Brain Drain

Catching up on the weekends is difficult and I should have written this ten days ago when I first found the bifold handout in an engineering building on campus. Last night, I heard the term “brain drain” on NPR’s “All Things Considered.” I knew the phrase from the 1960s because of the foreign medical doctors living in our neighborhood near City Hospital (now “Cuyahoga County MetroHealth”). 

Long ago, when I was working for Kawasaki Robotics, one of the company officers said to me that he considered “international people” to be special in themselves, different from the people in their countries of origin.

On the way home last week with the handout in my kit bag it was pretty easy to guess that Hyundai was not the only multinational corporation recruiting at the University of Texas Austin, and that UT is not the only place that those companies are visiting. 

If you had come to America to earn a doctorate in engineering and you were not sure of your future status here, it would make sense to actively arrange your next port-of-call, rather than leaving that to an encounter not of your own planning. 

PREVIOUSLY ON NECESSARY FACTS

Anti-Intellectualism in American Life 

Teaching Ethics to Engineering Students 

ArmadilloCon 41 

Entrepreneurship 

Jim Simons and the Quants

Being centered on mathematicians, this book was not exciting, but it was interesting. James Harris “Jim” Simons (1938-2024) earned his doctorate at Berkeley, and worked for the NSA and the Institute for Defense Analysis, before teaching at Harvard and MIT. (Wikipedia: https://en.wikipedia.org/wiki/Jim_Simons). And that is in this story, of course. The focus, however, is on Renaissance Technologies and their hedge funds (Medallion and others), the most successful trading firm in history. Simons’s background in language recognition—pattern recognition; pattern prediction—allowed him the insight to expect that correlations must exist across markets, even if causal factors ultimately remain hidden. Therefore, it should be possible to profit from trading on trends that are unexpected and unperceived by everyone else. He was right.

The Man Who Solved the Market:
How Jim Simons Launched
the Quant Revolution 
by Gregory Zuckerman
(Penguin RandomHouse, 2019)

The method was easy to explain: mine the data. Look at all the numbers from all the markets and seek out trends and patterns and correlations. Some turned out to be causative. Regression to the mean predicts that after some market has a remarkably bad day, prices will rebound. The prediction applies to hugely profitable days: the market reverts toward its previous level. That much is easy to understand. The rest never gets explained. 

 

For one thing, no one associated with Renaissance Technologies was willing to talk to Gregory Zuckerman because they were bound by deep long-term non-disclosure agreements. Aside from that, the powerhouse of the company was driven by its staff of Ph.D. mathematicians. It would have to be understood at their level before it could be explained to the rest of us. 

 

What can be understood is that on average, employees who invested with the firm earned about $50 million each. “Since 1988, Renaissance's flagship Medallion hedge fund has generated average annual returns of 66 percent, racking up trading profits of more than $100 billion…” (Introduction). With that money came power, of course. Robert Mercer put his ideology to work when he found Steve Bannon for the Donald Trump presidential campaign in 2016. However, Jim Simons was a Democrat. And he was not alone in that. Many of the academics in the firm were liberals and they contributed to political campaigns, naturally, and also to special foundations (some of their own creation) supporting education, medical research, and other social initiatives.

 

Jim Simons’s methodology was a long time coming. Computers were rare and costly. Ten years later, they acquired the first desktop computers, which were woefully underppowered by today's standards. Although he launched the firm specifically to mine data so that profits could be harvested from trends, Renaissance Technologies also employed traditional traders. The two teams often collided, with Jim Simons himself significantly abandoning the algorithms for what would be too easily called “gut instinct.” Sometimes, we just know.  Also, with that mountain of cash, and with their frequent intra-day trades, they did not need to be often right. At the peak, in Jim Simons’s last decade, with the models and algorithms and supercomputers all generating money, Renaissance Technologies was right only 51% of the time.

 

One aspect of the story which I believe explains as much of their success as their mathematical models, is that Renaissance Technologies adhered to the ideal academic organizational culture. Workspaces were open. Visiting around the office was common. Sharing ideas was habitual. Discussion and disagreement were encouraged. (Pages 199-203). (See also "Team of Teams" on this blog.) It was not always easy and some people never forgave others for their complete lack of social grace. Neither time nor money heals all wounds.

