Coyote Blog

The other day, I posted an update to my light rail bet saying that not only was light rail incredibly expensive for the amount of transportation it provides, it is not even clear that it provides any "green" benefits  (with "green" today meaning only the potential to reduce CO2, since the global warming hysteria has sucked all of the oxygen out of other environmental goals).

The Antiplanner has more information, this time from the transportation planners in Denver.  Normally, transportation planners grossly exaggerate the benefits of their proposed systems, so it is interesting that even they so no net CO2 savings from their proposed rail lines:

The Antiplanner's review
of rail transit and greenhouse gases found that Denver's light-rail
lines produce more greenhouse gases per passenger mile than a typical
SUV. The Gold Line DEIS agrees, admitting that the rail alternative
will result in a regional CO2 increase of 0.034% (see page 3.7-10).

By the way, the Denver system does not do so great on the financial part either:

Now, RTD says the line will cost more than $600 million, which is a
lot for a mere 11 route miles. Moreover, RTD has changed the proposed
technology to something it calls "electric multiple-unit commuter
rail," which sounds something like the Chicago Electroliners or some of
the Philadelphia commuter trains.

For this high price, the DEIS reports incredibly trivial benefits.
The proposed rail line is projected to take 0.0085 percent of cars off
the road. Of course, that's for the region as a whole, but in the
corridor it will take a whopping 0.227 percent of cars off the road. A
handful of buses could do as well.

While that might seem terrible, it actually outdistances our guys here in Phoenix, who are projecting that the next 3.2 mile line here will cost $306 million.  While the Denver line is projected to cost $10,300 per foot, the Phoenix line will cost at least $18,000 per foot.

What are the London Olympic organizers thinking right now?  In the immortal words of Bill Paxton,"That's it man, game over man, game over." 

I was amazed by the opening ceremonies last night.  I am not sure how that will ever be topped, particularly since most democracies cannot reasonably pour several billion dollars into a single three or four hour show.  I guess one could make some Triumph of the Will allusions, but it was really the most amazing meld of technology and showmanship I have ever seen.

George McGovern has an editorial in the WSJ urging the Democratic party to abandon the idea of stripping secret balloting from union organizing elections:

The key provision of EFCA is a change in the mechanism
by which unions are formed and recognized. Instead of a private
election with a secret ballot overseen by an impartial federal board,
union organizers would simply need to gather signatures from more than
50% of the employees in a workplace or bargaining unit, a system known
as "card-check." There are many documented cases where workers have
been pressured, harassed, tricked and intimidated into signing cards
that have led to mandatory payment of dues.

Under EFCA, workers could lose the freedom to express
their will in private, the right to make a decision without anyone
peering over their shoulder, free from fear of reprisal.

There's no question that unions have done much good
for this country. Their tenacious efforts have benefited millions of
workers and helped build a strong middle class. They gave workers a new
voice and pushed for laws that protect individuals from unfair
treatment. They have been a friend to the Democratic Party, and so I
oppose this legislation respectfully and with care.

To my friends supporting EFCA I say this: We cannot be
a party that strips working Americans of the right to a secret-ballot
election. We are the party that has always defended the rights of the
working class. To fail to ensure the right to vote free of intimidation
and coercion from all sides would be a betrayal of what we have always
championed.

I have always been a bit torn on this issue.  I don't in general think the government needs to get involved in how private organizations do their business.  However, by force of law, unions are not a normal private organization. They have special rights, including ones that mimic taxation, other groups do not have:

Unfortunately, we don't live in a free society, and the term "union"
comes with a lot of legal baggage.  Recognized unions are granted
certain legal powers and rights that an average group of self-organized
folks don't.  For example, they are the only private organizations in
this country that I know of that have taxation power, and the power to
demand absolutely that certain monies be withheld from employee
paychecks (even of employees not in the union) and given to them.
Perhaps more importantly, companies can't ignore them - they have
to negotiate with a recognized union.  Unions also have informal
powers.  For example, the legal system tends to tolerate a lot of
violence and physical intimidation by union members (in strikes and
such) that it does not tolerate in other contexts  (seventy-five years
ago, the situation was reversed and the system tolerated a lot of
company violence against workers).

