Posts tagged ‘Update One’

Bureaucracy and Incentives

Loved this passage from Glen Reynolds on the VA:

There's a naive tendency to believe that whatever a government agency's mission is supposed to be, is really the mission that its people pursue. That's seldom the case for long.

Science fiction writer Jerry Pournelle, observing such things, has formulated what he calls the Iron Law of Bureaucracy: In every organization there are two kinds of people: those committed to the mission of the organization, and those committed to the organization itself. While the mission-committed people pursue the mission, the organization-committed people take over the organization. Then the mission-committed people tend to become discouraged and leave.

As a result, the strongest priority of most bureaucracies is the welfare of the bureaucracy and the bureaucrats it employs, not whatever the bureaucracy is actually supposed to be doing. That's worth remembering, whenever someone says they've found something else that we should "choose to do together."

This is not unique to government, but a rule for all organizations.  However, in a private-sector, organizations that devolve in this way get slaughtered (except of course for crony favors and bailouts, but that is another topic).  Accountability never ever comes to government organizations.

Update:  One other observation -- in criticizing Obamacare in advance of its implementation, I never mentioned computer systems problems.  And I always assumed that if you threw enough money and mandates at the problem, the number of uninsured (not to be confused with the number of people with access to quality care) would be reduced.  So all the current triumphalism around Obamacare are about issues that were in fact never raised in advance as criticisms.

One issue that was raised time and again was the information and incentives issues that make it almost impossible to government health care to deliver quality care at a reasonable price.  And the heart of the VA disaster is all an incentives issue.  And it will not get solved.  In part because the incentives issues are endemic to monopoly government services (see: public high schools).  But the government is not even trying to solve the incentives issue.

What's Wrong with Economists

Justin Wolfers asks:

You probably recall Hillary Clinton turning anti-economist in the dying days of her campaign:

"Well I'll tell you what, I'm not going to put my lot in with economists."

And more recently John McCain has jumped aboard:

"I trust the people and not the so-called economists to give the American people a little relief."

Honestly, I don't get it.

There is a very simple answer here.  Economists are people who say that you can't have your cake and eat it too.  As this is the core of the politician's populist message, they don't want anyone calling their bluff.

More on not wanting to hear the science here.

Update: One other thought, vis a vis climate and economics.  Obama, I suppose, would be one to argue that the science of catastrophic global warming is "settled."  But does he really think it is more settled than, say, the science that free trade leads to general increases in prosperity?  The left is all for the sanctity of science, except in economics.

Observer Effect in Blogging

Observer Effect:  Acknowledgment that the act of observing will make changes in the phenomenon being observed.

So yesterday I read the latest XKCD.

Dangers_3

Like the typical Internet geek who reads XKCD, I immediately open Google and search for the exact phrase "Died in a Blogging Accident."  Of course, I don't know if the answer was ever "2," but now the search yields 7,900 results, most of which seem to refer to this XKCD cartoon.  And now I have added one more.

Update:  One suspects that the number was always greater than "2", since filtering out responses that include "XKCD" still yields over 6000 results.

Al Gore and the Peace Prize

Several readers have asked for my comment.  This is what I posted over at Climate Skeptic:

This
morning I was all fired up to write something petty, like "Al Gore now
has made the same contributions to peace as have previous winners
Yassir Arafat and Henry Kissinger."  Later, I considered a long and
drawn out post on the inaccuracies of "An Inconvinient Truth", but I
really have already done that in long form here and in short form here.
In truth, the Peace prize process has for years been about a group of
leftish statists making a statement, and often it has been about
tweaking the US, rather than a dispassionate analysis of true
contributions to peace made with the benefit of some historic distance
(as is done with the scientific prizes).  Further, most folks I argue
with don't really care about the specific inacuracies in Gore's movie,
their response typically being something in the "fake but accurate"
line of reasoning.

