Quotulatiousness

November 23, 2013

Epitaph for the vanishing used book store

Filed under: Books, Business, Media — Tags: , , , — Nicholas @ 09:42

Kathy Shaidle responds to a David Warren post on the demise of one of the last used book stores that used to cluster along Queen Street West in Toronto:

I owe much of what passes for my education to one particular second hand bookstore in Hamilton.

My mother would try not to roll her eyes when I returned from yet another all-afternoon excursion with two or three white plastic shopping bags full of dusty, smelly paperbacks.

The closing of yet another independent Toronto bookstore never fails to prompt meditations such as David’s, although they are rarely as well written.

However, the sad fact is that most of these indie booksellers were well-meaning book lovers but terrible businessmen, with (as David notes in his piece) crusty, eccentric personalities who not-so-secretly didn’t like seeing their precious babies being carted off in your unworthy mitts.

At least 20 years ago now, one iconic bookstore just north of Yonge and Bloor shut its doors, at the start of the Chapters/Indigo invasion.

I think it was Kevin Connolly, but anyway, some such young whippersnapper dared to counter the generalized wailing and gnashing of the city’s self-appointed elites.

He pointed out the truth: that the staff had been petulant; the inventory uneven and pedestrian; the music that classical stuff which urban planners prescribe to keep hoodlums from crossing the threshold.

I used to be a regular customer of several of the used book stores on Queen West, but as they began to move further west — driven by “gentrification” and rising rents (the same thing, really), I stopped trying to find the latest location they’d fled to. There are still a few used book stores I visit, but they’re in places like Port Perry or Port Hope, not downtown Toronto. They may not have the variety that the old shops used to have, but they usually lack the attitude too many old shop owners displayed toward their customers.

And failure gives me a rash, and is possibly contagious. I simply can’t bear to patronize shops of any sort that are so “authentic” and “organic” that the joint is falling apart or they keep having to move because they can’t afford the rent.

For all their snobbish sentimentality about Hemingway’s “clean, well lighted place,” too many indie bookshops are neither.

But Chapters is. So, in its way, is the internet — which is also the new second-hand-bookshop.

I’m as brokenhearted as anyone, sometimes more so, when one of my old haunts goes out of business.

But if any industry deserves to die, it’s traditional book publishing, which has been running on fumes of glamor and nostalgia for a few generations at least.

Sic transit gloria mundi.

November 21, 2013

“The food police have a gargantuan appetite for ordering other people around”

Filed under: Bureaucracy, Business, Food, Health, USA — Tags: , — Nicholas @ 10:32

In Reason, A. Barton Hinkle explains why the Food and Drug Administration’s latest regulatory move may cost more than a billion dollars, require millions of hours of work … and provide no measurable benefits whatsoever:

In comments shortly after the menu labeling rules were proposed, the Center for Science in the Public Interest — they are the folks forever hectoring the public about the dangers of Chinese food, Italian food, movie theater popcorn, etc. — insisted that “if a restaurant has both an inside and drive-thru menu board, both must list calories.” And: “The calories should be at least as large and prominent as the name or price of the item.” And: “Calories should be posted for each size beverage available.” And: “The color, font size, font type, contrasting background, and other characteristics should all be comparable to the name and price of the item.”

What’s more: “Deli items or prepared foods that are dished up into standard containers should have signs posted next to each item with calorie counts for each container size available. For example, potato salad that is typically dished up into half-pint, pint and quart containers should list calories for one half-pint of potato salad, one pint of potato salad and a quart of potato salad.”

Rules such as these, the CSPI says, should apply not just to restaurants and supermarket delis but also to “salad bars, buffet lines, cafeteria lines, and self-serve, fountain soft drinks.” Moreover, “Calories must be posted for each pizza topping, sandwich component, omelet selection, sundae topping, or salad ingredient or dressing.”

The object of such Byzantine busybody-ness is plain enough: to “nudge” (former Obama regulatory czar Cass Sunstein’s favorite word) people to ingest fewer calories.

Just one small problem: It doesn’t work.

“Restaurant menu labels don’t work, study shows,” reported Today back in July: “No matter how much calorie information is on the menu list, people still choose the food they like, not what’s supposed to be healthier, researchers from Carnegie Mellon reported Thursday. … ‘Putting calorie labels on menus really has little or no effect on people’s ordering behavior at all,’ says Julie Downs, lead author of the new study published Thursday in the American Journal of Public Health.”

