Author Archives: grenley

A Doctor Should Not Be Running Medicare

That may seem counter-intuitive. But Medicare employs thousands of people, lots of computer system, and in general is a big and unwieldy bureaucracy. It needs a CEO with experience running a big organization. Shoudl there be doctors for him to consult? Of course. But a medical education does not involve any classes in accounting, business management, IT, or other skills needed to run a large organization.

Just sayin’ 😉

The Glorious Fourth of July

Every year I promise myself I will write about about the Fourth of July holiday, and what it means to me, and to the world. Most years, I don’t remember to do it until it’s too late. This year, not so.

We celebrate the Fourth of July because it is the day in 1776 when 50-odd men representing thirteen British colonies signed a document declaring their independence from Britain. This is interesting in several ways.

First, it was four days late. Like most committees, they got behind schedule.  😉

Second, people rebelling against their rulers usually don’t bother to write out a list of why. They just rebel.

Most importantly, though, was the idea – the unshakeable idea:

“We hold these truths to be self-evident; that all men are created equal; that they are endowed by their creator with certain unalienable rights, and that among these rights are life, liberty and the pursuit of happiness.”

The idea was not altogether new. Other Enlightenment thinkers had come to recognize that, as God’s creation, we are equal before our creator, and are therefore equal before the law. Furthermore, we, not the discredited Divine Right of Kings, are the holders of sovereign, ultimate civil power on this earth. Not some king. Not some religious leader. Not even some elected government – such a body is the servant of the sovereign, not the master.

In 1776, this was a VERY radical idea. It still is; in many places in the world, ‘democracy’ means merely an election to pick a new dictator.

Critics point out that the signers of that document conveniently forgot that many of them owned other human beings. They omitted any mention of women.  Equality before the law would be a long time coming. But that misses a key point. Why don’t we celebrate October 19, 1781? Or September 3, 1783?

It’s because of the power of declaration. The transcendent, over-arching power of a solemn declaration of the way things WILL be. Max Weber said:

“Somewhere [a man] reaches a point where he says, ‘Here I stand; I can do no other.’ This is something genuinely human, and genuinely moving. ”

Declaration alone does not bring things to pass, of course. But it is the necessary first step. And THAT is why we celebrate July 4 – the date of DECLARATION. Those other dates? October 19, 1781 is when Lord Cornwallis surrounded, and we ‘won’ our revolution.  September 3, 1783 is when we and the British signed the agreement recognizing the facts. Those dates are forgotten; but the Glorious Fourth lives on.

In the years since, we have made enormous progress toward the goal of equality before the law for all men and women in America, but there’s still some distance to travel. I fear we may be backsliding, however, because equality before the law does not mean equality in life, or in outcome. It is plainly obvious that our creator did not create us equal in either body or mind. We remain, however, equal in our souls, before our creator, and hopefully before our own laws.

It isn’t easy. The word ‘democracy’ comes from the Greeks, but democracy in ancient Greece was a series of tragedies and train wrecks. It rather looks like democracy in modern Greece is not working out very well, but time will tell.

The men who founded America, who crafted the Constitution, knew this, and were concerned that America would follow the Greek pattern and turn into a dictatorship. So far, we’ve avoided it, but we remain at risk. Every election is the risk that we will vote unwisely, that we will vote for “me first” instead of what’s best for the nation. Voting cannot make you rich, or happy. It can, if used with great wisdom, help to keep you free.

How does this affect the rest of the world? That’s an easy question to answer, but a far more difficult one to bring to pass. Our Declaration said ALL men (and meant women, etc) – not just Americans, but every person on Earth. However, the idea that humans are not sovereign, that somehow the government or one’s faith is supreme here on earth is common. When you hear someone say the people have to change so the government will work better, they have it backwards. We are not here to try to fit ourselves into some government official’s idea of what we should be. It’s quite the opposite.

This is also true for religion. No church, synagogue, or mosque rules you here on Earth. No pope, no rabbinical council, no imam, gets to decide what you do or do not do. In the next life we will surely find out what we should have done, but in this life we are each sovereign, able to make our decisions, and if we are truly mature, happy to accept whatever consequences may result.

So on this Glorious Fourth, please remember what we celebrate. The power of declaration in general, and the ongoing power of that declaration 239 years ago:

“We hold these truths to be self-evident; that all men are created equal; that they are endowed by their creator with certain unalienable rights, and that among these rights are life, liberty and the pursuit of happiness.”

Banks and Media Mis-Representation, Part 2

There’s a lot of mis-information about derivatives, options, collateralized debt obligations, etc. As usual, the media tends to portray them as reckless gambling, with no purpose other than to enrich bankers. That’s not the case.

