Tuesday, March 31, 2009

The Power to Bail Out is the Power to Destroy

In the year 1819, in McCulloch v. Maryland, the United States Supreme Court ruled that the power to tax is the power to destroy, and thus the states were not allowed to tax the US Bank.

What we need is a new understanding that the power to bail out is the power to destroy.  By bailing out innumerable private industries, the federal government has now been exercising powers undreamed of just six months ago:  They've fired the CEO of a major corporation, they're halfway through the process of enacting a bill of attainder and thus violating the Constitution by demanding private individuals surrender their contracted compensation for labor, and they've granted, or acquiesced in allowing the president to unilaterally decree that the federal government will give a warranty for new cars.

It leaves one quite breathless, doesn't it?  

This is the stuff of banana republics.  It's such a bad farce that surely it's all just a collective nightmare we'll wake up from in the morning.  No one can swear to support and defend the Constitution and then dictate that a company be merged with Fiat, a foreign corporation, right?  

The next thing you know, "The Won," B. Hussein will declare Pravda to be the sole judge of editorial content in US newspapers in order to forestall their pending demise.  

You think I'm kidding?  

There are only a few ways all of this can end.  The scariest is that our nation will become a hopelessly endebted nation and war will be our only way out of it, much as how the Germany tried to escape its debts by waging war in the 1930's.  

Another way this can end is if the nation finally approves some kind of Constitutional Amendment restoring the Commerce Clause to its original purpose of proscribing interstate taxation of commerce.  Currently the Commerce Clause has been interpreted by FDR appointees as being virtually unlimited in allowing the feds to regulate any commerce, including outlawing growing tomatoes in your own garden for your own dinner table.  (Yes, the Supreme Court actually did that because those tomatoes in your garden were replacing tomatoes you would have otherwise bought.)

We have a separation of church and state.  What we now need is a separation of the eonomy and the state.  And we can start by stripping the executive branch of this unprecedented control of trillions of dollars

Monday, March 30, 2009

Borrack Hussein is not Stupid

Our president is not a stupid man.  I don't think he's in any way brilliant, but he's certainly not stupid.

So what then, explains his bizarre behavior?

As a communist, his goal is to destroy the free market, capitalism, and the power of our economy as perceived by the world.

At this he is succeeding remarkably.

 

Thursday, March 19, 2009

Obama on American Idol

I heard President B. Hussein Obama on the radio this evening explaining that being President is like being on American Idol, except that everyone is Simon Cowell.

I think he's right.  It's an apt comparison.  Obama is an amateur, just like the contestants on American Idol.  And just as all the contestants are bad singers who don't understand intonation or pitch, let alone the  other myriad qualities of good singing, so Obama has no idea what he's doing either.  And just as these amateurs delude themselves that they have talent, so does Obama.  And just as some of the really bad Idol performers become popular solely through the manipulation of the media, so has Obama been admired solely because of media adulation.

Yes, the analogy is perfect.  

AIG Bonuses

I have little patience for people complaining about the bonuses given to people at AIG.  

It seems a bit duplicitous to give a company free money explicitly with no strings attached and then complain about how they spend it.

If I were a worker at AIG I'd tell congress to shove it.  

It's not that I have even the tiniest shred of respect for the scum at AIG, it's that I have even less respect for the monsters that gave them money.

So I'm somewhat torn.  I want AIG to fail, because the quicker they are liquidated, the quicker our economy will recover, but I hate wasting the money that was thrown at them.  The point is that the money is already lost, we're never getting it back, so whatever actions congress can do now to destroy the leadership of the company and prevent any of the losers that were associated with running it into the ground from profiting, I'd be all for it -- except that the Constitution prohibits taking property without due process and specifically forbids bills of attainder, or legislative declarations of civil or criminal liability.  If they can do it to AIG, they can do it to me, too.

But whether they take those bonuses back or not, I won't be shedding tears for the people of AIG.  I just don't want the ultimate losers, congress, to get their hands on that money.

Tuesday, March 17, 2009

A Politicized Military: The Results are in

What do you get when the military becomes noticeably politcal?  Officially, the military is still strictly apolitical, but in the past 15 years the strict rule against expressing a political opinion has been generally ignored.  Today, officers often feel no need to refrain from discussing politics in front of subordinates.  This is a dangerous development for our nation, as I've discussed before, that our citizens will distrust the military and a Dreyfuss Affair mentality might split us apart.  That seems somewhat remote but a more immediate impact is being seen now.  

Our current commander in chief comes from the Chicago school of machine politics.  He got elected with virtually none of the military supporting him, or so we're led to believe.  Of course there are many democrats in the military, especially among the troops, and of course blacks in the military presumably voted for him.

But that won't stop Obama from punishing the military for not voting for him.  At the same time that he is advocating universal medical care he is now calling for the military to stop paying for the medical care of people wounded in combat.

That's right.  People who fought for our country, you know, the country that Obama's wife has never been proud of, and have the worst of injuries that require lifelong care, are being told to take a hike.

