Off the Rails

“The only way to be sure of catching a train is to miss the one before it.”  G.K. Chesterton

train tracksThroughout my nearly forty years in the lumber business, I have taken on many responsibilities from time to time.  One of the sidebars that intrigued me was my industry’s sometimes shaky marriage with railroads.  Demurrage charges accrue when the local railroad sets a car of freight on our siding to be unloaded, and the receiving yard takes too long to unload the product and release the car back for pickup.  Demurrage fines can be dear, railroads are enthusiastic to assess them, and the owners of lumber companies hold managers accountable for expediting unloading to avoid them.

Western fir plywood is still a frequent rail traveler, although in times past before manufactured engineered wood products came to the fore, Canadian or West Coast Douglas Fir timbers rode the rails and landed in one yard or another every day.  Now like most things, the set and release are done on line, but I remember often calling a bored dispatcher in some remote dingy railroad office to let them know to pick up their empty.  We kept a careful log in a three ring binder tracking car numbers, dates in and out, product and related purchase orders to the mills to document not infrequent disputes over charges — especially during the reign of the late, unlamented federally run Conrail.

“If you board the wrong train, it is no use running along the corridor in the other direction.”  Dietrich Bonhoeffer (Lutheran theologian and member of German Resistance, murdered by the Nazis)

When diesel was cheap in the seventies, many small railroads lost a lot of business to more flexible trucking companies.  In bankruptcy or near bankruptcy, some of the well connected owners of these railroads lobbied the government hard to bail them out, which, of course, it did, nationalizing the operations of poetically nostalgic names like Erie Lackawanna and Lehigh & Hudson River.  $7.65 billion later and losing nearly a million dollars a day, it was privatized by President Reagan and sold to Norfolk Southern and CSX.  Both companies to this day are chugging along with multibillion dollar annual profits.  Shares for both are trading near their all time highs.

The complexities undergirding their success are beyond the scope of a blog post, the obvious point is that private business out performs the bureaucratic, cholesterol clogged arteries of government run enterprises.  Profit, necessary cost efficiencies and the capital magnet of profitable companies drive success.  Self perpetuating bureaucracy, less than accountable cost structures and the ability to either print or borrow unlimited funds drive more Kafkaesque fiefdoms.

As the rollout of Obamacare continues to make bad news, we are reminded of other train wrecks of Federal programs.  We have yet to see the “rest of the story” when the mandate for small businesses is finally allowed to kick in.  The administration illegally breaks off pieces of the unmanageable bill and postpones other parts time and again to time the next disaster until after the election cycle.  But I suppose pain delayed and deferred is better than immediate suffering.

“Neither a wise man nor a brave man lies down on the tracks of history to wait for the train of the future to run him over.”  Dwight D. Eisenhower

What has me worried next is the nationalization of medical records set for October go live, part of the Patient Protection and Affordable Care Act (the irony in the bill’s name is beyond imagination).  The story this week of Target’s insecure records that resulted in somewhere between 70 and 110 million customers gives us pause.  Credit card numbers, PIN authorization codes, names, addresses and even email addresses were hacked.  Presumably Target has the most up to date security for these records available, but…..

Another story this week told of the vulnerability of offsite access to databases through Virtual Private Networks.  In recent weeks we’ve read of NASDAQ and Snapchat being hacked.  None of these companies lack Information Technology sophistication or concern for the privacy of their records.  Target is thought to be an inside job.  As Edward Snowden showed with his million plus record theft of our country’s deepest secrets, all it takes is one person with an agenda and a grudge.

Do we think that every county hospital and doctor’s office with access to a national database will have the security and IT capability of NASDAQ or Target?  The national database of medical records will tell who has AIDS, who has been treated for STDs, who has struggled with depression or bulimia or had an abortion or breast enhancing surgery, which job applicant has an expensive history of drug use or cardiac problems, members social security numbers – all of it will be there.  The intention to make more accessible and easily transferable all of our health records may or may not be benign to our brave new world, but it will undoubtedly leave us vulnerable.

“Concentrated power is not rendered harmless by the good intentions of those who create it.” Milton Friedman (Nobel Memorial Prize winning economist)

This week we are told that the administration finally chose not to renew the contract to the Canadian company, CGI Group, which was hired to oversee key aspects of the egregious healthcare.gov rollout.  Nobody got fired, including the inept Secretary of HHS, Kathleen Sibelius. Hundreds of millions were spent with CGI, who’s Executive Vice President, Tony Townes-Whitley, went to Princeton with Michelle Obama, belonged to the Princeton Black Alumni association with her and donated to the Obama campaign – a fortuitous coincidence no doubt.  Now after one of the most visible IT debacles in history, they don’t get their contract renewed.  No penalties, no claw back, no anything.

The House of Representatives on Friday passed the Health Exchange Security and Transparency Act with all Republicans and 67 Democrats.  The bill would require the health exchanges to notify victims of identity or information theft within the exchanges.  The administration lobbied Democrats hard to vote against it.  The self proclaimed most transparent administration in U.S. history opposes the Security and Transparency bill and threatens to veto it if enough Democrats in the Senate are persuaded by their nervous constituents to join their House colleagues.

As dear Alice wondered after going down the rabbit hole, it gets curiouser and curiouser!

 “This train don’t carry no con men, this train;

This train don’t carry no con men, this train;

This train don’t carry no con men,

No wheeler dealers, here and gone men,

This train don’t carry no con men, this train.”  This Train is Bound For Glory, Woody Guthrie

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