Coyote Blog

The New York Times has a long article on  Harvard Business School's effort to change its culture around women.  Given that both my wife and I attended, albeit 25 years ago, I have a few thoughts.

• I thought the article was remarkably fair given that it came from the NYT.  Men who are skeptical of the program actually are allowed to voice intelligent objections, rather than just be painted as Neanderthals
• I would have abhorred the forced gender indoctrination program, as much for being boring as for being tangential.  I am fortunate I grew up when I did, before such college group-think sessions were made a part of the process everywhere.  I would presume most of these young folks are now used to such sessions from their undergrad days.   I would not have a problem having an honest and nuanced discussion about these issues with smart people of different backgrounds, but I thought the young man they quoted in the article said it really well -- there is just no payoff to voicing a dissenting opinion in such sessions where it is clear there is a single right answer and huge social and even administrative penalties for saying the wrong thing.
• I went to HBS specifically because I loved the confrontational free-for-all of the classes.   It was tailor-made to my personality and frankly I have never been as successful at anything before or since as I was at HBS.   I say this only to make it clear that I have a bias in favor of the HBS teaching process.   I do think there is an issue that this process does not fit well with certain groups.  These folks who do not thrive in the process are not all women (foreign students can really struggle as well) but they are probably disproportionately women.  So I was happy to see that rather than dumb down the process, they are working to help women be more successful and confident in it.
• It is interesting to see that the school still struggles to get good women professors.  When I was there, the gap between the quality of men and women professors was staggering.  The men were often older guys who had been successful in the business and finance world and now were teaching.  The women were often young and just out of grad school.  The couple of women professors I had my first year were weak, probably the two weakest professors I had.  In one extreme case our female professor got so jumbled up in the numbers that the class demanded I go down and sort it out, which I finally did.  I thought it was fun at the time, but now I realize how humiliating it was.
• To some extent, the school described in the article seems a different place than when I was there.  They describe a school awash in alcohol and dominated by social concerns.  This may be a false impression -- newspapers have a history of exaggerating college bacchanalia.   At the time I was there, Harvard did not admit many students who did not have at least 2 years of work experience, such that the youngest students were 24 and many were in their 30's and 40's.  A number were married and some even had children.   To be there, they not only were paying a lot of money but they were quitting paying jobs.  The school was full of professionals who were there for a purpose.  I had heard that HBS had started to admit more students right out of college -- perhaps that is a mistake.
• The fear by the women running the school that women would show up on Halloween wearing "sexy pirate" costumes represents, in my mind, one of the more insidious aspects of this new feminist paternalism (maternalism?) aimed at fellow women.  Feminism used to be about empowering women to make whatever choices they want for their lives.   Now it is increasingly about requiring women to make only the feminist-approved choices.
• I actually wrote a novel where the protagonist was a confident successful female at HBS.   So I guess I was years ahead of the curve.

Postscript:  Below the fold is an excerpt from my novel.  In it, the protagonist Susan describes how an HBS class works and shares my advice for being successful at HBS.

Continue reading ‘Harvard Business School and Women’ »

Joane Hayes-White has no shame:

San Francisco's fire chief has explicitly banned firefighters from using helmet-mounted video cameras, after images from a battalion chief's Asiana Airlines crash recording became public and led to questions about first responders' actions leading up to a fire rig running over a survivor.

Chief Joanne Hayes-White said she issued the order after discovering that Battalion Chief Mark Johnson's helmet camera filmed the aftermath of the July 6 crash at San Francisco International Airport. Still images from the footage were published in The Chronicle.

Filming the scene may have violated both firefighters' and victims' privacy, Hayes-White said, trumping whatever benefit came from knowing what the footage shows.

"There comes a time that privacy of the individual is paramount, of greater importance than having a video," Hayes-White said.

Any 5-year-old can figure out here that this has nothing to do with victim privacy -- this is all about shielding her organization from accountability from future screw-ups.  Somehow we have ended up in a completely backwards world where surveillance is aimed at private citizens doing private things but is banned for public officials doing public things.  Ms. Hayes-White is obviously just a puppet for the firefighters union, and she be treated with contempt.

I don't like tribal red-blue politics, but I read a couple of blogs both from team elephant and team donkey to at least make sure I am not living in a libertarian echo chamber.  From that I know that bloggers on the Right were complaining for years about Maureen Dowd's dishonest editing of quotations to make Republicans look bad.  Apparently, bloggers on the Left, in this case Kevin Drum, have had it with Dowd's dishonest quote manipulation as well.

