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Thursday, April 29, 2004
IPOs, HOT OR NOT?
On one of the news programs this morning, the commentators were talking about the difficulties faced by "small investors" in getting allocations of stock in Initial Public Offerings (I believe that this was with reference to the prospective Google IPO). One of them sort of wrapped up the discussion by saying "the rich get richer."
In reality, of course, buying stock at IPO time is by no means a guaranteed way of getting a good payback. In many cases, an investor would do better to sit the IPO out and buy stock a few weeks or months later (or a few years later!) at a more favorable price. An hour or so of research should have been sufficient to uncover the real historical data on IPO investing, which might have been more useful to the viewers than this feeble attempt at stirring up class warfare.
Wednesday, April 28, 2004
Suppose you were watching a basketball game. And suppose a gorilla walked across the court, turned toward you, thumped its chest, and wandered off again. Think you'd notice?
Harvard psychology researchers did an experiment like this in 1999 (reported in Financial Times, 4/28), although they used a person in a gorilla suit rather than an actual gorilla. The subjects were assigned to watch the game and were given tasks (like counting the number of times the players passed the ball to each other). Only about half the subjects noticed the gorilla at all. Some of them, when shown the video again, insisted that there must be two versions of the tape, one with the gorilla and one without.
People tend to see what they are looking for, and filter out things that don't fit the expected pattern. Some filtering is necessary, of course, or we would be be overwhelmed by stimuli. But too much filtering, and you can miss things that matter a lot more than a person in a gorilla suit.
Interesting stuff. And scary.
Tuesday, April 27, 2004
INTERESTING NEW BUSINESS
eMachineShop provides custom machining services via the Internet. A downloadable piece of software lets the customer design his part (either metal or plastic), specifying both the geometry and other characteristics. It then provides prices, both for single quantity and for various larger lot sizes, and also for different delivery date options. The software even provides suggestions as to how the design could be modified to reduce the costs. When the customer has his design the way he wants it, he clicks "Place Order." The design is then transmitted to eMachineShop...and the parts will be made and shipped to him (the old-fashioned way, since no one has figured out how to send plastic or metal over a phone line yet).
The company has a pretty good selection of machine tools available, including milling, turning, laser and water jet cutting, etc, and is planning to add more services, including injection molding (for plastics) and metal casting.
The main benefit of this approach vs use of a conventional machine shop seems to be a reduction in total time due to the avoidance of the human communications loop...faxing or e-mailing the design, clarifying design intent, getting price quotes, and all the various back-and-forth that usually happens during any business deal (especially one involving customization).
Intriguing stuff. Will be interesting to watch how it develops.
Monday, April 26, 2004
ELECTRONIC PAPER UPDATE III
Forbes has an article on the new Sony product.
Sunday, April 25, 2004
THE STATE OF HOSPITAL AUTOMATION
The New York Times (4/6) has a couple of interesting articles on the application of information technology for patient care in hospitals, with a particular emphasis on systems for ordering prescriptions and lab tests. The hope is that these systems will be able both to reduce errors and to speed things up. And there's some evidence that these goals are achievable. At Montefiore Medical Center in the Bronx, which has installed a comprehensive system, it's reported that prescription errors--wrong drug, wrong timing, wrong dose--are down from 12 percent to 2.5 percent (though they say that even with the higher error rate, patients were rarely harmed.) And at Children's Hospital in Seattle, a nurse reports that ''Getting an antibiotic for a kid who has a fever used to take 45 minutes...Now, you get it in half an hour.''
Yet, only a small number of hospitals have installed such systems. And, in at least one case, a system was withdrawn after it had already been installed, after physicians complained that its use was too time-consuming and "a distraction from their medical duties." (The hospital plans to "reconsider" the system, or an improved version thereof, in a year or so.)
In speaking of the national situation, Dr Donald Berwick of Harvard Medical School said ''By a rational standard, we are making dreadful progress...Many, many lives could be saved,'' he said, and ''a lot of injuries could be prevented if we would move faster.''
So why aren't we moving faster?
Physician acceptance seems to be a key factor, and I suspect that there are two sides to this story. Clearly, the user interfaces need to be designed to make use by physicians (and others) as quick and simple as possible...and certainly, the physicians and other hospital staff need to be involve in the system design before it is frozen. But I also suspect that many physicans need to take a broader view of their professional responsibilities. A doctor working in a hospital isn't a solo performer. There are also other people involved in patient care--other doctors, pharmacists, nurses, and more. The definition of "professional responsibilities" clearly needs to include communication with the other people involved in the process, and that includes computer-mediated communication where appropriate.
