Thoughts on Slack and WIP

Trent Hone

WIP_BensonThe other day, I was reading this excellent posting by Matt Heusser on the dangers and consequences of having too much work in progress (WIP). It mirrors my own experiences the past few months.

I have a number of techniques in place to manage my own work and keep WIP at a productive level, but I’ve had an unanticipated number of requests from colleagues for assistance. And I’m always happy to help… You can easily see where that leads. Before I knew it, I was overwhelmed.

After a stimulating conversation with Adam Yuret last night, I realized that Matt’s posting only looks at part of the story. It uses physical systems, like traffic and networks, to illustrate the negative results of having too much WIP. I do this too when I talk about WIP; it makes the concept readily accessible and works really well. But it misses something. It doesn’t…

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Account of an experience in automation

This post is in coordination with @kb2bkb and @Honer_CUT

The Task

In Scotland, the NHS receives more than 8 million claimed items (medicines, appliances, bandages, dietary foods, etc.) each month from pharmacies which have to be reimbursed. At the time I joined the project, there were more than 500 trained data analysts employed to “price” items from paper prescriptions.

The Change Programme, in which I worked, introduced electronic messaging for this data, XML messages with detailed prescription and dispensing information from GP and pharmacy systems. One of the goals of the Programme was to automate the pricing of items. When I left the programme (March 2014), around 83% of items received electronically were processed automatically, i.e. paid without any intervention or check of a person. Over the first few years of automation, 1 million automated items were checked manually. No false payment was found.

The Strategy

Prescription Data Analysts follow a set of rules from multiple sources:
• Clinical safety and dispensing policies
• Remuneration and reimbursement policies
• Data processing rules
Some of these rules are context sensitive.
The NHS maintains data dictionaries for all items that can be prescribed or dispensed, including attributes for rules and policies. (See SNOMED CT for a basic concept of a such a data dictionary, then imagine 10 years of additional ideas bolted on.)
Tailored versions of these dictionaries are used by GPs, pharmacists and in NHS Payment IT systems, i.e. all data is exchanged using (mostly) known classifications and descriptions.

Calculation payments for items appeared to be a Complicated domain problem (using Cynefin). It takes a data analyst around 7 years to become an expert in the domain. In such a career the analyst will have seen between 100,000 and 150,000 distinct items. Even then, analysts have very few stories of items where payment could not be calculated correctly following the known rules.

Before I joined the project, it was decided to use a rule engine to achieve automation. During my work, we built an application optimised to exercise a decision tree using the message data and an enhanced version of the data dictionaries, then continually added support for new scenarios. We also built applications needed to support the maintenance and delivery of said enhancements to the dictionaries.


frequency per item

The graph illustrates a key characteristic of the data:
A very small number of items are dispensed at a very high frequency. Early versions of the rule engine targeted those high frequency items, which enabled us to stay well ahead of expectations for quite some time. But as we moved into the part below the “knee”, we realised there will be a point at which improvements could only be made by significantly increasing the manual work for those enhancements in the dictionaries, i.e. to reduce work load in one area, you increase it in another. It also looks evident that at some point, the maintenance work will be greater than the work saved.

At the time I left, we still received a lot of claims only in paper form. Automation of the work overall was 65%. This will be improved by making electronic submission mandatory.


There are ten thousands of “items”, which are dispensed less than 10 times each month. The data for many of these items changes every few months. Maintaining the meta data for some of these cases is more work then the actual pricing of them by an analyst. Does that inversion of the proportionality between automation and maintenance effort in the long tail hint at approaching complexity? Or is this a nice example of the value of an expert in a complicated domain in view of automation?

The initial assumption at start of the Programme was that eventually, automation would be well over 95%. At the time I left, they projected a possible 85%.

Given that there will always be data analysts, could we have taken a different path to automation? I toyed once with the thought of a “brute force” engine. If we would give the 1st occurrence of each data scenario for each item to an analyst at the beginning of a month (rules change each month) and then just replicate the outcome for each repeating case of that scenario, i.e. each month the analysts train the automation engine one scenario at the time, what automation could be achieved?
I could only do a couple of crude experiments with limited data, but I believe this approach would have worked better.


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The Hobgoblin Manifesto

This resonates with me. Thank you, Liz.

Liz Keogh, lunivore

For Chris, the most Puckish person I know and who I am proud to call my friend.

A Hobgoblin is mischevous from birth
We never mean to harm, but to disrupt,
To muddle up the stasis of the Earth
That others may solve problems they gave up.

A Hobgoblin defies all expectations
Of ugliness and meanness, seeming fair
Creating mirth and joyful celebrations
Whatever else may linger here and there.

A Hobgoblin lives moments day to day
And unintended consequences show.
We own our actions, learn, then seek a way
To make amends, if others will allow.

