Before I get flamed for suggesting retrofitting older coal plants for coal gasification is a good solution, I would like to point out that it is. Gasification is “Clean Coal”, and compared to regular coal, Cean Coal is a huge improvement. Regular coal burns the coal as is and tries to capture the pollutants on their way out the chimney. (This means along with the CO2 and water, sulfur, toxic and radioactive metals, fly ash, and NOXs are released as well.) Clean Coal, pre-combusts the coal in an oxygen starved environment, so there is no fly ash or clinker, then the gas (mostly CO, CO2 and H2) is scrubbed, removing the sulfur and metals, before burning the gas. Yes, there is a lose of energy content from the gasification, so you need to burn more fuel to generate the same amount of electricity, but regardless of the sulfur content of the original fuel you burn a “clean” fuel and the flue gas is nearly pure CO2 and water. (In theory you can recover the flue gas, dry it and pump it underground or bubble it through bioreactors to “feed” algae to make biofuel.)
Here is the truth about “Clean Coal”, it isn’t clean like solar power, it is clean the way your floor is clean after you mop. All the filth and dirt doesn’t disappear, it is moved from the floor to the mop water, which gets dumped down the drain. Everybody can see the clean floor, but not everyone has to see the nasty mop water. It is the same with Clean Coal; the flue gas is clean, because the filth has a separate waste stream.
Monday, March 30, 2009
I forgot to save 20 million tons of CO2
I my previous post I pointed out that turning off computers instead of letting them idle costs more than it saves. But I forgot to save 20 million tons of CO2. The obvious solution is to plant trees but I am not sure where we would plant 40 million acres of trees a year.
So we’ll need to use the computers for something that directly offsets the CO2 production. I suggest donating the idle CPU time to research projects similar to the following:
Materials science:
Better tires, more than any aftermarket accessory could allow the current generation of cars to achieve better mileage and therefore reduce CO2 production without waiting 10 years for the current generation of cars to be mostly changed out.
Better alloys and plastics to make the next generation of cars more fuel efficient without the Big 3 and the American people having to give up SUVs and trucks.
Better combustion chamber and boiler designs for coal plants. Also systems that allow older coal plants to retrofit and partly use coal gasification for a significant percent of the BTUs.
Designing ultra-efficient devises, right now sequestering the waste CO2 uses almost as much energy as burning the fuel creates.
Alternative energy research:
Affordable high efficiency solar cells, low noise, low profile, but efficient wind turbines, and hydro-energy solutions that can survive extreme environments but not damage ecosystems.
Superconducting or low resistance power lines to reduce transmission loses.
Biological sciences:
Genomic and proteomic studies to design organisms that can effectively produce biofuels, without the need for irrigation, fertilizer or converting land from food production.
Genomic and proteomic studies to design biological solutions for sequestering carbon.
Earth sciences:
Studies on how to reduce the effect of the produced CO2 on the atmosphere and climate.
Studies on where to put the captured CO2 for safe, long term storage.
Any one of the projects yielding results has the potential to offset the additional CO2 of leaving computers on.
To have a direct impact on the fact computers use a lot of energy these projects would be excellent directions:
RAM that retains information when unpowered. So the difference between the computer being on or off is whether or not new information is being written.
Solid state mass storage, to replace spinning harddrives.
OLED or better yet high color, fast refresh digital ink monitors.
There are lots more but these components consume a lot of the power in an “idle” computer, or stand between powering down being a tractable option.
So we’ll need to use the computers for something that directly offsets the CO2 production. I suggest donating the idle CPU time to research projects similar to the following:
Materials science:
Better tires, more than any aftermarket accessory could allow the current generation of cars to achieve better mileage and therefore reduce CO2 production without waiting 10 years for the current generation of cars to be mostly changed out.
Better alloys and plastics to make the next generation of cars more fuel efficient without the Big 3 and the American people having to give up SUVs and trucks.
Better combustion chamber and boiler designs for coal plants. Also systems that allow older coal plants to retrofit and partly use coal gasification for a significant percent of the BTUs.
Designing ultra-efficient devises, right now sequestering the waste CO2 uses almost as much energy as burning the fuel creates.
