The Backup Plan

I'm no expert, but I've written several columns about risk management for small business.

In case of a natural or man-made disaster, companies are encouraged to put emergency systems in place. For instance, have files stored on remote servers with automatic backups. Have both print and electronic customer and employee files stored in several places on- and off-site. Arrange for an alternate location where work can get done if your facility is shut down by a fire, leak or what-have-you.

What continues to amaze me about the BP Gulf Oil spill is what seems to be the absolute lack of adequate risk management. There's apparently a blow-out valve on the well that has failed and so far can't be activated.

So, what do you do when there's a problem and your blow-out valve fails? There is no plan.

BP is brainstorming with the military and with other deep water drilling and oil companies to improvise a solution. One might be drilling another well, something with a three-month timeline. Another is fabricating containment chambers that might be placed over the leaks so that the leaking oil can be pumped up to ships instead of pouring into the ocean.

Let me emphasize that these ideas have rarely - or never - even been tried before. It's really hard for me to believe that this incredibly risky, monumentally expensive technology has been permitted without proven backup techniques in place. To my mind, rescue operations should have been designed and tested before oil drilling leases were ever granted.

I imagine that many of my insurance sources would agree with me. Here's what a worker on the rig told an attorney working on the case:

Another worker familiar with the rig told the lawyers that the company had chosen not to install a deep-water valve that would have been placed about 200 feet under the sea floor. Much like blowout preventers, devices that are meant to seal leaks, this valve could have served as a cutoff of last resort in explosions, the lawyers said.

“The company took their chances in not having the valve so they could save money,” said Mike Papantonio, one of the lawyers representing the shrimpers and fishermen.

How much more irresponsible can this whole situation get?

We're All Keynesians Now

My hero, Warren Buffet (aka the Oracle), has featured rather prominently in the financial reform debates going on in Congress this week, due to his close ties to Nebraska Sen. Ben Nelson.

In light of that situation, and Buffet's annual meeting coming up this weekend, financial writer James Altucher poses a hypothetical Top 10 question list for Mr. B.

Meanwhile, a bit closer to home than Omaha, UCLA econ professor Roger Farmer will be speaking at Caltech on Sunday. His topic: Untangling the economics of the recent financial meltdown and parsing the Keynesians from the - what, Friedman-ites? - in the crowd. (I wonder if we'll have to sit on "bride and groom" sides of the auditorium?)

Yes, this stuff is dry as dust to most people - and about as appetizing - but I've been trying to get a handle on economics for most of my adult life. It will be interesting to see if I can at least follow the discussion.

A couple of years ago, theoretical physicist extraordinare Lisa Randall addressed the Skeptics Society. I may have followed about one-third of what she said. But it was a great workout for my brain, which had to be taken home and coddled (not like an egg!) afterwards.

Getting Paid

The questioner in my column this week is apparently not the only freelancer having trouble getting paid.

I have to laugh a little at the Journal's intrepid reporting: Freelancers often have a hard time collecting on their invoices!

Will wonders never cease?

Those of us who have freelanced for a couple of decades know that this is hardly big news. Okay, more people are working as independent contractors these days, so maybe more are noticing that this whole "getting paid" thing isn't always cut-and-dried.

Since I got burned way back in the '90s for a $500 payment (big money for my family at that time!) from a now-defunct business journal, I've learned how to make sure I get paid.

And I have a one-off policy: Late or non-existent payment? I don't take another assignment from that client. Period.

Power Grab

Election season is cranking up in California (oh, joy!) and the TV machine is once again flooded with confusing, innuendo-filled adverts for candidates* and propositions.

Whenever these commercials start running incessantly, I ask two questions:

Who's paying for these ads, and what do they stand to gain from them?

In the case of Proposition 16 (the "taxpayer's right to vote act"), I didn't have to look far.

Turns out that editorial boards all over the state, along with the League of Women Voters, have come out against this $35 million power grab by PG&E, the utility that supplies power to Northern California.

Big electric wants to protect its monopoly by making it virtually impossible (know how hard it is to get a two-thirds vote for anything?) for cities and communities to band together and supply their own power with "community choice" programs. "The organized opposition, lacking a wealthy backer, has raised about $20,000," notes the San Jose Mercury News.

How's that for cynical and Orwellian? The "taxpayer's right to vote" - sounds great. What taxpayer wants to give up her right to vote, especially in this year's extreme "throw the bums out" climate?

But what the proposition really does is take away the right for taxpayers to get locally provided, and potentially lower-cost, electricity. And, of course, it entrenches PG&E's monopoly and likely boosts its ability to raise rates.