Which all means that Dowd likely has a job for life at the New York Times, as journalism today seems more about generating controversy and clicks rather than delivering facts -- and controversies like this that send everyone running in circles on Twitter certainly generate attention.  From the New York Times : We have met TMZ and they are us.

Many of your know that my company operates public parks.  So I see a lot of different approaches to park design and construction.  Of late I have been observing a trend in "environmental sustainability" in park design that is actually the opposite.

The US Forest Service has built more campgrounds, by far, than any other entity in the world.  For decades, particularly in the western United States, the USFS had a very clear idea about what they wanted in a campground -- they wanted it to be well-integrated with nature, simple, and lightly developed.  They eschewed amenities like pools and playgrounds and shuffleboard.  They avoided building structures except bathroom and shower buildings.  The camp sites were simple, often unpaved with a table and fire ring and a place for a tent.  They used nature itself to make these sites beautiful, keeping the environment natural and creating buffers of trees and natural vegetation between sites.   I have never seen an irrigation system in a western USFS campground -- if it doesn't grow naturally there, it doesn't grow.

This has proven to be an eminently sustainable design.  With the exception of their underground water systems, which tend to suck, they are easy to maintain.  There is not much to go wrong.  The sites need new gravel every once in a while.  Every 5-10 years the tables and fire rings needs replacement, hardly a daunting task.  And every 20-30 years the bathrooms needs refurbishment or replacement.  The design brilliance was in the placement of the sites and their integration with the natural environment.

Over the last several months, I have been presented with plans from three different public parks agencies for parks they want to redevelop.   Each of these have been $10+ million capital projects and each one had a major goal of being "sustainable."   I have run away from all three.  Why -- because each and every one will be incredibly expensive and resource intensive to operate and of questionable popularity with the public.  Sustainability today seems to mean "over-developed with a lot of maintenance-intensive facilities".

What each of these projects has had in common are a myriad of aggressively architected buildings - not just bathrooms but community rooms and offices and interpretive centers.  These buildings have been beautiful and complex, made from expensive materials like stainless steel and fine stone.  They have also had a lot of fiddly bits, like rainwater collection and recycling systems and solar and windmills.  They have automatic plumbing valves that never seem to work right.  The grounds have all been heavily landscaped, with large lawns that require water and mowing, with non-native plants that need all kinds of care.  Rather than a traditional sand pad for tents they have elaborate wooden platforms.

The plans for these facilities are beautiful.  They win awards.  In fact, I am increasingly convinced that that is their whole point, to increase prestige of the designer and the agency that hired them through awards.  But they make no sense as a recreation facility.  In 10 years, they will look like hell.  Or sooner, since one agency that is in the process of spending a $22 million bond issue on 5 campgrounds seems to not have one dollar budgeted for operation and maintenance.

These things actually win awards for sustainability, which generally means they save money on one input at the expense of increasing many others.  One design  got attention for having grass on the roofs, which perhaps saved a few cents of electricity at the cost of having to irrigate and mow the roof (not to mention the extra roof bracing to carry the load).  I briefly operated a campground that had a rainwater recovery system on the bathrooms, which required about 5 hours of labor each week to keep clean and running to save about a dollar of water costs.

Well, it certainly comes as happy news to this correspondent that the Administration announced this week it will delay health insurance mandates on businesses.  Our company has spent a ton of time since last November trying to minimize the expected cost of the mandates -- the initial cost estimates of which for our business came in at three times our annual net income.  Our preparation has been hampered by the fact that the IRS still has not finalized rules for how these mandates will be applied to a seasonal work force.  Like many retail service businesses, we have studied a number of models for converting most of our work force to part time, thus making the mandates irrelevant for us.

I know this last statement has earned me a fair share of crap in the comments section as a heartless capitalist swine, but the vitriol is just absurd.   Many of the folks criticizing me can't or don't want to imagine themselves running a business, so let's say you have an annual salary of $40,000.  Now, on top of all your other expenses, the government just mandated that you have to pay an extra $120,000 a year for something.  That is the situation my business is in.  Are you just going to sit there and allow your savings to become a smoking hole in the ground, or are you going to do something to avoid it?  Unlike the government, I cannot run a permanent deficit and I cannot create new revenues by fiat.  Congress allowed business owners a legal way to avoid the health insurance mandate, and I am going to grab that option rather than be bankrupted.  So are every other service business I know of, which is why I have predicted that full-time jobs are on the verge of disappearing in the retail service sector.