Some thoughts on the obsession with peer review as the gold standard guarantee of climate science goodness, from Climate Skeptic:

One of the weird aspects of climate science is the over-emphasis on peer
review as the ne plus ultra guarantor of believable results.  This is absurd. 
At best, peer review is a screen for whether a study is worthy of occupying
limited publication space, not for whether it is correct.  Peer review, again at
best, focuses on whether a study has some minimum level of rigor and coherence
and whether it offers up findings that are new or somehow advance the ball on an
important topic. 

In "big
boy sciences" like physics, study findings are not considered vetted simply
because they are peer-reviewed.  They are vetted only after numerous other
scientists have been able to replicate the results, or have at least failed to
tear the original results down.  Often, this vetting process is undertaken by
people who may even be openly hostile to the original study group.  For some
reason, climate scientists cry foul when this occurs in their profession, but
mathematicians and physicists accept it, because they know that findings need to
be able to survive the scrutiny of enemies, not just of friends.  To this end,
an important part of peer review is to make sure the publication of the study
includes all the detail on methodology and data that others might need to
replicate the results  (which is something climate reviewers are particularly bad at).

In fact, there are good arguments to be made that strong peer review may even
be counter-productive to scientific advancement.  The reason is that peer
review, by the nature of human beings and the incentives they tend to have, is
often inherently conservative.  Studies that produce results the community
expects often receive only cursory scrutiny doled out by insiders chummy with
the authors.  Studies that show wildly unexpected results sometimes have trouble
getting published at all.

 As I read this, it strikes me that one way to describe
climate is that it acts like a social science, like sociology or gender studies,
rather than like a physical science.  I will ahve to think about this -- it
would be an interesting hypothesis to expand on in more depth.  Some quick
parallels of why I think it is more like a social science:

• Bad statistical methodology  (a hallmark, unfortunately, of much of social
  science)
• Emphasis on peer review over replication
• Reliance on computer models rather than observation
• Belief there is a "right" answer for society with subsequent bias to study
  results towards that answer  (example,
  and another
  example)

This is cross-posted from Climate-Skeptic, but it is very much in the spirit of the Canadian tribunals and University speech codes.  There are increasing efforts, mainly on the left, to make the world a better place by limiting speech of those who don't agree with them.

Because they are too freaking low!  ExxonMobil (XOM) is a cyclical company that is following on 20 years of middling prices for their commodity and finally have a price spike, and they only manage to make 8.5% return on sales  ($11.68 billion profit on $138 billion of revenues).  At the top of their cycle they are barely making the same profit margin as the average industrial company.  This is not good.   Sure, the absolute dollars are large, but it is a large company, and the absolute dollars of revenues, expenses, and taxes are also large.

While this outcome may be confusing to many  (since the press and politicians insist on calling these mediocre profits "windfall"), they are in effect the reflection of a new reality for western oil companies.  Less and less do companies like XOM operate their own oil fields.  They are increasingly concession operators or really glorified service companies and middle men to state producers. 

Disclosure:  I am an XOM stockholder, and I am not happy.

Postscript:  This from Mark Perry is kind of interesting:

Exxon has already paid $19.828 billion in income taxes for 2008 (data here),
and will probably pay almost $40 billion in income taxes this year (see
graph above, income tax data for 1999-2007 taken from Exxon's annual
reports).

To
put $40 billion of income taxes in perspective, it can be reasonably
estimated that Exxon will pay more in income taxes this year (both here
and outside the U.S.) than the entire bottom 50% of American individual
taxpayers (about 67 million) will pay in income taxes this year.

Perry has a number of notes and updates in response to questions about how he got these figures at the bottom of his post.

Update:  Yahoo Finance data and ranking on profitability by industry.  Integrated oil companies come in around #60.

I generally have a bet I make for new light (and heavy) commuter rail systems.  I bet that for the amount the system cost to build, every single daily rider could have instead been given a Prius to drive for the same money; and, with the operating losses and/or subsidy the system requires each year, every one of those Prius drivers could be given enough gas to make their daily commute.  And still have money left over.  I have tested this bet for the systems in Los Angeles and Albuquerque.