November 19, 2013

Making Granny pay … full fare

Filed under: Business, Cancon, Economics — Tags: , , , , , — Nicholas @ 17:43

In Maclean’s, a look at the feel-good but economically silly reasons for senior discounts:

The seniors discount has long been justified as a way to recognize the constraints faced by pensioners stuck on fixed incomes, and as a modest token of appreciation for a lifetime spent paying taxes and contributing to society. And for those truly in need, who would quibble? But with half a million Baby Boomers — a group not known for frugality or lack of financial resources — turning 65 every year for the next few decades, the seniors discount is in for much greater scrutiny.

[…]

There was a time when the seniors discount made a lot more sense. In the mid-1970s, nearly 30 per cent of all seniors were considered poor, as defined by Statistics Canada’s low-income cut-off. But today, this has fallen to a mere 5.2 per cent. The impact of this turnaround is hard to overstate. Seniors once faced the highest rates of poverty in Canada; now they enjoy the lowest level of any age group: The poverty rate among seniors is almost half that of working-age Canadians.

Thanks to a solid system of government support programs, the very poorest seniors receive more income in retirement than they did when they were of working age. The near-elimination of seniors’ poverty is widely considered to be Canada’s greatest social policy triumph of the past half-century.

This tremendous improvement in seniors’ financial security has dramatically changed the distribution of income across age categories, as well. In 1976, median income for senior households was 41 per cent of the national average. Today, it’s 67 per cent. Over the same period, median income for families where the oldest member is aged 25-34 has fallen in both absolute and relative terms.

Then there’s the vast wealth generated for the Boomer generation by the housing and stock markets (only some of which was lost during the great recession). The stock of wealth in housing, pensions and financial assets held by the average senior family is nearly double that of working-age households. Accounting for the financial benefits of home ownership and rising house values, Statistics Canada calculates the true net annual income of retired households rises to 87 per cent of a working-age household’s income. In other words, non-working seniors are making almost as much as folks in their prime earning years, but without all the expenses and stressors that go with a job, children at home, or middle age. Not only that, the current crop of seniors enjoys historically high rates of pension coverage. The much-publicized erosion of private-sector pensions will hit younger generations who are currently far from retirement.

November 15, 2013

Near-future investment advice – get out of retail clothing businesses

Filed under: Business, Technology — Tags: , , — Nicholas @ 16:19

As Charles Stross makes clear in his most recent blog post, the way we buy clothes will be changing markedly in the near future:

Fabrican is a unlikely-sounding spin-off of the Department of Chemical Engineering, at Imperial College (which in case you’re not familiar with it is one of the top engineering/science colleges in the UK; formerly part of the University of London) — at least, it’s unlikely until you begin thinking in terms of emulsions, colloids, and the physical chemistry of nanoscale objects. It’s basically fabric in a spray can. Tiny fibres suspended in liquid are ejected through a fine nozzle and, as the supernatant evaporates, they adhere to one another. If at this point you’re thinking The Jetsons and spray-on clothing, have a cigar: you’ve fallen for the obvious marketing angle, because if you’re trying to market a new product and raise brand awareness among the public, what works better than photographs of serious-faced scientists with paint guns spray-painting hot-looking models with skin-tight instant leotards? (Note: the technical term for this sort of marketing gambit is, or really ought to be, bukake couture.)

[…]

What are the implications?

If you don’t think printing woven fabric is a big deal, DARPA beg to differ; DARPA is pumping serious money into robot sewing machines. But automating garment assembly from traditional fabric components turns out to be a really hard problem (as this possibly-paywalled New Scientist article on a €23M project to build a sewbot explains). Cloth is slippery, changes shape if you drop it, wrinkles, and has to be stretched and twisted and folded as it is sewn. Note that final word: sewn. If you can print fabric in situ out of fibres in a liquid form, you don’t need to sew components to shape—especially if you can print more than one type and colour of fibre at a time: you can fabricate your “stitches” (inter-layer connections) as part of the process, with minimal hand-finishing to possibly add fasteners (zips or buttons).

