Salafi Jihadism and US Grand Strategy Part II – The Grand Illusion

We live in an age of morons.  Unfortunately, many of them now hold high office.  As an example of this foolishness at the top, consider articles like this nonsense from Foreign Policy magazine:

http://www.foreignpolicy.com/articles/2013/01/09/a_new_US_grand_strategy

Arrogant socialists imagine that key strategic goals for US foreign policy in the coming decades will depend on impractical economic whims, chicken-little scare tactics about the environment, denial of the US role as world leader, and dependency on central government.  Yet the hubris is similar to that displayed by conservatives not so very long ago, due to a similarly distorted view of the world.    In the case of the conservatives, at least they were not alone in their fantasy.

The Soviet Union appeared poised to dominate the Eurasian continent by 1980.  Europe was in upheaval, the US had somehow lost a war in Vietnam to a band of primitive thugs, the US economy was mired in both high unemployment and high inflation at the same time, and most self-proclaimed experts in the media announced the US was done.  Then a lot of things changed.  The Soviet invasion of Afghanistan turned into a disaster, the US revived under Reagan on all fronts, and American exceptionalism returned to favor not only in the US, but in many other nations.  This reached an apogee in 1991, ironically after the US made mistakes in judging the intentions of Saddam Hussein.  Hussein sent his army into Kuwait, imaging the US would not dare try to stop what he had all but completed.  Instead, George HW Bush directed a masterful campaign of diplomacy, influence, and military power to destroy Iraq’s military and make clear the US’ ability to obliterate any enemy of significance.  Unconfirmed reports from the intelligence community in 1991 generally relayed the same message at the Politburo:   

“о дерьмо”

AirLand battle doctrine was not only superior to anything on the books anywhere in the world, the Gulf War demonstrated not merely superiority but absolute supremacy of US training, logistics, and weapons systems.  Since 1991, only Iraq has been rash enough to plan for any kind of direct confrontation with main battle forces of the United States.  Even today, twenty-two years after the Gulf War, most strategic textbooks in China, Russia, or other potential opponents make clear that the only sort of warfare which may be waged against the US with any hope of survival (let alone victory) is asymmetric warfare.  This, by the way, was the reason for the sponsorship of the PLA’s propaganda piece, ‘Unrestricted Warfare’, in 1999. 

The success of the Gulf War led to a number of mistaken assumptions, by both Democrats and Republicans.  Bill Clinton used the success to justify a scale-down of military force, but also drastically increased the number of troop deployments, such as into Bosnia and Somalia.  George W. Bush was misled into believing that an invasion of Iraq would enjoy success similar to Desert Storm, although conditions and objectives were very different.   The limited goals of Desert Storm, the overwhelming unanimity of support, both domestically and internationally, and the restraint after freeing Kuwait, all combined to make Desert Storm a very different conflict from prior and future engagements.  If anyone had paid attention to Clinton’s blunders in Somalia, Haiti, and Bosnia, the errors of assuming easy victory could have provided important lessons.  Ironically, the US was far better prepared for the war against the Taliban in Afghanistan than in occupying Iraq.  The reason is that the United States always understood that occupation of Afghanistan was impossible, the only viable strategy being to help Afghans rule themselves.  In Iraq, the lack of a coherent exit strategy has made the campaign bloodier and less decisive than it might have been.

Switch now to the Jihadist perspective.  Before 1972, Americans were largely out of sight and out of mind to the Arabs, Persians, Jews and other Middle Eastern people.  World War 2 made it clear that the US was formidable when angered, but few nations tried to build strong friendships with the US before 1972, with four notable exceptions:  Israel, Saudi Arabia, Kuwait, and Iran.  Muslims in general found it easy to ignore the US, except for business deals. 

When Britain withdrew from the Gulf in 1972, the US was by default the referee for the region, which led to the rise of four general groups:

• Pro-US nations, especially Israel, Saudi Arabia, Kuwait and Iran
• Soviet client states, like Iraq, Yemen, Syria and Egypt (before 1979)      
• Arab nationalists, usually starting as NGOs to test the climate
• Neutrals like Algeria, which rejected diplomatic ties with the US and USSR but did business with both

Without going too far down the rabbit hole of splinter groups from these four general groups, we can recognize that there is a fractal effect from major changes in global policy, and this in turn created the opportunity for Jihadist groups to grow in size and influence in the Middle East.  At first, most of these groups followed the pattern of European terrorist organizations – indeed, the IRA and Baader Meinhof Gang both operated training camps in Middle East countries in the 1980s, and their influence colored thinking in PLO, Fatah, and Islamic Jihad operations and strategy.  The Jihadists, however, rejected Soviet connections from the start, basing their funding and ideology on strict Islamist principles.  This home-grown methodology limited the growth of the Jihadists early on, but also kept the American and Soviet agencies from infiltrating them and identifying leadership.  There is some evidence that certain European agencies were able to gain access through funding, most notably the DGSE of France and a number of Balkan organizations, but far more that recruitment through madrasas and funding through mudarabha were the means of building such groups.  The Jihadists commonly used tactics of planning and logistics that focused on mosques and Islamic communities for early staging, then abandoning all direct connections to nominal Islamic associations when activating a cell.  This demonstrates the desire to decentralize operations as much as possible, and to partition Jihadists from official government offices.

This point brings up a key aspect of Jihadist goals – while there are several nations supportive of Jihadist actions and ideals, there is no currently nation under Jihadist leadership, including Iran.  Jihad by nature is insurrection, and therefore all establish political hierarchies seek to dismantle domestic Jihad activity , preferring instead to sponsor foreign actions which destabilize enemies; there is no actual desire to establish the supreme Caliphate, as this would deprive these officials of power and influence in the region.  Even in theocratic states like Iran, sponsorship of terrorist groups is meant entirely as a weapon to attack foreign enemies, not establish a Jihadist state.  This is why, for example, wealthy donors from Saudi Arabia support terrorists – it’s a form of danegeld to send the monsters somewhere else than their own front door.

Next:    Salafi Jihadism and US Grand Strategy Part III – The Avenging Angel 

Salafi Jihadism and US Grand Strategy - Part I

In 1972, Great Britain essentially ceded its role in the Middle East to the United States.  The move was one of political expedience, as the UK's leaders hoped to cut their costs supporting long-time allies by passing the duty off to America.  The thinking was that the U.S. was already committed on a global scale because of its many alliances and international commitments at economic, military, and diplomatic levels.  Also, in 1972 the United States enjoyed strong approval by most Mid-East nations, specifically because the United States had never broken a promise to an ally in the region, and had never held colonies there.  However, the move radically altered the world power structure, as the Middle East has always served as a fulcrum for regional domination in Europe, Africa and Asia.  The Soviet Union could not afford an American-dominated Middle East, as this would  make Soviet domination of Eurasia impossible.  Therefore, while careful to avoid direct military confrontation in the Middle East, the USSR continued its proxy strategy by supporting client states in Iraq, Afghanistan and Yemen (among others) and creating disruption in US client states like Egypt, Iran and Jordan.  The Soviets' efforts were often ham-handed, but they gave inspiration to other nascent groups seeking to gain power through asymmetrical conflict, such as the Muslim Brotherhood in Egypt and (ironically) the Baathists in Iraq.

The United States intelligence community was aware of the Soviet actions, but could not generally oppose them in like fashion.  Also, with the US global focus on Asia at that time (the Vietnam conflict and building the China buffer especially),  the US felt that the Soviet actions in the Middle East were strategically disruptive but not an imminent threat, a decision proven wrong by the events in Iran at the end of the decade.

