BizIdeas

Climategate II

noreply@blogger.com (Terry L. Johnson) — Sat, 05 Dec 2009 22:39:00 +0000

A good bit of satire from Mr. Stewart. Too bad the science was treated as satire.

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Climategate

noreply@blogger.com (Terry L. Johnson) — Fri, 27 Nov 2009 19:22:00 +0000

Remember the "tech bubble" or the "housing bubble? If so, keep those in mind when you you say out the following words out loud, "global warming bubble".

Bubbles occur when there is speculation in the marketplace. Essentially, the market gets ahead of the product and demand outstrips supply.

The conventional wisdom was that the prices of technology stocks would continue up unabated. The conventional wisdom was that housing prices would always continue to rise. Looking backwards at the tech and housing bubbles it seems impossible that we missed the warning signs. So is the case with the global warming bubble.

I am not going to waste any time discussing the motives of the individuals and institutions which are critical in this unwinding tale. But stand assured that Johnson's First Law will be invoked: It is always about money.

There will be plenty of stories which will focus on the individuals. Rather, I am interested in the process by which the global warming became a "fact" and the data which created that "fact."

Much ado about the global warming bubble was created by a handful of scientists who have manipulated data and models which have resulted in scenarios where terrible things happen.

While I don't know anything about climate science, I do know a great deal about crunching data. I know for a fact that if you give me enough data points that I can, with selective processing, prove virtually any point. As they say, "Liars figure."

I have direct personal experience developing computer models. I have directed the development of two software models approved by the Navy for use of use. In each case, the model included a software representation of the physical world. The process in creating the models required strict adherence to systems engineering principles and the development of systems engineering artifacts which provide the framework within which the models will operate. Examples of those artifacts include: Systems Engineering Plan (SEP), Program Management Plan (PMP), Risk Management Plan (RMP) and Configuration Management Plan (CMP).

Critical in the model development is the Verification, Validation and Accredidation (VV&A) process which concludes with the determination of the model is a suitable representation AND, itemizes those areas or weaknesses in the model which any decision maker should be made aware. It is not a blanket approval, or disapproval. This is a critical difference between the models which I have developed and those which have been developed by the climate scientists - there is no disclosure of the weakness of their models.

My processes seem to differ significantly from those used by the University of East Anglia's Hadley Climate Center. The Center used a series of peer reviews to accredit the models and reports related to global warming. Absent from the peer review process is any one individual or institution whose job it is to be skeptical. In fact, it appears that the peer reviews of the Center's key climatic documents were accomplished with those who agreed with the authors. Far from being skeptics, the peer reviewers were closely aligned with the authors. (Note: The Center actually deleted data which was contrary to their "sky is falling" position in their calculations. I'll write more about their apparent cooking of the data in a future post.)

Another big difference: I have a government agency with which I work, whose duty is to be the professional skeptic and to challenge my systems engineering process as well as my data. Their presence ensures that I am not bending the data one way or the other as I seek a software solution within cost, schedule and performance. They keep me honest. The climate scientist have no analog for this watchdog.

My entire software development process is an open book to those who review my software development program. The professional skeptics, in fact, can hire a second set of systems engineers to audit my processes to ensure to their satisfaction that my systems engineering process is valid and my results are reliable.

The data from the Center has, until recently liberated, been a well-kept secret. While the emails and certain documents seem to provides some understanding of their internal process, it does not provide the raw data and meta data which are essential for independent review and authentication.

Politics aside, there are a number of key actions which should be taken by the scientific community to re-establish their position as revealers of truth. As Dr. Judy Curry notes two areas requiring immediate remediation in a recent posting to the Climate Audit blog:

"Transparency. Climate data needs to be publicly available and well documented. This includes metadata that explains how the data were treated and manipulated, what assumptions were made in assembling the data sets, and what data was omitted and why. This would seem to be an obvious and simple requirement, but the need for such transparency has only been voiced recently as the policy relevance of climate data has increased."

"Climate tribalism. Tribalism is defined here as a strong identity that separates one’s group from members of another group, characterized by strong in-group loyalty and regarding other groups differing from the tribe’s defining characteristics as inferior. In the context of scientific research, tribes differ from groups of colleagues that collaborate and otherwise associate with each other professionally. As a result of the politicization of climate science, climate tribes (consisting of a small number of climate researchers) were established in response to the politically motivated climate disinformation machine that was associated with e.g. ExxonMobil, CEI, Inhofe/Morano etc. The reaction of the climate tribes to the political assault has been to circle the wagons and point the guns outward in an attempt to discredit misinformation from politicized advocacy groups."

Bottom line: We may have seen the beginning of the end of the Global Warming Bubble. The lack of scientific methods and consistent systems engineering principles render the opinions of the "sky is falling" scientific crowd as void. In the end, the actions of the global warming actors may dwarf the fraud of Bernard Madoff.

Healthcare Reform and the Second Continental Congress

noreply@blogger.com (Terry L. Johnson) — Sun, 08 Nov 2009 18:56:00 +0000

The Speaker of the House is the representative of arguably the most liberal congressional district of these United States and is, perhaps, emblematic of the problems with the healthcare bill as it is currently crafted. Far from being post-partisan, the Speaker is the most partisan of those pushing the healthcare debate. The primary issue is that the Speaker is having a one-sided dialog with those who agree with her: Republican input and concerns have been uniformly rejected in favor of an FDR inspired solution to nationalize healthcare.