So instead I will say what I told a reader by email a few hours
ago.  I tend to be optimistic about the world, and believe that we are
approaching a high water mark (so to speak) for the climate
catastrophists, where we will look back and see their influence peak
and start unwinding under the presure of science and the reality of the
enormous cost to abate CO2.  Gore's Peace prize, in the same year as
his Oscar and that global warming music festival no one can even
remember the name of 3 months later, feels to me like it may be that
high water mark.   The Peace Prize certainly was the high water mark
for Jimmy Carter's credibility, not to mention that of Henry Kissinger
and a myriad of others.  Think of it this way -- if the guys who made
the peace prize decisions were investors, and you knew what they were
investing in, you would sell short.  Seriously, just look at the
group.  Well, they just invested in Al Gore.

Update:  One thing many commenters have not pointed
out is that Al Gore is really manuevering the US and China and India
(and the rest of the developping world) into a position that, if he has
his way, conflict is going to occur over who gets to grow and develop,
and who does not.  CO2 catastrophism has the ablility to be the single
most destabalizing issue of the 21st century. This is peace?

Rosie O'Donnell and the Failure of Scientific Education

Rosie O'Donnell is a great example of the failure of scientific education in this country.  Of late, Rosie has joined the "truthers," using her show to flog the notion that the WTC was brought down in a government-planned controlled demolition.

I will have to yield to Popular Mechanics for most of the discussion about WTC7.  However, I can, from my own engineering training, rebut one point on WTC1&2.  (Note again, future commenters, this applies to WTC 1&2.  There was a different dynamic at work in WTC 7).

Rosie, as others have, made a point of observing that jet fuel does not burn hot enough to melt steel, and therefore the fire in the main towers could not have caused the structure to yield and collapse.  This is absurd.  It is a kindergartener's level of science.  It is ignorant of a reality that anyone who has had even one course in structural engineering or metallurgy will understand.  The argument made that "other buildings have burned and not collapsed" is only marginally more sophisticated, sort of equivalent to saying that seeing an iceberg melts proves global warming.  (Note that this is all written by a person who has no faith in government and is at least as suspicious about government motivations at any truther).   

Here is the reality that most 19-year-old engineering students understand:  Steel loses its strength rapidly with temperature, losing nearly all of its structural strength by 1000 degrees F, well below its melting point but also well below the temperature of burning jet fuel.  For three years I designed piping and pressure vessel enclosures at a refinery.  Many of the processes in a refinery crave heat and run better at elevated temperatures.  In fact, what refineries can do, and how efficient they can be, is really limited by the strength of steel at high temperatures.  Refineries end up being limited to process temperatures no higher than 600 to 800 degrees, and even then these require expensive special metallurgies.  Anything higher requires a very expensive vessel lined with some sort of ceramic insulation material.

The strength curve of steel vs. temperature is dependent on the type of steel, but the curve below is about what I remember from my old textbooks.  Note by 930 degrees the steel strength has dropped by half and in the next 100 degrees it halves again.

Steel

But the proof of what went wrong in WTC1 and WTC2 does not take a college education.  You only have to look at building codes.  Building codes generally require that structural steel members be coated with a fireproofing material

As the critical temperature for steel is around 540°C (give or take, depending on whose country's test standards one reads at the time), and design basis fires
reach this temperature within a few minutes, structural steel requires
external insulation in order to prevent the steel from absorbing enough
energy to reach this temperature. First, steel expands, when heated,
and once enough energy has been absorbed, it softens and loses its
structural integrity. This is easily prevented through the use of fireproofing.

You have probably seen it- that foamy tan stuff sprayed on girders before the rest of the building is filled out.  In fact, this stuff is not fireproofing per se but insulation.  It is there to keep the structural steel cool during a fire, so the steel will not fail.  Generally the standards are set in the code that the insulation has to be able to stand X time of fire (generally several hours) and keep the steel below its critical yielding temperatures.   Engineers know that a building fire, which burns much cooler than a jet fuel fire, can cause steel members to weaken and fail and the building to collapse.  If this were not the case, then why do builders spend billions every year to insulate structural steel building components?? 

