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Archive for November 4th, 2009

Rain and Taxes

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“Taxes are the price we pay for a civilized society.” – Oliver Wendell Homes Jr. – 1904,

Above the door at 1111 Constitution Ave., Washington DC, IRS Headquarters

It has been raining for what seems like most of the summer. I don’t know how much rain in total we have had, but my pond which is usually down 4 feet or so this time of year is brimming to the rim, a situation that is fairly rare even in a wet spring. I have mushrooms growing on top of mushrooms, my flowers were devastated, and my firewood pile is rotting away despite my best efforts to keep it dry. Because of all the moisture the mosquitoes are everywhere and you can’t go out around sunset without getting bitten three or four times.

“At 428 PM EDT…satellite imagery and National Weather Service Doppler radar indicated that thunderstorms were rapidly developing near Nanuet…and moving north at 25 mph.”

All the rain put me in the mood to read something relevant and so I bought a fiction book called “Flood” by Steven Baxter. It is one of those depressing doomsday end-of-the-world books, which seemed appropriate given the weather. This one, as you can probably guess by the title, is about calamity by water. I like Baxter’s books as he is a Ph.D. in aero-engineering, and a mathematician and his works of fiction, while pushing the edge, are grounded in plausibility. The basic premise in the book is that ocean levels rise, not only due to the melting of the polar icecaps, but also because of the release of vast subsurface supplies of water.

Our oceans today have already risen between 6 and 8 inches due to thermal expansion from global warming, and if the icecaps continue their melting we could expect another 6 meters or so in rise. A rise of that extent would be devastating and would not only destroy many coastal cities, but would inundate many low lying land masses. Florida, for instance would cease to exist. Going beyond the current worst case scenario, Baxter, in his work of fiction, speculates what the world would be like not with a 6 meter rise or a 10 meter rise, but with a rise of 800 meters. At 800 meters half of the current land masses on the planet would be under water.

That could happen if there were other sources of water beyond what we currently view as the source of water (the icecaps) being released due to global warming. For instance, if only 1% of the volume of the mantle of the Earth consisted of water, and that amount was forced to the surface, a relatively trivial event for the planet, but quite devastating for all forms of life both on land and in the oceans, including humanity, we could expect a rise in ocean levels to the extent speculated in Baxter’s book.

“…A Flash Flood Warning remains in effect until 645 PM EDT for Westchester and Rockland counties…”

“Already nearly two-thirds of humanity — some 3.6 billion people — crowd along a coastline, or live with 150 kilometers of one. Within three decades, if trends continue, 75 percent of humanity, or 6.4 billion, will reside in coastal areas, nearly a billion more people than the current global population.” (American Association for the Advancement of Science).

Now before you write this off as completely absurd, consider that in 2009 it was confirmed that the northern and southern icecaps on Mars contain roughly 100 times the volume of water of all the Great Lakes combined, a volume of water that until this year was hidden from view. We are learning new things about planets, including ours, all the time.          

The book catalogs the various ills that could befall civilization including the deaths of hundreds of millions, the mass uprooting of hundreds of millions more, the spread of all sorts of disease, the near-collapse or total fall of many governments and civilizations. In the US, the federal government relocates from Washington, DC to Denver the highest state capital in the country, Nebraska becomes part of the new east coastline as a vast inland sea covers most of the current eastern part of the country. Europe and Asia suffer worse. During all this, one wealthy individual, whose company was benefiting immensely from providing services to the flailing government, still manages to complain about the taxes he has to pay. You never get away from it do you, death and taxes. While I have every reason to believe that some people will complain about paying taxes no matter what the circumstance there are some benefits that taxes bring to us, some that many don’t realize or think about.

Excessive runoff from heavy rainfall will cause flooding of small creeks and streams…highways and underpasses. Additionally…country roads and farmlands along the banks of creeks…streams and other low lying areas are subject to flooding.”

Back in the real world, a banker whose institution has successful weathered our current financial crisis by, as the New York Times puts it, “avoiding gimmickry”, which I applaud resoundedly, gave a speech in which he espoused the philosophies of Ayn Rand who wrote the fiction book Atlas Shrugged. In that story, reason, laissez-faire capitalism, and a focus on self-interest is celebrated and altruism is viewed as a destructive force. In Atlas Shrugged, “nothing is more heroic – and sexy – than a hard working businessman free to pursue his wealth. And nothing is worse than a pesky bureaucrat trying to restrict business and redistribute wealth.” The gradual takeover of businesses during an economic collapse by government and a smothering of innovation that follows is the basic premise in Ayn Rand’s fictional work and there are many adherents to the notions described in Atlas Shrugged who are collectively called objectivists.