Well, it turns out I left something out.  Many people are interested in commuter rail because it is perceived to be greener, which nowadays generally means narrowly that it uses less energy and thus produces less CO2.  But in fact, it may not.  Blogger John Moore sent me a link to this article by Brad Templeton analyzing energy usage in various transportation modes.  While a full train can be fairly efficient (just as a full SUV could be if 7 passengers were in it), cars and trains and busses are seldom full.  When you look at their average load factors, trains are seldom better than cars:

In fact, a car at its average load factor (1.57 pax) has about the same energy use as busses or light rail per passenger mile.  The analysis is difficult to do well, but even with errors, its clear that rail projects do not dominate over car travel in terms of energy use  (One must be careful to differentiate rail project construction decisions from individual choice of mode decisions -- an individual at the margin shifting from car to train saves a lot of energy;  a city choosing to invest in a large new rail system to entice drivers off the road does not).

In fact, relevent to my bet, Mr. Templeton says this:

My first conclusion is that we would get more efficient by pushing
small, fuel efficient vehicles instead of pushing transit, and at
a lower cost.

He explains his results, which are counter-intuitive to many

A full bus or trainload of people is more efficient than private cars,
sometimes quite a bit more so.   But transit systems never consist
of nothing but full vehicles.   They run most of their day with light
loads.  The above calculations came from figures citing the
average city bus holding 9 passengers, and the average train (light
or heavy) holds 22.   If that seems low, remember that every packed
train at rush hour tends to mean a near empty train returning down
the track.

Transit vehicles also tend to stop and start a lot, which eats
a lot of energy, even with regenerative braking.   And most
transit vehicles are just plain heavy, and not very aerodynamic.
Indeed, you'll see tables in the DoE reports that show that over the past 30 years,
private cars have gotten 30% more efficient, while buses have
gotten 60% less efficient and trains about 25% worse.   The
market and government regulations have driven efforts to make cars
more efficient, while transit vehicles have actually worsened.

In order to get people to ride transit, you must offer frequent
service, all day long.  They want to know they have the freedom to leave at
different times.  But that means emptier vehicles outside of
rush hour.   You've all seen those huge empty vehicles go by, you just
haven't thought of how anti-green they were.    It would be better
if off-hours transit was done by much smaller vehicles, but that
implies too much capital cost -- no transit agency will buy enough
equipment for peak times and then buy a second set of equipment for
light demand periods.

A lot of his data can be checked at the US Department of Energy data book here.  In particular, you can see the key numbers in table 2.12.  After perusing this data for a bit, I had a few other reactions:

• Commercial air travel gets a bad rap.  On a passenger mile basis, it is really not worse than driving and only about 20% worse than Amtrack  (and probably the same as Amtrak or better if you leave out the Northeast Corridor). (table 2.14)
• Busses have really gotten way more inefficient over the years, at the same time cars have become substantially more efficient.  While the government criticizes its citizens for not practicing enough energy conservation, in fact its citizens have been buying more and more fuel efficient vehicles while the government has been buying less efficient vehicles.  (table 2.13)
• While passenger cars have increased substantially in efficiency, over the road trucks have seen no progress, and have actually gotten less efficient over the last 10 years (table 2-18)

Make sure to read the whole article.  I think the author is pretty fair at achnowleging where the uncertainties are in the analysis.  He also has comparisons of mass transit energy numbers between cities.  A few individual cities seem to beat even the most efficient cars -- most, including places like New York, do not.

Postscript:  I don't think numbers for New York include taxis.  If they did, New York would likely look terrible.  From an energy standpoint, taxis are a horrible transportation option, perhaps the worst possible.  It would be interesting to know how many New Yorkers who look down on SUV's routinely get around town using taxis.

I had the same reaction as Dale Franks when I drove through Houston a while back and found that Astroworld was gone.  When I grew up in Houston, there was absolutely nothing that would get me as excited as the prospect of a trip there.  Another piece of trivia, for years the nearby Astroworld hotel had a penthouse suite that was listed by the Guinness Book of World Records as the most expensive hotel room in the world.  Hard to believe when you see what a pit it is now.

If you are going to lecture skeptics on science, it is probably a good practice not to begin with an analogy that gets the most basic physics incorrect (hint:  the fact that falling objects of different masses fall at the same rate has been "settled science" since the late 1500s).  Also, using the children's book "If you give a mouse a cookie..." as proof of the existence of positive feedback loops will not be very persuasive to practitioners of big-boy physical sciences and other non-post-modernist researchers.