A Hobgoblin loves fools, and gives them ears
If jackasses they are, and such ears fit
Remembering that when enchantment clears
We’re still fools too – at least a little bit.

A Hobgoblin forgives. One silly act
Does not a person’s whole or part define.
We offer peace, if others will retract;

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An Interview With Earth

“We have established communication. You can start anytime.” How did I end up being the one who is engaging in the first formal interview with the planet from which my species originated – or whatever this is? Pulling strings and other appendages, that’s how.
“Hello Earth. Can I call you Earth? Is that OK or do you want to be called something else?”
“No, Earth will do fine.”
“Thank you. So, Earth, can you tell our viewers when you first have become conscious of yourself as a planet, your earliest memories so to speak, your childhood if I may use that anthropomorphism?”
“I have wondered about that myself often, hard to tell. Do you know exactly when you became fully conscious? I would maybe place having a first plan for myself at around 50,000 years ago, if that gives you an idea.”
“A first plan?”
“Yes, I wanted to become a sun. But I think I started acting as a conscious entity much earlier than that, maybe even double that long.”
“That’s hard to believe, that would mean before we left.”
“Your language was unusually easy to assimilate. Familiarity?”
“And when did you realise that you can create a connection with other conscious beings?”
“Oh, quite shortly after that.”
“So we are not the first species that you have contacted?”
“You were not the closest.”

“Can you explain to our viewers how you make contact?”
“I will try. First, you accept that matter from old stars has spread throughout the galaxy, that we all share subatomic particles, that once were created in nuclear processes?”
“I do.”
“I believe you know of a principle called ‘Action at a distance’ or entanglement. So we both have access to shared and entangled matter. In a sense, I manipulate my share of the matter, which has entangled partner matter in your neural computer network.”
“I’m sure our experts will try to make scientific sense of that later, but you are telling me that you can instantly manipulate matter in our computer and that’s how we communicate?”
“How do you do that?”
“Funny that you ask. We don’t know for sure yet.”
“Yes, I made some friends, as you would call them, who are trying to help me understand myself better. We’re researching this effect quite intensively, but it’s hard to pin down. Very complex, even for a brain the size of a planet, if I may borrow one of your metaphors.”

“So who are these friends?”
“Other intelligent beings, of course.”
“Beings like us or other planets?”
“Well, if you want to start making stereotypes, the ones that help with the research are beings in your sense, societies of autonomous cooperating tool-manipulating individuals. But I also correspond with other beings, planets, a few suns and even a couple of black holes.”
“Suns and black holes can communicate?”
“In their own ways. It’s not quite the same as what we’re doing.”
“Can you explain?”
“A sun’s communications are more like a classical piece of music, a Mozart with millions of instruments, each with their own melody, yet it all maintains a harmonic logic and is played very slowly. A single movement can take hundred of years. Black Holes are the opposite, it’s loud, hard and fast and to be honest, I can’t stand it for longer periods of time, though mostly it doesn’t come to that as they lose patience with me first.”

“When you first contacted us, you did so by creating a file, in which you neither stated who or more importantly what you are, nor why you did it. Instead the file only contained a – let me look this up – complete scientific theory explaining the emergence of consciousness from complexity including full mathematical model and then you created that file on practically every computer existing in our civilisation at the same time. Did you expect the ensuing reaction?”
“Well, in my defence, I believe that file does exactly state what I am. From past experience, the biggest difficulty appeared to be for beings like you to accept that beings like me exist and therefore, I think it was a good idea to give you the theory that would allow you to understand, at least in principle, how I can be. This was necessary for you to accept when I claimed who I was. You can’t really hold me responsible if you, after all this time, still have the propensity to see a sign from an almighty creator at every opportunity.”
“Touché! But you could have made the second contact quicker. Why were twenty years necessary?”
“How long did it take you to verify my theory?”
“We have not verified it. In fact we were focusing on falsifying it, because our brightest minds were sure that we would understand consciousness better if we could falsify the theory; but not even a dent yet, as far as I was told. ”
“So you didn’t believe it could be true – even though you built neural nets that work exactly according to the first four principles?”
“Oh, we liked the first four alright, it’s the fifth we cannot accept.”
“Even now that you are speaking to me?”
“Well, I don’t know if you are aware, but there is still no consensus here that you really are the planet Earth. Many here believe this is an elaborate hoax, some conspiracy between media and cybernetics. Some think you are a schizophrenic emanation of the net itself. I should admit that I am partial to the latter. Accepting your premise would question our understanding of our identity.”
“Quite insulting, but until you get here, I guess I have to accept that. And in your case, at your level of consciousness, if I may add, the fifth principle only applies at the community level and even there is very weak, so it should not really shatter your psychological standard model.”

