Why Corporates "Support" The Trans Cause (Bud Lite / Anheuser-Busch)

ESG (environmental, social and governance) and CEI (corporate equality index) are smokescreens for corporations who do not give a damn about their customers, products, suppliers, employees, neighbours, regulations, regulators and anyone else with a legitimate interest in the company's activities.

They don't give a flying toss about Trans rights, Gay rights, Taiwanese rights, Aboriginal rights or anyone else's rights. They aren't supposed to. They are supposed to make products that don't come back to customers who do, treat their employees well, pay their suppliers a fair price and on time, and pay a decent dividend to investors while following evermore complex laws and regulations. In reality they do the exact opposite of that, and they need a whole lot of smoke to blow at the public and their own staff. We can't be a**h****s, look, we have an Inclusivity Director and a sticker from a CEI agency saying we have 5-stars for Equality.

Nobody has any idea who the certifying agencies are, how they are financed, who runs them, what qualifications they have, and so on. All anybody needs to know is that the hedge funds will accept a particular agency's certifications. We-the-public assume these agencies must be okay. I mean, look at their client list. Would all those big companies sign up if the whole thing was one huge con-job and grift?

Hell yeah.

These companies pay their fees to the grifters, tick some boxes, and get to put the claim that they are some kind of virtuous something on their corporate literature, and so stay on the good side of Black Rock and all those other ESG-pushing hedge funds.

Those hedge funds are only doing it because they can wave the ESG / CEI certifications to prove that they are not really investing in Bad Companies who make firearms, kill endangered species, or hire contractors who hire contractors who use children in Lahore to make masks for Western nurses. Even better, they use these ESG / CEI certifications to create special funds of "Good Companies" for which they then charge a premium fee.

Follow the money.

This is why the companies whose donations to BLM were used to buy multi-million dollar properties don't care about that. They paid BLM so they could say they support BLM. The corporate donors don't care what BLM did with the money: they were buying the publicity.

There's also this: a company dips its toe into Woke Marketing. If it works, they do more, but most importantly, if it doesn't, they can stop any further attempts dead in their tracks. We tried that and it didn't give us the results we needed. Thank you for coming in and sharing your ideas with us. Gillette is still solvent, last time I looked, despite alienating every man in the Western World with its toxic masculinity ad in 2019. They don't do it now. Anheuser-Busch will survive what may very well be the episode that finally makes senior management understand that social media and influencers are as important as TV and poster ads. Right now the older guys don't really get it. In the meantime, their CEI certification for this year is a shoo-in.

There's no doubt that some corporations do not choose their ESG / CEI grifters well. Some are extremists with ultra-minority causes, a talent for guilt trips and moralising invective, and useful connections in social media, journalism and the big-name management consultancies. As a result, an unsuspecting corporate finds itself co-branding with an organisation that offers their children puberty-blockers at school. Not a good look, but fortunately most of the public will never know that level of detail.

The final point is this. Managers, Head Teachers, sports teams, record labels, publishers and other such are always on the look-out for reasons to get rid of people, preferably at a really low cost, whom they don't want for whatever random reason. MeToo dispatched many an unprofitable artist or under-performing executive: it was hi-jacked for exactly that purpose. Trans rights are just another such excuse.

We take inclusion seriously at ABC Corp, unless you're a fifty-something white man who can be replaced at half the cost by a Gen Z diversity hire, when we will sack you for not using someone's pronouns (which you are going to do at least once by accident in the next three months). That's what we at ABC Corp mean when we say we take pronouns seriously. We don't give a s**t about anyone's rights, but we love a BS reason for cutting costs.

Follow the money.

Did 500,000 Retirements Cause Inflation?

tl;dr Uh, no, because there weren't 500,000 extra retirements.

The Bank of England is blaming inflation and our current recession on 500,000 mostly older people who quit working before 65 over the last two years. This, according to the Bank, is creating an upward pressure on wages and hence prices. It's talking nonsense, of course, but then, that's it's job(*).

Let's go find those miscreants. The Labour Force survey looks at the economic activity of everyone aged 16-64 (it's still living in an age when 65 was a mandatory retirement age). If there are 500,000 people who should be in the labour force but retired early, we would expect to see 500,000 more people retired in the 2022 Labour Force surveys. There were 501,000 retired 16-64 y/o men at the end of 2019, and 523,000 in summer 2022 : an increase of 22,000. For women the numbers were  610,000 in 2019 and 658,000 in 2022: an increase of 48,000. That's a total of 60,000 more retired 16-64 y/o people, 12% of the Bank's claim.

There's more. According to the ONS 

Our latest estimated number of workforce jobs for June 2022 (next updated December 2022) was a record high of 35.8 million, an increase of 171,000 jobs from December 2019, and the first time it has exceeded pre-[lockdown] levels. The total number of jobs includes both employee jobs and self-employment jobs, with both rising in the quarter to June 2022. Employee jobs in June 2022 continued to grow and are now at a record high of nearly 31.5 million, 710,000 above their December 2019...level. However, this rate of growth has not been seen in the self-employment jobs which remain 548,000 below December 2019 levels.

So there are more people in full-time work than there were before the lockdowns. Not less.

What is getting everyone excited is this graph 

showing that there were 1,246,000 vacancies at the end of September 2022 against 820,000 at the end of 2019: an increase of 426,000.

Vacancies arise from a) economic growth that creates employment, b) industrial re-structuring as new sectors appear, c) everyday churn as people leave this company and join that one, d) people leaving employment to e.g. care for family members or take up education, e) retirement. Vacancies decline because of a) economic recession, b) improvements in productivity, c) industrial re-structuring as existing sectors decline, d) removing jobs as people leave. Net all that out, and we get an underlying rate of around 600-700 thousand vacancies a quarter (plus or minus economic trends). Which is two-three per cent of the number of jobs in the economy.

Vacancies fell in 2020 because employers whose work was expanding (parcels companies, supermarkets) could find people as soon as they needed them, so those new jobs were never reported as vacancies, while the employers who were shrinking (cafes, hotels, airlines) had no vacancies because they were being prevented from doing business. Vacancy levels returned to the underlying rate in Summer 2021, despite many industries still being in hibernation. People carried on retiring, changing jobs, and temporarily leaving the workforce, effectively migrating out of sectors which were not hiring into sectors that were. As the lockdowns and economic restrictions eased during H2 2021, and then were removed in Spring 2022, a lot of hibernated jobs become available again. "Pent-up demand", if you like. But the people who would have done those jobs, are now working somewhere else (maybe back in their home countries) at better jobs.

What kind of jobs are not being filled? The largest numerical increases in vacancies are in "Accommodation & food service activities", "Human health and social work activities" and "Professional scientific & technical activities". Aka baggage handlers, airport security, zero hours retail jobs, on-call cleaners, cooks, care workers, hotel staff... 400,000 mostly low-paid / fake-self-employed / zero-hours s**t jobs that no-one wants. Pre-2020 those jobs were done by all sorts of people for all sorts of reasons: many left the country, or they switched sectors, found full-time work, or signed on(**).

So that's why that's happening.



(*)The job of the Bank of England is not to provide insightful analysis, but to lead the harumphing



so everyone can protect their phoney-baloney jobs. Nothing does that better than claims that can't be checked and blame a bunch of harmless victims.

(**) The Claimant Count was 1,240,000 at the end of 2019. It's 1,554,000 now, an increase of 314,000.

Peter Woit, Dominic Cummings and How To Hire Whizz-Kids

Dominic Cummings has a widely-cited blog post about the people he wants to hire and it has attracted a lot of attention. Even from Peter Woit, who says this...

The remarkable things to me about this long document are what it doesn’t contain. In particular I see nothing at all about any specific policy goals. Usually a new government would recruit people by appealing to their desire to make the world a better place in some specific way, but there’s nothing about that here. The goal is to control the government and what the British population believes, but to what end?

In addition, a more conventional hiring process would be asking for candidates of high ethical values, with some devotion to telling the truth. Cummings seems to be asking for exactly the opposite: best if your background is “from a crime family hired by the KGB.”

This is one of those times I’m glad I never stayed in Academia, but went into the private sector. Because I know exactly what Cummings is trying to do with this blog post / advertisement. He is trying to attract people who would never otherwise in a million years go anywhere near politics and the public sector.

