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Harvard Law School graduates Deval Patrick and Barack Obama will be holding a fundraising lunch on Friday here in Boston (details). Taxpayers nationwide will be paying Nobel Laureate Obama’s salary and travel expenses for an entourage of 500 while he spends a Friday doing something other than work. To prevent disgruntled taxpayers from throwing offal at the dignitaries, the FAA is imposing a 30 nautical mile flight restriction around the city from 11 am until 4 pm. Our flight school will be effectively shut down on what would otherwise be a profitable fall day.

Is it safe to say that we now have enough lawyers to kill any economy?

[Related: ABC News story about a flight school owner in Oakland, California sends the Democratic Party a bill for lost revenue during Nobel Laureate Obama’s fundraising visit there.]

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As noted in an earlier posting, at a total cost to society of about $150 in administration plus $2 in test materials it was established that I don’t have strep throat. After a week of feeling relieved not to be suffering from strep, but yet coughing and enervated, I went in to see the doctor and he said “Yes, I’m sure that you don’t have strep. All you have is swine flu. Try to get some rest, drink a lot of fluids, and expect the suffering to continue for 10-14 days total.”

The good thing about swine flu is that it gives one a good excuse to sit at the computer and type. In hopes that it will be useful to a team of energetic young programmers, I’ve drafted a complete idea for what should be a viable business: a Web service that conveniently allows someone to read and respond to postings from multiple online communities. Comments would be welcome.

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The New York Times today carries a story about a couple of local Republican functionaries in rural South Carolina who got in trouble for offering a theory about how wealthy Jews got rich. They were genuinely shocked to find that anyone objected to their sharing a bit of folk wisdom. It reminded me of a story told by a flight attendant friend who grew up in southern Appalachia. She was talking to a fellow flight attendant about renting a new apartment in northern Kentucky. “The landlord wanted $650 per month, but I Jewed him down to $500.” Her friend said, “You do realize that I’m Jewish, don’t you?” Our southern gal said “Of course. Why are you asking?” Her friend had to explain to her that the expression, “to Jew down”, which she had been blithely using for 30 years, was considered offensive by actual Jews.

[For those who are truly passionate on the subject of Jewish wealth, there is a new book coming out, Start-up Nation: The Story of Israel’s Economic Miracle. Apparently Israel is home to a large number of companies listed on the Nasdaq (list). I’m not sure why this is surprising. Israel is one of the world’s most densely populated countries and has very little water. That rules out agriculture. Israel is not on an important trade route and most nearby countries declared war on Israel in 1948 and remain in a declared state of war. That rules out trade. Israel remains poor compared to Western Europe and the U.S., which rules out banking. Israel has no natural resources, which rules out mining and heavy manufacturing. The only reasonable option for an ambitious Israeli therefore would be something in infotech or biotech.

For those who are upset by Jewish wealth, I guess they can take comfort in the U.S. government’s strenuous efforts toward making us all equally poor.]

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Folks: In 2004, I posted a query about the best way to manage a party invitation email spam list (and the bottom of the posting links to the perl script that resulted). I’m going to put the question forward again because technology keeps changing and spam filters keep getting stricter. A fair number of my messages were spam-filtered, even though they were from: me, to: recipient. I think this might have been because they were sent from an old server and old email address within MIT and a lot of spammers had appropriated that identity.

Here are the requirements:

• I can build a list of email addresses
• I can spam this list with a common message, e.g., “party on Saturday”
• The recipients do not have to visit a Web site to receive the full message, nor deal with a massive pile of HTML and graphics in the email (I believe this requirement rules out the commercial Evite service)
• Message should be plain text readable on a mobile phone
• Messages are not intercepted by spam filters

It would be nice to have the following:

• ability to tag some people with extra information, e.g., “helicopternerds”, and spam only them or spam the list minus them
• recipients can remove themselves from the list

I would have thought that Gmail or Yahoo mail would have something like this built-in. Yahoo seems to have the ability to create a mailing list, but I’m not sure what the resulting messages look like going out. Gmail doesn’t seem to have anything like this (if you say that you want to email a subgroup of contacts it does the obvious stupid thing of adding them all to a big To: list). Could I create a Google Group and stuff all of my friends in it without their consent? Even then it doesn’t seem ideal for managing a social list because I don’t think there are easy facilities for tagging people as belonging to subgroups.

