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    How To Fix the State of Illinois

    Posted by Carl from Chicago on 19th January 2015 (All posts by )

    In a previous post I discussed the high probability of there being some sort of major fiscal calamity in Illinois in the next two years. Here I propose how to solve the issues in the state. I realize that the chance of any or all of these solutions to be put into place is near zero without unthinkable changes, but in fact they are all obvious and will likely be part of the ultimate solution.

    Consolidate Governmental Entities – Illinois has over 8400 governmental entities, the highest in the USA. These entities need to be drastically curtailed and likely should number in the hundreds, and each should have professional management, strict caps on borrowing capabilities, and an inability to sign up for long term unfunded obligations (pensions, retiree health, etc…) without stringent oversight.

    Eliminate Pensions and Defined Benefit Plans and Move to Defined Contribution Plans – Illinois’s pension and benefits woes are myriad and well documented and extend through every city and county due to firefighters and policemen and governmental workers. Regardless of the one time pain, strikes, protests, and society-shaking impacts of these moves, these unfunded obligations are an impossible burden on the state and it must move to a 401k-like plan (similar to what Nebraska did)

    Reduce State and Local Employee Compensation Pay by 25% or More – The government faces a simple choice between paying its employees what they think they deserve (ever more) and the government’s obligation to provide services to its citizens at a price that does not drive excessive taxation. This deal is broken and a large part of the burden will have to rest on governmental employees. If they do not like this solution they will be free to find employment in the private sector where it is unlikely that they will be able to match the same package of benefits and compensation. We will know that the model is in balance when the turnover rate of government is equal to that of the private sector.

    Outsource 33% or More of Governmental Jobs – There are large opportunities for efficiencies in the governmental sector, through use of the Internet, changes in processes, and injection of competition into areas traditionally done by the government. Even within areas that are generally governmental functions (like the police), a significant portion of the functions such as administration could be done by third-party or online vendors.

    Reform Purchasing By Use of Modern Techniques and Focus on Outcomes Not Political Concerns – Our procurement systems in Illinois are riddled with favoritism, opaque decision methods, and a focus on aiding politically connected firms. In addition, payment of vendors is very slow which rules out many smaller and less capitalized vendors. We need to focus on market based outcomes (quality of service, cost reduction, speed to market), and reward vendors with consistent and timely payments rather than focusing on political connections and long term relationships which favor a few incumbents.

    Read the rest of this entry »

    Posted in Big Government, Chicagoania, Economics & Finance | 15 Comments »

    Illinois Government, Broadly Defined, Will Have A Major Crisis by 2017

    Posted by Carl from Chicago on 19th January 2015 (All posts by )

    The fact that the State of Illinois has dire fiscal problems is well documented. If you just type in headlines like “Illinois is broke” into your web browser and you can spend hours reading. One of the best is Illinois Policy.org which brings together articles from various news sources into a coherent theme. We have a new governor, Bruce Rauner, who is wealthy and thus unlikely to be entangled in corruption, who is pledging to take on this giant mess, which is a cause for optimism.

    The issues, however, are much larger. It isn’t just the state of Illinois which is in deep crisis – we have an interconnected set of entities all of which are on the verge of facing fiscal woes, who in turn can tip other entities off the fiscal cliff. The city of Chicago also has very significant financial problems, mostly from pensions as well, which it has been papering over for many years with debt and by allowing its unfunded pension issue to get ever larger. Cook County, too, which is one of the largest governmental counties and entities of its nature in the USA, is also facing dire challenges.

    Once you get beyond the state, the city of Chicago, and Cook County, you encounter myriad minefields from our plethora of governmental units. Illinois has more governmental entities than any other state, 8400, as you can see from this article. Most of them have various taxing powers, debt they’ve raised, and liabilities like pensions and health care for workers that are not funded. Look near O’Hare, where the (tiny) city of Rosemont has funded huge shopping malls, convention centers, and even a casino by floating debt. In the end this debt is substantially backed by the state whether that guarantee is implicit or explicit; a city of a few thousand residents can’t normally fund this sort of largess.

    But the challenges are much deeper than this. These entities, much of which are overseen on a local level, invite vast opportunities for institutional corruption. We saw this on Metra, where the scandals caused the prior president to commit suicide (by standing in the way of a train, no less) and cast a light on the squalid pay-for-play decisionmaking process of a typical entity in our state.

    The situation has become so bad that even in a time of record low interest rates, when there are many buyers of debt with any sort of return, that Illinois and the city of Chicago often cannot take advantage of municipally funded debt (which carries a lower interest rate because individuals are not subject to Federal taxes on the interest) because this debt has to be used for capital purposes and can’t just be used to pay day-to-day bills. Thus they are forced to issue “taxable” debt, and pay a higher interest rate. Many of the issues are essentially “scoop and toss” where we just take the entire principal and interest of expiring debt, refinance the whole thing, and just throw it out into the future, growing ever more indebted.

    Read the rest of this entry »

    Posted in Big Government, Chicagoania, Illinois Politics | 11 Comments »

    The Failure of State Sponsored Capitalism

    Posted by Carl from Chicago on 31st December 2014 (All posts by )

    It is my assertion that over the last few decades since the fall of communism a lack of understanding of how markets actually work has become commonplace around the world. When it was capitalism vs. communism (or socialism, or even fascism), you generally knew where you stood. To wit:

    • Capitalism said that the free market would provide the best outcome for society, while communism / socialism felt that capitalism had to be tempered and / or that key assets should be owned by the state 
    • Capitalism said that government should be small, and stick to a few areas of logical focus such as security and foreign affairs, while socialism / communism celebrated government and government jobs as a way to employ the citizenry and achieve social goals

    Subtly, the growing attraction of jobs that were primarily in the government sector (environmental jobs, education jobs, health care jobs, and outright government work) and the basic thought that you could build a nice, steady career there with assured benefits and pensions while “doing right for the world” became commonplace. These jobs were often seen as “nicer” and “better” than the ruthless corporate jobs that are continually vilified or parodied on television (such as “The Office” or virtually any thriller set in business).