Under President Bush there was much complaining about the war policy. In truth, Bush would have benefited from a wider set of views as the nation prepared for war. In much the same way now, the Speaker is pushing a bill which is so partisan so as to be intolerable for even the most liberal country-club Republicans.

The difference between the Bush and Obama policy regarding Iraq and Afghanistan is very small. In fact: there are more troops on the ground now then there were under Bush. Bush's policy has been vindicated by Obama's actions.

The difference between Republicans and Democrats regarding healthcare could not be more stark: the Republicans favor an open market approach and the Democrats favor a governmental approach. It really is that simple. The Republican approach would tend to maintain the status quo and the Democrat will significantly increase the position of the federal government.

I was in Philadelphia this weekend and walked through Independence Hall and considered the arguments between the Federalists and the anti-Federalists which took place during the second Continental Congress. Standing in the room in which Washington, Hamilton, Madison and Franklin crafted the shape of our nation it didn't take long to come to the conclusion that we have gone far astray.

The second Convention created the framework for our nation and established the three branches of our government. Even among the most fervent Federalists there was an appreciation for the limitation of government.

The shouting over the healthcare program is no where near completed. The Senate has yet to approve its version and then there is Conference Committee- where the real sausage making takes place.

Bottom Line: In much the same way the Bush's one-sided war policy paved the way for the movement of independent's to Obama, the healthcare (lack of) debate will move Independents away from Democrats in 2012.

Is an MBA Worth the Money?

noreply@blogger.com (Terry L. Johnson) — Thu, 05 Nov 2009 23:31:00 +0000

A recent edition of The Economist magazine rated the top business schools. My b-school, the University of Maryland came in 51st in the world behind the other likely suspects within the U.S. such as UC Berkley, MIT, Harvard, Wharton, Northwestern and University of Chicago.

It got me to thinking about the financial and time commitment necessary to obtain an MBA - particularly in this age of a depressed economy and an increasing dissatisfaction with profit at all costs.

CNBC did a quick study comparing the costs of a b-school education at a top 10 university (sorry this did not include UMD) in 1998 and again in 2008. They then compared the earning differential which came as a result of the MBA.

"...it would now take almost 2.5 years at the increased salary to cover b-school costs vs. 1 year ten years ago. Taking into account opportunity cost (i.e., lost salary during business school), the total cost today grows to ~$242 thousand vs. $149 thousand a decade ago. Again, based on the incremental salary gains, a current MBA would need 6.3 years to pay back the total cost of a Top 10 MBA vs. a 2.9 year payback a decade ago."

So the break-even point for an MBA today is 6.3 years as compared with 2.9 years only a decade ago. That is a disturbing trend.

What this would seem to indicate is that an MBA is still worth the money, but it is a better investment at a younger age. It was always thus, but the 6.3 year pay-off would seem to indicate that anyone over 45 think twice about investing $85k to $125k for an MBA at a prestigious school.

As a program manager I am often in the position of needing to manage expectations of the stakeholders to whom I support and to whom I report. Managing expectations involves providing realistic expectations between myself and my stakeholders and forever being honest. I wonder sometimes about the honesty of the b-schools as they seek out students to fill their classrooms.

Recently I received a note from UMD offering a $5,000 bounty to alumnus who direct a b-school candidate to College Park. At first I thought that was a new way for the school to recruit and after some consideration I have developed a distaste for the idea.

I enjoyed my time at UMD and have recommended prospective students to UMD without any fee. The idea of paying a bounty to direct b-school candidates to UMD creates the wrong set of incentives for me and for other prospective students. Let's say that I recommend someone to UMD: does that person believe that I am being honest with my recommendation, or does he/she think that I am merely setting myself up for a payday?

Bottom Line: My MBA from UMD was worth every penny and has opened multiple doors for me. I would hate to think that I might have gone to another school just because an alumnus was paid a bonus for recruiting me.

Hostile Work Environment is No Laughing Matter for Letterman

noreply@blogger.com (Terry L. Johnson) — Wed, 28 Oct 2009 23:21:00 +0000

Growing up in the 1960's I was a fan of the Dick Van Dyke show. The show was a SITCOM situated in New York around a team of comedy writers which featured Dick Van Dyke, Morey Amsterdam and Rose Marie. It turns out that the show misrepresented women's role in comedy writing. It turns out female comedy writers for television are non-existent with not a single female writer working on the staff of any of the late-night staffs.

The current issue of Vanity Fair magazine contains a damning indictment of the work environment for CBS's "Late Show with David Letterman". Former Letterman writer, Nell Scovell notes:

"Without naming names or digging up decades-old dirt, let’s address the pertinent questions. Did Dave hit on me? No. Did he pay me enough extra attention that it was noted by another writer? Yes. Was I aware of rumors that Dave was having sexual relationships with female staffers? Yes. Was I aware that other high-level male employees were having sexual relationships with female staffers? Yes. Did these female staffers have access to information and wield power disproportionate to their job titles? Yes. Did that create a hostile work environment? Yes. Did I believe these female staffers were benefiting professionally from their personal relationships? Yes. Did that make me feel demeaned? Completely. Did I say anything at the time? Sadly, no."

