Putting too much faith in employment "Recalculation"

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I have great sympathy for Arnold Kling's "Recalculation Story" of high unemployment. But he shoe-horns in some foolishness into his otherwise sound theory to try to head Keynesian interventions off at the pass. The main shoe-horned foolishness is that, magically, businesses will hire back everyone laid off, and hire also new workers entering the job market. I ask, Why? It does not follow at all - Businesses have never had so many techniques for keeping their staffs low, and all the techniques are improving in quality, as well.
The interventions to "cure" high unemployment _will_ be Keynesian. Because every other race of economists pretends that high unemployment is not a problem. I am exaggerating, but only a little bit.

I would not mind a "better" form of Keynesian, but those who are in the best position to provide those improvements are too busy pretending that high unemployment is not a problem. Or that businesses have techniques to turn marginal employees into highly productive employees, and they will use those techniques instead of the tried and true methods of raising productivity and shedding employees at the same time. Because of the time wasted on these fallacies, we will get the old Keynesian cure from the old Keynesians, because the Keynesians are immune to these particular fallacies (being too busy with their own fallacies).

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The interventions to "cure" high unemployment _will_ be Keynesian, whether I like it or not, whether anyone likes it or not. Prepare accordingly - labor legislation in the United States _will_ greater resemble Continental Europe - because the current and expected social costs of high unemployment are very real (including lost taxation and lost consumer demand, besides criminality induced by idleness).

The Job Assignment Problem, Arnold Kling | EconLog | Library of Economics and Liberty: "
> I agree that high productivity growth is very good news and that it portends increases in hiring.
Running a business, if I have productivity growth, and, for whatever reason, I wanted productivity to go back down, the fastest way to do it would be to hire more employees.
I am not supposed to admit this, but I feel compelled to be honest. Higher unemployment and higher productivity growth have no demonstrated inverse relationship.
When the social costs of unemployment come home to roost, we will see legislation to enforce lowered productivity. I can complain about it, but it would be foolish to not see it coming. Somehow, I will be compelled to hire more employees, and productivity will go down. Because employees bring with them the burden of mandated entitlements and the burden of their own inner sense of entitlement. Like it or not, it is foolish for me to pretend otherwise.
> What people are calling a "jobless recovery" is what I would call the market taking a long time to solve the job assignment problem.
The market has solved the job assignment problem by not hiring. And productivity has increased. During the 'good times', the market was more tolerant of low productivity - now less so. Businesses act accordingly. Because, at this time, businesses are not compelled to bare a share of the current and expected social costs of high unemployment (including lost taxation and lost consumer demand, besides criminality induced by idleness).
"

A depressing follow-up to a reply to my comment:

> I disagree with manuelg' first comment regarding legislation to compel more utilization of human capital - that's been attempted by, among others, the Luddites, the Wobblies, and the Communists.

I didn't say it would work as advertised! ;-) It will "work" to reward a particular voting block, as one would expect. High unemployment provides the "cover".

> ... the workforce will either develop or rediscover markets that require human capital (R&D, personal service) or the supply will re-train to enter other labor markets a la buggy whip makers and farmers

Or neither. New positions never opening up at an adequate rate is a distinct possibility. Take R&D - why not use 40 Indian PhD's to do the work of 60 US PhD's? Take personal service - a goodly portion of the work of a personal assistant can be done remotely - again employing someone without the same expectation of quality of life and compensation in a place with a much lower cost of living.

The majority of the work will be of poor quality, but the cost savings will be compelling. Like the craftsmanship of a pocket-watch compared to the time display on a plastic cell phone. People spend a smaller fraction of their income on telling the time (pennies out of the cost of the phone and service), and lose daily contact with items to true quality, and that prior level of quality becomes a boutique luxury item, and employs far fewer people.

> ...re-train to enter other labor markets...