    On a parallel scale, the idea that “State Owned Enterprises” (SOE) could be a significant part of the world economy, and compete effectively with private sector companies, became widespread. Let’s leave aside the companies that fell into the US governments’ hands during 2008-9 like the banks and car companies; I am focusing on the world wide companies, often country “champions”, that are in our midst and whose performance has now been hit with the usual causes of failure of these sorts of entities, including:

    1. Politically motivated investment
    2. Forced government subsidies or protectionist behavior
    3. Corruption
    The “poster child” for this negative outcome is Petrobras, the Brazilian oil company, which is 64% owned by the state.  Petrobras was briefly the 4th most valuable company in the world after their 2010 IPO; now it is barely in the top 100.  Petrobras hits all these typical failure points with a vengeance.  The government forced them to purchase goods and services from inefficient Brazilian suppliers, subsidized their citizens with Petrobras funds, pushed them to invest in deep offshore finds which were risky relative to the company’s capabilities, and finally just engaged in simple corruption to fund their political party candidates.  All of these actions weakened the company and now a downturn in oil prices and a heavy debt load put the company in a seriously bad state.

    Read the rest of this entry »

    Posted in Business, China, Crony Capitalism, Economics & Finance, Education | 20 Comments »

    Renting Vs. Buying

    Posted by Carl from Chicago on 29th December 2014 (All posts by )

    In the 2007-9 real estate boom and debacle here in Chicago there was a wave of newly built condominiums that swamped the market in River North, River East, the South and West Loop, and even Downtown. For a while the new buildings could do no wrong and then that disappeared into a pool of foreclosures and difficult times for condominium associations as they had to deal with vacant units and those that refused or were unable to pay assessments.

    In the 2012-5 period, that same area of Chicago has seen an enormous influx in new buildings, but this time it is different – they all seem to be rental units. Everyone seemed to learn the same lesson; condominiums can be hard to unload in a down market and the prices are highly variable (units sold for fire-sale prices during the nadir and condominium developers lost their shirts if they were holding inventory during that time), so let’s go with renters instead, who derive consistent returns for the building owner and lender.

    For a bit I even thought I’d try to put my condo on the market since prices have gone up. I figured I’d just rent for a while and not be exposed to future downturns. But as I looked around for equivalent value to my current condo in terms of location, views, bedrooms and bathrooms, I noted that I’d be paying $4500+ / month for an equivalent space, if I could find it at all (inventory of larger condos in modern buildings in good walkable areas was in fact very low). That just seemed crazy.
    Read the rest of this entry »

    Posted in Chicagoania, Real Estate | 10 Comments »

    25 Stories About Work – Unions in the Service Sector

    Posted by Carl from Chicago on 24th December 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    The Midwest, early 1990s

    When I was first starting out as an auditor I worked in Wisconsin at an electric utility. In your initial jobs as an auditor you were given the least interesting assignments, such as plant accounting. Assets like generating plants don’t usually change much in value from year to year so reconciling the plant assets was a job for the lowliest accountant.

    At the time the records for this plant were kept on what we called “13 column” yellow paper. I never thought about it until today but 13 columns was obviously chosen so that you had 12 individual months plus a thirteenth column for totals. The client’s records were partially computerized but some items (such as the plants built in the ’70s) were done manually.

    The guy who ran plant accounting was old, irascible, and disliked a young kid like myself who asked a lot of questions. They also were frustrated because ever year a new guy (or girl) took a look at the plant accounting records, since it was an entry level job, so they had no continuity and had to re-explain everything (badly) each year.

    Read the rest of this entry »

    Posted in 25 Stories About Work | 18 Comments »

    25 Stories About Work – the Henpecked Guy

    Posted by Carl from Chicago on 10th December 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    Chicago, Illinois, early 1990s

    One of the clients that I had was a (rare) financial services firm in downtown Chicago. This was a great client because I didn’t have to travel or do anything strange like audit a maximum security prison.

    The job was also interesting because the firm we were auditing took in investor funds and turned around and invested in myriad hedge funds. As a result, during audit time (year end) we had a lot of work to do because in order to complete OUR audit, we had to receive reports from all the individual hedge funds that the firm’s clients invested in. Back then we were barely computerized and used lots of paper, and all the audited financials came in at the last minute, so we worked non-stop to attempt to meet customer deadlines.

    At lunch we went out as a group and they brought the auditors along. Most of the time it was just me since I was fairly competent by that time so my manager usually left me on site to do all the work and just checked in on the results periodically. I was a workhorse, charging in hours from early morning to late night every day and on weekends during busy season. Since this firm made a lot of money, they didn’t care much how many hours we billed, they just wanted to complete the audit on time so that their clients felt confident in investing with them.

    The manager from the client was interested in hiring me. This is typically how you got a job as an auditor – you impressed the client with your intelligence and work ethic, and then they hired you to join their internal audit staff. Since most of my clients were in government or distant utilities in undesirable (at the time) cities, this was an unusual circumstance for me.

    Read the rest of this entry »

    Posted in 25 Stories About Work, Business | 9 Comments »

    25 Stories About Work – Working in a Maximum Security Prison (Part II)

    Posted by Carl from Chicago on 7th December 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    Joliet Illinois, 1992, at a Maximum Security Prison. Here is Part I of the story. This prison is where the Blues Brothers movie was filmed along with “Prison Break”.