What's the worst that could happen?  That the military constituency that was so vocal, if unofficially, in not supporting him may not vote for him.  Well, they didn't vote for him anyway, so it's no skin off his teeth.

This kind of naked, bare knuckles politics is not new to our nation, but it has never been inflicted on those who served it and suffered physical pain and maiming because of it.  Perhaps it's just a bargaining chip to get a lesser concession from military benefits, but I suspect that will be an incidental consequence and isn't the primary intent.  

The military as an institution certainly should expect, rightly or wrongly, to be punished for not supporting such a dangerous politician.  That this punishment is being inflicted on veterans wounded in battle is unconscionable.

The lesson is for the military to return to its apolitical traditions, but I suspect that the antipathy of the democrat party towards the military would have left this same result regardless.  Clinton's aide famously "loathed" the military, Obama's crew goes beyond mere words.

Monday, March 16, 2009

Fifty-Six Days

Brazil.  

China.

United Kingdom.

Russia.

Poland.

 This is the list of countries that B. Hussein Obama has insulted already.  

That's just the list we're aware of.

Wednesday, March 11, 2009

Why Businesses Fail

Or why I'm in law school instead of getting an MBA.

It's because I don't have a lot of respect for the MBA degree, per se.  There are plenty of smart people with an MBA, to be sure, but they would have been smart with or without that degree.  Mostly what an MBA does is create an artificial barrier to promotion and promote the success of people with more self-interest than is good for a company.

When I worked at Apple, the best job I ever had or will have, a truly stupid decision caused a factory to shut down a year after opening.  Apple was having plenty of other problems, Gil Amelio was the CEO and did a terrible job of leading.  (hmm a quick look at wikipedia shows he works on the board for Vanguard, which I just noted in my last rant lost me 37% of my 401k last year.  Coincidence?  Probably not.)  I could go on all day about the things Gil and Apple did wrong as a company.  But here's what I'll point out from a manufacturing standpoint.  Production quotas were to be met exactly:  Don't make one computer more or one computer less.  If you miss that target by one, it was the same as missing it by a thousand.  Of course, this meant that at the end of every month and quarter, we built a couple dozen extra computers and hid them.  In computer manufacturing, about 10% can be expected to fail test the first time, so we had to build this secret buffer to make our goals.  Stupid.  Then, the goals were set by someone somewhere without any rational reason.  In October of 1995 we cranked up the factory and built record numbers of computers against all expectations.  A month later they realized that no one was buying those computers.  To avoid flooding the market, they ended up destroying the computers instead of selling them for less or donating them somewhere.

But those were all mistakes controlled outside of our factory.  The mistake I'm more interested in now is the one made when they opened building D in Sacramento.  Building D was where they decided to make their own circuit boards on site.  It was scheduled to open up shortly after my arrival and was in fact my biggest interest in working at Apple.  I was very interested in moving eventually over to the board factory and break into that high potential field.  Gary Souza was to be the manager for that place, and he was the man that hired me.  I like Gary a lot.  But Gary decided to take his sabbatical shortly before start up.  At that time Apple granted a six week sabbatical to all employees every six years or so, and if you didn't take it, you lost it forever.  While Gary was out, the quality manager, the villian in this tale (but otherwise a very likeable guy) ingratiated himself to someone and snagged Gary's new job.  

Putting a quality manager in charge of operations is a really dumb idea.  It's like putting putting a safety manager in charge of a battlefield.  The new factory got its ISO 9000 certification in record time.  I'm sure everyone was very proud of that.  But they never made many boards.  Someone calculated that they needed to have, I think, three or four production lines to break even on costs.  So, naturally they decided to only install 2 lines initially.  Sure enough, around the same time that the computer factory next door in building B was destroying excess product (see above), it was very easy for Apple to decide that the board factory wasn't making money and should be closed down.

So, why do businesses fail?  Usually it's because someone makes really stupid decisions that turn out to be fatal.  I never got to work in that board factory because I was on Gary's team and because the board factory, with its vaunted ISO stamp, shut down exactly a year after starting up.  Besides, everytime I walked over to visit, no one was working.  If I asked a question about how it worked, they would turn it on, workers would drift over and they would start working again, but mostly out of boredom.

Then I moved to Dell.  Dell hasn't failed as spectacularly, but they have hired a layer of managers that all have MBA/Engineering degrees from either MIT or Michigan.  The management cliques created were quite powerful and competitive – and cared less for the company than they did for their own displays of brilliance.  I had just moved from Dimension to Work Stations while the Optiplex engineers started to expand their staff significantly.  The Optiplex leaders decided that they needed a new factory.  For some reason, I was asked to attend their engineering planning meeting.  Maybe I was supposed to be a spy, but if so, that was lost on me at the time.  The Optiplex engineers were justifying a new factory by showing that the new factory could build more of the new computers per labor hour than the old factory could build the old computers for the same labor hours.  I pointed out the very obvious fact that both still used two people to build a computer from start to finish, and the only reason the numbers were better is that the newly designed computer was used in the new factory and the old design in the old factory.  If the new product were built in the old factory, they'd get the same numbers as the new factory.  I was told I was to be just an observer and not invited back.  Since that first day of opening up that factory, they have never been able to meet the production capacity that was promised in the beginning, even though millions were spent every year to upgrade it.  It took several years, but they finally gave up and shut it down.  