She also says that she isn't going to sue Mr. Letterman which seems oddly generous for someone who was wronged professionally.

Bottom line: It will be interesting to see how CBS handles the coming fiasco.

Obama's Enemies List

noreply@blogger.com (Terry L. Johnson) — Sun, 25 Oct 2009 00:17:00 +0000

It was Richard Nixon who created what became known in the press as his "Enemies List" towards the end of his first term in office. The list was a compilation of those individuals who'd, in the opinion of the President, wronged him. Those individuals were the focus of his ire and, sometimes, the focus of his retribution.

Fast forward to 2009: President Obama has initiated his own "enemies list" declining to provide administration officials to Fox News for interview. I fully realize that Fox News is one stop to the right. I also realize that MSNBC, CBS, NBC and ABC are one stop to the left and President Bush NEVER excluded those networks from his administration.

Absent from this Administration is any sense of proportion regarding those who oppose its policies. Former President Carter has called those who oppose Obama "racist" and Speaker Pelosi characterized them as "thugs" and "gangs". The truth is that any Administration should be in the business of building coalitions vice creating divisions and the Presidents actions regarding those who disagree with him have been disappointing.

Bottom Line: I don't consider myself to be a racist, a thug or a gang member. What I do consider myself to be is a loyal American who has fundamental disagreements with the President.

Sex with Subordinates

noreply@blogger.com (Terry L. Johnson) — Fri, 09 Oct 2009 00:02:00 +0000

Lost in the discussions of Mr. Letterman and the extortion plot against him has been much talk regarding the impact of the boss having sex with those subordinate to him.

In most businesses such exploitation of individuals is criminal. In my line of work people lose their jobs when they use their
positional power over those junior to them for the purpose of sex. Apparently the entertainment industry is exempt from many of the legal niceties as alleged rape (Polanksi) and sex with subordinates (Letterman) seems to indicate.

Absent also is any sense of irony regarding Mr. Letterman who has made a career of making fun of others. Now it is his turn to be the butt of nation jokes.

People much more clever than me will be working on Top 10 Lists regarding having sex with subordinates. I can hardly wait.

The real issue here is the exploitation of those who worked for Mr. Letterman. Granted, there will be those who were eager to share the bed with him, and it is likely that there will also be a number who were less eager but felt an obligation to do so. What of them? What of those individuals who refused his advances? Was there a hostile work environment where sex with the boss equalled advancement? Did those who refused his advances lose promotion opportunities?

For the moment the nation has focused on the easy issue: extortion. I just wonder will the fullness of time whether Mr. Letterman will be seen not as the victim but as the perpetrator.

Clunker: Good or Bad?

noreply@blogger.com (Terry L. Johnson) — Sat, 26 Sep 2009 00:26:00 +0000

Now that the dust has settled on the so-called, "Cash for Clunkers" program it is a good time to look back and see if it did what it was supposed to do.

A quick trip to www.cars.gov revealed the first official release from the gov't which briefly described the purpose of the program, "With this program, we are giving the auto industry a shot in the arm and struggling consumers can get rid of their gas-guzzlers and buy a more reliable, fuel-efficient vehicle,” Secretary LaHood said. “This is good news for our economy, the environment and consumers’ pocketbooks.”

So, if I read that correctly the purposes are:
1. Help the auto industry.
2. Subsidize the purchase of new fuel-efficient cars.
3. Remove less economical cars from the road.

The site also includes statistics for the program and as of 25 September are thus:
C.A.R.S. Program Statistics
Friday, September 25th, 2009
Voucher Status (8:15 a.m. EDT) Number of Vouchers Paid: 649,984
Dollar Value: $2,737,444,000
Number of Vouchers Approved for Payment: 14,834 Dollar Value: $ 61,633,000
Number of Vouchers Paid/Approved for Payment: 664,818 Dollar Value: $2,799,077,000

At first glance dividing the dollar value by vouchers would indicate that the cost per vehicle sold was $4,215. But was it really?

Let's consider the situation regarding a consumer purchase at any given moment: 1) Those who are going to buy, 2) Those who might buy, and 3) Those who won't buy. In order to make a correct assessment of the cost per "Cash for Clunkers" transaction we need to understand how many individuals were going to buy with or without the program and how many were in the might buy category.

As Gary Becker noted in his blog, "Hundreds of thousands new cars will be purchased under the program, but many of these purchases would have occurred later in 2009 or in 2010 instead of during the five week window of the clunkers program. There is little value to the economy in subsidizing consumers to buy cars a few months earlier than they would have bought them anyway.

To be sure, some cars would be purchased under the program that would not have occurred during the next 18 months, if at all."

For the sake of argument, let's say that 1/3rd or 33% of the cars purchased in the Clunker program would have been purchased with our without the program and that a full 2/3rd of the cars purchased would not have been without the program.

That changes the dynamic of cost-benefit significantly. The cars purchased falls from 664,818 to 438,779 and price per car increases from $4,215 to $6,379. Was it worth it? Hard to tell. PhD students will be mulling over this public incursion into the private sector for years to come.

Bottom line: The Federal Government shelled out $2.7 billion dollars to subsidize the purchase of 664,818 automobiles. It is very likely that the overwhelming majority of those cars would have been sold without the subsidy over the next 12 to 18 months thus making the value of that subsidy questionable.