I wrote about this issue in more depth here.  In this post, one of the commenters listed a series of building fires and asked, why did these buildings not collapse?  The answer is:  Because insulation is applied to the building structural steel members to try to prevent the collapse.  Even insulation is just a stopgap -- if the fire burns long enough and
hot enough (or if the insulation is stripped off, say by an airplane
shearing through the building) then the steel will heat up and fail.   So there are three reasons that some buildings have fires and don't fail while the WTC did fail:

  • Some building fires can and do cause buildings to collapse.  Insulation on steel members help many buildings to survive, and often does save the building from collapse, but not always.  This building did collapse, at least the top 6 stores.  Oddly, this is actually used by truthers as further proof, somehow, that the WTC fires could not have brought down the building (the link is actually one of their web sites, I think).  But in fact, the Madrid building failed the same way as WTC 1 and 2, with the top six floors collapsing.  Since the building was not fully constructed on these top floors, there was not the huge weight collapsing that created the battering ram effect that brought down the WTC.  The Madrid floors took longer to collapse, but they were 1) under far less stress, since the building above them was not complete; 2) the fire burned much cooler and 3) the insulation had not been mechanically scrubbed from the beams, so it took longer for the beams to heat up.  To me, this is a clear parallel to the official version of the WTC collapse, but even this is distorted somehow by the truthers.
  • Fuel burns hotter than normal building fires, so even insulated members will heat up faster.  I have many pictures in my personal collection of refinery fires where the main thing you can see in the aftermath is all the structural steel bent and collapsed.  Truthers may not be able to find many examples of building collapsing in a fire, but you would be hard-pressed NOT to find examples of collapsed structural steel at every refinery and petrochemical fire.
  • The insulation that normally protects buildings was stripped off by the mechanical action of an enormous airplane shearing through the building at 300 miles an hour. 

This is in addition to the actual removal of some support columns by the crashing aircraft, which put more load on the remaining structure and thereby hastened the collapse.

postscript: By the way, can anyone tell me why the so called "reality-based"
community, that so often criticizes the Right for theocratic attacks on
science, is so quick to fall for this pseudo-scientific junk?

Update: One other thought:  The hallmark of truthers is that they take small abnormalities or uncertainties in the failure analysis and event reconstruction as justification for throwing out the whole explanation of events in favor of an alternate series of events with much, much larger gaps, contradictions, and logical problems (e.g. how did the buildings get wired for demolition without anyone noticing? or, how did the planes manage to crash into the precise floors wired for demolition without dislodging the charges and their wiring?  or, how did such a massive conspiracy get pulled off without one leak when the administration can't even competently fire 9 US attorneys?)

Anyone who has ever done root cause analysis of a catastrophic failure knows there are always questions no one can answer when all is said and done.  And people who say things like "always happen" or "can never happen" typically don't have any real-world engineering experience.

Update2: One other thought on WTC7, since most of the sites I have visited over the last several days really seem to focus on WTC7.  I consider our government capable of all kinds of hijinx, but why WTC7?  I would argue that about 0.00001% of the outrage that resulted from 9/11 is attributable to WTC7.  How many people not associated with the truthers have even heard of WTC7?  In fact, one could argue that the strike on the Pentagon was effectively irrelevant, since no one really even seems to remember that one.

One minor note:  I saw on a conspiracy site the claim that all military planes were ordered to stand down on 9/11.  I know from personal experience that can't possibly be true.  I was in Manhattan during 9/11 and remember well people in the streets hitting the ground in fear every time a military jet rocketed over the city.

I don't buy all this conspiracy theory not because I think well of the government, but just the opposite.  I consider the conspiracies posited at these various sites to be orders of magnitude beyond this government's capabilities.  Remember Coyote's Law:

When the same set of facts can be explained equally well by

  1. A massive conspiracy coordinated without a single leak between hundreds or even thousands of people    -OR -
  2. Sustained stupidity, confusion and/or incompetence

Assume stupidity.