I’ll begin by saying that both the government and the various financial institutions are not blameless in all this. But before we begin blaming, let’s understand what all these fancy things are.

And the answer to that question is: they are insurance.

Yup. They are a way to transfer risk from one person to another. Just like when you buy life insurance, or car insurance, etc. Let’s take simple term life insurance as an example. You might purchase a twenty-year, $100,000 policy for a premium of $400 per year. You will spend $8000. In financial terms, you have a guaranteed loss of $8000. However, you have avoided a possible loss of $100,000, the value of your life. If you die, your survivors will miss you, but they won’t miss your income, because they have the $100K.

Look at it from the insurance company’s point of view. They lock in a profit of $8000. But they have a potential loss of $100,000. If they sell lots of policies, and they’ve done their math correctly, the law of averages means they will come out ahead. The government further assures this by requiring them to keep fairly substantial cash reserves.

This is a simplistic example, of course, but it shows the basic concept. Now, let’s look at one that’s a bit more complex. Let’s assume you have a hundred-acre farm where you raise wheat. There are two bad outcomes: 1, a low price; and 2, a crop failure. More specifically, I’m going to say that any price below $5/bu is too low, and any yield less than 50bu/acre is a failure.

To protect against a low price, I want to BUY an option to SELL wheat at $5. This is a PUT option. According to the  Kansas City Grain Exchange options market, I can buy this for 33 cents per bushel, for September wheat. I’ll buy this insurance for 5000 bushels, so I am spending ~$1667. This is my maximum loss; this money is gone, just like an insurance payment.

When September rolls around, if the spot price of wheat is below $5, I can exercise my option and sell 5000 bushels at $5. Thus I have covered myself. I sell the rest of my wheat (if any) at the market price.

If the spot price of wheat is above $5, I let my option lapse. I sell all my grain at the current market price.

Here’s an example: Let’s say the spot price is $3, but I have a good harvest – 100 bu/ac.  I exercise my option to sell 5000 bushels at $5/bu. I sell the other 5000 bushels at $3 (market). I gross $25,000 (5000 *$5) plus $15,000 (5000 * $3), which is $40,000. But, I must subtract the $1667 “premium” I paid when I bought the option. I have ~$38,333 for my wheat.

To protect against crop failure, I buy an option to BUY  5000 bushels of wheat at $5/bu. This is a CALL option. These are trading at 32 cents/bushel. It costs me about $1600 for this.

At harvest, if wheat is above $5, I exercise my option (that is, I buy someone else’s wheat) and resell at market). If wheat is at, for example, $6, I make $1 per bushel profit, or $5000. This is independent of whether my crop was good or not.

Let’s say I get only 20bu/ac, and the price of wheat is $6. I sell my 2000 bushels at $6, or $12,000 total. I also exercise my option on the 5000 bushels, and I make $1/bu profit on those 5000 bushels, for an extra $5000. Total cash is $17,000. My option cost me $1600, so I net 15,900. Not a lot, but something.

Is there a drawback? Well, there can be. The person who SELLS me an option has almost unlimited risk. For example, the person who sold me the PUT option to sell wheat at $5/bu is in a world of hurt if wheat goes to, say $13, which it did not too long ago. He’s out $8* 5000 bushels, or $40,000.

This is why trading in options is not recommended for folks who don’t have deep pockets. The people who do have deep pockets, and are good at this, can make a lot of money. We call them speculators and we think they are evil people, but in point of fact they are simply providing a service to the farmers, just like insurance companies.

In the next post, I’ll talk a little more about what does and doesn’t work when dealing with complex financial instruments.

Banks and Media Mis-Representation, Part 1

Even since the financial crisis of 2008, the media have done an incredibly sloppy, if not purposefully biased, job of explaining what’s been going on. I’m going to take a crack at clearing up a few misconceptions.

1. The bank “bailout”. This has been presented as a gift of billions of dollars to the banks. It wasn’t, it was a loan, and it has been paid back.

Why rescue banks? Well, we need them. Banks are sort of like phone companies; they are exchanges that let millions of people interact more easily. Can you imagine what a PITA it would be if you couldn’t mail a check to pay a bill?

Suppose a major wireless carrier became insolvent – say AT&T. Suddenly they can’t meet payroll, and they send everyone home. The economic dislocation would be huge! Your cell phone wouldn’t work, your Internet would work, even your land line might not work, depending on where you live.

Furthermore, shutting down the company punishes thousands of ordinary workers who are NOT at fault. Why should they lose their jobs?

