Monday, August 30, 2010

Meanwhile in Washington

While we were in Phuket, Washington was in the midst of another power outage caused by thunderstorms. Need I say more?

By coincidence, one night when we were day, we lost power at the hotel, albeit for only about an hour. Apparently, a transformer down the road blew. According to M, when she was at the front desk asking about the power, a lady came by and said 'I heard an almighty bang and then the lights went out!'

As I wrote this I read that Washington has been beset by three more thunderstorms accompanied by widespread power outages. (See here for the storm the day after we left, here for the second storm, and here for the storm after. Or here for a roundup.)

It's great that I have been in 3rd world countries with no power interruptions! Looks like we left DC just in the nick of time. While this is may be an indicator of poor investment in the power grid, it is by no means the only infrastructure suffering from lack of maintenance – the Metro is having problems and water mains need to be fixed instead of the water authorities waiting for them to break before attending to them.

The usual things will happen – Pepco will be called to account for its handling of the power outages. After some apologies and how this summer has been 'unprecedented' and the county officials have had their outbursts and photo-ops things will go back to the way they were before. The problem lies in our willingness to accept things as they are before. This attitude can result in catastrophes such as poor responses to Katrina and the Gulf oil spill. We call these events unprecedented and excuse ourselves because we cannot perform any better. To say that we will try to perform better is not enough (nor is it enough to just learn from the past and hope the mistakes do not repeat.)

Deming calls this effort continuous quality improvement. (Note that Lexus calls it a relentless pursuit of perfection but did nothing much about it which accounts for the recalls this summer.) Yet, it is hard to get companies to continually invest in maintenance, repairs and upgrades. Economists will call this an incentive problem. One way to solve this would be to allow maintenance and repairs to be tax deductible, say 10 cents for every dollar and for upgrades say 50 cents for every dollar.

Deming would be against this however, if I read his philosophy correctly. Pick an area to improve on – for instance, for every storm the number of outages have to be lower and lower every year until it falls to zero. His philosophy would imply that the costs of fixing power lines from storms would in the long run more than pay for itself.

So is the problem short-termism (especially of the stock market) and long term? More on this in another post.

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