Here’s why you don’t advertise "high ethical values and some devotion to telling the truth" when what you want are people with off-the-charts technical skills and ideas. Because it signals that attitude is more important than skill, and that demonstrating that attitude is an important part of the job - rather than an important part of one’s character. Which means the job involves some posing and virtue signalling. So the skilled people won’t apply, no more than they would to an advertisement that said something about “must be able to function well in a big-company environment”, which they would read as “a lot of your time is going to be wasted on bureaucratic BS”.

For similar reasons you don’t go on about how you want people "to make the world a better place in some specific way.” Quite apart from all the talent you will turn away because they think that what you want to do will actually make the world a worse place. An appeal to people who want to change the world is code for “we’re not paying the market rate for the skills we say we want” and which will be read as “we don’t really want those skills because we don’t know how to use them”.

British politics is full of the “confident public school bluffers”. It’s full of networkers and people who can sense changes of policy and mood and pick up the latest buzz phrases and ideas, but who can’t actually do anything. When they go outside for advice and insight, they go to people who will listen carefully and then tell them what they want to hear.

This is exactly what Cummings does not want. He wants "people who are much brighter than me who can work in an extreme environment. If you play office politics, you will be discovered and immediately binned."

“People much brighter than me” is code for “I am not intimidated by the fact you can do things I can’t and understand things I never will. I don’t need to prove myself in competition with you.” Which is very attractive to people who have spent a couple of years dialling it down so as not to upset their less competent managers.

Cummings goes on to make a point near to my heart. "People in SW1 talk a lot about ‘diversity’ but they rarely mean ‘true cognitive diversity’. They are usually babbling about ‘gender identity diversity blah blah’. What SW1 needs is not more drivel about ‘identity’ and ‘diversity’ from Oxbridge humanities graduates but more genuine cognitive diversity."

Amen. The last thing anyone needs to solve real problems is a room full of multi-cultural people who all have MBAs from Harvard, London or INSEAD. Or a room full of vibrant Oxbridge humanities graduates. That is not diversity. That’s a mono-culture. Or the editorial staff of The Economist.

There’s another reason why you don’t advertise for people with "high ethical values and some devotion to telling the truth” who also want to make the world a better place in some specific way. It’s really easy to lie about those things and impossible to test for them, since most people can make good contextual guesses at what constitutes the interviewers’ understanding of “high ethical values”.

That’s why Cummings wrote his ad that way.

Peter Woit’s first complaint is that Cummings did not follow the assumed model of how politicians recruit, and the kind of people they should recruit: that politicians should recruit Good People Who Care About Issues And Can Work Within Existing Frameworks To Address Those Issues.

But those Existing Frameworks are not policy-neutral. Over two years of non-stop opposition by the British Civil Service to Brexit, culminating in the shenanigans of the House of Commons through the summer and autumn of 2019, the use of the legal system, and especially the Supreme Court, to pursue politics by other means… all this has shown that the Establishment is not a fiction but a bunch of real people with deep contempt for the very public whose taxes pay their wages. Some of those people will have been bought and paid for by the EU, but a lot simply have contempt for the voter. Cummings understands, as do many British people, that the bureaucrats, judges and others Establishment types who allowed their personal beliefs and feelings to get in the way of their job... those people have to step aside or be pushed aside.

That’s what I think is Peter Woit’s second complaint. He wants to believe in the Integrity and Rightness of "the institutions", and Cummings clearly does not. Peter Woit wants to believe that “the institutions" can somehow neutralise the personal interests of those working in them.

The latest generation of populist politicians are saying that if that ever was true, it is not now, and that "the institutions" are simply force multipliers for Establishment cronies to impose their ideas on, and express their contempt for, the people.

That’s a hard thing for a lot of people to take. If you don’t believe in "the institutions", what do you believe in? (Answer: that the job of a politician is not to make the people over in some image of a Good Person, but to manage the provision of Common Goods and to regulate and oversee the private sector and the provision of whatever are the key services and products in the current mode of really-existing Capitalism at the time. It’s not exactly inspiring, but I don’t want people who need to be inspired to run the State, I want people who will do it when they have a hangover.)

Disclaimer: Peter Woit is much better at his job than I am at mine. He probably has a longer track record of being a decent person as well, which since I’m a recovering alcoholic is pretty much a gimme. His book Not Even Wrong is a must-read even after all these years, and I continue to learn much from his blog. Everyone can’t be a good judge of everything, and the fact that a smart guy like him misses the point of a recruitment advertisement tells us how hard this stuff is to understand.

Facebook: Business Done Badly

Facebook took down a 1,000,000+ follower page belonging to high-protein / low fat Crossfit guys and gals. It was critical of government health and diet advice, as it should be, since all government diet and fitness advice has to be made with an eye to how much it costs compared to the minimum and median wages in the country. Since there are a lot of poor people in the USA, the US government diet and health advice is dreadful.

The user page went back up pretty quickly, but not before the central Crossfit organisation read Facebook the riot act and closed all its pages.

The commenterati saw Facebook’s take-down of the Crossfit as censorship: how dare the sheeple criticise the government and offer diet advice that Big Sugar, Big Carb, Big Farming, and Good Vegans Everywhere don't like?

Here's a much better explanation. Facebook is in dire need of decent middle-managers who know how to do this stuff properly.

Facebook offshores the censorship function. Many of those people regard eating meat, especially the meat of the cow, as a Very Bad Thing. My guess is that Offshore Guy saw a page a) criticising received dietary advice, and b) advising much consumption of the meat of the cow, and took it down as obvious crankery and for saying Bad Things. A while later, when the sticky stuff hit the fan back home in the USA, Offshore Guy was soundly beaten around the head and told that this wasn’t Bad, and even though it did say people should eat much of the meat of the cow, that is not Bad In America.

If Facebook had any actual decent middle-managers working there, they would have set up some rules like:

For the Offshore Team:

a) Pages identified by the software as frauds, bots and other junk: immediate take down.

b) Beheading videos, massacre videos, (add other obvious horrors here): immediate take-down, pass on to Head Office

c) pages with 500 (or whatever number counts as ‘a small number of followers’) or less: ignore

d) pages with 1,000,000+ (or whatever number translates as 'a large number of followers'): refer to Head Office if it meets the criteria

e) pages belonging to anyone on this long list of big corporations, political organisations, Celebrities and Very Important People; or anyone followed by more than twenty people on that list: refer to Head Office

f) Other pages: follow the guidelines and act accordingly. Send summary of the day’s banning to Head Office in time for opening of business wherever Head Office is

For the (Onshore) Head Office team:

a) Anyone on this list of Heads of State, Central Bankers, Facebook Shareholders, EU or UN officials, Major Stock index board members, religious leaders, or Friends and Relatives of same: to be decided by Mark or Sheryl personally

b) Anyone else on the Offshore List of Important Poeple and Organisations, or anyone worth more than (enter Facebook-related financial criteria here) or with 5,000,000 or more followers (or whatever number makes sense): to be decided by the Facebook Deliberation Committee

c) Anyone followed by more than twenty people on the list in criteria a) or b): also to be decided by the FDC

d) Anyone else: use your best judgement

This works if you can get a large enough bunch of people who might loosely be described as well-informed grown-ups with good judgement and a sound understanding of the politics, culture and PR environment of the language-users and main audience for the page.

Good luck finding enough of those people. And even more luck keeping them for more than, oh, six months.

Facebook cock-ups.

No conspiracy. No grand plot to censor free speech.

Just business.

Done badly.

Policed Speech is Dishonest Speech and Other Thoughts on Call Centres

Taping phone calls at call centres is a good thing, right? Keeps everyone honest, yes?

Not so much. Get the popcorn and read this tale.

The other day I got one of those just-calling-to-see-if-you’re-on-the-best-account-for-you calls from Vodafone. We chatted about the cost of the Samsung Note 9 and the iPhoneX, and then I asked if it was possible to move to a SIM-only contract on my phone. I didn’t think I could, as the contract runs out at the end of January, but hey, no harm in asking.

To my surprise the salesman (it always is a man) said that, yes I could, indeed to a 12-month contract offering 20GB of data per month. Sounds good to me. (I have an iPhone SE, it’s not very expensive, but this was still a saving, and much more data.) He said he would send me a SIM out that evening, which would reach me Friday, and I should call 191 to get everything set up.