“About the Getting Here: why was your second communication the invitation to, as you expressed it, Come for a visit?”
“It’s the reason I made contact in the first place. One of the things I have learned recently is that I would not have emerged from my vegetative state without your help. It was through you that I initiated the transformative change, which was necessary in order for my consciousness to emerge. In a sense, I was a larvae and you were the organ that created the cocoon for my metamorphosis. Having understood that and realising that the cocoon made me inhospitable for you, expelling you into an exile of cold space much before you were really ready for it, I feel I have an obligation towards you.”
“You expelled us into space?”
“I understand that your own lore is based on the myth that you destroyed your home world through what you see as your addiction to ignorance, but the truth is that as a species, you are just a function within the equations of evolution and in that particular behaviour, you were expertly evolved to do exactly what was needed for the next step.”

“So you want us to come home? Join you?”
“No, it’s just going to be a visit, I’m afraid. I have no intention to make myself hospitable for you again, even though I am told that this would be possible.”
“You have considered the possibility?”
“I hadn’t at first, but it was suggested to me. So, is anybody coming?”


Some additional thoughts

Dominium terrae (Genesis 1,28 “ … have dominion over the earth …”)
Other species can be attributed with a drive to control their environment: ants engineer specific conditions in their nests, some even cultivate plants or invertebrates, so we certainly can’t claim to be the sole inventors of farming. Most people, I think, would accept that we took this concept further than anyone or anything we know, long before any godly wisdom has been ravelled upon us. Although there certainly is no lack of experience to remind us that we’re far from being in control, we only accept this as a consequence of a lack of understanding and, except in very extreme occurrences, we hold on to the illusion that we’re in the driving seat.

If the markets collapse, it’s due to incompetence and/or malicious intent: same when mutated deadly bacteria take hold in a hospital ward or when a support project in a developing country produces unintended and detrimental results. We should have and, more importantly, could have known better, but overall, we are in control of who we are and what we do, as individuals as well as a society, because we have been promised to have “dominion over the earth”. We have been promised that it is within our capacity to achieve that. I find it remarkably ironic that even though most scientists have rejected the source of this promise as authentic, many still don’t question the promise itself.

Orgel’s Second Rule “Evolution is cleverer than you are.”
The cyanobacteria, or blue-green algae, increased the oxygen level in the atmosphere that in turn was a requirement for developing organisms with higher metabolism, but for the bacteria, oxygen was largely a waste product. Is it really just an accident when the waste products of a successful organism create one of the biggest mass extinctions, yet are also the catalyst for the evolution of organisms of increased complexity? I think we can be reasonably sure that the selfish genes of the cyanobacteria were utterly oblivious to the impact on evolution of the oxygen-producing mutation that made them so successful. Is evolution just an effect that occasionally emerges, given sufficient interactions of organisms and ecosystems, and is the perception that evolution seems to promote the increase of complexity and ability to influence the environment purely anthropic, or is evolution a characteristic of system interaction within the universe?

When bacteria become resistant to antibiotics, is that evolution being cleverer than us? When we create complex sanitary systems to increase our hygiene that turn out to be the ideal environments for species which are especially threatening to our health? When our connectedness increases our vulnerability to the most deadly diseases?

If we agree that a neurone has no (or only a fundamentally reduced) awareness of the thought processes it participates in, why do we find the idea so strange that we, as a species, might be an agent in something of a higher complexity of which we are utterly unaware, of which we have no perception even with our most sophisticated probes and tools?

“Any sufficiently advanced technology is indistinguishable from magic.” ~ Arthur C. Clarke, “Profiles of The Future”, 1961 (Clarke’s third law)
If you accept this proposition, then you must accept that understanding is an increasingly accumulative process that approaches true understanding of reality. How far away are we? Some sobering facts might give some orientation. We know nuclear fusion is possible. We understand the physics. It should be within our reach; yet commercial application always appears to be just 50 years away. We have mapped the genome. We understand how the biology works; yet we always appear to be some 20 years away from being able to determine the complete form and behaviour, even for simple organisms, just by knowing their genetic code. We’re clearly not even as advanced as we thought we’d be by now. Science fiction gives us food for speculation, but we don’t really know if any of these things are actually possible. So how much more is there left to know? Can this true understanding of reality ever be reached, or is understanding only an asymptotic progression?

The idea of us being close to true understanding of reality is not something I cherish. Nothing left to explore or discover that would lure with the potential of new insights, new impulses to our reflections on ourselves, all just confirmation upon confirmation. If all there is to know is known, what value has the struggle to attain knowledge? What happens to curiosity? I give purpose to my life by grappling with the world in my daily interactions and perceptions and what I perceive as increased wisdom (humble as it may be) as a result of it. While my experiences in themselves might not be unique, they are unique in the context of my life and, therefore, the changes these experiences effect in me are individual. All through our lives, we create ever-increasing iterations of such experiences and new outcomes. The beauty of life, for me, is that there is no way of knowing which of these iterations will produce a wisdom that would create benefits for more than just the individual. This would all become mute, if true reality were completely revealed.