Redistributing wealth can be equated to collecting taxes and using that money for projects that don’t simply benefit those who paid the taxes, but benefits all of us collectively, like roads, airports, mass transit, schools, hospitals, a strong military and police force, disease research, weather forecasting, etc. Those activities are wealth redistribution activities, since the wealthy pay a larger percentage towards creating them than the poor. But they are also those things that make it possible for those with an entrepreneurial inclination to be entrepreneurial. I owned my own business for a large number of years and will hopefully one day do so again, but I did not complain about paying taxes, for with my taxes I not only bought “civilization”, as quoted by the Supreme Court Judge Oliver Wendell Homes Jr., I also bought potential, an environment that allowed my business to flourish. What I resented much more than paying taxes was when people who should have been paying taxes got out of paying them. In other words, if the playing field is viewed as “fair” with everyone paying their share there is little resentment, it is when the playing field benefits only certain individuals or special interests does my resentment build. I know that I am not alone in those feelings. The on-going negotiations between UBS and the IRS to disclose the names of those hiding their money in off-shore accounts demonstrates that the IRS understands that as well, in addition to their desire to enforce the law. I realize of course that “fair” is in the eye of the beholder. What baffles me though, I have to admit, is that some of the adherents of “pay no taxes” are the very people who benefit the most from the taxes paid. They make no connection to the world in which they live and how it was created, as though infrastructure and civilization somehow magically sprang forth from the very earth itself.   

“Do not drive your vehicle into areas where the water covers the roadway. The water depth may be too great to allow your car to cross safely. Move to higher ground.”

Imagine if that very successful banker with all his millions had to hide behind prison-like walls and could not venture forth because in a free-for-all society the rule-of-law would be weak or non-existent and some enterprising individuals would look at him and think “you know it is easier to take it from him than to build the wealth ourselves”. He would be hunkered down, constantly looking over his shoulder for threats. Congratulations you are living in a tax free utopia. That banker by-the-way accepted over 3 billion dollars in US government bailout money, complaining that they had to in order to remain competitive with other banks accepting low cost money. Seems a bit like picking and choosing which side of the argument you want to be on at any moment.

Now don’t get me wrong, I am fiscally conservative, and believe that taxes should be kept as low as possible, but I do believe in a strong military, a strong social-safety net and a strong government and other programs that support our society, those things require tax dollars to occur. I guess you could sum it up by saying I am fiscally and militarily conservative and socially very liberal (I was born and grew up in New York after all). And yes, I realize that hard choices must always be made.   

“at 601 PM EDT…National Weather Service Doppler radar indicated a  line of severe thunderstorms capable of producing penny size  hail…and damaging winds in excess of 60 mph.  These storms were  located along a line extending from Harrison to Scarsdale…or  along a line extending from White Plains to Port Chester…and  moving northeast at 20 mph.”

Simply paying taxes of course does not guarantee effective use of those tax dollars and our government’s miserable efforts in New Orleans after Hurricane Katrina are a testament to that. Patronage and special interests once again at play. So not only do we benefit from taxes being paid but we also benefit when they are being paid into a government that is making effective and efficient use of those tax dollars. And of course there are examples that can be cited of government inefficiently using our money, but there are also many cases when government makes effective use of our money. Remember, our government was not set up to be the most efficient decision making body. That was intentionally done by the founding fathers. Our government was set up to purposely be somewhat inefficient, so that the decisions as they get made are deliberate and that checks and balances inherent within the system protect the interests of all, including those who are not strong enough to even raise their voices. Sometimes the system fails in that task, but mostly we have a government that is the envy of the world, a system that has created the most successful country this planet has ever seen, where by and large merit does in fact count and eventually the truth prevails.   

In addition to large hail and damaging winds…continuous cloud to ground lightning is occurring with this storm. Move indoors immediately! Lightning is one of nature’s number one killers. Remember…if you can hear thunder…you are close enough to be struck by lightning.

Can’t wait to get tomorrow’s NOAA weather forecast.