Alternative energy research:
Affordable high efficiency solar cells, low noise, low profile, but efficient wind turbines, and hydro-energy solutions that can survive extreme environments but not damage ecosystems.
Superconducting or low resistance power lines to reduce transmission loses.
Biological sciences:
Genomic and proteomic studies to design organisms that can effectively produce biofuels, without the need for irrigation, fertilizer or converting land from food production.
Genomic and proteomic studies to design biological solutions for sequestering carbon.
Earth sciences:
Studies on how to reduce the effect of the produced CO2 on the atmosphere and climate.
Studies on where to put the captured CO2 for safe, long term storage.
Any one of the projects yielding results has the potential to offset the additional CO2 of leaving computers on.
To have a direct impact on the fact computers use a lot of energy these projects would be excellent directions:
RAM that retains information when unpowered. So the difference between the computer being on or off is whether or not new information is being written.
Solid state mass storage, to replace spinning harddrives.
OLED or better yet high color, fast refresh digital ink monitors.
There are lots more but these components consume a lot of the power in an “idle” computer, or stand between powering down being a tractable option.
The high cost of turning off your computers at night
The original article is the high cost of leaving your computers on over night.
They estimate that leaving computers on over night and during the weekends costs a company with a 1,000 computers $26,000 a year. They estimate that the US spends $2.8 billion dollars leaving computers on overnight and during the weekends.
While I am in favor of reducing carbon emissions there is another way of looking at it. Going from a completely off computer to having all the necessary apps and documents open takes a non-trivial amount of time, for the sake of argument lets say it takes on average 5 minutes. (I’ve seen environments where half an hour is a more realistic average.) Now lets also say that the ratio of employees to computers is 1:1, like in a typical office environment.
If you are paying minimum wage $6.55 per hour, and 1,000 employees are spending 5 minutes of each work day, 5 days a week, 50 weeks a year waiting to work the cost of lost productivity is 136,457.50 per year. This is a net loss of $110,457.50 versus the $26,000 saved on electricity.
If the 1,000 workers have an average salary of $70,000, then after the $26,000 electrical savings the loss of productivity cost is $675,041.66.
For a single employee who makes $1,000,000 a year the ~21 hours a year of lost productivity (5 minutes a day) has a cost of $10,375.
The article’s statement about in the US alone $2.8 billion a year is wasted on electricity for idle computers is very compelling. It becomes less compelling when you consider that the national average salary is $44,909 so if 108 million workers lose 5 minutes of every work day the lost productivity cost is ~$48.4 billion. This kind of over shadows the $2.8 billion in possible savings.
For full disclosure, let’s examine the biases’. The authors of this study sell software that auto-shuts down computers and restarts them in the morning, so this is a marketing campaign. However, their solution does reduce the lose of productivity costs, but not all computers can be or should be shutdown, and the complexity of implementing and maintaining a solution like this, not to mention the CYA issues the first time power management software nukes some important work justifies at least half, if not a whole IT professional. Using average IT salaries (with benefits and overhead) the cost of the head count adjustment is $38K to $75K a year. This is more than $26K, plus I checked and the software is not free, so the savings is more like $11K. You also need to consider the work loads on your servers and infrastructure since every employee will be switching on at about the same time and connecting to the email server and downloads emails, establishing connection to the application server, and databases.
Now most companies don’t have these automated solutions so the cost savings will be achieved using a memo ordering employees to shutdown, or having the cleaning staff shut machines down. This second option is insane, so it shouldn’t be tried. The first solution is also not very smart. I am being very generous saying it only 5 minutes a day in starting up time. Shutdown has a time cost too and often getting a computer ready to be shutdown can take far longer, than starting it back up in the morning. So for all you penny pinching CEOs, and CIOs think about both sides of the coin, since saving electricity could just push the cost off to salary. I agree that shutting down over weekends and holidays might not be a bad idea, but every night you really need to look at the ROI.
A better way to make money is to offer your company’s idle desktop machines for cloud and other distributed computing. The revenue is thin but this is real money instead of perceived savings, if nothing else donate the time to charity projects and write it off as a tax deduction. If you are worried about security or want to maximize opportunity potential, you can offer the CPU time to the company’s own R&D department. There are lots of brute force algorithms that provide better solutions than computationally tractable “elegant” work around/approximate algorithms.
