Hollywood stars campaigning to stop these huge amounts of sewage from going into rivers.  There are no HBO movies on the problem.

Normally, this huge source of pollution that threatens public health and safety is ignored or draws a yawn.

Good risk prioritization is virtually impossible in the current state of the media and political dialog.   Mike Rizzo, writing at the blog, makes a good point:

if you asked people if the government should allow an odorless, tasteless, highly explosive gas to be piped into your house, where a small leak in a pipe could cause the entire house to explode, they would surely say No Way! But then ask them if natural gas stoves should be permitted in their homes and to a man they’d all say, “Of Course.”

Cutting the Right Expenses

In 2003, my company was in some serious financial problems.  Post 9/11 commercial insurance premiums had just risen substantially, so much so that my premiums went up more than my total annual profits.  At the same time I found out that a number of operations I had just acquired were profitable only because they were not in compliance with labor law, and my crash program to bring them into compliance was going to put me deeply in the red for that year.

I did a whole bunch of things to right the ship, but the two most important were 1)  I eliminated a whole layer of management, slashing 5 vice-presidents and having all the front line managers report directly to me; and 2)  I eliminated the smallest and worst performing business units.

Now, contrast this to what governments do in the same situation.  Their first response, of course, is to do something I could not do - compel more revenue for themselves by increasing taxes.  Those of us who make our living by the free decision making of others don't have this dictatorial option.

The second thing that governments do is cut their MOST important, MOST valuable operations.  In Seattle, it was always fire and ambulance services that would be cut.  Because the whole game was to find the cuts that would most upset the public to try to avoid the necessity of having to make cuts at all.  Its an incredibly disingenuous process.  Any staffer of a private company that made cost savings prioritization decisions like government officials would be fired in about 2 minutes.

The third thing that governments do if forced to actually, really cut costs (meaning that every other stalling tactic, taxation method, and accounting trick has been exhausted) is to cut field staff who actually do the work rather than high-paid, bloated administrative staffs.  This means teachers get cut but not vice-principals.  And it means that preventative maintenance gets cut and not transit staffers:

Having removed a mere 25 employees so far, and having just suffered its deadliest year ever, Metro officials now want to raid $10 million from the agency's preventive maintenance fund in order to cover operating expenses, including salaries and benefits. Metro managers would rather skimp on passenger safety and reliability than clear out the system's deadwood and force serious concessions by the transit union.

Moreover, even as it asks riders to sacrifice, Metro is fattening itself up, hiring two new "senior planners," one to a newly created position. According to Metro's official job description, they will be "responsible for participation in the development of an annual business plan ... identifying opportunities for future growth and development" and "defining future strategies."

The New Government Motors

The following actually seems real, though I had to check the date three times to make sure it wasn't April 1.  However, it appears that having cut R&D for most new vehicles and concept cars, GM is doubling down on this vehicle for the New York auto show:

ob-dl221_segway_g_20090407005950

No word yet on Federal crash test results, though I guess since the Feds own the company now they can waive whatever requirements they wish.

Postscript: Its probably a pretty cool technology, and I am sure it would be fun to scoot around in.   But the company is hemorrhaging billions of dollars of cash a month and someone is still funding this?  This can't be made in any of its plants, and can't reasonably be sold in any of its dealerships.   GM would have to sell millions of these to have any kind of impact on its financials, and it is highly unlikely there is any such market.  I therefore am waiting for someone in the Obama administration to say "this is exactly the type of thing GM should be doing."

Why These Guys Are Not Working In A Real Business

You start to get a sense of why green reporters might not make it in the actual value-creation world when you read stuff like this.  Is it really possible that someone is so pareto challenged that in a bid to make the world a cleaner place, they focus on ... excercise balls?  It is utterly unsurprising after reading this that when Bjorn Lomberg approaches environmental improvement from a prioritization perspective (ie where can we get the biggest improvement bang for the least bucks), greenies look at him like he is from Mars (or worse, Hades).

Whatever Is The Most Important to You, We Are Cutting That First

The very essence of business decision-making is prioritization and trade-offs.  The same is true in the government, its just that the objective function is reversed:

GM is warming up the propaganda engine for the next run at Congress. "Look, the first thing we had to cut was our electric car program!".

And here I thought that because GM has still, after 30 years, failed to realize their business model needs to change that maybe management there were slow learners.  But they seem to be very, very adept at learning the government game.

When I was in the corporate world, if I wanted extra funds for my projects, I would have to go in and say "Here are all my projects.  I have ranked them from 1-30 from the most to least valuable.  Right now I have enough money for the first 12.  I would like funding for number 13.  Here is my case."

But the government works differently.  When your local government is out of money, and wants a tax increase, what do they threaten to cut?  In Seattle, it was always emergency services.  "Sorry, we are out of money, we have to shut down the fire department and ambulances."  I kid you not -- the city probably has a thirty person massage therapist licensing organization and they cut ambulances first.   In California it is the parks.   "Sorry, we are out of money.  To meet our budget, we are going to have to close down our 10 most popular parks that get the most visitation."  The essence of government budgeting brinkmanship is not to cut project 13 when you only have money for 12 projects, but to cut project #1.

I can just see me going to Chuck Knight at Emerson Electric and saying "Chuck, I don't have enough money.  If you don't give me more, we are going to have to cut the funds for the government-mandated frequency modification on our transmitters, which means we won't have any product to sell next month."  I would be out on my ass in five minutes.  It just floors me that this seems to keep working in the government.  Part of it is that the media is just so credulous when it comes to this kind of thing, in part because scare stories of cut services fit so well into their business model.

So of course, with billions of dollars of waste, absurdly high labor costs, stupid-large executive compensation, etc., GM chooses to cut funding the project that is most important to Congressional Democrats and the new Obama administration.

More Auto Bailout Thoughts

I don't think I have ever gotten as much mail from as many different readers as I have received on the auto bailout.  Readers seem fairly unified in their outrage and horror at the prospect.

Via insty:

Nancy Pelosi calls the deal a barber shop, where everybody will take a haircut.

There is already an available process for operating companies that cannot meet their obligations where all the parties take a haircut:  Its called chapter 11.  We have about a zillion man-years of experience with it, in companies great and small.  And it does not take idiotic Senators flashing billions of our tax money to mediate it.

The auto industry is tremendously magnetic for wannabee technocrats in Congress, in large part because in perhaps no other industry is there a bigger gap between what the average American wants to buy and what the country's intelligentsia things they should buy.

But US automakers are failing because they have not been very responsive to customers; they have grown fat and complacent, feeling protected by their monopoly power position; they have consistently failed over decades-long periods to make tough decisions vis-a-vis labor and costs; and they have refused to make real prioritization decisions (GM brand strategy is a good example).  It is therefore hilarious that Congress thinks it can do better, because wouldn't these same traits be high on the list of failings of the Federal Government itself?

And this is funny, if you have not seen it yet.