Update3:  I guess I need to throw out a few more things.  This was not meant to be a comprehensive or definitive rebuttal of the 9/11 conspiracy theories.  I merely used as a starting point one stupid comment by Rosie O'Donnell on melting, a comment I have heard a lot of times, and that I knew I could refute of my own knowledge.  Those who want to get mad at me because I did not refute this or that, sorry, go deal with the book by the Popular Mechanics guys.  The only other thing I can contribute other than engineering sanity is the fact I have participated in many engineering failure analyses and the fact that I watched the towers fall live, with my own eyes, from the streets of Manhattan.

Every single engineering failure analysis I have ever participated in, from refinery explosions to airplane crashes, has always left unanswered questions and nagging inconsistencies that had, I am sure, nothing to do with conspiracies. We had many things we could never explain about a heat exchanger fire at our refinery in 1985, but I don't think that those unknowns and uncertainties leave the door open to blame government agents for the fire. 

I'll say again, if you want to argue that the WTC buildings were demoed by explosives, you have to explain how the explosives were laid, and, more important, how the explosives and their delicate wiring and detonators survived a plane crashing into the same floors.  And by the way, given that the buildings had not external markings showing the floors, how did the people flying the airplanes hit the exact correct parts of the building?  For every problem with the core hypothesis I could name 10 problems with the truther alternative.  I have no problem with offering an alternative hypothesis to the original thesis, but it is silly to criticize the core thesis for small problems only to replace it with a hypothesis that has problems that are orders of magnitude larger.

What Does "Negotiate" Mean in this Context?

Via Hit and Run:

As part of their 100 hours, the House plans to pass legislation that
would enable the federal government to negotiate Medicare Part D drug
prices.

My experience is that when the government "negotiates" prices via their standard procurement processes, they end up paying higher prices than a private firm might (see "$6000 hammer").  I am not a very experienced political observer who understands all the insider-speak, so maybe someone out there can tell me.  In this context, does "negotiate" actually mean "use the government's fiat power to demand that prices be set at whatever hell level they want?"

If it is the latter, then does anyone really believe that with populist political pressures, prices are going to be set anywhere near high enough to continue to justify intense drug R&D?  Already most of the world pays just above marginal cost for drugs, such that we in America pay for most all the drug R&D that occurs  (a form of charity we never get credit for).  If the US government "negotiates" US drug prices down to marginal cost, who will be funding the new life extension therapies I will be needing in about 20 years?

Update: One clarification based on the comments.  There is nothing wrong per se with American drug companies selling pharmaceuticals outside the US near marginal cost.  Profit is where you find it.  However, the issue is that US politicians tend to use these international drug prices as a benchmark, as in "US customers should get the same low price foreigners are getting."  The result is all the drug re-importation battles we have from time to time.  (By the way, its funny that politicians who support drug re-importation to reduce the US drug price differential vs. other countries never seem to apply the same solution to the entirely parallel situation of other countries having much lower labor costs than ours -- in fact in these cases they actively resist labor re-importation, which we also call immigration or outsourcing.)

A second point I want to make is that we cannot say for certain whether US customers are getting a good value or a bad value at current drug prices, though both supporters and opponents of the current health care system try to draw conclusions about the "fairness" of drug prices.  This is an odd situation to be in.  In other situations when people challenge the "fairness" of pricing, say gasoline prices, we libertarians can always retort "Well, buyers and suppliers both agreed to the transaction at X price, so X price was fair for both."   

But we can't do this with drug prices.  The reason we can't determine whether individuals are getting a good value is that, as I wrote at length in this post, our health care system is not structured in a way where individuals make cost-benefit tradeoffs for themselves.  Our employer's insurance company, via their coverage policies, or the US Government, via its rule-making and tort law, make these trade-offs for us.  Some drugs you might never pay for yourself, but you take because your insurance company pays for them.  Some drugs (e.g. Vioxx) you might dearly love to take, but the American litigation mess effectively precludes your access to it.  My suspicion is that, given the value I put on my life, prices for many US drugs are still a bargain for me, but who knows what trade-offs other people would make in a free society?  At the end of the day, we don't know what the real market price for pharmaceuticals is.  All we can say with confidence is that whatever price the government "negotiates," it will most likely be wrong.

