Re: Minimal Profits for Halliburton

[Julia Thompson]

"Ronn!Blankenship" wrote:
> 
> At 08:55 PM 1/11/04, Julia Thompson wrote:
> >"Ronn!Blankenship" wrote:
> > >
> > > At 09:45 AM 1/11/04, Steve Sloan II wrote:
> > > >Ronn!Blankenship wrote:
> > > >
> > > > > I don't know about financial models, but I do know that
> > > > > judgement, especially when immediate judgement on critical
> > > > > issues is necessary, is affected by fatigue.  For one thing,
> > > > > tired people tend to be grumpy people, and may do things
> > > > > they later regret.
> > > >
> > > >I think both of us are looking at this issue from a programmer's
> > > >viewpoint, where long hours usually *are* a sign of poor planning,
> > > >either by the managers who didn't hire enough people, or on the
> > > >software engineering side, where time for completing tasks was
> > > >severely underestimated.
> > >
> > > That's true.  (I'm sure all here have heard the rule for turning project
> > > time estimates into more realistic predictions:  multiply the estimate by 2
> > > and change to the next larger time unit, so an estimate of "1 day" is in
> > > reality likely to take 2 weeks to complete, and an estimate of "two months"
> > > means it is likely to really take four years . . . and I won't even make
> > > another reference to "The Mythical Man-Month" . . . )
> >
> >Ah, but it's an excellent book.  Anyone trying to manage a programming
> >project ought to read it, IMO, and it's worth reading even if you're
> >*not* trying to manage programming projects.
> 
> I agree!  I have praised it so many times on this list that I thought I'd
> give everyone a break from doing so again.  (Someday maybe I should even
> buy a copy to call my own.)
> 
> >(Did I ever mention having been on a bus briefly with Brooks?)
> 
> No.  Anything interesting to report?

Not really.  Just that I was on the same bus as he was, and realized
just who it was before I saw the nametag to confirm, just from what he'd
been talking about.  I thought it was cool.

(This was at Siggraph in 2000.  That's the same week I last had a meal
with Hector Yee, as well -- we had lunch together one day at a Chinese
restaurant near the convention center in New Orleans.)
 
> > > Actually, though, I wasn't thinking of programming examples when I wrote
> > > the earlier message.  One profession where many people think fatigue is
> > > frequently the cause of serious (too often, fatal) errors is the medical
> > > profession.  And as far as tired people being grumpy even if they don't
> > > want to be, and yelling at the people they really don't want to yell at,
> > > just ask any new parent, particularly a first-time parent . . .
> >
> >Yep.  What he said
> >
> > Julia
> >
> >There and Doing That (and contemplating the t-shirt) Maru
> 
> Probably contemplating *any* shirt without spit-up on it . . .

Acutally, I've had this shirt on since I got out of the shower last
night before bed, and it has remained free of spit-up by some miracle.

My *pants*, on the other hand

Julia
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Re: Minimal Profits for Halliburton

[Ronn!Blankenship]

At 08:55 PM 1/11/04, Julia Thompson wrote:
"Ronn!Blankenship" wrote:
>
> At 09:45 AM 1/11/04, Steve Sloan II wrote:
> >Ronn!Blankenship wrote:
> >
> > > I don't know about financial models, but I do know that
> > > judgement, especially when immediate judgement on critical
> > > issues is necessary, is affected by fatigue.  For one thing,
> > > tired people tend to be grumpy people, and may do things
> > > they later regret.
> >
> >I think both of us are looking at this issue from a programmer's
> >viewpoint, where long hours usually *are* a sign of poor planning,
> >either by the managers who didn't hire enough people, or on the
> >software engineering side, where time for completing tasks was
> >severely underestimated.
>
> That's true.  (I'm sure all here have heard the rule for turning project
> time estimates into more realistic predictions:  multiply the estimate by 2
> and change to the next larger time unit, so an estimate of "1 day" is in
> reality likely to take 2 weeks to complete, and an estimate of "two months"
> means it is likely to really take four years . . . and I won't even make
> another reference to "The Mythical Man-Month" . . . )
Ah, but it's an excellent book.  Anyone trying to manage a programming
project ought to read it, IMO, and it's worth reading even if you're
*not* trying to manage programming projects.


I agree!  I have praised it so many times on this list that I thought I'd 
give everyone a break from doing so again.  (Someday maybe I should even 
buy a copy to call my own.)



(Did I ever mention having been on a bus briefly with Brooks?)


No.  Anything interesting to report?



> Actually, though, I wasn't thinking of programming examples when I wrote
> the earlier message.  One profession where many people think fatigue is
> frequently the cause of serious (too often, fatal) errors is the medical
> profession.  And as far as tired people being grumpy even if they don't
> want to be, and yelling at the people they really don't want to yell at,
> just ask any new parent, particularly a first-time parent . . .
Yep.  What he said

Julia

There and Doing That (and contemplating the t-shirt) Maru


Probably contemplating *any* shirt without spit-up on it . . .



-- Ronn!  :)

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Re: Minimal Profits for Halliburton

[Julia Thompson]

"Ronn!Blankenship" wrote:
> 
> At 09:45 AM 1/11/04, Steve Sloan II wrote:
> >Ronn!Blankenship wrote:
> >
> > > I don't know about financial models, but I do know that
> > > judgement, especially when immediate judgement on critical
> > > issues is necessary, is affected by fatigue.  For one thing,
> > > tired people tend to be grumpy people, and may do things
> > > they later regret.
> >
> >I think both of us are looking at this issue from a programmer's
> >viewpoint, where long hours usually *are* a sign of poor planning,
> >either by the managers who didn't hire enough people, or on the
> >software engineering side, where time for completing tasks was
> >severely underestimated.
> 
> That's true.  (I'm sure all here have heard the rule for turning project
> time estimates into more realistic predictions:  multiply the estimate by 2
> and change to the next larger time unit, so an estimate of "1 day" is in
> reality likely to take 2 weeks to complete, and an estimate of "two months"
> means it is likely to really take four years . . . and I won't even make
> another reference to "The Mythical Man-Month" . . . )

Ah, but it's an excellent book.  Anyone trying to manage a programming
project ought to read it, IMO, and it's worth reading even if you're
*not* trying to manage programming projects.

(Did I ever mention having been on a bus briefly with Brooks?)
 
> Actually, though, I wasn't thinking of programming examples when I wrote
> the earlier message.  One profession where many people think fatigue is
> frequently the cause of serious (too often, fatal) errors is the medical
> profession.  And as far as tired people being grumpy even if they don't
> want to be, and yelling at the people they really don't want to yell at,
> just ask any new parent, particularly a first-time parent . . .

Yep.  What he said

Julia

There and Doing That (and contemplating the t-shirt) Maru
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Re: Minimal Profits for Halliburton

[Ronn!Blankenship]

At 09:45 AM 1/11/04, Steve Sloan II wrote:
Ronn!Blankenship wrote:

> I don't know about financial models, but I do know that
> judgement, especially when immediate judgement on critical
> issues is necessary, is affected by fatigue.  For one thing,
> tired people tend to be grumpy people, and may do things
> they later regret.
I think both of us are looking at this issue from a programmer's
viewpoint, where long hours usually *are* a sign of poor planning,
either by the managers who didn't hire enough people, or on the
software engineering side, where time for completing tasks was
severely underestimated.


That's true.  (I'm sure all here have heard the rule for turning project 
time estimates into more realistic predictions:  multiply the estimate by 2 
and change to the next larger time unit, so an estimate of "1 day" is in 
reality likely to take 2 weeks to complete, and an estimate of "two months" 
means it is likely to really take four years . . . and I won't even make 
another reference to "The Mythical Man-Month" . . . )

Actually, though, I wasn't thinking of programming examples when I wrote 
the earlier message.  One profession where many people think fatigue is 
frequently the cause of serious (too often, fatal) errors is the medical 
profession.  And as far as tired people being grumpy even if they don't 
want to be, and yelling at the people they really don't want to yell at, 
just ask any new parent, particularly a first-time parent . . .



