35 years ago this week

SS Edmund Fitzgerald (nicknamed “Mighty Fitz,” “The Fitz,” or “The Big Fitz”) was an American Great Lakes freighter launched on June 8, 1958. At the time of its launching, the Fitzgerald was the largest boat on the Great Lakes. It was one of the first boats to be at or near maximum “St Lawrence Seaway Size” which was 730 feet (220 m) long and 75 feet (23 m) wide.

On November 10, 1975, while traveling on Lake Superior during a gale, the Fitzgerald sank suddenly in Canadian waters approximately 17 miles (15 nmi; 27 km) from the entrance of Whitefish Bay at a depth of 530 feet (160 m). Although it had reported having some difficulties before the accident, the Fitzgerald sank without sending any distress signals. Its crew of 29 perished in the sinking with no bodies being recovered. When the wreck was found, it was discovered that the Fitzgerald had broken in two.

The rain falls on the just and unjust alike

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Paul Krugman can say some dumb things for a pretty smart guy:

Death Panels and Sales Taxes

I said something deliberately provocative on This Week, so I think I’d better clarify what I meant (which I did on the show, but it can’t hurt to say it again.)

So, what I said is that the eventual resolution of the deficit problem both will and should rely on “death panels and sales taxes”. What I meant is that

(a) health care costs will have to be controlled, which will surely require having Medicare and Medicaid decide what they’re willing to pay for — not really death panels, of course, but consideration of medical effectiveness and, at some point, how much we’re willing to spend for extreme care

(b) we’ll need more revenue — several percent of GDP — which might most plausibly come from a value-added tax

And if we do those two things, we’re most of the way toward a sustainable budget.

Yeah, we really have to think about having M&M pay for expensive procedures with a small likelihood of success, but that’s really a dumb way for a liberal to say it, especially considering the origin of that “death panels” term. But even so, “death panels” aren’t the only way to control costs.

We pay twice as much for health care as the other industrialized nations. At some point we’re gonna have to consider not just WHAT we’re willing to pay for but also HOW MUCH we’re willing pay for EVERYTHING, including routine care.

We can’t control M&M costs without addressing the entire health care market. And the best way to do that is a little thing called “single-payer.” While medical professionals deserve to be well compensated, “for-profit” health care makes as much sense as “for-profit” police and fire departments.

American business is flying into a mountain

Do you remember the 70’s PBS series Connections?  Each week, James Burke showed how politics, obscure history, necessity, science and opportunity lead to the technological advances we now take for granted.  You never know where you’ll find connections.  So, I’m intrigued when I think I spot one.  See if you agree.

In one of his recent books, Outliers, the Story of Success, Malcolm Gladwell relates the story of the crash of Korean Air Lines Flight 801 into a mountain in Guam.  There were a number of factors that contributed to the crash, including that the glide path signal was taken out of service for a 2 month overhaul, the landing beacon that was supposed to be located a the end of the runway was relocated 5 kilometers from it and that the low altitude warning system was reconfigured to prevent the air traffic controllers from being annoyed by false positive alarms.

But the air crash investigators found another problem on the black boxes and cockpit voice recorders.  The pilot was exhausted and the co-pilot was reluctant to override him until the crash seemed imminent.  The problem seems to be a function of the culture where those people in charge are not questioned.  Malcolm cites research that shows that countries where questioning authority is forbidden or discouraged have bigger barriers to cross when introducing new ideas and preventing catastrophes.  The more hierarchical the structure of the society, the less likely innovation is to be nurtured.

Flash forward to 2010.  Derek Lowe at In The Pipeline posted this letter from a pharmabot in a corporate setting regarding the perils of outsourcing.  Here’s the money quotes:

in a recent edition (25th Oct 2010 “The Grand Experiment”) you state that Merck &Co targets 25% external R&D and that AstraZeneca is striving for 40%. I recently talked to all the project managers which oversee our current collaborations. The stories of naivety, incompetence and missed deadlines by the outsource companies were legion. The managers I talked to mostly used in-house resource and expertise to paper over the cracks. Why?When asked whether they had reported these problems up the chain of command, the answer was always no. The reasons?

1 “If we have four collaborations and mine is the only one reporting problems, which three project managers do you think will get a bonus?”

2 “They won’t believe me, they will just think I am trying to protect jobs here”.

3. “You can’t swim against the tide”.

4 “When it goes bad here, I might be able to get a job with the collaborator”.

