Oooh! Oooh! I get to use my macroeconomics course! My professor would be so proud.
No, they wouldn't.
In any standard macro model, the size of the economy is the sum of all goods and services produced, not the size of the money supply.
Production requires labor and capital, both of which may be enhanced by "technology" (which doesn't necessarily mean the same thing to an economist that it does to an engineer).
Money is a convenient medium of exchange, and a nice way to measure things, but has value only in the sense that it represents labor or capital.
Unless NASA's contract makes use of labor and capital that would otherwise not have been used (that is, otherwise unemployed workers and idle machinery), more stuff made for NASA means less other stuff made.
Your companies A-F may prosper, but there are companies G-L somewhere that are worse off.
Government spending can influence what things get produced -- take money that would have been spent on plasma TVs away from people by taxing them, spend it on Saturn V boosters instead (note that money is still just a medium of exchange here -- it's easier for the government to take $100 than it is to tell you, "Don't go to your regular job on Tuesday, show up in Houston to work on the Saturn V instead.")
Deficit government spending can temporarily stimulate demand for goods -- borrow money that would otherwise have been saved/invested, and spend it on goods instead.
If the government simply prints money and spends it, but the total output of goods is unchanged, you get inflation -- each dollar in the money supply represents a smaller quantity of goods.
Of course, the real-life situation is enormously more complex than what we're discussing here.
There's been lots of speculation that the whole case was a pump-and-dump stock exercise. If the dismissal is with prejudice, suggesting that SCO never really had a case, or at least that they seriously misrepresented the strength of their case in public filings, can that be part of an SEC investigation?
Small businesses and entrepreneurs are starved for capital. Large businesses and management committees have substantial capital, but refuse to invest it. Therefore, there is no capital; or, if there is, it is usually totally inadequate.
These statements, at least those about why there is no capital available, are certainly open to debate.
Consider the large business case first.
Microsoft and Cisco fit the description of having substantial capital, as they have large amounts of cash on hand and little or no debt.
In fact, Microsoft has been criticized for years for sitting on their mountain of cash.
Let's pick another of the very largest companies, GE.
Cash, $8.32B.
Debt, $290.43B.
This latter situation is much more common than the former.
In the US, large companies are pretty much up to their eyebrows in debt.
In that situation, for almost any business opportunity, you have to ask the question, "Will this make me more money than paying off some of my existing loans?"
Consider small companies with big plans.
The most recent period where there were lots of those was the "new" telecom companies in the late 1990s.
They borrowed mountains of money on the basis of highly-suspect projections of growth in Internet traffic.
The US now has millions of strand-miles of long-distance optical fiber, most of which will never be lit.
Many of those companies have been through bankruptcy court.
In bankruptcy court, the shareholders lost everything they had put into those ventures (we'll leave the issue of how much was pocketed by the top executives for another day).
When approached by small firms with big plans, investors who might have money want to hear a good story about why it's not another telecom bubble.
Let's look at the various governments' situations, just to be sort-of complete.
Total US debt sits just below $7T.
Annual interest payments on that debt are something over $300B per year.
Estimates put this year's addition to the debt at between $400B and $500B, with near-future years only somewhat smaller.
Existing committments to entitlement programs make it likely that the annual deficit will really ballon starting several years from now.
So the government already has to make hard choices about where to spend its money.
Japan's economy has been in the doldrums for the last 10-12 years because too many of their large companies have debts they can't pay, the banks won't call those loans because they're technically bankrupt if they do, and the government has been spending its money to prop the whole thing up.
China's banks are in the same sorry shape due to bad loans held by state-owned companies.
The largest countries in Europe have situations similar to the US -- already running deficits and faced with potentially large growth in their deficits due to future committments.
In short, there's no capital because it's all been bloody spent, and then some!
Not because someone's sitting on it.
Canada has a surface area of about 9.971M square kilometers.
The United States comes in at about 9.372M square kilometers.
Canada is about 6% larger, not all that much.
Close.
Beer had been around for a long time.
