Kaulapi World

Not even a few days into the new year, the first primary/caucus of the presidential 2012 election.  Lots of observations from the Iowa Caucuses, the main headline is that yet another frontrunner in the Republican primaries has emerged, that in Santorum who just lost to the assumed frontrunner Romney by a total of 8 votes.  A lesser story is that it was a Ron Paul clocking in at 21%.  With the remaining candidates further back at in the lower teens and single digits.  Given all the talk about how unelectable Ron Paul is, the fact that he came a statistical tie for the top 3 speaks volumes for the how out of touch the major media outlets are to what the average person may be thinking in this day and age.

Another little twist on the Iowa caucus results. Regardless of the outcomes of total votes, if a candidate gets at least 10% of the total vote, they get at least 2 delegates for the convention. In other words, if the 2012 primary result in a brokered convention, there is no difference between 13% and 10% (2 delegates each for 4th and 5th) and 25%, 25% and 21% (7 delegates each for 1st, 2nd, 3rd).

Looking forward to New Hampshire which is already assumed to be Romney territory from the beginning, Ron Paul comes in a distinct second place, and Santorum is way off in the single digits.  At some point all of this talk of electability or lack thereof should get ridiculous if the people keep electing him and awarding him delegates.

Of all the candidates for president in 2012, the one I’m the most intrigued by is the congressman from TX, Ron Paul.  Following his breakout in the 2008 election cycle for the republican nomination served as an awakening of sorts for me, partly giving some substance to some of the economic and personal leanings that I’ve had for years, but more affirming my growing understanding that the 2-party system serves more to limit the quality of political debate and really serves to maintain the status quo.  The fact is that very few people actually fit neatly in the buckets of either party, the only way someone is a hardcore Dem or Repub is if they lack the intellectual curiosity to really consider and debate the issues.  I kind of liken it to being a sports fan, some people are loyal to their teams on the basis of living in a city, or going to a particular college, and they stick with them no matter how much the team might change, coaching, or style or quality of  play.  The problem is that while this is fine for sports, its a horrible method for electing candidates to office.  I remain very much a political independent, although I have my own leanings towards one party or the other, depending on the issues.

Just like the 2008 cycle, the constant mantra from all the main stream media outlets is that he is unelectable.  I find this very suspicious as to what exactly is electable nowadays anyway?  More importantly, shouldn’t the voters themselves decide what ideas and policies they would like to see in an elected official as opposed to the corporate media? BI had a good short post about the seemingly need to pander to electorate out there, telling them that everything will be fine if they just vote for him, that we can all just keep on buying overpriced homes, keep artificially propping up markets, and keep maintaining an empire overseas with no consequence.  This type of pandering also applies to the media when it comes to candidates running for office.

One of the ways the media discounts Paul’s support is to hold internet polls following the debates and then when he ends up winning them, they put an asterisk next to his name, citing that there were irregularities in the polling to make them unofficial or unscientific, sometimes they fail to mention him at all, skipping to the next candidate as the front runner.  Apparently one effort to suppress Ron Paul’s support in internet polls went a little too far, and now the commentary has had his amazon book list and facebook page overridden by pro-Paul posts and videos. One of the messages is very clear, if he is supposedly so “unelectable” then why the obvious efforts to censor and downplay him?  I’ve come to realize that often when it comes to official media and statistics, you have to consider the alternative message often behind the story, sometimes it is brutally obvious, as ZH offers, it is because he is very electable and is very much a threat.

In a year where there is even more talk of a 3rd party run which would shake things up a lot, I think folks should pay attention to Ron Paul.  Talking to pretty hard core Dem the other day he seemed pretty confident that a 3rd party run by Ron Paul would mean an automatic re-election for Obama, being that not too many Dems have much in common with libertarian thinking.  I can’t help but wonder if this person is too quick to judgment on this one, I’m pretty sure quite a few would seriously consider him as 3rd party candidate if they were to actually sit down and listen to what he has to say.

Next two weeks have the potential to be another battle over the 2012 budget that might result in another shutdown.  This time around it sounds like we’re headed to another continuing resolution (CR) that will stretch things out a few months.  With the new super committee set to knock out a few trillion in budget cuts come November, there is some indication that a CR is in the works, and things will keep on plugging along before the last 2 weeks of the fiscal year are up.