Good Time to Hire?

noreply@blogger.com (Terry L. Johnson) — Mon, 07 Sep 2009 18:31:00 +0000

The Bureau of Labor Statistics reports that 9.7% of the workforce is currently out of work. Not reported in that value is the large number of individuals who have given up looking for work and have returned to school, taken early retirements, or assumed a new life as a stay-at-home mom/dad. The Bureau considers these to be "discouraged workers" and if they are added to the mix of the unemployed the actual rate of unemployment is closer to 11% nationwide.

The availability of so much idle labor begs the question: Is it time to hire?

The question is a difficult one to answer as so much of the economic future is murky. While Vice President Biden sounded wildly optimistic about the impacts of the President's multi-billion dollar economic stimulus, taking credit for several million new hires the feeling on the street isn't universally upbeat.

A September 1st, 2009 report by the Bureau reports that unemployment varies wildly across the nation. "In July, 139 metropolitan areas reported jobless rates of at least 10.0 percent, up from 14 areas a year earlier, while 65 areas posted rates below 7.0 percent, down from 286 areas in July 2008. El
Centro, Calif., recorded the highest unemployment rate, 30.2 percent, followed by Yuma, Ariz., 26.2 percent...

Among the 19 areas with jobless rates of at least 15.0 percent, 8 were located in California and 5 were in Michigan. Bismarck, N.D., registered the lowest jobless rate in July, 3.1 percent, followed by Fargo, N.D.-Minn., and Rapid City, S.D., 4.2 percent each. Overall, 149 areas posted unemployment rates above the U.S. figure of 9.7 percent, 219 areas reported rates below it, and 4 areas had the same rate."

Most recently, the Conference Board reported that consumer confidence rose to a figure of 54.1 in August 2009 up from 47.4 in July. The Shiller Index reported a 3% increase in real estate prices in August. Both are very positive signs.

My personal opinion is that the Great Recession will continue on for some time. The concentration of unemployment in Michigan and California will be a drag upon the economy and not easily remedied. The housing depression makes transfers and relocations by employees to low-unemployment areas difficult, if not impossible.

Bottom Line: The results of the stimulus plan are mixed at best and a new class of hard-core unemployed in Michigan and California may endure for years to come.

Wayne E. Meyer, RADM, USN (Retired) Dies

noreply@blogger.com (Terry L. Johnson) — Wed, 02 Sep 2009 21:17:00 +0000

Chief of Naval Operations Admiral Gary Roughhead said it pretty well yesterday: "I am deeply saddened by a great loss to our Navy family. Rear Admiral Meyer’s passion, technical acumen, and warfighting expertise served as the foundation of our Navy combatant fleet today. On behalf of the men and women of the United States Navy, I extend my deepest and most heartfelt sympathy to the Meyer family. He was a close friend and mentor to so many of us. His legacy will remain in the Navy forever."

I have written on several occasions about the differences between management and leadership. It is my contention that leadership is a quality of the soul while management is a quality of execution. Without leadership there is no common goal and without management there is no way to execute that goal.

Wayne E. Meyer was a leader. And, damn what a leader he was!

Unless you have seen the sausage-making up close in the acquisition community you have little idea how challenging it is to get a well thought-out program to life. There are technical challenges, cost challenges and political challenges all to be conquered before a ship comes to life. You have only to look at the DDG-1000 class and LCS-1/LCS-2 class to see how easily a good idea can go wrong for any number of reasons.

So why so little leadership? An easy answer is to look at the Air Force and the F-22 program. The F-22 is an extremely expensive and extremely capable aircraft: it is the finest aircraft in the world. Air Force leadership understood this and wanted to keep it. In fact, two Air Force Chief's of Staff went down in flames defending the program until they found someone without the necessary leadership component: someone who'd say "yes" to killing the program. The two that were fired had Wayne E. Meyer in their blood. The one that succumbed to political pressure bleeds a cold mixture of ambition and indifference to the force.

Wayne E. Meyer's vision was an integrated shipboard combat system. It was that simple, but it has paid dividends for years and will continue to do so into the foreseeable future.

I have watched the Admiral up close for nearly twenty years and had come to see him as a fixture, something permanent, something immune to the laws of nature. At this moment I work in the Navy organization responsible for building, integrating and testing Aegis guided missile destroyers he created.

As the word of Admiral Meyer's death spread across the floor there were many who stopped to remember or to tell their favorite stories about the old man.

And, among the old-timers, there were tears.

Senator Kennedy, 30" Counter Tops and Urinals

noreply@blogger.com (Terry L. Johnson) — Sat, 29 Aug 2009 12:11:00 +0000

Lest everyone forget: It was in 1969 that Ted Kennedy allowed a woman to die of neglect after he ran his vehicle off a small bridge and into the water. His inaction, perhaps calculated cowardice, cost a human life.

While the media has completely papered over the demons of Kennedy's past, I have a liberal friend who opines that it was the Senator's demons which drove him to his action. That it was the guilt internalized by that, and many other, indiscretions which he exorcised by his work in the Senate. Perhaps. Perhaps.

A few years ago I managed an office in Oxnard California in which we were going to renovate the kitchenette used by the employees. The space contained a full-sized refrigerator, table, two chairs, dishwasher, shelving and counter top. We invited in several contractors to develop a bid to refresh the space and were shocked and dismayed at the cost. Why? Americans with Disabilities Act - a Kennedy led piece of legislation.

