Category Archives: Bit of politics

The Boeing Comet is still on sale

The first jetliner was Boeing’s square-windowed 707; it was grounded after a few months following tragic incidents which wiped out a fair proportion of elite Americans. The money flowing to De Havilland to create a civilian airliner progamme to promote their non-murderous plane trumped nationalist concerns.

Despite the fact that the 707 is a finer airliner than the Comet, nobody trusts it, and even Pan-Am and TWA are acquiring Comets. The fact that nobody had really understood pressurisation before Boeing’s painful lesson ensures that De Havilland’s planes became the narrow-body airliner to beat all airliners.

Fantasy world: #2: the first supersonic jetliner is Boeing’s supersonic 7NN7. While it made a bit of noise, the need to beat the Comet – because, despite the technical superiority of the Comet, the sheer cash of the US government and the fact that we all need to make up for America’s humiliation  has ensured that nonsense about ‘supersonic booms’ was defeated by the allegiances of the civilised world.

With its Rolls-Royce/Pratt & Whitney engines, it has been allowed to fly supersonic over all territories outside of the USSR. New York-London-Singapore-Sydney-Los Angeles-New York on Pan-Am was do-able in under a day. Fashionistas signed up, in the hope it would make them sexy and youthful. The conception that transatlantic flight takes more than 4 hours became ludicrous, like the concept of taking four days in a flying boat before WWII,

Why the G4S Olympics screw-up proves that outsourcing is good

Everyone seems very upset about the fact that private security firm G4S has not delivered as many guards as contracted to police the white elephant that is Sports Day 2012, with many people suggesting it’s an example of why outsourced contracts are terrible . I’m not sure they should. Let’s rewind on what’s happened here…

G4S was contracted by the London Organising Committee of the Olympic and Paralympic Games (LOCOG) to deliver 2,000 security guards, as part of total security staffing of 10,000 people. The requirement for private security was increased to 10,400 out of 23,700 in December 2011 for reasons that were left obscure at the time, but can be presumed to be down to some combination of fear of imaginary terrorists and the desperate need to prevent people bringing in off-brand merchandise.

The company agreed to the increase, having its existing GBP86m contract value increased to GBP284m. It then carried out 100,000 job interviews over the following six months for staff, but failed to find enough people available at the right time and willing to take the work. Eventually, it had to admit that it had massively screwed up by taking on a near-impossible task, was not able to meet the 10,400 requirement, and LOCOG (presumably with government help) has instead brought an unspecified number of police and 3,500 soldiers  in to make up the shortfall.

While detailed contractual arrangements for the G4S deal haven’t been published, people familiar with LOCOG say that its Olympics contracts generally contain two separate contractual penalty elements: 1) payment by results, so if you don’t deliver, your pay is scaled back; 2) reimbursement for the costs of getting someone else to finish the job if you can’t.

So we can reasonably assume, in the absence of evidence to the contrary, that G4S is getting its pay scaled back and paying for the police and soldiers to step in. There’s a standard rate of GBP55 per hour at which cops are billed out to festival organisers; while I’m not sure the Army makes itself available for hire on quite the same basis [*], the soldiers presumably should command something similar.

This double hit – less pay and much higher costs, offset by much smaller savings on wages for the staff that haven’t been hired – is reflected by G4S’s statement to the London Stock Exchange last Friday, in which the company said it expected to make an overall net loss of GBP35-50 million on the Olympics contract. According to FT Alphaville, the total profit for G4S if everything had gone according to plan would only have been in the region of GBP10m, or 4% of the revenue from the deal. In the best-case scenario for G4S, 96% of the GBP284 million paid by LOCOG to the company would have have been paid out in costs [**].

Net result:

1) Sports Day will still be going ahead with a full security contingent;

2) the net cost to LOCOG of the deal will be lower than if G4S had delivered, because of the impact of the penalty clauses;

3) the police and the army will also get decent reimbursement from G4S, so the taxpayer will win out to an even greater degree;

4) G4S will make a significant outright loss on the LOCOG contract, which is at least four times the size of the profit it would have made had everything gone well.

Had security staffing been carried out directly by LOCOG, there’s little reason to assume it would have gone appreciably better. G4S is probably the organisation in the UK with the most experience in recruiting security people for events, and this is one hell of an event; if the task were easy, they wouldn’t have stuffed it up so badly. Unlike G4S, LOCOG has a million other tasks to focus on to the same deadline, and no direct experience of recruiting security people.

