U.S. Treasury Secretary Timothy Geithner yesterday unveiled thoughts to improve the US economic situation. The market gave its mark to his appearances but I wanted to share a couple of my thoughts from software development perspective.
No significant software is ever created overnight. The first release takes an enormous amount of effort. In competitive situations, information surrounding the release time frames and content are typically very sensitive. The team usually gets formed along the way. Even if an existing high performance team undertakes a new project, it takes some time to gain expertise in new technologies. These times eat into the project schedules. Even if all technologies are well understood, it takes some time to establish the project and get everyone familiar and following the new processes. As the project forms and begins to progress, the “product” starts to take on a very rough shape. Decisions made earlier can be reversed later in the project but always at a cost. There are always numerous inter-dependencies, many reasons for the project to become delayed or derailed. The scope of the original project often changes based on realities so much that initial documents become almost completely irrelevant in later phases. This is unfortunately an oversimplification of the typical process. Though one would expect the second release to be more streamlined, that release also follows a somewhat similar path for a number of reasons one of which is the omission of key features from the first release.
If comparatively a micro-project like the development of software can have so many variables, complexities, and reasons to fail, how can we expect a gargantuan organization like the Treasury or the Federal Reserve to come up with a “perfect” plan to tackle the fundamental forces behind the current recession. My expectation is that the actions that have been taken and the plans being released and to be announced are incorrect, inadequate, and at best lacking. My main hope is for the government to do no harm. The programs and the funds are very large. Much electricity can be generated by diverting rivers but the same waters can also wash a lot of land. Trillions and billions are being discussed as if those funds will spend themselves automatically. It takes a lot of effort to put a million dollars to work in a small business. It takes a number of people a month or two to close on a loan of $100,000. It takes audit departments and independent accountants weeks to review books of companies with a few billion dollars in annual revenue. What type of accounting is required for a trillion dollars? How many small business loans would 10 billion dollars make? How long would those small business owners need to work to turn that money from a loan into salaries, profits, savings, spending?
I hear some hosts and guests on TV and elsewhere talk about their “expectations” as if they could do a statistically significantly better job had they been appointed to the post of the Treasury Secretary or any meaningful post. Think of the economy at any given date as steady state. Now imagine these “plans” as the initiatives individuals push to improve the steady state. I stress the word “initiatives” and “individuals” because that is what I see and most of us fail to implement average size initiatives, let alone ones to change the steady state of the world’s largest economic machine. My point is that these are not simple tasks. I give much credit to our leaders for their courage and pray that their actions do not result in negative unintended consequences. I do not want them to rush with any plans as “haste makes waste” and waste at this scale could really pollute the fish tank and affect the health of us, the little fish.