Anyway, it appears that the IRS and the Administration could not get their act together fast enough to make this happen.  Not a surprise, I suppose.  You and I have both been in committee meetings, and have seen groups devolve into arguments aver useless minutia.  This is not a monopoly of the government, it happens in the private sector as well.  But in the private sector, in good companies, a leader steps in and says "I have heard enough, it is going to be done X way, now go do it."  In government, the incentives work against leaders cutting through the Gordian knot in this way, so the muddle can carry on forever.

There are at least two more shoes that are going to drop, one bad, one good:

1. On the bad side, while companies like mine complain about the cost of the PPACA, they are going to freak when they see the paperwork.  My sense is that we are going to be required to know in great detail what kind of health insurance policy every one of our employees have, even if it was not obtained through our company, and will have to report that regularly to the government.  In addition, there are gong to be new reporting requirements to new agencies for wages and hours.  It is going to be a big mess, and my uneducated guess is that someone in the last week or so looked at that mess and decided to hold off announcing it.

   But readers can expect a Coyote freak out whenever it is announced, because it is going to be bad.  Wal-mart will be fine, it has the money to build systems to do that stuff, but companies like mine with 500 employees but only 2 staff people are going to get slammed.  There is a reason government agencies, even government schools, have more staff than line personnel -- they live and breath and think in terms of complex reporting and paperwork.  They love it because for many it is their job security.  Swimming every day in that water, it is no surprise they impose it without thought on the private sector.  This makes it hard for companies like ours that try to have 99% of our employees actually serving customers rather than pushing paper.

2. The individual mandate is toast for next year.  No way it happens.  If the Administration cannot get the corporate piece done on time, there is no way in hell it is going to get the exchanges up and running.  And even if they do, some prominent states with political influence with this President, like Illinois and California, likely will not get their exchanges done in time and will beg for a delay.

I just read about a project dedicated to local celebrities, people who are very famous in their own backyard but not known at all beyond a small region.

The one person in this category I could think of (beyond local TV and radio personalities) is Johnny Barnes in Bermuda.   I encountered him around the year 2000 when I went to Bermuda for a job interview -- I was running Internet companies at the time and a group in Bermuda had an idea to combine an Internet B2B model with offshore banking and tax havens.  Transfer pricing games seemed to be prominent in the model.

Anyway, there he was, at a busy traffic circle almost everyone on the island passed when going to work in the morning.  He just stood there saying hello and good morning to everyone.  I found out later he was a Bermuda icon -- if he missed a day the radio stations and government offices would be flooded with calls from people asking if he was OK.  Searching the Internet, I found that someone has made a film about him.

I was down at the Arizona capitol first thing  this morning to do some live TV interviews on reaction to the Supreme Court DOMA decision  (as Chair of Equal Marriage Arizona, which has a ballot initiative in the works to allow same-sex marriage, we wanted to get our initiative close tied to the story today).

Once the decision came down around 7:10 AM local time, the networks wanted an immediate reaction.  I told them I needed to read for 5 minutes to make sure the decisions were what we expected (they were).  So I leaned up against a palm tree to stay in the shade and read my iPad.  Well, it turns out the tree trunk was crawling with ants.  So as I began my live TV interviews, I could feel them crawling all over my back and starting to bite.  I am not sure how coherent I was in the interviews.  I am pretty sure the reporters were confused about my ripping off my jacket and shirt once the interviews were over.  Maybe they thought it was some sort of Brandi Chastain celebration.

On a related note, having tangentially been involved now in the media rush around a Supreme Court decision, I found this analysis of the running of the interns quite entertaining.

I have been meaning to write on the new Obama Administration guidelines to colleges for treating speech as sexual assault and reducing the due process rights of accused students.  But George Will does such a great job I am going to let him do it.

Responding to what it considers the University of Montana’s defective handling of complaints about sexual assaults, OCR, in conjunction with the Justice Department, sent the university a letter intended as a “blueprint” for institutions nationwide when handling sexual harassment, too. The letter, sent on May 9, encourages (see below) adoption of speech codes — actually, censorship regimes — to punish students who:

Make “sexual or dirty jokes” that are “unwelcome.” Or disseminate “sexual rumors” (even if true) that are “unwelcome.” Or make “unwelcome” sexual invitations. Or engage in the “unwelcome” circulation or showing of “e-mails or Web sites of a sexual nature.” Or display or distribute “sexually explicit drawings, pictures, or written materials” that are “unwelcome.”