The combination of the Shiite revolution in Iran and the Soviet debacle in Afghanistan led to an explosion of radical movements in the Middle East, especially those which used terrorism.  This was because government efforts, whether regional or global, had failed to wipe out such groups, because such groups could act with little logistical support and because such groups appeared to gain credibility in short time.  These groups early on fell into three types:

• Secular groups seeking political power, which generally failed due to limited popular support and because they were seen as direct sedition by the governments;
• Islamic groups based on nationalism, which achieved limited success but had trouble gaining support outside their demographic membership; and
• Jihadists which proclaimed loose versions of Jihad, in support of 'umma' or similarly broad and vague ideals.

The secular groups were seen as direct threats by most governments, yet also had some of the least public support, so most of these were eradicated quickly.  The nationalist groups were more successful, but could not continue in strength once their main objective was gained.   The third group learned from the first two, and   made sure their membership was spread out across several nations, that they did not directly oppose any host government in their actions, and that patronage was built through extant political, financial, and religious structures.   Terrorism therefore evolved from the fairly primitive PLO and Fatah, to Islamic Jihad and Hamas, to more elaborate constructions.

U.S. Grand Strategy was not well-considered for most its history.  Until FDR's election, U.S. Presidents were disinclined to think in global terms, preferring to avoid fights if possible and raise forces as needed.  Roosevelt agreed with Churchill even before Winston was Prime Minister that the Nazis represented a grave threat to the free world, and also that the Fascists in Japan were a threat to the Pacific region.  But even Roosevelt could not prepare U.S. forces for the war in advance, a lesson not lost on later Presidents so far as Europe and Asia were concerned.  But while Harry Truman supported the nation of Israel in part to stabilize the Middle East, and Eisenhower cultivated the Saudis to give the US a key Arab ally, no formal grand strategy for the U.S. included a Middle East plan.  Aside from standing by allies and opposing the Soviets, the rest was ad hoc.

After the Soviets withdrew from Afghanistan, humbled by their defeat, and with the U.S. stinging not only from the loss of Iran to Shiite extremist revolutionaries, Islamist groups had reason to believe their strategy was succeeding.  Lost in the noise for most people was the fact that the terrorists made up a very small portion of Muslims - Shiites, Wahhabists and the newly arrived Salafis.  With Soviet sponsors removed, terrorism became a domestic product and internal sponsors directed the flavor and character of the movements.

The U.S. also gained from the events, as sponsorship of the Afghan mujahadeen demonstrated that indirect support could achieve strategic results.  While the Islamists made effective use of asymmetric warfare, the U.S. was discovering that unconventional warfare could be more effective for them than nominal doctrine.    

Next - The Gulf War

The Fear of God

It's difficult to talk to a lot of people about God.  Some refuse to admit He exists, and others will only accept God if He happens to be soft and cuddly, a dispenser of material pleasures and comforts.  Some might be bold enough to allow God to care about Justice, but only in a politically correct manner which is consistent with humanism and social fashion.  What would Brangelina do, in a phrase.

Try to point out that this thinking puts God in a box, tries to make Him a puppet, and you will be accused of all sorts of evils, especially of being judgmental and a hypocrite.  Never mind that anyone making such charges would - by definition - be guilty of the very same offense.  I really have come to believe this is why so many people do not have a relationship with God; they have absolutely no sense of the God who truly exists.

So what does this have to do with the fear of God?  Well, for one thing, God is not tame.  I pray to God every day, but with more energy and focus on some occasions.  Like in 2008, when my family and I were in our house while Hurricane Ike roared past.  Not a big hurricane by most standards, but the power and the threat from the storm was very real.  I don't even think 'storm' is the right word.  A storm passes by in a couple hours, and varies in intensity, but a hurricane roars for half a day, with high wind and heavy rain, knocking out power and the phones before it even starts so you feel completely alone and helpless, and you spend more than a little time worrying about whether the plywood you put up over your windows was thick enough, put up securely or otherwise might fail to protect your house and family. At such moments you grasp how small we humans are.  The same when your child is seriously sick, or you wife was in a car accident, or when you lose a job, and so on.  The world is much bigger than we are, and the God who made the world and everyone in it, is great beyond measure.

But God is not just good because of power.  He is also pure goodness.  To some folks, that makes God seem like Santa Claus, but authentic good is scary.  Imagine someone who never lied.  Someone whose word was always sure to be good.  Someone who never spread rumors, who never exaggerated, who never took anything that was not theirs.  Someone who was not only the best student in the class, but who set aside time to help the slowest students improve.  Someone who made statements that seemed like assumptions, but in fact were always completely right.  Someone who could look at you and know everything there is about you.  Someone, in short, who never made a mistake, never got an answer wrong, and in any disagreement proved to be right.

Now imagine that this perfect person lived with you, so that everyday you saw the huge difference between your own ability and theirs, your own character and theirs, your own blunders and their perfect results.  Wouldn't you be intimidated?   Now consider that God is omnipotent, omniscient, and omnipresent.   Still think He's someone to mess with?

But God is also scary good in His essence.  I have been privileged to know some people who lived lives of great service and work, who were humble yet confident,  I could see God at work in such people, and friends those people scared me.  People like that are very, very different from ordinary folks, and as much as I want to hear God say 'well done, thou good and faithful servant' when I stand before Him, I am well aware that my actual results are likely to cause Him to comment 'get a mop'.  

God is scary.  Like a strong parent is scary, or a good wife.  Like a teacher who is top in his field, or a coach who means to make you a champion.  You do your best, knowing it needs to be done better and better every day.  It's not about fear of punishment, but fear of missing the mark, of turning out to be less the man than you hoped you could prove you were, in fact.  It's about learning there is a perfect piece of music or art you are meant to make, but you are afraid you won't do it properly.  It's about wanting to be the person you were meant to be, to reach full potential rather than make mistakes.

The fear of the Lord is the beginning of wisdom.  We would do well to remember.  

Really Stupid Ideas In History Part Four: Karl Marx

I first learned about Karl Marx back when I took a course in Economics.  The professor sort of glossed the theory of Marxism, because Marxism is as much about Politics and Sociology as it is about Economics.  I was, therefore, left with the sense that Karl Marx was a generally smart person who applied his knowledge to try to create a better strategy for money and employment.  After all, with so many governments declaring themselves ‘Marxist’ to one degree or another, there had to be something rational about his theories, I supposed.

But having finally read ‘Das Kapital’, I realize now that Karl Marx was not only unable to understand basic economic facts, he was remarkably stubborn in ignoring glaring blunders in his own theories.  I read that he took thirty years to write the first volume of ‘Das Kapital’ (Engels, a singularly inept theorist in his own name, forced the second and third volumes through the publishing process and onto an unsuspecting public), but I suspect what really happened was it took Marx three decades to find a publisher doltish enough to put his rant into print.  I mean, just how dull does a student or scholar have to be to actually take Marx seriously?  A man whose formulae never once seriously addressed the risk of investors and business owners?  A man who actually tried to promote the idea that a product’s value depended on how hard someone had to work to make it?   That innovation, globalization, process improvement and logistics were somehow undesirable?  Karl Marx got more than half of basic economics wrong, and crippled the better part of three continents with his notions for half a century.

The professional success of Rosanne Barr in the late twentieth century proves that people sometimes back incredibly poor choices, but one might wonder just how Marx reached the conclusions he did.  Marx was born into a wealthy family in Germany, and as soon as he got out of school (with very poor grades at first) Karl began to punish his parents every chance he got.  Kicked out of Germany, then France, Karl finally settled down in London, where his personal application of economics left his family destitute and nearly starving.    Like most narcissists, Marx believed that the only solution to economic disparity and poverty was the scientific application of revolution and Socialism, specifically using his model for class warfare and stealing wealth from the people who made it.  By 1850, Marx had settled into finding ways to sell his rants as some kind of science, for which purpose ‘Das Kapital’ was written. 