-- Ronn!  :)

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Re: Minimal Profits for Halliburton

[Steve Sloan II]

Ronn!Blankenship wrote:

> I don't know about financial models, but I do know that
> judgement, especially when immediate judgement on critical
> issues is necessary, is affected by fatigue.  For one thing,
> tired people tend to be grumpy people, and may do things
> they later regret.
I think both of us are looking at this issue from a programmer's
viewpoint, where long hours usually *are* a sign of poor planning,
either by the managers who didn't hire enough people, or on the
software engineering side, where time for completing tasks was
severely underestimated.
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Re: Minimal Profits for Halliburton

[Deborah Harrell]

--- Gautam Mukunda <[EMAIL PROTECTED]> wrote:

>  A lot of well-run companies put those
> sorts of demands on their employees.  Every
> consulting
> company (not just us), every investment bank, every
> venture capital fund, every hedge fund - and that's
> just in the financial sector.  I've seen our clients
> in the pharma sector routinely do 80 hour weeks. 
> Pretty much every CEO in America does that.  Time
> and motion study of Congressmen and Senators suggest
> that
> 80 hours is a _light_ week for them.  Anecdotally
> Cabinet Members say the same thing -I don't know
that
> a formal study has ever been done, but that's how
> they
> describe their lives.  In the military I know that
> junior officers in combat zones routinely work those
> types of hours for months - or even years - on end. 
> My old boss was a platoon commander in Vietnam, and
> he worked 100 hour weeks for two years.  So the
> argument
> that a well-run organization doesn't ask its people
>to do that is empirically contradicted - any number
of
> well-run (and highly successful) organizations _do_,
> in fact, run at that sort of tempo.  It's true that
> _pilots_ in particular are prohibited from doing so,
> but that's because the fine motor skills that pilots
> require are the first thing affected by fatigue.  I
> can stumble over door sills and still build
> financial models quite effectively.

I'm just commenting on the work-hours and their
potential fall-out: while many individuals can and do
'burn the candle at both ends' for extended periods of
time, the vast majority of humans make more mistakes,
and more serious mistakes, as stress and fatigue
mount. And while maybe financial decisions are OK to
make at that point (although I wouldn't want such a
person in charge of *my* money), it's dangerous to
habitually make decisions that involves life and death
under those conditions.  That's when the
incompletely-hidden tripwire is overlooked, or the
wrong body part is amputated, or one assumes that
somebody else checked for the proper blood type. 
That's why laws have been enacted to limit the number
of hours an intern or resident works.  Having
personally put in a few 90-100hr weeks, I can tell you
that discrimination and critical thinking are
adversely affected to a large degree.  I was lucky
nothing horrible happened, but I know those who frex
dropped babies on their heads because their judgement
and reflexes were shot after multiple cycles of
36+hour "days."

When you had RNs and pharmacists (who were not
themselves over-worked) backing you, most errors were
caught before they ever involved a patient; tired
"medical assistants" and pharmacy techs, however,
provide a poor safety net.  I tell all my
friends/family/aquaintances who have to go into the
hospital that they need to watch out for themselves, 
question the doc or nurse if a
procedure/pill/injection seems at all odd or
out-of-place; and that actually applies to medications
at home as well as outpatient procedures.

I think that operating in a hostile country within a
radically different culture requires fine judgement
and fast critical thinking, to decide frex whether
that enrobed figure is a suicide bomber needing to be
shot or just a woman carrying her toddler; those
faculties will be impaired in the perpetually
fatigued.

Debbi

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Re: Minimal Profits for Halliburton

[Robert J. Chassell]

On Wed, 7 Jan 2004, Gautam Mukunda <[EMAIL PROTECTED]> wrote:

One of the things that I think I've learned the last two years
(I've written about this on my blog at greater length) is that the
basic decisions to be made are not, generally, all that hard.

Right.  But the question is whether this is true for the
administration of the current US occupation of Iraq?

Just today, the BBC reports

http://212.58.240.35/1/low/world/middle_east/3377781.stm

that the US is freeing about 1/20 of its prisoners as "a goodwill
gesture'.  According to a report I read yesterday, the US occupation
authorities went to considerable trouble to identify those prisoners
who have the least `blood on their hands' and intend to release only
those who can obtain a guarantee for good behavior from an Iraqi whom
the US respects.

This is one of those situations where it is critical to make the right
judgements about hundreds of people.  Probably, from the US point of
view, it does not matter if the authorities make a few mistakes.  But
if the US authorities make many mistakes, they increase the expense of
the war and the risk of ultimate defeat.

The question is how should you characterize the situation in Iraq?

In his book, "The Innovator's Solution", Clayton Christensen (a
professor at the Harvard Business School) makes the distinction
between `sustaining' innovations and `disruptive' innovations.

When a company focuses on sustaining innovations, it establishes the
resources, processes, and values that enable it to succeed in its
circumstances.  Because they have so successfully internalized the
culture that tells people their priorities, i.e., the company's
values,

Initiatives that don't make sense to the middle managers rarely
get packaged for the senior people's consideration.

and this is good for the company.  However, in a business involving
disruptive innovations,

... with their ill-defined strategies and demanding profitability
targets, make-or-break decisions arise with alarming frequency,


[both p. 270]

In circumstances involving`sustaining' innovations, a company provides
resources, processes, and values such that people who have learned the
values and processes can make decisions that are usually right.  In
these circumstances, it is heroic to work long hours and apply the
appropriate learning.  Those who work longer hours are more
productive.  The mistakes they make are not so expensive.

However, in other circumstances, decisions are make-or-break.
A mistake is expensive.

The problem with the US occupation of Iraq is that, to use
Christensen's language, its circumstances are more disruptive than
sustaining.  Indeed, it is clear from the fact that the US changed
them (most importantly, in early November 2003), that the strategies
planned before the war were either ill-defined or erroneously defined.

Right now, the US looks to be winning this portion of its campaign in
Iraq, and gaining benefits there from -- primarily, as I wrote a year
ago, the benefits of frightening `the other Arab dictatorships into
greater efforts into policing against enemies of US.'

What if the US had been seen to have succeeded in its conquest of Iraq
a great deal sooner -- say by last August?  Then the US would not have
had to make a deal with Iran on terms as favorable to Iran as it
appears to have done; Libya would have accepted UN inspections sooner;
Syria would have started its current dance sooner.

These are the opportunity costs of the strategy that has been
followed.  Perhaps, having made the decision to avoid a war
mobilization and to invade Iraq in the spring rather than the fall of
2003, the US could not have done better.  While it is clearly the case
that `no plan ever survives contact with the enemy', the question is
whether a different strategy -- one of those talked about a year and
more ago -- could have led to better current circumstances for the US?

As for whether the US could increase the number of civilian
administrators in the Coalition Provisional Authority, I wrote

> Last February, the former chief of staff of the US Army ...
> figured an additional 250,000 Americans could go into Iraq.

to which Gautam Mukunda <[EMAIL PROTECTED]> responded

I frankly don't think Shinsecki was write about this,
and I don't know anyone else who agrees with that
assessment.  

Hmm ... no one that I know has ever said that the US Army could not
move another 250,000 troops to Iraq in the months since May 1.  Prior
to the first Gulf war, it took less time to move more troops.

Moreover, I have read that it appears the US Army was stretched thin
in the 6 months following May 1.  In the fall of 2003, for example,
Luttwak said that at any one time, the `teeth' of the US forces
numbered only about 30,000 troops.

The argument against adding troops after May 1 (as far as I know there
was no time to bring in more before that date) was that such an action
would overly weaken US 

Re: Minimal Profits for Halliburton

[Reggie Bautista]

Gautam wrote:
>  That's also the reason why the odds that I'm going to
> be able to go have dropped - just because they can't
> support any more personnel over there right now.

Well, here's hoping you beat the odds on this one.