Applications run the gamut from tool and die companies optimizing cutting paths and tool life, to retail stores running simulations of foot traffic and buying patterns in context of merchandise displays and store layouts, to city governments calculating traffic patterns as a way to plan infrastructure spending, using data collected from other cities to simulate future growth.
They estimate that leaving computers on over night and during the weekends costs a company with a 1,000 computers $26,000 a year. They estimate that the US spends $2.8 billion dollars leaving computers on overnight and during the weekends.
While I am in favor of reducing carbon emissions there is another way of looking at it. Going from a completely off computer to having all the necessary apps and documents open takes a non-trivial amount of time, for the sake of argument lets say it takes on average 5 minutes. (I’ve seen environments where half an hour is a more realistic average.) Now lets also say that the ratio of employees to computers is 1:1, like in a typical office environment.
If you are paying minimum wage $6.55 per hour, and 1,000 employees are spending 5 minutes of each work day, 5 days a week, 50 weeks a year waiting to work the cost of lost productivity is 136,457.50 per year. This is a net loss of $110,457.50 versus the $26,000 saved on electricity.
If the 1,000 workers have an average salary of $70,000, then after the $26,000 electrical savings the loss of productivity cost is $675,041.66.
For a single employee who makes $1,000,000 a year the ~21 hours a year of lost productivity (5 minutes a day) has a cost of $10,375.
The article’s statement about in the US alone $2.8 billion a year is wasted on electricity for idle computers is very compelling. It becomes less compelling when you consider that the national average salary is $44,909 so if 108 million workers lose 5 minutes of every work day the lost productivity cost is ~$48.4 billion. This kind of over shadows the $2.8 billion in possible savings.
For full disclosure, let’s examine the biases’. The authors of this study sell software that auto-shuts down computers and restarts them in the morning, so this is a marketing campaign. However, their solution does reduce the lose of productivity costs, but not all computers can be or should be shutdown, and the complexity of implementing and maintaining a solution like this, not to mention the CYA issues the first time power management software nukes some important work justifies at least half, if not a whole IT professional. Using average IT salaries (with benefits and overhead) the cost of the head count adjustment is $38K to $75K a year. This is more than $26K, plus I checked and the software is not free, so the savings is more like $11K. You also need to consider the work loads on your servers and infrastructure since every employee will be switching on at about the same time and connecting to the email server and downloads emails, establishing connection to the application server, and databases.
Now most companies don’t have these automated solutions so the cost savings will be achieved using a memo ordering employees to shutdown, or having the cleaning staff shut machines down. This second option is insane, so it shouldn’t be tried. The first solution is also not very smart. I am being very generous saying it only 5 minutes a day in starting up time. Shutdown has a time cost too and often getting a computer ready to be shutdown can take far longer, than starting it back up in the morning. So for all you penny pinching CEOs, and CIOs think about both sides of the coin, since saving electricity could just push the cost off to salary. I agree that shutting down over weekends and holidays might not be a bad idea, but every night you really need to look at the ROI.
A better way to make money is to offer your company’s idle desktop machines for cloud and other distributed computing. The revenue is thin but this is real money instead of perceived savings, if nothing else donate the time to charity projects and write it off as a tax deduction. If you are worried about security or want to maximize opportunity potential, you can offer the CPU time to the company’s own R&D department. There are lots of brute force algorithms that provide better solutions than computationally tractable “elegant” work around/approximate algorithms.
Applications run the gamut from tool and die companies optimizing cutting paths and tool life, to retail stores running simulations of foot traffic and buying patterns in context of merchandise displays and store layouts, to city governments calculating traffic patterns as a way to plan infrastructure spending, using data collected from other cities to simulate future growth.
Thursday, March 26, 2009
Genome theft in the news
Here is a link to my original post on the subject back in May of last year.