The better solution is for the Feds to step in, take over day-to-day operations, fire the CEO and the board of directors, and bring in (or promote) some new people to run the company.

Same thing with banks. In fact, this is what the FDIC does, and does very well, a few times a month. Smaller banks become insolvent fairly often, and the FDIC is literally world-famous for the efficiency with which it steps in and cleans up the mess, so that ordinary folks don’t get hurt. But for some reason the biggest banks are exempt from this. It makes no sense.

The result was that when some big banks became insolvent, they were rescued by a much more ad-hoc process, and it was not done as well as it could be. For one thing, the Feds did NOT fire the CEO and the boards of directors, as they should have. But, overall, the Feds did the right thing in keeping the big banks going. A general collapse of banking would be a crisis almost impossible to imagine. In the 1930s, many people never used banks, and could do okay without them. Today, that’s not true. We’d be utterly screwed, and far poorer, if the banking system collapse.

TMI and Over-sharing

Recently, the actress Lena Dunham suggested that the terms TMI and over-sharing are sexist. She is reported to have said:

“The term “oversharing” is so complicated because I do think that it’s really gendered. I think when men share their experiences, it’s bravery and when women share their experiences, it’s some sort of  TMI. Too much information has always been my least favorite phrase because what exactly constitutes too much information? It seems like it has a lot to do with who is giving you the information, and I feel as though there’s some sense that society trivializes female experiences. And so when you share them, they aren’t considered as vital as their male counterparts’ [experiences] and that’s something that I’ve always roundly rejected.”

She has some good points, but what the heck does that have to do with technical documentation? Easy. Figure out how much your audience wants to read (or watch), and adapt your message accordingly.

For most of us, our most precious commodity is time. I think this is what is driving the trend to shorter articles and content of all types. You will lose your audience if you waste their time, and people often make that decision within seconds of encountering your message.

I can’t say if Lena is correct in her overall assessment, but she is incorrect about it having to do with the sender of information. It’s the receiver. Tailor your message to your audience. And yes, in some cases that may mean considering whether your audience is male or female.

Here’s an amusing example: There is a theory that the universe began with a big “bang”, probably around 13 billion years ago. It went from a singularity, a point of zero dimension, lost in a void of darkness. Imagine that you are a physicist with a deep understanding of this theory.

Now, your first task is to explain it to a group of fairly bright college freshmen who are enrolled in a physics class. You might have a 20 or 30 minute lecture.

You second task is to explain it to a group of first-graders. You might have something like this:

“Darkness was over the surface of all. And God said, “Let there be light,” and there was light. God saw that the light was good, and he separated the light from the darkness, and created the earth and the stars.”

Sound familiar? Of course. It’s a loose adaptation of Genesis. Is it fully accurate? No. But neither was your college-freshman explanation. Both are simplified versions adapted to meet the intellectual of the audience.

At Plans2Reality, we rarely use biblical text to explain modern technology, but we do have a number of strategies and techniques that we can apply to make sure your message is tailored to your audience, and doesn’t have “TMI”.

Ways to Kill a Team

– Set your own private agenda. People will notice, and once they realize that there are hidden agendas and undeclared goals, they’ll quit trying. Why try to win a game where you don’t even know the rules?

– Believe that you are better than anyone else on the team at their job – even if it’s true. Economists refer to the law of comparative advantage. Even if you truly are better at every task in your organization that the people working for you, don’t act on that. Focus your talents on those aspects where your value is most valuable.

– Fail to put yourself in others’ shoes. Especially customers’ shoes. Too often a company creates a strategy that’s good for the company, but not the customers. Netflix did it not too long ago, and it darn near killed them.

– Play Favorites. This leads to the next rule, dividing the group.

– Divide the group establish rivalries. Not to be confused with competition, which can be good. One way to tell the difference is by seeing how many people can win. If only a few people can, it’s a bad idea. Once classic example is a sales competition; for example, to say that whoever sells the most product in the next 90 days wins a trip to Hawaii. Most people on the team know that have no chance of winning, so why try at all?

– Restrict the flow of information. This is similar to having one’s own agenda – people will figure out that they are not seeing the whole picture, and therefore have little chance of “getting it right”, and so they will likely stop trying.

– Insist that you’re right and the others are wrong. There may be cases where you are indeed right and they are not, but find a way to let them discover that. Propose a test of evaluation. Take some time to explain background information they may not have considered.

