Donner’s Daily Dose of Drama

I often hear arguments in discussions, both on the news and in person, that government oversight of certain industries is bad, and that the government should stay out of regulating businesses, because such practices increase burocracy and ultimately our taxes. I always believed that people who support this argument either profit directly from the lack of regulation in ways outlined below, or were brainwashed by other people who do.

I also believe that the damage caused to individuals and the nation’s economy by a lack of government regulation and oversight , and the cost of repairing such damage, outweigh by far the up-front cost of regulating and overseeing a market to avoid the worst.

The recent development in the subprime mortgage industry is a textbook example in support of my point. The blind believe that a free market works in the interest of everybody who particpates in it is a fiction, because there are very few truly free markets. A free market is free of constraints and limits. In reality, markets are constrained by all sorts of things, for example by the availability of resources (such as fossil energy), or because potential participants do not have access (such as access to a home loan for low income families with less then stellar credit ratings). Such constraints create imbalances that favor certain market participants over others, and as certain as the sun will rise tomorrow, there are always people who recognize and successfully profit from such imbalances, at the expense of the rest of us.

Now we hear of the practices of mortgage brokers who coaxed their clients into refinancing deals that ended up costing these poor people much more than what they paid for their original loan. These practices have been going on for years, out there in plain sight, and while there were voices who warned of the potential outcome, there were no serious attempts to curb them. Why not? Because those who profited from such practices are the powerful, the ones who have lobbyists and friends in D.C., the ones who tell you that regulation that is bad for them is also bad for you, the ones who brainwash others.

Now that the profits have been taken, the bubble can burst. A few will have to take blame while the real winners have long been working on new schemes in new imbalanced markets. How hypocritical is it to now claim that the market is ‘fixing itself’, because the bad guys are being taken down. It is too late, the damage is done, the cost to society is real, and it is enormous. And it could have been easily prevented, with a little oversight, and a little bit of funding.

What are the next imbalanced markets with opportunities for bad guys?

Healthcare is one of them. I have not seen Michael Moore’s new work “Sicko”, but it seems that he would agree with me on that assessment. The healthcare market is constrained because neither health nor care are available freely and in unlimited amounts. This market actually works against the interest of both providers (i.e. doctors and nurses) and patients. The winners in this market are the ones who control access and availability, and by doing that they control the cost and their profit margins, virtually without constraints.

Energy is both an example of the past and the future. Enron has only been behind us for a few years, but when I look at what’s going on with big oil, natural gas, and electric utilities, it seems that we have learned nothing.

An area that is relatively untapped in this regard is Global Warming, or specifically, attempts to control it. Plenty of opportunities here, and they even span many industries. I am sure we will see very creative schemes cropping up that will make sure that the history of big, unregulated businesses making lots of money at the expense of small, underinformed, and unsuspecting people like you (and me) will continue.

Update 6/13
I just saw Sicko, and while the movie’s message is much broader, it certainly recognizes, too, that healthcare and for-profit don’t really go together. A very powerful documentary, I must say, but only a first step. The movie by itself will not change anything, I am afraid.

So much has been written and preached about the difference between the words ‘principal’ and ‘principle’ that I don’t need to repeat it here. But in at least 50% of all job postings that are about a principal position you continue to use the term ‘principle’. You are not doing your clients a favor by publicly documenting your incompetence! The best candidates will skip right over such a job listing.

I had an inground pool installed last year and would like to get opinions regarding the quality of the work, since I don’t have anything to compare it with. Please post a comment or vote on the poll

Fernand Point, by some considered the “father of modern French cuisine”, writes in his book “Ma Gastronomie”:

Perfection is a lot of little things done well.

This is certainly true in regard to cooking. It is rare, albeit possible, that on little thing that’s missing or was not done right ruins the dish. More often it is a few subtle things, not enough or too little of a spice, the temperature of the oil in the frying pan slightly too low, that will make the dish less than perfect.

I find that the perfect software application also requires a lot of little things done right. That’s what makes software engineering more an art than a trade.

If you currently have a business relationship with HiProFile LLC, or had one in the past, please email me (pubs2007 at cdonner dot com). I would like to hear from you, whether you are an employer and have or had a business relationship with this company, or whether you agreed to let HiProFile try to place you in the past.
If you were contacted by someone at HiProfile and are interested in more information, please email me as well.

The outsourcing and offshoring trends of the early 2000’s were an indication that executives increasingly thought of software development as a commodity, i.e. something that is purchased in large quantities at a certain price per unit (e.g. $/hour) and the less the company has to pay per unit, the greater the savings will be.

It turns out that something went wrong with that calculation, since these trends are seeing a reversal today. Now companies are ‘in-sourcing’ because the out-sourcing turned out to be not as economical as projected.

This development was predictable, but why?

Software development is a creative process. The software engineer has to make design decisions along the way that will impact the quality of the end product. Quality is an ambiguos term, so lets be more specific. The end product is characterized by the number of lines of code, how well the code adheres to the requirements, the structure of the code, its clarity, modularity, reusability, etc. All these factors contribute to how we generally defined good code. Good code can be understood and maintained more easily.
A good programmer can write good code and be very productive.
An moderately talented programmer can write good code and be less productive, or write not so good code and be less productive. There are also programmers who write poor code and are very productive in it.
A poor programmer writes poor quality code and is a lot less productive.

Each programmer’s code contributes directly to the quality and the success of the project. In a way, each programmer owns a small portion of the project. I’like to compare a software development project to a corporation, and each developer manages a department or a subsidiary. Nobody would in his right mind think of department heads or managers in a real company as a commodity that can be bought in China at the lowest possible hourly cost. The bottom line of such a company would suffer dramatically.
Similarly, the bottom line of a software development project suffers dramatically when developers are brought on as commodities.