Sunday, October 30, 2011
Saturday, October 29, 2011
Friday, October 28, 2011
Computer Models are Always Wrong
The territory is not the map, so it should not be surprising that computer models are always wrong. It's pretty intuitive (at least to those of us who don't live in a virtual world.) But for those that do, someone has taken the time to prove it as described in Why Economic Models Are Always Wrong.
So economic models are always wrong. Big shock there. It also means that other sophisticated computer models are always wrong as well. So the next time you hear that computer models predict something, as they say, "don't believe the hype."
So economic models are always wrong. Big shock there. It also means that other sophisticated computer models are always wrong as well. So the next time you hear that computer models predict something, as they say, "don't believe the hype."
Thursday, October 27, 2011
Too Many Males
I've been saying for years that the one child policy of China and male-centric societies like India, combined with selective abortions of females, would result in severe social consequences in the 21st century. I grew up in a rural town with a lopsided male/female ratio and I've seen the results. It isn't pretty, but at least I could move a hundred miles to the nearest city.
From The unstable future of a world full of men:
From The unstable future of a world full of men:
As the global population hits seven billion, experts are warning that skewed gender ratios could fuel the emergence of volatile “bachelor nations” driven by an aggressive competition for brides.
The precise consequences of what French population expert Christophe Guilmoto calls the “alarming demographic masculinisation” of countries such as India and China as the result of sex-selective abortion remain unclear.
But many demographers believe the resulting shortage of adult women over the next 50 years will have as deep and pervasive an impact as climate change.Ugly.
Wednesday, October 26, 2011
The Unpopular
In a mass media capitalist society, as often noted, the unpopular is unprofitable. Niche markets exist, but the real money comes from mass appeal. Unsurprisingly, mass appeal is not as important as mass tolerance. Accepted backdrops, which develop into verbal worlds, are exploitable for Maximum Advantage in all Things. As the same response is promoted on all occasions, by nature (or anti-nature if you prefer) all responses are reactive and mediocre. Even fear may be stretched and strangled. The latest terror alert ceases to have meaning. One would think a failing propaganda campaign would cease in favor of a different tact. It often does not. Those caught in their own verbal world have abandoned reality. Who is to say what is reality? A kick in the teeth!
Tuesday, October 25, 2011
What Planet?
Only 23% trust U.S. financial system: poll. So what the hell is wrong with the other 23%?!? On what planet do they reside?
Monday, October 24, 2011
No Credibility
It appears that the announcement that the US is leaving Iraq has no credibility. When you lie so often, after a time, nothing is believed. Maybe Bush and Obama should have read (or in the case of the former had read to him) the story of The Boy Who Cried Wolf?
Sunday, October 23, 2011
Cratering
Cratering can be managed. Plan the work, then work the plan. What we get: plan the work, then do nothing.
Saturday, October 22, 2011
Keep it up, Geezers!
The stupid geezers behind what is left of the "Tea Party" movement that has since become co-opted by the slimy Republican Party are showing their desperation. They obviously know they do not represent the future, but instead of trying to do something about it they piss and moan. Rather than find some commonality with people whom they would generally agree on the larger symptoms of systemic disease, they would rather distance and isolate themselves further in a self-imposed ghetto. The hilarious thing is the contradictions in their criticism of OWS. They will claim that it is more interested in anarchy, but at the same time believe in "big government." It's kind of hard to see how these two extremes can coexist. From Wall St. Protest Isn’t Like Ours, Tea Party Says:
(It's also amusing to note that capitalists, whose feet they lick, don't feel an obligation to pay their bills either--and for real as well.)
(Another Maximum Advantage Discussed moment.)
“They seem to be more in favor of anarchy than they are in favor of working out problems through the Constitution,” Jenny Beth Martin, a co-founder of Tea Party Patriots, said about the Occupy forces.
“We have worked very hard to be respectful of the laws,” she said in an interview. “We protest and complain, but we’re also trying to work within the system. It’s frustrating to watch people who have an utter lack of respect for our form of government.”
Tea Party Patriots issued a statement last week titled, “Occupy Wall Street? They’re No Tea Partiers.” Tea Party supporters, it argued, were the ones who “have stood firmly on principle.”
“They believe freedom from government allows entrepreneurs to try new things, see what works and discard what doesn’t,” it continued. “They don’t believe corporations are inherently evil, or that bankers should be beheaded.”