    After I got acclimated to the prison, it was time to select the assets that I would audit during the summer. Typically you “randomly select” assets from the asset listing, take a statistically significant sample (perhaps 20-50 items), and draw conclusions about the whole pool of assets based on whether you were able to find the selected assets in the location where they were said to reside. I did this at first and the results came up with many assets titled “XXX-780″ and I asked the accountants working for the facility what they were. The accountants said that these were individual prisoner beds and that was the cell number and the way to audit those assets would be to go in and unlock the cells and I could flip up the bed and check the number. I thought about this for a few minutes and then said “f&ck this” and decided that I would use “judgement” to select my assets instead of the random method and I selected 30 assets myself for my project.

    The quest to find the assets took me throughout the facility. If it was a gun that I selected, I would go past the guard into the armory, through the tunnels under the building, and up the ladder into the tower to manually check the serial number of the rifle or other weapon that was picked to be audited against the building records.

    I selected what turned out to be a sniper rifle. These guns were kept in storage at the armory, and they brought out the sniper to show me the weapon himself because they didn’t let other people touch it after he had calibrated the scope. The sniper asked me a question:

    Do you know why they pick snipers out of the staff in the prison?

    No, I said.

    Because in Attica there was an uprising and the prisoners took over the yard and then the prison brought in outside marksmen to ensure they could not escape. During the melee the marksmen shot many prisoners but it turns out that the prisoners had changed clothes with the civilian hostages, so some of the individuals gunned down were actual guards or workers. Thus the snipers were prison guards from that facility because they could pick out the inmates from the guards and workers.

    I said that if he ever saw me in his scope wearing an orange outfit, please don’t shoot. It wasn’t a joke.

    Read the rest of this entry »

    Posted in 25 Stories About Work, Business, Personal Narrative | 5 Comments »

    25 Stories About Work – Working In a Maximum Security Prison (Part I)

    Posted by Carl from Chicago on 4th December 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    Joliet Illinois, 1992, at a Maximum Security Prison

    When I was an auditor I worked with utilities and governmental entities. These were the least popular clients because they often required a lot of travel and if you left the public accounting firm you generally worked for a client (or a different firm in the same industry) and this would pigeonhole you into working in regulated industries.

    When I thought I’d seen the least appealing clients possible, a new low occurred – I was assigned to a maximum security prison. The Joliet Correctional Center in Joliet, Illinois. The prison hired an accounting firm to do an audit of their property records and my job was to inventory the physical assets deployed throughout the facility.

    The only guards with weapons were in the towers or overlooking the prison walls. Once you were inside the facility the guards had nightsticks but no guns. This was to prevent the prisoners from overpowering the guards and taking their weapons. The prisoners could seize control of the facility at any time and hold the guards hostage but they could not exit the facility because the guards in the towers had rifles and would be able to fire back and would be difficult for the prisoners to overcome.

    You entered the facility and went into the armory. From the armory you could take tunnels under the facility and then you could go up into the tower via a ladder. Only within the armory and up the tunnels were the guards armed. This facility was built in the 1860s and it was disgusting in the tunnels underneath with standing water and rats. I would go through the tunnel and yell up and then they would let me into the tower via a ladder and I would climb up a couple stories in my suit with my briefcase. I remember distinctly that the guards seemed somnolent and they had a picture of the warden with a hand drawn mustache and graffiti on it; probably because there was no way he could sneak up there for a “sneak” audit. The guards in the tower always knew that you were coming.

    I took an initial tour of the prison with an assistant warden. She was an African-American woman perhaps in her 50s and the predominantly African-American prisoners treated her with great respect. They spoke to her politely and stayed out of our way rather than glaring and intimidating you to move out of their path, which would happen to me later when I walked alone throughout the facility.

    The first thing you noticed in the prison was how LOUD it was; everyone was screaming the word “motherf&cker” in about 250 variants. It was a cacophony of yelling and noise and very disconcerting. The prison cells were very small with 2 inmates each; one stood menacingly at the bars and one was usually on a bunk bed (there wasn’t really enough room for both of them to stand). If you walked too closely to the cell they might spit on you; if you walked below the high tiers they might throw urine down on you.

    Read the rest of this entry »

    Posted in 25 Stories About Work, Business, Personal Narrative | 7 Comments »

    On Russia and Ukraine

    Posted by Carl from Chicago on 30th November 2014 (All posts by )

    For many years I’ve studied the Russian front during WW2, where the Germans and their allies battled the Russians (and their empire) in some of the largest and deadliest battles on earth. The war went far beyond the battlefield, with the Russians taking over the ancient German capital of Prussia, evicting / killing all the (remaining) citizens, and turning it into today’s Russian enclave of Kaliningrad. This is fair desserts; the Germans planned to turn Moscow into a reservoir. That war was about annihilation, a complete extermination and permanent subjugation of their foes.

    In recent years I’ve tried to turn away from this focus, since I didn’t think that this conflict, ancient by modern standards, had much to teach us anymore, and just following along a well-worn narrative was teaching me nothing. And I did move on, reading about more modern conflicts, and today’s volunteer and high-tech military as opposed to the “old world” of conscripts, artillery, heavy armor, utter destruction of cities and the civilians trapped inside them, and political control superseding military objectives.

    The Russian armed forces also seemed to be gliding towards irrelevance, other than their ubiquitous nuclear weapons. Their performance in Chechnya was poor until they basically razed (their own) cities into ruin with heavy artillery fire; to this day I don’t understand why this wasn’t called out as a giant atrocity. In Georgia they were able to beat a tiny, poorly armed adversary, but their motorized divisions seemed to be driving by compass and they did not cover themselves in military glory. Their military transitions from conscript forces with older weapons and tactics also seemed to be foundering in the face of objections from old-line military-industrial complexes.