It may in fact be easier to "retrain" a US worker to become a ethnic Chinese worker (chopstick skills, walking stooped to pass through lowered doorways, reading/writing Chinese letter-forms) than it would be to retrain a US worker to have the skills and sense of responsibility and lack of sense of entitlement that the new employment positions opening up require. Look at the malaise of Japan's labor economy as the positions disappeared for lifetime employment by a single employer, never to return. Even after years of a desperate situation, it is not 100% certain that a human will change their attitudes to match a new reality.

Not to put too fine a point on it.

Derek Sivers - Ideas are just a multiplier of execution

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Derek Sivers - Ideas are just a multiplier of execution: "http://sivers.org/multiply
It's so funny when I hear people being so protective of ideas. (People who want me to sign an NDA to tell me the simplest idea.)

To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions.

Explanation:

AWFUL IDEA = -1
WEAK IDEA = 1
SO-SO IDEA = 5
GOOD IDEA = 10
GREAT IDEA = 15
BRILLIANT IDEA = 20

NO EXECUTION = $1
WEAK EXECUTION = $1000
SO-SO EXECUTION = $10,000
GOOD EXECUTION = $100,000
GREAT EXECUTION = $1,000,000
BRILLIANT EXECUTION = $10,000,000

To make a business, you need to multiply the two.

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The most brilliant idea, with no execution, is worth $20.The most brilliant idea takes great execution to be worth $20,000,000.

That's why I don't want to hear people's ideas.

I'm not interested until I see their execution."

Trust but verify

Derek Sivers on the management technique of "Trust but verify".

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Trust but verify: "

a few devastating times, I found out that I had tried too hard not to micro-manage. I hadn’t managed at all. I had said something once, thought it was understood and agreed, and assumed the best.
But things had gone horribly wrong. Months of orders had not been processed. Money had disappeared from the bank. Projects I thought were underway had never been started.
In all of the cases, a simple one-minute verification along the way would have prevented everything.
I could get mad at them, but really it was my fault for not building that verification step into the plan.
Not micro-managing, it can be as simple as:

• asking them to email you when done with each step
• or a “dashboard” style monitor showing the progress of projects
• or a simple note-to-self system to check in with someone a few days after you’ve assigned them something, to make sure it’s going OK
• or anything! - but don't ignore it.

So here I am sharing one of my hardest delegation lessons learned, in hindsight.

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Trust but verify.

"

The "Dashboard" style project monitor, or a progress bar that shows actual against projected - good ideas.

Very nice comment, here:

comment - Kamran Salehi (2009-11-24)

To take this concept one step further: Delegate the verification !

This is a method I resorted to as my teams were growing. Name the effort a project and assign a project manager to it. This can be a rotating role. So at the same time “Jim” can be the project manager for one project where “Julie” has tasks, and “Julie” can be the project manager of another project in which “Jim” has tasks. You still need to check with your project managers periodically. But it gets you even one more step away from doing everything yourself and micromanaging.

Very smart! Good one. -- Derek

Very interesting idea - a rotating job of "verifying" project manager.

Managers and manager-speak: This struck a nerve...

This post hit too close to home, and struck a nerve - about vapid manager-speak, like:

• "At the end of the day"
• "actionable"
• "teaching opportunity"

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and every managers favorite parable - "A Message to Garcia" by Elbert Hubbard [see http://www.birdsnest.com/garcia.htm http://en.wikipedia.org/wiki/A_Message_to_Garcia ] Very snarky list of Management Speak and translation into plain English:

Management Speak Compilation - InfoWorld's Bob Lewis http://seto.org/infoworl.htm

I have been prone to "manager-speak", I am ashamed to say. I just had to take the opportunity to defend my shabby behavior in comment...

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Managers and manager-speak: what is a "manager," anyway? - Statistical Modeling, Causal Inference, and Social Science: "

...whether knowing that someone uses management jargon in their speech gives you information on how likely they are to be a manager...

Why? Because...

1) In paternalistic cultures, leaders are expected to project confidence, and lack of understanding is rarely punished. So rattling off canned phrases is effective for managers, because it is very unlikely to get called on it.

2) Without whips or waterboards, managers are expected, with only their voices, to do the impossible - motivate another person to do something that is against that person's instinct and habit. Against futility, they can only run off their mouths. Again, canned phrases help.