Personal Genomics: a cynical analysis
Here’s the news article:
Special investigation: How my genome was hacked
It didn’t take long for someone to show that it is possible to steal someone’s genome. Now all that remains to be seen is what is the ROI for stealing someone’s genome, having it sequenced, and then blackmailing them. Having a genome sequenced is still expensive, so medical scams are still the best option since you can sequence a large population for markers of a couple diseases (Alzheimer’s, etc.) Watch your DNA, since not just doctors have access to your DNA in the context of identifying information, baristas and waiters provide an excellent opportunity to get discarded but relatively pure DNA samples in the context of personal information (credit cards, etc). Normally I would never post something like this, but given that baristas and waiters are not the sort of people you take medical advice from (at least if you are right in the head) this is not a “how to" example, but “watch out cause it could happen" example.
Seriously, how suspicious would you be if the person who sold you your morning coffee told you they had, had your DNA sequenced and that you were at risk for a terrible disease? Does the espresso machine give you messages from the other side...??? Call the cops!
Personal Genomics: a cynical analysis
Here’s the news article:
Special investigation: How my genome was hacked
It didn’t take long for someone to show that it is possible to steal someone’s genome. Now all that remains to be seen is what is the ROI for stealing someone’s genome, having it sequenced, and then blackmailing them. Having a genome sequenced is still expensive, so medical scams are still the best option since you can sequence a large population for markers of a couple diseases (Alzheimer’s, etc.) Watch your DNA, since not just doctors have access to your DNA in the context of identifying information, baristas and waiters provide an excellent opportunity to get discarded but relatively pure DNA samples in the context of personal information (credit cards, etc). Normally I would never post something like this, but given that baristas and waiters are not the sort of people you take medical advice from (at least if you are right in the head) this is not a “how to" example, but “watch out cause it could happen" example.
Seriously, how suspicious would you be if the person who sold you your morning coffee told you they had, had your DNA sequenced and that you were at risk for a terrible disease? Does the espresso machine give you messages from the other side...??? Call the cops!
The fourth and fifth generation DNA sequencers
The fourth and fifth generation DNA sequencers
Here is the article that gave me idea:
Room-temperature AFM gets picoscale stability
Basically the authors of the study have a way to get picoscale resolution from the cantilever tip of an AFM. With this they can feel each base of the strand and determine its nature. By using magnetic beads and magnetic fields or laser tweezers to straighten and immobilize the strand, the process can be made semi-high throughput. Using this technique accuracy can be nearly prefect with read lengths in the 100-1,000s of kilobases (limited only by the platform size and difficulty of straightening and holding long stretches of DNA.)
Similarly proteins and other biomolecules can be sequenced, by straightening them and running the tip over the amino acids or other monomers to determine their nature and if they are modified, etc.
For the fifth generation DNA sequencer the tip will slide in one of the groves (probably major) and read the bases the same way a needle reads the groves in a record. If this is impractical the fourth generation method can be improved by having the tip contact only the edges of the single stranded nucleotides so that it can “feel’ the bond energy. This is still faster than the fourth generation method since the scan is linear, since reading the other atoms in the base is not necessary. However, reading the bond energy requires a much more complex and sensitive data recording system.
Additionally this method could make X-ray crystallography and NMR somewhat obsolete. By feeling the structure of the folded protein the tip can determine a maximum volume, and use the surface texture to determine the location of domains and individual residues. Then by adding the binding partners or substrates the tip can be used to measure the conformational changes of the protein in semi-real time. (By constraining the protein’s movement with the tip, a whole new world is opened up for biochemists; intermediate steps in enzymatic reactions can be captured, etc.)
Here is the article that gave me idea:
Room-temperature AFM gets picoscale stability
Basically the authors of the study have a way to get picoscale resolution from the cantilever tip of an AFM. With this they can feel each base of the strand and determine its nature. By using magnetic beads and magnetic fields or laser tweezers to straighten and immobilize the strand, the process can be made semi-high throughput. Using this technique accuracy can be nearly prefect with read lengths in the 100-1,000s of kilobases (limited only by the platform size and difficulty of straightening and holding long stretches of DNA.)
Similarly proteins and other biomolecules can be sequenced, by straightening them and running the tip over the amino acids or other monomers to determine their nature and if they are modified, etc.
For the fifth generation DNA sequencer the tip will slide in one of the groves (probably major) and read the bases the same way a needle reads the groves in a record. If this is impractical the fourth generation method can be improved by having the tip contact only the edges of the single stranded nucleotides so that it can “feel’ the bond energy. This is still faster than the fourth generation method since the scan is linear, since reading the other atoms in the base is not necessary. However, reading the bond energy requires a much more complex and sensitive data recording system.