    When Ukraine slipped out of Russia’s orbit and the vast presidential compound of the ex-president was paraded on TV worldwide, Putin obviously viewed this as a direct threat to his authority. The Russians historically had been at odds with the Ukrainians over natural gas prices and on other topics, but it wasn’t obvious that this was going to move into a warlike situation. Ukraine is rich with agricultural resources but these resources aren’t prized by the Kremlin; they need easily extractable resources like oil, natural gas and various iron ores that they can pull out of the ground and sell for hard cash overseas. John McCain’s recurring joke that Russia isn’t much more than a gas station with nuclear weapons in fact has a lot of merit. Other than around Moscow, parts of St Petersburg, and in “showplace” locations like Sochi and Vladivostok Russia in fact was falling into ruin and shambles.

    But something was happening; the Russian forces that invaded the Crimea (even though they were never formally identified as Russians) appeared to be well organized and well armed. It was not the “Keystone Cops” group that I might have expected. They handled themselves with relative distinction, fulfilling their objectives with limited civilian casualties and using discretion against the Ukrainian military forces they encountered. This was the complete opposite of the blundering incursions into Chechnya.
    Read the rest of this entry »

    Posted in China, Economics & Finance, Military Affairs, Russia | 59 Comments »

    25 Stories About Work – Small Unit Cohesion

    Posted by Carl from Chicago on 28th November 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    Chicago, 2010, at a Shooting training center

    In 2010 my dad and I went to an all-day class to learn how to shoot properly. The first four hours were in a classroom and the last four hours were outside when it was a brisk fall day and we learned various techniques of how to shoot and spent over 800 rounds.

    In the beginning of the class, the instructor asked everyone about their background. My dad and I said we were complete amateurs. When the others talked about their experience I didn’t fully understand what they were saying until later but many were ex military who were now contractors in Iraq or elsewhere with very extensive experience. They were attending for what must be some sort of required periodic classroom time.

    The reason that this is interesting is because the instructor went through firearm basics that was all news to me but must have been the most banal and simplistic discussion that these guys have ever heard. It would be like sending me back to school for mandatory training and showing me a balance sheet or explaining the very basics of systems technology. In five minutes of this I would be agitated and distracted and frankly a bit insulted that someone wasn’t properly valuing my corporate and career experience. Because that is how a corporate or business person would view the process, but not a military person. Each of the military guys sat in their seats for four hours and if anything they constructively helped the instructor, who was ex-military himself. In hindsight no one was joking around or making a mockery of anything.

    When we were shooting the guys all helped each other and the team immediately without asking. We had a lot to cover so they leaped up and changed the targets and moved and anticipated and everyone was part of a larger mission. After a while it was completely obvious to everyone that me and my dad (who was in his late 70s at this point) were behind the game so they subtly starting helping and coaching us in addition to what the instructor was doing. Sometimes you had to shoot multiple targets to clear a level and I think a few times guys helped me by shooting my targets too.

    Only in hindsight did I recognize the “cohesion” concepts that SLA Marshall talked about in his famous book. He talked about the value of leadership and training in motivating and getting the best out of the men under your command. While these sound like commonplace lessons, and ones the military has likely long since learned in its recent brutal wars overseas, these lessons are usually nowhere to be found in corporate America and most private businesses.

    I watched “The Last Patrol” (highly recommended) last night on HBO and they had a similar observation. The protagonists are walking across America (even in Baltimore, I was scared for them) and asking people what is great about America. These ex-military guys and ex-combat photographers (with 20+ years in the middle of all of it) were trying to wind down and find their bearings without the adrenaline rush of combat and surviving possible death. They met a woman in an American flag bikini and she said she worked in an old folks home for veterans and she said that they all helped and looked out for each other. However, she said, it wasn’t like that once you left the facility – it’s not like that outside in America today.

    Read the rest of this entry »

    Posted in 25 Stories About Work, Business, Military Affairs, Personal Narrative | 7 Comments »

    Ed Paschke Art Center – And Steve Schapiro Photo Exhibit

    Posted by Carl from Chicago on 23rd November 2014 (All posts by )

    We watched an episode of “Chicago Tonight” the PBS news program where they discussed the Ed Paschke Art Center, a museum highlighting the work of the vibrant visual artist Ed Paschke, a Chicago native who died in 2004. They also have other artists featured at the museum, and when we went it was photographer Steve Schapiro, who photographed Warhol, Reed and Bowie among many others.

    The museum is easy to reach – by car you can take the Kennedy and get off at Lawrence, and it is an easy walk from the blue line or the metra (if you take that line). Here is the outside of the building, which is painted in the style of his work. The museum is free (we made a donation) and the docent working there was friendly and interested if you had any questions.

    We talked to the museum employee and the building used to be a call center; they redesigned it to hang his big art canvas projects and set it up so that the light illuminated everything properly. Downstairs they had his paintings, and upstairs they re-created his studio, including the last painting that he was working on at the time of his death.
    Read the rest of this entry »

    Posted in Arts & Letters, Chicagoania, Music, Photos | 3 Comments »

    25 Stories About Work – Building a Web Site, Then and Now

    Posted by Carl from Chicago on 17th November 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    Chicago, around the year 2000, before the dot-com bust

    Back around 2000 I worked in an “incubator” that was a digital design agency. At that time everyone was moving onto the web, and it was a giant land rush.

    This was the first time I worked in an office with any type of serious amenities. They had free coffee, lounge areas, and the occasional foosball table. Previously I had been a buttoned down consultant, auditor, programmer and project manager – and all of the sudden the world changed and we engaged with a whole host of “creatives” and designers on joint projects.