But we all enjoy the profits. Zuckerman presents this as a zero-sum game. For Renaissance Technologies to have profited, many other brokerages, whose clients were stereotypically “dentists” (and other middle class professionals), had to lose. It is true that every trading position requires two people with opposite expectations. Ultimately, conservation of energy (charge; spin) means that everything must be accounted for with nothing magically lost or gained. And yet here we are: 10 billion people, 50% of us in cities of over 1 million; flying around 10 kilometers above the ground or cruising on the ground at 100 kph. We could not have hunted and gathered enough to make this possible. If not for Jim Simons and Renaissance Technologies, we would each of us be poorer by unperceived small fractions that did not become the comforts we enjoy.

PREVIOUSLY ON NECESSARY FACTS

Two Books About Fermat’s Last Theorem 

The Remarkable Story of Risk 

Happy Pi Day of the Century 

Coins Without Realms (Digital Currency) 

World Peace Through World Trade

I stopped at Walmart because they have the best organic salad greens in a box at a price even lower than Whole Foods. Usually, it is a quick trip. This time all of the scanners near the groceries were gone and in their place were large boxes. After paying at a cashier's station, I took some snapshots.

Waiting to be uncrated

Each is half a unit.

Made in India. Over 7000 lbs of convenience.

The half that we consumers care about was made Mexico.

Previously on Necessary Facts

World Peace Through Massive Retaliation 

Chopmarks 

The Shroff 

Awesome Austin Foods at the Wheatsville Co-op 

Massive Constellations of Artificial Satellites: What if they were natural?

Many of my colleagues in astronomy, both professional and amateur, are vocal in their opposition to Starlink, the SpaceX project that is placing thousands of satellites in orbit. They complain that imaging and other data gathering has been harmed or ruined by the tracks of these devices.  

What if Earth had a ring and these tracks were a consequence of our natural situation? Would the astronomers curse the ring and demand its destruction?

 

They want it stopped. They want the UN to do something. They vilify Elon Musk. They call the satellites junk and pollution. This is not merely a matter of a difficult technical problem like the construction of the Panama Canal or going to the Moon. It is an emotionally motivated attack on material progress, capitalism, and one audacious entrepreneur. 

 

If no one wanted these things, they would not be launched. The project cost is estimated at $30 billion (Reuters here.) It could fail, ultimately. Enterprise entails is risk. In fact, absent risk, there would be no enterprise. (Against the Gods: the Remarkable Story of Risk by Peter L. Bernstein reviewed here.) However, the basic fact of a perceived market still exists. 

 

One of my first university classes in sociology studied the workplace in America. The professor was a nice enough guy but accepted the usual complaint that corporations advertise to motivate to buy and do things that we do not really want. I understand. I certainly was never motivated to buy and drink Mountain Dew though millions of people have been. So, I went out online and found some easy examples of famously failed products. When vitamin-enhanced bottled water was first introduced, it failed, and was mocked in the advertising trade magazines. Starlink could fail. 

But it is not the first communication satellite. That honor goes to OSCAR-1 launched for the Amateur Radio Relay League six months before AT&T’s Telstar. So, these satellites have been “polluting” astronomical images for sixty years. No one seemed to care.

 

I believe that the detractors of progress are privileged and satisfied, enjoying their own comforts, and now wanting to deny those benefits to others. Back in the 1960s, one mock on British Labour was “Sod you, Jack. I’ve got mine.” Ludwig von Mises sketched out well the anti-capitalist mentality (Mises Institute here) as being motivated by envy and jealousy.

 

What if Earth had a natural ring? Other planets do. The four giants, Jupiter, Saturn, Uranus, and Neptune have rings. Smaller planets do, also. The minor planet of Chariklo, Centaur 2006 Chiron, and trans-Neptunian minor planet Haumea all have rings. (See Caltech News here.)  Ontologically, Earth could as well. If we did and if views of the other planets, the stars, nebulae, etc., etc. were occasionally blocked or photographic plates captured their tracks what would be the response? 

 

Would astronomers wish for (or demand) a massive anti-satellite program? No one seems to be calling for weather modification to clear the sky of clouds on nights that astronomers want to work from their visual observatories. (Radio astronomy is not affected by clouds and rain.) 

 

PREVIOUSLY ON NECESSARY FACTS

 

Entrepreneurship 

Elon Musk and the Audacity of Entrepreneurship 

Supplies and Demands 

The Big Whimper of Modern Philosophy 

Virgin Galactic VX01 VX03

 A picture is worth a thousand words.