The SIM arrived Saturday. We will pass over the call to Vodafone 191. It was long, it was full of people in Chennai popping off to make a cup of tea consult with a colleague while I was on hold, and none of them seemed to be able to grasp the problem, or of they did, they didn’t prove it by describing the problem and the remedy to me in their own words. In the end I think I hit the wrong button with my ear and dropped the call. Or they did. I can get upset after forty-five minutes going nowhere on a call.

It was during this call I learned that I had two lines. I explained that I didn’t want two lines, only one, and I wanted the SIM-ony tariff transferred to my existing number, not on the new number.

What had happened was this: the salesman created a second line for the new SIM card which would be billed alongside my existing monthly contract for the next five months. I am going to pass on speculating whether that was intentionally setting me up for double-billing. The usual way of changing is a tariff doesn’t involve changing a SIM card, but hey, who knows how these things work?

I went into that oasis of sanity, a Vodafone shop, and explained what had happened, showing them the SIM and the letter that came with it. The assistant looked at at his screen and in reply to my comment “I think the guy on the phone messed things up” said that, indeed, the guy on the phone had done bad.

Here’s the thing. In the shop, they can say that. On the phone, they can’t, because everything is taped, and so they have to go through a dozen contortions to avoid saying “Yeah, he pulled a fast one on you, let me straighten that out”.

Turned out the new card was cancelled on Saturday evening, when I made the 191 call, so something came out of that, but they could not tell me they had done that, because that would have been tantamount to admitting that the salesman had tried to con me. Or had misunderstood what I wanted and caused me a bunch of nuisance and potential double-billing problems. Neither of which make ‘Vodafone-the-corporation’ look good.

That’s what tapes do to any attempt to be honest.

In the shops, nobody is taping, so the staff can be honest with the customers. They can also deny they ever suggested that the salesman was pulling a fast one. Sometimes deniability leads to greater honesty for the customer.

Want it in five words? Policed speech is dishonest speech.

Student Debt Isn't - In The UK

Recently I had to look at Student Loans. The UK version. I went to university when students got grants, so I don’t really grok Student Loans the way my younger colleagues do. I had read phrases like ‘burdened by student debt’ and stories about rising fees increasing student debt and assumed that, well, students had to pay these loans off. In the USA they sure do, and in ten years. So I read up at the Student Loan Company’s website, and was astonished by what I learned, and then puzzled that anyone who one might think would know this stuff by virtue of being a journalist, banker or politician would be concerned by how many people had Student Loans to what degree.

My first surprise was that the credit rating agencies do not count Student Loans as part of anyone’s indebtedness. I suspect this is built into the legislation. It follows that no British bank or other lender can take account of a graduate’s “student debt” when making lending decisions.

My next surprise was how student debt is repaid. Over a threshold amount, which varies by the year the course started, a student pays 9% of their salary to the Student Loan Company, and continues to do so until the account is cleared, until the debt is thirty years old, when the outstanding account balance is written off. It follows that the only thing that the ‘debt’ affects is the length of time the graduate pays this 9%-over-threshold amount. At top decile incomes it amounts to around 6% of pre-tax salary, and under 1% at the third decile. It’s a progressive Graduate Tax by another name and method.

A regular loan, such as a mortgage, has a monthly repayment that, if made throughout the term of the loan, will settle the original advance and the accrued interest. If you miss payments, a real lender makes helpful-but-firm noises about how you might carry on repaying. If it’s an unsecured loan, they will hand you off to a debt collection agency after three months or so. If it’s a secured loan, they might throw you out of your house, repossess the car and otherwise send in bailiffs to seize assets and sell them to settle the debt. You have not lived until you’ve had the bailiffs knock on the door.

A Student Loan has no such conditions and consequences. HMRC garnish the 9%-over-the-threshold payment at source, so you can’t miss payments, and if you aren’t earning for some reason, no-one is going to seize and sell your laptop. After thirty years, the SLC writes off the loan. (I mentioned that before, but it bears repetition.) It has none of the characteristics of real debt.

The SLC is not a commercial company: it is owned by the UK Government. It’s not a real company that does anything, it’s the site of an accounting fiction, like a Cayman Islands company but without the bronze plaque. The Government pays the universities, just like it always did. But it does so via some double-entry book-keeping that assigns amounts to individual students. The debt is not intended to be repaid, but serves as the basis of a calculation that determines how long the student will pay the Graduate Tax.

Do the calculations in real terms (I have) and it is clear that for graduates starting in 2018 all but the top earners will reach the 30-year limit with some outstanding debt, which will be written off. Add in some mild salary inflation, and because the threshold is not adjusted for inflation, all but the lower earners will repay their ‘debt’ at some point over the thirty years. If there is not enough wage inflation, the SLC will be writing off at least £2bn a year and everyone will have to go through the farce of pretending it is real money that the taxpayer must provide. (Whereas it isn’t. It’s fiat money invented by the Band of England and hidden by specious double-entry book-keeping.)

The smart student takes all the money they can get, and pays the Graduate Tax. In their early-50’s the balance, whatever it is, will be written off. Only a fool would use real money repay their Student Loan any earlier. The smart investor would no more provide or buy UK student debt than they would a lottery ticket.

TV and Movie Streaming

Moving on to TV and Movies, let’s talk about subscription services. The final post in this series is about that Prime and other subscription services work and why. Let’s just say that Prime Video looks like the bargain shelves in Blockbusters. I don’t get The Long Goodbye for free, and I have to stump up for MUBI to watch Two or Three Things I Know About Her. It looks like I can watch all the kids movies I want. So let’s just toss Amazon in the bin.

You know how Amazon is really J C Penny on steroids? The streaming services - Apple, Netflix, Amazon - are Blockbusters on steroids. That’s why looking at what they offer always reminds me of walking round Blockbusters, or Fopp in Covent Garden, with the difference that Fopp has, and Blockbusters had, art movies. Blockbusters worked because some people were prepared to wait a while to see the latest movies, but mostly because all of us would watch something that was cheap to rent and looked “okay” but that we would not splash out a full-price cinema visit to see. Streaming services make money because of those grim Sunday afternoons when you’re bored and will watch anything. Amazon’s in the bin because Prime doesn’t actually apply to any movies I want, and do you notice how hard it is to find out what Netflix actually has to offer, and if any of the films or programs have an additional charge? So did I. Let’s give Netflix a pass. If you like it, you pay for it.

I'm going to stick with cut-price box sets from Fopp.

It’s Curzon Home Cinema I really want. I’ve ranted about their crazy commercial decisions before, but hey, let’s rub it in. When it started, they used the browser and I could plug an HDMI cable to my laptop and watch on my TV. Then they revamped the service, and now the Curzon app does not support any form of output re-direction. No Air Play. No Lightning to HDMI for the TV. Who the heck wants to watch a film on an iPad? Even Amazon’s iOS app supports Air Play! Ah, but wait. Curzon has an app for the Apple TV. That’s £139. Since I’m a Curzon member, £139 is about 10-12 movies depending on when I go. And it costs to rent the movies, so breakeven is way down the line. And they all come out on DVD anyway, and eventually for about £5-£10. This is not looking good for Curzon Home Cinema. I’ll just watch the movies when they come out instead. (Note: this is only because I work in central London. If you’re outside the M25 in a town with no council-sponsored art house, then it’s a bargain.)

So if I'm going to get an art-movie subscription, I’ll get MUBI instead. Ya na na ya na. (In this case, it’s the commitment to watch at least one art movie a month that’s the stumbling-block.)

Cathy O'Neill on Social Justice Algorithms

Dr Cathy O’Neill, aka mathbabe, a former Algebraic Geometer turned Wall Street Analyst turned Data Scientist / Activist, has a best-seller and has just been appointed a Bloomberg columnist. Her target is the algorithms used in complex decision-making…

Here’s her conclusion:

The irony is that algorithms, typically introduced to make decisions cleaner and more consistent, end up obfuscating important moral aspects and embedding difficult issues of inequality, privacy and justice. As a result, they don’t bypass much hard work. If we as a society want to make the best use of them, we'll have to grapple with the tough questions before applying algorithms -- particularly in an area as sensitive as the lives of our children.

Well, actually the social justice bit is not the most important issue here. First, something about “algorithms”.