Reggie Bautista
No Second Line Maru


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Re: Minimal Profits for Halliburton

[Ronn!Blankenship]

At 10:20 AM 1/7/04, Gautam Mukunda wrote:
--- "Robert J. Chassell" <[EMAIL PROTECTED]> wrote:
> Last February, the former chief of staff of the US
> Army claimed
> otherwise.  He figured an additional 250,000
> Americans could go into
> Iraq.
I frankly don't think Shinsecki was write about this,
and I don't know anyone else who agrees with that
assessment.  Even if it was true, though, there's a
big difference between putting that number of soldiers
in Iraq, and that number of civilians in Baghdad.  The
CPA is staffed by civilians - guys like me at the
lower levels, basically, and diplomats and ex-military
officers at the upper ranks.
> Of course, the amount of work to be done is
> effectively limitless.
> That is why management has to be concerned about
> fatigue and has to
> take steps to prevent reduction of good judgement.
They do, but they have to balance that with getting
the job done.  A lot of well-run companies put those
sorts of demands on their employees.  Every consulting
company (not just us), every investment bank, every
venture capital fund, every hedge fund - and that's
just in the financial sector.  I've seen our clients
in the pharma sector routinely do 80 hour weeks.
Pretty much every CEO in America does that.  Time and
motion study of Congressmen and Senators suggest that
80 hours is a _light_ week for them.  Anecdotally
Cabinet Members say the same thing - I don't know that
a formal study has ever been done, but that's how they
describe their lives.  In the military I know that
junior officers in combat zones routinely work those
types of hours for months - or even years - on end.
My old boss was a platoon commander in Vietnam, and he
worked 100 hour weeks for two years.  So the argument
that a well-run organization doesn't ask its people to
do that is empirically contradicted - any number of
well-run (and highly successful) organizations _do_,
in fact, run at that sort of tempo.  It's true that
_pilots_ in particular are prohibited from doing so,
but that's because the fine motor skills that pilots
require are the first thing affected by fatigue.  I
can stumble over door sills and still build financial
models quite effectively.


I don't know about financial models, but I do know that judgement, 
especially when immediate judgement on critical issues is necessary, is 
affected by fatigue.  For one thing, tired people tend to be grumpy people, 
and may do things they later regret.



> What you are saying here is in the 250 days since
> 2003 May 1, the US
> administration has not figured out that the
> Americans, outside the
> military, in Bagdad are working so many hours they
> are making, at
> times, mistakes that they would not make normally.
> Or else you are
> saying that the mistakes they are making are not
> relevant to the cost
> of the war or to its ultimate outcome.
No, I'm saying that I disagree with your cause and
effect linkage.  Experience and anecdote both tell me
that the fact that people are working as hard as they
are is not a sign of poor management, because the best
managed organizations in the world work that way.  If
people were working nine-to-five, I'd be concerned.
This is not a nine-to-five setting.
=
Gautam Mukunda
[EMAIL PROTECTED]
"Freedom is not free"
http://www.mukunda.blogspot.com




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Re: Minimal Profits for Halliburton

[Gautam Mukunda]

--- "Robert J. Chassell" <[EMAIL PROTECTED]> wrote:
> Last February, the former chief of staff of the US
> Army claimed
> otherwise.  He figured an additional 250,000
> Americans could go into
> Iraq.

I frankly don't think Shinsecki was write about this,
and I don't know anyone else who agrees with that
assessment.  Even if it was true, though, there's a
big difference between putting that number of soldiers
in Iraq, and that number of civilians in Baghdad.  The
CPA is staffed by civilians - guys like me at the
lower levels, basically, and diplomats and ex-military
officers at the upper ranks.

> Of course, the amount of work to be done is
> effectively limitless.
> That is why management has to be concerned about
> fatigue and has to
> take steps to prevent reduction of good judgement.

They do, but they have to balance that with getting
the job done.  A lot of well-run companies put those
sorts of demands on their employees.  Every consulting
company (not just us), every investment bank, every
venture capital fund, every hedge fund - and that's
just in the financial sector.  I've seen our clients
in the pharma sector routinely do 80 hour weeks. 
Pretty much every CEO in America does that.  Time and
motion study of Congressmen and Senators suggest that
80 hours is a _light_ week for them.  Anecdotally
Cabinet Members say the same thing - I don't know that
a formal study has ever been done, but that's how they
describe their lives.  In the military I know that
junior officers in combat zones routinely work those
types of hours for months - or even years - on end. 
My old boss was a platoon commander in Vietnam, and he
worked 100 hour weeks for two years.  So the argument
that a well-run organization doesn't ask its people to
do that is empirically contradicted - any number of
well-run (and highly successful) organizations _do_,
in fact, run at that sort of tempo.  It's true that
_pilots_ in particular are prohibited from doing so,
but that's because the fine motor skills that pilots
require are the first thing affected by fatigue.  I
can stumble over door sills and still build financial
models quite effectively.

> What you are saying here is in the 250 days since
> 2003 May 1, the US
> administration has not figured out that the
> Americans, outside the
> military, in Bagdad are working so many hours they
> are making, at
> times, mistakes that they would not make normally. 
> Or else you are
> saying that the mistakes they are making are not
> relevant to the cost
> of the war or to its ultimate outcome.

No, I'm saying that I disagree with your cause and
effect linkage.  Experience and anecdote both tell me
that the fact that people are working as hard as they
are is not a sign of poor management, because the best
managed organizations in the world work that way.  If
people were working nine-to-five, I'd be concerned. 
This is not a nine-to-five setting.

=
Gautam Mukunda
[EMAIL PROTECTED]
"Freedom is not free"
http://www.mukunda.blogspot.com

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Re: Minimal Profits for Halliburton

[Steve Sloan II]

[EMAIL PROTECTED] wrote:

> Re: Minimal Profits for Halliburton

Maybe they should sell tee-shirts?

(According to a different thread)

Hey-ohhh!

;-)
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Re: Minimal Profits for Halliburton

[Robert J. Chassell]

The reason there are limits on the number of people
there is _logistic_.  The Bush Administration is
desperately trying to squeeze as many people as it
possibly can into Iraq.  The "long pole in the tent"
is that we are currently at capacity for the number of
people we can _support_ in Baghdad.  That's the issue.

Last February, the former chief of staff of the US Army claimed
otherwise.  He figured an additional 250,000 Americans could go into
Iraq.

Since he also predicted the asymmetrical nature of the fighting,
namely, that the US would win conventionally and that after that there
would be several months of guerrilla attacks, unless the US introduced
a large occupation force, I tend to think he is right.

Additional Americans would not necessarily be comfortable; and they
would cost the US tax payer a lot, but this is a campaign in a long
term war.  (Wars are infamously expensive and wasteful.)


I should also add, btw, that there is another reason
why people work those hours, which you have missed in
your otherwise excellent article.  As someone who has
worked those hours, it sticks out at me pretty
obviously.  It's the same reason that my friends in
the Pentagon are currently working that, and more. 
It's that when you're working on something extremely
important, the amount of work to be done can be
effectively limitless.  

Of course, the amount of work to be done is effectively limitless.
That is why management has to be concerned about fatigue and has to
take steps to prevent reduction of good judgement.

In World War II, the British were training new pilots as fast as they
could.  (They could build new fighter airplanes faster, so the choke
point was new pilot training.)  The problem was, they were fighting a
difficult war.  In the Battle of Britain, British pilots kept getting
killed.  

Pilots knew they could do more.  Even with radar warning, so they did
not make too many `useless' flights, pilots could do more.  (This was
told me by a pilot as an aside to why he had lost his hearing at
certain frequencies: the frequencies he lost were those generated by
his Spitfire engine during the battle of Britain when he flew too
much.  I also read the same in history books (the fatigue issue, not
the hearing loss), and I have no reason to think he was making things
up.  The British pilots definitely understood that Germany would have
to gain control of the air before it would invade; the British pilots'
goal was to prevent that.)


... if you doubled the number of people they had,
they would _still_ work those hours, because the
amount of work _to be done_ is effectively infinite. 
So you do everything you can, and hope that's enough. 
Which is what we do as well.

The point is, if the cost of mistakes is very high, then a good
management worries about long term fatigue.  They do not permit
people to do all the work that could be done.

Only if the "marginal value of another analysis" is higher than the
discounted cost of a mistake (discounted by the probability or
improbability of it occuring), does a smart management permit "another
analysis".

Is "the `marginal value of another analysis' is higher than the
discounted cost of a mistake"?  Not likely in the case of this war.

What you are saying here is in the 250 days since 2003 May 1, the US
administration has not figured out that the Americans, outside the
military, in Bagdad are working so many hours they are making, at
times, mistakes that they would not make normally.  Or else you are
saying that the mistakes they are making are not relevant to the cost
of the war or to its ultimate outcome.