This is yet another perfect example of why California's ballot proposition system is institutionalized insanity. Big tobacco, big power and other deep-pocket corporate interests are the ones that bankroll these initiatives and they use deeply deceptive ad campaigns to get uninformed voters to approve them, usually to their own long-term detriment.

How do we stop this? Tell everyone you know about the reality behind Prop. 16, and tell them to explain it to everyone they know. Help out with the No on 16 campaign, which is being outspent 100 to 1.

It may not help much, but it's the least we can do.

*Speaking of candidates, check out last weekend's This American Life episode for a humorous take-down of gubernatorial candidate Steve Poizner.

Correlation Does Not Equal Causation

There was no dial tone on my business phone this morning.

Harrumph!

Clearly, the workmen swarming around outside, installing my lovely new air conditioning unit (brrrr!), had knocked out my telephone service. It was pretty obvious.

A couple weeks ago, I spent an entire afternoon trying to get my computer mouse to work. I had disabled the critter when I took my laptop out of town, and clearly I had not properly re-installed it when I returned. Easy diagnosis, right?

Wrong. In fact, epic fail.

In both cases, I committed the dreaded cum hoc ergo propter hoc logical fallacy, also known as false cause.

On closer inspection (and thankfully before I accused the A/C guys) the volume on my headset was turned down, making it impossible to hear the dial tone - which was working just fine, thank you very much.

My better half took one look at my complex mouse wranglings and said: "Your mouse is shot. Go get a new one." I did. And it worked great.

Correlation does not equal causation. Correlation does not equal causation. Having been raised on magical thinking, it's hard to get this useful principle through my head. But I am trying.

My favorite related story dates back to the early '90s, after a swarm of termites emerged from my Batchelder tile fireplace in Monrovia one sweltering afternoon. I promptly duct-taped the fireplace screen shut and called three exterminators for bids.

The first two guys gave me quotes for tens of thousands we did not have. The third, a woman, took one look at the situation, ripped off the duct tape and peered into the hearth. "Here's your problem," she said, poking at the half-burned logs left over from the previous winter. "This wood's full of termites!"

"You mean ... we don't have to tent the house!?" I asked.

"Naw. These old houses are made with hard, dry redwood. Termites hate it." She brought in some garbage bags, evacuated the buggy lumber and drove off.

I wanted to kiss her, I really did.

So: Correlation does not equal causation. Or: Always look into the fireplace before you hire an exterminator.

Wait For The Beep

Beep. “Oh hello, this is just your mother calling. It’s 8:30 Tuesday night. I thought you’d be home. Just calling to see how everything’s going. I’ll talk to you later.” Click

The breezy voice projected from my car speakers, at once utterly familiar and yet not. I hadn’t heard my mother speaking in more than 10 years.

Driving to the mall a few weeks ago and hearing mom’s voice again was weird. She popped up on an old answering machine tape (remember those?) that I discovered while clearing out nooks and crannies in preparation for a yard sale last month.

Mom wasn’t the only surprise on this tape, which caught odd bits and pieces of my life circa 1989-1991.

There are messages from my old newspaper editors, colleagues and readers. (Just listening to them stressed me out!) And other ghostly voices – from an aunt who passed not long ago, an old friend I’ve lost touch with, a book binder asking me to pick up a long-forgotten job.

Most intriguing is a 10-minute conversation unintentionally caught on tape. My son is three weeks old and I’m talking to a work colleague (who? I don’t recognize the voice) about adjusting to motherhood, what’s going at the newspaper and how I hope to start getting some writing done “when the baby starts taking three-hour afternoon naps.”

Ha! Little did I know those long naps would never materialize. The eternal optimist shines through in my voice, pitifully, even as it is tinged with exhaustion.

“It’s weird, because this tape is just ordinary,” said my other baby (who did take three-hour naps on occasion, bless him), “but it means a lot because it’s old.”

That’s how I feel about a lot of things. Growing up in a disposable age with parents who valued the shiny and the new, I was the freak always longing for something old. Old houses, old heirlooms, old family stories.

I guess I never outgrew the feeling.

Freelance Tax Form

I so wish I could actually file this marginally employed tax form, IRS number BFaS (blood from a stone).

A few friends of mine would be well-served to use some of these freelancer deductions, including:

*Deduct 50% of medicines taken to combat avian flu, swine flu, rogue flu and subway poet flu.

*That/which Deduction: Deduct $1 for every grammatical error in a sign or poster thatn you pointed out to someone else.

*Your food blog

*Your other food blog

The only reason this is a no-go for me is a note in small print: "If you do not Twitter, you do not qualify as a freelancer and may not use this form."

Blast!