It is unbelievable that this was an actual advertisement in my lifetime.  And don't get me started on my kids reaction.  Via Hit and Run.

Via Disloyal Opposition

"Helicopter parents"
-- overinvolved, overbearing, moms and dads who just won't let their
offspring venture into the world without a protective, hovering
presence -- have made the news repeatedly over the past few years. This
being summer, a new crop of articles detailing the woes sleep-away camp
administrators are facing with clingy parents is making the rounds.

I am proud to say that we put our kids on an airplane and sent them off to camp for six weeks.  Other than a few brief letters back and forth (the only way we got our son to send a letter was to make up a fill-in-the-blank madlibs-type form for him to fill in) we had no contact with them.  And while we missed them, the kids had a blast and mom and dad had a trip without the kids for the first time in years.  The camp we send the kids to does not allow any contact whatsoever with parents in the first week, and only brief 3-minute phone calls in a 1-hour window each evening.

For a while, I have been writing that traditional silicon/germanium based solar-electric panels are not yet economic as an electricity source.

I have hopes for other technologies eventually making direct solar conversion to electricity.  However, there seems to be some activity in solar concentrating plants, where solar energy is reflected onto tubes to boil water and drive traditional steam turbines to generate electricity.  Fortune has an article on one such plant opening recently:

The completed solar arrays will be trucked to California where Ausra
is building a 177-megawatt solar power station for utility PG&E (PCG)  on 640 acres of agricultural land in San Luis Obispo County. (To see a video of the robots in action, click here.)
The arrays focus sunlight on water-filled tubes to create steam to
drive a turbine. Ausra manufacturing exec David McKay points to where
standard-issue boiler pipe will be fed into a machine and treated with
a proprietary coating that transforms it into a solar receiver.

I would love for this to work, but the article goes on to say that this approach still requires federal tax subsidies to compete with other electricity sources.  I am not very familiar with the economics of such plants.  Does anyone have a link or source that delves into the economics.  I am increasingly frustrated of late with alternate energy articles that fail to give any of the relevent economic info.  For example, I read an article in the Arizona Republic (sorry, lost the link) about Arizona's first wind project, but I could not get a sense from the article if the power was being purchased at market rates or some special inflated rate.

So, apparently Lawrence Summers was correct:

Wall Street Journal -- Girls
and boys have roughly the same average scores on state math tests, but
boys more often excelled or failed, researchers reported. The fresh
research adds to the debate about gender difference in aptitude for
mathematics, including efforts to explain the relative scarcity of
women among professors of science, math and engineering.

The
latest study, in this week's journal Science, examined scores from
seven million students who took statewide mathematics tests from grades
two through 11 in 10 states between 2005 and 2007.

The
researchers, from the University of Wisconsin and the University of
California, Berkeley, didn't find a significant overall difference
between girls' and boys' scores. But the study also found that boys'
scores were more variable than those of girls. More boys scored
extremely well -- or extremely poorly -- than girls, who were more
likely to earn scores closer to the average for all students. The study found that boys are consistently more variable than girls, in every grade and in every state studied
(see crude diagram above - showing distributions where mean
intelligence is the same, but the standard deviation of male
intelligence is greater than female intelligence).

In Minnesota, for example, 1.85% of white boys in the 11th grade hit the 99th percentile, compared with 0.9% of girls -- meaning there were more than twice as many boys among the top scorers than girls.

Of course, Summers did not get in trouble for being incorrect.  He got in trouble for saying something he was not supposed to say.  And it seems that the media are trying to avoid the same mistake, reporting what they want to believe, and not what the study actually says.

As I write in a post at Climate Skeptic, this is part and parcel of a new post-modernist science, where (as MaxedOutMamma writes) "If a
research finding could harm a class of persons, the theory is that
scientists should change the way they talk about that finding".

There is a study out of the most and lest politically correct professions, as measured by the survey responses of faculty of those departments in universities.  Mechanical Engineering:  Zero politically correct responses.  Woohoo.

I thought this was a pretty good video -- why even the innocent should not talk to the police.  Learn to love your fifth amendment rights.  He demonstrates that even the innocent can make statements that can be used to wrongly convict them.