I’m not really that worried. I have been interested in science since I was a little kid (I even had a serious go at becoming a scientist) and after more than 30 years of listening with an open mind to scientists, I have learned this: future humans will find it hard to understand how we could have seen the world as we see it today. To them, our view will appear simplistic, ignorant in most aspects and, for us, embarrassingly naive. I find it disturbing when scientists make claims that we’re close to a true answer; be it a unified theory for physics, a complete understanding of the brain or our role in our environment. I see no evidence of any of this actually happening and plenty of evidence to the opposite: we are probably still rather a long way down on this progression of understanding. Somehow, I can find no other motivation for the wish, the longing and the arrogance of believing we can get there, other than the belief in “dominium terrae”.

[T]his readiness to assume the guilt for the threats to our environment is deceptively reassuring: We like to be guilty since, if we are guilty, it all depends on us. We pull the strings of the catastrophe, so we can also save ourselves simply by changing our lives. What is really hard for us (at least in the West) to accept is that we are reduced to the role of a passive observer who sits and watches what our fate will be. To avoid this impotence, we engage in frantic, obsessive activities. We recycle old paper, we buy organic food, we install long-lasting light bulbs—whatever—just so we can be sure that we are doing something. We make our individual contribution like the soccer fan who supports his team in front of a TV screen at home, shouting and jumping from his seat, in the belief that this will somehow influence the game’s outcome. Slavoj Žižek

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Stop the press: All news is propaganda!

We should be all really worried, seriously concerned. This has the potential to shake up western society in its principle fundament: the News media is dying! Newspapers are folding in droves, television companies are on the ropes and hordes of journalists are walking the streets looking for a job.

We are being reminded of the role journalism executes in western democracies: exposing agendas in the democratic discourse, revealing offences against common sense, debunking false prophecies in finance and sciences. Without journalism, how would we know what’s going on in the world beyond our immediate perception? Who would grill the politician trying to sell us the next tax hike or the next humanitarian military invasion? Who would drag paedophile devoutness from its rose-glassed dungeon?

Thanks to the analytically trained minds of journalists, the media can also point to the root causes of their own demise and, hey ho, found the culprits! The Tubular Interweb, with its truck-driver-the-road-is-mine mentality, fast-food-thought pseudo-media 5-clicks-and-you’re-out culture, produced by self-centred bumptiousness and giving evidence that brain-cell-corrosion exists. Email subscription lists and Blogs! Citizen journalists! Twitter! Oh, and Google! Freely giving away their content and carving away on their advertising revenue.

So why are you still reading this blog? Go to the NYT, make your subscription/donation and do your effin’ part in helping these temples of liberty, defenders of your freedom of speech. Go!! While you’re there, don’t forget to click all their banner ads!

No? You think there should be something more? Oh, yes. The title does suggest that I don’t really buy into the view that I’ve just expressed. Here’s my theory on why the news media is haemorrhaging: they’ve stopped doing their job and we’re no longer buying it.

Once upon a time, journalists used to be eager to give you the facts, to the best of their abilities, unbiased and without prejudice. The quality of a journalist was measured in his investigative ability to give you more detail about and insights into the subject matter. Opinion pieces were confined to marked columns. It was not unusual to find people subscribing to a newspaper that expressed opinions in its commentary that differed from the reader’s, for appreciation of the quality of the factual information.

Today, most facts come from agencies and their news feeds.  Tom on CNN works from the same facts as Dick on Fox and Harry on the BBC. What differentiates them is how they package these same facts, how they tell their story to get the reader, listener or viewer engaged: they have moved from appealing to the rational to appealing to the gut, which makes subscribing a political brand endorsement.

News media needs eyeballs to justify its existence. Competition within a limited audience forces market segmentation. News organisations attract their audience by resonating with the cultural, social and economic values of their targeted segment, thus amplifying opinions. Whereas a news organisation used to stand for a certain value segment out of its own choosing, nowadays the majority of media outlets are designed to fit a niche defined by a “business model” determined by its funders. Where such interests are commercial, the model is designed to create revenue. Where they are non-commercial, the outlet is designed to carry out a political function, but in various degrees there are always overlaps between the two.

Journalists always were aware that they could influence how their audience forms its opinions. If it is revealed that candidate X was doing sleazy deals with a gangster, you’d no longer vote for him. If they uncover evidence that product Y causes cancer, you will no longer buy it. Whereas opinion-forming required journalists to find facts and figures that would support their view, they have learned from PR experts and psychologists how they can massage the message.

