In January’s edition of Wired Magazine, they detail an article about rail systems and advocate high speed rail as a solution for congestion.  The problem is identified correctly (here):

…Getting California’s train up and running will be expensive. But doing nothing would cost two to three times more. Why? Currently, gridlocked lanes waste $20 billion in fuel and productivity annually. And it’s only going to get worse. The Golden State is growing — quickly. By 2030, another 12 million people could be calling it home. Without an infrastructure overhaul, drivers can expect a 10 percent congestion increase every year. To accommodate the billion trips between cities that residents and visitors will make annually, the state would need to build 3,000 more miles of freeway lanes, five more commercial airport runways, and 90 more airline departure gates. The price: at least $100 billion. Oh, and all that construction wouldn’t alleviate traffic; it would simply keep pace with it….

The article goes on to detail rail as a solution, showing a brief history of rail in the US, including the really cool technological advancements in rail systems.  The main problem with the idea however, isn’t that new rail systems aren’t cool or that rail couldn’t become much faster and more efficient, the main problem, which they slightly acknowledge, is getting people to use it:

…To be cost-efficient, any high-speed rail system needs an ample supply of riders. San Francisco hopes to deliver them through a new million-square-foot terminal. Dubbed the Transbay Transit Center, it will connect the new rail line with nine regional transportation systems…

And

…No city epitomizes the insane appeal of driving like Los Angeles, whose citizens cling to their steering wheels even as they face the worst congestion in the nation. Will high-speed rail persuade them to give up their autos? Maybe. Ridership on the local rail system has increased to 306,000 on weekdays, up from 265,000 in 2007. A faster, cheaper trip — the high-speed ride between Ontario and LA will save the average commuter at least 85 hours and as much as $6,400 a year in gas, parking, and lost productivity — might pry even the most dedicated motorist out of the driver’s seat….

Looking historically though, they’ve made this argument over and over again and it’s always failed.  Due to constant regulation of the transportation industry, we’ve wasted billions and continue to poor billions more into this mess (from 2007):

Rail transit is a huge waste of money that harms transit riders and mainly benefits a few politically powerful interest groups, such as rail contractors, at the expense of ordinary taxpayers….

Thanks in part to the high cost of rails, transit systems in Atlanta, Baltimore, Buffalo, Chicago, Cleveland, Philadelphia, Pittsburgh, St. Louis, and the San Francisco Bay Area carried fewer riders in 2005 than two decades before….

…Due to financial stresses caused by the high cost of rail transit, San Jose cut its transit service by 20 percent and lost a third of its transit riders.

The mass transit system in Portland, Ore., carries only 7.6 percent of the region’s commuters, down from 9.8 percent before rail construction began.

The subway in Washington, D.C., is wonderful for tourists, but not commuters: Though the region gained more than 100,000 jobs between 1990 and 2000, the transit system lost more than 20,000 daily commuters….

& it fails for the very same reason most centralized planning fails – there is no one-size fits all solution which can magically come from government that will ever be better than what the market can provide.  Over thinking the obvious, that if rail lines could honestly save the average individual 6400 dollar a year, they should be willing to pay 4000 dollars a year to help fund it.

The simple truth is that government inefficiency will only increase the costs of rail overtime, increasing the subsidies and making a large portion of the population fund what a small portion of the population will use.  As Cato notes (here):

….Second [problem with highs peed rail], highway users paid for interstate highways, whereas high-speed rail will be almost entirely subsidized by general taxpayers who will rarely use it….

Why do “smart” people seem to espouse imposed solutions by default?  Well, as with a lot of scientific minded individuals and magazines, the search for solutions to problems becomes an end by itself.   This certainly helps when it comes to innovation – always looking for that next step or next increase in efficiency is extremely valuable ideal which helps many be successful.

Conversely, we also try to decrease known defects, a valuable skill in a fairly closed system, but I think a detriment to larger scale thinking.

Engineers, computer programmers, process engineers, CFOs, IE those in the industries where daily critical thinking tasks ask not only what we can do better, but also attempting to steam line, standardize, and reduce defects through control mechanisms, seem to be more prone than others to view imposed solutions as a solution default.