The Act required that counter tops be positioned at a height convenient for someone who was wheelchair bound. A 30" counter top would require a dishwasher which would fit under the lower-than-spec height. A typical dishwasher at that time cost about $300 and there was only one brand (from Europe) which fit under a 30" counter and it cost more than $1500. So too with the refrigerator: a ADA compliant version needed to accessible thus resulting in the need for a more expensive sub-scale version of the full-sized version it would replace. All-in-all the price of the renovation was significantly beyond what I had expected and had approval to spend.

As a result we did not renovate. Contractors did not get the work. Appliances were not sold. Taxes were not collected.

So? Am I an uncaring fool? I don't think so. Our office was a third-floor walk up in an old business park. There were no elevators built into buildings such as that in the 1950s. No wheelchair would ever roll across our floors. Yet, the law required that we accept the fantasy that they would and were mandated to accommodate those wheelchair bound individuals who'd never come.

Reminds me of the gender-equity issue when the City of Los Angeles was renovating the then-home of the L.A. Lakers. A group had sued the city demanding that there be greater equity between the restroom facilities for men and women. The result was that to gain gender equity between the sexes in the renovation that urinals were REMOVED from the men's room.

Laws have consequences.

Bottom line: While we celebrate the life of Ted Kennedy we'd do well to consider the long-term implications of those who want to do good for the public without considering the impact on the individual. Exorcising demons, it seems, has its price far beyond the man himself.

More Random Thoughts

noreply@blogger.com (Terry L. Johnson) — Thu, 20 Aug 2009 00:07:00 +0000

1. NASCAR. President Obama welcomed NASCAR driver Jimmy Johnson to the White House today. As one pol noted, "Jimmy Johnson turns left faster than most". Coming on the heals of his Beer Summit a couple weeks back the President is increasing his populist function.

2. Bomber. The New York Times reports that the only person convicted of the in the Pan Am bombing over Lockerbie will be set free from a prison in Scotland: "...Tuesday, lawyers for Mr. Megrahi, a 57-year-old former Libyan intelligence officer, say that he is close to death from terminal prostate cancer.

The BBC reported last week that he was “likely to be released on compassionate grounds,” so that he can return to Libya to die."

Humm. For those who don't remember, this man was responsible for having his pregnant girlfriend carry the bomb in her personal effects as she flew back to the United States.

I am truly astonished at Scotland applying compassion to a cold blooded murderer of innocents and expect a significant backlash by Americans.

3. Dissent Across the Fruited Plains. Health insurance reform continues to be an issue as the President has been unable to get his party in line for this takeover of 18% of the U.S. economy. Of course, this will be portrayed as Republican obstructionism. The truth of the matter is that Americans are fed up with the debt with which the President has burdened this nation - rightly or wrongly.

It is my opinion that a lot of the anger and frustration one sees in the evening news are individuals who are frightened of their lack of control in the process and this is the FIRST OPPORTUNITY that ordinary citizens have been able to have their voice heard in policy matters. Absent from this mess is any sense of self-awareness by the President or his Party regarding genuine concern by their electors. That they characterize dissent as "mob tactics" is not helpful.

Perhaps it is the failure of the Republicans, but it is only their failure in that the plurality of the Democrats have made their participation largely unnecessary. So, emboldened and unrestrained the Democrats have moved without benefit of critical negotiations with their opposition. It would be well for the President to remember that 53% of the popular vote does not equal a landslide and that President Bush (41) had a 92% approval rate two years before Bill Clinton unseated him from office.

What the President's Reaction to Dr. Gates Tells us about the Future of Iranian Nuclear Weapons

noreply@blogger.com (Terry L. Johnson) — Sun, 02 Aug 2009 02:16:00 +0000

It is disturbing that the President chose to play the race card so quickly over the Gates-gate affair. That he failed to even consider the alternative (e.g. Dr. Gates was responsible for the hub-bub) speaks to a world-view in which facts play a very small role.

To call out the Cambridge Police department as "...acting stupidly..." would seem to indicate an eagerness to embrace comfortable stereotypes. The very sort of stereotype which he implied was applied by the Police. Irony is seldom this thick.

I bring this up as the government of Israel as made it very clear that they will not allow Iran to build a nuclear bomb.

Since taking office the President has gone out of his way to make nice with Middle-Eastern despotic dictatorships to include senior-level visits by himself, Secretary Clinton and Secretary Gates. He seems unable to be challenging of any middle-Eastern leader who isn't the Prime Minister of Israel.

Given the Israel's stand vis-a-vis Iranian nuclear weapons and Iran's stated goals: a bloody outcome is all but certain.

Failure of the Obama administration to acknowledge the long-term relationship between the U.S. and the regions only democracy is a shift with possibly calamitous consequences. It certainly sends the wrong message to BOTH Israel and its Holocaust-denying neighbors.

Much like the issue with Dr. Gates, Mr. Obama is quick with his Middle-East stereotype, has his views and appears reluctant to allow facts to alter his position.

Bottom line: Supporting the only Middle-Eastern democracy is critical to the United States. And this is increasingly NOT in the cards of the Obama administration.