I think there are a lot of us who scratch our heads over foreign aid.  While open to helping starving kids, its not always clear how to do so without simultaneously reinforcing and strengthening despotic regimes and dysfunctional cultures that caused the problems in the first place.  At least not without sending in the US military along with a trillion dollars or so for a decade or more.

This question could lead to a fairly interesting discourse, but in reality it does not.  Expressing the above quandary merely gets one labeled as unfeeling and insensitive.  One of the problems with having a reasonable debate is that the people and groups in the West who most support aid also are philosophical supporters of many of the failed leftish regimes that caused the aid to be needed in the first place, or else they are strong advocates for cultural relativism that feel that it is wrong to criticize any non-western culture for any reason.

While he does not offer any answers to this question, it is nice to see Kevin Myers at least try to raise these complexities, especially at a time when Barack Obama is trying to make all these questions seem easy:

I am not innocent in all this. The people of Ireland remained in
ignorance of the reality of Africa because of cowardly journalists like
me. When I went to Ethiopia just over 20 years ago, I saw many things I
never reported -- such as the menacing effect of gangs of young men
with Kalashnikovs everywhere, while women did all the work. In the very
middle of starvation and death, men spent their time drinking the local
hooch in the boonabate shebeens. Alongside the boonabates were
shanty-brothels, to which drinkers would casually repair, to briefly
relieve themselves in the scarred orifice of some wretched prostitute
(whom God preserve and protect). I saw all this and did not report it,
nor the anger of the Irish aid workers at the sexual incontinence and
fecklessness of Ethiopian men. Why? Because I wanted to write
much-acclaimed, tear-jerkingly purple prose about wide-eyed,
fly-infested children -- not cold, unpopular and even "racist"
accusations about African male culpability.

Am I able to rebut good and honourable people like John O'Shea,
who are now warning us that once again, we must feed the starving
Ethiopian children? No, of course I'm not. But I am lost in awe at the
dreadful options open to us. This is the greatest moral quandary facing
the world. We cannot allow the starving children of Ethiopia to die.

Yet
the wide-eyed children of 1984-86, who were saved by western medicines
and foodstuffs, helped begin the greatest population explosion in human
history, which will bring Ethiopia's population to 170 million by 2050.
By that time, Nigeria's population will be 340 million, (up from just 19 million in 1930). The same is true over much of Africa.

Thus
we are heading towards a demographic holocaust, with a potential
premature loss of life far exceeding that of all the wars of the 20th
Century. This terrible truth cannot be ignored.

But back in
Ireland, there are sanctimonious ginger-groups, which yearn to prevent
discussion, and even to imprison those of us who try, however
imperfectly, to expose the truth about Africa. And of that saccharine,
sickly shower, more tomorrow.

via Maggies Farm.

By the way, does it seem odd to anyone else that we in America get accused of having "unsustainable" lifestyles and we are urged to return to simpler, less technological, less energy-intensive lives like those in Africa?  I would have argued that "sustainable" means to be able to support your own people with their own effort.  By this definition, the US is the most sustainable country in the world.  Our prospective efforts not only sustain us so well that even our poorest 20% live better than the upper middle class in African nations, but we also help sustain the rest of the world.  We create so much wealth that we are able to consistently import more than we export, creating jobs around the world.  And we send more aid to other countries than most of the rest of the world combined.

I am blogging from my mom's MacIntosh.  Apple has done a lot of good things with its electronics of late, but their absolute refusal to adopt the two button mouse is just absurd.  Sorry, but cntl-click is just not the same. 

By the way, I think the iPod may be one of the best bits of industrial design in decades, but I am not about to join the Apple worship.  Microsoft gets dinged all the time for silly instances of proprietary over-control, but to my mind Apple is often worse.  However, I may not be entirely unbiased in this judgment, as I spent an hour the other day waiting in some zoo of an Apple store line just to buy a new video cable for my iPod Touch, since Apple added a chip in their latest iPods to cause third party cables to no longer function.

From the Interagency Task Force on Commodity Markets, via Mark Perry:

The Task
Force's preliminary assessment is that current oil prices and the
increase in oil prices between January 2003 and June 2008 are largely
due to fundamental supply and demand factors. During this same period,
activity on the crude oil futures market "“ as measured by the number of
contracts outstanding, trading activity, and the number of traders "“
has increased significantly. While these increases broadly coincided
with the run-up in crude oil prices, the Task Force's preliminary
analysis to date does not support the proposition that speculative
activity has systematically driven changes in oil prices.