NASA-TV cut between its own feed and the press feed from Unity 22.

These are all sequential as presented by NASA.

Time and Altitude stamps show actuals.

 

 

 

PREVIOUSLY ON NECESSARY FACTS

Space is the Place: Come to the High Frontier 

The Virtues of Aviation Culture 

Armadillocon 41 Day 3 Part 1 

Entrepreneurship 

The Audacity of Entrepreneurship

"What comes out of a team or a committee is the most daring idea that the least daring man can accept." John Arnold. "Space, Time and Education," Astounding Science Fiction, May 1953, pp. 9–25. Introductory remarks by John W. Campbell, Jr., editor, pp. 9–10.

Earlier this month, I (virtually) attended a conference of the American Astronomical Society. I participate in the History of Astronomy Division. One of the presentations was about Voyager. One of the presenters sighed that the government cancelled several follow-ups to include messages on deep space probes. I asked if they had any contact with Elon Musk. The expert replied that maybe some entrepreneur in the future might launch a mini-satellite with a solar sail, but no private firm can send a one-ton probe out of the solar system. After the conference, I sent him a link about Elon Musk's Tesla two-ton automobile orbiting the Sun. That is exactly the audacity of entrepreneurship. It radiates a fundamental optimism about what is possible in human achievement. 

PREVIOUSLY ON NECESSARY FACTS

Entrepreneurship

Bob Swanson and Genentech 

The Public Good Be Damned

Politics and the Inverse Square Law 

Disruptive Diagnostics and the Business of Science 

Amateur Astronomy for Pay 

 

The Pencil: History, Design, and Circumstance

The book opens and closes with the fact that the pencil’s ubiquity rendered it invisible. On pages 5 and 346 the author tells of being unable to find old pencils in antique stores or museums. Shops that specialize in classic craftsman’s tools keep the compasses, but throw out the pencils. They value the carpenter’s levels, but discard the trade’s signature pencils. They curate the surveyor’s drafting pens, but not the pencils that laid out the guidelines that made inking possible. If that is received as incongruous, then consider that very little engineering is ever recorded. The work is the story. How it came to be is locked and lost in the mind of the inventor. The engineering drawing delivers its thousands of words. The engineer seldom records any of the words that gave birth to the plans and procedures. And as central as is the precision drawing, the pencil that made it has been ignored.

The Pencil: A History of Design and Circumstance by Henry Petroski (Alfred A. Knopf, 1990) is a paean to engineering with the pencil as its metonym. Being a professor of civil engineering, the author frequently compares the creation of pencils with the development of bridges. The allusion is not deep. The focus is the pencil, not the truss or suspension, though both are mentioned as needed for context.

  

We are told too easily that scientific theories become applied as engineered structures or machines. In truth, it is the other way around: theories explain what engineers develop by intuition, insight, trial and error, craft, and trade secret. When those are formalized into mathematics, then engineering science can improve the product or the process by analysis, seeking and eliminating limitations, flaws, defects, and oversights.

 

People were happy with metallic scribers made of lead, tin, or silver, and pens cut from reeds or feathers. The discovery in the 16^th century of “black lead” or “plumbago” or “British lead” that we now call “graphite” radically altered writing and drawing, both for fine art and engineering. For three hundred years, the best graphite came from a single district in England. France’s wars with England led to the Conté crayon, a secret mixture of clay and graphite. Closed out of France, German firms developed their own secret formulas with graphite from Bavaria and Bohemia. Suitable graphite was found in New England and pencils were the family business for Henry David Thoreau. A new lode was discovered in China, giving rise to the yellow color we assume for the default and trade names such as “Mongol.” 

Alongside the rapid successive innovations of the 19^th and 20^th centuries, pencils were still sharpened with penknives. The first pencil sharpeners date to the 1890s and did not achieve the forms we accept today until after the 1930s. (Wikipedia has more to say about their development.) Into the 1980s, if not still a practice today, drafters at their drawing boards sharpened their pencils with sandpaper. I had mechanical drawing classes in junior high school (1962) and college (1978 and 1984) and that is how I was taught. 

