111–120 of 166 posts
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"The number of people making a real living in the arts will remain very small." This sounds a lot like an agricultural-age person saying "the number of people making a real living in manufacturing will remain very small". If all physical goods are really cheap enough, you don't need to earn that much as an artist to afford them.
The art most people can produce is worth exactly zero .
Maybe at this point in time you have to accept a high unemployment rate, the problem you have to be careful with I guess is you still want to provide incentive to the people currently in minimum wage positions.
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Many of them shifted into fields that didn't exist in 1900 because in 1900, food and shelter were the majority of what people in the US worked for.
Many of them shifted into fields that didn't exist in 1900 because in 1900, food and shelter were the majority of what people in the US worked for. Exactly -- science led to technology which led to job creation. That's the whole story of the 20th century, with a couple of wars tossed in to keep things moving. Meanwhile, in 2010, science and technology are just two more things most Americans take for granted. We still…
You're actually very wrong about foreign STEM students (every US graduate school is filled with Chinese grad students and post-docs), but that's neither here nor there. One of the main points of the article was that it gets harder to educate a new generation of high-tech workers when the industries that have all of the institutional knowledge out-source that knowledge to China.
Middle-achieving Chinese students have an incentive to come to the US for higher education -- it helps them get jobs back home. What incentive to middle-achieving American kids have, when the bottom 95% of high-tech jobs are sent to China?
The unspoken Myth of economics is that just because we've transitioned from an agrarian to an industrial economy in the past, we'll be forever able to use efficiency improvements to drive employment in the future. In real life, it's just plainly, obviously untrue. If nothing else, the simple fact that human intelligence follows a bell-curve should tell us that there's always going to be a large class of people who cannot function at the highest level of production. Those people need factory jobs, or farming jobs, or other lower-skill industries that pay a decent salary.
He had me up until: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars -- fight to win.) Everybody loses a trade war. And the ensuing impoverishment and desperation can trigger a shooting war.
We are currently losing this non-war. The Chinese are playing to win this non-war.
From the trade, we in the USA get cheaper products and low-cost loans/investment.
We then enact counter-productive feel-good policies that make us less competitive:
- employment-depressing labor rules (ranging from minimum wages to complex and expensive mandates)
- corporate welfare (including bailouts)
- subsidies for politically-popular activities (like home ownership and acquisition of often-superfluous academic credentials)
These choices are not the fault of the Chinese. At worst, because our trade with the Chinese makes us wealthier, we can then afford to make bigger mistakes elsewhere before correcting course. We spend the surpluses from trade on our anti-competitive policy luxuries.
"Winning" won't require getting tough on the Chinese, but getting tough on ourselves.
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Citation? Evidence? Data? Or are you just saying that because economic experts like Thomas Friedman have drilled it into our heads for a decade or more?
Probably the best citation is of course the classic economic text "Ferris Buller's Day Off". To quote: In 1930, the Republican controlled House of Rep, in an effort to alleviate the effects of the… Anyone? Anyone?… the Great Depression, passed the…Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act which, anyone? anyone? Raised or lowered?… Raised tariffs, in an effort to collect more revenue for the federal…
I'm not for tariffs actually, but neither do I think 'common knowledge', especially if it's 80yrs old, has earned any right to go unexamined. Globalization and free trade are not without their problems, especially not if Grove is correct (I think he is) in asserting they've cannibalized a significant portion of our economy that both creates jobs and enables innovation.
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> Grove is basically saying we need to start more companies that "scale up" to require factories where people sit doing stuff like what's seen in that video. He's wrong. You have to give Grove more credit than that. Obviously, he does not want to create clock-punching jobs just for the sake of having clock-punching jobs. Grove is known to run a tight ship. His example of the alternative energy space is a perfect one…
My real point, though, is that consolidation is inevitable. Production jobs ("Scaling," etc.) are going to become less important over time, not more important, whether they're in China or America. Any forward-looking argument that doesn't take that fact into account is flawed from the outset, and I think Grove's piece falls into that category. Is it really healthy for Silicon Valley if Apple has a factory cranking ou…
You're right on that since we're clearly talking past each other :-) Yes, businesses become commodities over time. We agree here. However this is orthogonal to innovation and job creation. If an old mature industry is on its last throes, then by all means, farm that out. Those jobs are gone. But that's not what we're talking about here. We're talking about new industries that if they can stay put for even say 5-10 years could provide immense benefits to the innovating nation. It keeps the middle class healthy and prevents the have/have-not scenario that you mentioned as troublesome. I share those same concerns. It also creates an in-house knowledge base for future innovation and an investing base for venture capital formation (think Paypal/Google mafia). It also has the effect of incenting the country to implement pro-innovation policies to continually lay those golden eggs. A virtuous cycle if I ever saw one.
