Anatomy of a Failure

[HoyaLawya]

Interesting series in the Seattle newspaper about the crazy loans that sunk WaMu.

seattletimes.nwsource.com/html/businesstechnology/2010131911_wamu25.html

Highlight of the first installment: They loaned to O.J. even after the massive civil judgement against him for the deaths he'd managed to "evade" in criminal court. On what basis? Oh, cuz he handed the loan officer a letter in which he said "That civil judgement won't stand up because I didn't do it."

mmmKay, OJ, if you say so!

[theexorcist]

Not much new here save the OJ stuff.

It still frustrates me that, at parties before the bubble crashed, everyone agreed that the housing market wasn't sustainable. People knew that this was coming - and businesses still made strategies based on avoiding the writing on the wall.

[The Stig]

To me it looks like the major problem was management's complete and total fixation on stock price and their competitors. That means a major focus on short-term gain at the expense of long-term viability.

With this sort of thinking, facts are molded to fit the business model, not the other way around. Anybody with a modicum of knowledge of housing markets knows that house prices will fall quickly at some point, but due to management's focus on improving stock price and taking business from their competitors, people who should have known better based their business model on the assumption that housing prices would always go up.

This sort of problem goes way beyond WaMu, and way beyond the banking industry. Executives want to please stockholders, and stockholders are only interested in share price. Then sometimes you get executives who have an obsession with market share, often at the expense of profitability. They're out to gain market share even if it means taking a big loss to do so. The airline industry is one of the worst offenders here (I'm looking at you, American Airlines). It's not a coincidence that two of the most profitable airlines in the US (Southwest and Allegiant) are two of the very few that don't give a sh** about market share.

[tashoya]

Add to that the incentive to cook the books or at least sugarcoat them as much as possible to "earn" an outsized bonus. Not exactly an infrastructure geared toward best practices on the whole.

[Boz]

Is it OK if I use the "Anatomy of a Failure" thread to talk about the stimulus?

(Seems appropriate to me.)

Someone better page Sherriff Joe Biden about the fuzzy math being used to calculate the mythical "saved" jobs......

www.google.com/hostednews/ap/article/ALeqM5jMNoef6xDenBbHWO0Im6rIjDmAgAD9BOJH300

[tashoya]

Because prior to this administration the job numbers were somehow less fuzzy?

[Elvado]

Nov 4, 2009 15:24:03 GMT -5 tashoya said:

Because prior to this administration the job numbers were somehow less fuzzy?

Ah the mantra of the Obamites. We can suck because everyone sucked before us. What happened to change, transparency and post-partisanship?

[Boz]

Less fuzzy than calling raises "saved jobs"? Yes, yes they were.

Welcome to the new era of accountability!!


EDIT: But wait! There's more......

Chicago:
www.chicagotribune.com/news/education/chi-education-stimulus-04-nov04,0,4659134.story

Wisconsin:
www.jsonline.com/news/wisconsin/69254347.html


I'm sure these are all just isolated incidents though.....

[Boz]

Here's a good way to have fun today while waiting for the Hoyas to tip off.

Go to www.recovery.gov and look up the tracking of stimulus money spent and jobs saved in your state.

I guarantee you will be surprised.

For instance, here is my state:
www.recovery.gov/Pages/TextView.aspx?data=stateSummaryAllCD&statecode=VA

Hey, awesome! We've spend $2.3 million in Virginia's 12th Congressional District to save 5 jobs!!!

Well, let's forget for a moment that those jobs are running at nearly $500K (how do I sign up for that??), I'm wondering.....where exactly is Virginia's 12th Congressional District?

Oh, that's right. IT DOESN'T EXIST! (Maybe Joe Biden has invented a time machine and has gone back in history to spend this money in 1860, the last time Virginia had a 12th Congressional district)

I also like the $2.1 million in the "00" congressional district (to save 2.5 jobs -- what is the .5, exactly?)

Where is the "00"? Is that Robert Parish's district?

Overall, it seems as though about $6.8 million has been spent in Virginia to save a whopping 34.1 jobs....in districts that do not exist. AWESOME!!!

But don't take my word for it. Look up your own state. I almost guarantee you are going to find similar, ummm, inconsistencies.

Two things are happening here, both bad:

Either: 1. There is rampant fraud going on in the stimulus spending.

Or: 2. There is rampant incompetence going on in tracking stimulus spending.

(But hey! $18 million well spent on that Web site, huh?)

And these are the people who say they can save hundreds of billions of dollars in eliminating "waste, fraud, and abuse."

Pardon me while I wipe my tears I am laughing so hard.

Whether you support the stimulus on principle or, like me, think it is a gigantic waste of our money to accomplish little end, I'm pretty sure everyone should be fairly upset at how awful this administration is at math (not to mention geography, accounting, database administration, etc., etc.....oh, and honesty).

[nychoya3]

Wow, there are errors amounting to rounding mistakes in a giant database with tens of thousands of datapoints. Yes, fraud is clearly rampant. Quick- to the tea store!