Human judgement was first replaced by algorithms in bank lending and insurance. It turned out (apocryphal source) that human bank managers got it right 82% of the time, and the credit algorithms got it right 85% of the time. For even a small unsecured loans book of a billion pounds, generating £250m of new business a year, that three per cent ibuidls over a short time to a steady £7,500,000 a year of extra profit. More than enough to pay for a couple of dozen credit analysts, their computers and some SAS licenses.

Credit algorithms are brutal. No spare money at the end of the month after paying all your bills and feeding the family? Sorry, no loan. A couple of missed credit card, council tax or gas bills? Sorry, no loan either. A CCJ (County Court Judgement) issued to you at your address? Don’t let the door hit you on your way out. Before you mutter something about banks only lending to people who don’t need it, remember that the bank is lending your savings. You don’t want the bank to turn round and tell you your savings are gone because it was loaned to people who needed the money so bad they couldn’t pay it back - do you? OK. That’s clear then.

Most people can’t make their payments on time, or don’t have spare cash at the end of the month, are low-paid rather than irresponsible. People are low-paid because they don’t have the technical skills, education, or professional persona to earn better salaries. They may also lack the neuroses, character and moral defects, dysfunctions and ability to live without much social life that characterise many of the people who do earn in the top decile of salaries. But let’s not go there, and stick with the lack of education and social skills. Those, in the Grand British Narrative of the Left, are class- and culture-biased behaviours, which fortunately cut across race, creed and colour. In the Grand American Narrative of the Good People, it’s all about race, gender, religion, and economic status - because there is no "class system” in America. Cathy O’Neill is one of the Good People, so she’s concerned that the algorithms may have social injustice embedded in them.

Nobody gets too worked up about bank lending decisions because they are based on past financial behaviour and indicators. Those have an obvious relevance to a lending decision. However, what if the bank refused you because it picked up friends on your Facebook feed who were bad risks? Big Data says that in all sorts of ways we tend to act as our friends do, so it might seem relevant to see if we hang out with financial losers. Everyone lurves Big Data because smart and cool and computers. But how is this not the same as the local gossip saying that we shouldn’t lend to someone because she hangs out with losers? Did the banks hire all those PhD’s just to have them behave like the village busybody? (That’s my objection, not Dr O’Neill’s.)

When the decisions are about sentencing, parole, or taking children into the Social Services system, we would like the algorithms to be a lot better than the local gossip. And Good People want the algorithms to be socially-just as well. Here are the points O’Neill makes about a system called Approach to Understanding Risk Assessment (AURA) introduced in Los Angeles, to help identify children at risk.

The conclusions that algorithms draw depend crucially on the choice of target variable. Deaths are too rare to create discernible patterns, so modelers tend to depend on other indicators such as neighbor complaints or hospital records of multiple broken bones, which are much more common and hence easier to use. Yet these could produce very different scores for the same family, making otherwise safe environments look dangerous.

The quality and availability of data also matter. A community where members are reluctant to report child abuse, imagining it as a stigma or as a personal matter, might look much safer than it is. By contrast, a community that is consistently monitored by the state -- say, one whose inhabitants must provide information to obtain government benefits -- might display a lot more “risk factors.”

AURA, for example, uses contextual information like mental health records and age of parents to predict a child's vulnerability. It’s not hard to imagine that such factors are correlated to race and class, meaning that younger, poorer, and minority parents are more likely to get scored as higher-risk than older, richer parents, even if they’re treating their children similarly.

Her concern is that AURA will have too many false negatives, as the sneaky White People With Jobs stay off the radar. The result will be “unfair” treatment of the people who are correctly modelled. There’s a much bigger elephant in the room. AURA is an appalling model, as O’Neill describes:

In a test run on historical data, AURA correctly identified 171 children at the highest risk while giving the highest score to 3,829 relatively safe families. That’s a false positive rate of 95.6 percent. It doesn’t mean that all those families would have lost custody of their kids, but such scrutiny inevitably carries a human price -- one that would probably be unevenly distributed.

In other words, the next prediction from AURA is overwhelmingly likely to be wrong. Why? Do these people not know what they are doing? Well, I have tried using propensity modelling on a rare event, and got the same result: a horrible level of false positives. After checking my work and berating myself for a lack of creativity, I thought the issues over, and realised that this was caused by the rarity of the event and the nature of the facts I had to use. There is no hope of ever getting a decent predictor for an event as rare as child abuse. First, because it’s rare, and second, because it’s kept private, which is O’Neill’s second point in the quote. By contrast, defaulting in bank loans is a lot more common amongst borrowers than you might believe, and happens within a much smaller chunk of the population than “all parents”.

Propensity modelling started in direct marketing, and even models with much worse false positive rates can help improve profits by cutting down the number of mail shots. What’s good for junk mail is not acceptable for families. Propensity models of rare events are wholly unsuitable for sensitive issues around rare events, not because it "obfuscates important moral aspects and embeds difficult issues of inequality, privacy and justice”, but because the model will inevitably be awful.

That doesn’t mean Dr O’Neill needs to find a new line of work. Big Data research exercises are not expensive and in these kinds of cases a negative result can be valuable. Knowing that there is no group of reliable, accurate markers for child abuse can help dispel prejudice and old wives’ tales, challenge professional folk lore and force policy-makers to think about what they can and cannot achieve. Helping children who are found to be abused is and something a caring society should try to do. Claiming that you can prevent child abuse, when you know it can’t be reliably identified or predicted from publicly-availalble facts, is just irresponsible.

And all the Big Data in the world won’t overcome the cowardice that allowed child prostitution rings run by members of minority groups to operate for years, even though the police and social services knew about it. Which doesn’t mean someone shouldn’t do Big Data research, but it does mean that its issues need to be put in context and proportion.

Gellner's Ironic Cultures Illustrated By Volkswagen Advert

The sociologist Ernest Gellner wrote a very good book called The Legitimation of Belief, and one of the many ideas in it that stuck with me was that of an “Ironic Culture”. He used this to describe the way that the middle-classes were embracing Eastern spirituality, various forms of mysticism and guru-based ways of living and thinking about the world, but when they broke a leg, they went straight to hospital and had X-rays, antibiotics and whatever else. When it mattered, they went to western rationalism and its by-products (science, modern medicine, engineering). All the spiritual stuff was there to provide a little cultural colour. It wasn’t really what they believed, it was an ironic costume.

Multi-culturalism is an ironic culture. The Good White People think that the West should welcome people from antagonistic cultures with open arms, but while the may have mutli-culti Saturday Nights, they marry assortively with other Good White People, work in organisations where the entry qualifications are attainable only by adopting White European personal values such as study, practice, self-control, and deferred gratification. So although the Good People say they are all for multi-culural life, and eat in Vietnamese, Pakistani, Ethiopian and Malaysian restaurants to prove it, their real lives are white, white, white all the way through.

And here’s Gellner’s idea illustrated as only a good advertising agency could. It shows why someone would want to believe all that hippy claptrap, and how they rely on technology when it matters, and even the love-hate relationship with that technology.

You may have seen the ad in your local independent cinema, but if you don't have a local independent cinema, watch it now. Or anyway. I love it.

How Not To Tell A Story With Statistics

There was a recent study in the USA showing that 15% of people born between 1990-94 were still virgins, compared with 6% of those born between 1965 and 1969. Headline summary? "Millennials are having less sex."

Okay. We will pass over the difference between "More 24-year olds are virgins now than they were in 1982" (which is what the numbers say) and "The people who are having sex now have it less often than their parents did" (which is what the headlines said). Let's not complain about journalism.
Statistics creak and out come the freaks. All of them blaming their pet peeve about the world today. Everything from an increasing number of younger people living at home to low testosterone cause by oestrogen in the water supply. What's wrong with these explanations? The cause is too broad and the effect is too narrow. If Harry is affected by the oestrogen in the water so that he doesn't want to get laid, how come Chad still lost his virginity? As for living at home? Again, the numbers are too large and the effect is too small. It’s just silly.

Sadly, the same old stuff is trotted out by the authors of the original papers, and they are supposed to be smart academics who are on the ball with this stuff. They try to crack the nut of a small (absolute) change of a fringe behaviour (being a virgin at 24) with the hammers of nationwide trends.
What the survey says is that of the children born in 65-69, 95% of women had lost their virginity by 24, compared to 92% of men. Of those born in 90-94, 84% of women and 86% of men were no longer virgins. Most Americans have had sex at least once by the time they are 24, though it seems the late 1970’s and early 1980’s were prime sexy time.