Additionally this method could make X-ray crystallography and NMR somewhat obsolete. By feeling the structure of the folded protein the tip can determine a maximum volume, and use the surface texture to determine the location of domains and individual residues. Then by adding the binding partners or substrates the tip can be used to measure the conformational changes of the protein in semi-real time. (By constraining the protein’s movement with the tip, a whole new world is opened up for biochemists; intermediate steps in enzymatic reactions can be captured, etc.)
Monday, March 23, 2009
Therapeutic symbiosis
People talk about using stem cells, nanobots, or viruses and other genetic therapies to fix storage diseases, or compensate for organ failure. However there is a possibly easier solution, using parasites and synthetic biology to engineer novel organisms. Malaria, TB, and a host of various protozoa’s (Trypanosomes) and worms have spent eons finding ways to live inside people by minimizing their signature on the immune systems “radar”. If we could engineer out the bad characteristics of these organisms like killing people, and say put in gene networks that would allow a malaria organism that was limited to the sporozoite stage and unable to replicate in humans to sense blood sugar levels and produce the required hormones we could use a tiny faction of the liver to replace the exocrine functions of the pancreas. The malaria organism would in effect become an endosymbiote, living in a host serving a function in exchange for room and board. We could replace the thyroid and parathyroid the same way.
The list of therapeutic symbiosis opportunities is endless:
-The Chagas organism (T. cruzi) could be used to stimulate the repair of damaged heart muscle.
-Mycoplasmas could be used to make semi-engineered mitochondria or other organelles that could be used to fix gene defects or to add novel functions like the ability to metabolize xenobiotics (from transfat to dioxins), make all the required amino acids and vitamins or even convert sunlight to energy using artificial chloroplasts.
-Engineered amebas could repair severed or demyelinated nerves.
-Engineered euglena could be used to reduce viral loads or clear the blood of bacteria in severe cases of sepsis.
-Worms could be designed to seek out tumors and form cysts in the capillaries, blocking the flow of blood and reducing the risk of metastasis.
The list goes on and on…
What I am suggesting is very dangerous since engineering organisms to replicate human metabolic functions even with “fool proof” safeguards is extremely risky. However, so is suppressing the immune system with drugs so people can live with transplanted organs.
Genetic therapies can cause cancer, so can stem cell therapies, and lord knows what tiny robots designed to repair cells could do if they break. No type of molecular medicine is without risk. I am not saying that we should engineer worms to replace our brains, but a worm that would eat arterial plaque might not as bad an idea as it sounds at first.
For anyone who thinks sharing your body with another organism is objectionable keep in mind there are more cells in you that aren’t you than there is of you. (Simplified. the bacterial cells in your gut alone significantly out number the cells in your body.) You play host to a variety of organisms from gut bacteria that actually feed you, to eyelash mites that feed vampirically on your skin cells, to a wide variety of intra-dermal fungi. Without this menagerie of organisms you would not thrive, so what are one or two more critters if they can save your life?
The list of therapeutic symbiosis opportunities is endless:
-The Chagas organism (T. cruzi) could be used to stimulate the repair of damaged heart muscle.
-Mycoplasmas could be used to make semi-engineered mitochondria or other organelles that could be used to fix gene defects or to add novel functions like the ability to metabolize xenobiotics (from transfat to dioxins), make all the required amino acids and vitamins or even convert sunlight to energy using artificial chloroplasts.
-Engineered amebas could repair severed or demyelinated nerves.
-Engineered euglena could be used to reduce viral loads or clear the blood of bacteria in severe cases of sepsis.
-Worms could be designed to seek out tumors and form cysts in the capillaries, blocking the flow of blood and reducing the risk of metastasis.
The list goes on and on…
What I am suggesting is very dangerous since engineering organisms to replicate human metabolic functions even with “fool proof” safeguards is extremely risky. However, so is suppressing the immune system with drugs so people can live with transplanted organs.
Genetic therapies can cause cancer, so can stem cell therapies, and lord knows what tiny robots designed to repair cells could do if they break. No type of molecular medicine is without risk. I am not saying that we should engineer worms to replace our brains, but a worm that would eat arterial plaque might not as bad an idea as it sounds at first.