Why I am Changing Jobs

noreply@blogger.com (Terry L. Johnson) — Sun, 26 Jul 2009 23:33:00 +0000

It was the 8th of January and my boss, a retired USAF Brigadier General, came by and counseled me on my performance. Apparently my name had come up before my SES boss as, "Not being at my desk" as much as I should be and that he was there to let me know that senior management had been made aware of this issue.

It was at that moment that I decided I needed a new job.

If you don't know me you should be aware of the following facts:

1. I am not the sharpest tool in the shed. My brother once asked me if math always came easy to me: hell no. I had to work my butt off to get through the calculus and physics at Auburn. It did not come easy and I envied those to whom the hard classes came easily. Throughout my professional career I have had to work harder precisely because I was not innately gifted. That has created a very strong work ethic to which I hold.

2. I take my professional reputation seriously. It had been over 25 years since a manager had questioned my performance and I am still pissed about that episode.

What galled me was that my performance was not the issue. The issue was that I was not warming my seat as much as one Division Director thought that I should. That manager's metric was not performance, production or quality: it was that I wasn't in my seat.

It is impossible to buy-in to an organization in which the time one spends in their seat is more important that the product which is delivered.

Luckily for me there were other opportunities and I'll be heading back to the Navy working Test and Evaluation on a number of interesting programs. I have worked for this organization before as a contractor and look forward to being productively engaged and not just warming a seat.

Nothing Meaningful to Say

noreply@blogger.com (Terry L. Johnson) — Sun, 26 Jul 2009 18:38:00 +0000

The past week has been very challenging for me to write about business. I have posted several items related to my wine blog, but am having a very difficult time writing anything coherent on the business side.

That doesn't mean that I don't think that there is a lot to write about including:

1. The President's incoherent speech on health care (psst...he means health insurance). Even Chuck Todd who has a man crush on the President was agog after he received a 7 minute non-response to a fairly straight forward question. If the President was serious about this stuff, he could hit it out of the park had he tied the 40th anniversary of the moon landing with the health care (err health insurance) plan. Could have gone Kennedy very easily but utterly failed to do so.

2. People put too much value on what they do. There was a story in HBR some years ago about how people prefered the brand of cakemix which they added an egg over the brand in which the egg components were included in the mix. This seemed to indicate that the bakers prefered the product solely on the fact that they had contributed to the cake in a larger measure than had they used the brand with all the ingredients all ready there. Makes me think about all the hub-bub about global warming and the move to saving energy. Is this just the same as adding an egg to the cake mix?

3. Cash for Clunkers. Chrysler is offering to double the maximum $4500 contribution. Not a shocker since they are playing with the house's chips. The really sad part is that there is not a single car in the Chrysler or Dodge lineup which is the least bit interesting to me. Perhaps that is the problem

Is it Really This Bad?

noreply@blogger.com (Terry L. Johnson) — Mon, 20 Jul 2009 15:41:00 +0000

~ Image from The Economist magazine.

Changing Jobs

noreply@blogger.com (Terry L. Johnson) — Mon, 20 Jul 2009 00:38:00 +0000

After twelve months with my current company I have accepted an offer to work for the U.S. Navy in the Program Executive Office Integrated Warfare Systems (PEO IWS). My precise duties have yet to be assigned, but they will be associated with the Test and Evaluation of weapon systems on Navy ships.

I'll write more about this in the days to come including why, after so short a stay with my current company, I am willing to move on.

Paris Hilton and Paul Krugman: The Nature of Celebrity

noreply@blogger.com (Terry L. Johnson) — Sun, 12 Jul 2009 19:54:00 +0000

Both Paris Hilton and Paul Krugman are celebrities: one I comprehend and the other I don't.

Now, why is Dr. Krugman famous? The easy answer is that he is a Nobel Laureate and recognized Economic guru who teaches at Ivy League schools and writes essays for the New York Times (NYT). The conventional wisdom would be then that he is an expert on all things economic.

Well now. It wasn't that long ago that I was in graduate school listening to Ph.D's offer opinion and fact and it wasn't always easy to discern one (opinion) from the other (fact). There were some professors from whom, in frustration, I walked out of the room so strong was my revulsion. A tenured-for-life professorship does not guarantee ground breaking ideas.

Krugman is a celebrity the same way as is Paris Hilton, albeit without a sex tape. He is famous for being famous. While everyone knows that he is a famous economist, almost no one understands why Dr. Krugman is famous.

Dr. Krugman was recognized in 2008 by the Royal Swedish Academy of Sciences for his, "...for his analysis of trade patterns and location of economic activity..."(1) and "...Prof Krugman's approach was based on the concept known as economies of scale - that many goods and services can be produced at less cost in long series, the citation said." (1) Really? That products cost less per unit given longer production runs is NOT groundbreaking - that is old news. Surely there MUST be more to Dr. Krugman to account for his fame.

Now I certainly have my beliefs as to explain Dr. Krugman celebrity. I'd be interested if anyone else would care to share their ideas regarding the media fascination with the man.

Buehler?

Buehler?

(1)http://news.bbc.co.uk/2/hi/americas/7667190.stm

Modeling and Simulation

noreply@blogger.com (Terry L. Johnson) — Sun, 12 Jul 2009 18:52:00 +0000

Over the past three weeks I have heard references to "computer modeling" used in references to the current financial mess, global warming and future automobile sales.