The commentary in the analysis is opaque, and that’s being polite. They did an APC analysis, which stands for Age-Period-Cohort, and to keep a long story short, that should not fill you with warm fuzzy feelings of security. This gives us the two graphs below.

(The axis labelling on these graphs is sloppy. It says “Percentage” and then gives us numbers looking like 0.02. Is that 2% or 0.02%? If you think that’s picky, try taking a graph mis-labelled like that into a meeting with a sharp business manager. You may never be invited back. I’m going to assume they mean 2% when they put 0.02. Otherwise the effects are trivial.)

What these graphs show is never explained, and neither is the idea of a "moderator of the cohort effects” given in this splendid paragraph.

The increase in adult sexual inactivity between the 1960s and 1990s cohorts was larger and significant among women (from 2.3 to 5.4 %) but not among men (from 1.7 to 1.9 %). It was nonexistent among Black Americans (2.6–2.6 %, compared to a significant jump from 1.6 to 3.9 % among Whites). The increase in sexual inactivity was significant only among those without a college education (jumping from 1.7 to 4.1 %) and was nonexistent among those who attended college (2.2–2.2 %). The trend was largest and significant in the East (2–4.5 %), followed by the West (1.7–2.7 %) and Midwest (2.1–3.2 %, not significant), and nonexistent in the South (2.4–2.4 %). The increase was slightly larger and significant among those who attend religious services (2.3–4.3 %) than among those who do not (1.5–3 %, not significant). Many of the differences between groups in recent cohorts were also significant: For example, women were more likely to be sexually inactive compared to men, Whites more than Blacks, those who did not attend college more than those who did, and in the East more than in the West.

No. It’s not you. I do this stuff for a living and I have no idea what these numbers mean. I’m guessing that the percentages are added to some base number to get the virginity rate. For the 65-69-born women, that’s 3% (period) + 2% (cohort) + 1.7% (gender) = 6.7%, which is an overstatement, and for the 90-94-born women, that’s 3% (period) + 4% (cohort) + 5.4% (gender) = 12.4% which is an understatement, so maybe we have to add on other things. Or maybe it's multiplicative. I don’t know, and the authors don't explain how we should use all those numbers. As a result, the paper is useless to everyone. (The more I run across this kind of opacity, the more I appreciate the discipline of having to tell a story in business presentations.)

Let’s do some math. The sample size for the 90-94-born is 1,910 (291/0.152). The rate increase of 9% between the 60’s and 90’s cohorts makes 114 people, most of whom, according to this analysis, are white non-college women. The sample has 955 women (half of people are female) of whom 525 are white (55% of women in the USA are white) and 65% (in the USA), or 340, of whom are non-college-educated. If this was the 60’s cohort, that would be 20 virgins. Now there are 20+114 = 134 virgins and the rate amongst white non-college women has gone up nearly seven times to 33% in that segment, compared with 6% in the college-girl segment. That gives a blended average virginity rate of 27% for all white women 20-24. NATSAL-3 tells us that in the UK almost 20% of men and women were virgins at 24, and half of them went to university.

At this point I could start speculating as to what might be causing this frankly unbelievable proportion of American virgins. But I won't. I call sampling scheme problems. Or I call something wrong with the APC method. Or both.

And maybe the girls are lying. It’s just a thought. Because it never happens in other surveys.

An Introduction to Andrew Gelman's Garden of Forking Paths

The Garden of Forking Paths is an idea introduced in a paper by Andrew Gelman and Eric Lokin that should be understood by everyone who uses statistics and analyses data.

Context for those unfamiliar with statistics. For a long time, and in many journals even now, research would only get published if it was “statistically significant”, which usually meant that the result had a p value of less than 5% (a figure chosen arbitrarily). The p-statistic can be calculated from the data and a hypothesis about the distribution of the data. This gave rise to the practice of “p-hacking” or “fishing” – looking through data, excluding this and grouping that, recalculating the p-statistic, until one found a result that had p < 5%, which they then published. Many of these results turned out to be un-reproducible by other researchers.

In the old-school approach, a researcher is supposed to formulate an hypothesis, and run an experiment to test it. If the results of the experiment are insufficiently probable under the hypothesis, the hypothesis has to be rejected. What counts (classically) as "insufficiently probable” is a value of the p-statistic greater than 5%. What you’re not allowed to do is throw away data you don’t like and change the hypothesis to suit the data that’s left. That’s downright dishonest. You have to take all the data, and there are complicated rules about what to do when subjects drop out of the study and other such eventualities. This is how the old-school founders worked. Much of their work was in agriculture and industry, and R A Fisher really did divide his plot of land on an agricultural research station, treat each patch of soil, plant the potatoes and stand back to see what happened. He had no previous theories, and if he did, the potatoes would decide which one was better.

In epidemiology, political science, social science, longditudinal health and lifestyle tracking surveys and other subjects, the experiments are not as simple nor as immediately relevant, and may even not be possible to conduct. The procedure is often reversed: the data appears first, and the hypotheses and statistical analysis are done afterwards. This is how businessmen read their monthly accounts and sales reports. Often those businessmen are expecting to see certain changes or figures, and when they don’t, want to know why (“We doubled advertising in Cornwall, why haven’t the sales increased? What are they playing at down there?”). Researchers in social sciences and epidemiology also come bristling with pet theories, some of which they are obliged to adopt by the prevailing academic mores.

Under these circumstances, the data is scanned by very practised eyes for patterns and trends that the readers expect to find. If there seem to be no such patterns, those same eyes will look a little harder to find places where they can see the patterns they want, or at least some patterns that make sense of the lack of expected results. Researchers looking at diet know but cannot say that the less educated are less healthy and eat worse food, because they cannot afford better. So the researchers scan the data and blame bacon and eggs, or whatever else is believed to be eaten by the lower classes. This saves the researchers' grants and jobs.

However, the next survey fails to find that eating bacon and eggs did not alter the health of the people who ate it. Though nobody will ever know, this is because, in the first sample, the people who ate bacon and eggs were mostly older unemployed English people who did not exercise, whereas in the second survey, they were mostly Romanian builders in their late twenties who also played football at the weekends.

What happens in this practised data scanning? It is a series of decisions to select these data points, and group those properties, and maybe construct a joint index of this and that variable. It may include comparing the usual summary statistics, looking at histograms, time series, scatter graphs and linear regressions, and maybe even running a quick-and-dirty logistic regression, GLM or cluster analysis. All this can be done in SAS or R, and much of it in Excel, in a few moments by a reasonable analyst. Speaking from experience, it does not feel any more sophisticated than looking at the raw numbers, and so, because familiarity breeds neutrality all this is seen as part of the “observation process” rather than the hypothesis-formation and testing process. (Methodological aside: Plenty of people still think that observation is a theory-free process that generates unambiguous “hard facts”, or that it is possible to have observations that may involve theories but are still neutral between the theories being tested, and so “relative hard facts”. The word has not got out far enough.)

These decisions about data choice and variable definition are what Gelman and Lokin call the “Garden of Forking Paths”. Their point is that to get the bad result about bacon-and-eggs we took one path, but we could have taken another and not found any result at all. And if we used all the data, we would have found nothing. The error is to present the result of the data-scanning, the walk down the Forking Path, as if the whole survey provided the evidence for it, instead of a very restricted subset of the data chosen to provide exactly that result.

The Forking Paths we take through the Garden of Data in effect create idiosyncratic populations that would never be used in a classical test, or which are so specialised that it is impossible to carry over the result to the general population. The decisions that are made almost unconsciously in that practised data scanning seem to produce evidence for a conclusion, but the probability of obtaining that evidence again is minimal. That is the key point. When the old-school statisticians did their experiments on potatoes, they could be fairly sure, based on what they knew about soil and potatoes, that the exact patch of ground they chose would not matter. Another patch would yield different results, but within the expected variations. The probability that their results would be reproducible was high. When researchers walk along a Forking Path, they risk losing reproducibility and therefore a broader relevance.

That’s why so many attention-grabbing results are never reproduced: because the evidence lying at the end of the Forking Path was itself improbable. Nobody cheated overtly, they just chose what made a nice story but didn’t then check on the probability of the evidence itself. Practised data scanning, or a good stroll through the Garden of Forking Paths, can give you a good value for
P(Nice_Story | Evidence), but P(Evidence) can be almost zero, and so the P(Nice_Story) =  P(Nice story | Evidence)*P(Evidence) is also nearly zero and Nice_Story, really is just a fiction.