The other issue is money. Montefiore spent about $100 million on its system. It's been estimated that the initial cost for an average-sized hospital to install a system is around $8 million (It's not clear from the article whether this refers to a system which is strictly for order entry and management or to a broader system also encompassing medical records.) These costs are likely to come down as packaged software becomes more available, but considerable customization is still likely to be required in order to fit individual hospital needs. Nationwide, $200-300MM is being spent annually on hospital order entry systems, and it's estimated that around $20B will be required to install these systems on a nationwide basis.
In some cases, pressure to get these systems installed is being applied to hospitals by local employers...in Seattle, Boeing and its largest union (the machinists' union) have been working together to accomplish this.
I don't think it was mentioned in the NYT articles, but reliability also needs to be an important consideration. As these systems get used on a day-to-day basis and as confidence in them grows, there will be a tendency to let manual backup procedures fall into disuse. Redundancy and failure mode issues need to be carefully addressed: particularly as patient records go on-line, these sysems probably need to be thought in terms of something life-critical, like the air traffic control system, rather than just another system for clerical processing.
It will be interesting to see how all of this unfolds. It will also be interesting to see which companies are most succcessful in addressing this emerging market--off the cuff, I see three major groups of potential suppliers: (1) specialized software companies focusing on the healthcare industry, (2) enterprise application software companies, and (3) the major suppliers of sophisticated medical equipment, like Siemens and GE. Each has strengths and weaknesses applicable to this arena. It also seems quite possible that hospitals who have been in the lead in developing such systems will attempt to market their systems to other hospitals, possibly with a business partner involved as well.
(The NYT articles referenced are here and here; payment is required for access.)
THE JOY OF KNITTING
...is the name of a promising new blog. And for a knitting blog, she sure writes about some heavy stuff...heavy and important. Here's excerpt from a recent post:
Cupio dissolvi...These words have been going through my mind for quite a long time now. It's Latin. They mean "I (deeply) wish to be annihilated/to annihilate myself", the passive form signifying that the action can be carried out both by an external agent or by the subject himself...Cupio dissolvi... Through all the screaming and the shouting and the wailing and the waving of the rainbow cloth by those who invoke peace but want appeasement, I hear these terrible words ringing in my ears. These people have had this precious gift, this civilization, and they have got bored with it. They take all the advantages it offers them for granted, and despise the ideals that have powered it. They wish for annihilation, the next new thing, as if it was a wonderful party. Won't it be great, dancing on the ruins?
Definitely read the whole thing.
I am reminded of words from Walter Miller's A Canticle for Leibowitz, speaking of the human race:
...children of Merlin, chasing a gleam. Children, too, of Eve, forever buiding Edens--and kicking them apart in berserk fury because somehow it isn't the same.
Saturday, April 24, 2004
In foreign policy, John Kerry seems to believe that it's not what we actually do that's of foremost importance--what really matters is that lots of other countries (especially those in Europe) agree with us about it and as many as possible of them do it with us. And he asserts that he's the man who can get them to do so.
This assertion--that Kerry's golden voice will somehow get (for example) the French and the Germans to support us in Iraq--seems to me to be stunningly naive. These are independent powers, run by leaders who have wills of their own. They will make their decisions for their own reasons, and even the nicest and most eloquent diplomacy is likely to have only a marginal effect. And what happens when the decision, after all the diplomacy, is still one you don't want?
Consider the case of Britain and America between May 1940 and December 1941. There was no realistic possibility that Churchill, for all his eloquence, would be able to bring America into the war as a combatant, despite his fervent desire to do so. Given American domestic politics at the time, it just wasn't going to happen--even though the U.S. had a President who was very sympathetic to the British cause (infinitely more sympathetic than the French and German leaders are to the American cause in Iraq.) Should Churchill have simply abandoned the fight because he had not been able to achieve the alliance (or at least the level of alliance) that he wanted?
And there's an interesting paradox here. Kerry's singleminded focus on "multilateralism" has put him, were he to actually become President, in a very difficult negotiating position. One of the main rules of negotiating is that if the other side knows you are desperate for a deal, that deal is going to be very expensive. Kerry has put himself in a position where, because of the stance that he has taken, he would have to do everything possible to get the major European powers involved in Iraq, at almost any cost--and you can be sure that the leaders of these countries know that and would take full advantage of it, in ways that might be stongly to our disadvantage and that of the world.