Add in a left-field extra: the rapid spread of millimeter wave scanners for airport security. These devices caused a bit of a to-do, earning them the nick-name “perv scanner” in some circles, because of their ability to see through clothing to the skin beneath, in order to check passengers for hidden contraband. But if you put the same machine in a clothes shop, it allows the establishment to obtain extremely accurate measurements of its customers without requiring a strip-tease and manual measurement of all the relevant saggy, lumpy bits and pieces. By use of surface-penetrating wavelengths (possibly high-intensity laser light, or infrared) it may also be possible to automatically distinguish between fatty tissue, musculature, and underlying bone structure. All of which are relevant to the construction of clothing.

So here’s my picture of the chain store of the future. You go in, go to the scanning booth, and do the airport-equivalent thing in a variety of positions — stretch and bend as well as hands-up. You then look at the styles on display on the shop floor, pick out what you like, and see it as it will appear on your own body on an avatar on a computer screen. You buy it, and a machine in the back of the store (or an out-of-town lights out 24×7 robotic garment factory) begins to print it. Some time later — maybe minutes, maybe hours or a day or two — the outfit you ordered comes to you. And it fits perfectly, every time. Some items are probably still off-the-shelf (socks, hosiery, maybe even those cheap tee shirts), but anything major is printed, unless you can afford to go to the really high end and pay a human being to make it for you out of natural fibres. Oh, and the printed stuff doesn’t have seams in places that chafe or bind.

Corporations and social responsibility

Filed under: Business, Government, Law — Tags: , , , , , — Nicholas @ 14:17

In this week’s Goldberg File email, Jonah Goldberg talks about the notion that corporations should operate with an eye to “social responsibility”:

Milton Friedman was famously opposed to the whole idea of “corporate social responsibility.” His argument was that corporations have a single obligation: to maximize profits for shareholders. When CEOs spend money on gitchy-goo feel-good projects, they are exceeding their authority and wandering outside the lines of their job description. I’ve always been very sympathetic to this view. If you asked me to invest $10,000 dollars in your startup company and then I found out you spent $5,000 of it to sponsor a program to teach prison-gang members to settle their disagreements by acting out scenes from Little Women, I’d be pretty pissed. That’s not why I gave you the money. And it’s pretty shabby of you to buy fame and praise for your generosity while spending someone else’s money. Indeed, it’s not much less selfish than blowing it on a three-day bender with the mayor of Toronto.

There are lots of different takes on this argument and, because this is my “news”letter, I choose not to deal with most of them. My problem with the profit-maximizing-über-alles creed for Big Business is that it offers no principled or moral reason for Big Business to stay out of Uncle Sam’s bed. If the federal government can make it rain Benjamins for any business willing to twerk for its amusement, why should GE or Big Pharma or the insurance companies demur?

Of course, some businessmen understand the risks of getting in bed with the government. But, since there’s lots of money to be made, there will always be other businessmen perfectly happy to put on the French-maid uniform and bark like a dog.

Even Adam Smith said, “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” That’s true. What’s even more true is that when government officials and business leaders sit down to talk, the inevitable result is a new “public-private partnership” that uses government force to limit competition from non-whorish corporations. Railroad magnates lobbied for the Interstate Commerce Commission. AT&T asked the government to make them a monopoly in the name of “efficiency” so they could clear the field of competition. Andrew Carnegie wanted government control of the steel industry so he could rely on Uncle Sam to guarantee his profit margins. GE loves Obama’s green-energy stuff, because without the inherent subsidies and regulations, it couldn’t make money off of its green tech.

I have no problem with contractors doing work for the government. It’s better that the guys building roads and bridges work for the private sector. But when big businesses agree to make the country less free, the market less competitive, Americans less prosperous, and the state more powerful just to make a few more bucks for their shareholders, it makes me think that Milton Friedman was wrong. We need a free-market version of corporate social responsibility. We need to equip businessmen with an ethical code that tells them there’s a principled reason not to get in bed with the government. They’d still be free to violate that principle, of course, but if they did, I hope they’d have the good sense not to come running to us to complain that the government has asked them to eat a bowl of dogsh**t.

Misunderstanding the purpose of health insurance

Filed under: Business, Economics, Health — Tags: , , , , — Nicholas @ 00:01

One of the big problems facing everyone in the US is the cost of healthcare: it’s expensive and getting more so. Obamacare is supposed to be an attempt to lower the overall cost of healthcare, but by approaching it from the “insurance” angle, it’s likely to make the situation worse rather than better. The Anti-Gnostic reposted an extended comment from Steve Sailer’s blog explaining why misunderstanding the purpose of insurance is a big problem:

1) Most people lose money on insurance, because most of the time insurance doesn’t pay out more than it takes in.