By contrast, it portrayed Occupy protesters as freeloaders, or would-be freeloaders: “Those occupying Wall Street and other cities, when they are intelligible, want less of what made America great and more of what is damaging to America: a bigger more powerful government to come in and take care of them so they don’t have to work like the rest of us who pay our bills.”So which is it? Granted a truly leaderless movement (which truly scares authoritarians) will have such contradictions, but this propaganda isn't even interesting. (The Constitution is a dead document, so why would it be respected is besides the point.) It shows why their generation has done such a great job of destroying America: they believe what they are saying even if it makes no sense compared with what they just said. Keep it up, geezers! Your doing a heck of a job...
(It's also amusing to note that capitalists, whose feet they lick, don't feel an obligation to pay their bills either--and for real as well.)
(Another Maximum Advantage Discussed moment.)
Friday, October 21, 2011
Thursday, October 20, 2011
New Song
Drunk And Armed, my music project, has released the 4th track to the politician E.P. called Cranial Rectal Embedment.
The song title was suggested by the Author Morris Berman, author of Dark Ages America (see Also) and other titles. His latest book is Why America Failed.
See Here for Downloads.
More Drunk and Armed songs may be found Here.
The song title was suggested by the Author Morris Berman, author of Dark Ages America (see Also) and other titles. His latest book is Why America Failed.
See Here for Downloads.
More Drunk and Armed songs may be found Here.
Tuesday, October 18, 2011
No Demands
From Occupy Wall Street’s demand? No demands:
I believe the success of OWS (so far) and the miserable failure of the Tea Party (by which I mean the original concerned citizens who comprised it before it was co-opted by the Republican Party) is due to this fundamental difference in premise. The Tea Party went on and on about the Constitution, but for many it is a document that has no real meaning--especially those to whom it was entrusted. Legitimacy dies when values are only paid lip service. Who gives a crap about something over 200 years old that has no real relevance to modern issues? Only naive "geezers" apparently (as evidenced by the lack of support from youth or even middle aged). By definition, there is no future there. They are "past it." The Twentieth Century is over. Get on with it.
OWS is what it is. Perhaps its appeal represents a foundation for resilient communities? (I will concede some of the original members of the Tea Party, and conservatives in general, may already by well on their way as well--as a reaction. The way is forward.)
“You can make demands, but I’ve seen coalition after coalition marching and marching and making demands, yelling mostly, and then going home,” said Janet Kobren, an experienced activist who left Occupy Wall Street’s San Francisco outlet to join the New York hub.
“Who are they talking to?” Kobren, 68, asked of protestors who habitually stand outside barricaded government offices asking for something specific. “I see them as kind of teenagers saying, ‘I want, I want,’ to their parents.”
Kobren reflected the purist Occupy Wall Street philosophy: that there’s no point demanding change from the government or the financial industry when those institutions are rotten. “We need to do it (bring change),” she said.Nicely said. (Obviously some of the older generations get it.) Other than "drop dead" what else can one say? The government and large corporations that back it have no legitimacy whatsoever. The federal government does nothing for (but a lot to), and corporations, especially the financial sector, are nothing but parasites to the average citizen. Demanding something from them is like asking a tapeworm to stop feeding. It isn't going to happen--so why bother? The best response is to turn away and make something that excludes their sort altogether by its definition.
I believe the success of OWS (so far) and the miserable failure of the Tea Party (by which I mean the original concerned citizens who comprised it before it was co-opted by the Republican Party) is due to this fundamental difference in premise. The Tea Party went on and on about the Constitution, but for many it is a document that has no real meaning--especially those to whom it was entrusted. Legitimacy dies when values are only paid lip service. Who gives a crap about something over 200 years old that has no real relevance to modern issues? Only naive "geezers" apparently (as evidenced by the lack of support from youth or even middle aged). By definition, there is no future there. They are "past it." The Twentieth Century is over. Get on with it.
OWS is what it is. Perhaps its appeal represents a foundation for resilient communities? (I will concede some of the original members of the Tea Party, and conservatives in general, may already by well on their way as well--as a reaction. The way is forward.)
Monday, October 17, 2011
Public Megaproject Overruns: Error or Lie?
As I've disclosed previously, in my real life, part of my job as an (un-)civil engineer revolves around estimating construction costs for heavy civil/transportation/marine projects. These projects include small projects that I design, and sometimes work on the construction side, and $100M+ projects of which I am a team member. One of the professional requirements for such work is the identification and mitigation of risks.
Risk based estimating, as opposed to traditional estimating approaches, attempts to proactively recognize threats and opportunities to a project's scope, schedule and/or budget. In this process, known and unknown risks are assigned relative weights as some will impact the project to a greater extent than others. Identifying risks (and opportunities) will also keep management and executives from being surprised as the project progresses. Certain risks are ongoing, whereas others pass with time. Although unlikely, a major earthquake could occur at any time, whereas a high bid cannot occur at the end of construction.