Marx made his money through his writing and in organizing socialist groups in Europe and the U.S.  That is to say, Karl had learned what sold in the popular newsstands and took care of his family’s finances in a manner far different from his proposed solutions in his essays, speeches and books.  By the time he died in 1883, Karx had mastered the art of political hypocrisy, selling with full voice a political theory he had personally abandoned long before.    

The China Debt

The Wall Street Journal has an interesting article up this week, about the coming Debt Crisis in China.

http://online.wsj.com/article/SB10001424127887324338604578325962705788582.html

Mr. Sharma appears to have the credentials to speak on this, not only in his role at Morgan Stanley, but also as a published author on national economies.  Forbes also had a recent article about China’s debt,

http://www.forbes.com/sites/kenrapoza/2013/01/28/is-china-next-to-suffer-a-debt-crisis/

with similar warnings although somewhat less dire.  I found it interesting from a personal perspective, because it echoes impressions I received in my own, admittedly amateur, consideration of the situation.   
  

To put it bluntly, everything has to be paid for by someone.  There may be such a thing as a free lunch for you, but only if you get someone else to pay for it. This is where all risk consideration starts, the fact that someone has to pay for things and by definition if you are involved in a transaction with someone who may not pay, then you are at risk of paying for something used or taken by someone else.  As a credit manager, I am well aware of customers who aren’t good credit risks, and it should really not be a shock to consider that most governments are none too trustworthy on that count.  After all, most government contracts of which I have been involved in or knew about, involved poor performance by the government, in many cases because the government is well aware that you can’t do much about it if they pay slow or give themselves discounts not allowed in their contract.  What are you going to do, after all?  Sue them?  Give them a bad credit reference?  Actually, there are reasons that the government ought to be better at paying its bills, but that shows up only at the high level consideration.  If the government fails to pay in a reasonable time to its suppliers and service contractors, those companies will stop doing business with the government, out of a need to survive as much as anything else.   But in the short term, governments tend to be poor-performing customers. 

And as you might guess, in a government which is based on both a single political party in a strong central government, and an economic philosophy that the people have no individual rights, government spending is unlikely to be criticized at all, let alone challenged.  So China has basically done whatever it pleased for the last sixty-four years, with sometimes disastrous results.  They seem to have good intentions this time, building roads, bridges, and power plants for infrastructure, but they have planned no better for this than they have anything else in their past several decades.  The problem is that basic question of how they pay for the things they want.

 President Obama made many blunders in his first term, largely because he did not understand how things work, nor did he really seem to care.  It should be obvious that throwing trillions of dollars around is bound to have an impact, though it will do more damage than good if you are not very careful with it, since all that money comes from the wealth of the nation.  Too much spending by a government is, in essence, eating your seed corn and dooming the future.  But at least in the U.S. there is the potential for an elected official to be held accountable for his decisions, and for all the gloom and doom from the media, the U.S. is far and away the most productive nation on the planet.  China, on the other hand, is not equipped to handle a debt crisis, neither on the political front nor in economic terms.

The political dimension for China would seem to be apparent. The problem is that following the Sichuan Earthquake, China found itself facing serious criticism for the failure of basic systems and the deaths of children and elderly people.  On the surface, China handled the crisis much the same as they have addressed previous disasters, but there are indications the Central Committee demanded more than face-saving gestures this time, in part due to the sense in many parts of the country that coastal regions have received much better capital support because of foreign investment and China’s high-tech PR spin, while rural and highland areas have been ignored, to the point that lives have been lost.  To allay these rebukes, China’s Politburo has spent unprecedented monies on infrastructure, especially roads, bridges and construction of housing.  Funding for high-profile projects (such as aircraft carriers, a China-only hypernet system, or new resort communities along the east coast), however, has not been changed, so China is spending money in larger amounts than it can justify in the long term, partly because neither alternative is politically palatable.  While unthinkable in the West, the potential for catastrophic events like a civil war or a military coup attempt have been quietly voiced by intelligence analysts, possibly as soon as 2018.

The economic facts are even more harsh.  The WSJ article noted a figure of $2.7 trillion budgeted for these projects in FY2013, which is roughly comparable to the entire federal budget for the United States, a nation which has the GDP to support most of such spending.  China, bluntly, cannot come close to producing the revenue needed to support such spending.  China’s GDP is still about half that of the US, and that does not even consider the purchasing power of the two currencies.  China, essentially has built its economy with a combination of sound principles and financial tricks.  The most obvious of those tricks would be the combination of China’s tight controls to keep the RMB low and to manipulate all financial data sent outside the nation.  To truly compete for global economic domination, China would first need to either embrace GAAP or a similar international accounting standard, then create effective internal controls statutes, instill transparent reporting practices in its public markets, and then – only then – could China hope to present its products and services with a reasonable expectation to challenge the US, Europe, Japan, or any other established major economic power on level ground.  It is, essentially, impossible for China to do so and continue to operate as a Communist regime, not least because the central government would face the irreducible conflict between state control of information and  power, and the necessary decentralization required for a national economy to be truly responsive to economic opportunities and dangers.  China 2013 is no more prepared for the global arena than Russia was in 1985.

The short explanation is that there will not be a soft landing.  When China realizes its debt cannot be hidden or simply transferred to perceived ‘wealthy’ businesses or citizens, probably between 2015 and 2017, the crisis will be sharp and almost certainly lead to bad decisions, like the initial 1997 decision to punish Hong Kong with debilitating tax rates.  Hong Kong is again likely to be hit with high tax rates on everything Beijing thinks it can charge, but this time Shanghai and other major coastal cities and regions will also be hit with taxes and sanctions, as punishment for non-communist behavior in creating business opportunities.  Companies may expect to see a streak of nationalizations, especially if the business engages in any technological industry where intellectual property is a major part of the company’s competitive advantage.  While a return to the Cultural Revolution of a half-century ago may not occur, a similar desire to punish the ‘greedy Gwai-lo’ is certain to show up again, especially when China experiences sharp inflation and high unemployment, which will be the hallmarks of the debt crisis.     

The Performance Review

There are good ideas, bad ideas, and good intentions which don't work out in the real world.  An example of the third type is the Annual Performance Review.

Most medium-to-large companies try to operate as meritocracies.  That means they generally want to promote and reward the best-performing employees.  The problem is how to identify the best  and worst employees, and how to identify problems and areas of possible improvement.  As a concept, the annual performance review serves to identify employees who should be terminated, given remedial training, considered average, rewarded for superior performance, or groomed for executive futures.  In practice,  it just doesn't work out well.  This post examines the reasons for that disparity.

The first mistake is how companies define job performance.  Reviews basically come in two flavors - the personal opinion of direct superiors, or a standard form used as a rating system, again primarily judged by the direct superiors.  In both cases the judgment of managers can be far too subjective a measure, and the standardized review form is often biased by focus on certain qualities which may be easier for some employees to demonstrate than others.

To make matters worse, many managers are focused on key group performance metrics, making it difficult to track individual performance, especially since individuals are not always able to demonstrate empirical results.  And if that were not enough, most HR departments seem to set deadlines for turning in evaluations which don't give managers enough time to really do much thinking on their grades, especially since managers still have to do their regular jobs and meet their deadline for work and reports.

But it gets worse.  Most companies want employees to write up self-reviews, then managers need to write up their own reviews, get them approved by their superiors and HR, then meet with employees to discuss them.  Again, as I said, while still doing their regular duties with no time or resources set aside for the reviews.  It's not hard to see how doing the performance reviews will, in fact, hurt actual group performance/

Another problem is the scoring of reviews.  Rather than just allow managers to say whether someone is dong a good job or not, most HR departments require managers to score employees on a wide range of categories, supporting with examples and comments.  This just makes it harder for managers to identify and reward the truly exceptional employees, because managers have to spend same amount of time and effort on every employee, and even exceptional employees can come off as just slightly-above-average if they are graded on qualities not essential to their job along with those which do matter.  The weighting of categories is another blunder.  Just ask any department or group manager if they were asked about the ways their employees should be judged, about the competencies which should be used to grade how employees perform, and you'll hear that HR never asks for opinions from the people who best understand what competencies should be measured, and how they should be identified.

