Bigger Is Better Is A Fundamentally Flawed Idea

Frederick Taylor is one of the greatest villains in American history.  He is the efficiency fanatic, and the author of Scientific Management,  whose name was a household word in the U.S. and Europe around the turn of the last century.  Not too many people remember him today but almost everybody does accept his principal premise as gospel, ie; that the goal of industrial (or for that matter social or governmental)  enterprises is to achieve such large scale that one can bring more resources to bear and “scientifically’ manage your business operations.   

So if your not achieving the results you want say in obtaining good intelligence prior to 9/11 what you do is merge every possible intelligence gathering function together then apply ever more consistent and well thought out rules for intelligence gathering.

Taylor’s most famous example was assembling a team of efficiency “experts” to study the large number of people shoveling at Bethlehem steel works. And study it they did.  They set hourly rates for various materials, dictated the substrate they should shovel off of, the shovels they had to use, the type of men who should be hired for shoveling.  In other words they made shoveling a science administered by “college” men specially trained to control the workers performing their assigned tasks.  And he did achieve some savings.

Yet unfortunately for Taylor’s theory (but fortunately for the human soul), economy of scale is primarily a purchasing or mechanical benefit and rarely a social one.  Real progress doesn’t come, as Frederick Taylor says he “proved”,  by getting better and better at telling people what to do, instead it comes from changing the method. 

Just like it did at Bethlehem Steel, where eventually they threw his techniques out the window and bought a steam shovel.

But here’s the key, CHANGING THE METHOD IS ALWAYS EASIER THE SMALLER AN ORGANIZATION OR THE MORE DISTRIBUTED DECISION MAKING IS IN AN ORGANIZATION.

Which is why the U.S. achieved some stunning intelligence results prior to and during WW II, like breaking the Japanese codes, predicting the Nazi/Soviet pact, pinpointing German subs in the Atlantic and so on because we were operating a potpourri of small intelligence and code breaking organizations.  Something we could do because there was no centralized Department of Defense and no centralized Central Intelligence agency just Naval Intelligence code breaking at CINCPAC fighting it’s own war, the Marine Corps doing it’s own thing in secret, the OSS fighting another war (often with the FBI who was always fighting its own war) and of course Roosevelt, that incurable dabbler, handing out “unaccountable funds” left and right to this that and the other intelligence dilettante.

But then of course, we looked at our failures instead of our successes and organized the whole thing according to Taylor’s dictum about “Scientific Management.”   Consolidated intelligence gathering and the military and choked off the initiative, loaded it down with lawyers in order to write more and more rules and wound up with well what we got. Nobody sounding the alarm prior to 9/11. 

And after 9/11 what did we do, yes consolidated further.

Because Taylor’s principal of bigger more centralized control is still widely accepted.  There’s a problem with mine safety?  Consolidate mine rule making in one huge agency with broad powers to develop specific and detailed rules.  Kids aren’t learning how to read?  We need a bigger better funded Dept. of Education.  What they still aren’t reading?   Make the Dept. bigger, bigger and bigger yet BECAUSE WE NEED MORE RESOURCES AND BETTER MORE RIGOROUSLY ENFORCED RULES.

Tom Peters wrote a couple of really excellent books about this back in the eighties which profoundly changed how many manufacturing managers think about economy of scale and ever since factories have been getting smaller or more distributed.

Somebody has got to do the same thing for government. 

Once people get the idea things will slowly begin to change.

Bigger is not better.  Central Planning never beats decentralized decision making.  If it did the old Soviet Union would have been able to supply more than 2 out of the 100 most popular consumer items available in the West.

Although it is interesting that leftists and trade unionists, who vociferously attacked Taylor when he was alive for developing ideas which, they thought, would rivet the cruel capitalistic system onto the backs of workers forever, now have no other ideas, but his.

 

 

Now We Know

If the reports of new whistle-blowers are to be believed, Hillary gave Stinger missiles to Al-Qaida in Libya, the ambassador went to Benghazi to try and buy them back and they killed him.  Meanwhile it looks like Hillary was the behind the ban on sending help, one supposes in order not to call attention to his mission. 

What a disgusting swamp and what a despicable swamp-rat she is.

