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No science, no startups: The innovation engine we're switching off

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Re: No science, no startups: The innovation engine we're switching off

#431

Post by walkabout »

treyd wrote: post #404
AnthonyMouse wrote: post #373

Earlier quoted context omitted.

> Share buybacks allow companies to reward executives directly as their compensation is tied to stock price. If we started not doing that, the priorities might shift, but those executives like things the way they are. This isn't right but it's adjacent. Executives don't need buybacks to get whatever compensation. Their compensation is negotiated and you can write the contract to make it whatever. However, paying divi…

> Companies often use it to acquire other companies, which is the worst. We also used to enforce antitrust law.

Chicago school assholes backed by economic-right postwar "think tanks" managed to radically shift our standard for "harm" in anti trust enforcement, back in the '70s, though a combo of lobbying and positioning their folks in the right places. The result was that it became nearly impossible to take anti-trust action. That's why it seems like we suddenly stopped enforcing it—we did. This was followed shortly by a shift way to the right by Democrats on economic issues (among other things—listen to Clinton in the '90s talk about crime or schools or lots of other topics some time, he sounds exactly like a Republican) after Reagan's landslide, which put any hope of reversing that bad course on hold indefinitely.

The first notable push-back on that state of affairs was Lina Khan under Biden, who ever so slightly course-corrected us back toward healthy market competition in the tiniest of ways, and every business bro reacted like she was committing mass murder. Meanwhile, we need that times ten for at least a decade just to get us back to something resembling functioning markets. At this point I doubt we'll see a shift back toward reasonable market regulation... ever. Plutocrat capture of the levers of power is so complete that the only way I expect the US to see serious anti-trust action ever again is as a tool of corruption.

Re: No science, no startups: The innovation engine we're switching off

#432

Post by doctorpangloss »

fidotron wrote: post #64

There's something odd in this argument. If you come at it from a Canadian perspective Canada seriously spent on neural network computer science when almost no one else did (many in AI considered the entire thing discredited and impossible), now the (financial) gains from that are almost entirely in a foreign country. The US science establishment was all about buying and utilizing Russian rocket engines until he-that-…

There are successes in Canada, surely Google’s presence there counts for something. It’s an huge multinational corporation, some big AI units are in London and Toronto. Among startups in AI, Ideogram. Public funding in the arts in Canada is also really good, and it’s not an accident Ideogram is there and not here.

50% of VC is biotech, HistoSonics is on the front page of HN, and it was a PhD project turned into a huge company with deep, liquid capital markets. BBC doesn’t really write about that but the venture system that made HistoSonics was super sophisticated, full of very bright people willing to take huge risks, and while the inventor isn’t going to be a billionaire, she is still there inventing stuff, and she’s not going to be poor either.

Nobody is asking economists in the article any questions. How does R&D show up as something measurable? - thats really the meaning of financial we care about in this case, as opposed to economic or humanistic, where it’s pretty obvious that Canada, Russia, and the US, among other smaller countries like Israel and Finland, benefit from R&D more than financially, compared to say the UAE, which has spent relatively much more but yielded far less. A very attractive measure, to me, is the productivity of sectors that are basically indexes on a nation’s geography, like real estate, agriculture and minerals, versus innovations-driven sectors like healthcare, education and technology. In relative terms, given how great the weather is and how much oil there is, California and British Columbia (for EXAMPLE) swing way above their weight, no?

Instead of asking why Canada is doing this or that - Canada is doing quite well - we should be looking at South Korea.

Re: No science, no startups: The innovation engine we're switching off

#433

Post by runako »

Great post. I would love to see someone connect the long-term increase in Americans' wealth with our ability to develop and harness new technologies. And conversely, how much poorer we can expect Americans to become if that cycle is slowed/stopped.

I've seen similar articles about trade & the UK (and now the US). I'm sure someone has done or is working on similar analysis for science & engineering.

Re: No science, no startups: The innovation engine we're switching off

#434

Post by zaphar »

fakedang wrote: post #411
zaphar wrote: post #381

Earlier quoted context omitted.

I don't think they do know. Nor do I think most of the shareholders know. If they did they would know that they can make way more money with forward thinking and planning beyond a quarter. The lack of that is the clearest indication I can imagine that they do not know.

Most investors today are basically stock printer go brrr.... If one looks at US money printing in the past two decades, they'll find that the S&P's gains are basically just a mirror to the increased injection of dollars, a facade made to prop up the market. There really has been no actual growth compared to like Japan in the 1980s or China and India in the early 2000s, or Vietnam today. Just a few companies, mostly i…

Which is kind of just one way of saying "They don't know".