It got me thinking. In all the discussion regarding modeling I have not heard any discussion as to the validity of the various models. I may be the ONLY person that my readers have met who has actually been responsible for moving an M&S effort through the process used by the Department of Defense to qualify M&S.

In the Department of Defense there is a process used to qualify M&S and is called "Validation, Verification and Accreditation". And, each step along the way has a series of checks to ensure that the process isn't swayed by bias or a desired outcome.

A few years ago I was tasked with running the VV&A of a hybrid device which was both software and hardware and emulated the actions of an anti-ship cruise missile. The M&S was being developed as it was unsafe to fly a physical missile close enough to a populated ship to be safe.

The process began with a letter from the Navy's Commander, Operational Test and Evaluation Force (COTF) which validated a requirement for M&S citing ship safety. The letter provided direction which the M&S developer by providing about ten requirements of the Model.

My boss at the time, was a T&E manager in the Navy and he funded an organization to tailor an existing M&S suite to meet the requirements created by COTF. The organization required about 12 months to complete the M&S after which time the validation process began.

The M&S validation process was comprised of hundreds of simulation runs of the Model in a closed-loop lab and then to compare the Model's performance with that which had been observed by the missile in the real world. The validation process compared the actions of the Model against the real anti-ship cruise missile: essentially, it measured the level of goodness of the model. Upon completion of the validation process a Report was prepared for my boss which compared on a line-by-line bases the requirements provided by COTF against the results from the Model's validation tests.

The Model wasn't perfect, but if I recall correctly it was good enough on eight of the ten requirements and not good enough on two of the ten requirements. This resulted in an Accreditation by the T&E manager for the use of the Model in the areas where its performance closely replicated that of the real article. The critical take-aways were:

* The Navy had specific measurable requirements
* A M&S was developed to meet the measureable requirements
* The performance of the M&S was measured against the actual article
* Shortcomings of the Model were documented and limitations were clearly understood
* The cognizant Navy decision maker chose to accept the results which came from the Model in eight of the ten areas where requirements existed

So. Why I am giving this inconsequential discussion of the VV&A process used by the DoD? Well, it is to highlight how complex the M&S process is in the DoD. I deal with other engineers and physicists and the rules in which we operate are defined by the physical world around us.

I would ask my readers to pay close attention anytime the media hypes M&S which draws any conclusions or imagines a future. As complex as my M&S was, I was fortunate to have immutable laws of physics to bound my problem.

Bottom Line: M&S is hard work which requires the user to get his hands dirty to ensure that it accurately replicates the environment of interest. It would be very easy for M&S modelers with a lax process to insert bias into their Models should a desired political outcome be considered more important than revealing the truth.

Fire, Ready, Aim: The Financial Reform Act and the First Law of Unintended Consequences

noreply@blogger.com (Terry L. Johnson) — Sun, 05 Jul 2009 22:33:00 +0000

A WSJ summary of the Financial Reform Act can be found here and is worth a read.

The President proposes significant regulatory remedies to the financial crisis without a full understanding of the root causes of the problem: hence, Fire, Ready, Aim.

Much has been said about the pay excesses of the various bank executives. I would remind everyone that Japan suffered a banking crisis in the 1990's with low paid executives.

It is my opinion that there are bound to be unseen consequences of hurrying this bill through Congress. These consequences could easily be mitigated by upping the staffing at the various regulatory agencies which already exist (SEC, FDIC, etc) without upsetting the apple cart completely.

Without fully comprehending the problem, we are developing an overly complicated solution. And, it is my fear that this medicine may be far worse for the patient than the illness which it purports to remedy.

This Time I Agree with Krugman

noreply@blogger.com (Terry L. Johnson) — Tue, 30 Jun 2009 10:26:00 +0000

Not often. But this time I do agree with Krugman.

"No modern American president would repeat the fiscal mistake of 1932, in which the federal government tried to balance its budget in the face of a severe recession. The Obama administration will put deficit concerns on hold while it fights the economic crisis.

But even as Washington tries to rescue the economy, the nation will be reeling from the actions of 50 Herbert Hoovers — state governors who are slashing spending in a time of recession, often at the expense both of their most vulnerable constituents and of the nation’s economic future."

Full story at the NYT.

Pay Czar: I Think You are Earning too Much

noreply@blogger.com (Terry L. Johnson) — Wed, 24 Jun 2009 23:50:00 +0000

Make no mistake. The appointment of a federal official reportable only to the President to oversee the pay of corporate executives is an un-alloyed power grab. Congress and the President have been unable to restrain their zeal in creating financial and process controls on companies who have received funding under the TARP program. That the Pay Czar will endure long after the last TARP dollar is repaid is a virtual certainty.

There is an “agency” issue disguised in here which is worthy of consideration. Agency problems occur when incentives are created (in this case by the President and Congress) which create a difference between that which is best for the shareholder and that which is best for the corporate officer. In this case, it is the harsh terms of the President, Congress and the Pay Czar which are colluding to create the mother-of-all agency problems.