    Back then we all wore suits. I remember one day very clearly; one of the designers sat immediately in front of me. I was looking up and I saw “Victoria’s Secret” – she was showing off the new style where women were wearing their pants so low that their underwear was showing. To a consultant that charges hundreds of dollars an hour (not like we collected it, but that’s a different story) this sort of behavior and style just screamed WTF.

    When we bid on a client our clashing styles were immediately evident. I started out the template to respond to the RFP (request for proposal), and was tasked with estimating the cost to reply to this opportunity. The creatives didn’t seem to understand any of my questions, which seemed pretty simple to me:

    What are we delivering, and how many hours will it take to build it?

    They couldn’t be pinned down. Were we making a logo, or a web site? Would it allow them to run transactions? At the time that was just a tremendous amount of work and seemingly an insurmountable task.

    We ended up bidding hundreds of thousands of dollars for what, I still am not sure. The company who was “buying” our services was VC funded and was just about bled dry, without having even launched anything substantial. The era of the dot.com companies had petered out and we were entering a recession.

    Read the rest of this entry »

    Posted in 25 Stories About Work, Business, Personal Narrative | 4 Comments »

    Bitcoin ATM

    Posted by Carl from Chicago on 14th November 2014 (All posts by )

    Recently I was standing in the Merchandise Mart when I noticed something new – a Bitcoin ATM! This ATM allows users to utilize Bitcoin to receive dollars in exchange, in that sense being a “regular” ATM.

    This is a Robocoin kiosk. Here is a link to their site where they describe what you can do at this ATM. I like their example of someone in Argentina depositing their currency in Bitcoins to avoid the inflation (and risk of outright seizure) that Argentina faces.

    If you are interested in Bitcoins, wikipedia has an excellent summary here.

    Cross posted at LITGM

    Posted in Business, Chicagoania | Comments Off

    Innovation – A Bed in a Box From Casper

    Posted by Carl from Chicago on 12th November 2014 (All posts by )

    Recently we contemplated buying a new mattress. There are seemingly infinite ways to approach this problem, from the Hasten’s bed store down the street in River North where they cost $16,000 and up to the re-occurring commercials on TV promising custom or cheap mattresses. This article in the NY Times “How to Find the Best Mattress in the Maze of Choices” explained how customers were confused in a world of competing brands, technologies, and choices.

    Since we are not excited about spending all day shopping and fond of trying something new, we took up one of their recommendations which was a company called Casper which can be found at http://www.casper.com. Casper was well recommended on their site and sold only ONE product (reminiscent of Apple’s strategy) which was a mattress that they ship to you in a box. The only difference was the size of the mattress to fit your bed frame. We bought a queen size mattress with shipping and tax included for $850.

    This model is highly innovative. Instead of investing in a vast distribution system and retail footprint, moving to an online only (they have one store in NYC) model with a much smaller shipping plan (it is much easier to ship this box than a standard mattress), they should be able to beat the hell out of competitors assuming that they have a superior product.

    Here is what the box looked like when it arrived. It was a relatively small box and I could put it on a cart and manhandle it around the condo.

    Read the rest of this entry »

    Posted in Business, Product Reviews/Endorsements | 9 Comments »

    Twenty Five Stories About Work – The School of Rock

    Posted by Carl from Chicago on 9th November 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    Chicago, the 1980s

    Recently I was at an art exhibition and I saw a book about the “School of Rock” which takes kids with an interest in music and sets them up in a band situation and allows them to work together and perform live. I think it is a great idea and I have a friend whose son plays drums and has really gotten a lot out of this in terms of confidence and poise.

    I had my own experiences learning an instrument and playing in a band which really were formative to my business experience, although I never really thought of them as “formally” part of my background until I looked at that photo and remembered these 25 posts.

    Back in the 1980s I used to play bass guitar (switched from regular guitar) and was in various local bands with friends which typically went nowhere except maybe some free gigs in a public place or someone’s backyard. I absolutely am not a good musician nor was I particularly talented.

    However, the act of participating in a band in that era had many of the hallmarks of being in a small business. First of all – you needed to have some money to buy gear. You needed a bass guitar, a few amps (one to practice on at home, and one to leave at the primary practice space), and if you had extra money – a PA system which we could use for the entire band and microphones for the drums, vocals, etc… Actually having gear and these extra pieces of equipment immediately made you a more attractive potential band member, regardless of your skills.
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    Posted in 25 Stories About Work, Music, Personal Narrative | 9 Comments »

    Bye Bye Quinn and Hello Rauner… And Congrats to Scott Walker

    Posted by Carl from Chicago on 5th November 2014 (All posts by )

    Wanted to give a brief congratulations to Bruce Rauner who won the Republican governorship in Illinois. He beat the fumbling and inept Pat Quinn, who wouldn’t concede even though he lost by FIVE PERCENTAGE POINTS. I’m sure that Madigan and the cronies in Springfield are engineering hijinks to occur while Quinn is a lame duck and then our state will immediately move to some sort of deranged gridlock situation. No matter, gridlock is preferable to a stone blue state running into oblivion.

    Scott Walker also won comfortably. He has faced the voters a bunch of times and each point come out on top. I was talking to Dan and he said the liberals were all crying as if they were being sent off to the gulag. There is zero learning in their world – to them the loss is due to Republicans being “uneducated and clueless” – there is nothing to be understood from defeat or that their statist views on economics and reactionary views on everything else are driving the electorate away from them.

    The governors are the real heroes here – it is one thing to be a politician in DC away from all the drum circles and personalized vicious attacks that are the hallmark in particular of Madison and soon to be Illinois. There is no quarter for the Democrats when they are supporting what they view as their positions so they will use all negative weapons available in an attempt to re-impose their will.