For anyone who thinks sharing your body with another organism is objectionable keep in mind there are more cells in you that aren’t you than there is of you. (Simplified. the bacterial cells in your gut alone significantly out number the cells in your body.) You play host to a variety of organisms from gut bacteria that actually feed you, to eyelash mites that feed vampirically on your skin cells, to a wide variety of intra-dermal fungi. Without this menagerie of organisms you would not thrive, so what are one or two more critters if they can save your life?
Fixing companies: CEO to workers
I read an interesting article the other day; it seems that people are blaming business schools and MBAs for the current mess. They claim that business schools teach their students that snap decisions and short term profits are a correct form of leadership, and the responsibility is to the shareholder to the exclusion of the workers and customers. This is an interesting thesis, and it is supported but the fact that CEO is now a profession, and companies can shop around for the “right” CEO. There was a time when most CEOs even if they were born to be a CEO started in the mailroom and worked their way up. They knew the company and its market intimately, but in this time of professional CEOs I doubt the CEO of most major companies truly understands what is being done in the R&D department. This is because the CEOs job is to maximize shareholder value, and most CEOs are like the President of the USA, if you are popular they will keep you around for a while, but in the end there are term limits. So if you set something up that will make profits thin for several years but in the end the company will make see huge rewards, you will likely lose your job and then your replacement will either reap the benefits or kill the project and point to those now fruitless years as a sign of your poor leadership.
To fix things CEOs need to be more like benevolent dictators, since without term limits planning can be much longer term. But like dictators, there needs to be a system for a peaceful coupe d'etat so if those who follow you lose their faith in you, you can swiftly be replaced. This means that the shareholders need to be linked to the success of the company long term
The answer is either in ownership by people like Warren Buffet who says you should never buy anything unless you plan to own it long term, or worker owned companies. The key to Warren Buffet’s success is summarized in that paraphrased statement, since he buys companies that are solid-ish then through leadership with an eye to long term gains makes the companies successful. However, there are not a lot of people like Warren Buffet. Most people would feel the need to show that their leadership skills and cash in too early.
That leaves worker owned companies, since people who hope to retire from a company that is more profitable than ever can see long term. The biggest obstacle to this is the Unions. Unions are political animals just like companies and see the need to maximize short term gains. How can a company survive if the management and the workers are both pillaging the coffers for short term gains?
I am not saying that communism the way, I am saying that power needs to be in the hands of people who can see past the next set of quarterly reports to a time when their kids will be applying for their old jobs. This does not require closing up the stock markets; this requires altering the structure of the board, and proxy voting system. If the workers own >51 percent of the company, in shares they can’t sell until they leave or retire, and the management also has the same golden handcuffs, selflessness is easier to achieve. (The shares you sell off over time will be a big piece of the pension, but the constant influx of younger workers keeps the company from becoming too “old” in its financial policies.) The external (minority) investors will still have seats on the board and votes at meetings, so they can sway the majority owners and win votes, and keep the company streamlined. However the CEO will now answer to the people on the factory floor or in the labs, instead of in the offices of the various mutual funds.
Now is actually a good time to make these changes, the US government has loaned enough money to the pillaged companies that it is now the majority owner in many. The workers are being asked to that pay and benefit’s cuts to help keep the companies afloat. This administration has proven that it is pro-worker, and unless many of these companies seriously change their ways, the government is just going to end up with a lot of factories after all the bankruptcies proceedings close. Instead, give the companies to the people who have an interest in their long term success, by selling the workers the discounted debit, for the required concessions. The UAW has long said they could run the Big Three better than the actual leadership, now it could be time to prove it. The American tax payer has a better shot of see their money again this way, than they do if the old guard leadership of the companies and their questionable practices are allowed to continue on. Once the debt is repaid then the workers can renegotiate their contracts and see both sides of the coin. Since competitive wages at the top end will now be justified by the workers seeing the value to the company. If the workers don’t vote for a good top level pay package they won’t be able to attract top talent. If they take a bonus instead of reinvesting in R&D, then next year they might be voting for layoffs or factory closings.