5 “My next job will be outside chemistry as a project manager. The last thing I need is any negative vibes around this collaboration”.

6. “I want to be the out-sourcing manager when that is all that there is left here. Do you think I want any trouble to become visible”

So, as far as senior management know, it is all going very well.

Unfortunately I can’t attach my name and organization. I need a job too and telling the truth is not always that popular, as many out-sourcing managers will have experienced. . .

This isn’t really surprising and isn’t exclusive to R&D industries.  But the whole R&D apparatus in particular is scared sh&*less by layoffs and outsourcing.  No one wants to be the one to break the bad news to upper management that some outsourcing collaborations or periodic business management rearranging of the deck chairs restructuring is making our jobs harder and less productive.  As Derek sums up:

Just as with internal efforts, Something Upper Management Wants can too easily turn into Something Upper Management Is Going To Do No Matter What. And with outsourcing, the problems can be both harder to detect and potentially more severe. Because what you don’t want is Something Upper Management Will Be Told Is Going Great, if it’s really not.

But how do you break the news to the guys in charge without getting fired?

And then I read this article recommended in the comments section of today’s news post about the fading fortunes of America’s middle class.  In Class Dismissed: Why middle income jobs are not coming back, this paragraph caught my attention:

From 1979-2009, there was a nearly 12% drop in the four “middle-skill” occupations: sales, office/administrative workers, production workers, operators. Meanwhile, people in the top 20% of the economy earning $100,000 or more a year, says Peter Francese, demographer at Ogilvy & Mather, “have barely been touched by this recession.” They average an unemployment rate between 3% and 4%, the lowest in the nation. The US Bureau of Labor Statistics projects a 14% increase in low-education service jobs between 2008-2018. “The only major occupational category with greater projected growth,” Autor writes, “is professional occupations, which are predicted to add 5.2 million jobs, or 17%.” These sectors include medicine, law and middle- and upper-management.

Yes, that’s right.  Middle and upper management is now considered a “profession” right along side doctors and lawyers.  Hold that thought for a moment.

A couple of years ago, I ran into one of my daughter’s friend’s parents in a movie theater lobby.  Here’s how her side of the conversation went:

Oh, hi, what’s up?  Oh, I didn’t know you work for yadayadaco?   No, I work for blahco.  Yes, my job is very exciting.  I graduated from Wharton.  Which school did you go to?  Oh, really?  Well, my last project was very ambitious.  Yeah, we just corrected the labeling on the bottle of *insert famous over the counter medication here*.  And you do what?  What does that mean, I mean, I don’t know what that is.  Oh, it must be very interesting.  Well, gotta go.  Bye!

Readers, she’s bringing in the big money in her family.  Her husband’s career is more like a hobby.  They live very well, very well indeed.  Nice big house.  Expensive cars.  Lavish vacations.

And she changes the labels on over the counter drugs.  Now, I’m not saying this is not a very important thing to do but do you really need an MBA for that?  I mean, wouldn’t any one with sufficiently well developed communication and planning skills be able to read the documentation provided by the FDA and make the appropriate changes?  Sure, you have to coordinate with other departments but this is something the labrats do on a daily basis in addition to solving science problems.  Yeah, we have to read contracts, negotiate with vendors, make spreadsheets, call meetings, coordinate with other departments, prepare budgets and do every thing else that the Wharton MBA does.  But we do it for much, much less in salary and other benefits.  Moving from the lab to the corporate building always comes with a generous increase in salary regardless of company.

They think very well of themselves, those MBAs.  I doubt that any of them have a clue what we do and I don’t expect that any of them want to find out.  I’ve seen well respected PhDs in biology dressed down in a training session by some snooty woman from purchasing in her business suit because he had the temerity to ask about the application they were forcing on us.  It’s typical.  The condescension is palpable any time a labrat has to deal with the administrative side of the business.  You get the impression they think of us as dirty nuisances, an unpleasant and expensive necessity and we are stupid idiots for not immediately understanding their obscure bureaucratic procedures for getting even the simplest things accomplished in a time sensitive manner.  Yes, they waste our time and they aren’t nice about it.

But the fear we face is that the MBAs don’t want to hear this even if it is in the best interests of the shareholders.  We fear that they don’t want to hear that  they are sometimes wrong and that they will kill the messenger.  So, we just try to adapt and keep doing our best even when the alarms are all flashing danger.  No one wants to be the first one to raise their voices and get cut down by the higher ups.  We’ll keep our heads down and brace for the impact into that mountain.