You are claiming that delays in providing electricity to Bagdad is
irrelevant to US goals in Europe; or that providing gasoline to
civilians is irrelevant.  I do not think this is true.

The goal is victory.  Based on Osama bin Laden's latest statement, he
(or whoever is pretending to be him) has changed tactics, since his
previous tactics failed.  It is a victory for the US that the previous
enemy tactics failed.  On the other hand, it is still not clear that
the US will succeed 30 or 50 years from now in providing its people
with freedom and a democratic mode of deciding political issues.  This
what the war is about, from the US point of view.  (bin Laden's goal
is different.)  It is not clear that the US will get a balance of
payement deficit funded by European investors in 2035.

Gaining support for UN inspections in Libya, as the US had done, is
good for the US.  However, the inspections or the disarmament that
they imply must last for more than one generation.  This is victory
for the US.  Unfortunately, it is not yet clear that either a UN
agency will continue inspections of Libya in 2035, or else that Libya
will be so different a country that inspections will not be necessary
for the US.  If one or the other of these do not happen, the US loses.

The goal is victory. 

Re: Minimal Profits for Halliburton

[Gautam Mukunda]

--- Jan Coffey <[EMAIL PROTECTED]> wrote:
> Is it not better to do a few thing right thn many
> things wrong?
> Jan

I don't think so, actually.  One of the things that I
think I've learned the last two years (I've written
about this on my blog at greater length) is that the
basic decisions to be made are not, generally, all
that hard.  Sometimes they are - and that's when it's
the most fun.  But usually they aren't.  It's just
that the people involved with making them are too busy
to actually take the time to go over the issues and
make the decision.  The usual thing in business I've
noticed, and in government by anecdote, is that people
are usually putting out fires continually, without the
time to make longer-term strategic decisions. 
Consulting companies are often hired, I think, in
order to bring this sort of extra capacity to the
table, not for any particular brilliance of their
employees (any of you who felt that consultants were
particularly brilliant have, of course, been disabused
of that notion over the past couple of years...).  It
is possible to be quite productive at hour 100 of a
week.  It takes time and acclimatization, and not
everyone can do it (there are people at McK - often
very successful ones - who simply refuse to work on
studies of that intensity), but it is certainly
possible.  And people who can do it are, over a span
of time, more productive than people who cannot.  If
you have (for example) one month to present an opinion
on some issue to the CEO of a large pharmaceutical
company, then you had better be really thorough in
what you present.

Surely one large (but often overlooked) component of,
say, the astonishing output of Winston Churchill and
Napoleon (to pick very different figures) is that both
are said to have routinely slept four hours a night. 
That's extra time to work that adds up pretty quickly.
 I would be willing to give up quite a lot if I could
get by on four hours of sleep without feeling
constantly tired, as they were able to do.  It is also
often quite necessary.  

=
Gautam Mukunda
[EMAIL PROTECTED]
"Freedom is not free"
http://www.mukunda.blogspot.com

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Re: Minimal Profits for Halliburton

[Jan Coffey]

--- In [EMAIL PROTECTED], Gautam Mukunda <[EMAIL PROTECTED]> 
wrote:
> --- "Robert J. Chassell" <[EMAIL PROTECTED]> wrote:
> > On 5 Jan 2004, Gautam Mukunda
> > <[EMAIL PROTECTED]> said
> > In other words, the Bush Administration has limited
> > the numbers of
> > people available to the Coalition Provisional
> > Authority and to
> > contractors.  It has placed a handicap on past US
> > success.  It has
> > made a US defeat more likely; a US victory more
> > expensive.
> 
> The reason there are limits on the number of people
> there is _logistic_.  The Bush Administration is
> desperately trying to squeeze as many people as it
> possibly can into Iraq.  The "long pole in the tent"
> is that we are currently at capacity for the number of
> people we can _support_ in Baghdad.  That's the issue.
>  That's also the reason why the odds that I'm going to
> be able to go have dropped - just because they can't
> support any more personnel over there right now.
> 
> Snip

>Similarly, in the Pentagon right now the
>planning staff is doing that not because they lack
>people (although they could always use more) but
>because if you doubled the number of people they had,
>they would _still_ work those hours, because the
>amount of work _to be done_ is effectively infinite.
>So you do everything you can, and hope that's enough.
>Which is what we do as well--

Is it not better to do a few thing right thn many things wrong?

In software we see this all the time. Programmers working 100 hour 
weeks for sometimes months at a time. In the end they are less 
productive than if they had simply worked 40.

If the thing is worth doing, it's worth doing right, but if you 
overtax your resources you end up with a failure anyway.

Unfortunatly this truth seems to be lost on the A-type workaholics 
who our society elivates to positions of power. I hope that time 
will tell, and that this very important lesson can eventualy be 
learnedagain.

Jan

"Hope start with believing that today is not as good as it could be."


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Re: Minimal Profits for Halliburton

[Julia Thompson]

"Robert J. Chassell" wrote:

> When people work long weeks under extreme time pressure, they are more
> likely to make mistakes.  That is why the Royal Air Force grew so
> concerned about pilot fatigue during the Battle of Britain.  That is
> why nuclear plant operators are limited in the amount of time they may
> work.
> 
> (This is not the kind of fatigue that comes from staying up 48 or 60
> hours, as soldiers and others often do, but the kind of fatigue that
> comes from weeks and months of heavy effort.  In World War II,
> researchers for the US Army found that US soldiers' military
> efficiencies, which peaked after about 90 days in combat, dropped off
> after about 150 days.)

Throw the category of "mothers of infants" in there on the fatigue list,
as well.

About a month or so after Sam was born, I got to where I could count on
about 5 1/2 hours of sleep a night.  If I got less than 5 1/2 hours of
sleep, I was no good the next day, but if I got somewhere between 5 1/2
and 7 1/2 hours of sleep, I could function adequitely.  I could keep
this up for a month or two, but I was extremely grateful when he was
sleeping long enough that I could get 8 hours uninterrupted on occasion.

I'm still nowhere near there with the twins.  We've had a handful of
nights in the past 2 weeks where I got a solid 7 hours, babies sleeping
long enough for me to get that, but the last such night was last
Thursday, and the nights since then have really taken a toll on me.  (I
should be napping, but I need a minimum amount of nap time, and we
really need to get Catherine up to give her a bath within the next 20
minutes, so a nap for me isn't going to happen before dinnertime.)

I'm going to have to do something drastic about bedtime tonight, I
think

Julia
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Re: Minimal Profits for Halliburton

[The Fool]

> From: Gautam Mukunda <[EMAIL PROTECTED]>
> 
> Rather than arguing about this in detail, let me point
> you to Dan Drezner's articles on the topic, which are
> quite persuasive and well-researched.  Drezner is
> hardly a Bush partisan - he wrote an article titled
> "Bush the Bumbler" for Slate.  

Here's what noted economist Brad Delong has to say about Daniel Drezner:

The Slime Machine at Work Again: 
<
>

Posted just this morning in fact.
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Re: Minimal Profits for Halliburton

[Gautam Mukunda]

--- "Robert J. Chassell" <[EMAIL PROTECTED]> wrote:
> On 5 Jan 2004, Gautam Mukunda
> <[EMAIL PROTECTED]> said
> In other words, the Bush Administration has limited
> the numbers of
> people available to the Coalition Provisional
> Authority and to
> contractors.  It has placed a handicap on past US
> success.  It has
> made a US defeat more likely; a US victory more
> expensive.

The reason there are limits on the number of people
there is _logistic_.  The Bush Administration is
desperately trying to squeeze as many people as it
possibly can into Iraq.  The "long pole in the tent"
is that we are currently at capacity for the number of
people we can _support_ in Baghdad.  That's the issue.
 That's also the reason why the odds that I'm going to
be able to go have dropped - just because they can't
support any more personnel over there right now.