Indeed, in their lines of work, lots of systems are routinely imposed on clients, employees, and others with typically, minimal involvement from the end user. & often for good reason.  Allowing untrained users to have open access to say a client database would be too risky.  Allowing any employee to spend the company’s money on what they thought was a good idea, would be a huge preventable risk as well.

The difference however between these critical thinking endeavors is that they have somewhat of a closed system.  Sure, market dynamics affects the controls companies can exert on their clients, but the cost benefit analysis for decisions in these closed system will be much more accurate than a similar analysis for the market as a whole.

The idea of imposing these new systems through tax payer funds has a further assumption as well: if the market is currently in state A and many experts believe it should be in state B, that’s because the market has failed.  Inside of that assumption holds that we have the requisite knowledge to take literally billions of individual transactions which led to the creation of the current transportation system and with a few nifty math tricks and a good sales pitch from the experts -  impart a better solution than all those transactions managed to build.

& lastly, but not an inconsequential difference, is a company’s ability to control the results.   One of the keys to any systems update success, will always be in checking the results.

For instance, if I changed process X, hopefully to make the time spent on X lower on average or hoping to reduce defects in products for which process X can affect – I should be able to look back in time after making the changes and ask the question – did my solution work for the problem we attempted to solve?

This doesn’t seem all that radical and certainly seems like something our government could be doing now, but the historic reality is always the same.  Governments seek to grow by expanding power.  Governments by nature move slowly.  Good government is stable and therefore moves more slowly.

This means when the government proposes changes in X process to solve problem Y, they have a known tendency to exaggerate the benefits and obfuscate any attempts to prove that changes in X didn’t affect Y, by constantly shifting goal posts (example of just one, tiny government program employing this strategy  here – 2002):

…This is essentially the strategy that DARE, the country’s leading drug education program, has successfully used to stay in business for nearly two decades. One study after another has found that students who complete DARE (a.k.a. Drug Abuse Resistance Education) are just as likely to use drugs as students who don’t. Yet DARE claims it is constantly revising its curriculum, so any research indicating that it doesn’t work is immediately outdated….

In a classic example of not being able to see the forest for the trees, this default condition of believing in solutions which will be imposed for benefit of others might be well meaning, but still one of the largest logical & philosophical impediments to true freedom.

I guess to start any post about this, I should start with why people think I am.  The main reason I tend to side with Republicans is because of their stance towards free markets and smaller government.  I think they are overly concerned with porn, violence in video games & on tv (censorship leanings shared with the Democrats), stem cell funding (though as a libertarian I don’t think any research necessitates government involvement), and a number of other things.

Like most I suspect, I pick the one I dislike the least… though it’s a little more than that as the Democrats don’t even discuss economic freedom, only economic redistribution.

To my main point – the reason I’m not a Republican is because even in the last sentence, the Republicans may talk about economic freedom, relaxing overbearing regulations, moving towards smaller government, but all I’ve seen is a slower movement towards lesser freedom from the Republicans than the Democrats.

Case in point – in MO (here):

JEFFERSON CITY — Smoking would be banned in many public places statewide under legislation proposed Monday by two St. Louis-area legislators.

The bill, which has not yet been assigned to a committee, would ban smoking in restaurants, bars, shopping malls and gambling facilities, among other public places.

“We’re on three sides surrounded by no smoking states,” said Rep. Walt Bivins, R-St. Louis, the bill’s primary sponsor. “I just think it’s time we pass this for the health of all of us.”

Bivins and Rep. Jill Schupp, D-Creve Coeur, hammered out the specifics of the legislation with support from the American Lung Association and American Cancer Society, who have, in the past, opposed bans at the city and county level because they were too lax for the groups’ liking….

The article goes on to tell us that a few years back someone sponsored a similar bill that failed to get a hearing, but this one is likely to pass due to the overwhelming support of these types of bans.

So there you have it – take President Bush’s overwhelming need to increase social spending, the size of the government, and increased federal control (IE – NCLB), add it to this idiot’s complete misunderstanding of the basic RNC Platform (here):

…That is an urgent task because economic freedom – and the prosperity it makes possible – are not ends in themselves. They are means by which families and individuals can maintain their independence from government, raise their children by their own values, and build communities of self-reliant neighbors.