The uncertainty hasn’t gone away at all, despite it being relatively quiet in the news lately.  Been keeping tabs on some unofficial sources to try and anticipate whats around the corner, but anyone’s guess is probably close to reality at this point.  I’ve retrenched my positions similarly to hour the April and August budget/debt battles played out, fully ready for the possibility of a furlough or shutdown, a matter of several months now instead of a few.  Looking at some of my account positions I would normally feel a little rich if not for the prospect of having to rely on these balances to keep afloat for an expended period of time.

All of this has created a considerable amount of stress, at the same time I’ve noticed how many of the normal distractions that exist in our modern American society can either serve as healthy coping mechanisms or dangerous blinders.  I’m all for the occasional healthy distraction when things get too intense, but too often I look around and am reminded that none of us can really afford to take the eye off of the ball even for a moment, least we get blindsided.

Took a family day trip just out of town, to a nearby farm that let’s people come by and pick their own produce, whatever is in season at the time. We started off with yellow peaches, moved on to tomatoes, and blackberries before our bin was full, when we got back to the store to pay for things, we realized what a great deal it was. That explained the large crowd, interestingly the parking lot was fill of a lot dc and va plates, most of the visitors were actually Hispanic and Asian, I saw at least a handful of diplomatic plates and luxury cars.

Just as we were wrapping up, a huge storm cloud blew in, dropped a swimming pool worth of water on the crowd. It was refreshing, being outside getting caught in the rain, the little guy seemed both puzzled and amazed at the sight of all that water coming down at once, I realized that this was his first time experiencing a thunderstorm outside.  A few kids and adults took to running around in the rain, being that they were already soaked after getting caught out in the fields and it didn’t make a difference if they got more drenched. Something very simple and cleansing about the rain coming down, sudden and unexpected, but fully welcome.

Driving back I reflected a bit on how different the landscape and way of life seemed just a short drive from dc, and all of the crap that comes with the territory of living and working in the district. I had actually bookmarked on my phone a thread to the straw poll taking place in Iowa that day for the republican nomination, thinking that I might want to check in on it. ended up having so much fun picking fruits that I forgot I even had a smartphone at all.

Coming up on more milestones in life, need to remind myself to fully appreciate how great things have turned out so far, despite the usual and unusual setbacks that are more just another part of life. Some can’t really be considered setbacks of they open up to new opportunities in life just waiting around the corner.

Recently Came across a few nuggets of wisdom from wikipedia:

The Peter Principle states that “in a hierarchy every employee tends to rise to his level of incompetence”, meaning that employees tend to be promoted until they reach a position at which they cannot work competently. It was formulated by Dr. Laurence J. Peter and Raymond Hull in their 1969 book The Peter Principle, a humorous ^[1] treatise which also introduced the “salutary science of hierarchiology.”

The principle holds that in a hierarchy, members are promoted so long as they work competently. Eventually they are promoted to a position at which they are no longer competent (their “level of incompetence”), and there they remain, being unable to earn further promotions. Peter’s Corollary states that “in time, every post tends to be occupied by an employee who is incompetent to carry out their duties” and adds that “work is accomplished by those employees who have not yet reached their level of incompetence”. “Managing upward” is the concept of a subordinate finding ways to subtly “manage” superiors in order to limit the damage that they end up doing.

The employee’s incompetence is not necessarily a result of the higher-ranking position being more difficult — simply, that job may be crucially different from the job in which the employee previously excelled, and thus requires different work skills, which the employee may not possess. For example, an engineer with great technical skill might get promoted to project manager, only to discover he lacks the interpersonal skills required to lead a team.

Thus, “work is accomplished by those employees who have not yet reached their level of incompetence”.

Peter also suggested that ‘super-competence’ in an employee is more likely to result in dismissal than promotion, which again is a feature of poor organizations, which cannot handle the disruption. A super-competent employee “…violates the first commandment of hierarchical life: [namely that] the hierarchy must be preserved…”.

–Which eventually lead me to read this entry:

The Dilbert principle refers to a 1990s satirical observation by Dilbert cartoonist Scott Adams stating that companies tend to systematically promote their least-competent employees to management (generally middle management), in order to limit the amount of damage they are capable of doing. In the Dilbert strip of February 5, 1995Dogbert says that “leadership is nature’s way of removing morons from the productive flow”. Adams himself explained,^[1]

“I wrote The Dilbert Principle around the concept that in many cases the least competent, least smart people are promoted, simply because they’re the ones you don’t want doing actual work. You want them ordering the doughnuts and yelling at people for not doing their assignments—you know, the easy work. Your heart surgeons and your computer programmers—your smart people—aren’t in management. That principle was literally happening everywhere.”