In case you were curious, some of this data is reported by the recipient agency in the state, so if some clerk thinks that 00 is a congressional district...there you go.

If you want to make an argument about the stimulus and the response the economic crisis, I suggest you do so on the merits of the policy, because this is just silly.

[theexorcist]

Nov 17, 2009 13:34:18 GMT -5 nychoya3 said:

Wow, there are errors amounting to rounding mistakes in a giant database with tens of thousands of datapoints. Yes, fraud is clearly rampant. Quick- to the tea store!

In case you were curious, some of this data is reported by the recipient agency in the state, so if some clerk thinks that 00 is a congressional district...there you go.

If you want to make an argument about the stimulus and the response the economic crisis, I suggest you do so on the merits of the policy, because this is just silly.

You're kidding, right? Someone did fifteen minutes worth of research and found some prety basic errors and it's just the cost of doing business? At what point do you get outraged? A million dollars? Two? Ten? A billion?

Fine, you want a debate on the merits of the policy, here - an argument that, to save the US economy at the minimum and the entire Western system of capitalism at the maximum, the Obama administration rammed through a whole pig farm of pork with its own logo and continuous PR signs, and have dobne so little oversight that someone in their spare time found errors.

This is MY MONEY. I don't like it when people waste MY MONEY. I particularly don't like it when people take MY MONEY, say that it's for something that's critical, and then don't take basic steps to ensure that MY MONEY does what they say was necessary.

Is that enough of a policy complaint for you?

[Boz]

I believe it is fair for me to call "insanity" when we start referring to multiple millions of dollars as "rounding mistakes."

You can believe in this initiative on principle all you want. I'm not arguing that. We'll just disagree on that.

But if you are not severely disturbed by the volume of errors in tracking funds, the widespread misreporting of job figures and many other areas of lapsed accountability here, then yes, I am just going to call you crazy and pretty much dismiss most anything you have to say.

In the interest of fairness, do I think this is the first administration that wastes money? Of course not. But, this is the administration that is asking for record amounts of money and control of the economy, and has promised unprecedented levels of accountability. Their grade thus far is FAIL.


UPPDATE: ABC News and Democratic congressman David Obey (he would be the one who wrote much of the stimulus bill) must be crazy tea partiers too for pointing out such minor and trivial matters:

abcnews.go.com/Politics/jobs-saved-created-congressional-districts-exist/story?id=9097853&page=1

[nychoya3]

Haha. You're kind of a jerk, but you like Drinky Crow, so it's all cool.

Two questions:

1) Would you prefer the database not exist, or not be public? Do you give the administration any credit for putting a vast amount of data about the stimulus and where the funds go on the web?

2) As the spokesman for the Recovery website said, they got 130k submissions in the span of 10 days. There are going to be errors in data at that point. They should be fixed. I assume they will be fixed. But this is not evidence of waste. It's evidence of human error at a very small scale in a fairly meaningless way. You've indicted the stimulus and the administration based on it. Is it possible you're overreacting?

Out of curiosity, did you see this before or after the ABCNews story was posted? Because it sure sounded in your original post like you had a nice little scoop. Shame if you're not credited.

[Boz]

Conservative blogs have been tracking this for the past few days. ABC and David Obey just picked up on it today.

EDIT: If you check over the the Temple attendance thread, you will notice that I am going out of my way to be a jerk today.

[Boz]

Good news!

We have found a digital replacement for Joe Biden! ;D

Just kidding, but this (new and improved) Web site is pretty cool:

stimuluswatch.org/2.0/

It's kind of fun to go in and check out. And it's not partisan, as far as I can tell. It is a wiki/social type of site where anyone can comment -- positive or negative -- on various stimulus projects.


Also, as an update, watchdog.org, has estimated the total number of bogus congressional districts on recovery.gov at 440. Total number of dollars "spent" in these bogus districts: in excess of $6 billion.

[TC]

Biden addressed this on The Daily Show last night, you should check it out.

[Boz]

Stimulus irony in Washington, DC:

reason.com/blog/2009/11/18/stimulus-goes-to-the-dogs


(I missed it live, but I am planning on watching that Biden interview, TC)

[Boz]

OK, I have to give it up to President Obama.

Go about 2 minutes in. This is pretty funny:



I still oppose this president's domestic policies, pretty much across the board, but a little self-deprecating humor at the turkey pardon? I have to give him a thumbs up for that.

(and please, no comments about levity in the face of huge unemployment; like I said, while I'm opposed to what he's doing, it's the turkey pardon, he's allowed to have a little fun)

[Coast2CoastHoya]

Yeah you know there's a difference between labor and operations costs right? So that $500k job? Maybe $100k of it is salary & benefits (roughly a GS-12-2's total comp package) plus equipment, fuel, etc. Is that high? I have no idea without looking at the nature of the project. Could be a great deal. Do the data go into more detail?

[Boz]

Taking a moment out of my Ash Wednesday to celebrate the one-year anniversary of the $800+ billion (recalculated) stimulus and those oh-so-many jobs it has created so far.

Thanks a bunch! Can we have another? We can? Oh, Washington, you always know just what to get us.