I'm fifty-two years old going on fifty-three, and I have never come across a performance review standard that was anything but a waste of time.      

Carnival's Decision Point

Right now there is a large ship floating in the Gulf of Mexico, with over three thousand armed bomb waiting to go off.  Obviously a tense situation, but especially for Carnival Clueless Cruise Lines, whose cruise ship 'Triumph' suffered an engine fire, but whose disaster management has managed to turn a bad situation into one which could kill their company.  The three thousand bombs I was writing about, are the paying customers trapped on that ship, whose opinion of Carnival is predictably angry, to the point that Carnival should expect a lot of lawsuits and very bad press.

Carnival's web site, rather stupidly, is still bragging about the Triumph, as if spin could overcome the disastrous way the company has mangled their response to the episode.
http://www.carnival.com/cruise-ships/carnival-triumph.aspx

So what happened?  Carnival released a statement which reads:

The Carnival Triumph, while on a four-day cruise that departed Galveston last Thursday, experienced an engine room fire on Sunday morning and has been without propulsion in the Gulf of Mexico since that time. The ship's automatic fire extinguishing systems activated and the fire was successfully extinguished. Fortunately, there were no injuries to guests or crew members.
Earlier this evening, the first of two tugboats arrived and is tied up to the ship with the second expected in the early hours of Tuesday morning. We had originally planned to tow the ship to Progreso, Mexico, the closest port to the ship's location early Sunday. Since that time, the ship has drifted about 90 miles north due to strong currents. This now puts the ship nearly equidistant to Mobile, Alabama and given the strength of the currents, it is preferable to head north to Mobile, rather than attempt to tow against them. We now expect to arrive in Mobile sometime on Thursday, roughly the same time the ship would have arrived in Progreso given the distance the ship has traveled. From there, we will provide the necessary transportation to get our guests home. Mobile also provides simpler re-entry, particularly for the 900 guests onboard traveling without passports.
We have maintained constant contact with the ship's officers. All of our guests are safe, and we're doing everything we can to make them as comfortable as possible. The ship has maintained emergency generator power since the fire occurred and the technical team on board has been successful in gradually restoring auxiliary power to operate some basic hotel functions. Currently, public and cabin toilets are operational in certain sections of the ship, power has been restored to a limited number of elevators, and some power in the Lido dining area is providing for hot coffee and limited hot food service.
All guests on the current Carnival Triumph voyage will receive a full refund for the cruise, along with transportation expenses. In addition, they will receive a future cruise credit equal to the amount paid for this voyage, as well as reimbursement of all shipboard purchases during the voyage, with the exception of gift shop and casino charges.
We're terribly sorry for the inconvenience, discomfort, and frustration our guests are feeling. We know they expected a fantastic vacation, and clearly that is not what they received. Our shipboard and shoreside teams are working around the clock to care for our guests and get them home safely.

At first glance this might appear to be one of those act-of-God things, something that could happen to anyone.  But let's consider how Carnival bills itself.

Remember that ad, where a couple recalls the horrible experience they had on their last vacation?

http:www.youtube.com%2Fwatch%3Fv%3Dje7axonV2UA&ei=fMUaUYKiGYbo8gS2woGYAw&usg=AFQjCNFP3yguDLa6WCySP1eVhZSrLB44Lw&sig2=2qhMHm3cDO8UR74Qe-ypBw&bvm=bv.42261806,d.eWU

They are enjoying a nice, safe, comfortable vacation this time with carnival, and they happily sigh "never again".

Now consider what is being reported as conditions on the 'Triumph' right now:

The LA Times reports, "Passengers stranded on a cruise ship adrift in the Gulf of Mexico say they must stand in long lines to use working bathrooms and to get hot meals."  It also says "there were no toilets. They were using little red bags. And no running water, no lights, except emergency lighting."

http://www.latimes.com/business/money/la-fi-mo-carnival-cruise-ship-20130212,0,1856952.story

CNN reports "sewage running down the walls and floors" with passengers being asked to defecate in bags and urinate in showers due to a lack of functioning toilets."

http://www.cnn.com/2013/02/11/travel/cruise-ship-fire

Sounds like those passengers will go somewhere else next year, and it will be Carnival they mean when REAL PEOPLE say "never again", hey?

But that's not the half of it.  CNN also reported that passengers told them "they had no power, no running water, and she said she hadn't been able to eat anything yet. Then you call the Carnival phone number for families, and they tell you that everything is all right".

http://www.cnn.com/2013/02/11/travel/cruise-ship-fire

Lying to the families is really, really stupid,  After all, the truth is going to come out and there's going to be all kinds of trouble, and juries really don't like liars.

So what does Carnival plan to do for the passengers?  CNN reported that  "After being towed to port, those aboard the Carnival Triumph will be flown home at no cost to them, the cruise line said. They will also get a full refund, credit that can be used toward a future trip and reimbursement for all expenses, except casino and gift shop purchases, for their current trip."

Folks, there is absolutely no way any reasonable person would settle for that.  Imagine if you had been in a car accident; the liable party has to pay for your 'pain and suffering', not because they feel like being nice but because the law requires it.  And there's no way Carnival is going to get away with a token gesture here.  

Some folks will do the math quick and say that a refund and some credits for three thousand people will hit Carnival for a few million dollars.  The problem is, they lost that as soon as they had the engine fire.  Right now, every one of those passengers is ready to tell their family and friends to never buy from Carnival, and there will be lawsuits, which Carnival will lose.  If Carnival were smart, they'd settle as soon as possible, not just refunds or token discounts, but serious cash right away.  Doing so would have short-term costs but earn Carnival the reputation for doing the right thing, which would protect their brand and rebuild the confidence they have lost in the way they bungled the incident.  Trying to get off cheap now is a transparent insult to the passengers, and will warn off potential customers that Carnival does not really care whether or not it does the right thing.

When I was in business school, one thing I learned was that when bad things happen, companies basically do one of two things - they either suck it up and do the right thing, or they try to get off as cheap as possible.  In this age where everything is online and social media can make or break your company, only an absolute moron would fail to understand that there are three thousand people whose opinion of your company will influence hundreds of thousands of potential customers, who will remember the 'Triumph' and ask whether Carnival is a trustworthy company.

Let's remember that when cruises are concerned, there's a lot that can go wrong, so people will want to see evidence that the company really will make sure things are safe, secure, and comfortable.  For some reason, it has not yet occurred to the suits at Carnival that the kinds of vacation they made fun of, are exactly what just happened to their paying customers on one of their cruise ships.  This is extremely serious, because nobody feels they have to take a cruise.  If Carnival lets the image of its company become that of a profit-first, screw-ethics business - which is exactly what they are doing right now - they will have destroyed their competitive advantage and vaporized their growth potential.  

As for me, I don't plan on ever buying a cruise from Carnival.  I would not be surprised if investors in the company don't demand major changes at the top.  But the way they're screwing up this whole situation, don't be surprised if the company is bankrupt in the next decade or so,.  Because Carnival is just not prepared for the long term.  They are doing exactly the wrong thing to survive as a business.

The Credit Manager

For more than a decade, I have worked as a Credit Manager.  This particular job is a great fit for me, but it's not for everyone.  On the odd chance that the reader might be interested in becoming a Credit Manager, or if you're just curious about the job, this post sets out to describe the job.