The first time I heard of the Peter principle was during my first job out of college, my boss at the time used it as a humorous explanation to why middle and upper management could at times seem hopelessly deadlocked, and at times totally incompetent to make key management decisions, even in times of fiscal crisis where decisive leadership is called for.  It was an interesting concept, that over time as an unintended consequence, you end up with the level of incompetence of individual workers being directly correlated with the higher pay and fancy sounding titles.

The Dilbert principle I think actually is much more on point, but it is almost like a symptom of an institution that has gotten so deteriorated that it can’t even operate rationally, let alone efficiently.  Then instead effectively managing incompetence by moving people to positions that they are a better fit for, or by training or disciplining the problem, you just push it aside in the most perverse way, through a promotion.

I’ve actually observed and witnessed both of these up front and personal. Had some managers so insanely incompetent that I was left scratching my head as to how the hell they got promoted to management, knowing that at one point they were in my position, yet over time they seem to have forgotten even the simplest aspects of the job entailed.  I’ve also seen individuals that are rewarded for having skills at negotiating office politics to their favor as relative to possessing actual skills relevant to the work, but they get the token rewards – no real power other than a fancier sounding title, and a nominal pay raise.  When systems start acting in these ways, there is a major hit to workforce morale for the rest of the workers in the system, as it flies contrary to what most workplaces like to promote as how promotions and bonuses are handed out, based on the individual doing a good job, and being good at what they do.  The worst is when I’ve experienced a mix of both an incompetent manager that has some real power, and they resist being “managed upward” .

Together, these principles pretty much sums up one of the critical flaws of so called performance-based / merit-based compensation systems, or meritocracies.  The naive assumption is that in the best interest, institutions would want to strive for greater efficiency, producing better goods and services for their customers.  Under this theory, anything or anyone who gets in the way of this goal should be reassigned or replaced, especially policies that erode morale.  You want to motivate your workers with incentives, namely higher pay and bonuses.  However in reality the self-enforcing nature of the system or hierarchy itself, which is a form of corruption at the institutional level.  Hence, what promotions are really looking for are to a varied extent, conformity to the norms of the institution.  Or more importantly, the perception of upper management to the individual’s ability and willingness to conform to the norms of the institution.

Over time things degenerate to the point where system is spending a lot of time managing the individuals that have risen to their level of incompetence with more and more promotions, instead of trying to capitalize on their relative strengths and recasting them in the most beneficial position in the company, in other words, truly developing them.  If this continues on long enough it becomes ingrained into the culture of the institution, inefficiency, incompetence, favoritism, corruption becomes the status quo, the unspoken rule.  Outsiders, reformers, or just newer, motivated workers coming in are then handicapped from making any contributions that might have been a net benefit.  Thus, you don’t get very far in an institution or system by talking or promoting change.  It does make for a good campaign slogan though.

Maybe a solution is to approach promotions and pay incentives differently, keep the pay increases the same, but maybe demote the individuals to their level of competence.  Stop referring it to a demotion, rather make it a transfer, or repositioning.  For those that have a knack for office politics and ass kissing, but lack the core work skills and management skills, maybe capitalize on their skills into marketing and public relations.

Been a rough couple weeks so far following the aftermath of the debt ceiling crisis which proved to be more political theater once again.  Late last week S&P broke the trend of the rating agencies and actually downgraded the US, and then it seems like all hell has broken loose in the financial markets, down 4%-5% one day, and then a quick retrace the next.  Exchanges around the world having technical difficulties due to high volume, governments stepping in to halt trading, or to ban shorting particular stocks or sectors, calls for increased margin requirements, shares of large well known banks getting slaughtered in a matter of minutes.  Its feeling like 2008 all over again, but in many ways worse.

The next looming political battle that will be sure to cause even more uncertainty in the markets is the 2012 budget showdown, which evidently will impact the newly formed deficit reduction committee of 12 congresspeople, at least make their job much harder with all of the distractions that will come from #3 budget battle in 2011.    The downside risk for us as a federal employees is an even greater possibility of a shutdown coming in the end of September, or if the new debt committee is unable to come to an agreement, an across the board cut to all budgets, coupled with a very volatile stock market.  I’ve been feeling like a storm has been brewing for some time now, and it seems like its just getting started.