    Now the only stone blue state in the Midwest is Minnesota, although one house of their state legislature is now Republican, so like Illinois is is only 2/3 blue instead of 100% blue as Illinois was. Here is a summary of the Minnesota election.

    From the midwest we are seeing a rejection of the redistributionist and economically statist plans that the Democrats throw to their constituents. The union jobs are not coming back and are a huge albatross on the economy and only benefit the teachers and government workers that remain behind, clinging to their posts until oblivion.

    Posted in Politics | 20 Comments »

    25 Stories About Work – Consulting HR and the Tragedy of the Commons

    Posted by Carl from Chicago on 1st November 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    Baltimore, the late 1990s

    In the late 1990s I worked for a large, now defunct, management consulting firm. This firm had recently gone public to great fanfare and morale was high. As a senior manager (a title right below partner), however, I had already seen a lot of booms and busts in this arena and was skeptical.

    Consulting firms have large pools of skilled resources. You can classify the resources many ways – by skill set (MBAs, engineers, programmers, project managers), by industry expertise (finance, government, utilities, technology), by region (a large firm might have 30-50 offices scattered throughout the US and nearby countries), or by level (staff, senior, manager, senior manager, and partner). Each of these categorizations is valid in some dimension.

    Consulting firms and audit firms used to have everyone come “up through the ranks”. They rarely hired from competitors, and when you left you weren’t welcome back. This has changed 100% today with staff at all levels jumping ship to competing firms, out to industry, and back in. The firms today also have an active alumni outreach plan to bring back talented staff that may want to return to consulting.

    At the time the firm I was with was organized mainly by “industry” regardless of your physical location. I was in the utilities group along with many other individuals scattered throughout the USA. This firm did not have a thriving utilities practice so we were often fighting uphill for assignments and our staff were often “seconded” to other verticals to fill needs on sold work.

    Our utility engagement was in Baltimore. Baltimore at the time was at a low ebb, with the downtown populated by crackheads and other undesirables. It didn’t matter much to us since we were staying in a hotel a couple blocks from our client.

    The partner on our engagement (who was the boss) was an ex-Navy SEAL. He was a very fun and interesting guy. I wasn’t there but one time another staff person said that they went to an antique store and the partner took a knife from the display and started doing that thing where you put the knife blade between each of your fingers in a pattern, going faster and faster. At some point the partner nicked the web of his hand and started bleeding but didn’t even flinch. It sounded plausible to me.

    For a variety of reasons the HR department of the consulting firm was investigating this partner. Since work is done on the road there is little supervision but somehow bad news about this partner got to HQ so they sent out a hapless HR partner. The HR partner sat down with me and started asking questions. My response was

    I don’t have anything bad to say about a guy who could kill me with his pinky

    The interview obviously ended soon after.
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    Posted in 25 Stories About Work, Business, Personal Narrative | 6 Comments »

    Fall Colors at Their Apex

    Posted by Carl from Chicago on 26th October 2014 (All posts by )

    Last weekend we were in southern Wisconsin. Periodically we attempt to drive up and look at the fall colors but often we get there just a bit too early or a bit too late. This time we drove down a winding road and the colors were at their absolute apex – big golden leaves falling down right on the car.

    Cross posted at LITGM

    Posted in Photos | 4 Comments »

    25 Stories About Work – Lost Productivity and Typing

    Posted by Carl from Chicago on 23rd October 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    Vermont, the early 1990s

    When I was interviewing for my first job I had a chance to visit IBM in Burlington, Vermont. At the time IBM had a large contingent of workers and management staff at that location. On an unrelated note, IBM still has about 4000 workers in the state, and recently offered a company $1B TO TAKE THEM OFF THEIR HANDS. To confirm, they were willing to sell this business for negative one billion dollars (to quote Dr. Evil). And the sad thing is that the “buying” company wanted IBM to PAY THEM two billion, so they rejected the “offer”. Read about it here.

    I had been on a plane maybe once or twice previously and was completely clueless about what to do. I packed my bags and took a cab to the hotel. In the morning, before my interview, I got into the shower and turned on the water. I did not think to check what the temperature was before I got into the shower and it happened to be set on a scalding level; I ended up falling back out of the shower, grabbing the curtain on the way down, and scattering the shower curtain rings throughout the bathroom. I wasn’t seriously hurt. To this day I always check the shower temperature while standing outside the shower stall (or tub) and I only go in when it is at an appropriate level.

    The day started out on an ignominious note (with the shower incident) and the interviews were a disaster. I think we ended the day with a discussion that maybe someday I would at least utilize IBM equipment (they were primarily a manufacturing company at that time) since it seemed obvious that I wouldn’t get a job offer in Vermont.

    What I remember most of all was the endless sea of desks. IBM had workers that manually calculated their managerial accounting reports and they sat in a giant room that seemed to go on for infinity. I don’t have a photo but in my head it looks something like this…

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    Posted in 25 Stories About Work, Business, Personal Narrative | 8 Comments »

    25 Stories About Work – “Don’t Hang Up” and the Recruiter from Detroit

    Posted by Carl from Chicago on 19th October 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    Champaign, early 1990s

    As I graduated from college in the early 1990s, I went through the interview process on campus. About half the companies really liked me and about half the companies hated me. I guess I was a polarizing interviewee but who knows I had little idea about what to expect in an interview or how to behave. I do remember buying a suit with my mother for about $400 which seemed like an astonishing amount of money at the time.

    In addition to the on campus recruiters, I also fielded some phone calls. Looking back before the age of cell phones it is amazing that anyone ever got in touch with anyone else – they must have called me in my dingy hellhole of an apartment in the 5 minutes that I happened to be there in between class, prepping for the CPA exam, and going out drinking. I guess we had an answering machine but I’m not even sure about that and my roommates at the time weren’t exactly the most reliable.