Economic freedom expands the prosperity pie; government can only divide it up. That is why Republicans advocate lower taxes, reasonable regulation, and smaller, smarter government. That agenda translates to more opportunity for more people. It represents the economics of inclusion, the path by which hopes become achievements. It is the way we will reach our goal of enabling everyone to have a chance to own, invest, and build….

I guess the State Senator forgot that part of economic freedom means that if I’m willing to invest a few hundred thousand to build a restaurant, hire people, deal with all the regulations associated with hiring/firing, food preparation, and the rest…then it should mean that I can control the legal actions which are permissible in my private establishment.

Just like the government has no right to tell me whether I can smoke legal tobacco in my home – neither should they have the right to tell me whether I can allow smoking in my private establishment.

The idea that somehow, by allowing the general public on my private property, therefore means I’m suddenly at the voter’s whims to what I can do with that property after I’ve purchased and invested in it, is nothing more than tyranny of the majority.

The simple fact those that support this legislation are usually unwilling to admit any possibility of the paraphrased truism: the government that can ban smoking can tomorrow become the government that can force smoking.

& there you have another genius that lied within our founding fathers.  A democracy, they understood, is nothing more than allowing 50.1% of the population to destroy 49.9% of the population for the former’s benefit.  So they made, a representative constitutional republic, where the main founding documents allowed free men to subvert any government which subverted their natural rights and setup a government constitution which didn’t empower the government, but limited it.

This wasn’t a social contract whereby citizens gave up their rights for security, but a social contract in which citizens allowed a monopoly on force so long as that force never subverted their freedoms.   They knew the government was needed for a common defense, international treaties, and other things, but also knew the tendency of government was always to grow more powerful, to control more, to subvert the rights & freedoms of their citizenry, all for their own ends… intention good or bad, it was historical reality.

Just like the iPod (trivially), which is beautiful in its simplicity because of the constraints on its design, the Constitution and the United States government is beautiful because it didn’t state what should be – but only what shouldn’t be.

The founding fathers, reflected in the document itself, never assumed they had the answers.  They only knew, through belief and faith, of what should never be.  No man shall ever be above another.  No leader shall ever be above the law.  To secure these things, freedom, justice, the opportunity for life, we propose a government which can not restrain speech, religion, association, press, expression, right to bear arms… and it cannot unnecessarily seize private property, remove an individual’s rights (incarceration) without trial, fair and impartial…

Yes – it was flawed.  The black man was 3/5 a person and couldn’t vote.  Neither could a woman.  It Pennsylvania you had to be a Quaker to be a resident.  Thank you William Penn, our founder of freedom of religion…

But I think somewhere, maybe, the founding fathers that really wanted to stamp out slavery in the constitution itself (Benjamin Franklin was the head of the first anti-slavery group), knew that to impart the true ideals of freedom that quickly would mean the end of the idea itself.

So they wrote the words – we are all created equal and endowed by our creator with certain inalienable rights – knowing they might have rang hypocritically hollow, but hopeful for the future that could be.

So Mr. Bivins and even Ms. Schupp, don’t call yourselves anything more than you are – big government statists, neither of you deserve any other designators.

Via Buzz.Yahoo.com (because I refuse to send people to the Huffington Post), the Huffington Post reports (here):

President Obama will unveil on Thursday a proposed levy on the nation’s biggest financial firms structured not just to repay taxpayers for the bank bailout, but to recoup some of the public subsidy that “too big to fail” banks have enjoyed on account of their implicit government backstop, a senior administration official tells the Huffington Post….

First, I honestly have a problem with senior administration officials lending their knowledge to such a highly partisan propaganda site as the Huffington Post.   They long ago stop pretending to care about being news or even being accurate and moved straight into MoveOn.org territory.

Now, I’m not saying the President or his staff must chose the outlets I would prefer, but they could definitely send out press statements or use seemingly “real” and more honest news organizations.  It’s not like the NY Times isn’t on the President’s side – why go to Huffington?

Either way – regardless of the merits (or lack thereof0) for this specific  marketing strategy – it seems quite obvious that Mr. Obama and his team lacks a fundamental understanding of economics.  Their continued reliance on government solutions to all economic problems, demonstrates a misunderstanding of the dynamics needed to keep this economic engine and society moving forward.