A manager that didn't avail himself to canned phrases would be such an eerie, uncanny creature it would likely be fired or chased down an alleyway with pitchforks or torches. It would creep out upper management and employees alike.

This is my excuse, and I am sticking with it. Manager speak is a good tool to dazzle people with bullshit, just long enough to make a quick get-away to a place where you can hide from the problem.

Ten Habits of Incompetent Managers

Very well written and perceptive article by Margaret Heffernan ( via http://blogs.techrepublic.com.com/career/?p=1068 via Google Reader Rajneesh Garg )

fastcompany.com heffernan 10-signs-incompetent-managers

Quoting Toni Bowers:

I came across a great piece about traits that incompetent managers share. Written by Margaret Heffernan for FastCompany.com, this no-nonsense piece cuts to the chase and is about as true a list as I’ve ever seen.

Read the whole piece. Here are the ten:

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   Bias against action
2. Secrecy
3. Over-sensitivity
4. Love of procedure
5. Preference for weak candidates
6. Focus on small tasks
7. Inability to hire former employees
8. Allergy to deadlines
9. Addiction to consultants
10. Long hours

Network of Executive Women Online, speaking about Margaret Heffernan's book The Naked Truth:

For those women who think "you can have it all," comes this contrarian view from business journalist and former technology CEO Margaret Heffernan. Heffernan interviewed more than fifty mostly female executives for this book and it delivers, as the title promises, some hard truths about the work and lives of women executives. Some women think even less of their own capabilities than their male counterparts do and often aim low from the very beginning. Many male executives continue to stereotype women ("geisha," "bitch") and try to hold them down. Toxic bosses and hostile work environments still abound. Sexual harassment, pay discrimination and hostility to the "mommy track" are not everywhere a thing of the past. But Heffernan and her interview subjects (many identified only by pseudonyms) aren't just doom and gloom. They offer real solutions to the challenges women executives face on and off the job. How to increase confidence, build relationships and reputation, create alliances and networks, mentor and be mentored, and avoid the familiar trap, "I'll do it myself."

What are the paths to be developed?

Management; Business; Personal Effectiveness; Information Automation; Effectiveness Modeling; Teaching Personal Effectiveness OK, got Day Zero, what would be Day One? Business: singular, consistent source of increasing value, at lower total cost; or else, race to the bottom Management: if considering a group of more than one person, either Value the Differences, or Continually Fight the Differences, until 100% of the effort, attention, focus is spent fighting the differences, and nothing of value gets done

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Personal Effectiveness: Everything you do satisfies a need, or desire, or impulse. There is a hierarchy of needs and desires (impulses are on the very bottom) Information Automation: The chair has ??? (many) legs --

• Throughput
• Latency
• Sustain Increasing Bandwidth
• Integrity and Correctness
• Respects Rules of Trust Relationships
• Respects Rules of Security
• Reliability
• Availability and Accessibility
• Scalability (and Distribution of Working Instances)
• Economic use of Limited Resources
• Timely Implementation with Available Resources
• Satisfying Human Value
• Not Violating Human Sensibilities (including Regulatory requirements)
• Iterative Development
• Ability to be Sustained by Attracting enough developer hours
• Distributed Development

(Why the heck so many? The absence of any one is a failure mode that is almost always fatal, if we consider projects in competition for developer hours.) Kick out one of these legs, the chair falls down. Sorry. Wish it was different, but it is not. (I got to think about this more.) (Oh wait, contemplating projects in competition for developer hours is the real Day One) Effectiveness Modeling: We consider, as a fundamental pair, the distribution and a measure of certainty. In competition, respectful of the Violation Criteria, several sources yield distributions and measures of certainty, as pairs. (LIAR: this is several days packed together, day one is -- We assume the existence of at least one Violation Criteria) Teaching Personal Effectiveness: Possess something that might be mistaken for Success, and document the method by which it was obtained. (Might be mistaken for Success, only from a great distance, and through fog, but somewhat resembles Success, none the less.)