Written by Jeffrey M. Saltzman

November 4, 2009 at 7:38 pm

Organizational Hikes

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Among the activities we undertook as part of our summer vacation in the Adirondacks was to hike up Azure Mountain. Azure Mountain was not our first choice as we had selected another hike, but as we approached that trail head a black bear ran in front of us and my wife and daughter would go no further. We turned around and looked for a hike with a little more civilization attached to it, so if we got mauled by a black bear on the hike there would be people around to help (hopefully us and not the bear) or at least watch. When I saw the bear, I began trying to remember the defense you were supposed to undertake with black bears. Were you supposed to run from them, hold your ground or begin to put up a fight? Wait, wait give me a minute, it will come to me. Where is an internet connection when you need it? 

As these things go, Azure Mountain is not a huge mountain at 2518 feet in elevation. The guide book described its 1000 foot vertical rise over 1 mile as unrelentingly steep, but in the next paragraph called it “a good family hike”, so off we went, myself, my wife and daughter and our 8-month old Labrador, Jessie.

At the beginning of the trail there was a substantial pile of rocks, mostly fist sized but some larger and some smaller. Attached to a tree next to the pile of rocks was a note. I am going to paraphrase the message since I had nothing to write notes upon (so much for being prepared for my hike). “Dear Hikers”, it began, “we have an erosion problem at the top of the mountain and if you would be so good as to grab a couple of rocks and take them to the top we would be grateful.” Well I felt pretty good, the air was pretty cool, I had a pack on my back with water and food, and in that state of mind I placed 3 averaged-sized rocks into my over-shirt pockets to play my part in erosion control and began the climb. My young daughter and dog were scampering around eager to run ahead, but I knew my 50-year old legs and lungs were no match for theirs and so I began more slowly. I had an altimeter on my wrist watch and every so often I would take a reading on how far we had come and more importantly how much further we had to go.

The first 100 feet of rise were easy, but I should probably have loosened up my leg muscles a bit as I could feel a little tightness. After about an hour with some scrambling over rocks and roots we made it to the 500 foot level and I needed a break to grab some water and to catch my breath. The puppy and daughter were still going strong, impatient at my plodding pace. At 700 feet I stopped again, wondering about the crushing feeling I was getting in my chest, checking my left arm for any tingling sensations, finally realizing it was the rocks (which had grown to boulders) in my shirt pockets pressing against me that was causing the pain. At 800 feet I stopped once more, grabbed some more water, this time wondering if the altimeter was broken for surely by now I must be at the top. The day had warmed somewhat and sweat was pouring down my back between my shirt layers and my pack. We had yet to see another hiker on the trail, but luckily no bears either. Another 100 feet up and I decided to peel off a layer as I was sweating a great deal now. When I did that I immediately got chilled as the next layer down was wet with sweat, onward we went.

About 30 feet or so from the top we broke free of the tree-line and could see the restored fire tower located on the very peak of the mountain. Off to one side of the peak was a terraced ledge that provided good seating for really spectacular views of a sweep of the Adirondack range. The kind of view which no picture can ever really convey the feeling generated. The air was so clear we were likely seeing 60-70 miles, perhaps further into the distance. The effort expended in getting to the top of the mountain in an instant became worthwhile. After 2 hours of climbing, I was huffing and puffing, but felt a little better when the dog collapsed under the fire tower in the shade to rest. My wife and daughter decided to climb the 5-story fire tower to get even better views. I decided to wait with the dog.   

Right next to the fire tower was another pretty massive pile of rocks, mostly fist sized but some smaller and some larger. There was no note next to this pile, but I imagined a sign that simply said “Thanks”. I dropped my 3 rocks onto the pile and my wife and daughter dropped theirs. All told our contribution to the rock pile was pretty insignificant. The pile of rocks did not look any bigger once we had deposited our haul, the erosion did not immediately stop when we dropped our load, but I have to tell you it felt good to contribute to the overall effort.

I had a CEO once tell me that about 200 people out of his 100,000 employees were needed to generate the profits and success of the firm that only 200 of them really counted. I would have to respectfully disagree. If I give him the benefit of the doubt, that he did not allow his organization to bloat needlessly, I think he would have found that if the 99,800 who he did not think really contributed disappeared that his organization would cease to function. He could likely re-engineer his organization to function with fewer people, creating a different organization, but by and large people, no matter how small their contribution may appear in the overall scheme of things do contribute, do count and will make a difference. When the efforts of all those people are added up watch out, the bear will roar and roar loudly.

Perhaps this is a worthwhile notion to contemplate as more and more people are laid off and organizations continually try to do more with fewer and fewer resources. I get the feeling that the organization that can successfully harness the contributions and efforts of all of its people, not simply treating them as pawns in a chess game, casting some aside while moving others around the board, will be the one that makes it to the top of the mountain, and prevent the erosion of its market share from the competition.