Words fail me.

It should be noted that Stingers at the time of Reagan had to be programmed for the type of aircraft they could down.  I don’t know how the new improved versions work, but I’m not reassured.

And neither should you be.

The Gravity Free Economy

The Wall Street Reports that Congress is outraged Apple Computer is paying less taxes than they could.  Not that they should, but they could.   Here’s a quote.

One of the units, Apple Operations International, hasn’t filed a corporate tax return anywhere in the past five years, the Senate panel found. The unit is the main holding company for Apple’s business outside of the Americas. 

“Despite reporting net income of $30 billion over the four-year period 2009 to 2012, Apple Operations International paid no corporate income taxes to any national government during that period,” the report found.

 Apple told the panel that it doesn’t believe Apple Operations International “qualifies as a tax resident of any other country under the applicable local laws.”

 In 2011, another Ireland-based Apple unit, Apple Sales International, which sells iPhones, iPads MacBooks and other products to overseas distributors, recorded $22 billion in pretax earnings but paid just $10 million in taxes, investigators found. That works out to a rate of about .05%. 

A third Apple subsidiary, Apple Operations Europe, also maintains its corporate profits aren’t taxable by any country, according to the investigation.

What this means is some very smart people at Apple constructed a matrix of tax laws both here and in foreign countries and then put their foot down where they couldn’t be touched.  Kind of like kids will run down a sidewalk and jump over all the lines – “step on a crack and break your mother’s back” anybody remember that?  So why the indignation, after all Apple didn’t write the tax laws, stupid people greedy people in Washington, London, Paris and Berlin did.

And maybe the fact that they’re bright enough not to get nailed by the suck your blood types in D.C., is a good part of the reason they’re as successful as they are.

But Apple super-smart tax avoidance is actually small potatoes in the scheme of things.  The underground economy, or untaxable cash or kind economy in the United States is usually estimated at a trillion dollars a year.  Those with some interest might study this issue because I ran the numbers and got something like four trillion.  In other words the underground economy in the United States or as I call it The Gravity Free Economy (have to trademark that name) may be as large as the total economy of Japan.

The way we’re encouraged to look at this activity is that these people are stealing from the rest of us.   If they only paid their taxes the thinking goes the rest of us would have  to pay less and/or we wouldn’t have a Federal deficit.

But is that true?  Let’s say this four trillion dollars worth of business suddenly kicked in say $500 billion a year in taxes.  Would the government use that windfall to reduce taxes or the deficit?  If you answer yes, not only are you smoking dope, but some very bad dope.  What government would do is spend more and while it’s a subject for another time, above a certain very bare minimum every dollar the government spends distorts and damages the economy.  Which is why, with our enormous government spending, we are no longer twice or three times as rich as our closest competitor.  So withholding taxes, or simply avoiding them as in the case of Apple is a very good thing.  Makes our economy stronger not weaker.

Indeed the Gravity Free Economy is probably the reason the United States hasn’t completely tanked yet despite the best Obama can do.  Because bear in mind what these people are doing is creating wealth, not destroying it like Washington does.

Think about it.

Flackback

Stone Ridge Dictionary Of Political Terms, 2013 Edition

FLACKBACK [flak-bac]

Def: Noun, Verb (with a subject or not) A flashback by a Flack (a public relations person or other surrogate) in which they reference some out-of –context comment or action made in the past which confuses the issue of what their host organism’s responsibility is in the issue under discussion today.

Punishing Castro Of Cleveland

The Constitution forbids cruel and unusual punishment. But in the 1790s it was usual for Indians to have evildoers run the gauntlet. Nor was it considered cruel, cruel was when the sawed off your joy stick with clam shells or poked burning embers up your butt. So why not a gauntlet. Why not say “Castro, my man you’re home free if you can run the length of Euclid Avenue between those two files of citizens you see out there. It’s only four or five miles, give it a shot. Take your f__king lawyers along. They have something to say to them too.”

Am I allowed to pray for this or does that make me a bad Christian?

What Difference Does It Make

The first day of the Benghazi hearings are over and two things once evident are now confirmed.  One is that the “Talking Points” were changed in an attempt to place the blame for this debacle on the so- called offensive video trailer instead of where it belonged, on the criminal ineptitude of Hillary Clinton’s State Department and a President who was AWOL.