It seems they have an idea that they can model the economic behavior of institutions they define as “Too big to fail” as if this equilibrium is: A) possible to spot & B) static enough to allow the slow moving government the ability to legislate in a helpful way.

Indeed the current economic crisis itself lends credibility to the idea that the government is in no position to grasp the complexities that exist when dealing with so many interconnected businesses (here):

…”We are here to examine what happened in the public sector, what happened in regulatory agencies, what happened in enforcement agencies,” said Phil Angelides, the chairman of the Financial Crisis Inquiry Commission….

While investigating the public portion of the failure:

…Questions focused on failures around regulatory decisions to loosen bank leverage and capital limits, faulty credit rating agencies, a warning about epidemic of mortgage fraud and a decision by Congress and the FDIC to stop collecting vital insurance fees from ‘well capitalized” banks between 1996 and 2006….

They grilled DOJ:

…Panel members asked Attorney General Eric Holder to conduct an investigation into what, if anything the agency did after the Federal Bureau of Investigation in 2004 warned that mortgage fraud was so rampant that it was a potential “epidemic.”…

& the SEC:

…SEC Chairwoman Mary Schapiro was inundated with questions about the agency’s failure to oversee credit rating agencies, which provided overly rosy debt ratings for problematic mortgage securities….

The FDIC & Congress:

…Meanwhile, the FDIC and Congress were criticized for its decision not to collect deposit insurance premiums from well capitalized banks for roughly a decade between 1996 and 2006….

But it’s ok, because the FDIC agrees with them:

…Both Schapiro and FDIC Chairwoman Sheila Bair agreed that an SEC decision in 2004, under its chairman at the time, William Donaldson, to allow banks to identify how much capital and leverage they must have on hand, based on their own model-based formula, was a mistake that allowed banks to expand their leverage to problematic levels….

Where the lead to the obvious conclusion they were searching for the entire time – government help:

…Bair said. “I think the only place to tackle that on a system-wide basis for both banks and non-banks was through consumer protection rules that gave the Fed the authority to apply rules against abusive lending across the board to both banks and non-banks.”…

Now it might just be me, but thinking federal regulators with new powers over banks and abusive lending standards will get it right next time seems a tad optimistic…. you know, especially considering their massive failure with the current crisis.

Which is of course only a portion of the story.  The government, through various GSE’s, exacerbated the problems with global capital flows, by giving banks incentives to make riskier and riskier loans (here):

…The actual causes of our financial troubles were unusual monetary policy moves and novel federal regulatory interventions. Regulatory distortions intensified in the 1990s. Poorly chosen public policies distorted interest rates and asset prices, diverted loanable funds into the wrong investments, and twisted normally robust financial institutions into unsustainable positions.

We can group most of the unfortunate policies under two main headings: (1) Federal Reserve credit expansion that provided the means for unsustainable mortgage financing, and (2) mandates and subsidies to write riskier mortgages….

Please don’t misunderstand me – just because someone leaves their keys in their car doesn’t mean you should take it – so immoral actions on behalf of lenders, home buyers, and an inaccurate understanding of the true risks were also present in the prelude to this tragedy:

…There is no doubt that private miscalculation and imprudence made matters worse for more than a few lending institutions and individual borrowers….

& therein lies the true rub.  This imprudence is something for which the market should bear the price of their mistakes.  Only through bearing the true cost will their incentives ever line up with true moral behavior.  If you think a local bank or lender wasn’t able to sell every single loan to a GSE, they would’ve continued to allow bad loans to be made which they knew would sink themselves… well, that’s just not very likely and not very rational.

But don’t worry – I’m sure with these new and smarter people, this time they’ll figure out which banks are too big to fail, do it right, and only tax them in the amount they need to insure against the risk.

It’s been a full five years since Thomas Friedman gave us the book and idea that The World is Flat. While I’ll never be one to completely agree with Mr. Friedman, he proffers from an economic perspective that national boundaries are becoming less and less a barrier.  The consequence in America, as with all other western societies, is a need to prepare to compete with other countries for jobs.