LOCOG perhaps could have made the cops and the army part of the original plan – but then the taxpayer would be paying the full billing rate, rather than having G4S picking up the tab. Or it could have massively raised wages for everyone (including the people already hired, not just the extra people at the margin – I’m fairly certain this is why LOCOG and G4S didn’t go down that route once problems arose) – but again, the taxpayer would then be paying the full rate for everything.

In other words, the risk of failing to deliver on the contract was successfully transferred from the taxpayer to the private sector, without being significantly elevated. For just 4% margin, G4S was willing to assume the entire financial responsibility for the staffing project. The consequences of the epic failure fell entirely on their shareholders, and not on the taxpayers.

Conclusion:

The outsourcing model [***] has won the day, and the wicked private capitalists are the only ones to lose out. Hurrah!

[*] although I suppose this could be one way to offset the impact of military cuts in future.

[**] the only reason to take such a low margin on such a high-risk contract is as a loss-leader, with the whole world watching G4S’s performance as a contractor. Which has admittedly happened, although not quite as planned.

[***] when combined with tough contracts that have decent enforceable penalty clauses. Without them *cough*Metronet*cough*, it’s a terrible model and people who use it should be horsewhipped.

All open letters are pathetic in the same way

Inspired by the “send a letter to the Government of Ecuador” left-meme, here’s my letter to the Government of Ecuador:

Dear the Government of Ecuador. You’ve got a slightly disturbing Cuba-light personality cult going, and Julian Assange is an autistic pervert who I wouldn’t let within a hundred yards of any female friends or relations. Nonetheless, the Yanks are still probably mad enough to torture the hell out of the poor sod for the rest of his natural life for making them look silly, so saving him from that one is an excellent PR opportunity for yourselves. Best, John. PS, I love your song (*).

I’m sure this will address matters.

* this one, I mean.

The sun is, most likely, still gonna shine in November

After a massively high-spending recall campaign, a controversial Republican state governor has held onto power with a slightly increased majority (while losing control of the state senate). Naturally, the oh-so-left-wing US media are spinning this as Terrible Democrat Defeat, Disaster Due for November, etc.

To highlight the fact that this spin is absolute dingoes’ kidneys, it’s been pointed out that the Walker campaign spent $7 for every $1 his opponent could muster, which is not really a feasible plan for the November election (no, not even for someone with Mitt Romney’s wallet).

This figure is slightly unfair: the difference wasn’t as stark between interest groups which didn’t donate directly to the campaign. Not much less stark, though. Some quick-and-dirty analysis on CNN’s handy “who gave what” piece shows that we have:

Walker $30.5m
Named R lobby groups $16.9m
Estimated R lobby groups* $0.8m
Total R $48.2m (71% of total)

Barrett $3.9m
Named D lobby groups $14.9m
Estimated D lobby groups* $0.7m
Total D $19.4 (29% of total)

So the Republicans only need to manage to outspend the Democrats by 2.5:1 in November. That’ll be nice and easy for them.

They’ll also need a charismatic candidate who’s become popular among independents (17% of Walker voters currently say they’ll go for Obama in November) through being fiscally conservative but avoiding the social culture war. That’ll be nice and easy for them.

* The “estimate” is where I’ve split the outside donations that aren’t named to specific groups between the parties according to the split of named groups. If you ignore it instead, you get 72%/28%.

100% true, 100% of the time

From Ian B at Tim’s place:

The problem with a society in the grip of a moral panic- an example is the Gay Panic that started in Victorian England- is that it does not recognise it. The hysterical and extreme behaviours exhibited by panickers are considered not only normal, not even just desirable, but effectively obligatory. It’s quite interesting to note that the paedophile as folk devil has almost perfectly replaced the homosexual as folk devil, with only the degree of hysteria being even greater. The fact that many of the victims of this witch hunt are not, as noted above, even recognisably suffering from the aberration described as paedophilia does not matter, because unfortunately when it’s witch huntin’ season all that matters is that one joins in with the hunt (or raise suspicions that one is worthy of becoming the quarry).

…and this is why we throw people in jail for possession of Simpsons slashfic and manga. Even though only a certifiable lunatic could consider such an outcome just, The Great And The Good don’t want to march in the streets in defence of Someone Who Might Be A Nonce.

Sacking people is easy to do

Just a quick one on the incompetent Mr Beecroft‘s attempt to take labour relations back to the 1830s… noting that in private sector workplaces in England & Wales without union recognition agreements, all of the following are the case:

There are straightforward processes available to sack lazy/incompetent workers which, if you follow them correctly, take less than six months from when you first notice the problem with their work [*] and don’t lead to complicated legal action. I’ve personally dismissed people in this way. Anyone denying that is either lying or has no idea what they are talking about.