2) Thus, a “good” policy is a catastrophic-coverage-only, high-deductible policy, where most payments are out of pocket. This is a policy that protects you against the downside risk, but where you lose a lot less on average.

3) This is because the purpose of insurance is to protect yourself from *catastrophe*, not to make routine purchases.

4) For example, if you went to Best Buy and whipped out your home insurance card to get a new flat screen TV, everyone would look at you as a crazy man. “Don’t you know that home insurance is only for fires and floods, and not for routine purchases?”

5) And so it should be with health insurance, because you’ll actually — *provably* — pay less with a high deductible plan for all but catastrophic conditions.

6) Indeed, the most innovative and technologically advanced areas of medicine are ambulatory areas in which people feel that markets are “ok”. These are paradoxically the most trivial areas: lasik, plastic surgery, dermatology, dentistry, even veterinary medicine.

7) Why are these areas so advanced? Because people pay cash money, because they choose based on quality, and because they are *able* to choose — i.e. they aren’t being wheeled up to the hospital in a gurney in a no choice scenario.

8) Moreover, with every technology ever, from cars to cell phones to air travel to computers, things that start out expensive become cheaper when enough people demand them. With medicine it seems to bite more that money means differences in care. But at the end of the day doctors, patients, nurses, drugs, ambulances…all that stuff means real resources, and a refusal to do explicit computations just results in massive waste as costs are shunted to a place where no one looks at them.

At the Independent Institute blog, John Graham points out that — in the few places that government allows free markets to operate — prices tend to drop over time even while services or features improve:

It has taken a long time, but the price of hearing aids is in the process of falling dramatically. How has this happened? Technological innovation, of course, but there is more. There’s no shortage of technological innovation in U.S. health care. However, because third-party payers, that is, health insurers and governments, determine prices, there is no mechanism for customers to signal value to providers.

This is not the case for hearing aids: Although some states have mandated insurance coverage for hearing aids, this is usually limited to disabled children. The big market for hearing aids is seniors, and Medicare does not cover hearing aids.

This is another case of a phenomenon observed elsewhere by Devon Herrick of the National Center for Policy Analysis [PDF]: Where patients pay directly for medical care, prices fall like they do in every other market.

Seniors who want highly personalized service from an audiologist in his own practice can get it, and they will pay for it. Those who want to order online can save money by doing that. Those who want to get their old hearing aids repaired can make that choice. And the most adventurous seniors, who don’t mind running an earpiece into an iPhone, can get a functional hearing aid almost for free.

We are on the verge of enjoying universal access to hearing aids — but only because the government restrained itself from interfering, and let the market operate.

November 13, 2013

The NFL “closed shop”

Filed under: Business, Football, Law, Liberty — Tags: , , , , — Nicholas @ 10:35

In Reason, S.M. Oliva discusses how the NFL’s exemption from normal labour regulations makes it difficult to assess the rights and wrongs in the Miami Dolphins “bullying” situation:

Many libertarians see nothing wrong with the NFL’s labor system. Even in a pure free market, employers and unions could enter into “closed shop” agreements like the NFL’s CBA. But as we all know, professional sports hardly exist in a free market. The NFLPA itself holds a government-sanctioned monopoly over all current and future NFL players. Indeed, Martin was not even a union member when the NFLPA signed the current CBA in 2011.

More importantly, in a free market any closed shop would face competition from new entrants seeking to exploit the incumbent’s labor restrictions. There’s little risk of that with the NFL given that most of its infrastructure is subsidized by government. This includes not just stadiums built with billions in taxpayer financing, but also player development, as most NFL players are the product of college football programs subsidized by state-run universities.

There’s also the perverse incentives created by federal antitrust law. The collective bargaining process creates an exemption from antitrust law. Without that exemption, most NFL labor policies, such as the draft, would be deemed illegal. Now, that’s hardly a libertarian outcome. But consider the NFL’s position. The more rules and restrictions they can stuff into the CBA, the lower the risk of future antitrust lawsuits. Thus, the exemption encourages the NFL (and the NFLPA) to centralize as much of its labor policy as possible.

That means there’s little motive to experiment with more flexible labor policies. Individual teams can’t offer employee incentives or enforce discipline in any way that conflicts with the CBA. When there are workplace disputes like the Dolphins situation, the bureaucracy acts not to “protect” employees, but to ensure nothing disturbs the government-granted authority of the league and its monopoly labor union.