The difference between outright p-hacking and practiced data scanning is subtle, but it is politically important. p-hacking is clearly dishonest, and heaven forbid pharmaceutical companies should do it. Forking Paths is just, well, an understandable temptation. Gelman and Lokin stress how natural a temptation it is, as if to excuse it, but of course, if it is a natural temptation, the Virtuous Analyst will take care to resist it.

What Virtuous Analysts want to know is: how does one take a pre-existing data set and avoid the Garden of Forking Paths? Isn’t that an analyst’s job? Isn’t that why businesses have all that data? Because in amongst all that dross is the gold that will double sales and profits overnight? So suppose as a result of a thorough stroll round the Garden, I find what my manager wants to hear: that when sales of product A increase, sales of product B decrease. Product B, of course, is his, and product A belongs to a rival in the same organisation. This result holds only during periods of specific staff incentives in larger stores and not during the school holidays, and that makes up 65% of the sales during those periods. Everywhere else during those times, there is no relationship, and in the small stores at all times there is no relationship. That’s what I tell my manager, with all the caveats. It’s his decision whether to simplify it for the higher-ups. The Virtuous Analyst does not anticipate political or commercial decisions, but leaves that to the politicians and commercial managers.

Virtue sometimes hangs on a nuance.

Negative Interest Rates and Why We Need A £1,000 Note

This popped up in the daily press summary we get...

Banks in Europe and Japan are rebelling against their central banks' negative interest rates policies. Commerzbank is considering holding cash in expensive deposit boxes instead of keeping it with the ECB, while the Bank of Tokyo Mitsubishi UFJ has warned the Bank of Japan that it could stop its sales of Japanese debt.

In other words… Commerzbank are going to put the money under the mattress.

Aren’t they supposed to have unrivalled networks through which to discover great business opportunities in which to invest that money? So either Commerzbank doesn’t know about the business opportunities out there or it does and there aren’t any. Both can be true. There aren’t any and Commerzbank wouldn’t hear about them if there were. And no, before you ask, fintech start-ups and another sharing app won’t soak up that kind of cash. investment opportunities are skewed: at one end are small opportunities with speculative upsides and almost guaranteed but limited downsides; at the other end are the Crossrails, HS2, Hinkley Point C, Sizewell C, and other humungous vanity projects. The other big stuff, like developing the Dreamliner or Windows 10, is financed by companies, which may simply not need external finance (Apple, Microsoft) or will borrow it against their balance sheet rather than the future profits of a project.

Nope. Looking like the mattress is a good bet.

Central banks have to lie about why they are charging negative interest rates. The real reason is that there’s no way for them to make even a small return on the money other banks deposit with them, because the returns on government debt are so low. They can’t say that, because then the central bank would be admitting that the economy is screwed. So they mutter about using negative interest rates to encourage spending and lending - and that, of course, amounts to saying that there isn’t enough spending and lending going on, because there isn’t anything worth spending on or lending to, and that amounts to saying that the economy is screwed.

Commerzbank are posturing, of course, though they may also be looking at the costs of strongrooms.

Of course, if Commerzbank was going to store money of that amount in deposit boxes, it would need 500 euro notes to do it. Which the ECB wants to get rid of. I say the Bank of England should issue a £500 and even a £1,000 note for exactly these purposes. The Big Four banks in London should build a currency storage facility somewhere in the City. With £1,000 notes, it wouldn’t need to very large. The flight of capital to sterling would be exactly what it needed post-Brexit.

£15 for a Korean Martial Arts Film at the Curzon Bloomsbury? My Inner Pricing Manager is Offended

I went to see The Assassin at the Curzon Bloomsbury (or “The Renoir” if you’re old-school) the other Saturday. The 11:00 AM showing. In the Minema screening room.


It cost £15.

It’s a good film. There were quite a few people there - for a Korean martial arts film showing at the Renoir. And get they must have spent a LOT of money on the Takero Shimazaki-designed overhaul of the cinema, of which this is a sample.

But £15?

When the DVD, which will come out in six months at the most, will cost about £8 in the Covent Garden branch of Fopp?

I paid £20 to see the Star Wars movie at the Odeon Leicester Square, and I was happy to do that because some films need to be seen on a BIG screen. The Curzon Bloomsbury does not have a big screen, though it does have more comfortable seats. I think the Minema screening room is not a lot bigger than my back room, and I live in a small terraced house.

My inner pricing manager is offended. I’m not sure what I think would be a good price. The Prince Charles charges £11. That feels about right, as they have refurbished the Prince Charles as well. I think I paid about £12 to see The Big Short at the Cineworld Haymarket the Saturday before that. I know the Curzon want me to sign up as a member, when I will get two free tickets and “reduced” rates. Except those “reduced” rates are the standard rates, and the walk-in price I paid was a premium rate. The annual membership (for me) is £45, less £30 for the free tickets, which is £15, and I think the discount isn’t as much as £3. I would need to see six films a year before I broke even on that one, which is just about possible.

It ain’t cheap to go to the movies no more. And I’m not sure the movies they’re showing are worth that kind of money. Maybe having Rohmer, Robbe-Grillet and Godard on DVD does spoil one. 

Maybe I need to go to the ICA more. After all, they show more or less the same films as the Curzon chain. But this week it’s only showing The Assassin at 16:00, and that’s when I leave the office over in the City. So maybe not the ICA then. While I’m still working.

Minimum Wage, Subsidised Childcare and Middle-Class Lobbying

Two editorials in The Economist this weekend that roused my ire. One on the folly of raising minimum wages, and another on the need for subsidised child care to maintain a country’s population. The two are linked. Not by any economic theory, but by the class interest of the journalists and interns who write for The Economist. The people who write for The Economist want cheap tradesmen to work on their St John’s Wood flats, cheap nannies to look after the children so that Charlotte can go back to her career as a consultant at Accenture, and, of course, more immigrants. Lots of immigrants. But that’s another subject.

Anglo governments are talking about minimum wages because the overwhelming majority of low-paid workers are women and immigrants, two constituencies which are seen as block votes with a tendency to turn left. It’s also because Governments are getting tired giving tax subsidies to low-paid workers which end up in the profit line of large companies who then: cut jobs; create social uncertainty; sell, make or provide goods and services of ever-decreasing quality; and generally make Governments look as though they are presiding over a decline the quality of life. It also happens to be the right thing to do: how on earth does anyone run a society when only about 20% the workforce can afford to live in an independent, adult manner? The rest have to get married or live in subsidised housing to even pretend to be living an independent life.

If you’re doing something that isn’t profitable unless you pay low wages, you probably shouldn’t be in business. Either you don’t know how to price properly, or you’re being screwed by your customers (any farmer supplying any supermarket in any country in the developed world), or you aren’t supplying something that people really want. Like Morecombe Bay cockles. Low wages are the result of bad management. It’s an entrepreneur’s job to find something people want at a price that makes it profitable when the workers are paid enough to live like adults. The reason cleaners aren’t paid a lot of money is that their clients are quite prepared to live in dusty and slightly messy conditions. A cleaner-cleaned house is a nice-to-have, not a must-have. Now, if parents risked having their kids removed by social services should a random inspection find fecal matter in the toilet bowl or a trace of grime or spilled milk in the children’s room - guess how important it would be to employ a cleaner? Guess what would happen to cleaning rates? Especially if cleaners (not the agencies) had to be local-council certified first?

According to Charlotte’s editorial-writing husband Jasper, the reason Charlotte should have free child-care so she can go back to her job at Accenture is that developed countries aren’t producing enough children to keep their parents in fat pensions and luxurious healthcare when they get old. (Oddly, one way out of that is, Jasper’s editorial says is, yes, more immigrants! But I digress.) However, a declining young population is not a problem. The problem is declining GDP. Anyone who sees a declining population as irrevocably linked to declining GDP, again, probably shouldn’t be running an economy. And who says that healthy old people should be exempt from work, especially when there won’t be enough (younger and middle-aged) people to do all the work that needs doing? Keep the oldies working. When they start dying, close down what they needed to live behind them. And instead of importing more people to do low value-add jobs with a low tax take, work on figuring out how to increase GDP per capita so that the economy doesn’t shrink even while the population does. More exports and fewer imports of high-value goods would help. (It wouldn’t hurt if Vodafone, Google, Apple and others paid their due taxes either. Who cares if they go somewhere else, since they aren’t actually making a net contribution to the country? But again, I digress.)