Kerry particularly emphasizes a leading role in Iraq for the United Nations. Here, some comments by Victor Davis Hanson are worth considering:
Since 1967, almost fifty percent of all the U.N. resolutions have been condemning Israel. When there's fifty million people have been killed all around the globe in Africa and Asia, up in former Soviet Union, they never said a word. And why was that? Because the U.N. has been basically ideological--far more ideological than we are and they have a preexisting deductive idea that Westernism as it's symbolized by the United States and Israel are the causes of most of the great sins of the world. So they concentrate on these two powers, United States and Israel and they will not apply the same standard of behavior to the Russians or--we talk about occupied land, they'll pass hundreds of resolutions about Palestine and not one about Cyprus, about Tibet, about the Sakhalin Islands. So when we in America look at this, we see that it's ideologically driven and a lot of people die where they adjudicate in New York.
Kerry reminds me of a junior high school kid who is desperate to be accepted by the cool kids in the school. And teenagers desperate to be accepted by the cool kids often do things that are shortsighted, dangerous, and downright cruel.
(The VDH quotes are via Occam's Toothbrush.)
Thursday, April 22, 2004
From the novelist A S Byatt:
Books I have read that were written at a moment of social-political crisis tend to be incomprehensible 20 years later. Books that are written about some problem of 20 or 50 or 100 years ago are written with understanding and somehow also illuminate the present and the future.
(via Erin O'Connor)
Previous Worth Pondering
Monday, April 19, 2004
ELECTRONIC PAPER UPDATE II
I've written before about the emergence of electronic paper technologies (also here). These technologies allow information to be displayed on a medium which is (a) thin, (b) flexible (to at least some degree), (c) readable in bright sunlight, and (d) power-efficient (power is used only when changing the page, not for display per se.) I think these technologies will have major implications for the display of long text documents, eliminating the current undesirable alternatives of reading it on the screen or going to the trouble of printing it out.
Now we have an actual product announcement in this field. Sony has announced an "e-book reader," which they call LIBRI'e and which will go on sale (initially in Japan) late this month. It's announced as "the first device to utilize Philips’ display solution for enhanced reading...similar in size and design to a paperback book. LIBRI’e allows users to download published content, such as books or comic strips from the Internet, and enjoy it anywhere at any time. LIBRI’e can store up to 500 downloaded books." Sony packages the device, Philips Electronics makes the actual display, and E Ink and Toppan Printing supply important components.
The implications for all aspects of the publishing world are likely to be very significant--if the product (and others based on electronic paper technologies) are marketed properly, which I see as a nontrivial issue. (It may just a nit, but I really hate the name. And I'm not sure that "book" is the best metaphor to use in marketing this device.)
Disclosure: I'm a shareholder in Philips (although I doubt that this technology will have tremendous influence on that company's results, simply because Philips is so big.) The most dramatic wins (and losses) are likely to occur further downstream, particularly in media companies.
As always, nothing on this weblog is intended as investment advice.
THE LIBRARY INDICATOR
Here's a possibly-significant (and very different) indicator of economic growth. The SMU library offers a commercial research service for businesses. They report that:
About six months before national economists announce a positive change...companies increase their inquiries about new technology and new products. Before the economy slows, businesses cut their research to the basics.
What are they seeing now? Business for the staff (of four people) is better than it's been in the last 5 years.
Does this indicator make sense? I've never bought research services from a university library, but I have bought such services from commercial research firms on multiple occasions...and, intuitively, the suggested correlation makes sense.
One cautionary note: It sounds like the businesses served by the SMU library are mainly in the Dallas area, so it's not clear to what degree these resuts can be generalized across the US economy.
(via Virginia Postrel)
Sunday, April 18, 2004
A NOTE FOR HIRING MANAGERS
If you are involved in hiring people--either as a line manager or executive or as a human resources person--please read this post.
Large numbers of American soldiers are at some point going to be coming back from Iraq. Some of them are at some point going to be leaving the military and looking for civilian employment. You need to think about hiring some of these people. For your own good and that of your company.
There's always been a lot to be said for hiring people with a military background, because the military often gives very young people the opportunity to exercise heavy levels of responsibility. But the nature of the current conflict is giving many people experience that will be of especially high value in business.