It takes some work to simultaneously violate this many Constitutional protections in one letter, but the Obama Administration continues to demonstrate its heroic determination to ignore that aging document.

By the way, I cannot find any story about a single university President in the whole country who has objected to these rules.  What a bunch a spineless conformists we running universities.

A few things I would add to Will's comments:

1. I have written about this emerging "right not to be offended" on University campuses for some time.  This is the Obama Administration trying to codify this nutty BS "right" into law.
2. There is no way in a rule of law where one can have a law where only the opinion of the victim matters in determining culpability.  To some extent, the loss of due process rights are almost secondary here -- if it is a crime if the victim says it is (ie they were offended), then what defense can one have, anyway?
3. Given that everyone takes offense to something nearly every day, this law would quickly cause everyone to be kicked out of school.  The Venn diagram of speech that is offensive either to, say, fundamentalist Christians or Muslims and to radical feminists would encompass essentially all of speech related to sex.    Since everyone will not be kicked out of school, the rules will almost certainly be enforced disparately, likely punishing speech with which the university administration disagrees but being far less aggressive in pursuing "unwanted" sexual speech with which it might disagree.

Via the AZ Republic

The true cost to operate Jobing.com Arena ranges from $5.1 million to $5.5 million a year, which is about $10 million to $20 million a year less than the Glendale City Council has agreed to pay hockey-related interests to manage the facility in recent years.

The net management costs, included in documents recently published on the city’s website, are bundled in the city’s solicitation for a new company to operate the city-owned arena.

Glendale council members interviewed by The Arizona Republic said they hadn’t reviewed the documents and were surprised by the figures.

“I wasn’t aware of that,” Mayor Jerry Weiers said. “Then again, I know damn good and well that the way it’s been run, they’re not putting anything extra into it whatsoever.”

This is unbelievably easy to understand .  It is a hidden subsidy, and everyone knows it.  The pictures of politicians running around saying "what, we had not idea" is just hilarious.  The Phoenix Coyotes hockey team has the lowest attendance in the league, and loses money.  In addition, the NHL, which owns the team, has committed to its members that it will not take a loss on the team, meaning that it needs to sell the team for north of $200 million.  The team is worth over $200 million, but only if moved to Canada.  In Glendale, it is worth $100 million or less.

The city was close to a deal a few years ago to sell the team.  It tackled the team value problem by basically throwing $100 million in taxpayer money into the pot for the sale (to make up for the difference in value between the asking price and actual worth).  When this encountered a Constitutional challenge (under the AZ Constitution corporate welfare is illegal though you would never know it living here) the city council disguised the subsidy in the form of an above-market-rate payment for running the arena.

So absolutely everyone knows what is going on here.  This has become a massive black hole for the town of 250,000 people that achieves nothing but the self-aggrandizement of the local politicians, who feel like bigshots if they have a real major sports franchise in town.  Oh, you heard that this all actually pays for itself in tax money?  Hah!

The justifications for previous management deals revolved around a commitment to keeping the team in Glendale. Loyal fans pleaded with council members for the team’s future. And a council majority saw advantages, including thousands of fans trekking to their city 41 nights a year to watch hockey and spend money in the city’s restaurants and shops.

The city collects revenue associated with the team and arena through leases, parking fees and tax collections for food and merchandise sales in the nearby Westgate Entertainment District. Those figures have been on the upswing, particularly since an outlet mall opened last fall.

Total collections were $4.7 million in fiscal 2011, and reached $6.4 million through just the first eight months of the 2013 fiscal year, according to the city. That money helps pay, but doesn’t fully cover, the city’s debt to build the arena.

The town spent $300 million on a stadium and subsidized the team between $25 and $40 million a year, depending on how you count it, all to get an "incremental" $6-8 million in tax money.  And by the way, just because they collect it in this area does not make it incremental -- these sales could well have cannibalized another area of town.

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).

Matt Yglesias and I certainly do read history differently.  He writes recently in a Salon article:

The basic economic foundations of industrial capitalism as we've known them for the past 150 years or so have an activist state at their core. Building political institutions capable of doing these things properly is really difficult, and one of the main things that separates more prosperous places from less prosperous ones is that the more prosperous places have done a better job of building said institutions. There's also the minor matter of creating effective and non-corrupt law enforcement and judicial agencies that can protect people's property rights and enforce contracts.