Bob Beckel made a great point about this.  Changing talking points under the press of events is the worst thing you can do.  Go with story, take the hit and move on.  People reward honesty and will forgive.  But change it and you’ll never, especially in this age of electronic records being preserved everywhere, get your fingerprints off it.  And this is what’s happening.  And so Hillary will, wind up having this stake driven through her chest.  Whether it hits her heart (and whether or not she has one) is another matter, but she’s going to bleed.

A larger point is that the American people should recoil at the very idea of “Talking Points.”  It’s just another name for “Party Line” as in the heyday of the U.S.S.R. when everybody had to mouth the same lies, stick to the same Communist Party Line.

The second confirmed something, is the fact that there are men out and about still motivated by patriotism and the example of bravery.  Just not our leaders.

But we once had leaders determined to do their duty and it’s wise to remember what they were like.  Leaders who didn’t blow off the idea of doing their duty like Hillary Clinton did when she made two plump little fists and whooshed “what difference does it make?”

One example is the ordeal of Fort Stanwix in the early days of the American Revolution.  Stanwix was located west of Albany New York in the Mohawk Valley where Rome New York is now.  England was trying to invade New York from three directions and so sunder the united colonies into two.  A huge army was moving north from Manhattan, a large force south along the Champlain corridor from Canada and a third east up the Mohawk.  Stanwix blocked the Mohawk move and a relieving force under General Herkimer had just been shot to pieces and had to withdraw and so Stanwix was on its own, outnumbered, outgunned and without any chance of supply.  Worse it looked like the other two arms of advance had already succeeded and so ST Leger the British Commander sent an emissary into the fort, explained all this and demanded its surrender. 

The response from Lieutenant Colonel Willet was in writing and a bit too long to repeat here, but allow me to quote the salient lines:

“We are doing our duty: this garrison in committed to our charge, and we will take care of it.  After you get out of it, you may turn around and look at its outside, but never expect to come in again, unless you come a prisoner.”

And the British grew afraid, and fled.

But no enemy will ever flee Hillary Clinton or Barack Obama, because when it comes to their duty to their garrison, to their people, their conviction is, “what difference will it make?”

Government Spending Boosts The Economy?

The Practical Economist – Lesson 1

Does Government Spending Stimulate The Economy?

The short answer is no.   Yet the idea that pumping money into the economy gets people spending and so boosts economic keeps getting restated as a fundamental fact, like the law of gravity.

But it’s not and never has been true.

Some government spending is required as overhead.  Overhead being defined as that roof which keeps the rain off of the productive machinery and people beneath.  And so we need laws both civil and criminal, we need a military to keep the barbarians at bay etc.  But that’s about it and this legitimate overhead is so tiny a fraction GNP that we don’t have to consider it in normal discussion.

But everything else our government does, every “good idea” it has for spending money – social programs, crony industrial deals, subsidies,  damages productive output.   Every dime every time!

Because the government is not sending money in the direction market forces would have if the market had a choice, in other words in the most effective way.  Consider the fact that the government has spent an amount equal to the national debt (16 trillion) on social programs since LBJ’s “War On Poverty.”  Suppose that money was invested into productive businesses instead?  Somewhere between forty and sixty million new jobs (productive jobs) would have been created, wiping out unemployment and as much as tripling our standard of living.  But paying somebody not to work because they insist their back hurts, or subsidizing non-working  non-productive single mothers or propping up some industry which would have otherwise died is not a productive use of money and as far as the economy goes, it’s not any different from throwing it down a rathole.

Look at Japan, sometime ago they decided to stimulate their economy with government spending .  To the point where their national debt is now 200% of GNP.  What happened?  Their economy flat-lined.   Just as ours has since LBJ.  The same has happened in Europe – zero real growth.

It is true that people spending money can boost the economy, like after World War II.  But only because people were spending their own money, making their own private free market decisions.  Government spending (which was being cut at that time) had nothing to do with it.

But the Left keeps telling us that government spending stimulates the economy just like private spending.

It’s a lie.

Just ask them to show you an example from history where it has.