The
world economy has expanded at its fastest pace in decades, and that
strong growth has translated into substantial increases in the demand
for oil, particularly from emerging market countries. On the supply
side, the production of oil has responded sluggishly, compounded by
production shortfalls associated with geopolitical unrest in countries
with large oil reserves. As it is very difficult to rely on substitutes
for oil in the short term, very large price increases have occurred as
the market balances supply and demand (see top two charts above).

If
a group of market participants has systematically driven prices,
detailed daily position data should show that that group's position
changes preceded price changes. The Task Force's preliminary analysis,
based on the evidence available to date, suggests that changes in
futures market participation by speculators have not systematically
preceded price changes. On the contrary, most speculative traders
typically alter their positions following price changes, suggesting
that they are responding to new information "“ just as one would expect
in an efficiently operating market.

Congress and other agencies have commissioned studies of this type on oil markets and prices approximately every 90 days or so for the last 35 years, and every one of them have come to the same conclusion:  Oil markets move based on the participant's best guesses about trends in supply and demand.  Duh.  As I wrote previously, the last hydrocarbon price manipulation case I have seen in court was aimed at a group that allegedly manipulated prices for 30 seconds at the end of a trading day whose closing price affected certain contracts.  And it is not clear that they were successful. 

John McCain put his name to the campaign finance bill that, in effect, allows only the media, not other private citizens, unlimited free speech in the run-up to the election.  So I think it is hilarious that the media seems to be lined up against McCain in the next election. 

There is nothing in any law book that says the media has to be unbiased.  In fact, today's notion of an unbiased media is a relatively new concept.  Most newspapers of the 19thy century had a clear political orientation, something that is still the case to some extent in Britain today.  It was absurd to give such a limited group a monopoly on political speech close to an election.  I have opposed this law from day 1, but I do find it funny that McCain himself maybe its first victim. 

San Francisco has a ballot initiative this November to seize all PG&E transmission lines and assets in the city such that all city power comes from a new government owned utility.  Further, the initiative would require that this new entity get 100% of its power from renewables, particularly wind and solar, by 2040.  It is similar to a 2001 initiative.

All due respect to PG&E's private property, but I would love to see this happen.  If I were governor, I would be seriously tempted to encourage them to proceed, with the only proviso that no one else in California be allowed to sell electricity to San Francisco on the hugely unlikely possibility that there might be a day without sunshine in San Francisco.   (I find it hilarious that San Francisco's solar future is trumpeted in the "fog city journal.")  This might actually be a big enough disaster that even the media would have trouble ignoring its spectacular failure.  It would also do wonders for the Arizona and Nevada economy, as major industries would move our way.

I am sure San Francisco is well on their way to success.  After all, the city just completed its largest ever solar project. 

            The solar system is expected to generate 370,000 kilowatt hours of
electricity annually, enough to power 80 San Francisco homes.

Wow.  It can power 80 whole homes, as long as its not night time or winter (when it is seldom sunny in SF).

This is a reprise of a much older post, but since I have limited time for blogging, I thought it might be timely to reprise it:

I had a conversation the other day with a person I can best describe
as a well-meaning technocrat.  Though I am not sure he would put it
this baldly, he tends to support a government by smart people imposing
superior solutions on the sub-optimizing masses.  He was lamenting that
allowing a company like GM to die is dumb, and that a little bit of
intelligent management would save all those GM jobs and assets.  Though
we did not discuss specifics, I presume in his model the government
would have some role in this new intelligent design (I guess like it
had in Amtrak?)

There are lots of sophisticated academic models for the corporation.  I have even studied a few.  Here is my simple one:

A corporation has physical plant (like factories) and workers of
various skill levels who have productive potential.  These physical and
human assets are overlaid with what we generally shortcut as
"management" but which includes not just the actual humans currently
managing the company but the organization approach, the culture, the
management processes, its systems, the traditions, its contracts, its
unions, the intellectual property, etc. etc.  In fact, by calling all
this summed together "management", we falsely create the impression
that it can easily be changed out, by firing the overpaid bums and
getting new smarter guys.  This is not the case - Just ask Ross Perot.
You could fire the top 20 guys at GM and replace them all with the
consensus all-brilliant team and I still am not sure they could fix
it. 