Re: No science, no startups: The innovation engine we're switching off

#435

Post by potato3732842 »

hlfshell wrote: post #328
terminalshort wrote: post #3

> In the 20th century, U.S. companies put their excess profits into corporate research labs. Basic research in the U.S. was done in at Dupont, Bell Labs, IBM, AT&T, Xerox, Kodak, GE, et al. This changed in 1982, when the Securities and Exchange Commission ruled that it was legal for companies to buy their own stock (reducing the number of shares available to the public and inflating their stock price.) Very quickly B…

What's missing from this explanation is that the corporate tax rate was also much higher, but R&D dramatically cut down profit that would be taxed and was taxed lower. So large corporations like Bell Labs and co would basically say "do we give the government X in taxes, or do we spend X on research?". They chose research, so we got the technology that powers our world. That, combined with stock buybacks and the gener…

Exactly.

These days you're better off giving it to a university with strings attached. Sure, they might piss a bunch of it away, but when you account for the dollars on the subject you care about after taxes are leeched out it's still more efficient than building out research within the confines of a for-profit entity that gets taxed at such.

This is why we no longer have corporate research labs and damn near every university is bristling with BigCo funded stuff.

Re: No science, no startups: The innovation engine we're switching off

#436

Post by jstanley »

mitthrowaway2 wrote: post #372
jstanley wrote: post #369

Earlier quoted context omitted.

> Buybacks create a tendency toward higher share prices, but only while they continue. Buybacks increase the share price because you have a company that is worth (for sake of argument) the same as it was worth before, except now there are fewer shares available. A fixed market cap divided by fewer shares equals a higher share price. In the limit case imagine buying back all but 1 share. Now that 1 share represents th…

The company is worth a bit less after the buyback, because it's given away some of its money, which was part of its valuation. But the effect should still be positive on the share price.

Good point.

Re: No science, no startups: The innovation engine we're switching off

#437

Post by pixl97 »

whatshisface wrote: post #262
echelon wrote: post #243

Earlier quoted context omitted.

Lecture halls sit empty while universities build amenities to make college seem like a staycation. If a university truly needs more classrooms, so be it, but much of the spending is going to perks like gyms, saunas, and sports facilities.

If the free market says that young adults 18-24 want to spend thousands of dollars on gyms, saunas and sports facilities, why should government regulators get involved?

>If the free market says

The free market will gladly smash your nation into the ground and kill everyone if it's profitable enough.

Re: No science, no startups: The innovation engine we're switching off

#438

Post by mexicocitinluez »

philipallstar wrote: post #416
mexicocitinluez wrote: post #402

Earlier quoted context omitted.

God, the irony in saying "All major research is done by companies" while typing your message out to post ON THE INTERNET. LOL.

Basically all of the internet is powered by software, standards, computers, networks and storage created by companies.

lol and? What does that have to do with the original claim?

Re: No science, no startups: The innovation engine we're switching off

#439

Post by foobarian »

cadamsdotcom wrote: post #227

It feels like in the past 20-ish years, maybe longer, game-changing innovations have become rarer, making science lower ROI. If that’s true (maybe it’s not? all I have is vibes!), if it is indeed true, and science is becoming less able to convert into invention- it stands to reason that at some point it becomes rational for a country to direct resources elsewhere. Political will becomes strained, and politicians deci…

Used to be you could throw a handful of metal scrap into a vacuum chamber, hook it up to high voltage and get a handful of patents right off the bat. That ship has long sailed

Re: No science, no startups: The innovation engine we're switching off

#440

Post by sidewndr46 »

andrewlgood wrote: post #394
sidewndr46 wrote: post #260

Earlier quoted context omitted.

As others have mentioned that isn't comparable because salaries are taxed. The tax rate on unrealized gains in the US is zero percent from what I understand.

Not correct. Capital Gains taxes depend on the holding period. Short term capital gains (stock held less than a year) are taxed at the same rate as salaries (ordinary income rate). Long term capital gains (stock held at least a year), are taxed on a reduced level that peaks out at 20% (depends on total taxable income) with a possible additional 3.8% Obama Net Investment Tax.

So I buy a stock on Jan 1 for $1 and by June 15 it is worth $100. I'm going to pay $99 of short term capital gains at that point?
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