The American Enterprise recently ran an interesting article on the American forces in Iraq ("The Guerilla war," by Karl Zinsmeister, April/May edition--doesn't seem to be available online. American troops are negotiating with local dignitaries. They're making tough decisions involving the balancing of multiple conflicting objectives. For example, the article tells of a lieutenant who is asked to take his platoon to a Baghdad sewer plant, where a suspected terrorist is believed to be employed. Does he charge in, seize the employment rosters, grab all the employees, and interrogate them? But the plant is--which was in a state of "advanced decay" when the Coalition arrived--is now being rebuilt, a project that is employing hundreds of workers and serving as a centerpiece of the reconstruction effort. Not a good place for a firefight, or even an angry scene. In the end, the lieutenant decides to take a more diplomatic approach, working quietly through the plant management. The right decision?..it's hard to know. But a person who makes decisions like this on a day-in/day-out basis is surely growing in executive capacity.
The article also tells of a Major--a West Point graduate who also has a masters in public administration--who has led a variety of projects. He helped organize Iraqi contractors to quickly build barracks. He took advantage of the presence of a local steel plant to get armor plate made for the humvees. "These worked so well that the rest of the Army units in Baghdad soon contracted with the plant to manufacture the impromptu armor for their vehicles as wel. The whole American Army's transport fleet now looks like a scene form The Beverly Hillbillies, but the stuff works and the soldiers feel a lot safer."
Operations of this kind require the making of judgments about who you can count on. One Captain, involved in setting up neighborhood advisory councils, says "Any time I ran into an iraqi who struck me as a potential leader, i would start a conversation with an eye to deciding whether that perosn might be a good neighborhood representative. I often had to rely on my gut instincts, and of course I wasn't always right."
Those now serving in Iraq are gaining extraordinary experience in making decisions under conditions of uncertainty. They're honing their experiences in people-assessment. They are practicing multicultural communications, rather than just learning about it in theory. Driven by life-and-death issues, they're taking initiative--as in the case of the armor plate--rather than just waiting for "the organization" to do something.
So, back here at home--think about bringing some of these people on board when you get the chance--even if it means you have to pass up a few recent graduates from "elite" colleges. Even at the higher levels, think about hiring some people with military experience as an alternative to considering only those who have followed a conventional business career. Yes, it takes some vision and creativity to see how experience in a different field can be mapped into the needs of your business--but that's what they pay you for, isn't it?
If Company "X" takes advantage of the people whose skills are now being developed in Iraq, and Company "Y" does not--who would you bet on (other things being equal) in the competition?
Saturday, April 17, 2004
It may not be a silly as it sounds. Business Week reports that Penn State researchers have been working on methods of transforming coal into jet fuel (in liquified form and mixed with various petroleum byproducts). Apparently, the fuel has the advantage of remaining stable at higher temperatures, which is desirable for new-generation engines. (More information here and here). This work has been funded by the US Air Force and the Department of Energy; apparently the USAF is interested in using the fuel on the F-35 Joint Strike Fighter.
According to Business Week, about 10% of all US refinery output goes for jet fuel..so, if the process turns out to be practical and economical on a large scale, the implications could be pretty significant.
I'd be interested in knowing, though, how much energy is used in the conversion process. Hopefully, it's relatively small in proportion to the energy liberated when the resuting fuel is burned. (This kind of question needs to be asked about all alternative-energy type projects.) Most likely the researchers know the answer, but I couldn't find it in a quick search with Google.
Monday, April 12, 2004
SHORTENED ATTENTION SPANS
Erin O'Connor links to Camille Paglia's reflections about shortened attention spans--the causes and the consequences, particuarly in education.
Erin has enabled comments again, at least for some posts, and this one looks like there will be a good discussion.
What we must decide is how we are valuable, rather than how valuable we are
--F Scott Fitzgerald
...Might be something for the promoters of "self-esteem" programs to consider
The finest eloquence is that which gets things done, and the worst is that which delays them
--David Lloyd George
...Should be pondered especially by the natterers of "nuance."
(Both quotes are via that very unusual--and valuable--publication, Investor's Business Daily)
Previous Worth Pondering
Saturday, April 10, 2004
MADE IN AMERICA
The little red wagon--the Radio Flyer--is no longer made in America. There's been much media commentary about the departure of this manufacturing activity (for China), and I believe that John Kerry has even chimed in on the matter.
But here's a product that is made in America: CT (CAT) scanners for health care. They sell for around $1 million each. General Electric builds them, in places like Waukesha, WI. Forbes (4/12) has an interesting article on this subject.
CT machines are an interesting hybrid. They are "high tech" devices as that misbegotten term is generally used, meaning that they contain lots of software and electronics. But they are also large, heavy pieces of rotating machinery.