I should also add, btw, that there is another reason
why people work those hours, which you have missed in
your otherwise excellent article.  As someone who has
worked those hours, it sticks out at me pretty
obviously.  It's the same reason that my friends in
the Pentagon are currently working that, and more. 
It's that when you're working on something extremely
important, the amount of work to be done can be
effectively limitless.  It is not uncommon for a
McKinsey team to deal with decisions involving
billions of dollars, for example.  In that situation,
the marginal value of another analysis is always high
- no matter how obscure the analysis it's always worth
doing.  In that situation (particularly when it's
combined with extreme time pressure - a private equity
deal, for example) McKinsey teams routinely work those
hours.  Similarly, in the Pentagon right now the
planning staff is doing that not because they lack
people (although they could always use more) but
because if you doubled the number of people they had,
they would _still_ work those hours, because the
amount of work _to be done_ is effectively infinite. 
So you do everything you can, and hope that's enough. 
Which is what we do as well.

Government operations lack the flexibility that
McKinsey has, sadly.  In Baghdad the major problem is
_logistic_ - the Administration has (very wisely)
limited the administrative constraints upon the CPA,
but they simply can't feed and house more people than
they currently have right now.  People are sleeping on
cots in their offices because _there's nowhere else to
put them_.  Not because the Administration has put
limits on the number of people it can hire.  People in
the Pentagon are understaffed because of legal reasons
- Congress has authorized such and such a budget,
which can't be exceeded, so people have to take more
onto each individual plate.  

=
Gautam Mukunda
[EMAIL PROTECTED]
"Freedom is not free"
http://www.mukunda.blogspot.com

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Re: Minimal Profits for Halliburton

[Gautam Mukunda]

--- Dan Minette <[EMAIL PROTECTED]> wrote:
> But, few of the stockholders will be at personal
> risk.  I'm guessing that
> we will not see the board of directors of
> Halliburton in Iraq for any
> prolonged period of time either.  They will not be
> working longer hours for
> Iraq.  So, the compensation in terms of larger
> profits should be for
> business risk only.

Yeah, but the business risk is significant.  Insurance
costs, equipment costs, etc.  It's a war zone.  The
number of companies that are even willing to operate
there - or have the capacity to do so - is very small,
something like 2 on any large scale, actually.

> OK, how are no-bid contracts awarded
> fairly...especially when the costs are
> uncertain?  When things are done in a hurry, the
> normal procedures are not
> followed, and the paper trail is minimal or
> non-existent, how are things
> properly checked out?
> Dan M.

Rather than arguing about this in detail, let me point
you to Dan Drezner's articles on the topic, which are
quite persuasive and well-researched.  Drezner is
hardly a Bush partisan - he wrote an article titled
"Bush the Bumbler" for Slate.  

http://www.danieldrezner.com/archives/000860.html
http://www.danieldrezner.com/archives/000868.html

You can also look at a very good NYT article on the
topic:
http://www.pepeace.org/current_reprints/16/Nation%20Builders%20for%20Hire.htm

I should also note that - like most people in
Washington - I have friends and family in the Federal
Government and they, Republican or Democrat, all think
that it's simply _not possible_ to manipulate the
system in a corrupt fashion.  There are too many
checks - so many, in fact, that the cost of running
through them almost certainly vastly excedes the cost
of the corruption that is prevented.



=
Gautam Mukunda
[EMAIL PROTECTED]
"Freedom is not free"
http://www.mukunda.blogspot.com

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Re: Minimal Profits for Halliburton

[Dan Minette]

- Original Message - 
From: "Gautam Mukunda" <[EMAIL PROTECTED]>
To: "Killer Bs Discussion" <[EMAIL PROTECTED]>
Sent: Monday, January 05, 2004 1:01 PM
Subject: Re: Minimal Profits for Halliburton


> --- Dan Minette <[EMAIL PROTECTED]> wrote:
> > If these folks were to tell me, for reasons X,Y,Z,
> > Halliburton actually
> > made a lot less than they expected to from the Iraq
> > contracts, then I'd be
> > inclined to believe them...since they've given me
> > good information in the
> > past.  However, I will not accept reports that have
> > often not reflected the
> > true profitability of an operation as valid without
> > evidence that standard
> > operating procedures have not been followed.
> > Particularly, when the buzz I
> > get from people who are in the field and are
> > thinking of doing business in
> > Iraq is that the potential for profits there are
> > enormous.
> >
> > Dan M.
>
> I've heard the same (that the profit potential is
> enormous).  Note that this is not a bad thing - it
> _should be_ enormous.  Working in Iraq is a risky
> thing to do right now.  We are also asking people
> working in Iraq to work under extreme time pressure.
> People in the CPA routinely work 100 hour weeks, as do
> the contractors there.  Both of those things are
> expensive.  The market is _supposed to_ reward outsize
> risk with outsize profits, and doing things quickly is
> always expensive.

I understand how each of these can add to the expense.  I have no problem
with that.  Further, If a small
company's owner goes to Iraq, I would certainly expect him to be extremely
well compensated for his efforts. I would not be shocked if workers in Iraq
make a lot more than they would doing the same job here.  In fact, I'd be
shocked if they didn't.  I see nothing unfair in that.

But, few of the stockholders will be at personal risk.  I'm guessing that
we will not see the board of directors of Halliburton in Iraq for any
prolonged period of time either.  They will not be working longer hours for
Iraq.  So, the compensation in terms of larger profits should be for
business risk only.

 The question is not - "Are
> companies making outsize profits in Iraq?"  No
> responsible company would go into Iraq unless that
> potential exists.

Why not?  If, there is a guaranteed modest but real profit available, after
paying one's employees to compensate for the time, risk, being away from
family, etc., why not take it? I think that only reason to consider very
large profits expectable is if there is real financial risk involved.  In
makes sense that some projects do, indeed, involve financial risk.  But,
cost plus contracts have always been taken as gravy.

The question is, "Are companies
> getting deals at higher than the market price?"  Of
> that there is no evidence whatever, and considerable
> evidence to the contrary.  In fact I know of no one
> who understands the government procurement system who
> thinks that the contracts have been - or _could be_ -
> awarded unfairly.

OK, how are no-bid contracts awarded fairly...especially when the costs are
uncertain?  When things are done in a hurry, the normal procedures are not
followed, and the paper trail is minimal or non-existent, how are things
properly checked out?

I realize that the normal procurement system is so cumbersome that the per
order overhead for companies doing business with the government is
enormous.  A friend of mine knows the people who sold those $80 dollar
hammers seats to the government and said they probably lost money on the
deal, due to the enormous paperwork overhead for a few toilet seats.  I
would expect that most government procurements are competitive, including
competing to hire retired military men to grease the skids for big deals.
(yes, I know this is not unique to the military or even the government.)
But, I do not see how no bid contracts can really be competitive, unless
the real costs are very well known up front.

Dan M.




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Re: Minimal Profits for Halliburton

[Robert J. Chassell]

On 5 Jan 2004, Gautam Mukunda <[EMAIL PROTECTED]> said

 We are also asking people working in Iraq to work under
extreme time pressure.  People in the CPA routinely work 100 hour
weeks, as do the contractors there. 

In other words, the Bush Administration has limited the numbers of
people available to the Coalition Provisional Authority and to
contractors.  It has placed a handicap on past US success.  It has
made a US defeat more likely; a US victory more expensive.

When people work long weeks under extreme time pressure, they are more
likely to make mistakes.  That is why the Royal Air Force grew so
concerned about pilot fatigue during the Battle of Britain.  That is
why nuclear plant operators are limited in the amount of time they may
work.

(This is not the kind of fatigue that comes from staying up 48 or 60
hours, as soldiers and others often do, but the kind of fatigue that
comes from weeks and months of heavy effort.  In World War II,
researchers for the US Army found that US soldiers' military
efficiencies, which peaked after about 90 days in combat, dropped off
after about 150 days.)

Of course, long hours are heroic for those doing non-critical jobs.
The hours show the advantage of learning, since people tend to do well
at what they have learned, so long as a small number of mistakes do
not matter.

And, indeed, it does not matter whether someone who writes reports
will occasionally write `cut costs' as the third rather than the
fourth recommended priority; the occasional error is outweighed by
spreading fixed costs over longer hours.

However, the occupation, governance, and rebuilding of Iraq are
critical.  Mistakes matter.  For example, people in the Coalition
Provisional Authority have to negotiate with clan leaders, often using
translators of dubious quality and security, and decide to what extent
particular leaders should be supported or hindered.  This kind of
activity requires judgement -- and while fatigued people often will do
right, they are more likely to make mistakes than when rested.