The point is, it takes an awful lot of politics to get an advanced capitalist economy up and running and generating wealth. A lot of active political decisions need to be made to grow that pie. So why would you want to do all that? Presumably because pie is delicious. But if you build a bunch of political institutions with the intention of creating large quantities of pie, it's obviously important that people actually get their hands on some pie. In other words, you go through the trouble of creating advanced industrial capitalism because that's a good way to create a lot of goods and services. But the creation of goods and services would be pointless unless it served the larger cause of human welfare. Collecting taxes and giving stuff to people is every bit as much a part of advancing that cause as creating the set of institutions that allows for the wealth-creation in the first place.

This is a guest post from Gregg Stevens.  His story resonates with me in particular because he is in the same business as I am, running campgrounds.  The story begins with the proverbial tree falling in the forest.  

I used to think there wasn’t much a hole in the ground could do. The hole could get bigger, or it could get smaller. And that’s about it. But I’ve recently learned that a hole in the ground can not only suck an enormous amount of money, time and energy from a fellow, it can drive him to the edge of madness as well.

I run a small campground on a river in northern California, and one winter day a big old fir tree blew over into the water. It’s fairly common for trees to fall here on the heavily wooded, storm-battered Mendocino Coast. But this particular tree was a bit different than most. For it fell under the benevolent gaze of the California Coastal Commission.

Continue reading ‘Another California Coastal Commission Horror Story’ »

Steven Rattner, investment banker and former member of the Obama Administration,  is terrified that under a proposed law companies will be able to raise money without investment bankers.

Most troublesome is the legalization of “crowd funding,” the ability of start-up companies to raise capital from small investors on the Internet. While such lightly regulated capital raising has existed for years, until now, “investors” could receive only trinkets and other items of small value, similar to the way public television raises funds. As soon as regulations required to implement the new rules are completed, people who invest money in start-ups through sites similar to Kickstarter will be able to receive a financial interest in the soliciting company, much like buying shares on the stock exchange. But the enterprises soliciting these funds will hardly be big corporations like Wal-Mart or Exxon; they will be small start-ups with no track records.

This is absolutely, classically representative of the technocratic arrogance of the Obama Administration and the investment bankers that inhabit it.  I have three quick thoughts:

1. Rattner's concern for individual investors comes rather late.  After all, he was the primary architect of the extra-legal screwing of GM and Chrysler secured creditors in favor of the UAW and other Obama supporters.
2. God forbid investors get actual, you know, ownership in a company for their capital rather than just trinkets.  This is so bizarrely patronizing that I had to read it twice just to make sure I wasn't missing something.  But no, he is explicitly preferring that you and I get trinkets rather than ownership  (ownership, apparently, to be reserved for millionaire insiders like himself).
3. We have truly entered the corporate state when leftish opinion makers argue that large corporations like Exxon and Wal-Mart get preferential access to capital and that smaller startups that might compete with them be shut out of the market.

I predict that over that Internet entrepreneurs running such crowd-sourcing sites would develop reputation management and review tools for investors (similar to those at Amazon and eBay).  Over time, it may be that these become far more trustworthy than current credit agency reports or investment bank recommendations.  After all, which do you trust more -- a 5-star Amazon review with 35 responses or a Goldman Sachs "buy" recommendation on an IPO like Facebook or Groupon?  Besides, it would take a very long time, like eternity, for fraud losses in a crowd-sourcing site to equal 1/100 of the investor losses to heavily regulated Bernie Madoff.

Well, as promised, I wanted to post our race day picture from the half marathon.  This was done for my daughter's benefit, who set the goal to run a half marathon about 6 months ago and figured the promise of a Disney trip would be incentive to stay on top of her training.

She schlepped that tutu and that tiara for the whole 13.1, walking only at a couple of the last water stops.  This event was 95% women, and attracts a LOT of folks who really don't run the whole thing, so it was a great place for her to begin.  It's also pretty laid back, as there are actually character photo ops every mile, though we skipped those.  I have not seen our time, but we probably did about 2:45.  That's 20 minutes worse than my time five years ago -- it would be nice to say I was holding back to stay with my daughter but in fact she pulled me through the last mile.  Muscles and cardio were fine but the knees and ankles really can't take it any more.  But I proudly wore this bad boy all day.

If you are interested in this sort of thing, it was a great event, going through two of their parks.  The only problem is that it has to take place before the parks are open, so we had to set the wake-up call for 3:15 AM.  Uggh.  The butt-crack of dawn, as my sister calls it.

And yes, I did help make the tutu, with the aid of this video.  It is videos like that that remind me there are whole worlds of which I am virtually unaware.   Note the number of views - 1.4 million, on making a tutu.