All in all this doesn’t make for much of a relaxing August, which has traditionally been the time of year where we can take a quick break before a busy fall season.  We decided to try and take it easy by just staying around town, taking the kid out and about. We had talked about planning a trip home, but that got scaled back to a short road trip in the area, and then eventually nixed entirely to cut down on costs.

Meanwhile on more happier news, the little guy has started walking.  I’ve noticed that he had already developed the leg strength and balance to stand on his own, but hadn’t realized it just yet.  Then he just decided one day it was time and now he can’t stop standing up and stomping around the house, hands in the air and grinning ear to ear.

Came across an interesting CNBC interview this morning, covered by some of the financial blogs that I read.  The guest commentator was a representative from more lesser known credit rating company that had already downgraded the US credit rating from a AAA to AA.  In contrast to the big rating agencies who have been talking about the possibility of a downgrade, this company went ahead and did it.

Mentioned in the interview is position that debt ceiling debate is nothing but a red herring, the real issue towards the creditworthiness of the US, as with any other country is the debt-to-GDP ratio, which is growing at an alarming rate, similar to Portugal, one of the famous PIIGS nations.  It goes back to what I have been thinking myself, that no matter what form of new revenue we are able to pull in, the debt/GDP ratio will likely stay at a very dangerous level.  The commentator also addressed the dollar as being the world reserve currency in addition to having a printing press may help paper things over for a while, but over time reliance on it will not help the overall situation.

The commentator also briefly got into the differences between delinquency and default, alluding to the fact that a lot of the rhetoric about financial Armageddon should the Aug. 2 deadline come without a deal may not come if the markets only see the US as delinquent on paying the interest on its debts.  From what I’ve been gathering, that is a valid critique, since the US will still be generating some amount of revenue even after the deadline, the question of default really comes down what priority does the administration apply to which obligations to pay, and which ones to not pay.  There really is discretion to the sitting administration to either continue servicing the debt, or pay entitlements, military contractors, federal salaries, etc. first.  it seems like if there is a default, the timing is the thing to watch out for.  If we do default in early august, it might be a self-inflicted wound for political gain to the current administration.  If it is later down the road, then I’d say both parties are to blame.

Meanwhile congress is announcing their plans to keep in session until the debt ceiling is raised, stating that the US will not default on its obligations, or something to that matter.  I guess it really depends on what one’s definition of default is. Given the way things are looking, we’ve already suffered a default on the political process.

Example of DC cynicism: Whatever the crisis is facing the economy, the powerful elite are “handling it” in the form of closed door meetings.  Regardless of which political affiliation you find yourself cheering on realize that they have too much at stake to disrupt the status quo, so ignore the rhetoric you see on the tv and print, recognize its all a political charade.  Once they get the deal done, it’ll be back to normal, you can continue partying, shopping, watching ESPN and reality TV.  To me this demonstrates a bizarre mixture of blind faith to compensate and distract from a collective helplessness to forces that are bigger and unseen.  The cynicism is more alarming to what it really says: that since most of us are so insignificant to the powers that shape our world, really we are all expendable.  No matter how high you can soar, within a chain of command or bureaucracy, titles, position, power, responsibility, connections, salaries can be taken away from you on a whim, by a single individual, or group of individuals in a closed door meeting.

Been on edge for the last few days, really for the most part of this year. Some of it has to do with the looming budget situation which I may have been overloading myself with reading and my own style of analysis.  But something about this latest round of political theatrics has me wondering if there is something that a lot of us aren’t thinking about.  Maybe it is fact that we as a country even need to have a discussion about the deficit at all.  The established school of economics is that deficits don’t matter, the last 100+ years of fiscal and monetary policy have made the country very wealthy and prosperous.  We have a number of societal safety needs that were spawned from the great depression to ensure that nobody will be left behind, nobody will starve or go homeless.  The established school of political science has said that are the remaining military and economic superpower, champion of the cold war, and policeman of the world.  We are not Greece.  Then why are we being held captive by the bond raters and growing CDS spreads?  The urgency of some of the commentary recently kind of shatters this illusion of life that a lot of us have grown accustom to, that maybe we really are out of money and out of time.

The large majority of folks in this town are just along for the ride on various levels. This is a company town after all, and the federal government is it. It doesn’t matter much if you are a  federal employee, a contractor (revolving door and double-dipper), lobbyist, non-profit advocate, university employee, or a private sector employee whose business relies on federal contracts. Pretty much everyone in this area is either directly or indirectly dependent on the federal government operating.  I have to include myself to this, to a certain extent, however I refuse to keep my eyes closed to the writing on the wall, and just assume that everything will pass, and it’ll be business as usual.  Even if this is just another example of beltway theater, I don’t want to be caught by surprise should things really get interesting.