Seriously? A magazine with the self-advertised stature of The Economist should not be lobbying for the benefit of a bunch of wanna-be BCBG’s. Perhaps if paid its staff more, they wouldn’t use its pages in such a blatant manner.

Diversity As Industrial Sabotage

A lot of SJW’s and PC columnists are making a noise about the fact that women are “under-represented” in the big tech companies. Those companies are making pledges about getting Women Into Tech. Oddly, there are less women graduating in Computer Science now than there were twenty years ago, which probably says something about the lack of fortitude of today’s women compared to their older cousins, but don’t let that stop anyone.

Once a company is known as a diversity quota-house, the really good people don’t apply to work there, and the really good people who do work there, leave. I’m not talking about hacks like me, I mean actually talented people who could make a huge difference to the products, processes and profits of an organisation. Those people are jealous of their time and talent, and they are focussed on developing and using it. How else did they get to be good in the first place? They do not want to deal with working for insecure managers, or with team members who can’t haul the load.

If you hired someone who was good at the job and also happened to be (enter Diverse parameters here), then you didn’t make a quota-hire. You just hired a good person who happens to be (enter Diverse parameters here). Your new hire won't cause problems with the non-Diverses because they have talent and they are a professional, and want to be accepted as that. If the non-Diverses start to make comments, you can indulge in some old-fashioned shaming and tell them to behave like professionals.

The Diversity Illusion is that there will always be enough acceptable quota-hires when you need them. This is obviously wrong. Since a quota-hire is someone you hired over a better non-quota candidate so that you could meet your quotas, quota-hires are by definition less capable. (Let me repeat, Diverse candidates who have the required talent aren't quota-hires.) Which means they are more likely to be insecure, entitled, and less talented. This upsets the genuine talent, while us hacks shrug and wait for it to pass. Or you could put all your quota-hires somewhere they can’t do any damage to the important stuff, though where that would be, I’m not sure. Which means you’re carrying un-needed overhead.

Why on earth would a company do this to itself? It wouldn't. But, here’s a thing. All those Diversity SJWs write for web companies that are owned by Tech or Media billionaires. Each one of whom is trying to get the other guy’s company to become a diversity quota-house.

It’s industrial sabotage by other means. The tech companies who take it seriously and actually start hiring women on quotas will lose talent, not be able to re-hire it, make worse products, loose their edge and go out of business.

Capitalism turns everything to its use.

The Illusion of Marketing Segmentation

One of the things that Insight Analysts are expected to produce from the data are useful customer segments. The conventional wisdom is this:

Customer segments are differentiated by the customers’ different requirements for your product. The value proposition for any product or service is different in different market segments, and the price strategy must reflect that difference. Your price realization strategy should include options that tailor your product, packaging, delivery options, marketing message and your pricing structure to specific customer segments, in order to capture the additional value created for these segments.

Publishers have been doing this since Gutenberg. It makes sense for cultural production: books, music, paintings, wallpaper, paint colours, rugs, furniture, plate design, perfume, clothes, pens, watches and so on. But for domestic water? How do you vary “clean water”? The logistics of water supply mean that we all get the same water.

And just how different can a telephone service really be? It’s all the same copper and fibre, and no matter what price plan you’re on, you’re going through the same switches. Those price plans are there to smooth the usage out. Data services can be made faster or slower, but not telephone calls. Are Hertz “segmenting” when they offer you a range of cars from a Ford Fiesta to a Mercedes E-class? Insofar as a car is a cultural object, yes they are, but the service you get, from online reservation to them checking it for damage and petrol tank fullness on return is the same.

Airlines don’t segment their customers when they provide First, Business and Economy: they segment their cabins and hope there are enough people willing to pay those prices. If they researched their customers, they would hear overwhelmingly that we all want 36 inches or more leg-room, no middle seats, no reclining seats, and either no children under about 18 outside a special sound-proofed part of the cabin. Like hell airlines are going to do any of that. 

The truth is that in most cases you can’t "tailor your product, packaging, delivery options, marketing message and your pricing structure to specific customer segments”. A supermarket can’t identify who will take home delivery of groceries until it offers it, and offer it at a sensible price and under sensible terms. The most it can do is conduct some interviews and surveys, and everyone knows the problems with those. 

An airline can’t identify who will pay for flexible return or more legroom: it can only offer it and see. Or conduct those same dubious surveys. A bank, however, can make a good guess about who it is prepared to lend money to. A supermarket can make a good guess about who might be tempted by an offer of a discount on Pampers. Because unlike the airline, who don’t have a clue about their passengers' disposable income, a bank does. And so do supermarkets, at least for some of their customers.

But companies with access to really good MI are few and far between. Banks. Insurance companies. Supermarkets (includes Amazon). Two out of three of those industries are basically commodities. And strictly, so are retailers. (Think carefully: the shopping experience is the same, whether you buy the branded or the Value Range, fresh baked or sliced white - you’re pushing the same trolley round the same aisles and standing in the same queues. Supermarkets provide a commodity service: what they sell sometimes isn’t.)

It’s not customers who drive segments, it’s producers and providers who take the risk of creating them. A company can create a product no-one wants (I’m looking at you, Sinclair C5), and it can create a product everyone thought they wanted until they got it and then they realised it wasn’t that great (hello, Kindle), and there will be those (hiya Steve Jobs) who say it can create a product that no-one knew they wanted until it was there, but I’m not so sure. I think every product has a fore-runner of some kind. The theatre has spun off the cinema, radio, TV, videotape and DVD. All come from the same desire to have dramatic entertainment.

And those companies will have absolutely no idea who will take up the products - unless the company has a strong cultural image (take a bow Apple). That’s how Burberry got themselves into a mess a while back.

7 Habits, Well 6 Actually, That WIll Make You More Successful

I came across this while browsing Business Insider, which I do much less now than I used to. It's from a US Navy SEAL officer (Q: How do you know someone was a Navy SEAL? A: Give them five minutes and they will mention it) and I found myself agreeing with much of it. So here we are...

1. Be loyal. Team loyalty in the corporate environment seems to be a dying philosophy. Loyalty to the team starts at the top. If it's lacking at the senior executive level, how can anyone else in the organization embrace it? Loyalty is about leading by example, providing your team unconditional support, and never throwing a team member under the bus.

2. Put others before yourself. Get up every day and ask yourself what you will do to add value to your team, such as simply offering your assistance with a project. The challenge is overcoming the fear that your team member might say: "Yes, I really need your help with this project…tonight."

3. Be reflective. Reflective people often spend too much time analyzing their actions. But imagine if you could harness this talent into something highly valuable? Reflecting on your mistakes, such as mine in Iraq, ensures you never repeat them.

4. Be obsessively organized. Some of us innately have this ability, often to a fault, and some have to work at it a bit more. You have to find a process that works for you. I've known people who will put something on their to-do list after they did it and then cross it off to feel a greater sense of accomplishment! Whatever your system is, make it work for you.

5. Assume you don't know enough. Because you don't. Any effective team member understands that training is never complete. It's true in the SEAL teams, and it's true in any elite team. Those who assume they know everything should be eliminated. Those who spend time inside and outside of the workplace developing their knowledge and skills will provide the momentum for their team's forward progress.

6. Be detail-oriented. Attention to detail is one of our company's values. Do we get it right all the time? Of course not. Imagine, though, if all members of a team are obsessed with detail in their delivery? My lack of attention to detail in the incident in Iraq could have had catastrophic results. Don't ask yourself what you are going to do today to be successful; ask how you are going to do it.

7. Never get comfortable. Always push yourself outside of your comfort zone. If you do this continually with every task you take on, that boundary will continue to widen. This process will ensure that you are continually maximizing your potential, which will positively impact your team.

You may be wondering how you could ever have a relaxed life if you maintain all of these habits. But that's the beauty of it. If you enjoy what you do and form good habits, it all becomes second nature. Maintain these habits, and encourage your team members to do the same

. ... and we're back. Notice that 1) is prescriptive for managers. That's how they should behave and how you should if you make it to management. The good ones behave like that and the mediocre ones are just, well, what they were hired to be. Be one of the good guys.