As outsourcing becomes easier and developing countries access to highly skilled resources in developing countries, citizens have been or will soon be forced to compete for jobs not only with their local competition, but with their global competitors as well.

DA noticed for a little while now, that the US seems to moving backwards in terms of competitiveness (here):

…Odd thing is – those without freedoms or with lesser freedoms around the world have been pushing for market reforms, including Germany, France, China, Russia… while the US is pushing centralized control over banking and health care (to name two things)….

Energy apparently skipped my mind that day, but either way… with more evidence at hand, Ron Hart wrote a great piece The dangers of ‘Crony Capitolism’. He begins with a a prescient Winston Churchill quote:

Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk.  Not enough people see it as a healthy horse, pulling a sturdy wagon.

His basic premise is that through increased economic regulations in America and a movement away from the free market, we are in real danger of losing our economic edge:

…But the real damage done by his taking control of our major banks and car companies (and now one-sixth of our economy with his health care grab), is that private capitalism, one of the great drivers of our country’s abundance for all of us, has been damaged….

& due to these anti-market policies combined with ever increasing regulation, we are not only in danger in the future, but the signs are already here:

…The result, per Forbes magazine, is that we are losing ground to foreign competitors.

Korean automaker Hyundai registered record sales in August. Chinese telecom manufacturer Huawei might soon pass Cisco in sales. Brazil’s jet maker Embraer is, according to Cessna CEO Jack Pelton “scaring us to death.” And more IPOs are happening away from America’s overly regulated capital markets. In addition, India has heart bypass surgery outcomes equal to the U.S. at half the cost, and Singapore is willing to pay U.S. biotech research stars about $715,000 in annual salaries….

Concluding with:

…In short, we do not have a monopoly on capitalism. We risk losing out to a world market that moves faster and with more resolve today than ever before. Our new political class does not seem to care that innovation and capitalism are fleeing….

Well said.

In a great piece over @ The Christian Science Monitor, Arnold Kling & Nick Schultz argue well that Markets fail. That’s why we need markets:

…This seemingly paradoxical view is based on several overlapping strands of research in economics as it pertains to development, history, technology, business expansion, and new-firm formation. According to this view, entrepreneurs at work in the economy – in finance, high tech, manufacturing, services, and beyond – are constantly experimenting, creating new business models, techniques, and technologies that upend the established order of things.

Some new technologies and innovations are genuine improvements and are long-lasting welfare enhancers. But others are the basketball equivalent of pump fakes – they look like the real deal and prompt market actors to leap hastily into action, only to realize later that their bets were wrong.

Given this dynamic, markets are unpredictable, prone to booms and busts, characterized by bouts of exuberance that are rational or irrational only in hindsight.  But markets are also the only reliable mechanism for sorting out this messy process quickly. In spite of the booms and busts, markets drive genuine long-run innovation and wealth creation.

Not as eloquently as they did, I wrote about this earlier in the year (here):

…the dynamic system of the United States might have felt more pain that other countries during this crisis, but due to the mostly decentralized economic model, we will recover more quickly than most…

It then seems for most people to become a question of risk adversity.  Do we allow for individual freedom and understand that sometimes failure is a part of the process?  Or do we constantly attempt to control individual behavior for fear of potential negative consequences?

Only if we first believe in the premise that by trading freedom for stability, we actually get stability.  The CSMonitor article continues:

…When governments attempt to impose order on this chaotic and inherently risky process, they immediately run up against two serious dangers.

The first is that they strangle new innovations before they can emerge. Thus proposals for a Consumer Financial Protection Agency, a systemic risk regulator, a public health insurance plan, a green jobs policy, or any attempt at top-down planning may do more harm than good.

The second danger has to do with the nature of political economy. Politics creates its own kind of innovators who can be as destabilizing to markets as market actors themselves – but in far more pernicious ways.

Economists call these political entrepreneurs “rent-seekers.”…

…This gets to the key difference between markets and governments. When innovation-driven excesses and imbalances are recognized in the marketplace, the system can correct itself quickly. This is less the case when government policy failure occurs.

Because political failure is less publicly tolerable than market failure, the temptation becomes for policymakers to avoid acknowledging their role in creating or perpetuating problems.  Or they double down on bad bets. So rather than recognize the government’s central role in the housing boom and bust and quickly changing its ways, we see the federal policy apparatus continuing to throw good money after bad in the mortgage market and on Wall Street….