– Think negatively or be a pessimist. A healthy skepticism is a good trait in an engineer or scientist, and in many other disciplines as well. There’s a difference between asking yourself, and the team, “what could go wrong?” versus “it can’t be done.” On the other hand, large or complex projects that break new ground are going to trip over unforeseen problems. Allow for it.

– Denying the existence of “bad news”. Some managers like to tell subordinates to never bring them bad news. This is a bad idea. As just mentioned, complex projects discover unforeseen factors; to assume there will be no problems just because you don’t know specifically what problems will occur is foolhardy. Give people the space to explain the challenges they are facing and to solicit help without being branded as “someone who couldn’t handle it.”

The corollary of this is Punish bad news, aka shoot the messenger. Don’t. Make a point of acknowledging them in front of the team, and praising them for identifying a problem early before it gets too complex.

– Guard your turf. Like private agendas and not sharing information, this causes other to decide not to play nicely with you, because you aren’t playing nicely with them.

– Hog credit. Give all credit to your team. Your credit was in assembling and leading them, not in the work they did – even if you did some of it.

Silicon and Silicone

I suppose the ever-evolving nature of the tech industry requires an occasional re-explanation of ‘silicon’ and ‘silicone’.

Silicon is an element, and can be found in the periodic table directly below carbon. Like carbon, it prefers to form four bonds with other elements. CO2, carbon dioxide, we all know. SiO2, silicon dioxide, is also known as quartz, and is quite hard, hence its use in sandpaper, among other things.

Chemists once thought that the atomic bond similarities between silicon and carbon might allow for complex silicon compounds, analogous to the complex carbon-based organic compounds of life. ‘Twas not to be (though Star Trek did get an episode out the idea). Instead, a chemist by the name of Frederick Kipping discovered that you could create a chain of alternating silicon and oxygen atoms pretty much as long as you wanted, and that these had useful oily and rubbery qualities. Dr. Kipping coined the term “‘silicone’ way back in 1901 to describe his discovery. Silicone (like ice cream cone) sounds ever so much nicer than polymerized siloxane…..

Silicone oils and silicone rubber have a wonderful advantage of being pretty darned near totally non-toxic to humans, and so are widely used to make medical implant devices for the repair of damaged humans, and of course their most famous cosmetic application, silicone breast implants. I once worked at Dow Corning, a major supplier of such devices, and they had a display case of silicone bits for human body repair. There were ears, noses, testicles, and many more – dozens, actually. I’m sure they’ve helped many people recover from serious injury or disease.

Silicone oils are specified for use in certain food-handling machinery where there is a chance that some of the oil may get into the food. Silicone oil is non-toxic – though a heavy dose tends to move material through your bowels in a spritely manner, to put it politely.

Your most likely everyday encounter with silicone is in bathtub caulk and similar compounds. Some folks call this RTV, which is correct, but it is a silicone rubber. Another increasingly common application is in silicone bakeware, hot pads, and related items. Silicone withstands extremely high temperatures quite nicely.

But enough about silicone. Silicon (no ‘e’), the element, is the basic compound used in the modern semiconductor industry. (There are other semi-conducting compounds, but the vast majority of the industry is based on silicon.) Silicon has a short ‘o’ sound. It rhymes with con-man, or Khan.

The area stretching along the west side of San Francisco Bay, from San Jose up past Palo A lot, is Silicon Valley. Short ‘o’ sound. It is not silicone valley. Were there a place to be designated as silicone valley, I suppose it would be the east side of Midland, Michigan, where Dow Corning is based. But that part of Michigan is pretty flat, so perhaps we should prefer silicone meadow. Have to ask my friends in Midland about this.  😉

Reliable Wireless?

Frankly, it’s an oxymoron. This article http://www.automationworld.com/drastic-improvements-wireless-reliability describes one vendor’s approach – basically, two parallel wireless paths, and intelligence at each end to (a) duplicate packets; and (b) removes duplicates at the receiving end.

Not a bad idea. However, it has two drawbacks:

You need to use two RF channels, and in most wireless environments, there are already far too many devices competing for far too few channels.

Interference is a primary cause of packet loss. There are other causes, notably Fresnel zone effects, but interference from other wireless devices, and from various machinery, is the most common cause. The dual-link idea does address Fresnel issues, but does not do a lot to help the interference. To be fair, it will help some, because the two links are on different channels, and possibly even different bands, but if the interference is from radar, industrial machinery, or other broad-spectrum sources, y you’re still going to lose the link.

The best bet is to find a way to wire it. It’s hard to beat cat-5 for reliability…

If you really really can’t have a wired connected, and you really really need five nines of connectivity, you might want to rethink your design. Because reliable and wireless don’t belong in the same sentence.