When the Catholic church began spreading into the area that is now Germany, there was some question as to whether German priests would have to give up beer.
A sample was sent to the Vatican, and the Pope made some comment to the effect that if the German priests wanted to do this additional penance, it was fine with him.
Imagine what kind of condition the beer was in by the time it got to Rome.
Non-pasteurized, probably transported by ox cart, over the Alps in the summer when the passes were clear.
Skunky doesn't even begin to describe it!
People can always come back to town after the quake hits, and return to their land and repair their buildings.
Assuming that they can afford such repairs without insurance.
If these guys are onto something and can forecast large earthquakes at least several months in advance, and I'm an insurance company, I will not renew policies on buildings in those areas.
Same kind of ethical problem that comes out of our increasing understanding of the human genome -- "Your genes make it quite probable that you will develop cancer by the time you're 50, so no medical insurance (or at least no cancer coverage) for you."
Ahg! did you just refer to VB as an embedded programming language?!
Well, yes, but only in the sense that it's embedded within (or at least directly accessable from within) Excel.
Not in the sense of writing embedded software for real-time control.
That was careless of me:^)
All the basic functionality of the Office Suite is there in Free form
Since I retired and went back to school, I have discovered large groups of people that use Excel as a general-purpose everybody-has-it environment for numerical computation.
They make heavy use of tools like the embedded Visual Basic and Solver (general nonlinear constrained optimization).
Some of those features, such as Solver, will be quite difficult to duplicate.
If an OSS alternative uses a different algorithm, for example, it may have quite different convergence properties that cause the alternative to get different numerical solutions than Excel.
Similarly, an embedded programming language that is almost-but-not-quite Visual Basic will break a large number of existing spreadsheet applications.
Are there OSS apps that provide "sophisticated" compatibility?
The whole point of having OpenOffice.org is that it will communicate with MS Word.doc's seamlessly, so if Israeli contractors already had Word installed, there would be no point to switching.
I tried using OpenOffice, and ran into constant small problems with opening documents prepared by MS Office tools.
The problems with Word were mostly annoying -- the spacing slightly wrong here, a font size different there, etc.
The problems with Excel and PowerPoint were much more serious.
A noticable fraction of the slides were simply not readable.
All of the spreadsheets except the very simplest ones had serious problems.
If I'm a business person preparing a proposal or any other document for the government, and I know that the government official is going to open it with OpenOffice, I'm going to want to prepare it with OpenOffice.
Israel govt's purchases account for 3-4% of MS Israel's annual revenue.
Of course, in the somewhat longer term, losing that 3-4% of the market will put pressure on the remainder of their sales in Israel.
I'm sure that there will be a lot of businesses that will need to communicate with the government electronically.
If MS Word and similar file formats can no longer be assumed to be correctly readable by government employees, then businesses will start shifting to software that produces files/attachments that they know can be read properly.
Hrm. Odd that. I do believe that this was an economic stimulus package that was designed to get people who invest into businesses in large chunks to invest even more money. Amazingly, it seems to have worked!
There hasn't been time for additional investment to show up as economic growth yet -- it takes at least a couple of years for such stimuli to work their way through the system.
Mainstream economists attribute almost all of the quick stimulus effect not to the tax cuts, but to the fact that the government simply continued to spend, and in some areas, increased its spending dramatically.
Or are you one of those who is actually oblivious to the fact that every tax on a corporation gets passed on to the consumers, with perhaps a smidge more added in to make a larger profit? Go ahead! Tax the large companies. Hit 'em hard, 50% of their profit! Watch the price of goods skyrocket to unimaginable levels! It'll be FUN!
Huh?
The dividend tax cut doesn't cut the taxes paid by corporations -- it cuts the personal income tax of those who receive the dividends.
Your goal, as well as the administration's stated goal of eliminating the "double tax" on dividends, could be accomplished by the much simpler change of making dividends a before-tax expense for corporations, the same way that interest payments are handled.
I have no problem with that, but THAT'S NOT WHAT THEY DID.