Fatigue not only causes problems among those making political
judgements; it can plague those fixing a broken steam line in an
oil-fired electric power plant.  To get it right, they may have to
repeat the repair.  (This possibility is based on a private
communication about the root cause of a mistaken fix on a line in a
nuclear power plant, not in an oil-fired power plant; but the point is
the same:  smart people can make dumb mistakes when fatigued, even if
usually they do all right.)

When a governing authority takes responsibility for repairing an
oil-fired power plant, and that repair is delayed, the authority looks
less competent than it should.  In the case of Iraq, this delays the
Iranian and Libyan governments deciding they are going to have to deal
with the US government on terms more to the liking of the US
government.  The delay increases the possibility that the US
government will agree to a more corrupt, authoritarian, and 
theocratic indigenous government than it would have otherwise.

Before the war in Iraq, the Bush Administration had months to prepare.
It could and should have planned to find and employ enough people so
that those doing critical work would not `routinely work 100 hour
weeks'.  Too many ill judgements result from that kind of effort.

Moreover, the Coalition Provisional Authority and the various
contractors have been in place now for more than six months: even if
the Administration made incompetent decisions before the war, it
should have seen and acted on the matter since then.  

When Gautam says that people `routinely work 100 hour weeks', others
will infer this is the result not of a minor error, but from a major
administrative incompetency.  He is making a statement that,
regardless of his personal intent, amounts to a very harsh attack on
the Bush Administration.

According to a transcript and translation of the latest tape
attributed to Osama bin Laden, which I just read, bin Laden opposes
changes in educational policy among Palestinians and other Arabs that
would encourage children to become more tolerant.  He is against both
the official `roadmap' for peace supported by the US government and
others, and he is against the unofficial proposals for peace made
recently in Geneva.  This is what the US and others are up against.

While everyone can and will tolerate a fair number of mistakes by
people in the Coalition Provisional Authority and by US contractors,
the more mistakes they make, the more difficult the advance of US
(and, in this case, European, Russian, and UN) policy.

As I said, the claim is from Gautam.  As an American patriot who wants
the US to succeed, I hope he is wrong; but I fear he is right.

--
Robert J. Chassell Rattlesnake Enterprises
http://www.rattlesnake.com  GnuPG Key ID: 004B4AC8
http://www.teak.cc [EMAIL PROTECTED]
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Re: Minimal Profits for Halliburton

[Gautam Mukunda]

--- Dan Minette <[EMAIL PROTECTED]> wrote:
> If these folks were to tell me, for reasons X,Y,Z,
> Halliburton actually
> made a lot less than they expected to from the Iraq
> contracts, then I'd be
> inclined to believe them...since they've given me
> good information in the
> past.  However, I will not accept reports that have
> often not reflected the
> true profitability of an operation as valid without
> evidence that standard
> operating procedures have not been followed.
> Particularly, when the buzz I
> get from people who are in the field and are
> thinking of doing business in
> Iraq is that the potential for profits there are
> enormous.
> 
> Dan M.

I've heard the same (that the profit potential is
enormous).  Note that this is not a bad thing - it
_should be_ enormous.  Working in Iraq is a risky
thing to do right now.  We are also asking people
working in Iraq to work under extreme time pressure. 
People in the CPA routinely work 100 hour weeks, as do
the contractors there.  Both of those things are
expensive.  The market is _supposed to_ reward outsize
risk with outsize profits, and doing things quickly is
always expensive.  The question is not - "Are
companies making outsize profits in Iraq?"  No
responsible company would go into Iraq unless that
potential exists.  The question is, "Are companies
getting deals at higher than the market price?"  Of
that there is no evidence whatever, and considerable
evidence to the contrary.  In fact I know of no one
who understands the governemnt procurement system who
thinks that the contracts have been - or _could be_ -
awarded unfairly.

=
Gautam Mukunda
[EMAIL PROTECTED]
"Freedom is not free"
http://www.mukunda.blogspot.com

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Re: Minimal Profits for Halliburton

[Dan Minette]

- Original Message - 
From: "John D. Giorgis" <[EMAIL PROTECTED]>
To: "Killer Bs Discussion" <[EMAIL PROTECTED]>
Sent: Sunday, January 04, 2004 8:41 PM
Subject: Re: Minimal Profits for Halliburton


>
> So, in other words, it seems to me that you are making a non-falsifiable
> claim.  There is absolutely no evidence that can be presented to you that
> will persuade you that Halliburton is profiteering, right?

Nope.  There certainly would be evidence that would make me believe that
Halliburton actually is obtaining a modest rate of return on their
investment in Iraq.  I was just pointing out that what you presented was
not that evidence.

My objections are not wild hypothesis that are untested.  The type of
actions I describe are, as far as I've seen in 20+ years in the industry,
normal business procedures.  Other posters have given examples of this
happening in the entertainment industry, too.

The oil patch is much smaller than one might expect from the outside.  I
know folks in 'most every service company.  We trade stories.  I've always
been interested in how the companies have worked, and have asked a lot of
questions over the years.  I know people who were fairly high up in
Halliburton, and we've swapped stories about how companies do things.

If these folks were to tell me, for reasons X,Y,Z, Halliburton actually
made a lot less than they expected to from the Iraq contracts, then I'd be
inclined to believe them...since they've given me good information in the
past.  However, I will not accept reports that have often not reflected the
true profitability of an operation as valid without evidence that standard
operating procedures have not been followed. Particularly, when the buzz I
get from people who are in the field and are thinking of doing business in
Iraq is that the potential for profits there are enormous.

Dan M.



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Re: Minimal Profits for Halliburton

[Bryon Daly]

From: "Reggie Bautista" <[EMAIL PROTECTED]>

And the oil patch isn't the only place this kind of bookkeeping takes 
place,
of course.  Here are a couple of other examples of how money gets moved
around and accounted for in, shall we say, interesting ways.  Back in early
2000 there was a discussion on the moderated Babylon 5 newsgroup about this
kind of thing in the entertainment industry.
Hollywood has been pulling the "no net profits" trick on people for years...

Mario Puzo never made any money on The Godfather, due to the same trick.  My 
grandmother was  friends with his wife, so they heard all about it at the 
time.  It sort of worked out OK in the end for the Puzos, though, because 
then Hollywood wanted to make Godfather II, and they were able to get a far 
better deal that time around.

I read some articles a while back about how the author of Gump was in a 
legal battle with the movie studio over not getting a penny from the $300 
million movie release of Gump, which also managed to show zero net profit.

Most recently, I just read an article discussing the likelihood that New 
Line Cinemas will likely show no net profit on the $2.7 *billion* in 
estimated worldwide revenues from the LOTR trilogy.  Many (most?) of the 
actors had only been a net percentage deal, and so were likely not to make 
any money and were understandably upset.  They banded together and told New 
Line that they were expected to travel around the world helping to promote 
the movie (ie: on talk shows, etc), but it would be tough finding the 
goodwill to do so if they were all getting screwed out of any money.  New 
Line eventually cut some sort of deal with them, undisclosed terms, of 
course.

I've seen the kind of stuff Reggie and Dan describe as well.  I had a summer 
intership at NYNEX Materiel Enterprises, a subdivision of NYNEX that didn't 
fall under the phone company profit-cap regulations.  It's whole purpose was 
to be the purchasing arm for the phone company; basically, if the phone 
division needed to buy a telephone switch (a big $$$ piece of equipment, not 
at all like a light switch), then the phone division was supposed to provide 
its requirements to my division (Materiel Enterprises), which would then 
meet with vendors, select and purchase the switch, and *resell* it to the 
phone division.  This allowed the profit that Materiel Enterprises made to 
not be counted against the profit cap that the phone division was restricted 
by.  A couple years after I left, I read that a new ruling (by the judge in 
charge of the phone company breakup) put an end to that scheme by forcing 
Materiel Enterprises' profits to also count towards the profit cap.

-bryon

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Re: Minimal Profits for Halliburton

[Medievalbk]

>  Re: Minimal Profits for Halliburton

Maybe they should sell tee-shirts?