So why is GE building these machines--and many other medical devices, such as MRI scanners and portable x-ray machines--in the US? The Forbes article puts great stress on the ability of engineering and manufacturing to work closely together. Product engineers regularly work on-site with assembly workers. And GE is quick to credit production workers with important productivity improvements. One example: "For the latest CT machine, workers suggested attaching the base to the 4,000 pound machine at the beginning of assembly rather than at the end. This eliminated the need for a 15-foot crane to flip the doughnut-shaped rotating body of the CT machine from a horizontal to a vertical position so it could be placed on the base. That freed up more room on the factory floor: The new line takes up half the footprint of the old one, plus 35% less assembly time." It's not just about cost--particularly important in a fast-moving market like that for CAT scanners is the ability to get new and improved products to market more quickly, which is enhanced by having all the players in geographical proximity--and by having skilled, highly-motivated people in all functions.
Although the CT machines are made (in the sense of being assembled) in the US, some components come from overseas. The Forbes article provides little detail about the component sources for the CT machines, but mentions that for the advanced mobile x-ray systems "mechanical components come from GE's plant in Monterrey, Mexico, generators from its factory in Bangalore, India and displays from its site in Beijing." What would happen if legislation required all of these parts to be made domestically? The costs of the finished systems would go up, contributing to further increases in the overall US healthcare bill. And the GE products would be less competitive, encouraging hospitals to opt instead for systems built by non-US suppliers, such as Siemens (Unless additional draconian protectionist measures were enacted, like putting heavy tariffs on the imports of complete systems--but such measures might well set of a full-scale trade war with Europe). Governmental actions intended to "protect American jobs" could in fact wind up costing the jobs of people in places like Waukesha.
International trade issues are complex, and involve many interactions among variables. Sloganeering and demonization are not very helpful. Unfortunately, that is the level at which most political discussion of these matters is presently being conducted.
One point that the Forbes article could have explored more fully is the role of logistical factors in the production decision. Yes, the decision to produce in the US was clearly driven by the complexity of the product, the frequent changes, and the importance of time-to-market. But I bet that the simple size and weight of (most of) this heath care equipment also played a role in the decision. If CT scanners could somehow be made small enough to fit in a FedEx package, then decisions about the geography of production might well have been different.
An important paradigm for future made-in-the-USA manufacturing: complex products, with frequent changes and/or customization. Products that are physically large enough for transportation costs to be significant. Alert, motivated workers, participating in the improvement of the production process as well as its execution. Management focused on continuous improvement and supportive of--rather than threatened by--worker participation. Extensive cross-functional activity, with engineers on the shop floor and customers heavily involved in the product planning process.
This isn't the only model for how manufacturing can work in America, but it's an important one.
European sophisticates often think they are insulting an American when they call him a "cowboy." There are many (self-defined) American intellectuals and sophisticates who feel the same way.
Catherine Seipp has a good comment on this.
Maybe what distinguishes cowboys is that because they spend their days dealing with animals that are large, dangerous and rarely entirely rational, they understand that not everyone is open to reason. And that arguing a point has its limits, whether on the ranch or at war.
THE FIGHTING IN IRAQ
Andrew Sullivan posts from a letter from a Marine. Excerpts:
...my opinion only, this battle is going to have far reaching effects on not only the war here in Iraq but in the overall war on terrorism. We have to be very precise in our application of combat power. We cannot kill a lot of innocent folks (though they are few and far between in Fallujah). There will be no shock and awe. There will be plenty of bloodshed at the lowest levels. This battle is the Marine Corps' Belleau Wood for this war. 2/1 and 1/5 will be leading the way. We have to find a way to kill the bad guys only. The Fallujahans are fired up and ready for a fight (or so they think). A lot of terrorists and foreign fighters are holed up in Fallujah. It has been a sanctuary for them. If they have not left town they are going to die. I'm hoping they stay and fight.
This way we won't have to track them down one by one.
Definitely read the whole thing.
I've quoted the following poem before, but it once again seems appropriate.
THE MAN WITH THE RIFLE KNOWS
Men may argue forever on what wins their wars
and welter on cons and pros.
And seek their answers at history's doors,
But the Man With the Rifle Knows.
He must stand on the ground on his own two feet,
And he's never in doubt when it's won.
If it's won he is there, if he's not it's defeat.
That's his test when the fighting is done.
When he carries the fight it's not with a roar
of armored wings spitting death.