November 11, 2013

The newest menace of the waterways – private submarines

Filed under: Australia, Business, Technology — Tags: , — Nicholas @ 12:24

Keeping up with the Joneses has always been a popular hobby among the nouveau riche, and topping the neighbours’ fancy car is only the start of it for some people. If your particular Jones just bought a lovely new pleasure boat, here’s a possible riposte — the Seabreacher J:

Seabreacher J

The Seabreacher J was designed and engineered exclusively for the recreational boating market. This model incorporates a jet drive for increased safety and better surface performance. The J model is able to be registered as a conventional powerboat. It is powered by a Rotax engine which is available in 155hp or 215hp supercharged variants. The engine and jet drive can be easily maintained at any personal watercraft dealership, making it a very basic watercraft to own and operate. The Seabreacher J combines the thrill of flying a submersible watercraft with the practicality and dependability of a conventional personal watercraft. The J model can be custom built with a host of available options that can personalize your Seabreacher to your desires.

The Seabreacher J isn’t a true submarine, but it’s priced for a larger market. To see what they look like in use, a quick Google Image Search turns up lots of “action shots”. True submersibles are also available for more wealthy customers, as Strategy Page explains:

Since the 1990s there have been a lot of recreational submarines. Luxury boat builders have even built submarine yachts. Submarine construction technology has come a long way in the past century, and it’s possible to build these boats at an affordable ($10-200 million) cost. They are safe and there are over a hundred of them out there.

A few companies have gained a lot of experience building subs for non-military underwater operations (academic research, oil exploration), which has created a body of information and cadre of technicians who can build these recreational subs. One of the largest civilian submarine yards is in Dubai, where dozens have been built so far and construction continues. Another large operation in the U.S. has built most of the scientific subs over the last two decades.

The submersible pleasure craft look like streamlined yachts while on the surface. The upper deck, including the bridge, is outside the pressure hull. When submerging, everyone goes below and the upper deck gets flooded. If you get close to one of these yachts it becomes obvious that they are built to dive. Military subs are still not used to encountering this civilian traffic underwater. The military boats have the right of way, but military boats are now warned to exercise extra care when approaching coastal areas used by civilian subs.

Owners of these luxury subs tend to be secretive, and the builders have agreed to some government oversight, especially to make sure militarized subs, that can carry torpedoes or mines, are not built. But there is no law against anyone owning one of these submarines, and it’s feared that it’s only a matter of time before drug dealers, gun runners, or even terrorists, get their hands on some of them. Some police officials believe this has already happened, but no one is saying much. The civilian subs don’t dive as deep as military subs and are not built for combat. They have staterooms and large windows. But they do have carrying capacity, and that could be put to criminal uses. Already, Colombian gangs have been caught trying to build subs, using Russian advisors initially and later just employing the same tech used for recreational subs. Over a hundred submersibles (a sub that travels just below the surface) have been caught carrying cocaine. The age of privately owned subs is here.

November 9, 2013

Barack Obama on the difference between private enterprise and government

Filed under: Bureaucracy, Business, Government, Technology, USA — Tags: , , , — Nicholas @ 11:43

Ann Althouse finds it amazing that President Obama clearly understands why his campaign website was so effective and why the Obamacare website fails on so many levels, but can’t generalize that knowledge to the whole public/private sphere:

In yesterday’s interview with Chuck Todd, Obama said:

    You know, one of the lessons — learned from this whole process on the website — is that probably the biggest gap between the private sector and the federal government is when it comes to I.T. …

    Well, the reason is is that when it comes to my campaign, I’m not constrained by a bunch of federal procurement rules, right?

That is, many have pointed out that his campaign website was really good, so why didn’t that mean that he’d be good at setting up a health insurance website? The answer is that the government is bad because the government is hampered by… government!

    And how we write — specifications and — and how the — the whole things gets built out. So part of what I’m gonna be looking at is how do we across the board, across the federal government, leap into the 21st century.

I love the combination of: 1. Barely able to articulate what the hell happens inside these computer systems, and 2. Wanting to leap!

    Because when it comes to medical records for veterans, it’s still done in paper. Medicaid is still largely done on paper.

    When we buy I.T. services generally, it is so bureaucratic and so cumbersome that a whole bunch of it doesn’t work or it ends up being way over cost.