I wrote about this “doubling down”  (here):

…For those playing the home game, this means we are taking a problem caused by excessive credit and government incentives and trying to fix it by:

1. Preventing the normal contraction that needs to happen by artificially propping up failed business and bad home purchasing decisions.
2. Keep money cheap by keeping interest rates very low.
3. Then, repeat the same process that got you to the recession in the first place by incentivizing the market to buy a commodity (housing) which is still overvalued in some places….

& made the perplexed statement (here):

…I’m not really into prediction making as it’s obviously fraught with so many problems, but I’ll never understand how the solution to cheap money and an over investment of housing, is to keep money cheap and incentivize home buying…

As historically known, the vast majority of centralized government intrusions into free markets and free people has led to disastrous consequences.  NBER research suggests that two of the reasons for the current global economic crisis are due to unfree markets:

…The inability of emerging economies to absorb savings through domestic investment and consumption due to inadequate national financial markets and difficulties in enforcing financial contracts; the currency controls motivated by immediate national objectives;…

Everywhere we look objectively, freedom gives us more of everything.  Do you want to fix healthcare?  Using the government will likely lead to higher rates and more control, using individual freedom however doesn’t cost much as has been proven in other avenues such as food.  Something I think is just as important as healthcare, but been left to the market unlike health care.

& the market has responded.  Food costs as a percentage of disposable income has decreased from 23.4% in 1929, to just 9.6% in 2009 (here).

Meanwhile health care costs continue to increase with government regulation.  In just the past 5 years spending on health care as a percentage of GDP has continue to go up and is projected on that trend still.  In 2005 spending was 15.9% of GDP whereas in 2009 is it 16.9% and projected to be 19.5% in 2017  (here).

It seems that the overwhelming majority of evidence suggests to honestly help the most needy, freedom is not only a moral good, but a requirement for anything approaching success…. yet what seems to be an irrational fear of “economic crisis” many people can’t see the forest for the trees.

In what has to be good news in the world & especially Russian citizens, Russia appears to be moving forward towards free market reforms with help from former President Putin.

For Russia, the last 30 years has been marked by instability.  Russia in the 80’s was in a descent from crumbling Communism which limited real individual freedoms.  They moved from that, to a poorly implemented and corrupt form of cronyism, which also limited real individual freedoms.

Then to stabilize and reassert themselves to the international community, former President Putin worked towards a stronger central government.  In doing so, he too worked towards the removal of individual freedoms.  For example, having the government buy the the main press outlets, using the judicial system to attack  corporate heads who were against Mr. Putin’s reforms, changing election laws to reduce citizen say, and many other things.  All of which seemed a sure march back to Communism and the stage for a new global dynamic with Russia trying to be the main international opposition to the US.

However, in recent months Stratfor and other publications have been noticing changes inside the Russian government.  Many reformers have been pushing the new President and Mr. Putin to begin to make real free market reforms through privatization and it looks like they’ve won some ground (Stratfor Video below):

Since I have a strong belief in the morality and pragmatism of individual freedom, this is a good sign.  Let’s hope it continues.

Odd thing is – those without freedoms or with lesser freedoms around the world have been pushing for market reforms, including Germany, France, China, Russia… while the US is pushing centralized control over banking and health care (to name two things).

Proving once again, that the price of freedom really is eternal vigilance.

What are the odds that a government agency tasked with identifying research priorities, research performance management, and reviewing the impact of completed research will come up with a solution that doesn’t involve the government?

Today & tomorrow the EPA are meeting for just this reason (@eScienceNews):

…The goal of the meeting is to develop a collaborative framework to ensure future research and development dollars are spent wisely and in a coordinated manner….

Of course it doesn’t really matter what the answer is, because “spent wisely in a coordinated manner” is almost mutually exclusive to good R&D.  As should be expected by now, the EPA is wasting money on answering a question for which recent literature already exists.

Back in 2001, a Jack Welch underling, W. James (Jim) McNerney, Jr was hired as 3M’s CEO.  In the fanfare associated with being a protege of Mr. Welch, when Mr. McNerney joined 3M, investors had high expectations of pushing some of the GE magic onto the 3M culture.