All these management factors, from the managers themselves to
process to history to culture could better be called the corporate
DNA*.  And DNA is very hard to change.  Walmart may be freaking
brilliant at what they do, but demand that they change tomorrow to an
upscale retailer marketing fashion products to teenage girls, and I
don't think they would ever get there.  Its just too much change in the
DNA.  Yeah, you could hire some ex Merry-go-round** executives, but you
still have a culture aimed at big box low prices, a logistics system
and infrastructure aimed at doing same, absolutely no history or
knowledge of fashion, etc. etc.  I would bet you any amount of money I
could get to the GAP faster starting from scratch than starting from
Walmart.  For example, many folks (like me) greatly prefer Target over
Walmart because Target is a slightly nicer, more relaxing place to
shop.  And even this small difference may ultimately confound Walmart.
Even this very incremental need to add some aesthetics to their
experience may overtax their DNA.

Corporate DNA acts as a value multiplier.  The best corporate DNA
has a multiplier greater than one, meaning that it increases the value
of the people and physical assets in the corporation.  When I was at a
company called Emerson Electric (an industrial conglomerate, not the
consumer electronics guys) they were famous in the business world for
having a corporate DNA that added value to certain types of industrial
companies through cost reduction and intelligent investment.  Emerson's
management, though, was always aware of the limits of their DNA, and
paid careful attention to where their DNA would have a multiplier
effect and where it would not.  Every company that has ever grown
rapidly has had a DNA that provided a multiplier greater than one...
for a while.

But things change.  Sometimes that change is slow, like a creeping
climate change, or sometimes it is rapid, like the dinosaur-killing
comet.  DNA that was robust no longer matches what the market needs, or
some other entity with better DNA comes along and out-competes you.
When this happens, when a corporation becomes senescent, when its DNA
is out of date, then its multiplier slips below one.  The corporation
is killing the value of its assets.  Smart people are made stupid by a
bad organization and systems and culture.  In the case of GM, hordes of
brilliant engineers teamed with highly-skilled production workers and
modern robotic manufacturing plants are turning out cars no one wants,
at prices no one wants to pay.

Changing your DNA is tough.  It is sometimes possible, with the
right managers and a crisis mentality, to evolve DNA over a period of
20-30 years.  One could argue that GE did this, avoiding becoming an
old-industry dinosaur.  GM has had a 30 year window (dating from the
mid-seventies oil price rise and influx of imported cars) to make a
change, and it has not been enough.  GM's DNA was programmed to make
big, ugly (IMO) cars, and that is what it has continued to do.  If its
leaders were not able or willing to change its DNA over the last 30
years, no one, no matter how brilliant, is going to do it in the next
2-3.

So what if GM dies?  Letting the GM's of the world die is one of the
best possible things we can do for our economy and the wealth of our
nation.  Assuming GM's DNA has a less than one multiplier, then
releasing GM's assets from GM's control actually increases value.
Talented engineers, after some admittedly painful personal dislocation,
find jobs designing things people want and value.  Their output has
more value, which in the long run helps everyone, including themselves.

The alternative to not letting GM die is, well, Europe (and Japan).
A LOT of Europe's productive assets are locked up in a few very large
corporations with close ties to the state which are not allowed to
fail, which are subsidized, protected from competition, etc.  In
conjunction with European laws that limit labor mobility, protecting
corporate dinosaurs has locked all of Europe's most productive human
and physical assets into organizations with DNA multipliers less than
one. 

I don't know if GM will fail (but a lot of other people have opinions) but if it does, I am confident that the end result will be positive for America.

* Those who accuse me of being more influenced by Neal Stephenson's Snow Crash than Harvard Business School may be correct.
**
Gratuitous reference aimed at forty-somethings who used to hang out at
the mall.  In my town, Merry-go-round was the place teenage girls went
if they wanted to dress like, uh, teenage girls.  I am pretty sure the
store went bust a while back.

Radley Balko has a roundup of stories of overdue freedom for the improperly incarcerated.  Its good to see this happening, though I must say I still have some mixed feelings about the Innocence Project after their staggeringly bad judgment of putting Janet Reno, Queen of Abusive Prosecution, on their board.

