September 26th, 2015

Last night: traffic, dinner, concert

My heart goes out to everyone who has to commute south on 495 on a weekday. That's kinda slow, especially leading up to the Mass Pike.

We headed out a little before 4, and just barely made it to Cibo Matto in Mansfield for a 5:30 reservation outside. We had to bundle up for the concert anyway, so we didn't really care, but if you eat outside at this time of year, maybe angle for a table closer to the heaters. We told our server we were in a little bit of a hurry for 7:30 at Xfinity Center and she took our entire order at once and put it all in at the same time. I had a whisky drink with "ancho reyes" in it, and that was yummy. R. had a Pimm's Cup. Very salad-y, tasty, but unlikely to sway me from my innate preferences. He had the house salad (with fennel!); I had a brussel sprouts, strawberry and walnut salad that was quite wonderful. We split a half dozen oysters on the half shell and a cheese-free version of their sausage and mushroom pizza. We left comfortable and happy and in plenty of time to rejoin traffic as we entered the venue lots.

Opening act was Mickey Guyton (One of her better known songs seems to be this one: https://www.youtube.com/watch?v=iHgPt2UPciE). She is very charming and was a pleasure to watch.

Next up was Justin Moore (who is the listed additional act on the ticket) and a good chunk of the audience, while liking Brad Paisley, seems to have come for Moore. Not so, us! We found him somewhat painful to listen to. (You've been warned: https://www.youtube.com/watch?v=55GAUgjpDQA).

Then there was a longer break to remove the Moore layer of lights and kits and finally time for the main act. As everyone reassured me ahead of time, Paisley is a good guitarist and does put on an excellent show. The screens are amazing (at least to someone who hasn't been to a large venue show in over a decade) and the props were hilarious (altho the kid playing Super Mario Kart got kinda old, that was mostly because first person driving games, like oh so many things in life, make me queasy). One brief encore and then the traffic scrum home. We were back home and settled in by 1 a.m.

While R. goes out at intervals, he usually goes to bars/small venues in Boston/Cambridge/Somerville/Arlington. Neither one of us can remember with any certainty the last time we went to a large venue (presumably it was something at Bumbershoot, but I couldn't tell you what or which year, and even then, Bumbershoot is its own thing). We had a good time, and the kids seem to be okay with the evening out going so late -- they were asleep when we got home and are in a good mood this morning. I don't know when I'll do this again, however, because it's kind of tiring (R. is really sleepy this morning, and my knees are feeling my not-decision to jump up and down on concrete for a couple hours last night. They're okay, but I'm sure glad I didn't jump up and down AND walk five miles. I only walked 2, so I think it's all gonna be fine).

We'd happily go to Cibo Matto again, and recommend it to anyone who finds themselves in Mansfield, MA, whether for a show or some other reason.

(ETA: Our seats were amazeballs. I bought them months ago and paid extra on whatever the hell website I used. So I had section 2 seats at Xfinity, specifically, row T seats 25 and 26. Translation: we were seated, 10 rows back from dead center in front of the stage. Nice spot, only drawback is I felt too awkward to read FB while Moore was performing because I was afraid he might see me doing so and you just never know what a performer with control of a couple live HD vidcams, big screens on either side of the stage and spotlights will decide to do. So I had to wait until enough people around us were standing to snark on FB. There was no FB'ing during Guyton and Paisley because I really enjoyed them.)

ESG: Environmental, Social and Governance in an investing context

Now that we're past the immediate OMG HOW COULD THEY response to VW, people are starting to think about how the lessons we are learning there might apply to other stocks/companies/the economy in general. Here is a so-so piece on the topic at FT Alphaville:

http://ftalphaville.ft.com/2015/09/25/2140878/putting-esg-risk-into-the-market-with-volkswagen/

It has a real clunker in the middle of an otherwise competent piece. Here is the clunker.

"2. Vastly increased complexity: in the past, it used to be possible to do a few simple things to fix car engines – such as DIY (do-it-yourself) cleaning the spark plugs to improve running. Now, car engines are so complex a computer engineer is often needed to fix problems when they (far more rarely) arise. The question is can test regulators understand engines to the same level of complexity as the best auto engineers? If not, engine performance regulation is a virtually impossible job and something like this could happen again."