Risk assessment and management is something we constantly do everyday. Nobody would cross a street without looking for traffic, and managing projects should be no different. Regardless of the size of the project, risk may be both quantitative and qualitative. Market conditions pose a risk to the cost of a project. The loss of key personal is more difficult to assess numerically. Risk is something that should be assessed continuously (or at least daily). Once a risk is identified, it should be documented. Likewise, if a risk is retired, it should be removed and the reason(s) for doing so noted. Therefore, to be effective, a risk registry is a living document that must be utilized throughout the life of a project. In order for it to be proactive, it must be acted upon. A risk is an issue that has not yet occurred; an issue is a risk with a 100% probability of occurrence; and an action item is the implementation of the mitigation plan. A transportation analogy is defensive driving.
One advantage of risk based estimating, as contrasted to traditional estimating approaches, is the estimate is given as a range of values rather than a singular number. As the design progresses, the range is narrowed. As with traditional estimating, it is important that risk based estimates are not skewed due to pressure to advance a project. Unfortunately, when it comes to public megaprojects, which I'll define as projects with over $100M in costs, there is a tremendous amount of political pressure to downplay the impacts of risk. There is a great deal of research on under-reporting projects costs by Professor Bent Flyvberg. For more background his seminal paper Underestimating Costs in Public Works Projects Error or Lie? is essential.
In my experience and as shown with extensive analysis by Professor Flyvberg, the riskiest projects, no matter the size, are those where something that was previously unknowable becomes exposed through the work process. Examples are building remodels and underground work. For example, during a building remodel, asbestos or mold may be discovered when a wall is removed, therefore leading to costly abatement work. In the case of underground work, the geotechnical boring test pattern may have missed a large rock that is only removable by expensive means, or contaminated soil may be discovered. (Change orders are always more expensive than work as it was originally bid.) There are several means of mitigating these unknowns. More preliminary work, during design, may help to identifying potential risks, such as performing more borings. Another means is for the owner to take the risk from the contractor by a contracting tool such as force account, where the owner's representative directs the work methods.
There are also more general methods to mitigate risk, such as contract cost escalation clauses, which ensure that the contractor is protected from material and/or fuel cost hikes, therefore eliminating the need for hedging bids to account for future price shocks.
Another method for estimating the cost of risks is to create a risk model that uses a Monte Carlo simulation to develop a range of costs. The probability of occurrence and the cost range of possible risks (and opportunities) are fed into the model and a random number generator computes the range of costs from best to worst case. This is considered a cost-risk model. For example, hypothetically, if the project was constructed 100 times, and the 60th percentile is chosen as a baseline this means the amount of funds budgeted for a certain project will correspond to the 60th highest cost per the model. However, for public projects, this strategy is subject to manipulation as the percentile chosen will dramatically alter the cost estimate as it is released to the public. A case in point is as follows.
In Seattle, as the residents of Washington State are aware, the earthquake damaged Alaskan Way Viaduct is being replaced, not with an elevated structure in-kind, but with a highly expensive deep bore tunnel. The project has already started. A cost-risk model, using the base estimate, has been developed. The cost of the project, as reported to the public, is based on the results of the 60th percentile, which is the current policy used agency wide. Although the 60th percentile might be a conservative estimate for rebuilding an interchange, it is rather low for an underground project with many known unknowns and unknown unknowns. As Professor Flyvberg has convincingly demonstrated, tunnel projects worldwide are the projects that most susceptible to underestimating costs. One reason, other than the nature of the projects, are these types of projects often allow politicians and others an opportunity to make their mark in a big way. At the same time, the policy makers responsible are usually long gone by the time the final cost come due, so their ego is appeased and they do not have to deal with the fallout from trying to pay for it. The deep bore tunnel is another such case. Since tax receipts are falling, this project is taking funds that could be used to repair roads and other less glamorous, but necessary, transportation work.
It isn't only economists that use statistics to lie.
Risk based estimating, as opposed to traditional estimating approaches, attempts to proactively recognize threats and opportunities to a project's scope, schedule and/or budget. In this process, known and unknown risks are assigned relative weights as some will impact the project to a greater extent than others. Identifying risks (and opportunities) will also keep management and executives from being surprised as the project progresses. Certain risks are ongoing, whereas others pass with time. Although unlikely, a major earthquake could occur at any time, whereas a high bid cannot occur at the end of construction.