US Airways has chosen to try to cover rising fuel prices by unbundling their ticket price and charging for services that were here-to-fore free, or built into the base ticket price.  They now charge $15 for the first piece of checked baggage ($25 for the second), and charge for most in-cabin services, including for soft drinks.

I'm not going to argue with them about this.  Airline pricing is a wickedly complex topic, and folks who know more than I do think this is the best way to get incremental revenue.  Really, these charges don't affect me (I almost never check bags, except when on vacation with my family).  In fact, as I write this, it strikes me that the baggage charge is really a price hike mostly on non-business travelers, which is interesting as it bucks the trend of having increasing price spreads over the years between business/last-minute and tourist pricing.

Anyway, the net effect has been to absolutely jam the security screening station this morning.  Every passenger seems to be carrying every bag he or she can on board to avoid the $15 charge.  What a mess.  I can't wait to see what the boarding process is going to be like.  Glad I don't have any bags today.

By the way, a few weeks ago I shipped a 60 pound trunk to my kids' camp for about $16 via UPS.  If these airline bag charges stick, it might be time for UPS to start soliciting the send-your-luggage-ahead business in earnest.  Next time we go skiing or some such place, I am going to seriously consider sending a couple of duffle bags ahead by UPS.

Update: The luggage bins were completely full before the fourth group out of six were called.  There was a fairly long line down the jetway of people gate-checking their bags.  Apparently, the airline is not set up to charge the $15 when they gate-check the bags, so everyone is hauling all of their bags to the gate and either bringing them on the plane or checking them at the gate for free.

I am headed off to Wyoming and my family's ranch for a while:

Since data rates go down substantially when the cows are chewing on the phone line (really- the phone line is draped for miles on a fence) I am not sure how much I will blog.

In case I am offline for a while, I would like to offer this serious thought for world improvement.  We don't need more progressive taxes, or larger government, or more wiretapping, or more government control of mortgages, or mandatory service.   All we really need is ... more cowbell.

This may not be of much interest to regular readers, but is being posted so future recipients of this letter may find this article when searching in Google. 

I got this in the mail the other day (click to enlarge)

It is laid out to mirror the typical format of a state annual report or business license renewal form.  It purports to be from a government-sounding "Board of Business Compliance."  The layout and wording is very similar to the California State required annual report form, as is the $125 fee the letter claims is "now due."  Only in the really fine print near the bottom right does it admit to being a business solicitation. 

Beware.  Despite all their efforts to fool you, filling out this form and filing this $125 fee is not required by any government agency.   I am not sure if you pay money to this group whether you will actually receive any services (I did not pay).  But I will observe that there is absolutely no way that a third party could create a legally meaningful set of minutes for your company based on the information in this form.  Remember, though, that it is important for small corporations to keep their minutes in order -- but I am pretty sure this is not the best way to do it.

Business that must be obtained this way is not worth having, at least in my book. 

Postscript:  One might ask, how can anyone fall for this?  The biggest problem is the government itself.  Doing business in 12 states, 20 counties, and a number of large municipalities, I get literally a hundred "legitimate" forms like this requiring a $50-$150 filing fee from government institutions all the time.  This form, at first, looks more legitimate than say, the application for egg license I get from two states (which are in fact real government requirements). 

PPS:  Don't even get me started on yellow page vendors, directory listing providers, and companies claiming your URL registration is expiring.

UPDATE: Apparently one of the commenters included contact information at the California AG.  The AG's office has written me asking to have comments and concerns about this issue routed to a different address.  I think poor Mr. Wayne was deluged with a bunch of complaints.  Here is what they sent me as their preferred alternative contact information:

 

Complaints may be filed with the California Attorney General's Office by mail, telephone, fax, the Internet, or email:

 

MAILING ADDRESS:

 

Attorney General's Office
California Department of Justice
Attn: Public Inquiry Unit
P.O. Box 944255
Sacramento, CA 94244-2550

TELEPHONE:   1-800-952-5225 (Toll-free in CA) or (916) 322-3360

 

FAX:   (916) 323-5341

WEBSITE:   http://ag.ca.gov/consumers

 

EMAIL:   piu@doj.ca.gov