There are straightforward process available to sack people for gross misconduct which, if you follow them correctly, can be actioned on the same day, totally resolved within a week, and don’t lead to complicated legal action. I’ve personally dismissed someone in this way. Anyone denying that is either lying or has no idea what they are talking about.

If someone you have sacked having followed the correct procedures then takes you to tribunal, you can call a pre-hearing review where the judge determines there is little or no case to answer. Should they wish to pursue the case, they’ll have to pay a hefty deposit and will ultimately be liable to pay your costs when you lose. Anyone denying that is either lying or has no idea what they are talking about.

Where cases make it as far as losing at a tribunal, it is inevitably for one of two reasons:
1) the person was fired without reasonable cause (whether for race/whistleblowing/management petulance/whatever)
2) the person was fired with reasonable cause, but the company failed to follow the simple procedures that you need to follow in order to fire somebody with reasonable cause.

Anyone denying that is either lying or has no idea what they are talking about.

In unionised and/or public sector workplaces, the procedures may be more complicated; I’ve got no idea how they work, having never worked as a manager there. Ditto Scotland, although I think most employment law is reserved to Westminster. But none of that matters for Beecroft’s purposes, because the procedures followed in these situations are not the ones laid down in statute law, and hence wouldn’t be changed by anything that Beecroft dictates.

[*] it’s been questioned whether ‘six months’ is ‘simple’. I’d say yes: if someone on probation turns out to be crap, you can fire them immediately and easily – so the ‘six months’ bit only occurs for someone who was decent and suddenly becomes crap, or who’s been left to get on with being crap for years with nobody doing anything about it. In the first case, it’s human decency to give them the chance to turn around (hence why performance improvement plans etc exist); in the second, the company can hardly blame the law for doing what it failed to do in the first place.

Why minimum alcohol pricing is a terrible idea

Governments in both England and Scotland are planning minimum-pricing regimes for alcohol. These are a terrible idea, not only if you’re a liberal, but even on their own terms. There are three main issues associated with minimum pricing, all of which are conflated by minimum price proponents (this article is a good example of their muddled thinking, and indeed their sanctimony; this piece is expanded from a comment I left there).

1) is it reasonable to expect the government to take measures to reduce the harm that alcohol does to people who aren’t consenting adults?

Yes of course. Hence, tougher powers for councils to revoke the licenses of pubs and clubs associated with violent behaviour, tougher enforcement of bans on sales to minors, better treatment for domestically abusive alcoholics and support for their families, and so on are a good idea.

Nobody has come up with any evidence *at all* that minimum pricing would have any impact on this. Booze consumed in pubs and clubs is always going to be above any minimum price level that encompasses off-trade sales, because *that markup is what pays for the pub to exist*, so the town centre violence argument is nonsense; and bottle-a-day alkies are merely going to have less money to spend on other, less important things like food.

2) is it reasonable to expect the government to impose restrictive measures on consenting adults, based on the probability of health risks in later life *to the person being considered*?

Not in my opinion. If people choose to lower their life expectancy from 80 to 60 but have a better time on the way, that’s entirely their lookout.

This is where the puritan wing (‘teetotalitarians’) and the liberal wing of the left diverge: the puritans want to compel everyone else to live in the way that they view as most appropriate. Which, y’know, is pretty much exactly the same as religious fundamentalists compelling everyone else to live in the way that they view as most appropriate.

3) Even if you accept the puritan argument, is a minimum price a good way of achieving it?

Absolutely not, it’s a fucking terrible idea, because THE ECONOMIC BENEFITS OF THE POLICY GO TO THE BREWERS AND THE SUPERMARKETS. Suddenly, there’s a floor to price competition in the market, which means that everyone involved makes far more profit. This is what a cartel *is*.

If Cameron wasn’t in the industry’s pocket, he’d be suggesting that alcohol tax were raised to ensure that, based on the current lowest-cost production, all forms of booze cost at least 50p a unit (formal policy, actual rates reviewed every year based on what was available in the market). This would have the same impact on consumption of cheap booze as the proposed policy on drinking, whatever you think that impact may be, but the money raised would go to schools’n’hospitals rather than to Mr Tesco and Mr Heineken. At the same time, it would encourage people above the ‘cheap booze’ cutoff point to moderate their consumption, which is a desirable goal if you support the puritan argument (d’you think Christopher Hitchens drank cheap cider or Special Brew? Not exactly…)

The only reason to support a minimum price over higher tax is if you think the poor should have their lifestyle choices forcibly controlled by the state, but that the middle classes shouldn’t. In which case, you’re a bit of a scumbag, nah?

(disclosure as always: I’ve done consulting work for the drinks industry in the past and will probably do so in the future.)