Not every company has a specific person set out to be the Credit Manager, but someone has to do it.  This is because every business takes a certain risk in selling to people.  Let's be clear; some folks will try to steal from you, and some will have very different ideas about their responsibility to pay the way you expect.  So, you'd expect a Credit Manager to be careful, maybe even a bit paranoid, about giving credit to someone.

But all business needs Sales.  And if you won't grant credit to someone, they will often go buy from someone else, and if you are too cautious you'll lose business you need.  Also, there are a lot of customers who may look risky, but if you give them credit when others won't, they will respect you and give you more business out of loyalty.  So it can be tricky.

As a result, when a company has a Credit Manager, that person spends their time basically making sure new customers are worth granting credit to, that existing customers have the right credit level, and of course, chasing the customers who owe money.

There are a lot of ways to do this job, but you should make sure you have a credit policy in place before you even start. That way, you can stay organized, if your business ever goes public it will be easier to be SOx compliant, and you can honestly tell your customers that you don't play favorites.   The policy should define what you need from a customer to make a credit decision, what determines the limits, and when those limits may be revised.

DSO The Myth

Most Credit Managers are judged, in large part, by the metric of Days Sales Outstanding, or DSO.  It's a convenient metric, easy to understand by most people .. or so it can seem.  The DSO is useful, but not by itself. First, in pure collections terms you want to understand how much of your AR is current or delinquent (and how late), you need to track your average payment terms, and you need to track documentation for accounts contacted - there's a great difference between an account working to clear its balance and one which won't answer calls or emails.  The trouble, for me at least, is that Credit Managers answer to Finance Directors and Sales-focused General Managers/VP's.  So, we tend to be told to 'keep it simple' and report our DSO month to month.

My company is growing, which is good.  But DSO's formula works out to a simple fact; if you collect more than your company ships in a month, AR goes down and so does DSO.  But if your company ships more than you collect, AR goes up and so does DSO.  If a collector is not bringing in money, then rising DSO can indicate poor performance, but if the DSO goes up in spite of solid collections because of large orders shipping at the end of the month, rising DSO can be misleading.

If a Credit Manager wants to avoid being judged by just one metric, be it DSO or another metric, he or she needs to make sure alternate metrics are established for performance reviews.  If you can show how other factors like Percentage of AR Beyond 60 Days, Collection Effectiveness Index (CEI), and Days Delinquent Sales Outstanding (DDSO), you can not only protect yourself against being judged by a single, volatile metric, and establish your department's reputation on a broader base of results.

The Online MBA 2012

Let’s start with the obvious; if you have any interest in earning an MBA, you either mean to improve your value to your company, to increase your potential for pay and position, or both.  Let’s be clear – if you earn an MBA worth anything, you will be considered for jobs which pay well and carry great responsibility, but where you will be expected to produce great value for your employer.  So if you want to pursue an MBA, you need to make sure that it will expand your skill set, and suit your personal career path.

Before discussing the Online MBA, I want to be clear about the three basic kinds of MBA (not how they are earned).  The most common MBA is the basic operational MBA, where business theory is the main focus.  Another type is the Executive MBA, which is designed to groom fast-track performers for C-suite responsibilities.  The third type, and the newest, is the Professional MBA, a type meant for candidates with management experience, who want to augment practical knowledge and enhance cross-team performance.  That third type offers a bridge between low- and mid-level management positions to senior leadership, and also provides a means for working professionals to raise their educational credentials.  The professional MBA curriculum is also based far more heavily on practical experience than on simple theory.  And the best Online MBA programs are focused on these working professionals, who not only represent the widest and deepest demographic for potential MBA candidates, but whose contributions provide the most realistic appraisal of business and management theories.

Therefore, you should not consider earning an MBA online if you have just finished your undergraduate studies; you would do better with a face-to-face program where you are totally immersed in theory and can develop the necessary people skills on campus.  Similarly, the Executive MBA candidate is not advised to pursue an Online MBA, in part because of course selection but also because the Executive MBA program includes vital Networking opportunities.  The Online MBA, however, is very effective for the professional MBA program, because working professionals already have developed people skills, they need to be able to work and study in a manner that is most time-efficient and which produces the most business value. 

This brings us to what Online program to choose.  Essentially, your choice should follow three factors – what will a potential employer look for, what skills do you need or want to add to your set, and what combination of price, convenience and standards are most comfortable for you?  This is where my rankings come in.  I’m not telling anyone where to go to school, but the list and the considered factors may be useful in your own decision.  Accreditation, tuition, number of concentrations, average GMAT score, student to faculty ratio, and similar elements can help you find the best fit for your decision.   

The Top 25 Online MBA Programs 2012

Every year since 2008 I have posted my opinion of the Top 25 Online MBA programs. I determine these rankings by a weighted system which uses information from the schools’ websites and the AACBS (Association to Advance Collegiate Schools of Business), which is the premiere accreditation agency for business schools, both in the United States and the world. With no disrespect intended for schools which are not members of the AACSB, in my opinion that designation sets apart the serious programs from the run-of-the-mill schools. This year the number of AACSB-  accredited schools is down to 92 which offer an MBA degree with all or nearly all classes online; some of the schools require an on-campus orientation, a foreign trip to a profiled nation, or a very few selected courses to be taken on campus, such as case competitions. My ranking uses a weighted evaluation of fifteen categories of information, with weighting based on criteria which will be of value to students in the quality of education and resources available to them, as well as cost and convenience.  In past years I put too much detail into explaining the categories, so this year I am trying to keep it simple. In this post I will simply announce the top 25 with a brief review of the factors considered in their scoring, and in subsequent posts I may comment on the Online MBA as compared to more traditional versions.

2012Top Online MBA Schools

1.     Nebraska at Lincoln (#4 in 2011, #5 in 2010) 

2.     Oklahoma State (#7 in 2011, #25 in 2010) 

3.     Alabama (#14 in 2011, #8 in 2010) 

4.     Fayetteville State (#12 in 2011, #13 in 2010)

5.     Mississippi State (#11 in 2011, unranked 2010) 

6.     North Dakota (unranked 2010-11, #10 in 2009)

7.     Western Kentucky (#17 in 2011, unranked 2010)

8.     Massachusetts – Amherst (#6 in 2011, #17 in 2010)

9.     East Carolina (#18 in 2011, unranked 2010)

10. Florida (#1 in 2011, unranked 2010)

11. Texas – San Antonio (#15 in 2011, #23 in 2010)

12. Texas – Dallas (unranked 2010 and 2011, #11t in 2009)

13. Indiana – Bloomington (#13 in 2011, unranked 2010)

14. Wisconsin – Whitewater (unranked in 2011, #2 in 2010)

15. Wyoming (#10 in 2011, unranked 2010)

16. Wisconsin – LaCrosse (#25 in 2011, unranked 2010)

17. Morehead State (unranked 2010 and 2011, #7t in 2009)

18. Houston – Victoria (unranked 2011, #14 in 2010)

19. Louisiana – Monroe (#19 in 2011, unranked 2010)

20. Texas – Tyler (unranked 2009-2011)

21. Quinnipiac (unranked 2011, #11 in 2010)

22. Tennessee Tech (#20 in 2011, unranked 2010)

23. South Dakota (unranked 2009-2011)

24. Texas – Pan American (#24 in 2011, unranked 2010)

25. Southern Arkansas (unranked 2009-2011)

Weighting Categories

1. Average GMAT score (14.00%)

2. MBA in-state tuition (13.00%)

3. Minimum GMAT score (12.00%)

4. MBA out-of-state tuition (11.00%)

5. Number of available concentrations (9.50%)

6. Minimum Duration (8.50%)

7. Operating Budget (7.50%)

8. # Faculty FTE (6.50%)