 

Through all of that and into our time, the challenges have been to make consistent pencil leads in predictable grades, tough, strong, resilient, pliant, black (or other colors), and cheap; and do so by the millions, eventually billions. Graphite mixed with clay will not make a pencil. Only a few species of trees—mostly cedars—will do. The wood must be treated. The leads must be prepared. They are both in their ways shaped, formed, baked, boiled, heated, coated, stripped, and glued. While mechanical pencils—known since the 18^thcentury—solve the problem of the wooden casing, they bring their own limitations. 

As a result of this book, I have been buying pencils, driving to office supply and art supply stores, giving long minutes to reading the pencils themselves, comparing their imprinted names and grades with the notecard I made for the purpose. I think that for myself, a 2-½ H or F would be best, but I cannot find them locally. Amazon has two brands, Mirado and Ticonderoga. I may have to give in and buy there.

 

PREVIOUSLY ON NECESSARY FACTS

Start the Presses! 

Art & Copy 

For the Glory of Old Lincoln High 

Dealers Make the Show: Armadillocon 41 Day 3 Part 2 

 

The GOP as Pushy Beggars

That Donald Trump is a bully is obvious. His influence on the Republican Party and conservatives is also apparent. Back in late October 2016 when Trump’s election was still in some doubt in the minds of Democrats, at a press conference in Michigan, Michael Moore explained in clear language why Trump would win: Donald Trump brought to the polls millions of disaffected non-voters and other centerists whose personal losses and disappointments opened them up to a Leader making Promises. Now, the Grand Old Party attempts to energize its loyalists by reacting as a victimized bully.

 

Where do these "matching funds" come from?

Back in 2007, I was elected as a Republican precinct delegate from Ann Arbor Township. It was pretty easy. Ann Arbor is heavily Democrat. There were six slots on the GOP side of the ballot and I was one of four people running. Before moving here, I joined the Austin Tech Republicans luncheon club. Since then, I have been registered on both sides depending on the candidates in the local elections. Austin is heavily Democrat, but sometimes it is important to send the GOP leadership a message in a primary. The same is true of the Democrats. In 2016, I voted for Bernie Sanders as a vote against Hillary Clinton. 

 

Because I still have my Ann Arbor cellphone number, I have been getting these text messages from the Republicans. Their strategy reveals their soul. (And, yes, I block each one. They use a different number the next time.)

 

Now, it's my fault.

Aggressive beggars kept us from moving to Portland, Oregon. Back in 2010, after completing an associate’s, a bachelor’s, and a master’s, work was still hard to find in Michigan. So, we looked around. Portland was nice. The beggars were hard to take. They followed us on the street; sometimes they stood in front of us. Austin was different. With four months of 100-degree highs and no rain, brown was the new green. The beggars in the medians were selling ice water. I liked that entrepreneurial spirit. 

 

Despite the political narratives to the contrary, government in Texas follows the Taxachusetts model. Our senior federal senator, John Cornyn, never met a new law he did not like. We got a problem? Make it illegal. The state legislature made it illegal to buy Tesla automobiles by making it illegal to buy a car from a manufacturer who did not have a dealership in the state. It was the Texas automotive dealers association who got that passed in the Republican-controlled state legislature and signed by the Republican governor. That was changed a couple of years ago. Tesla is in orbit now and that plays well in Houston. 

 

Insistent Begging from Trumps Senior and Junior 

Working on a state agency project now, I have been diving into the Texas Compiled Laws, especially the Texas Government Code and the Texas Administrative Code. We have a franchise tax here. If you license your music or your painting or your poetry, you pay a tax on the income. But, if you license mineral rights, you are exempt from the franchise tax. That’s what makes fascism more successful than socialism: they know whose bread to butter.

 

Showing some concern and then blaming others.

The root of the problem is that in essence fascism is just another kind of socialism. Right wing syndicalism and left wing syndicalism are mirror images. Whatever the shades in their rainbows, the radiation is on the same spectrum. 

July 14 -- Bastille Day. I am not going to post all of these as they keep coming in, but this is starting to sound like On the Waterfront.

PREVIOUSLY ON NECESSARY FACTS

Tycoon Dough is Democratic 

In Support of Paid Political Advertising 

President Trump and the Military 

Toxic Leadership 

TURN THE SHIP AROUND

“Ahead two-thirds,” said the Captain. “Ahead two-thirds,” repeated the officer of the deck. The helm did nothing. They sat there, both of them, unable to comply. The Captain’s previous ship did, indeed, have a control input for two-thirds power. This newer submarine did not. The order could not be carried out. The real problem was that the officer of the deck and the two helmsmen all knew that, but would not contradict an impossible order. It was time to “turn the ship around” and turn followers into leaders.