It's creep and crawl on the eathen floor,
Butt down and holding his breath.
Saving his strength for the last low rush,
Grenade throw and bayonet thrust;
And the whispered prayer before he goes in,
Of a man who does what he must.
And when he's attacked , he can't zoom away,
When the shells fill the world with their sound.
He stays where he is, loosens his spade,
And digs his defense in the ground.
That ground isn't ours till he's there in the flesh
Not a gadget, or a bomb, but a man.
He's the answer to theories which start afresh
With each peace since war began.
So let the wild circle of argument rage
On what wins as war comes and goes.
Many new theories may hold the stage,
BUT THE MAN WITH THE RIFLE KNOWS
(author unknown -- found here)
Friday, April 09, 2004
POLITICIANS BEHAVING BADLY
France 1940, USA 2004
On May 10, 1940, Germany opened its campaign against Belgium, Holland, Luxembourg, and France. It was all over within two months with France's signature of the armistice--basically, a surrender.
This outcome was by no means inevitable. France should have been able to resist the German assault, as it had done so valiantly in the years 1914-1918.
The consequences of the failure were far reaching. General Andre Beaufre, who in 1940 was a young Captain on the French staff, exaggerates very little when he writes:
The collapse of the French Army is the most important event of the twentieth century.
If France had held--as knowledeable people like Winston Churchill fully expected it to do--the Hitler regime would almost certainly have fallen. There would have been no Nazi conquest of Western Europe, no Nazi assault on the Soviet Union, no Holocaust, most likely no Communist takeover of Eastern Europe.
There are many reasons why the French collapse occurred. One important factor was the tendency of many French politicians, during the interwar years and in 1939-1940, to put their quarrels with each other ahead of their country's security. After the German attack began, Georges Mandel, the courageous Minister of the Interior, observed a Deputy (legislator) whose district had been bombed by the enemy...he went about the lobbies (of the Chamber of Deputies), screaming "I will interpellate the government on this outrage as soon as the Chamber meets!" Mandel remarked to his friend, the English General Edward Spears, about the disconnect of this behavior from reality. "Paris is bombed by the Germans? Let's shake our fists at our own Government." Sadly, this kind of behavior was by no means exceptional.
I can't help being reminded of this by the current behavior of many American politicians and media types. John Kerry and Edward Kennedy, in particular, would have been very much in their element as French Deputies in 1940. It's a frightening parallel
Note: In the name of historical accuracy, it's important to recognize that by no means all French Deputies were of the defeatist variety--there were many who were for strong resistance. Unfortunately, there weren't enough of them.
The Mandel/Spears information is from General Spears' important memoir Assignment to Catastrophe. The Beaufre quote is from his book 1940: The Fall of France.
Thursday, April 08, 2004
KERRY ON IRAQ
John Kerry has recently made some statements that are almost unbelievable. From NewsMax:
In an interview broadcast Wednesday morning, Democratic presidential candidate John Kerry defended terrorist Shiite imam Muqtada al-Sadr as a "legitimate voice" in Iraq, despite that fact that he's led an uprising that has killed nearly 20 American GIs in the last two days.
Speaking of al-Sadr's newspaper, which was shut down by coalition forces last week after it urged violence against U.S. troops, Kerry complained to National Public Radio, "They shut a newspaper that belongs to a legitimate voice in Iraq."
In the next breath, however, the White House hopeful caught himself and quickly changed direction. "Well, let me ... change the term 'legitimate.' It belongs to a voice — because he has clearly taken on a far more radical tone in recent days and aligned himself with both Hamas and Hezbollah, which is a sort of terrorist alignment."
A sort of terrorist alignment?????
It gets worse. Kerry also says:
"If all we do is make war against the Iraqi people and continue an American occupation, fundamentally, without a clarity as to who and how sovereignty is being turned over, we have a very serious problem for the long run here," Kerry added.
Make war against the Iraqi people? He thinks that working to suppress a group of violent fanatics is making war against the Iraqi people? A stunningly irresponsible thing to say, even in the heat of a campaign.
A few words from an actual Iraqi seem appropriate here. Read what Zeyad has to say, and note especially the concluding paragraph:
No one knows where it is all heading. If this uprising is not crushed immediately and those
militia not captured then there is no hope at all. If you even consider negotiations or appeasement, then we are all doomed.
Evidently Zeyad doesn't view the suppression of the thugs as "making war on the Iraqi people"--and he is one of the Iraqi people.