9. Student/Faculty Ratio (6.00%)

10. AACSB Accreditations (3.50%)

11. Budget/Student (3.00%)

12. Student Body Size (2.50%)

13. Undergraduate in-state Tuition (1.50%)

14. Undergraduate out-of-state Tuition (1.00%)

15. Degree levels offered

A Quick Word on Factors and Weights

This list of ranks is not meant to tell you where you should go to school.  It’s meant to offer a guide of schools which generally should provide a quality education and expand your skill set, at reasonable cost and with appropriate resources.  The school best suited for your career growth will need to meet your personal goals and provide support and opportunity where you choose.  The online MBA, for example, is a degree suited far better for the working professional seeking to expand an extant skill set rather than an inexperienced person who just finished their undergraduate studies.  As a result, you don’t need your hand held by having face access to your professor, but you should get timely and substantive answers to emails and class discussions.  You don’t need to schmooze in a student lounge with classmates, but you should have the means to make contact with other MBA candidates and quickly assess suitability for virtual teams on projects and for your case competition team.  You will expect to work independently, but you will still need access to timely resources to support research and develop your reports.  Most of all, you need to be able to tailor your MBA to meet your career goals, including competitive work with and against fellow students with superior abilities and intellect.  These rankings are meant to identify the schools which most effectively offer a package suited to such goals.

Good luck.

On Evil

We are all still in shock, I think, from the terrible events in Newtown, Connecticut.  When such things happen, in places like this board it is inevitable that those tho do not believe in God will take the moment to mock Him.  But I see it differently.

Evil has been here for as long as we have been here.  Just in our own history, we have learned much, too much, about rape, slavery, murder, genocide, and countless terrors of a dismal variety throughout human history.  While we sometimes hear how we have 'advanced' and 'evolved', still from time to horrible time we are forced to witness the depths to which men may sink.  Surely we must admit that evil exists.

Fortunately, we also know that good exists.  The very day of those awful murders, I watched on television as some children were able to smile a bit, play with each other, and reassure their own parents.  And for all the horror we have experienced, we have also been able, most of us, to be reminded the precious value of our family and children.  We have relearned something of community, and the fact that our neighbors, our nation, our humanity, still count in our hearts and minds.  Some good refuses to die, even in times like this.

I believe that God takes responsibility for evil, because it happens as a result of human free will.  We are allowed our freedom, and for that freedom to be real it must be allowed even when it leads to things like this.  No sermon here from me about how we could have prevented it, no lecture about how a deed here or a prayer there would have changed things  - we control some things, but none of us has that kind of power, however much we may wish we did.  God allows us to make choices of consequence, even when that consequence is terrible.  This is also why I believe there is a better place afterwards, where Time is something other than as we know it here, so that those children who went on ahead of their parents will be waiting for them as if it were mere moments they were apart.  God is good, and so has prepared a better resolution than the pain and torment we so often bring upon ourselves.  And it is that promise of reunion, and of safety in the permanent home which God offers to those parents whose pain would otherwise be impossible to bear.

I know some little bit.  When my daughter was an infant, on three occasions she fell ill with a very high fever which did not respond to medication.  The fact that she might be taken from us was a pain I do not like to remember, and I can only imagine how much worse the loss is for those families whose loss became their reality.  Platitudes and false hope are worthless in such a place and time, so I do not write these words casually, but with firm conviction and faith that my Lord will make solace known to these families.

The strange thing about evil, is that it is like pain.  No one touched by it is pleased, but it passes, even if it is sharp and cruel in its moment.  But we must be there for those suffering from evil, just as we would for a friend in pain.  It may seem small, but in such times there is great value in being there for each other, meeting every need in whatever we can, whether we have the word or are silent, whether we think we understand or recognize something beyond our ken.

Believers know God is our father, but when facing evil we do well to remember we are family to each other, all of us.  

Thoughts on the Lottery

Wednesday night the folks at Powerball drew for a jackpot worth, at most recent estimate, some $588 million.  And as always happens when a lottery jackpot gets really big, the media made sure to give it lots of coverage, all the while chiding folks for buying lottery tickets.  But that hypocrisy can be discussed at some other time.  For this essay, I would like to address the common claim that a lottery is, quote, .a tax for people bad at math’, unquote.  I submit that many rational people would take a different view of eth lottery.

To start, though, let’s discuss taxes.  While most folks speak of taxes in a derogatory manner, most os us recognize that taxes are not always bad.  Consider, for example, taxes used to support fire and police departments, maintain roads and bridges, and keep schools open.  It’s understood by pretty much all rational adults that some taxes are necessary and good.  So, from the start we should reject the idea that calling the lottery a ‘tax’ is automatically a bad thing.  It would only be bad, if we could show that the lottery was a bad tax.

OK, so what would make a tax bad?  To my mind, there are three ways a tax can be bad.   First, the tax could be a heavy burden, hard for the taxpayer to be able to pay and still make a decent living.  Second, the tax could be collected for an immoral purpose, like the taxes raised by nobles in the past for no better reason than to build palaces and provide luxury for themselves.  And third, a tax could be imposed without the consent of the governed, and as such would be punitive.  A lottery is none of those things.  First, no one is compelled to purchase even a single lottery ticket, so the last argument about consent of the taxpayer falls quickly – the lottery is the most fair tax in existence, since only those who approve ever pay it.  Also, the price of a lottery ticket is as little as one dollar, the price depending depending on the game.  But more than that, no one has to spend money they can’t afford on lottery tickets, and there’s even a toll-free number on the back of the scratch-off tickets for those who may be concerned about gambling addiction.  I don’t recall my 1040 form ever offering counseling on how to pay less income tax.

So what is the lottery money used for?  In some cases, education, though admittedly that claim by states has run hard against facts at times.  But where lottery money is not used for education, it goes into the general fund, which at least avoids the stigma of being directly associated with some of government’s more irresponsible ventures. 

Taken as a whole then, lotteries may not seem like good wholesome activities to some people, but you can’t really make an effective argument that lotteries are immoral or wrong.  That leaves skeptics pointing out obvious facts such as the high odds against winning the jackpot, while they ignore the obvious fact that we already know those facts.  We are well aware that in all likelihood buying lottery tickets means we are giving away money that we might otherwise use to productive purpose.

Here’s the way I see it:  I know that in any realistic sense, I am throwing away a few bucks a week playing the lottery.  But I don’t waste money on Starbucks, bottled water, or ‘organic’ anything, so anyone telling me I’m wasting money is a hypocrite in need of a slap in the face.  The thing is, if someone wants to spend five bucks on a cup of coffee, or a loaf of bread, or so on, they get their return in the immediate enjoyment of their product.  So do I, in the anticipation that maybe, just maybe, I will suddenly have enough money that financial considerations will no longer be necessary,  Even the ‘small’ jackpots would be enough to set me up for life, and more to the point, take care of my family and give my daughter a financial foundation – heck, give HER kids a solid financial foundation.  It’s worth a buck or two to imagine that could happen.  And let’s be clear, if you spend your money on a coffee, that’s it – the enjoyment maxes out at however you enjoy what you bought.  I accept that my lottery tickets will probably be worthless paper, but I also know that every so often someone really does win the big money, and if I buy a ticket that might- just might – be me.   Skeptics like to point out that the odds of getting hit by lightning are better than the odds of winning Powerball, but they forget that when the weather gets stormy, you can protect yourself by taking shelter. And if there’s a chance that spending a buck or two might bring in more money than I could make in a hundred salaried jobs, well, a smart man sees the opportunity there.

Play on.

Grand Theft Nation

Last Tuesday night, Mitt Romney conceded the Presidential election to Barack Obama.  Obama, ever the snide, self-serving narcissist he is, was quick to praise himself and promise even more of the policies which nearly bankrupted America in his first term.