For a class in Complex Organizations, taught by Ron Westrum in the summer of 2007, we were assigned It’s Your Ship by Capt. D. Michael Abrashoff (2002). Both commanders faced the same problems. The crews were under-motivated and as a result the ship was rated unsuccessful in operations.  Capt. Abrashoff  solved the problem in the best way he knew: he empowered his subordinates to take charge of their areas of responsibility. They were rewarded for being pro-active, rather than waiting for orders. When Abrashoff’s billet changed and the ship came under a new captain, it all pretty much fell apart and things went back to the bad old ways. On the other hand, Capt. Marquet claimed to have effected a cultural change on board which continued after he cycled out. The difference is that Capt. Marquet got passed empowerment.

Empowerment is top-down. It does not begin with the actor but with that agent’s controller. That manager is often several levels above; and no one between is empowered to make the changes at the lowest level of action. So, Capt. Marquet did not empower anyone. Rather, he let them take on their own chosen responsibilities. 

It was not easy. Missing from their experiences was an actual picture of what was required. No book or cinema they knew told them a story like the one they were expected to act out. All they knew was the U.S.S. Ustafish, the previous submarines they used to be on. So, when the Captain asked his chiefs – the frontline supervisors, chief petty officers, and others immediately above and below in rank—if they really wanted to be in charge of their areas, they all said, “Aye-aye!” without understanding exactly what would be required of them now.

Capt. Marquet made the time and effort to lay out what they would take on and give up. He underscored the fact that authority is not responsibility. You can delegate authority. You cannot delegate responsibility. 

Ultimately, when his chiefs failed (which they did early in the new process), the responsibility remained his alone. (See, also, the same lesson explained in detail in Extreme Ownership: How U.S. Navy SEALs Lead and Win by Winnick and Jocko reviewed here.) Marquet created the culture of authority aboard the Santa Fe by encouraging everyone to think out loud, to speak their thoughts. The new watchword was “I intend to…”. 

That was one of several procedural changes that Capt. Marquet initiated before the failure at the helm. He was moving in the right direction. 

It paid off during inspections. Operators occasionally attempted to perform the wrong action. Everyone makes mistakes. However, thinking out loud and not acquiescing to someone else’s error prevented mishaps. The Santa Fe passed her inspections and exceeded expectations. 

Learn to think like the next higher level was another lesson here. But it goes back a long way. Gen. Jim Matiss said it best: “The battlefield has its own accounting system.” In both the book and the movie of We Were Soldiers Once and Young (reviewed here) Lt. Col. Hal Moore is training his mobile infantry; and as they deploy from a helicopter, he grabs the sergeant, throws him to the ground and yells, “You’re dead!” He then points to the astonished corporal and says, “You’re in charge!” Oh… now what…?  

Capt. Marquet found concrete methods to realize his theoretical intentions. When people gathered to discuss a problem, he would wait until they had it framed and then he would leave the room. He asked, “How would we know if the crew were proud of the boat?” At the beginning, ahead of their first inspection, he told them to use “three identifiers”: Identify the visitor; identify yourself; welcome them aboard the ship. At first only about a tenth actually did that (though it was noted very positively on the evaluation). By the last inspection, it was routine. They had become proud of the boat. 

That was an unintended consequence of another change in culture: embrace the inspection. Instead of suffering through it like everyone always does, ask the inspector: How did another ship solve this problem? 

For myself, the book had two other invaluable lessons. The first was Don’t train: learn. On board the Santa Fe, learning opportunities were everywhere every day. Instead of parceling training into a time slot to be checked off, everyone was encouraged to be curious, not just questioning. The other was Don’t brief: certify. In other words, beyond assuring your managers that everything is OK, prove to yourself that it is. 

PREVIOUSLY ON NECESSARY FACTS

BNOC: Basic Non-Commissioned Officer Training Course 

Venture Capital 

Entrepreneurship 

Engines of Creation 

A Successful Imitation of Alan Turing 

ANOC: Advanced Non-Commissioned Officer Training