This should have made him sympathetic to the way government burdens private enterprise, but he’s focused on liberating government to take over more of what has been done privately. And yet there’s no plan, no idea about what would suddenly enable government to displace private businesses competing to offer a product people want to buy.

November 7, 2013

Children and the early industrial revolution

Filed under: Britain, Business, History, Law — Tags: , , , , , — Nicholas @ 11:35

Wendy McElroy talks about the plight of poor children in the early days of the industrial revolution in Britain:

Parish workhouses existed in Britain long before the Industrial Revolution. In 1601, the Poor Relief Act paved the way for parish officials to collect property taxes to provide for the “deserving poor.” In 1723, the Workhouse Test Act was passed to prevent false claims of poverty. Any able-bodied person who wished to receive poor relief was expected to enter a workhouse; its harsh conditions would presumably act as a deterrent. About the same time as the Industrial Revolution (circa 1760-1840), attitudes toward the poor underwent their own revolution. The Napoleonic Wars (1803-1815) not only bled Britain of money; they also created a flood of injured and unemployable men who returned from battle. Those men had families who were plunged into poverty. Between 1795 and 1815 the tab for Britain’s poor relief quadrupled. Meanwhile, the cost of mere subsistence soared because of political machinations such as the Corn Laws, a series of trade laws that artificially preserved the high price of grains produced by British agriculture. Many people could not afford a slice of bread.

But sympathy for the poor was in short supply. Historian Gertrude Himmelfarb’s definitive book The Idea of Poverty chronicles the shift in attitude toward the poor during that period; it turned from compassion to condemnation. An 1832 government report basically divided the poor into two categories: the lazy who sucked up other people’s money and the industrious working poor who were self-supporting. The Poor Law Amendment Act of 1834 instructed parishes to establish “Poor Law Unions” with each union administering a workhouse that continued to act as a deterrent by ‘virtue’ of its miserable conditions. Correctly or not, statesman Benjamin Disraeli called the act an announcement that “poverty is a crime.”

Pauper children were virtually imprisoned in workhouses. And nearly every parish in Britain had a “stockpile” of abandoned workhouse children who were virtually sold to factories. Unlike parents, bureaucrats did not view poor children as loved or otherwise valuable human beings. They were interchangeable units whose presence was a glut on the market because there would always be another poor child born tomorrow. Private businessmen who shook hands with government did not have clean fingers, either. Factory owners could not force free-labor children to take dangerous, wretched jobs but workhouse children had no choice and so they experienced the deepest horrors of child labor. The horror was not because of the free market or capitalism; those forces, along with the family, were among the protectors of children. Child laborers were victims of government, bureaucracy and businessmen who used the law unscrupulously.

November 5, 2013

Just add lawyers and stir

Filed under: Business, Law, USA — Tags: , , , , — Nicholas @ 10:46

Coyote Blog on the problem with the latest anti-discrimination law:

In reality, this is how it works: Suddenly, as owner of the company, one finds a lawsuit or EEOC complain in his lap, generally with absolutely no warning. In the few cases we have seen in our company, the employee never told anyone in the company about the alleged harassment, never gave me or management a chance to fix it, despite very clear policies in our employee’s manuals that we don’t tolerate such behavior and outlining methods for getting help. There is nothing in EEO law that requires an employee to try to get the problem fixed via internal processes.

As a result, our company can be financially liable for allowing a discriminatory situation to exist that we could not have known about, because it happened in a one-on-one conversations and the alleged victim never reported it.

What I want is a reasonable chance to fix problems, get rid of bad supervisors, etc. A reasonable anti-discrimination law would say that companies have to have a grievance process with such and such specifications, and that no one may sue until they have exhausted the grievance process or when there is no conforming grievance process. If I don’t fix the problem and give the employee a safe work environment, then a suit is appropriate. The difference between this reasonable goal and the system we actually have is lawyers. Lawyers do not want the problem to be fixed. Lawyers want the problem to be as bad as possible and completely hidden from management so there is no chance it can be fixed before they can file a lucrative lawsuit.

November 4, 2013

QotD: Software quality assurance

Filed under: Business, Government, Quotations, Technology — Tags: , , , — Nicholas @ 10:13

The fundamental purpose of testing—and, for that matter, of all software quality assurance (QA) deliverables and processes — is to tell you just what you’ve built and whether it does what you think it should do. This is essential, because you can’t inspect a software program the same way you can inspect a house or a car. You can’t touch it, you can’t walk around it, you can’t open the hood or the bedroom door to see what’s inside, you can’t take it out for spin. There are very few tangible or visible clues to the completeness and reliability of a software system — and so we have to rely on QA activities to tell us how well built the system is.