Does John Kerry really care about what happens to Iraqis like Zeyad? Does he think about real people and real issues at all, or is he completely lost in his own rhetoric?
Wednesday, April 07, 2004
Today is the 40th anniversary of the introduction of the IBM System/360, according to an article in The Washington Times.
The System/360 project cost IBM $5 billion, roughly the equivalent of $30 billion in today's terms. The objective was to provide a common architecture and instruction set for computers ranging from fairly small to very large, thus achieving significant economies in software development--and also synergies in marketing and support. Creating the System/360 was a bet-your-company decision, and it paid off...but there were many scary moments when it looked like it wasn't going to succeed at all. The book Father, Son, and Company by Tom Watson, Jr (who ran IBM during this period) vividy describes the System/360 project as experienced from the top.
The implementations have changed, but the System/360 architecture is still very much with us.
Tuesday, April 06, 2004
When ideas fail, words come in very handy.
--Johann Wolfgang von Goethe (quoted in Forbes, 4/19 edition)
Previous Worth Pondering
Sunday, April 04, 2004
The serious high school essay is apparently an endangered species. Will Fitzhugh, the subject of an article in The New York Times, says that the high school research paper is on the verge of extinction, shoved aside as students prepare for the five-paragraph essays now demanded on state tests, the SAT II, and soon, the SAT. "I'm convinced the majority of high school students graduate without reading a nonfiction book cover to cover," he says. Even the National Endowment for the Humanities has a 1200-word limit for its essay contest (which carries a $5,000 prize)--apparently, anything longer is considered as asking too much.
Mr Fitzhugh has been attempting to do something about this problem--the de-emphasis of serious writing--for years. In 1987, he founded the Concord Review, which publishes "the best high school history papers in America." One recent paper explores to what extent John Maynard keynes's economic ideas were truly revolutionary vs borrowed from others; another investigates Anne Hutchinson's suffering at the hands of the Puritan leadership. The publication has been praised by people like Eugene Genovese, John Silber, and Arthur Schlesinger, Jr.
Mr Fitzhugh has invested most of his own money in this venture, and takes only a minimal salary. He has approached many foundations for funding, and most of them have turned him down--apparently often for reasons having to do with the perceived 'elitism' of his project. On two occasion, he has had to stop publishing for lack of funds. The Concord Review has survived only because of the generous contributions of John Abele (co-founder of Boston Scientific), and money is still a very serious problem.
It would be very sad for this enterprise to be allowed to fail. Please drop by their website and consider ordering a subscription ($40 per year).
Even better...if you have been considering making a donation to your college, please think about giving the money to the Concord Review instead. The actual positive impact on American education is likely, I believe, to be much greater.
Saturday, April 03, 2004
SOME REACTIONS TO FALLUJAH
Decent people everywhere are feeling horror and anger concerning the atrocity in Fallujah. However, the category "decent people" evidently excludes a significant number of individuals on the American left.
First, there were comments on sites like Democratic Underground, applauding the killings and suggesting that the victims got what they deserved--comments like this:
"mercenaries - These men are just serial killers with a good retirement plan. They deserve what they get."
(Michele has collected other comments from this thread here.)
This isn't really too surprising, coming from mostly-anonymous commenters on a site like DU. But next, along comes The Daily Kos--a very heavily-read blog of the liberal/left persuasion, with this:
Let the people see what war is like. This isn’t an Xbox game. There are real repercussions to Bush’s folly. That said, I feel nothing over the death of merceneries. They aren’t in Iraq because of orders, or because they are there trying to help the people make Iraq a better place. They are there to wage war for profit. Screw them.
After the storm of outrage began, The Daily Kos published a clarification/partial retraction, here. You know what? I don't care. Concerning the original post: he thought it; he wrote it; he pushed the "publish" button.
Jay Reding has pulled together some information about the people who were killed in Fallujah, and contrasts the reality of their lives with what The Daily Kos said. Go and read his post here.
I don't have a lot to add to the reactions of Jay and Michele, except this: The Daily Kos is not just any blog. When Democratic National Committee chairman Terry McAuliffe had a "message to the blog community," back in February, he "asked if I would post this," according to the blog's proprietor. Kos is apparently not many degrees of separation away from the mainstream of the Democratic Party leadership, and I find that disturbing and even frightening.
And one other thing. Democrats and leftists are always talking about their concern for "working people." But sometimes, the curtain slips, and we see what many of them really feel about working people.
One final point that shoud be made: the liberal/leftist blogger Oliver has spoken out against the Kos comments on Falluhah. I guess honor is not entirely dead on the left.