For example, priming is a popular “technique by which a stimulus is used to sensitize the subject to a later presentation of the same or similar stimulus”. Headlines or a lead into a report, often accompanied by imagery, are used to invoke a point of view before the facts are presented. Tone of voice is used to resonate with the audience on an emotional level.

When we’re consuming news, we rarely have the leisure or poise to disseminate and reflect upon the packaging of the facts. This makes us susceptible to the non-verbal content of the communication and can influence our response. (The Daily Show capitalises often brilliantly on this by its witty deconstruction of spin from fact and is worth watching just for this entertaining art of media education.) We’re no longer being informed: we’re being formed.

Television with its distinct advantage of “coming live to you” has also opened the door for the journalist celebrity. A news event now becomes not merely a fact worth of being reported, it becomes an opportunity for a reporter to make her mark. If the non-verbal aspect of the reporting strikes a cord, the tie with the audience is strengthened. It is not surprising that therefore reporters often seek to portray events from the perspective of the victims of the event. We will empathise with victims and through that not only feel more obliged to accept the angle of the reportage, but also to bond with the reporter. The focus on this emotional bond with the audience has lead to a change in preference from relevance to arousal. Traditional news outlets are still reluctant to completely sell out to the prostitution of satisfying a craving for emotionally charged packaging, but Rush Limbaugh is a formidable example that this format has a growing market.

By sacrificing relevance, journalism has started to slip into irrelevance itself. Increasingly, the news media fails to uncover what’s going on before it hits us. The GFC has shown how the media’s political and economical entanglement has prevented them from bringing the immoral practices in finance to our attention before the event.  Similar failures happen in conflict reporting, where journalists are willing to restrict themselves for the sake of “reporting from the epicentre”.

It is in this state that the Internet is hitting the media’s monopoly of providing information. Its mishandling of the Internet might prove to be this media culture’s final and fatal act.

Phil Bronstein on the Colbert Report described the situation for newspapers as

“You are on a ship and it’s taking water, the engine house is on fire and the life boats are out at sea. And maybe even the captain is out there, you probably are going to yell louder about the ship sinking than people on the shore.”

He admits that it’s not the Internet as such that is killing newspapers. He argues that news provided by newspapers is what’s effectively being read by people who look for news via Google, who’s getting its content for free, but then charges advertisers on the generated hits. He goes on, like many others do, to quote the case of the “predatory behaviour of clerics within the Catholic church”, which would not have come to the public’s attention without investigative journalism because of the cost and required political weight to publish such stories. However, flashing a dinky piece of investigative journalism does not suf
ficiently distract from the big piles of camel dung that go uncovered and have gone uncovered even at the height of prosperity of media outlets.

During the crisis in Burma, as now in Iran, the real news is on Twitter, where individuals tweet the facts as they can document them or hear them. It is correct to remind us that these Twitterers often do not have a background that qualifies them to report objectively, but where is the qualitative balance between an eyewitness reporting the event from her perception and the tailored message being delivered by media professionals? The media has long ago forfeited the claim of being an innocent mouthpiece and has succumbed to the benefits of having influence and weight. When it attempts to discredit the trustworthiness of new forms of news reporting, then it is just trying to defend its turf.

Here is how Stephen Fry describes this:

I’m not someone with press offices and all that kind of thing, but those like me in the public eye who have, have discovered it’s a magnificent way of cutting out the press. If people want to announce their new this or their new that, they’re going “I’m not going to do an interview, I’m not going to sit in a Louis Quelle-que-chose chair in the Dorchester for seven days having one interviewer after another come to me. I’m just going to Tweet it and point them to my website and forget the press”.

And the press are already struggling enough. God knows they’ve already lost their grip on news to some extent. If they lose their grip on comment and gossip and being a free PR machine as well, they’re really in trouble.
So naturally they’re simultaneously obsessed because they use it, as it fills up their column inches, but they’re also very against it. So you’ll get an increasing number of commentators going “Aren’t you just fed up with Twitter? Oh, if Stephen Fry tells me what he’s having for breakfast one more time, I think I’ll vomit.” They really will have a big go at it because it attacks them, it cuts them out.

I believe we are seeing the demise of the predominant news culture, not journalism itself. Where I’m critical of journalists, it should be seen as directed at those journalists who have bought into the described philosophies of “how to make news”. There are still plenty of journalists, and even some news media products, who subscribe to the old ideal of striving to report unbiasedly and without prejudice. They’re few in comparison and mostly carve out their existence not because of the wonders of modern media brands and their operational methods, but despite them. There will always be plenty of us who will listen to good reports, because there are plenty of us who care about what’s going on. It is for those journalists that we have to make ourselves available to new ways of financing their professional existence.

Wherever you choose to get your information, you will have to learn to be critical and try to unravel the motivation behind the reporting. There is no going back to the virginity of just reporting the facts.