(According to a different thread)


Vilyehm Teighlore
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Re: Minimal Profits for Halliburton

[Robert Seeberger]

- Original Message - 
From: "John D. Giorgis" <[EMAIL PROTECTED]>
To: "Killer Bs Discussion" <[EMAIL PROTECTED]>
Sent: Sunday, January 04, 2004 8:41 PM
Subject: Re: Minimal Profits for Halliburton


> At 02:21 PM 1/4/2004 -0600 Dan Minette wrote:
> >In addition, if there is anything like a cost plus bidding with a
poor
> >paper trail, it becomes a cost sink.  Anyone who can get their
costs
> >association with that project can make their division balance sheet
look a
> >lot better.  There are bonuses riding on those sheets, so there is
an
> >overwhelming incentive to do this.
> >
> >I'm not assuming any unusual bookkeeping here, just the stuff that
oil
> >service firms have been doing for decades.
>
> So, in other words, it seems to me that you are making a
non-falsifiable
> claim.  There is absolutely no evidence that can be presented to you
that
> will persuade you that Halliburton is profiteering, right?
>

What Dan is describing is a pretty common business practice.
Its not unusual at all. Even outside the oil business.

I know for a fact that my company and others in the same field will do
a construction job at zero profit or even at a loss, just to get a
long term maintenance contract later. Happens all the time.

xponent
Femurduggery Maru
rob


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Re: Minimal Profits for Halliburton

[Reggie Bautista]

- Original Message - 
From: "Dan Minette" <[EMAIL PROTECTED]>
To: "Killer Bs Discussion" <[EMAIL PROTECTED]>
Sent: Sunday, January 04, 2004 2:21 PM
Subject: Re: Minimal Profits for Halliburton


>
> - Original Message - 
> From: "John D. Giorgis" <[EMAIL PROTECTED]>
> To: "Killer Bs Discussion" <[EMAIL PROTECTED]>
> Sent: Saturday, January 03, 2004 10:53 PM
> Subject: Re: Minimal Profits for Halliburton
>
>
> > At 06:46 PM 1/3/2004 -0600 Dan Minette wrote:
> > >Any corporation worth its salt can have small or zero profits from
> certain
> > >international operations.
> >
> > So, so you are saying that you disagree with the conclusions of the NY
> > Times' investigation?
> >
> > If so, on what grounds?
>
> I have no doubt that the facts that they report are accurate.  I'm saying
> that they are, virtually, meaningless.  In a corporation, the splitting of
> the profits and costs between different cost/profit centers is fairly
> arbitrary.  For example, a corporation may work in a country that
prohibits
> taking profits out of that country.  So, they make no profit in that
> country.  However, the division of the company that rents tools to that
> operations in that country makes a nice profit.
>
> In addition, if there is anything like a cost plus bidding with a poor
> paper trail, it becomes a cost sink.  Anyone who can get their costs
> association with that project can make their division balance sheet look a
> lot better.  There are bonuses riding on those sheets, so there is an
> overwhelming incentive to do this.
>
> I'm not assuming any unusual bookkeeping here, just the stuff that oil
> service firms have been doing for decades.
>
>
> > If not, then what *are* you saying, other than simply saying that no
> > evidence will sway you from your pre-determined conclusion that Cheney &
> > Co. are looting America and Iraq for the profiteers at Halliburton?
>
> But, I never said that it was looting.  I'd just be shocked if they didn't
> maximize return by using Iraq as a wonderful cost sink.

And the oil patch isn't the only place this kind of bookkeeping takes place,
of course.  Here are a couple of other examples of how money gets moved
around and accounted for in, shall we say, interesting ways.  Back in early
2000 there was a discussion on the moderated Babylon 5 newsgroup about this
kind of thing in the entertainment industry.  Someone on the newsgroup
remembered JMS stating at one point that he owned a piece of the B5 net
profit and asked if that amounted to anything.  His reply, from 1/15/2000:

 No, nor will it ever.  That's how Hollywood bookkeeping works.
 We know, because [w]e were told, that when the show was
 still first airing on PTEN, it was a mandate that All PTEN shows
 had to show a profit every season in order to be renewed.  That
 was a hard and fast rule.

 Each year, we got renewed, because we made a profit for WB.
 Once, in a meeting with the execs after year 3, they complimented
 us on how much money the show had made for WB.  [Warner
 Brothers was the major partner in PTEN.]

 Then they turn right around and, for purposes of net
 participation, pump out balance sheets that show we'll forever
 be in the red.

 Net means nothing because they can continue to charge anything
 and everything against the revenue, and you can never show a
 profit on paper; it's only if you own a piece of the gross that
 actual money appears.

Shifting around what division within a corporation is running at a deficit
and what division has a profit, or even what company owned by a corporation
has debt and what part is profitable, is nothing new at all.  Just recently,
a company for which I formerly worked did an interesting piece of debt
restructuring to save some money for one of its subsidiaries.  This
wholly-owned subsidiary company had taken out a rather substantial loan and
was paying a relatively high interest rate because of the balance sheet of
that company.  To reduce the debt load, the parent company, which was
eligible for very low interest rates, took out a loan *from the same bank*
in the amount that would pay off the original loan including currently
accrued interest, and then loaned that amount to the subsidiary to pay off
the original loan.  Now the subsidiary pays the parent company enough each
month to cover the payments on the new loan, which are quite a bit lower
than the payments they were making in the first place.  On paper, the new
loan looks like a wash to the parent company, it's paying more out but
getting an equal amount back in.  For the subsidiary, it basically has the
same loan it always has, but with a lower interest r

Re: Minimal Profits for Halliburton

[The Fool]

> From: John D. Giorgis <[EMAIL PROTECTED]>
> 
> At 02:21 PM 1/4/2004 -0600 Dan Minette wrote:
> >In addition, if there is anything like a cost plus bidding with a poor
> >paper trail, it becomes a cost sink.  Anyone who can get their costs
> >association with that project can make their division balance sheet
look a
> >lot better.  There are bonuses riding on those sheets, so there is an
> >overwhelming incentive to do this.
> >
> >I'm not assuming any unusual bookkeeping here, just the stuff that oil
> >service firms have been doing for decades. 
> 
> So, in other words, it seems to me that you are making a
non-falsifiable
> claim.

> There is absolutely no evidence that can be presented to you that
> will persuade you that Halliburton is [sic _Not_] profiteering, right?

Not when There are mutiple half billion dollar no bid contracts.  Not
when there are ongoing Multi-million dollar payments to Cheney.

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Re: Minimal Profits for Halliburton

[John D. Giorgis]

At 02:21 PM 1/4/2004 -0600 Dan Minette wrote:
>In addition, if there is anything like a cost plus bidding with a poor
>paper trail, it becomes a cost sink.  Anyone who can get their costs
>association with that project can make their division balance sheet look a
>lot better.  There are bonuses riding on those sheets, so there is an
>overwhelming incentive to do this.
>
>I'm not assuming any unusual bookkeeping here, just the stuff that oil
>service firms have been doing for decades. 

So, in other words, it seems to me that you are making a non-falsifiable
claim.  There is absolutely no evidence that can be presented to you that
will persuade you that Halliburton is profiteering, right?

JDG
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   "The liberty we prize is not America's gift to the world, 
   it is God's gift to humanity." - George W. Bush 1/29/03
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Re: Minimal Profits for Halliburton

[Dan Minette]

- Original Message - 
From: "John D. Giorgis" <[EMAIL PROTECTED]>
To: "Killer Bs Discussion" <[EMAIL PROTECTED]>
Sent: Saturday, January 03, 2004 10:53 PM
Subject: Re: Minimal Profits for Halliburton


> At 06:46 PM 1/3/2004 -0600 Dan Minette wrote:
> >Any corporation worth its salt can have small or zero profits from
certain
> >international operations.
>
> So, so you are saying that you disagree with the conclusions of the NY
> Times' investigation?
>
> If so, on what grounds?

I have no doubt that the facts that they report are accurate.  I'm saying
that they are, virtually, meaningless.  In a corporation, the splitting of
the profits and costs between different cost/profit centers is fairly
arbitrary.  For example, a corporation may work in a country that prohibits
taking profits out of that country.  So, they make no profit in that
country.  However, the division of the company that rents tools to that
operations in that country makes a nice profit.