Furthermore, almost any software system developed nowadays for production is vastly more complex than a house or car — it’s more on the same order of complexity of a large petrochemical processing and storage facility, with thousands of possible interconnections, states, and processes. We would be (rightly) terrified if, say, Exxon build such a sprawling oil refining complex near our neighborhood and then started up production having only done a bare minimum of inspection, testing, and trial operations before, during and after construction, offering the explanation that they would wait until after the plant went into production and then handle problems as they crop up. Yet too often that’s just how large software development projects are run, even though the system in development may well be more complex (in terms of connections, processes, and possible states) than such a petrochemical factory. And while most inadequately tested software systems won’t spew pollutants, poison the neighborhood, catch fire, or explode, they can cripple corporate operations, lose vast sums of money, spark shareholder lawsuits, and open the corporation’s directors and officers to civil and even criminal liability (particularly with the advent of Sarbanes-Oxley).

And that presumes that the system can actually go into production. The software engineering literature and the trade press are replete with well-documented case studies of “software runaways”: large IT re-engineering or development projects that consume tens or hundreds of millions of dollars, or in a few spectacular (government) cases, billions of dollars, over a period of years, before grinding to a halt and being terminated without ever having put a usable, working system into production. So it’s important not to skimp on testing and the other QA-related activities.

Bruce F. Webster, “Obamacare and the Testing Gap”, And Still I Persist…, 2013-10-31

November 2, 2013

FATCA may have significant (negative) influence on Canadian law

Filed under: Business, Cancon, Law, USA — Tags: , , , , — Nicholas @ 11:00

In Maclean’s, Erica Alini tries to explain just what the US Foreign Account Tax Compliance Act (FATCA) is, and why Canadians should be very concerned about it:

To say that FATCA is controversial is an understatement. The law is so complex and onerous to implement that some foreign banks have reportedly kicked out their U.S. clients in order to avoid dealing with it. Americans living abroad are queuing to give up their U.S. passports over it. The other problem with FATCA is that it asks foreign banks to do things that are often illegal in their home countries, such as passing on certain private information.

It has caused a stir in Canada as well, but the press here generally portrays it as something that affects only dual citizens and green-card holders. Given the number of Americans who live in Canada, that would be enough to make it a big issue (and a big headache for Ottawa). But the truth is FATCA has the potential to touch a much larger number of unsuspecting Canadians.

[…]

In general, what you get for signing an agreement to enforce FATCA is a pledge that the U.S. will do its best to share some of its information on your country’s potential tax cheats. You read that right: Not a duty to reciprocate your efforts, but a lame “we’ll try hard” promise. That’s because the U.S. government does not, at the moment, have permission to force U.S. banks to share information with foreign governments. Only Congress can change that.

That sounds bad enough, but it gets worse for Canada. We are the exception — the only country with which the U.S. has an automatic information-sharing agreement. Now, the trouble with FATCA is that it demands some new information: Not about the Canadian assets and incomes of people who live in the U.S. but about the assets and incomes of people who live in Canada but might have some ties to the U.S. While Canadian taxation, thankfully, is based on residency — you owe the CRA if you’ve been living in Canada — the U.S. has started demanding that its citizens file taxes regardless of where they live.

One of the unforeseen effects of this legislation is that it’s been making it much harder for US citizens to do business in other countries or to work in other countries for extended periods of time. If foreign banks refuse to allow US citizens to open accounts, you’re imposing significant costs and extra inconvenience on people who are in no way attempting to hide assets or income from the IRS. As with so many government initiatives, it probably won’t inconvenience actual criminals all that much, but will primarily impact ordinary — innocent — US citizens.

It’s “time” for a change

Filed under: Business, Cancon, History, Railways, USA — Tags: — Nicholas @ 10:29

In Quartz, Allison Schrager wonders why we still bother with daylight savings time and four separate timezones for continental US states:

Click to see full-size version at Quartz

Click to see full-size version at Quartz

This year, Americans on Eastern Standard Time should set their clocks back one hour (like normal), Americans on Central and Rocky Mountain time do nothing, and Americans on Pacific time should set their clocks forward one hour. After that we won’t change our clocks again — no more daylight saving. This will result in just two time zones for the continental United States. The east and west coasts will only be one hour apart. Anyone who lives on one coast and does business with the other can imagine the uncountable benefits of living in a two-time-zone nation (excluding Alaska and Hawaii).