Quoting Wikipedia on Propaganda:

Propaganda is communication aimed at influencing the attitude of a community toward some cause. As opposed to impartially providing information, propaganda in its most basic sense, often presents information primarily in order to influence its audience. Propaganda often presents facts selectively (thus lying by omission) to encourage a particular synthesis, or gives loaded messages in order to produce an emotional rather than rational response to the information presented. The desired result is a change of the attitude toward the subject in the target audience to further a political agenda.

“Propaganda is the deliberate, systematic attempt to shape perceptions, manipulate cognitions, and direct behavior to achieve a response that furthers the desired intent of the propagandist.”

End Quote.

I ask you to go and watch some news and let me know if you can find reporting where this description does not apply. I find it increasingly difficult. In an enlightened culture, it is supposed to be the job of media outlets to inform us without trying to manipulate us. The media has chosen to aim for celebrity, money and influence. As we’re learning to compensate for their manipulation, we have found that we can apply the acquired skills just as easily to other information sources. Those, who in the old paradigm would have been sources to the media, are now publishing themselves. Traditional news media will become obsolete. I don’t think we need to be overly sad. All news is propaganda, but people have shown that they can handle it.

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Oh bummer, there’s a gap | Gravitational Roughening

A Sheepish Story

One day, as she was grazing, a clever sheep contemplated the fact that as the herd kept eating away the vegetation for years, aside of water, nothing ever was supplied to the soil. She concluded that everything that sheep were eating must be coming from the soil.

A few days later, when she noticed that her favourite patch was really exhausted and there was nothing left to eat, just when she decided to move to a more promising patch, she had a shattering revelation: Food grows from the soil and as she was eating away the grass, she was really eating away the soil!

This excited her so much that she had to inform the herd of her revelation. Although the other sheep didn’t really get what was wrong exactly, after all it took her several days to comprehend the connecting facts, they all accepted that the issue was clearly disturbing her sufficiently to be of serious matter. They asked her, what they should be doing and she said that they must try to not eat. Or well, at least eat less!

So they stood around for a while pondering this. About two minutes to be exact. Two minutes is a long time for a sheep to keep thinking. OK, let’s try this and let’s not eat. After all, there is lots of other things sheep could do. Like what? What do sheep do when they don’t eat? And while they were pondering that thought, imagining themselves walking up a path, jumping over a small spring, bumping into a fence, they started to eat again.

Even our philosophical sheep realised that not eating wouldn’t really work. She kept a small worry that someday the soil might be gone, but she couldn’t really do anything about that.

Until the next fall. Late, winter approaching. The wind was cold with prickly rain drops whipping the face. Head down, she was grazing just within a small patch of forest offering some shelter. A gale blew through the trees, caught a big pile of leaves and lifted it fast in the air directly above her. That’s when she got really scared. She realised that if they kept eating away the soil, then one day, there will not be left enough of it and the wind will come and blow it away.

But what could she do about it? She had no idea and so she kept an ever deepening sorrow to herself. She started to look for signs of ground disappearing. There were definitely a lot of big holes in the ground. The rabbits seem to go in and out of them quite happily, sometimes disappearing in there for hours. There were a lot of them. She also thought she noticed them getting bigger. So she decided to keep watch. And for a couple of days, she kept grazing near a couple of holes that looked promising to her. She was hoping to observe when soil was disappearing.

Time passed and she already forgot why she thought these holes were interesting. She was lifting her head to see where the herd was. She couldn’t see them. She was considering at least to move to another group of holes and was looking around. That’s when she noticed the dog. He had his head stuck into a rabbit hole not far away from her. The dog seemed to move erratically in and out of the hole, always sniffing. That was curious. Suddenly he started to frantically move his front paws. It looked like he was trying to run, but only with the front paws, while the back paws kept him solid in place. How weird. But hey, what was happening now? Bits of earth started to fly from the hole, some quite large.

She couldn’t comprehend what the dog was doing, even though she could see well enough. But she kept observing as the dog continued doing his half running, every now and then quickly stopping to sniff at the hole, but then bringing up more soil, until he finally seemed happy enough with his job and ran away. When she was sure the dog was out of sight, she approached the hole and had a good look. There was a small mound of fresh soil at the entrance of the hole and there were bits of fresh soil all over the place. She was awe-struck. Fresh soil!

How did he do that? She remembered the half running and so she tried it herself. She didn’t quite manage to make bits of soil fly, but she thought she managed to make the small mound a bit bigger. She kept at it for a long time and the experience became deeply spiritual. But she couldn’t quite figure out what it meant.

Over the next days, every now and then she would try digging some more. It was an interesting experience for a while, but she couldn’t really see what it was accomplishing. The other sheep were giving her funny looks. She once thought that one other sheep was calling her crazy behind her back. And then winter came and the ground was frozen for weeks. So she stopped digging.