To be a regulator in the first place, you have to be persistent, socially skilled and optimistic enough (alternatively, foolish enough) to believe that it is possible to create rules that capture public values and then to enforce those rules. Not surprisingly, regulators tend to focus on black box/end point testing for enforcement purposes, and they also have a tendency to create the simplest testing regime possible that accomplishes their goals.

The clunker here is that it confuses the vague and largely useless concept of complexity with the much more useful concept of testing as part of an offense/defense dynamic. "Complexity" and phrases like "understand engines to the same level of complexity as the best auto engineers" are designed to make people throw up their hands and go, it'll never happen! Boooo! What VW has actually done is exploit an oversimplification in the testing regimen. It wasn't that hard to detect the exploit: slap a cuff on the tailpipe and then measure what's coming out while driving around vs. put the car in a rig and then measure or (worse!) have the automaker install self-diagnostics and periodically dump the data. _Activist_ groups were able to deploy the reality test and were able to repro the results enough to pressure the regulators to replace their oversimplified testing regime with one that better matched Real World Use of a car and also detect the problem. From there, figuring out how the exploit worked was something you handed off to "the best auto engineers". But spotting the results of the exploit in no way required "the best auto engineers" or really _any_ understanding of how things worked in the car.

Now, if you _did_ know how diesel engineers were fixing the nox problem in other makes, you could have looked at a parts list for a VW diesel and go, wait, they are missing this whole subsystem (mumble urea mumble turn nox into nitrogen and water mumble). How are they fixing the nox problem? And then you maybe would have known that something funny was going on and you could have sicced "the best auto engineers" on it -- or just slapped a cuff on the tailpipe and drove around with a testing rig.

_Testing_ people know this stuff. It's not _easy_, but it's not as hard as this article might lead you to believe.

Besides, if you need crazy smart people to measure stuff, we're all fucked anyway. If it's important, we have to simplify it down to us norms.

Regardless, I'm happy to see that some of the more immoral/amoral market theorists are finally caving on this whole idea that values don't matter to the market, only Profit does. It's no good making a Profit, if the entire population is chasing after you with pitchforks, tar, feathers, etc. Profit is money, and money is the reification of Other People Collectively Owing You. If everyone hates you, the IOU is probably not collectible.

VW Owners Self-Flagellate: It is Officially a Thing

I've seen it twice. That makes it a thing. I'm saying so, so it is true.

Sam Grobart wrote the one I saw first, over at Bloomberg.

http://www.bloomberg.com/news/articles/2015-09-22/the-sting-of-volkswagen-s-slap-across-my-well-moisturized-euro-loving-face

Here's the subtitle: "In which a cappuccino-sipping media professional loses the smug sense of superiority he once achieved just by driving a Jetta Sportwagen TDI."

Quotes: "I am a Northeast-dwelling, cappuccino-sipping, Whole-Foods-shopping media professional." About the Sportwagen TDI: "It was, I thought, the perfect car for a poncy Europhile such as myself: a German (Euro!) station wagon (so Euro!) with a diesel engine (Eurissimo!). The only thing more Euro would be a Citroën that ran on adultery."

But now the NYT is in on it.

http://www.nytimes.com/2015/09/27/opinion/sunday/me-and-my-jetta-how-vw-broke-my-heart.html

"A committee of jurors, including the executive director of the Sierra Club and the president of the Natural Resources Defense Council, had just called it the “Green Car of the Year.” A review in this newspaper described the Jetta TDI, persuasively, as “easy on money, fuel and the planet.”"

"It was like owning a Prius in disguise, without the spongy brakes or the self-righteous appearance of scolding the gas-guzzlers of the world."

"Those of us who purchased the Jetta TGTBT (too good to be true) are now stuck with vehicles we cannot drive without making other people our victims."