Imagine the situation: You are the CEO (or other highly compensated employee) of a major bank and your pay and benefits are severely limited until such time as the bank pays back the TARP money plus interest to the Treasury. Now being a prudent businessman, you are confronted with the dilemma: do what is right for the company or do what is right for the CEO. There is no doubt that having a couple hundred million dollars of government funds on the balance sheet is comforting to shareholders and customers alike and that paying back those dollars will create some (however minor and transient) concerns with the aforementioned groups. Maintaining those TARP funds may be fiscally prudent. However, maintaining those funds will also mean that highly compensated employees will suddenly become formerly highly compensated employees.

Highly compensated employees are treated that way for one and only one reason: they bring profits to the bank. In an environment where some banks are limited in their ability to pay and others are not, those with the limitations will contribute to the loss of the very individuals they need the most to earn their way out of trouble. Highly compensated employees (read that as highly profitable employees) will follow market forces as the inexorable hand of capital rewards those who produce and punishes those that do not. The most skilled, the most profitable employees will depart.

You need only look at the punitive measures levied on the banking industry as a set of negative incentives. While the President and Congress seem to be trying to punish the recent excesses of the banking community they are actually creating a set of incentives which will move the banks which received TARP funding to prematurely pay back their government funding to the Treasury.

I suspect that we’ll shortly see a former-TARP bank in dire financial straits due to their response to the Presidential and Congressional dis-incentives.

Bottom line: The President and Congress appear are making the most of this crisis. Mr. Chavez’s comments about being to the Left of the President were prescient.

Random Thoughts

noreply@blogger.com (Terry L. Johnson) — Wed, 17 Jun 2009 19:14:00 +0000

1. Salary Czar. The President is appointing Mr. Kenneth Feinberg to be the Salary Czar to oversee executive compensation in those companies which the Federal Government has taken and equity position or bailed out with funds. Bad idea. I am sure that there are a large number of anti-capitalists out there who are happy to see executive compensation being controlled by the government. I would remind those individuals that it is a competitive marketplace for executives and that a company gets what it pays for. While wholly satisfying it might be to punish the executives at GM, it is unlikely that low pay (relatively speaking) and Congressional oversight will be a recipe for success.

2. Iran. The apparent theft of the recent election by hard-liners in Iran has set in motion the eventual demise of the Islamic revolution: or so I would hope. The Boston Globe web site “The Big Picture” and the BBC web sites both have great images and some text regarding the mess over there. Yesterday when I checked the BBC had a short clip taken from an individual’s cell phone of gun fire coming out of government offices. Nice.

3. Software. When I was in b-school at University of Maryland I was able to use the Oracle software product “Crystal Ball”. It was great stuff. Now I’d like to have a copy for my own use and am dismayed that the user cost is $1,995 per copy. Yikes. Far be it from me to criticize Mr. Ellison, but it would seem that this price point limits the adoption of the product from a wider array of users – other than hard-core financial wonks.

Bottom line: I will be investigating further and posting later on the Salary Czar. This is going to end badly.

Lakeview High School Class of 1973

noreply@blogger.com (Terry L. Johnson) — Tue, 09 Jun 2009 22:45:00 +0000

When I was a senior at Lakeview High School (Lakeview, Michigan) I drove a 1965 Mercury Monterey sedan. It was red in color and in the days of 19 cents per gallon gasoline it was expensive to drive. It's one redeeming characteristic was the the rear window would go up and down. I am not talking about the rear passenger window, I mean the REAR WINDOW would go up and down. That was cool.

A friend of mine had a dentist father. For his 16th birthday he was given an almost new 1972 Dodge Challenger Hemi similar to this one below. I remember at the time being envious of him: geeze it had a hemi.

Now it looks like Fiat is going to buy the Chrysler brand and no one know what the *&^% that is going to mean - the details are not yet clear. In 1973 Fiat was famous for it's model 500 which was a very small, very unexciting automobile. In Boolean terms: think "challenger not".

Bottom line: The castration of American automobile manufacturers by foreign ownership sucks. It is better than going out of business, but it still sucks.

How Free is Free: Carbon Credits and Congress

noreply@blogger.com (Terry L. Johnson) — Sun, 07 Jun 2009 01:11:00 +0000

In the People's Republic of China a publisher may only publish a book if they are granted a Serial Number by the government. Each book has a unique serial number. The distribution of Serial Numbers by the government is provided without cost to the publishing houses of China.

Should a publisher deign to print something which is contrary to the will of the government, that publisher would lose some (if not all) of their Serial Numbers for the following year: a serious dis-incentive.

It is not surprising then that most books published in China are not controversial. Or should the be controversial, that controversy is directed outward say, at the United States.

The distribution of of Serial Numbers without cost is a form of indirect censorship by the government as well as a source of income by Chinese ministers who receive bribes and other forms of compensation from publishers who wish to keep their free Serial Numbers.

The United States Congress is working diligently on a Energy Bill which features the distribution of Carbon Credits - in most instances for free. My read of the draft would indicate that approximately 85% of the Carbon Credits would be granted without cost to the energy developing and energy generating sectors.

Once the Carbon Credits are granted by Congress (yes, they'd determine who gets them) there would be similar pressures on Congress to maintain the status quo and for those with credits to retain those credits. I wonder if Congress would be tempted by financial gifts from the energy lobby? Naw.

Bottom Line: Carbon Credits have great financial value and should be auctioned off to ensure that market forces are applied to the issue of global warming. That Congress is ready to grant Carbon Credits for free to the Energy lobbies displays how fundamentally un-serious, and susceptible to bribery, they truly are.