UPDATE: The Kerry campaign website has removed its link to Daily Kos. This was clearly the responsible thing to do.
However, if you go and read the comments on the Kerry site, many of the commenters seem much more upset by the decision to delink Daily Kos than they do by the original post. And quite a few of the the comments are in my view just about as bad as the original Daily Kos post. There is a lot of use of the term "mercenary," and a lot of apparent resentment at the money these men were supposedly paid.
As of this writing, the Kerry blog still contains a link to Democratic Underground, which is my view can best be described as an appalling snakepit.
(Kimberly, if any actual snakes were offended by the foregoing comparison, could you please apologize to them for me? Thanks.)
And also...the snake reference may be kind of obscure to many readers...education blogger Kimberly, who is an expert on educational testing (and an incisive writer on many educational issues), is also a reptile collector.
Thursday, April 01, 2004
FASB ON OPTIONS
The Financial Accounting Standards Board (FASB) has a draft proposal requiring that companies be required to expense employee stock options. I think it's a bad idea, for three primary reasons.
1) It's bad accounting, in my view. I think the proposed expensing makes corporate income statements less meaningful rather than more meaningful. The real impact of options grants is not to affect the financial results of the business entity itself; rather, it is to dilute the ownership interest of the existing shareholders. Information allowing an investor to estimate this dilution is already available in corporate financial reports. (The accounting issues here are conceptually somewhat tricky, and I will write about them later at more length.)
2) Discouraging options grants is bad economic policy. It makes life considerably more difficult for the small and entrepreneurial companies that play such an important role in American economic growth. And it is likely to harm productivity across the board, for large companies as well as small ones. Academic research has shown that companies with broad-based options programs have improved performance and morale--and it is exactly this kind of broad-based distribution of options that would be discouraged by an expensing requirement.
3) Discouraging options is bad social policy, in that it tends to inhibit class mobility by making acquisition of wealth significantly more difficult for those who don't already have it.
I've seen more than one statement in the media to the effect that: "Options represent a massive wealth transfer from shareholders to corporate officers and employees." What a strange viewpoint! Don't those corporate officers and employees have something to do with creating that wealth? How much would the corporation (and its stock) be worth without those officers and employees? I'm a capitalist and an investor--but capital by itself is sterile; it also needs intelligent, innovative, and motivated people to put it to work.
In a press release, Technet (an organization of technology company CEO's) has this to say:
"The Financial Accounting Standards Board continues to ignore widespread concerns about the inability to accurately value employee stock options. Without an accurate and reliable valuation method, mandated expensing will substantially overinflate the value of employee stock options, resulting in financial statements that do not serve investors, shareholders or employees," stated Rick White, President and CEO of TechNet, "This is not about executive compensation -- it's about protecting the ability of rank-and-file employees to share in our nation's economic success."
"At RSA Security, more than 80 percent of our 1,000 employees worldwide have received stock options in the past four years because we recognize that options attract and retain skilled workers, inspire creativity and entrepreneurship, and encourage loyalty and performance," said TechNet member Art Coviello, President & CEO of RSA Security. "Employees at all levels have the opportunity to share in RSA Security's financial success through stock ownership. FASB's expensing proposal will force companies like RSA Security to curtail or eliminate entirely broad-based stock option plans resulting in a loss of productivity, innovation, jobs and economic growth."
"We are extremely concerned that the FASB has proposed valuation models that will result in highly inaccurate financial statements. The Exposure Draft issued today will only muddy the picture for investors," stated Rick White, "Further, stock option expensing that relies on inaccurate valuation models will threaten the broad-based employee ownership that has been a hallmark of America's technology industries, driving economic growth and productivity. The United States is the global leader in technology and innovation for a reason. Mandatory expensing is bad accounting that threatens our continued global competitiveness."
Mandatory expensing using the Black-Scholes or binomial valuation models will result in gross overvaluation of employee stock options that will have its biggest impact on companies with broad-based stock option plans. As a result, companies that offer broad-based employee stock option plans will have little choice but to severely curtail or eliminate them. Mandatory expensing under the proposed approach will cause only an immaterial distortion in the financial statements of companies that grant options primarily or exclusively to senior executives.
See also extensive information and analysis at SaveStockOptions.org, a coalition of several organizations including the American Electronics Association and the National Venture Capital Association.
(I should probably mention that I'm by no means an accountant; as an investor, however, I am a heavy consumer of accounting information.)