Written by Jeffrey M. Saltzman

November 4, 2009 at 7:31 pm

I Promise

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I don’t know about you but I am getting tired of listening to sales pitches or promises that are just substantially not true, contain misdirection or are purposely vague. For instance a certain cable company has been calling me two sometimes three times per week trying to get me to sign up for their internet based telephone service or VOIP (Voice Over Internet Protocol).  The opening line of the sales person who calls is that he/she is there to offer me a lower monthly cable bill. He/she then goes on to say all I have to do to get this lower rate is to sign up for their telephone service. So by signing up for additional services I can lower my monthly bill. Sounds too good to be true, doesn’t it? Well, if it sounds too good to be true it typically is. When I asked for how long this lower rate would stay in effect before the rates rise I first get evasion. When I repeat the question for the third time the sales person finally tells me that after 12 months the rates will rise, without telling me what they will rise to, but what the sales person will say is that I can cancel at any time. (That process is called objection handling among sales people). By the time I get to some truth in the conversation, (usually earlier but I decided to play it out with the last sales person to have some material for this blog), I simply say not interested and hang up the phone.

My mom who just turned 85 (don’t tell her I told you), gets calls just about daily from people trying to tell her that they can help out with the mortgage problems they know she is having, telling her that they can help save her house from foreclosure which would force her to live on the street. Only thing is the mortgage was paid off 30 years ago. To an 85 year old this is a very frightening thing and she will often now answer the phone without saying “hello” just picking up the receiver and listening. Thank you to all the */?-@@**?s out there who feel that it is ok to prey on an 85 year old woman. Just about as bad are the sales persons who call up virtually daily to see if she is interested in a cemetery plot, taking care of the problems with her credit, or some insurance product or another. The national “do not call list” and legislation that was set up about 5 or 6 years ago seems to have had no effect.

I remember bidding on a research project for a nuclear power company that I lost. They wanted normative data for nuclear power plants and organizations undergoing transitions to be included in their final report. I told them that I had enough data for utilities but I did not have enough clients who had nuclear power plants to provide norms for nuclear power plants. And I indicated that while virtually all companies at the time were undergoing transitions of one sort or another, my company did not track “transitions” as a variable so the data could not be provided that way. My competition for that work indicated that they had enough data on nuclear power plants in transition to provide normative data specifically on nuclear power plants undergoing transitions. Being from New York, my response to that was “is that nuclear power plants undergoing transitions from the north side of town or the south side of town?” If you have been in this business for any length of time you will immediately understand how ludicrous the notion is of having norms for nuclear power plants in transitions, yet a supposedly sophisticated company bit on that promise. Promise now, figure it out later was the notion I think my competitor was using.

Why are we susceptible to these forms of misdirection? If we weren’t they would stop happening. There must be enough 85 year olds out there who respond positively to the sales pitches for those companies to keep that activity going. In a previous blog posting called “Is grandpa going to be ok”, I describe research on wishful or magical thinking that sheds light on how the human minds has a tendency to want to believe. Another aspect that can cause misinterpretation of what is said is the differing levels of saliency that a message has to the speaker and the listener of the message or to different listeners, a topic I discuss in “My jeans are irregulars”.

Human beings all of sorts, including some managers of organizations, have raised the ability to make promises that do not have to be delivered upon to an art form. In her book “Fearless Leadership”, Loretta Molandro has developed a classification scheme for promises that people within organizations make to one another or to customers/potential customers. First she describes casual promises, then half promises, vague promises then finally authentic commitments. Here is an overview of her descriptions:

  • Casual Promises – These are promises that the promiser has actually no intention to deliver upon. “Sure, no problem”, kind of statements.
  • Half Promises – These are promises that come with built-in excuses and escape hatches. When a half-promise is not delivered upon the response here is along the lines of “I must have misunderstood what you wanted. If I had actually understood you, and it is of course your fault that I did not, I would have been able to deliver upon what I promised.”
  • Vague Promises – These are promises with nothing specific attached to it, no dates or deadlines. Here the promiser is saying “I will get to it if something more important to me doesn’t come along”.
  • Finally you have Authentic Commitments – These are clear and explicit statements that can be easily understood by all those involved. People who make authentic commitments will say “no” often, but when they say “yes” they deliver.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

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Written by Jeffrey M. Saltzman

November 4, 2009 at 7:07 pm

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