After leaving Dell, I went to work for a very small, but successful company in San Marcos, Marshall Gas Controls.  They had garnered about 80% to 90% of the US market in propane grill regulators.  They had invested heavily in an entirely automated robotic factory to make their product which they intentionally designed to not be easily built by hand, to discourage copy cat manufacturers that had plagued it in the past.  I was hired to help them realize the full potential of their factory, they couldn't seem to consistently get above about 50-60% capacity, and often much less than that.  By the time I left, the factory was starting to regularly attain 90% capacity.  Most of this was due to my colleague, Reese, who was brilliant at measuring and controlling incoming component quality but his work was possible only from the data collection systems that I helped improve and make usable.  The factory was really beginning to hum.  But then a snag occurred.  One of the machines kept jamming and our experience told us that a component was out of spec.  Sure enough, the seat disks, perhaps the most important part of a regulator, and in our case too small to be readily seen well by eye, were misshapen.  Reese inspected and under the microscope the flaws were obvious.  

And now comes the part of this tale that causes me to include this story.  My boss, Mark, the cowardly, hypocritical, bible thumping, holier than thou, bigoted smart aleck, made the decision to build the product anyway because he theorized that the testing equipment should stop any bad regulators from getting shipped.  Even though we knew of the problem, even though we had enough clout with our suppliers to get a new batch within a day or two, he decided to not tell anyone above him and just send our customers junk.  Dangerous, flamethrowing junk.  How would you like to be barbecuing some chicken and suddenly get fire balls coming out of your propane regulator?

And that's still not the worst of it.  When the customer complained, Mark and his boss tried to hide what happened to the owners of the company.  They blamed everything under the sun.  They tried to blame me.  In fact, another engineer warned me that they would.  (I had never worked with such complete red necks before, and the social division in the factory between hispanic engineers and white engineers was pretty dramatic.  This was one of the very competent hispanic engineers offering me this pointer, he saved my butt.  For a short time anyway.)  I redoubled my efforts and was able to prove exactly what happened that caused the problems in testing, problems that I was able to prove existed before I was ever hired and told was perfect.  In fact Mark was very clear he didn't want me wasting time on it when he hired me.  

But none of that mattered.  The biggest customer, Charbroil, dropped our product.  The company shut down and moved its operations to Mexico where they made their old style regulator by hand again.  I and almost everyone else was let go, including poor Don, one of the three readers of this blog, who had only been with the company for a month after relocating his family from out of town.

In all these cases, these factories were shut down, not because the product was inherently bad, not because business had soured, but because people who were supposed to be smart, people paid to make sound decisions, made dumb ones either through misfeasance or malfeasance.  In most cases those people are still employed as managers.  No one puts on their resume that they worked at Apple as a director and it was their stupid decision that shut down a potentially profitable factory.  

Even Gil Amelio, a man who failed spectacularly as Apple's CEO, is still earning millions of dollars to this day.  Once someone is in the club of making that kind of money, they never really leave it.  But the disaster left in their wake causes devastation to the lives of people not in that club.  These are the people who caused the financial melt down with subprime mortgages.  These are the people who thought merging a failing Hewlett Packard with a failing Compaq would make, not one big failing company, but somehow a miraculous and successful company.  

I want no part of that anymore.  I do not wish to rely on someone else's control of a business.  I've seen what the so called smart MBA people do, and I fail to be impressed.  I will run my own business soon, and I will fail or succeed based on my own talents and abilities.  

Monday, March 09, 2009

One Rocky Decade . . .

 I just got the annual report from the single remaining 401K fund I've still got a piece of.  The important quote to remember is "One rocky decade does not diminish the fund's long-term outlook."

Yeah.  The fund has existed since 1990 and it's only had one bad decade.  Sheesh.  

I wonder if I could have said something like that to my prior bosses.  It's only been one bad decade, boss.  My long term outlook is still pretty good.

I'd have taken my money out of it a decade ago were it not for the huge government imposed penalties.  This was my last, most reputable 401K/IRA and it's now worth less than when I first got it in the mid 90's.  If I could have put this money in a mattress, I'd be better off now.

This is why I decided long ago to never again invest in a 401k/IRA.  If I were to need my own money, I would have to pay tax on withdrawing it from the 401k, and then pay a 10% penalty, and on my IRA accounts I already paid taxes on the money before putting it in the IRA.  Furthermore, I don't trust the government to not take this account from me.  There has been talk in congress of changing the rules on 401k plans.  I suspect this talk won't go anywhere yet, but this is the type of talk that eventually gets taken seriously.

I no longer believe any claims about investing.  The only investments worth having involve the bank or the mattress.  One rocky decade.  Yeah, right.