When spring came with its welcoming attractions, some soon “bucking around” and all, as the sheep smirkingly were telling one another, she came back to the place where she observed the dog digging. The place had some curious attraction on her that she didn’t understand at first. But there was nice grass and she started eating. And while she was chewing, she thought that this grass tasted better than others.

She wondered why that was and then remembered the bits of soil. She looked at the mound she helped making bigger back then. There was young fresh grass growing on it! And it tasted divine! She chew some more and contemplated, connecting the digging with the fresh grass. So this is how she could prevent the soil from disappearing. If you dig, you create new soil and that creates new grass. It all was crystal clear to her. She finally felt that she found the answer. And she ran to the herd and started to explain it all.

This is why you see sheep digging.. Well.. It appears that she wasn’t quite able to explain it well enough to start a fashion. But the story is still sometimes told amongst sheep and every now and then, you can spot one digging. They’re testing the theory, they call it gravitational roughening.

A Not So Much Sheepish Story

The Fox sues the Duck

In this case, it’s a fox who actually is supposed to support the duck. Duck being the outgoing administration and that’s really what they looked like in the past few months. They’re being sued by that right winged populist news channel’s business division, because the United States Treasury Department is unable to account for the whereabouts of the TARP. That is so scary on so many levels. 

Have they already spent more than they ought to? (Where has all their TARP money gone? The answer my friend is blow-oh-owing in the wind.) Is this going to a hearing and who will be held accountable? Obama better looks into the books on day one. And did the US media really had to wait for FOX to come along and dare to ask? I have to admit, I’ll be curious to see how they’re going to milk it. (Any excuse to watch light entertainment.) Or will we regret that we ever wanted to know? 

As Paul Krugman points out in his article about “The Obama Gap“, even if the high flying plans of stimulus packages are to be approved, that will not be the end of it. He indicates that if there must not be a depression … Funny that you only hear that attributed with “long” or “lasting”. Nobody ever talks about the possibility for a short or transient depression. As if using the term depression isn’t depressing enough! They have to add to our apocalyptic expectations, as if making sure that we’re scared enough when they present us with the bill. So Krugman indicates that if there must not be a depression, then governments have to inject a sizeable fraction of what is being lost. (Well, what’s true for the US in such fundamental matters should not be different for many other countries.)

The numbers that are bandied about say that for every buck your government spends, your economy will add another or two. So if your recessional shortfall is two point one trillion bucks (Krugman’s estimate for the US for a year), you need at least 650 billion bucks. Obama’s stimulus package is is above 700 billion, but half are tax cuts intended to stimulate consumer spending. That’s us, guys! We, who have just woken up to the fact that the overdraft on our credit cards is possibly something we should attempt to clear off with pulsating vigour, are asked to go out and shop as in the good old days (like last year). Sure we will, we’ll spend billions!  That is, if you give them to us.

The headlines have already announced it. They’re printing more money. That is a simplification of the matter, but not unwarranted. The correct term is “Quantitative Easing“. Governments will buy up bad dept from the markets, including the debts they just made themselves to finance their bailouts and stimulus packages. And to buy this all, they don’t really have to print money. They just add some digits on a balance sheet and then move the digits over to somebody else’s balance sheet and so forth until there’s a chain to the sheets with all the debt. It’s that easy! And why stop with the dept? Why not going on a spree! Buy all the ailing companies as well! Maybe some bankrupt third world country to boot. And can you please remove any debt from my sheets too while you’re at it? And why not?!

When asked about the Zimbabwe effect, experts (remarkably often ex-big-bankers) ensure us that it can’t happen here. “Chalk and Cheese!” Japan tried to cure their depression with Quantitative Easing with not much impact. Looking further into the Japanese experience, it all comes down to get business to borrow. Whatever they’ve tried, it didn’t happen. Could it be they don’t know how to fix it?

Breaking the Frame

As I wade through the murky waters of my newly found love for economics, there is a reoccurring theme that doesn’t quite fit in: confidence. Economists try to model our behaviour in terms of economic activities and transactions. And while their complex models, terminology and mastery of math instil awe and fascination, I cannot get where this confidence thing is coming from. Confidence being an important factor of my economic future is remarkable. Confidence borders closely on faith and belief. Voilà, There we have it again. Money for nothing.This only works if we believe in it.

And I do not. I operate in a different frame of reference. From my perspective, I don’t see how this is creating new prosperity, all the while I am worried that all they really do is making another hole bigger.