    I was enamored with the idea of work and getting the heck out of Champaign so I was like a happy puppy when anyone called. The joke is that I would select the last recruiter to call.

    One day I did receive a call: Hello. I’d like to talk to you about a job opportunity in the transportation industry, he said. I was interested. I was always interested. Then he said something I’ll never forget.

    The job is in Detroit. Don’t hang up!

    The recruiter combined both sentences into almost a single thought, with urgency, because he apparently was used to people instantly hanging up as soon as they heard the job opportunity was in Detroit.

    I didn’t hang up. But I surely did not pursue that opportunity. Because it was in Detroit, of course. No wonder that city went down the drain…

    Cross posted at LITGM

    Posted in 25 Stories About Work, Business, Personal Narrative | 18 Comments »

    Tributosaurus Plays “One Hit Wonders of the ’80s” at Copernicus Center in Chicago

    Posted by Carl from Chicago on 18th October 2014 (All posts by )

    Tributosaurus is a Chicago cover band that has been around over a decade and has covered an astonishing range of songs and artists. When they cover a song they go to great pains to sound as close as possible to the original song – this usually involves multiple guitarists to do overdubs which are tracked in the studio, horns, strings, and an array of drummers, synthesizers and backup singers. Here is their web site and they are a lot of fun. I have seen them do XTC, Pink Floyd, the Rolling Stones, Dire Straits, and most recently the “One Hit Wonders of the ’80s” at Copernicus Hall at Jefferson Park in Chicago (it is a few blocks off the blue line stop; we took the train and walked).

    Here they are at the start of the show. Later they bring on the horns, the strings, more backup singers, and more of everything. It was a lot of fun – they played a lot of forgotten songs like “This Beat Goes On / Switching to Glide” by the Kings which got the whole place rocking (it was a huge hit in Chicago) and also Dexy’s Midnight Runners with real banjo players.
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    Posted in Chicagoania, Music | 6 Comments »

    25 Stories About Work – Office Hoteling and the Elusive Consultant Desk

    Posted by Carl from Chicago on 16th October 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    Chicago, the ’90s…

    When I first started out as an auditor I had a tiny cube that consisted of just a desk and a chair with a big phone in a giant warren full of other cubes. There was a big bay window that let in the sun and lights far overhead. I didn’t know anything and was happy just to have a place to call my own.

    How accounting worked at the time was that you were assigned to clients and were “on the road”. If you were in the office you charged a code for down-time and struggled for something to do. You could take a training class, do research in the library, or more often than not you’d be assigned some sort of drudgery administrative work. Most of the time I ended up photocopying our audit files when clients transitioned to new auditors, which is much more work than it sounds because you had to dis-assemble the work papers, copy them, and then re-assemble the files again. The copier tended to regularly jam and you soon learned how to take that copy machine apart, as well. Not a good use of a master’s degree…

    After a while the managers learned who was good and who wasn’t and I was constantly busy as a result. We worked and traveled all the time and often I had overlapping clients, meaning that tasks I couldn’t complete onsite piled up for me at the little cube while I was at a different client. This was before any concept of telecommuting and we didn’t even have our own laptops. The only way to get work done was to show up at the office (on Saturday or Sunday, since I traveled all week) and do the remaining tasks.

    One time our office engaged in some sort of ISO process and they decided that having a “clean desk” was mandatory. So the (usually worst) staff that were in the office packed up everyone’s desk and sent it off site so that when the office tour occurred, my little rat cube was completely clear. Thus when I showed up on a Sunday a couple of weeks later to follow up on some annoying task from a parallel client, all of my papers were gone and that was an entirely wasted day. The fact that I still remember this over 20 years later shows how angry I was at this bureaucratic stupidity.

    Read the rest of this entry »

    Posted in 25 Stories About Work, Business, Chicagoania, Personal Narrative | 6 Comments »

    25 Stories About Work – New Mexico Is Part of the United States

    Posted by Carl from Chicago on 11th October 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    El Paso Texas, the ’90s…

    I supported a financial analytics system for a utility based in El Paso, Texas. Before I visited El Paso for work I knew virtually nothing about the area, the economy, or the people. One of the most interesting and unexpected benefits of my career was the opportunity to extensively work in areas of the USA that I never would have visited otherwise.

    One thing I did know is that 1) Texas has its own electricity grid that ‘walls it off’ from the rest of the USA called ERCOT 2) the El Paso area was “outside” of that grid. Thus while Texas may be its own separate country in their mind, El Paso was something else entirely.

    Another realization when you are working in El Paso is just how damn big Texas is. It can take longer to drive from El Paso on the western side of Texas to Houston on the eastern side of Texas than to drive from El Paso to Los Angeles. It was also extremely hot and the sun was blazing; some of the women brought umbrellas to shield themselves from the noon-day sun.

    The managers I met in El Paso said it would likely make more sense for El Paso to be part of New Mexico, rather than Texas. Many of the managers lived in New Mexico. A funny story they told was how many Americans believed that New Mexico was NOT part of the United States, and stories like this were collected in the back page of a local magazine and they were often hilarious.

    While flying to New Mexico one day I sat next to a gentleman that was frequently in El Paso for business. At the time, Ford Expedition SUVs were all the rage. He said that the last three times he visited El Paso, he selected an Expedition from the local rental car affiliate, and the car was stolen (and likely driven over the border into Mexico). I didn’t ask him why he was so stubborn and kept renting them.