This was a strange election.  Not the GOP losing, but the fact that Romney and his supporters were blind-sided.  In 2008, most Republicans saw it coming but this year most Republicans genuinely believed Romney would win.  And there was reason to believe as well, with most national polls showing Romney ahead until the last few days before the election.  Exactly what happened to give Obama a second term will be examined and discussed for quite some time.  Either the national polls were wrong until the very end, literally millions of voters changed their mind in a matter of days for no significant cause, or something else happened that defies easy explanation.  The sneering derision from the Left, that America is leaving the GOP behind, is a malicious lie, but something happened.

One thing that does annoy me, though, is the character of the election.  Obama’s job performance was so abysmal that he certainly could not be honest about his record and win re-election, but there is also no question that Obama lied, pretty much throughout the election campaign, about what Mitt Romney stood for and what he meant to do.  My wife is Asian and some of my friends are Hispanic, and they noted that a lot of TV and radio ads in non-English language which claimed outrageous lies, like Romney wanting to abolish Medicare or defund school programs for at-risk children, that he wanted to deport all immigrants or give billions in tax cuts just to rich people.  There’s no justification for such outrageous behavior, even if Obama wants to hide behind the canard that the PACs putting out those ads did not represent his position.

The United States is healthiest when political debate is lively and substantive.  Demonizing the opinions and beliefs of half a hundred million voters just so you can win an election is not merely unethical, it damages the framework for effective decision-making, and plays all too often into the hands of demagogues.  If President Obama wants to establish a legacy of honor and to build genuine accomplishments, he better back off his hate speech and start listening to other opinions besides his own. 

An Alternative To Nate Silver: Here Are The Real Odds

Back in 2008, a man who established his reputation with Baseball statistics was lionized as a political guru for correctly “predicting” the winner of 49 of the 50 states.  He did this through aggregation of state polls, and a formula which, speaking bluntly, was based heavily on subjective weighting of polls he liked.  On his side, it’s true Silver was accurate in 2008.  Silver, however, doesn’t like anyone bringing up his results in the 2010 mid-term election.  This year, Silver has announced that President Obama has an almost ninety percent chance of winning re-election.  He has also, rather dishonestly, tried to hedge his predictions by saying that turnout will decide the actual odds (hidden well below his bold headline), and admitted that if the state polls used invalid weighting on party participation, then the election results may be very different from his forecast.  His supporters have even gone so far in recent days as to demand that Silver’s system be judged on the process rather than whether his predictions come true.  Leaving all this aside, the question may reasonably be asked, about what the odds really are for Obama and Romney.  There is a reasonable method available for determining those odds.

Whenever a percentage chance is given for something happening, it claims that of a hundred possible outcomes, this one will happen ‘x’ number of times.  So we can figure up the odds by working out what each candidate needs, and how they could get there.

First, President Obama.  By this date, there’s really no doubt that the District of Columbia and the following states will be won by Obama:  California, Connecticut, Delaware, Hawaii, Illinois, most of Maine, Maryland, Massachusetts, New Jersey, New York, Rhode Island, Vermont, and Washington.  That gives Obama DC plus 13 states, for 178 Electoral Votes, meaning he needs another 92 EV to win re-election.

Next, Governor Romney.  There is no doubt that Romney will win the following states:  Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, and Wyoming.  That gives Romney 24 states for 220 Electoral Votes, meaning he needs another 50 EV to win the White House.

There are 13 battleground states plus 1 EV in Maine that is contested, for 140 Electoral Votes.  From the start we can see that neither candidate needs to sweep all the battleground states to win. 

Before going on, there is a controversy which will sort itself out tomorrow.  Many state polls have given heavy advantage in weighting to Democrats, even when previous elections show no such disparity in voting by party.  As a result, there is suspicion among conservatives that the state polls are inaccurate in stating actual voter support.  So the question comes down to whether turnout will be like 2008, 2004, or somewhere in between.  For each of the states, therefore, we can look at the actual part weights from 2004 and 2008, then use that to tell us what we might see this year.  Here’s how each state plays out, starting with the highest EV states still contested:

Pennsylvania:  20 EV, polls either even or show Obama slightly ahead

08:  Obama                  04:  Romney                Mix: Obama

Ohio:  18 EV, polls even or show Obama slightly ahead

08:  Obama                  04:  Romney                Mix:  Romney

Michigan:  16 EV, polls show Obama ahead but close

08:  Obama                  04:  Romney                Mix: Obama

North Carolina:  15 EV, polls show Romney ahead but close

08:  Obama                  04:  Romney                Mix:  Romney

Virginia:  13 EV, polls show Romney ahead but close

08:  Obama                  04:  Romney                Mix:  Romney

Minnesota:  10 EV, polls show Obama ahead but close

08:  Obama                  04:  Romney                Mix: Obama

Wisconsin:  10 EV, polls show Obama ahead but close

08:  Obama                  04:  Romney                Mix:  Romney

Colorado:  9 EV, polls show Romney ahead but close

08:  Obama                  04:  Romney                Mix:  Romney

Oregon:  7 EV, polls show Obama ahead but close

08:  Obama                  04:  Romney                Mix: Obama

Iowa:  6 EV, polls show Obama ahead but close

08:  Obama                  04:  Romney                Mix: Obama

Nevada:  6 EV, polls show Obama ahead but close

08:  Obama                  04:  Romney                Mix: Obama

New Mexico:  5 EV, polls show Obama ahead but close

08:  Obama                  04:  Romney                Mix: Obama

New Hampshire:  4 EV, polls show tie or close either way

08:  Obama                  04:  Romney                Mix:  Romney

Maine: 1 EV contested, polls show tie

08:  Obama                  04:  Romney                Mix: Obama

On the weights, assuming each of the three turnouts is equally likely, then on average Obama would win 70.3 of the EV and Romney would win 68.5.  But since Obama needs 92 to win, he has a net 38.2% chance of winning, while Romney (who only needs 50 more EV) has a net 61.8% chance of winning.

That’s the math.   The votes themselves will decide the fact.

Be sure and vote.

One Scenario Which Will Definitely Not Happen

As the election race closes to less than forty hours before Election Day, all kinds of stories have come out.  ‘Inside’ stories about Romney preparing for a loss, Obama planning to move to Hawaii next year because he knows he’s done, so-called experts and gurus who promise perfect knowledge of what will happen … there’s no shortage of noise and media flatulence.  While I have my own ideas about what will happen, I don’t pretend to know it for a fact, and frankly I don’t respect anyone who pretend that they have such knowledge.  However the voters think, however early voting went, the race itself will be decided Tuesday by the actual votes. That’s because opinion polls are not actual votes, and however important early voting is, no one has ever had so commanding a lead in early voting that the Election Day was not necessary.   Nate Silver is lying to you, and so is Karl Rove.  It’s what they are paid to do, actually, but you should keep in mind that spin is pervasive in the media, including a lot of people pretending they are objective reporters.  The race could be razor-close, it could be decisive, and it’s even possible that President Obama could win the Popular Vote but lose the Electoral Vote, as Gore did in 2000.  But I have not been able to work out a way for Mitt Romney to win the Popular Vote without also winning the Electoral Vote.

Here’s how that works out:

Obama has a commanding lead by all accounts in polls in five states (54%+ in New York, Illinois, Massachusetts, Connecticut, and Washington).  Obama also won handily in D.C.,  Hawaii, Vermont, Rhode Island, Maryland, Delaware, and Maine, but there are no polls in the last two weeks for those states.  If you take the poll support where known (use those RCP average that get such press), and apply 2008 numbers for states without polls, when you plug it all in, Barack Obama ends up leading Romney 48.9% to 46.6%. 