World's Ugliest Currency

My vote for the world's ugliest bank note is the new US $10 bill (click for larger pictures)

800pxus_10_series_2004_face

800pxus_10_series_2004_back

Really these images don't do justice to just how butt-ugly this bill is.  I understand the need to introduce color and anti-counterfeiting technologies.  I also understand that they are trying to maintain elements of the historic greenback.  But this bill marks the point where it is now impossible to sustain both these goals.  If we need color, then its time to go color -- maybe Peter Maxx could design a new bill.

Really, who designed this thing?  The combination of colors is god-awful. And what's that blank oval on the back that looks like a misprint?  This thing is a mess.

(Note to my wife:  Yes, I am actually blogging about this.  She thinks that some of the things I get worked up about are kind of trivial.)

Update:  One of the commenters reminded me that there were for a while calls to replace Hamilton with Reagan.  I guess Hamilton was singled out because like Franklin, he is a non-president.  Which is kind of ironic, since Hamilton probably knew more about money and banking than all the presidents on the other bills combined.  I'd be a lot happier if they instituted some kind of waiting period, like for the Hall of Fame, of say 50 years before you can get your face on currency.  Besides, everyone know that the Gipper is supposed to be on the quadrillion dollar note.

Protecting the Consumers from Low Gas Prices

Decades ago, anti-trust regulation abandoned any pretense that its goal was protecting consumers.  The vast majority of anti-trust laws and cases today are more about protection of businesses from competition.  A good historic example is the Microsoft case, where consumers were bravely protected by the government from getting various utilities included free with their operating system.  You only had to look at the major defenders of the anti-Microsoft anti-trust suit (e.g. Sun, Oracle, etc) to know that the suit was about protecting other businesses rather than protecting consumers.

It would be difficult to find a better example of this today than for gasoline in Maryland:

A gasoline price war erupted in St. Mary's County last week after one station
slashed its price for regular to $1.999 a gallon and spurred three others to
follow suit, giving drivers some hope of relief at the pump.

But the price dip proved fleeting.

Maryland regulators quickly stepped in and told the stations that their prices
were too low. They needed to go up by 5 cents...

The sudden fluctuation in the Lexington Park area was the result of a
little-noticed Maryland law that took effect in 2001. The General Assembly
mandated that stations cannot charge less than what they pay for gas -- unless
they're lowering prices to compete with a nearby station.

The rationale for the law is ostensibly this:

Independent service station owners pressed lawmakers for the measure as a way to
protect themselves from big retailers selling gas below cost to drive them out
of business and limit competition. Maryland is one of at least 13 states to
adopt similar laws, which are not in effect in the District or Virginia.

First, its not the government's job to protect individual businesses.  Businesses should be treated like adults who knew the risks they were getting into in a business.

Second, this argument is specious anyway.  The logic is that ostensibly these dealers will be driven out of business, and then the big guys, without competition, will jack up their prices.  This is absurd.  It is important to note that it never happens this way, not for any sustained period of time in any market in the hundred years of gasoline retailing.  Gasoline retail margins are low, have been low, and will always be low.  If they ever creep up locally, someone has the incentive to undercut prices because volume is so important to profitability.  In fact, people have accused Wal-mart of this for years - ie they cut
prices and drive out the independents.  But so what, particularly if
prices never go back up?  This is even more true in gasoline retailing because gasoline station capacity never really leaves the market.  Because of the unique nature of the infrastructure, and the environmental rules vis a vis underground tanks, the best use for a gasoline station sold in bankruptcy is another gasoline station.  Even if an independent goes bankrupt, the site will likely stay a gas station, under different ownership.

Finally, in the current gasoline market, there are very good reasons not related to driving competitors out for one to sell gas under cost.  Many modern gas stations make as much or more profit on their convenience stores, car washes, and other services than they do on gas.  I know my company does in the few places where we sell gasoline.  Using gasoline as a loss leader to bring in convenience store traffic is perfectly valid.  Grocery stores have been doing this with eggs and milk for years.