Doesn’t this seem like a sufficiently common problem that it shouldn’t require Unix shell programming?

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Wall Street banks have had profitable quarters. JPMorgan Chase reported $3.6 billion in profit (more than $1 billion per month). Goldman Sachs was only slightly behind, at $3.2 billion. These profits supposedly came from “trading.” I asked a friend who has worked in the money business how this was possible. “For someone to make money trading, there has to be someone on the other side of every trade who is losing money. Where does each bank find someone who can lose $1 billion every month?”

He explained that “carry trade” would be a more accurate description of what they’re doing. Because of the Collapse of 2008 financial reforms, the big investment banks are able to borrow money from the U.S. government at 0 percent interest. Then they can turn around and buy short-term bonds that pay 2 or 3 percent annual interest. Now they’re making 2 percent on whatever they borrowed. They can use leverage to increase this number, by pledging some of the bonds that they’ve already bought as collateral on additional bonds.

I asked if they were taking any risk in order to earn this return. “If interest rates went up to 20 percent, even though the bonds are short-term, the price of the bond could fall enough to make the trade a money-loser.” (Though since the banks are too big to fail, they would simply be bailed out with additional taxpayer funds.)

What kind of bonds are they buying? Are they investing the money in American business? “No, they are mostly buying Treasuries.” So the money is just being shuffled from one Federal bank account to another, with each Wall Street bank skimming off $1 billion per month for itself? “Pretty much.”

[A more old-fashioned way of making supranormal returns is insider trading, which was perfectly legal until the Crash of 1929 (history). The New York Times ran a story yesterday on Raj Rajaratnam, a hedge fund manager who invested heavily in inside information. Rolling Stone published “Wall Street’s Naked Swindle” on October 14. The story is much more sensational and entertaining than anything from the Times. It covers a guy who spent $1.7 million on out-of-the-money put options on Bear Stearns on March 11, 2008. The options would become worthless on March 20, just 9 days later, unless Bear Stearns basically went bust. Bear Stearns collapsed the next day and the guy made a $270 million profit. He has never been identified by the SEC.]

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Andrew Grumet and I have drafted an article on software design review and would be grateful for comments (persistent comments underneath the article itself; comments about what should be changed in the article or typos should be posted here on the blog). Software projects would seem to be extremely amenable to external design review and yet though this practice is common in business agreements (have a lawyer look over a letter agreement) and in construction (builders bring in an architect or an engineer; architect brings in an engineer to review the structural design), it has been almost unheard-of in software development. A team of programmers is selected and then is able to do more or less whatever it wants.

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… mostly by themselves. This AOPA article reveals that the relaxation of regulations for pilot and aircraft certification did not result in a skycar for every garage. In fact, only 1688 LSA planes have been registered and only 3064 sport pilots certified. There are roughly 200,000 pilots in the U.S. who fly primarily for private or recreational purposes and also roughly 200,000 airworthy planes that an individual could reasonably afford, so Light Sport has not had a significant effect.

Training minimums have been reduced from 40 hours to 20. The price of a new two-seater has been reduced slightly, though it is still substantially higher than that of an older airworthy four-seat certified airplane. Perhaps the sad answer is that Americans are too busy working (to pay for their health insurance!) to take up a hobby that requires a lot of time, effort, and dedication.

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Two of the great minds that the New York Times has picked for its editorial page debate the future of the U.S. in “The Economy is Still in a Funk”. David Brooks concludes with “The economy has always bounced back. There is an energy to the country so that after a time the animal spirits get moving and before you know people are starting businesses (even if there are slight chances of success) and expanding current ones, and a few of those turn into Apple and ESPN.”