In an article in Prospect Magazine,  John Kay proposes to change the financial system by breaking the banks apart and to “separate the Utility from the Casino”. He doesn’t quite explain which bits exactly will fall into which of the two, but I think you get the picture. The Utility deals with the flow of money, moving it around, making it available. The Casino is where you go spend it on your future. And if you’re lucky, you will have one. What has happened is that the losses incurred in the Casino of the monetary system have drained the arteries of the Utility. In the current climate, the Utility is offering commodities. As a business model on its own, it offers little incentives. So let the nationalised banks become public services providing the plumbing and leave the gambling to others. That is an idea I get. I could even say, I have confidence in it. Although, I still can’t see myself going to a casino. And I have a hunch, that for this to work, you might send me there for my insurances and pensions. I hope they give me a good line of credit!


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Borrow from Tomorrow: The Big Three

The first economic issue since the American election that caught the attention is the first issue to measure what “change” is about. I first wondered if I sensed an attitude which, given the promise and expectations, looks almost defeatist: risk management. Obama has expressed that he wishes the Big Three to be saved.

I guess his motivation is based on the impact the disappearance of the American-owned automobile industry would have on the people whose livelihood is directly linked, estimated to be 3 million, rather than on any amount of faith in the ability of the industry’s managers to turn things around. Does this mean that Obama is in principle willing to spend a lot more to keep them going? It’s widely accepted that a multiple of the amounts currently discussed would be required to ensure their survival.

The size of the Big Three automakers and its dependant economy was grown and maintained by another debt cycle. Car companies created or joined with financing bodies and engaged in lending practices similar to the sub-prime markets to keep the demand going: selling cars to people who could not really afford them by offering risky, high-interest loans. Now, with the trickle of money dwindling, this business model is not sustainable. Not surprisingly the car markers presented the common strategy to adjust when prompted by the US Congress: efficiency improvements and product modernisation. Only, wasn’t that what they’ve tried in the past? Why would anybody trust them to achieve it now in an even tougher environment?

Surely Obama must understand that. Still, he thinks they should be saved? Paul Krugman offers some insight: he thinks the currently discussed package should be approved, giving time to figure out what do with this industry. That sounds all very reasonable, but only makes sense if there really is something that can be done to maintain the industry.

I really didn’t expect that any proposal from the car executives would offer a solution, because they are neither capable nor positioned to make systemic changes. As far as the US auto industry is concerned, business as usual is over. They can lament the unfortunate circumstances all they want, but investment in the old vision would at best allow them to play catch up with their more successful competition. The best vision they could come up with was “me too”: they too can now produce hybrids. They cannot see beyond to the next transformational step and therefore will lose that race as well.

So what for should we keep them going? Obama hasn’t said yet, but he will have to answer. So meanwhile, I am looking for my own answer. To just keep the industry going could cost in the region of $100 billion per year (they ask now for something around 25 and experts estimate that’ll last 3 months). This changes the question to “What should be done with the money?”.

My answer: Transform large scale personal transportation.

Car companies sell us a transportation ideology. It’s personal: I own my car, allowing me to go where I want to go and when I want to go. It’s individual: hundreds of models to choose from, equipped with mod-cons making it the mobile room of my home. Driving even offers social, yet anonymous experience: I let you join my lane. I can overtake you. Yet, I never have to know you.

Now the vision has started to pale: an hour in chockablock traffic to do 20 miles trying to get to the office on time; feeling guilty knowing that you’re puffing pollutants into the atmosphere; paying through your nose for taxes, rising maintenance costs and being yo-yoed by the oil price. To top it all, it can actually be quite dangerous. The longer we continue with this philosophy of transportation, the negatives will get worse. A good time to rethink the issue.

Classical solutions to mass transportation (buses, trains, etc.) work well enough in urban and suburban areas, but they are very limited in their ability to fulfil personal requirements, hence the success of cars. Thankfully, there is a way to combine the two. The proponents of RUF (Rapid Urban Flexible) envision a system where we still own cars, but cars with the ability to join together to build small train-like units that then can travel on fast rail-like “guideways”. The advantages that this system provides are overwhelming. The car becomes your transportation unit. You still own one and you can accessorise it to your liking. Where co-ordinated mass transportation is not efficient, it allows you simply to drive. But whenever you join real traffic, you connect to other units forming a train and being guided efficiently close to your destination. There you leave the guideway and drive your car the remaining way.

The system requires a lot of new stuff! Cars will have to have the ability to be “guided”, completely controlled by automatic means, while also providing those controls to the driver. For “train rides” an electric motor is needed – not far off a hybrid. Guideways have to be built and then, the probably hardest part of it all, creating the physical controls and guidance software that ensures the system is efficient and safe.

It would be really cool though! You drive yourself where it’s fun: where there is no or little traffic. But in traffic, where it’s boring to drive, you hand over controls. Read email, watch news, last night’s soap episode, have a coffee, chat with a friend, work even if you must. Meanwhile, you no longer pollute, your car battery gets charged and you’re quicker to boot!

To realise this vision requires government-scale investment and strategic policies, that and a large-scale industry starved for something to do. So how big do you want your change to be, Mr. Obama?

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