Okay, so. Let's back these "clean diesel" cars up a bit and think about this. (a) A software recall service will likely make these cars behave in a way much closer to the way they were advertised as behaving (minus the zippy performance). (b) YES, pushing for more regulation/better testing/regulation/wtf is a good idea. HOWEVER, I think this is the wrong takeaway:

"For the rest of us, we need to acknowledge that some of our favorite phrases — “clean diesel,” “green car” and apparently also “corporate responsibility” — are just a contradiction in terms. But that shouldn’t let us off the hook either. Every time we complacently accept some company’s green-scamming promises, we allow ourselves to become the gullible partners in crimes against one another, and the Earth. And that makes us all just a nation of willing fools."

WE CANNOT JUST DISMISS ALL INNOVATION. If we do, we'll be stuck with what we have forever, and I'm pretty sure a lot of us think that's not good enough and we can do better. There are solutions that result in "clean diesel" (mumble urea mumble nox mumble nitrogen and water mumble). And some of those "clean diesels" even have good performance. Just because these con artists took advantage of us doesn't mean we need to disbelieve all the other innovation out there.

We need to do the hard work of assessing on a case by case basis.

ETA: Wikipedia on mumble urea mumble nox mumble diesel: https://en.wikipedia.org/wiki/Diesel_exhaust_fluid

How Rotten Is Our Credentialing System?

We rely on our credentialing system every day. We assume the nurse at the doctor's office has the training and license that is required by law for that job. If we are hiring for a position, and we look up a company's website, call a number on that website to verify employment for a person who says they worked there, we assume that the company is real and the person we are talking to is telling us the truth. If someone applying for a job has educational credentials from a country we are not familiar with, and a certificate from our government authenticating that educational credential, we assume that the person has the degree and the school is real and competent.

What if that stops working?

The Washington Navy Yard shooting exposed one problematic credentialing system: a contracting firm hired to keep track of pesky little things like people with security clearances that maybe shouldn't have them any more wasn't really doing its job.

This was in the Boston Globe recently:

https://www.bostonglobe.com/metro/2015/09/25/two-more-fake-nurses-identified-state/liKYp52qGJC9LvKXpmTbrI/story.html

"A Globe review of the documents in the initial 13 cases found common patterns. For example, four filed forms indicating they had licenses from Hawaii, all supposedly signed recently by the same person — a person who, Massachusetts officials later learned, had retired five years earlier. Three claimed to have Oklahoma licenses, each purportedly signed by “Kimberly Glazier”; Oklahoma officials told Massachusetts investigators that Kimberly Glazier does not sign verification forms."

There is now a massive review going on across the state.

It is a global problem, as this NYT article describes:

http://www.nytimes.com/2015/05/18/world/asia/fake-diplomas-real-cash-pakistani-company-axact-reaps-millions-columbiana-barkley.html

I started to notice it after a friend told me she knew of places that claimed to get you any job you want: they fake up diplomas from other countries, create websites of fake companies, staff phone lines to supply references and confirm employment and coach customers how to apply for the Position They Desire successfully. This was told in the context of The Squish getting gunshy about applicants from one particular country, because they always look good on paper but then can't actually do the job they are hired for.

If you think that INS would catch this, well, INS may be concerned that they aren't catching it. From the NYT article above: "But the proliferation of Internet-based degree schemes has raised concerns about their possible use in immigration fraud".

When a job requires a certain amount of training, and the pool of qualified applicants has been largely worked over, a would-be employer can either offer more money to attract people who already have jobs, or they can attempt to expand the pool of applicants. A variety of tech companies have been working the latter approach for a long while now. Perhaps more importantly, so have hospitals and nursing homes. What happens when we run out of people with the right training _globally_ to do a job? Especially, what happens when employers decline to hired the truly trained and skilled, in favor of those whose credentials are not what they seem?

The experience with VW (it's cheaper to lie, than to implement) suggests that we had probably better be diligent about enforcement, if we want our regulatory scheme of credentialing to continue to be useful in the future.

ETA: Speaking of catching people in lies, and promises being broken, Bloomberg has a great long piece about bullshit web traffic, the advertising model of the web, etc.:

http://www.bloomberg.com/features/2015-click-fraud/