Now enter the bureaucrats in Beijing who have created their own "incentives". The main one being cost which they obtain by mortgaging their labor/environment and toying with the exchange rate. These aren't truly economic advantages but are really artificial rules put in place by a planning committee for national interest. Government intervention if you will. Entrepreneurs and startups who must factor in cost to any decision are thus improperly incented to quickly offshore. Thus we have the familiar story of "we innovate and they get the jobs" This is why Grove said creating more startups won't do anything to help US unemployment since they do their scaling elsewhere. The proper course of action is for China to due away with their policies but we can't make them. This is game theory folks. The unfortunate reality is that the rules of engagement are written by bureaucrats and Grove is saying if China is playing that game we must too.
There's another proposed solution to this problem in the form of tax reform - The Fair Tax proposal. IANA Tax Expert, but I like how they've completely rethought the tax system from the ground up, with the objective of making the US a tax haven for all parts of the manufacturing process - harvesting raw materials, milling into useful materials, manufacturing into products, transport, and sales. In a nutshell, there a…
Anyway, the reasons the fair tax will not be adopted are: 1. Too many special interests benefit from the current tax structure: -Charities -Accountants/CPA firms and their lobbies -Large corporations who pay a very low effective tax rate -Rich people 2. The government LIKES a complex tax system with different tax treatment for different types of people and tax credits which they can use to "shape behavior" 3. Progressives always cry "Regressive tax" when we aren't appearing to tax the rich proportionately more than the poor. News flash guys the rich are smarter than you and avoid paying most of their taxes already by using personal corporations to hold their wealth. Also as has already been stated the fair tax has a cost of living rebate for poor people. 4. It would make too much sense, and we can't do anything that makes sense in America, that's just downright unamerican.
Also can we please stop pretending "creative destruction" and blatant mercantilism and market manipulation by the chinese are the same thing. China doesn't believe in free market capitalism, they never have, they never will, they have a planned economy and manipulate their currency and subsidize factories to create large amounts of manufacturing wealth. This is not the same thing as buggy whip makers going out of business, this is the wholesale destruction of the American manufacturing economy to the benefit of the chinese.
We need an import tariff on ONLY chinese goods UNTIL they stop manipulating the currency. The tarif should be the same amount by which they have devalued their currency, about 40 percent. All of you trade hawks screaming about trade war seem to believe we only trade with China, this is obviously false. If we don't levy tariffs on anybody else things will be fine, we'll just buy crap from viet nam, south america and south korea until china falls into line with their currency policy. Sure China will retaliate against us, but we'll still be selling stuff to every other country who's name isn't China.
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This is an extremist point of view. Realistically they have a lot of purposes that should be kept in mind.
When you become a director of a company you have a legal duty to "enhance shareholder value" thats the only rule. Anything else you do, every hire, every contract, every charity donation must be justifiable in this context - unless you enjoy shareholder lawsuits.
I believe the only thing legal you are required to do is not to defraud your shareholders. Any idiot can, legally, run a company into the ground.
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Or to put it in other words, the Chinese are fighting a trade war and we are just pretending this is not happening, and getting our asses kicked.
More likely, Chinese leadership has its own set of problems and what happens to the US is tangential, at most just another factor to consider in complex calculations. They are probably indifferent about whether some particular policy of theirs is "creating" or "destroying" jobs in the US, as long as it has its desired domestic effect. That's a completely different thing from a "war" with its focus on the other side a…
Looking like a duck and quacking like a duck doesn't depend on your silly definition of "war." What China is effectively doing is waging war on the US. Whether we wake up to this fact or not will determine whether the US becomes a nation of the rich in fortified castles sitting amongst the poor and desperate, or whether we return to the American Dream.
I find this line of thinking very disturbing. Mr. Grove follows others in believing a common fallacy, by ignoring secondary effects, and fails to see how issues in macroeconomics affect each other. Where to start... The American standard of living is higher than China. In order for a worker in the US to continue to enjoy his standard of living and salary, she must contribute to creating something of value equal to wh…
This is what most of the Western world wants, yet it is very difficult to achieve this - largely because of education. Most of the West, not just America, wants the bulk of it's jobs in high value-added positions because of labour costs arbitrage which many companies are forced to engage in because of intense competition. Where education is concerned, some people don't want to go to college, some aren't suited to it and well, funding education is damn expensive and the pressure on politicians to cut educational spending (which takes a long time to payoff) is huge. So you are never going to get all of the workforce in the country to work in high value-add roles, for various reasons.
I was fascinated by this interview with Andy Grove, because I had read an interview with Craig Barrett (current as chairman of Intel) who took a largely polar opposite view to what Grove has said in this article. Barrett was talking about how Ireland must change in order to move out of recession. I think he would be appalled at the notion of the US entering into a fully-blown trade war with China, as Grove advocates.
Barrett quote [on Ireland]: What I said is that [having] smart people (good education) is important, smart ideas (investment in research) is important, and then letting smart people get together with smart ideas to do something is the third thing (the environment). The very same could just as easily apply to the US.
Full article here (a very good read): http://www.irishtimes.com/newspaper/finance/2010/0212/122426...