First, notice that no national poll , well no serious poll by professionals, give Romney support numbers that low nationally.  And Obama is below those numbers in serious national polls.  I don’t think those state polls are kosher, but for here they create a problem for anyone saying Romney would win the PV but lose the EV, because the only way to create that condition would be to add votes for Romney in battleground states … or create ridiculous scenarios, like saying he takes 90% in Texas and 48% in California.

When you add in the necessary votes to give Romney the PV lead, it always creates a condition where he wins the EV as well.  The closest scenario I could find, allowed the 3^rd party percentages for each state to be copied from 2008, Obama was allowed the poll support and Romney the rest, and I end up with Romney 49.5%, Obama 49.0%, and Romney wins the EV 318-220.  I’m not saying that’s how it ends up, but if Romney wins the Popular Vote this year, he wins the Electoral College as well.

Homers

Heard about the polls?  Sure you have.  Even if you have no interest in the polls, even if you hate them, the news has been full of reports from all sorts of agencies and groups, some of whom you may never had heard of, and some you frankly should ignore.  This is because the news depends on viewers and readers for their revenue, and a tight election – in theory – keeps their attention.  Polls serve the narrative, because you can’t tell if the poll is right or wrong until after the election.  That’s not to say the polling agencies are dishonest, for the most part at least, because polling groups are businesses and need to be reasonably accurate to be able to attract clients.  But polls are not all the same, and even where they share common ground, sometimes you would be wise to be skeptical.

Let’s start with the obvious.  If I put out a poll on the election and asked, say 600 men but only 400 women their opinions, you’d reject my findings as out of balance, because we all know even without checking the history that men and women vote in roughly equal numbers.  So a poll that did not balance men and women would not be reasonable.  Similarly, I could hardly call my poll reasonable for a national election if 80% of the people contacted were in, say, California and New York.  Or if my respondents were all white, or had some mix that was not in-line with census numbers for race. 

You get the idea.  Any poll which is not a reasonable sample of the actual public is not a valid poll.

With that in mind, the fact that a majority of state polls and a fair number of national polls have weighted political affiliation rather heavily in Obama’s favor is odd, to say the least.  Now yes, it is true that in 2008 Democrats represented 37 percent of the voters, seven full points more than the dispirited Republicans of that year.  So, some people will say the polls are simply reflecting the last Presidential election.  However, the polls in 2008 did not weight party affiliation according to the 2004 turnout, nor did the polls in 2004 use 2000 as a baseline for their weighting.  What’s more, the 2010 mid-term elections demonstrated a rather drastic shift in party participation, as Republicans showed up in large numbers and with great energy.  Ignoring that election seems to be, well, short-sighted.  Let’s also not forget the novelty of 2008.  Obama ran as the first black candidate from a major political party, surely worth political capital in 2008 but hardly the same impact now.  The economy is also a problem for Obama, and while his supporters may stand by him in the main, it’s frankly inconceivable that he would gain support on that point.  But what’s even stranger, is that some of these polls are handing Obama an ever greater advantage in party participation than he enjoyed in 2008.  There is absolutely no empirical basis whatsoever for such a weighting.  It’s misleading, it’s deliberate, and frankly the polls doing so risk humiliation if they – as seems likely – are proven wrong.

The question here is just why they would do something so, well, dumb.  The effect of the weighting is obvious; it’s not hard to expect that Democrats will largely vote for Obama while Republicans will largely vote for Romney, so fudging the weights will obviously change the outcome.  The reason it’s dumb is two-fold – first, it’s not hard to observe that if Romney is leading among Independents in a battleground state (which by definition is not automatically Democrat or Republican in the main), then saying Obama is winning is just plain dishonest, an obvious lie, and second, when the election results are known, the lie will not only be obvious, it will be a matter of record. 

Some folks, like our friends over at Pew Research, like to claim that there’s no reason to use party affiliation weighting.  Their explanation is that however folks respond is a fair representation of voter enthusiasm.  Certainly that helps explain the strong pro-Democrat weighting in 2008.  But there’s no evidence that’s always the case, and anyway, we’d laugh at Pew if they ignored other demographic weights on the basis that interest in answering a poll reflected accurate representation in the voter pool.  It’s lazy and intellectually dishonest to pretend so.  Also, Walter Mitofsky, who pioneered political polling as we know it, candidly admitted that Democrats are “chronically” over-sampled in polls.  He suggested it might have to do with the personality of Democrats versus Republicans, but in any case the bias is documented, and every responsible polling group knows it.

Yet, yet, yet.  I still don’t buy into conspiracy theories, not least because it makes no sense for a polling group to pretend someone is winning when they know he is losing.  Especially if doing so produces no financial benefit for the company, and instead would damage their reputation for accuracy and integrity.  And make no mistake, if Romney wins by a big margin, as could very well happen, then those polls which went out of their way to make Obama look stronger than he is, are in for a hard time of it.  They won’t be able to make the excuse that no one saw it coming, or that their hands are clean.  So why be stupid like this?

They’re homers.  That’s why.

I don’t mean the polling groups want Barack Obama to win, exactly.  Rather, these groups are engaging in an unconscious groupthink, based in their own demographics.  Back in 2008, I pointed out a reason for liberal bias in polling.  It has to do with their home ground.  Below, is a list of major polling groups from the 2008 election and their headquarters addresses:

ABC News 77 W 66th St, #13, New York City, New York
CBS News 524 W 57th St, New York City, New York
FOX News 1211 Avenue of the Americas, New York City, New York
Gallup 901 F St NW, Washington DC
Hotline 88 Pine St, 32nd floor, New York City, New York
IBD 12655 Beatrice St. Los Angeles, California
The Los Angeles Times 202 W 1st St, Los Angeles California
Marist Institute 3399 North Rd, Poughkeepsie, New York
Mason-Dixon 1250 Connecticut Ave #200, Washington DC
Newsweek 251 W 57th St, New York City, New York
The New York Times 1 City Hall, New York City, New York
Pew Research Center 1615 L St NW, #700, Washington DC
Quinnipiac 275 Mount Carmel Ave., Hamden Connecticut
Rasmussen 625 Cookman, #2, Asbury Park, New Jersey
Reuters 3 Times Square, New York City, New York
Survey USA 15 Bloomfield Ave., Verona New Jersey
TIPP 690 Kinderkamack Rd, Oradell, New Jersey
Washington Post 1150 15th St NW, Washington DC
Zogby 901 Broad St, Utica, New York 

See the trend?

Two Left Coast outfits, and the rest well into Blue-State territory.  They live, work, and operate in an environment where balance and critical thinking, at least in political terms, does not exist and is punished when discovered.  Not a single group based in, say, Kansas, Texas, or Wyoming, or in more balanced states like Iowa, Missouri, or Ohio.  The bias is unavoidable, yet these guys never see it, because for them ‘normal’ is what for us means leaning left.

This also explains why many of these polls have not done what they usually do, make a last-week adjustment to get closer to the actual condition: the heavy storm knocked operations for a loop, and they are stuck with their garbage releases.   It’s too late to nudge things back to actual numbers.

So this seems hinky, but it really can be unconscious behavior.  Back when I officiated sports, I noticed how homers think and act, and what struck me early on, was that even the most outrageous homer believed he was reasonable and balanced; he simply did not perceive the other perspective.  Sports fans may not seem like a good model for a media professional, but I ran into the same effect with coaches and school officials.  If you don’t get out and travel, you can end up with a very limited view of what’s really going on. 

The thing that strikes me about polls, and it reinforces this problem, is that the polling is often done by firms hired by these media outlets, but the press release comes from the media guys, and specifically from their head office.  So, it’s very likely to me that these polls are performed professionally at the field level, then massaged at the high level to produce the desired report.  It’s not at all that these people are trying to deceive you.  They just know what results they expect, and make sure the report is in line with those expectations.  Strange as it may sound, they may be just as surprised next Tuesday night as Mr. Axelrod and his crew.