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What The Bubble Got Right
dtolton writes "Paul Graham has written an article entitled What the Bubble Got Right. In recent years the roaring tech bubble has become a byword, yet Paul does an excellent job of articulating what it got right."
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Finally an actual sladotter who read it considered the assumtpions..
Yes, most of P G's articles are based on questionable assumptions and more questionable thesis statments..
Most finanical wizards describe the bubble as the fleecing of Retirement fundws.. which in fact was..as we the investment public moved from indvidual stocks in the 1980s to mutual funds as our major source of funding for IRAs and etc..
Don't Tread on OpenSource
When the Internet frenzy began in 1998, the labor market encountered shortages. Consider what would have happened in two scenarios: (1) no H-1B's and (2) plenty of H-1B's. Consider scenario #1. The dire labor shortages would have done 2 things: (1) improved working conditions for engineers and (2) raised salaries. "Improved working conditions" could, for example, mean that the average working hours is reduced so that the engineers can return home somewhat earlier to be with their families and to build better relationships with their children. When companies cannot raise salaries to attract more workers, the companies could improve working conditions.
As salaries rise and working conditions improve, more people enter the engineering profession. However, the labor market does not grow fast enough, so some ideas are delayed and are not turned into startup companies. There is no problem here, since there are already plenty of jobs. Some companies close due to labor shortages. Consequently, venture capitalists are more prudent and do not fund hokey, idiotic ideas.
During the downtown in 2003 to 2005, there is a surplus in the labor market, and the ideas previously delayed due to a labor shortage are now converted into companies, hiring the newly unemployed Americans. The downtown is not severe. All is well.
Now, consider scenario #2, which actually happened. Into the picture enters the H-1B engineers from India and China. Instead of allowing market forces to work in the labor market for high-tech employees, the American government chose to intervene aggressively -- in much the same fashion that the government has intervened in the low-tech labor market. The government "fixed" the labor shortage and flooded the market with H-1B engineers (in the same fashion that the government floods the low-tech labor market with Mexican illegal aliens).
Companies demand that engineers work 57 hours per week. Since the Indians work 57 hours per week, the other engineers better work 57 hours per week. Otherwise, they are "out" of the company.
Almost every idea is converted into a startup company since there is plenty of H-1B labor. Many hokey, idiotic ideas are funded by venture capitalists.
The shortage of labor does increase wages, but wages do not rise as rapidly as they would in scenario #1.
Rents increase rapidly. The flood of H-1B engineers create a housing shortage. The Chinese engineers and the Indian engineers come from the elite of their nations, and expensive housing is no problem. They lived as elites in their own nations, and they have the money to pour into high rents and high mortgates.
Then, the downturn arrives in 2001-2003. All the companies based on hokey, idiotic ideas crash. Massive numbers of people are fired. Unemployment in Silicon Valley reaches 9%. The downturn is deep and long.
There are very few new delayed ideas because most of them were implemented as new startup companies during the Internet craze. The H-1B hordes facilitated this situation.
Which scenario is better? Scenario #1 is better. Allow the free market to work. The government should not intervene in the high-tech labor market. If the government did not intervene, the downturn in the Silicon Valley would have been much milder than it actually was. We should not allow any more H-1B workers into this country unless that country has a free market. In other words, H-1B workers from Canada and Europe are okay. However, foreign workers from Mexico, China, and India should be banned.
If you hate what is happening to our nation, the USA, then write the following on the November ballot.
president: Bill O'Reilly
vice-president: Tammy Bruce
Get a life people.
People often want it both ways. They don't want to adapt to a new economy, but they want all of the benefits. You have three choices, and these have existed for most of human history. You can lead, you can follow or you can be dominated. America leads, India follows, others are simply dominated because they refuse to follow the leaders' example and try to grow, and cannot lead on their own, thus another country steps in and economically dominates them. It doesn't mean it's right, but it's a fact of life.
Nothing like being the excuse maker for American Corporate Imperialism, eh? Who the fuck are you? Karl Rove? Or Hermann Goering reincarnated?
RS
Shoes for Industry. Shoes for the Dead.
When someone breaks into your house and steals something from you, and you want it back, is that envy?
The constitution promises a government for the people and by the people, but our govt is in fact for the rich and not the people. The top tax rates are much too low. That wealth that our country is losing is OURS, by right. Yes, a person who is successful should have more than others. But pay unto Caesar what is Caesar's. The rich and our own govt collude to rob us. It aint envy to want back our robbed wealth.
eat shiat and bark at the moon