Over the years I’ve tracked our personal finances both in terms of investments and day-to-day case accounts as short and long term budgeting tool.  I made a visual marker for each financial milestone on my spreadsheet, green for raises and bonuses, red for bills, one-time payments that don’t come very often.  All of this debt talk has made me draw sort of a financial line in the sand as to when we might have to face the reality of not getting a paycheck.  Given the ongoing uncertainty in the past few weeks on the debt ceiling, I’ve resorted to drawing red lines for every month for the remainder of the year.  Now my once colorful spreadsheet is covered in a sea of red.  Fortunately this being a digital file, I can clear some of the red to clear if things somehow start getting better.

News came out late Sunday evening that US special forces had shot and killed OBL in a fortified compound in Pakistan. Most noteworthy was that apparently he wasn’t hiding in some cave, he was actually in a highly residential area surrounded by relatively light personal security and had been there as early as 2006. I can’t help but think that it was one of the last places one might look for the most wanted man in the world.

For me it brought back some memories from the morning of 9/11, and all that has happened since then in the name of bringing the mastermind of the attacks to justice. The very same day while the towers were still burning, we were all told the name of the man responsible and his organization. Days later the US launched military action against countries in the middle east that we have maintained a significant presence. It serves as a reminder to what a single act or event can have on the overall perception of reality, and how it can define a generation.

I was struck by the impromptu crowds that gathered in front of the white house while the president was giving his speech, a lot of the people there seemed like college kids that must’ve been too young to really remember the events of 9/11, but news of the death of the elusive boogie man that has posed a threat to our national security was enough to get people out of their apartments late Sunday night.

But maybe the celebration is mostly symbolic. Like clockwork, the security talking heads cautioned that his discovery and death does not mean any end to the global war on terror, and many of the policies that have been put in place since then. At the end of the day, the new security apparatus that has been built of the past 10 years, complete with hundreds of thousands of security positions created, and billions in security contracts is too big to be shaken down by the death of one man, even a vary famous one.

Need to write a quick post to mention the ongoing labor battles in Madison, WI that has been in the news a lot lately. Every day there seems to be another clip of protesters occupying the state capitol, marching down state street, chanting behind the cable newscasters with creative signs. It seemed like it came all of a sudden, after watching a lot of protests in the middle east, thousands of people occupying the streets in Cairo, then there was talk about budget cuts coming to state workers in a small midwestern state that had just celebrated their banged up team go from wildcard to superbowl champs.

I’m seeing a trend that seems to omit the bigger picture. Since the financial crisis there is a lot of anger building up directed at public employees for their pensions, benefits, and job security that were the fruits of organized labor. I would normally say that this is another case of “divide and conquer” being that while there are good benefits for public employees and job security, overall salaries are much lower than the private sector. However what is more significant is that to blindly attack the public employees is to support a huge bait and switch which seems to becoming the norm in America today.

It seems strange to attack the a public school teacher’s benefits and pension while ignoring the wall street executive has their golden parachute attached to their contract regardless if they run the company to the ground and bankrupt thousands of investors. Some of which, by the way, were the major pension funds that are hurting so bad now that they need to increase required contributions or in the case of public pensions, increased funding from the state. It also seems cowardly to advocate for pay freezes of rank and file federal employees but exempt military contractors getting paid six figures to do work that a full time enlisted soldier is fully capable and willing to do. And then there is the question of where the blame for the recession, it wasn’t the public employees or even the unions that crashed the economy. Last I checked, the very ones who were responsible for getting us into this mess are still getting the VIP treatment by the media and still have enough money to influence the next election cycle, whoever ends up back in the positions of power.

Back in DC, we are bracing for a shutdown of the federal government coming this Friday. There has been talk about a short term extension deal that is being hammered out behind the scenes, but that only delays the shutdown for another two weeks. This is coming on the back of a 2 year freeze of annual cost of living adjustments that are normally designed to cancel out inflation, and additional rhetoric from congress about hiring freezes and reductions in force. The talk of a shutdown comes as a big political battle to shrink the size of the federal bureaucracy and the role of government. However like much other things in DC, the devil is in the details as federal salaries, even money spent for foreign wars is nothing compared to the major entitlement programs of medicare, social security and medicaid.