In addition, if there is anything like a cost plus bidding with a poor
paper trail, it becomes a cost sink.  Anyone who can get their costs
association with that project can make their division balance sheet look a
lot better.  There are bonuses riding on those sheets, so there is an
overwhelming incentive to do this.

I'm not assuming any unusual bookkeeping here, just the stuff that oil
service firms have been doing for decades.


> If not, then what *are* you saying, other than simply saying that no
> evidence will sway you from your pre-determined conclusion that Cheney &
> Co. are looting America and Iraq for the profiteers at Halliburton?

But, I never said that it was looting.  I'd just be shocked if they didn't
maximize return by using Iraq as a wonderful cost sink.

Dan M.


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Re: Minimal Profits for Halliburton

[John D. Giorgis]

At 06:46 PM 1/3/2004 -0600 Dan Minette wrote:
>Any corporation worth its salt can have small or zero profits from certain
>international operations. 

So, so you are saying that you disagree with the conclusions of the NY
Times' investigation?

If so, on what grounds?

If not, then what *are* you saying, other than simply saying that no
evidence will sway you from your pre-determined conclusion that Cheney &
Co. are looting America and Iraq for the profiteers at Halliburton?

JDG
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   it is God's gift to humanity." - George W. Bush 1/29/03
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Re: Minimal Profits for Halliburton

[Kevin Tarr]

At 07:46 PM 1/3/2004, you wrote:

- Original Message -
From: "John D. Giorgis" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Saturday, January 03, 2004 5:31 PM
Subject: Minimal Profits for Halliburton
> Here is the NY Times Article that found that so far there have been,
quote
> "minimal profits" for Haliburton.
>
> JDG
Any corporation worth its salt can have small or zero profits from certain
international operations.  Its been SOP in the oil patch for at least the
last 20 yearsI know because that's how long I've been in there.
If you want, I can tell you some of the techniques, but it should be self
evident.
I know a lot of the good 'ol boys at Halliburton.  I'd be shocked beyond
belief if they didn't take every dime they could out of the situation.
Dan M.
I read a non-fiction serialization in Playboy about the oil business while 
I worked for Halliburton. I hate to call them abuses, but that's what the 
writer did. The main line was "We don't pump oil out of the ground, it's 
money." !00% agreement with you Dan. They reimbursed me for anything I 
could claim as job related. I'd get plane tickets that had me going from 
State College to Philly to Chicago to Hobby in Houston. I'd get it changed 
to Pittsburgh straight to Houston IA and save them a couple of hundred. Of 
course, they'd quibble on the $40 taxi ride from IA to Hobby, but they 
would still pay it.

Remember when LA had it's earthquake, 3-5 years after the SF earthquake? A 
year later the major contractor for the highway construction got a million 
dollar bonus for finishing his job in time, while they were still 
negotiating in SF. After the 1991 war how long were the oil fires supposed 
to last? Years? Carl Segan predicted a nuclear winter. And how long did it 
take until the last one was put out? Two months? In fact Halliburton lost a 
lot of money after the first war, they hired thousands of people and really 
fired up their machine shops expecting a lot of work for years in the gulf. 
A year later the job was done.

You don't call ELF to fix the oil fields, you call KBR. You don't get some 
small company to build big things, you get Bechtel.

Kevin T. - VRWC
Go Tennessee
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Re: Minimal Profits for Halliburton

[Dan Minette]

- Original Message - 
From: "John D. Giorgis" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Saturday, January 03, 2004 5:31 PM
Subject: Minimal Profits for Halliburton


> Here is the NY Times Article that found that so far there have been,
quote
> "minimal profits" for Haliburton.
>
> JDG

Any corporation worth its salt can have small or zero profits from certain
international operations.  Its been SOP in the oil patch for at least the
last 20 yearsI know because that's how long I've been in there.

If you want, I can tell you some of the techniques, but it should be self
evident.

I know a lot of the good 'ol boys at Halliburton.  I'd be shocked beyond
belief if they didn't take every dime they could out of the situation.

Dan M.


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Minimal Profits for Halliburton

[John D. Giorgis]

Here is the NY Times Article that found that so far there have been, quote
"minimal profits" for Haliburton.

JDG



 December 29, 2003
Halliburton Contracts in Iraq: The Struggle to Manage Costs
By JEFF GERTH and DON VAN NATTA Jr.
WASHINGTON, Dec. 28 - The Qarmat Ali water treatment plant in southern Iraq
is crucial to keeping the oil flowing from the region's petroleum-rich
fields. So when American engineers found the antiquated plant barely
operating earlier this year, there was no question that repairing it was
important to the rebuilding of Iraq. Setting the price for the repairs was
another matter.
In July, the Halliburton Company estimated that the overhaul would cost
$75.7 million, according to confidential documents that the company
submitted to the Army Corps of Engineers. But in early September, the Bush
administration asked Congress for $125 million to do the job - a 40 percent
price increase in just six weeks.
The initial price was based on "drive-by estimating," said Richard V.
Dowling, a spokesman for the corps, which oversees the contract. The second
was a result of a more complete assessment. "The best I can lamely fall back
on is to say that estimates change," said Mr. Dowling, who is based in
Baghdad. "This is not business as usual."
The rebuilding of Iraq's oil industry has been characterized in the months
since by increasing costs and scant public explanation. An examination of
what has grown into a multibillion-dollar contract to restore Iraq's oil
infrastructure shows no evidence of profiteering by Halliburton, the
Houston-based oil services company, but it does demonstrate a struggle
between price controls and the uncertainties of war, with price controls
frequently losing.
The Pentagon's contract with a Halliburton subsidiary, Kellogg Brown & Root,
conceived in secrecy before the war and signed in March, was meant as a
stopgap deal to last no more than a few months. But it has been in effect
since then and has grown to more than $2 billion.
The scope of the contract includes myriad tasks from importing fuels to
repairing pipelines, and the costs have increased through task orders and
subcontracts, some of which are carried out with limited documentation or
disclosure.
The reconstruction of Iraq has taken on "a Wild West atmosphere," said
Gordon Adams, a military procurement expert at George Washington University.
"Wartime creates an urgent need, and under an urgent need, contractors will
deliver and take a price. There's a premium for getting it done fast."
Earlier this month, Pentagon auditors questioned the $2.64 per gallon that
Halliburton was charging to truck fuel from Kuwait to Iraq, and sought to
recover $61 million. In response, company officials said they had actually
saved the government money and had put the fuel supply subcontract up for
competitive bidding. But there was little paperwork to show that any bidding
had taken place, according to government officials familiar with the audit.
"Most of it was done on an emergency basis, very quickly, over the phone,
and Halliburton has struggled to prove this was competitively bid," said one
government official.
Wendy Hall, a spokeswoman for Halliburton, said bids were solicited by
telephone in May because the corps needed fuel imported into Iraq within 24
hours. But she said a more formal bidding process was done several days
later, and that KBR has provided Pentagon auditors with documentation on the
bids.
"KBR followed government-approved procedures in responding to this
significant, challenging and dangerous mission," she said. 

Minimal Halliburton Profits
The estimated price of another KBR project, the replacement of damaged
pipelines over the Tigris River, also grew significantly over the course of
a few weeks. In July, KBR estimated that the cost would be $29.8 million for
the job, included in a list of 220 tasks to be completed in Iraq. But by
fall, the cost had more than doubled, to $70 million.
Both Mr. Dowling, the spokesman for the corps, and Ms. Hall said the price
grew because the scope of the project and the method of repair had changed.
Ms. Hall said the company had tried to get the lowest price from its
subcontractors. In addition, Halliburton and government officials note that
the violence in Iraq increases the cost of security and adds to the cost of
all reconstruction contracts.
So far this year, Halliburton's profits from Iraq have been minimal. The
company's latest report to the Securities and Exchange Commission shows $1.3
billion in revenues from work in Iraq and $46 million in pretax profits for
the first nine months of 2003. But its profit may grow once the Pentagon
completes a formal evaluation of the work. If the government is satisfied,
Halliburton is entitled to a performance fee of up to 5 percent of the
contract's entire value, which could mean additional payments of $100
million or more.
The nonpublic way in which KBR was selected for the job in Iraq remains a
political flashpoint, especially