One of the first and most prominent of these culture changes Mr. Mcnerney instituted was a heavy does of SixSigma.  From the beginning, leading business thinkers were asking whether pushing a very creative culture into the narrow focus of SixSigma might not work.  Or at least, it should not include the whole company.  Sure, use SixSigma for accounting procedures, but leave out R&D.

Of course proponents of SixSigma disagreed.  If it can help manufacturing and then be translated to service related products, why not R&D?

Regardless of the writing public, 3M went forward with implementing a SixSigma policy that included training all workers to a Green-belt level and use SixSigma methodology for every department, including R&D.  How’d it fare?

As you’d expect, the results are mixed.  But asking former 3M scientists, engineers, and the like?  Overwhelmingly they tend to agree it wen too far (@DesignNews):

…While 3M emerged financially stronger from the McNerney era, many long-time 3M researchers, engineers and scientists chafed under the strictures of Six Sigma. Critics argue that excessive metrics, steps, measurements and Six Sigma’s intense focus on reducing variability water down the discovery process. Under Six Sigma, the free-wheeling nature of brainstorming and the serendipitous side of discovery is stifled. Proponents contend such methodologies’ rules keep researchers on track and accountable for producing. Striking the right balance between the application of Six Sigma and unencumbered research is often seen as key….

In fact, a then board member and the former 3M scientist who developed Post-It Notes stated that he believes that in the SixSigma environment, Post-It Notes would simply never have been developed.

History is also rife with examples.  In the book, Sex, Science and Profits: How People Evolved to Make Money,  written by Terence Kealey (review @ Reason.com):

…Kealey shows in nearly every case the crucial inventions of the past two and half centuries were called forth by markets, not invented by scientists working from ivory towers. These include the steam engine, cotton gin, textile mills, railroad engines, the revolver, the electric motor, telegraph, telephone, incandescent light bulb, radio, the airplane—the list is nearly endless…

In fact, a government-funded research paper showed public money can hurt innovation.  Mr Kealey writing about it(@AllBusiness.Com):

…n fact, the evidence shows otherwise. In 2003, the Organisation for Economic Co-operation and Development published The Sources of Economic Growth in OECD Countries, reporting on a comprehensive regression analysis of the factors that might explain the different growth rates of the world’s 21 leading economies between 1971 and 1998. This indicated that only privately funded R&D led to economic growth, and that publicly funded R&D did not. Worse, the public funding of R&D crowded out private funding, and thus slowed economic growth…

No worries though, I’m sure the government will tell you, that this time is different.   Just ask them.  They completely understand it’s failed many times before, but what you (read: citizens) are too ignorant to understand, is that those failures were under other people and not the worldly, brilliant, omniscient, and yes, even death-defying leaders of today.

& if that doesn’t work for you, remember that it’s “Green”, which we all know are now established unqualified goods.  As such, regardless of how much money taxpayers have to spend to subsidize “green” stuff, the end results are worth it.

Last, but certainly not least, if both of these arguments don’t work to mitigate your concerns, welcome to the club: Disgruntled Americans Against Government Stupidity (DAAG)

Late last week, Michael F. Cannon @ Cato released a study entitled, Yes, Mr. President A Free Market Can Fix Health Care in response to a challenge made by President Obama in March 2009:

“If there is a way of getting this done where we’re driving down costs and people are getting health insurance at an affordable rate, and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I’d be happy to do it that way.”

This is very much a presumption based question, like “When did you stop beating your wife?”  It holds within an assumption the only plausible answer is one which uses the power of the government to control the market, and by extension individual citizens, with complete skepticism about any power of the free market.

While this seems to be the default assumption of many of my fellow citizens these days, I don’t know that I’ll ever understand how an objective look at market success versus an objective look at governmental success would lead one to believe the government is capable of much more than simple, repetitive tasks.

Having said that and even knowing the Democratic leadership and the White House is likely to ignore the answer, Mr. Cannon presents a pretty convincing case about a market solution (@Cato).  He explains:

how Congress can remove the impediments that currently prevent markets from doing so:

Whole thing here.