This type law is a lazy protection device for a few companies that happen to have political clout in the government.  Maybe the IJ will get on the case.  Overlawyered.com has commentary and examples from other states.

Update:  One should also note that it various circumstances, the oil industry has, in addition to this case where a company was hit by the government for selling at a lower price than competitors, been accused of gauging (selling above cost and other competitors) and collusion (selling at the same price as competitors).  The Mises Blog has a nice link to R.W. Grants the Incredible Bread Machine, a poem that includes this stanza:

"These very simple guidelines,
You can rely upon:
You're gouging on your
prices if
You charge more than the rest.
But it's unfair competition if

You think you can charge less!
"A second point that we would make
To
help avoid confusion...
Don't try to charge the same amount,
That would
be Collusion!
You must compete. But not too much,
For if you do you see,

Then the market would be yours -
And that's Monopoly!

 

Princeton Speech Code

I could easily have chosen nearly any university in the country as the example for this post, but I will choose my alma mater Princeton

Like many universities, Princeton has a speech code.  Like many universities, Princeton's speech code is an affront to the First Amendment and an open license to selectively apply administrative punishments based on political beliefs.

The Princeton speech code says, in part:

Abusive or harassing behavior, verbal or physical, which demeans, intimidates, threatens, or injures another because of his or her personal characteristics or beliefs, is subject to University disciplinary sanctions...

And further defines sexual harassment as:

verbal or physical conduct [that] has the effect of unreasonably interfering with an individual's work, academic performance, or living conditions by creating an intimidating, hostile, or offensive environment.

This is the worst kind of arbitrary legislation.  In no part of the guidelines are any of these terms defined.  In fact, both as written and as practiced, the definition of these terms is left entirely up to the victim, with outrageous consequences.  Basically we have gotten to the point where hurting someones feelings, or even disagreeing with them, is a crime. 

This would be bad enough if enforced even-handedly, but in practice, speech codes become a tool of the University faculty and administration to squelch speech they don't agree with.  One of my pet peeves is the term "hate speech", which is used frequently in political diatribes by both the left and the right.  While this term may have at one point had some utility in narrowly describing the most extreme racism, today in its common usage it has come to mean "speech I don't agree with".  In a similar manner, campus speech codes are effectively enforced as banning speech that the ruling orthodoxy of the university does not agree with.  If a gay rights activist and a conservative Christian get into an
argument on campus and use similar invective against each other, you
can bet only one is probably going to get sanctioned.  And, given the typical politics of universities today, you can guess what speech is protected and what is sanctioned. 

Here is my rule of thumb:  unless speech meets the (narrow) definition of libel, no legally or
administratively actionable harm can be claimed as a result of it.  Or, as we were taught as kids, sticks and stones will break my bones but names will never hurt me.  In the adult world, this should translate to:  Physical assaults are actionable, verbal assaults are not. 

The Princeton Tory has a nice article on these policies, as well as the really bad idea to extend this to a "social honor code".  And, the Foundation for Individual Rights in Education (FIRE) is the leading defender of free speech on campus and has a great web site.

Postscript:  Speech limitations are a very slippery slope.  So much so that I have never encountered speech or expression by adults aimed at other adults that I would limit.  Nazis, communists, birchers, pornographers, racists, revolutionaries, militia, muslims, atheists:  Have at it.  Even Congressmen.  And even this.

Update:  One other thought.  I have never understood why so many people think that the right approach to people who have stupid, awful ideas is to keep them from being heard.  This applies not only to speech codes but the increasingly frequent attempts to ban speakers from campus or, if that is unsuccessful, drown their speech out with chants and interruptions.  Why?  I have always thought that Sunlight is the Best Disinfectant not just for government proceedings but for bad ideas as well.  Let them be heard and ridiculed.  After all, Hitler "called his shots" more than a decade before he began his horrible reign.  The world would have been better off if he had been listened to carefully in those early years.