To some what I am proposing might smack of communism. It is not, the workers are investors, and the companies become a true democracy. By doing it this way the power can be put back into the hands of people who care about the future of the companies and this country, without the government needing to do it for us. If the government has to reform the financial system then communism or socialism is much more likely. By making the leadership of companies accountable again, we might reform our country and get out of a boom and bust cycle and back on a path that sees slow but continuous growth. The alternative is changing the mindset of all the people who went to business school to match that of Warren Buffet. You pick, which you think will be easier…
Though for the people who actually propose this idea in front of any USA legislative body, you better pray a phoenix really can arise from its own ashes, cause that is the only way you going to come out of this alive. However, if we stay on a path where it’s a few years of boom and then longer and longer busts, we will be a second class country again in a couple generations.
To fix things CEOs need to be more like benevolent dictators, since without term limits planning can be much longer term. But like dictators, there needs to be a system for a peaceful coupe d'etat so if those who follow you lose their faith in you, you can swiftly be replaced. This means that the shareholders need to be linked to the success of the company long term
The answer is either in ownership by people like Warren Buffet who says you should never buy anything unless you plan to own it long term, or worker owned companies. The key to Warren Buffet’s success is summarized in that paraphrased statement, since he buys companies that are solid-ish then through leadership with an eye to long term gains makes the companies successful. However, there are not a lot of people like Warren Buffet. Most people would feel the need to show that their leadership skills and cash in too early.
That leaves worker owned companies, since people who hope to retire from a company that is more profitable than ever can see long term. The biggest obstacle to this is the Unions. Unions are political animals just like companies and see the need to maximize short term gains. How can a company survive if the management and the workers are both pillaging the coffers for short term gains?
I am not saying that communism the way, I am saying that power needs to be in the hands of people who can see past the next set of quarterly reports to a time when their kids will be applying for their old jobs. This does not require closing up the stock markets; this requires altering the structure of the board, and proxy voting system. If the workers own >51 percent of the company, in shares they can’t sell until they leave or retire, and the management also has the same golden handcuffs, selflessness is easier to achieve. (The shares you sell off over time will be a big piece of the pension, but the constant influx of younger workers keeps the company from becoming too “old” in its financial policies.) The external (minority) investors will still have seats on the board and votes at meetings, so they can sway the majority owners and win votes, and keep the company streamlined. However the CEO will now answer to the people on the factory floor or in the labs, instead of in the offices of the various mutual funds.
Now is actually a good time to make these changes, the US government has loaned enough money to the pillaged companies that it is now the majority owner in many. The workers are being asked to that pay and benefit’s cuts to help keep the companies afloat. This administration has proven that it is pro-worker, and unless many of these companies seriously change their ways, the government is just going to end up with a lot of factories after all the bankruptcies proceedings close. Instead, give the companies to the people who have an interest in their long term success, by selling the workers the discounted debit, for the required concessions. The UAW has long said they could run the Big Three better than the actual leadership, now it could be time to prove it. The American tax payer has a better shot of see their money again this way, than they do if the old guard leadership of the companies and their questionable practices are allowed to continue on. Once the debt is repaid then the workers can renegotiate their contracts and see both sides of the coin. Since competitive wages at the top end will now be justified by the workers seeing the value to the company. If the workers don’t vote for a good top level pay package they won’t be able to attract top talent. If they take a bonus instead of reinvesting in R&D, then next year they might be voting for layoffs or factory closings.
To some what I am proposing might smack of communism. It is not, the workers are investors, and the companies become a true democracy. By doing it this way the power can be put back into the hands of people who care about the future of the companies and this country, without the government needing to do it for us. If the government has to reform the financial system then communism or socialism is much more likely. By making the leadership of companies accountable again, we might reform our country and get out of a boom and bust cycle and back on a path that sees slow but continuous growth. The alternative is changing the mindset of all the people who went to business school to match that of Warren Buffet. You pick, which you think will be easier…
Though for the people who actually propose this idea in front of any USA legislative body, you better pray a phoenix really can arise from its own ashes, cause that is the only way you going to come out of this alive. However, if we stay on a path where it’s a few years of boom and then longer and longer busts, we will be a second class country again in a couple generations.
Subscribe to:
Posts (Atom)