It sounds radical, but it really isn’t. The purpose of uniform time measures is coordination. How we measure time has always evolved with the needs of commerce. According to Time and Date, a Norwegian newsletter dedicated to time zone information, America started using four time zones in 1883. Before that, each city had its own time standard based on its calculation of apparent solar time (when the sun is directly over-head at noon) using sundials. That led to more than 300 different American time zones. This made operations very difficult for the telegraph and burgeoning railroad industry. Railroads operated with 100 different time zones before America moved to four, which was consistent with Britain’s push for a global time standard. The following year, at the International Meridian Conference, it was decided that the entire world could coordinate time keeping based on the British Prime Meridian (except for France, which claimed the Prime Median ran through Paris until 1911). There are now 24 (or 25, depending on your existential view of the international date line) time zones, each taking about 15 degrees of longitude.

Now the world has evolved further — we are even more integrated and mobile, suggesting we’d benefit from fewer, more stable time zones. Why stick with a system designed for commerce in 1883? In reality, America already functions on fewer than four time zones. I spent the last three years commuting between New York and Austin, living on both Eastern and Central time. I found that in Austin, everyone did things at the same times they do them in New York, despite the difference in time zone. People got to work at 8am instead of 9am, restaurants were packed at 6pm instead of 7pm, and even the TV schedule was an hour earlier. But for the last three years I lived in a state of constant confusion, I rarely knew the time and was perpetually an hour late or early. And for what purpose? If everyone functions an hour earlier anyway, in part to coordinate with other parts of the country, the different time zones lose meaning and are reduced to an arbitrary inconvenience. Research based on time use surveys found Americans’ schedules are determined by television more than daylight. That suggests in effect, Americans already live on two time zones.

H/T to Tyler Cowen for the link.

ENDA as political theatre

Filed under: Business, Law, Politics, USA — Tags: , , , , , — Nicholas @ 09:41

Walter Olson explains why the proposed federal Employment Non-Discrimination Act (ENDA), even if passed, would not do much to help the people it’s supposedly designed to protect:

The U.S. Senate is expected to vote Monday on the Employment Non-Discrimination Act (ENDA), a bill to “prohibit employment discrimination on the basis of sexual orientation or gender identity” that’s been proposed in one form or another for nearly 40 years. It will be a symbolic vote at many different levels. First, the bill stands little chance of passage in the GOP-controlled House; the point of giving it prolonged attention now is more to inflict political damage on Republicans for resisting a popular measure than to get a bill on President Obama’s desk. Second, it seeks to ratify (and take political credit for) a social change that has already occurred through nearly all the country, including even very conservative locales. Most larger employers are now on record with policies against discriminating against gay employees, and even smaller employers without formal policies mostly hew to the same path in practice, for many good reasons that include not wanting to lose the talents of employees from any demographic.

ENDA is a less salient bill than it looks in a second way as well; statistics from the many states and municipalities that have passed similar bills (“mini-ENDAs”) indicate that they do not serve in practice as a basis for litigation as often as one might expect. This may arise from the simple circumstance that most employees with other options prefer to move on rather than sue when an employment relationship turns unsatisfactory, all the more so if suing might require rehashing details of their personal life in a grueling, protracted, and public process. The forbidden group categories that tend more to drive HR managers crazy are things like age, disability, and criminal record consideration, where the law regularly tries to forbid behavior that in fact is perfectly rational for employers to engage in.

On a level of sheer entertainment, the bill has certainly furnished more than one way for some conservatives and Republicans to make themselves appear ridiculous. Some GOP supporters in Congress, for example, seem to be tempted by ENDA as an “easy,” crowd-pleasing vote to show they’re not always on the anti-gay side. But consider the implication: lawmakers who take this path come across as willing to sacrifice the freedom of private actors — as libertarians recognize, every expansion of laws against private discrimination shrinks the freedom of association of the governed — even as they go to the mat to preserve disparate treatment by the government itself in the recognition of family relationships. Sorry, but that’s upside-down. A classical liberal stance can reasonably ask the government itself to behave neutrally among different citizens with their differing values and aspirations, but should not attempt to enforce neutrality on private citizens themselves.

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