Risk assessment and management is something we constantly do everyday. Nobody would cross a street without looking for traffic, and managing projects should be no different. Regardless of the size of the project, risk may be both quantitative and qualitative. Market conditions pose a risk to the cost of a project. The loss of key personal is more difficult to assess numerically. Risk is something that should be assessed continuously (or at least daily). Once a risk is identified, it should be documented. Likewise, if a risk is retired, it should be removed and the reason(s) for doing so noted. Therefore, to be effective, a risk registry is a living document that must be utilized throughout the life of a project. In order for it to be proactive, it must be acted upon. A risk is an issue that has not yet occurred; an issue is a risk with a 100% probability of occurrence; and an action item is the implementation of the mitigation plan. A transportation analogy is defensive driving.
One advantage of risk based estimating, as contrasted to traditional estimating approaches, is the estimate is given as a range of values rather than a singular number. As the design progresses, the range is narrowed. As with traditional estimating, it is important that risk based estimates are not skewed due to pressure to advance a project. Unfortunately, when it comes to public megaprojects, which I'll define as projects with over $100M in costs, there is a tremendous amount of political pressure to downplay the impacts of risk. There is a great deal of research on under-reporting projects costs by Professor Bent Flyvberg. For more background his seminal paper Underestimating Costs in Public Works Projects Error or Lie? is essential.
In my experience and as shown with extensive analysis by Professor Flyvberg, the riskiest projects, no matter the size, are those where something that was previously unknowable becomes exposed through the work process. Examples are building remodels and underground work. For example, during a building remodel, asbestos or mold may be discovered when a wall is removed, therefore leading to costly abatement work. In the case of underground work, the geotechnical boring test pattern may have missed a large rock that is only removable by expensive means, or contaminated soil may be discovered. (Change orders are always more expensive than work as it was originally bid.) There are several means of mitigating these unknowns. More preliminary work, during design, may help to identifying potential risks, such as performing more borings. Another means is for the owner to take the risk from the contractor by a contracting tool such as force account, where the owner's representative directs the work methods.
There are also more general methods to mitigate risk, such as contract cost escalation clauses, which ensure that the contractor is protected from material and/or fuel cost hikes, therefore eliminating the need for hedging bids to account for future price shocks.
Another method for estimating the cost of risks is to create a risk model that uses a Monte Carlo simulation to develop a range of costs. The probability of occurrence and the cost range of possible risks (and opportunities) are fed into the model and a random number generator computes the range of costs from best to worst case. This is considered a cost-risk model. For example, hypothetically, if the project was constructed 100 times, and the 60th percentile is chosen as a baseline this means the amount of funds budgeted for a certain project will correspond to the 60th highest cost per the model. However, for public projects, this strategy is subject to manipulation as the percentile chosen will dramatically alter the cost estimate as it is released to the public. A case in point is as follows.
In Seattle, as the residents of Washington State are aware, the earthquake damaged Alaskan Way Viaduct is being replaced, not with an elevated structure in-kind, but with a highly expensive deep bore tunnel. The project has already started. A cost-risk model, using the base estimate, has been developed. The cost of the project, as reported to the public, is based on the results of the 60th percentile, which is the current policy used agency wide. Although the 60th percentile might be a conservative estimate for rebuilding an interchange, it is rather low for an underground project with many known unknowns and unknown unknowns. As Professor Flyvberg has convincingly demonstrated, tunnel projects worldwide are the projects that most susceptible to underestimating costs. One reason, other than the nature of the projects, are these types of projects often allow politicians and others an opportunity to make their mark in a big way. At the same time, the policy makers responsible are usually long gone by the time the final cost come due, so their ego is appeased and they do not have to deal with the fallout from trying to pay for it. The deep bore tunnel is another such case. Since tax receipts are falling, this project is taking funds that could be used to repair roads and other less glamorous, but necessary, transportation work.
It isn't only economists that use statistics to lie.
Sunday, October 16, 2011
Lying with Statistics
There's nothing so easy as Lying with Statistics (which should be required high school reading). Government statistics have been so skewed that it is difficult to see if any of them have any resemblance to economic reality. Financial Armageddon features a good example regarding the supposed gains in September consumer spending. From Alternative Universe, which concludes:
The truth? The entire gain was "seasonal adjustment." All of it. In other words, in actual dollars there was not only no increase there was a net decrease in sales of approximately five percent - not annualized either, month-over-month!
Put that in your economic pipe and smoke it.Indeed. It's best not to believe the hype. For more examples, the Shadow Government Statistics site is an excellent source.
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