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    Posted in 25 Stories About Work, Business, Personal Narrative | 5 Comments »

    25 Stories About Work – Brooklyn Before Gentrification

    Posted by Carl from Chicago on 4th October 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    Brooklyn, New York City, the ’90s…

    I was assigned to do a regulatory audit of a large utility in Brooklyn, New York, in the 1990s. At the time Brooklyn was nothing like it is today. When I got off the plane at LaGuardia and hailed a cab…

    Me to the Driver – I want to go to Brooklyn. The Driver – Hell no, I’m not driving to Brooklyn

    After I finally convinced a cab driver to take me to Brooklyn (with much New York style yelling), when he dropped me off in front of the office building, he would whip the wheel around as fast as he could and do a U-turn right in front of the facility and high-tail it off to the highway to get out of Brooklyn. They couldn’t get out of the neighborhood fast enough.

    The utility was based at what appeared to be the only newer office-type building in Brooklyn. There were NO hotels that you could stay in Brooklyn at the time. We stayed in Manhattan and took the subway to work every day. We seemed to be the only boring white accountant-type people in suits going TO Brooklyn in the morning and we were the same distinct minority returning to our hotel every evening. Our partner onsite was kind of distracted so we had to stay on him to get out of work at 5pm so we weren’t taking the subway at night because that seemed to be a dicey proposition.

    Whenever there is a strike at a utility the union guys who read meters and make service calls walk off the line and management comes out to do essential tasks (along with other people that they hire). Thus the management people that we spoke with had harrowing tales of visiting completely dilapidated and burned out homes throughout the borough while they were on strike duty. Management seemed to live everywhere except Brooklyn and it made sense why – there were even a few who lived in Pennsylvania and made epic commutes to and from work daily.

    One manager talked about a scam where people wrote checks to the utility to pay bills and often they used a 3 digit acronym rather than spelling the whole utility. He said one of the customer service agents took those first three digits and added a last name and opened a bank account themselves under that combined name and took the checks and deposited them, running off with the money. We laughed a lot because that seemed like a scam that was doomed to fail after a while but a bit clever.

    There were no cabs in Brooklyn. You had to hire a “car service” which was usually a completely beat up Chevy Impala or the like driven by someone who spoke zero English. They usually had no idea how to get to the airport so I had to give them directions. A few times I was very scared that the car would literally fall to pieces while we were driving; they were probably old taxis that had given up the ghost and given a second, desperate life through this method

    One Monday morning when I was flying in I felt dizzy and ill and when I got onsite in Brooklyn at the only standing office building I came down with the flu very badly. I kept throwing up in the stall and getting progressively weaker. I was the only person onsite from my company and didn’t know the client people well enough to count on them to take care of me so in the few minutes between throwing up I somehow got back to Manhattan (probably via the subway, I don’t remember) and arrived at my hotel early. For some reason I remember this clearly – the band Rancid was pulling up and their hair was spiked up and they had real “rock chicks” with them in miniskirts and fishnets and covered with tattoos right when I arrived. They said my room wasn’t ready yet so I told the clerk “that’s fine, I will just projectile vomit onto you” and amazingly they got me a room right away. I just sat in there and was sick for a few days and then flew back to Chicago. That was not a productive week at all, obviously.

    Today Brooklyn has changed immensely and seems to be almost completely gentrified. I even have friends that I visit there and it is quite charming. It is amazing to think of all these changes that have occurred since I first went there in the early 1990s.

    Cross posted at LITGM

    Posted in 25 Stories About Work, Business, Personal Narrative | 4 Comments »

    25 Stories About Work – Industrial Decay

    Posted by Carl from Chicago on 3rd October 2014 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    Somewhere in a Northwest Indiana formerly industrial city, the ’90s…

    We had a utility client in Northwest Indiana. The city used to be a large industrial town but had been hit hard by various plant closings and also the rout of the US steel industry in the ’70s and the ’80s. A friend of mine joked that you wouldn’t be surprised to see a dinosaur walking around the abandoned ruins of the nearby towns and city. For some reason I thought that was really funny after working there for a while.

    At our client they had multiple buildings that were connected by walk ways that were sometimes rounded or with all around glass. We called them the “habitrail” just like the hamster homes you could buy for your pets.

    The work onsite at the client was grim. I was given the least exciting areas to audit, the balance sheet and plant accounting. The balance sheet had assets that were not documented that were stagnant for years. At that point in auditing all you did was to re-word the notes from the prior year accounts and then put them back in this year’s file. After just a few hours as a novice auditor I pointed out that the notes didn’t make sense and started to do a bunch of new analytics when they told me to stop and just gave me something else to do. This is where you get the joke

    Why did the accountant cross the road? Because they did it last year.

    If you tell that joke to an accountant I am telling you they will laugh their heads off. It isn’t really funny to anyone else but it sums up the drudgery of what auditing used to be.

    One day the partner came out. Now we were all packed in a grimy little room. These were also the days when you could smoke like a chimney in the office and we all wore wool suits so I might as well have smoked 3 packs a day too. I stunk. It was after noon and I was hungry and I broke the silence by asking if we were going out to lunch. The whole room swiveled their heads at me and I got a tongue lashing later from the manager. I wasn’t supposed to talk or ask any questions while the partner was on site. Live and learn.

    Driving to Indiana from downtown Chicago was a long effort. The air conditioning in my car wasn’t great so I’d usually just drive in a T shirt and change when I got near the facility. One time I was pumping gas in a gas station nearby when the auto shut off didn’t work and I got gasoline all over my suit. That did not make for a pleasant afternoon of work.

    Another time when I was pumping gas a deranged, toothless local came up to me with his arms waving.

    Don’t sign the deed! he screamed. Don’t sign the deed!

    I didn’t.

    Cross posted at LITGM

    Posted in 25 Stories About Work, Business, Personal Narrative | 13 Comments »