None of the 100 or so comments seem to note Mr. Brooks’s survivorship bias. The U.S. economy has prospered to this point and therefore we believe it will always prosper… because we live in the U.S., a country whose economy has happened to do well for several hundred years. Plenty of folks in Argentina thought that way as well. Each bust was followed by a boom. Until it wasn’t and Argentina slipped from having a comparable level of wealth to that of the U.S. to being a relatively poor country. The U.S. economy has never faced the challenges of a health care system that costs 20 percent of GDP, of staggering pension obligations (mostly for public employees), of effective competition from China and India, or of global warming. It is, of course, quite possible that we will recover from our current recession as we have from earlier recessions. But past recoveries don’t guarantee anything about the future. It is possible that the U.S. recovered in the past because it was one of the world’s best places to do business, not because it was the U.S. In that case, we would have to do whatever was necessary to ensure that we were an attractive place to invest (see my economic recovery plan, for example).

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If you’ve given up on The New Yorker‘s coverage of business management due to excessive Gladwellization (the latest work by North America’s greatest thinker asks “Is football any better than dogfighting?” and uses 9 full pages to show that in both activities there are likely to be injuries), reading “Not So Fast” may restore your faith in the magazine. This piece by Jill Lepore covers the early days of management consulting and business education. The most interesting part is the second half, which concerns the life of Lillian Gilbreth, mother of 12 children, Ph.D. in Psychology, author of several pioneering books on scientific management, and inspiration for the movie “Cheaper by the Dozen.” She had done a lot of her work under her husband’s name and when he died in 1924 found that businesses would not pay for advice from a woman-run enterprise. Despite her lack of any experience or competence in the kitchen, she remade herself into a home economics expert and died at the age of 93 in Scottsdale, Arizona in 1972 (before Phoenix sprawled out to swallow it!).

More: read the full text of the article

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A friend from graduate school visited this weekend with his three kids. Before they departed, I began to feel my throat getting sore. Yesterday the parents called to say that one of the children had tested positive for strep throat. I called my primary care physician to find out what I should do. His assistant returned my call three hours later, referring me to a lab affiliated with a local hospital. I visited the lab, handing over a health insurance ID card (required by law now in Massachusetts). I would have expected the hospital’s IT system to be able to grab my address and phone number from the insurance company’s IT system, but instead I was asked to hand-write a one-page form with this information. Meanwhile the clerk searched among a stack of 30 or so FAXes that had come in that day, trying to find one from my doctor with my name on it. After she’d found the test order, she started entering my contact and insurance information into the hospital’s IT system. She made multiple transcription errors, necessitating two reviews by me. I was presented with a full page of fine print in which I signed away various legal rights to privacy. The clerk said that without this they would not be able to disclose the test results to my doctor. Nor do they ever disclose test results to a patient. So a patient who refused to sign the form would end up getting tested and the results would never be useful to anyone. The paperwork took about 30 minutes to complete.

The strep test itself was done fairly quickly after the paperwork was done and I walked out, having been told to call my doctor’s office the next day for the results.

I called the doctor today and the phone menu said “Press 1 if you are having a medical emergency or need to talk to your doctor’s office”. I pressed 1 and got a busy signal, then was disconnected. I called again and repeated the process. I was disconnected again. I called a third time and pressed 0 for the operator and explained the situation. She said that my doctor was out today and I should call again the next day. I explained that I had been told to expect this and that anyone else in the office should be able to retrieve the test results and read them. She said that someone would call me back. About 20 minutes later, a different physician’s assistant called me back to say that the “quick strep” test was negative but that they were still waiting on the throat culture test, which had been started in parallel. I asked how long the quick strep test actually took. She said that she had no idea. I looked it up on the Web and the answer turns out to be less than 15 minutes. So it took 21 clock hours to get the results of a test that takes 15 minutes. Two FAXes were sent and at least three additional pieces of paper were consumed; six voice phone calls were placed.; roughly 60 minutes of patient time was consumed, not including driving to/from the lab.

I would say that this incident demonstrates one point from my health care reform plan: “As the health care industry has never been competitive, nor had any incentive to control costs, we have no idea how much American health care could or should cost.”

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