Yes. Creating a stable democracy in the center of the Middle East will immediately begin to have an impact on the radical fundamentalists surrounding that democracy. As a matter of fact, Saudi Arabia has already begun reforms in that direction.
If it works, fine.
More than fine, terrific!
But at what cost?
Do you really believe that the US can withdraw in the near future and the "stable" democracy will continue to function that way?
$80B per year for how many years?
How much of that $80B as profit for large American companies?
At least, let's have a plan for putting that profit in the hands of Iraqi companies as soon as possible -- getting their economy up and stable will improve the chances for a stable democracy.
Yep. And for the first time, senior citizens without an exorbitant amount of income and/or pension-provided insurance are eligible for prescription drug benefits. Sounds like a win-win deal for me. Or are you one of those types who can't see how private citizens AND major corporations can win on the same deal?
No, I'm one of those who claim that, as the law stands, the three-sided game involving beneficiaries, corporations, and the taxpayer is set up to be a win-win-lose affair.
Please note that I'm not against the notion of a prescription drug benefit -- medical care has changed dramatically since Medicare was created, and as long as the government is in the health insurance business, drug costs should be covered in some fashion.
However, every state that currently administers a prescription drug benefit (there are several) negotiates bulk discounts with the drug companies.
So do most insurance companies.
Other than protecting drug company profits, why would the federal government be specifically forbidden from negotiating such discounts?
Further, the law contains provisions that allow insurance companies to dump high-cost beneficiaries back into the government program -- preserving their profits, because they can pick and choose who they cover.
For me, the correct order of consideration has to be (1) provide the benefit, (2) minimize the cost to the taxpayer, and finally (3) allow private companies to profit if they are helping with cost minimization in a global sense.
No, he's the president whose main goal seems to be to make sure tax funds make it into the hands of the giant corporations, or people wealthy enough to hold large shares in giant corporations.
Tax cuts for individuals who receive stock dividends, primarily benefitting the wealthy.
Most poor and middle-class people who get dividends do so within a tax-deferred vehicle like an IRA or 401(k).
Defense contractors will make a bundle replacing all the munitions and other supplies used in Iraq, during the fighting and after.
Yes, Saddam is a terrible person, responsible for the deaths of at least 300,000 Iraqis, but should the US taxpayers have spent $160B (or more) to depose him?
Insurance companies and drug companies both get major benefits from the prescription drug bill.
Proposed guest-worker program has got to put downward pressure on the cost of labor.
Campaign proposals (not acted on yet) to privatize Social Security.
Estimates are that as much as 20% of the money would end up in the hands of large brokerage houses as fees and expenses.
We may not get anyone to the moon or to Mars, but I'll bet the effort is organized so that several giant companies have a chance to make major profits.
I have a friend who works in Washington, just below the appointed level, who says the word is out that Mr. Bush knows who funded his election and is determined that they will get repaid.
I was working at a Fortune 500 company in an R&D job.
In order to provide demonstrations of new network services under a variety of conditions, I had built a real-time network emulator.
I was testing it, on a test subnet, which was supposed to be isolated by the gateway router from the company's production network.
I wanted to "soak" things, looking for odd error conditions, and left it running on Saturday morning with every intention of coming back Sunday evening to shut it down.
A sick kid kept me at home Sunday night so I didn't get back to it until 7:30 Monday morning.
I walked in, the packets-per-second being forwarded was off the scale, hit the interrupt key and everything shut down gracefully.
The problem involved multicast packets and some bug in the Linux kernel which caused, occasionally, packets to be reported as being received from a different interface than where they had actually arrived.
One line of added code fixed things nicely, but as it turned out, I had code running on multiple boxes that caused such packets to be bounced back and forth forever.
Complicate the situation further when it turns out that the gateway router was not configured as I had been told, and it only isolated unicast traffic; my multicast flood had leaked out onto the production network.
I had intentionally run a small TTL so the packets didn't propogate past the Denver headquarters (could have been ugly if they had gotten to Atlanta, Boston, LA, etc).