The only one I disagree with is 2). There's nothing wrong with asking the rest of the team if you can help out, if you've done all your work, and you're pretty sure no-one is going to take advantage of you. The deal with adding value is that you add what they pay you plus some profit. After that, they have to add value to you as well. This very rarely happens in a large company, which, let it be remembered, hired you for the skills you already had, not because you were a smart guy who could pick up their stuff real quick.

I'm going with the others because they are about humility, growth and self-respect, important values all. And you thought the SEALs just blew shit up?

Unemployment and Forward Guidance

Mark Carney (for Martians: the new Governor of the Bank of England and a Canadian) says he won’t be making it worth taking your money out of a sock and putting in a deposit account until unemployment is below 7%. And 7% isn't a trigger, he was making noises about how unemployment around 5% would show that the economy strong. (Think about that for a moment: 1 on 20 people can't get jobs, and that's "strong"? Who's kidding? "Strong" is when employers who don't pay enough lose all their people next week to another employer who will.) Anyway, I thought you might like to see how often even 7%  happens. At a first glance, between 1971 and this year, it happens 48% of the time. 

But wait. Around 100 or so of those months were in the pre-modern era when we had strong Trade Unions and other such horrors, so they don't tell us anything about this economy, and at least another 100 were in the “bubble” era Oughties, which nobody thinks is coming back. That brings the proportion down to… 11%. Most of which was in the lead-up to the bubble.

So unless Mr Carney thinks there’s another bubble on the way, a sock still looks like a good option. Especially since, as you will remember, a few months ago all the pundits were talking about how the UK economy had a puzzlingly large number of people in work, given its output. Employers were supposed to be holding on to people “for stock”. In other words, there’s plenty of productive slack in the current workforce and employers will have no reason to hire even as the economy picks up. I'm not sure I believe that, but I do think that the 5% unemployment rate in the Oughties was very different from the 5% in the late 70's. It's made up of a lot of long-term unemployed, ethnic minorities are over-represented, and there were clearly a lot of people whose employment was pretty marginal, as they were tossed out of work briskly after 2008. Unemployment decreases slowly and increases sharply. Unemployment in the Tens is much more sticky than it was before the Modern Era. 

It could be that Mr Carney is as aware of this graph as you are now, and chose 7% exactly as a way of saying "interest rates are NEVER going back up again, EVER" which of course he couldn't say out loud. Remember, just as the largest direct or indirect employer of low-paid, contract and off-shored workers is the British State, the largest payer of interest is also the UK Government, which would mean me and you, as taxpayers. Nobody really wants interest rates to go up again. Except savers and investors. 

Simple, Fast, Insightful. Pick Two.

There's a really neat presentation by the man with the coolest job in IT-town ("I'm Ira Hunt, I'm CTO of the CIA" and he says it real fast). It has many interesting points that shows he gets the whole Big Data thing, and yet, and yet... one of the things he wants is to reduce the dependance on expensive data scientists who are in short supply, and produce a piece of kit that lets regular analysts with degrees in History and Politics from Georgetown search their way through the databases.

Now where have I heard that before? How many times have I heard that before? And why does it never work? Well, here's how the Miracle Information System gets demo'd: "Let's say you want to look at all the e-mails sent by people who are one link removed from Hamid al Hamid to people who looked at the al Jazeera video on You Tube about the bombing in Katusk-al-Katusk and then Facebooked a Like? So all you'd do is (makes a few mouse movements) and there's your answer." Applause, coo-ing and million-dollar orders swiftly follow.

Except. How did the analyst know that those e-mails were there? How did they know how to click that box, then drag that? How did they work out the boolean conditions required for the search? How did Hamid-al-Hamid's name wind up on a drop-down menu? And so on and so forth. Of course when they get the system, the regular analysts won't learn all this stuff, and there will be a handful of guys who do, and they will have dead-end guru jobs for a decade being whizzes on the system.

To handle a data set, however small or large, you need a picture of it, and the way it gets fed from the outside world, and the hierarchy of tables within it, in your head. To be any good at all with it, you need to know the names of all the major identifying variables and categories (you'll need to tell the computer it's Hamid-al-aHamid the Iraqi terrorist you want, not Hamid-al-Hamid the second-generation US citizen and Queens Halal shop owner). That's often a task of scholarship in itself.

Even if you use a GUI to design the query and cut the SQL (or whatever) for you, you still need to know about join types, boolean operator precedence and lexicographical ordering. Nope, right there, that's lost everyone who doesn't have a STEM background. Seriously. Join types, operator precedence and lexicographical ordering. That's all it takes to stump ninety-five per cent of the population. FOR LIFE. (I am the only person on a floor of one hundred analytical people, including many well-paid SAS analysts who knows what operator precedence is. Everyone else instinctively keeps what they do simple enough so they don't have to. So that affects how insightful and complex the work is.)

There are only so many people who can do that, just as there are only so many people who learn the contents of Grey's Anatomy and a zillion other disconnected facts to become some kind of medic, or who can learn the endless VAT statutes and rulings. No-one suggests replacing surgeons with a nurse and a GUI, and everyone has given up trying to develop "expert systems" for tax legislation, so why do IT guys keep trying to get rid of their surgeon-equivalents, the data scientists (or whatever they get called these days)?

They don't of course, but they have software to sell, or buy, and projects to run, and promises to make, so they pretend that, yes, you can exploit data as complex as the CIA and NSA has with a neat GUI and a joint honours degree in International Relations and Farsi (I have nothing but respect for people who can learn Farsi or any other non-native language, it's just that it won't help you design the query you want.) No. You really can't. And unless you put the design of the databases in the hands of people who have an end-to-end appreciation of the issues, you will wind up with some contractor encoding everything in sight without asking anyone who will actually use the data, and then refusing to change anything because you can't demonstrate a business case for doing so. Maybe the CIA don't have that problem. Maybe they can just kill DBA's and Sysadmins who won't do as they're told. (Do you think so? Can I work there if they can?)

Nah. Until we can, we are all safe from Big Brother, because Big Bro simply doesn't have the technical chops. Actually, nobody does.

Simple, fast, insightful. Pick two.

Why I Don't Like Big-Company Decision-Making

Peter Drucker says somewhere that the purpose of organisations is to allow ordinary people to achieve extraordinary things. Many might add that organisations also prevent extraordinary people from doing ordinary things. (Ordinary, that is, to an extraordinary person.)

In a large organisation, many people can say NO and nobody can say YES. Let me explain: in a small owner-managed company, if the boss wants it done, it will be done, unless the few people he listens to persuade him otherwise. Nobody is under any doubt that if he insists, then it will be done. In a large company, even if the CEO orders it so, it can be blocked by bureaucrats of so lowly a junior status that they will never meet the CEO, even if they have defied him. This is why CEOs, like Heads of State, prefer to spend time on mergers and acquisitions (foreign policy) rather than internal growth and development (domestic policy). Merchant bankers and lawyers are so much more responsive than their own staff  - as at those prices, they should be.

Getting anything done in a large organisation isn't about finding someone to say YES. It's about making sure everyone who can say NO won't. It isn't about making a decision, it's about stopping the decisions being thwarted. It's less about getting the go-ahead as not getting the stop sign. It's about convincing people that whatever it is won't mess up their personal and departmental agendas, especially the ones about their egos. And it's never anybody's fault: it's budgets, rules, or priorities. Except that's a total crock and everyone knows it. If it was about having favours out and due, or having clout, I could live with that. I understand the favour economy. But it isn't. 

And sometimes the bureaucracy does things to make its life easy. As the result of a re-organisation, I and my co-analyst (a team of two) suddenly needed access to the full range of data, which had been denied us in the past for every nonsense reason you could think of. We were dreading the endless futility of applying for access and being denied because we didn't have the "business case". However, one Monday morning we signed in to the database... and found we had access. I swear we never filled in one form. In this case, someone realised their lives would be easier if they just did it, and they did. 

Needless to say I find that process frustrating. NO is to me a personal rejection, a sign of indifference and contempt. (Addict, remember?). There are plenty of other people who can take it as "come back with another proposal and we'll toss a coin on that as well" and are happy in a world of coin-toss decisions. (Sorry, I meant, a world of rapidly-changing priorities.) I'm good with work and I subsume myself to the work. I have no time for people who seek out positions where they can exercise their egos at the expense of the work, and I'm really bad at hiding my dislike of them.