I'm in early, got the problem shut down, and think that no one has noticed, right?
Some weeks later, I was at a presentation done by the network support group, talking about the kinds of things they measure and monitor.
The guy doing the talk, whom I don't know at all, puts up a slide showing an enormous spike in traffic early one Monday morning.
"We're not sure what caused this," the guy says, "but we think it was Mike up in Westminster."
Emberrassing when problems that cannot be otherwise explained are attributed to you.
I also suspect that it's not pump and dump.
People forget that the price can go up and up like this even if its the same small percentage of shares being sold over and over again on the "greater fool" theory of returns (that is, I bought it at 10 knowing it wasn't worth that, but believed that I could sell at 12 to someone more foolish than I).
A substantial majority of SCOX is held by insiders and institutional investors (about 75% IIRC).
For these people, buying at $1 or $2 back when the lawsuit started might be a very reasonable gamble.
They're not betting that they can sell their shares at $20;
they're gambling on the low-probability outcome of winning the lawsuit, and collecting a one-time $100/share dividend.
When you're managing a fund with billions of dollars in it, an occasional million-dollar bet on a 100:1 payoff can be worthwhile.
It's pretty basic global economy theory. Tariffs and protectionist barriers are not highly regarded by economists. You sound like a textile worker in the 60's or an auto worker in the 80's. Free trade is good, despite what you may think.
Of course, there's Wynne Godley's (who's certainly entitled to have an opinion on the subject) take:
It is a well kept secret that the theory of international trade -- the entire story about the benefits every country can gain by exchanging goods with other countries -- depends upon the assumptions:
A) that trade between countries is balanced and
B) that trade does not alter the level of employment or unemployment.
Certainly the first condition is not currently satisfied, at least in terms of goods and services.
There is a convincing argument that the rest of the world has, in fact, been "loaning" us the difference in the trade balance by using their excess dollars to buy US government and private debt.
As to the second, if offshoring results in countries like China and India "exporting" their own unemployment and underemployment problems to the US, then the US does not necessarily see a net benefit from trade.
If exporting that type of macroeconomic variable is possible, the US has a serious problem --
estimates of unemployment in China run as high as 150M people, almost as many as are employed in the US.
The manufacturing jobs that went overseas were replaced, at least in part, by knowledge-based jobs in the service sector.
If these jobs are gone permenantly, it remains to be seen if we can replace them with something else of comparable value.
Remember: The PRIME responsibility of the board of directors for a publicly traded company is to MAKE MONEY for it's stock holders.
With all due respect, I have to disagree at least somewhat.
At least, I have to say that while the prime responsibility within "the game" may be to make money for the share holders, there are other considerations in terms of the field on which the game is played.
A company incorporated in the US receives a number of benefits that do not show up in any quarterly or annual statement.
Strong property rights, the rule of law to enforce them, and little probability of change in that situation.
Ability to move capital freely.
Little or no civil unrest.
A stable government with sufficient authority to help protect the company's overseas interests.
Unfortunately, these benefits apply to all companies equally.
So the standard economic problem arises -- if one company finds a way to avoid the costs of these obligations, that firm benefits.
However, if all companies succeed in avoiding their obligations -- well, the "tragedy of the commons" problem is one of the oldest in economics, and it occurs with monotonous regularity.
There is an implicit obligation on each company to maintain the stability of the beneficial environment in which they operate.
The hard policy questions involve decisions about restrictions that should be imposed on companies in order to enforce that obligation.
Out-sourcing core portions of your business is an extraordinarily bad idea.
Of course, sometimes companies make bad choices about what their core business is.
Many years ago, Honda and Chrysler both conducted exercises to decide what their core competencies would be and how to ensure that they were world leaders in those areas -- it was a "hot" management technique at that time.
Honda decided that, as an auto company, they would be world class in engines -- and since they needed a place that could test new technology, they created the Honda factory racing teams.
Chrysler decided that they would be world class in marketing and selling cars -- and disbanded their factory racing teams and signed contracts to buy engines from Japan.
You've missed the point of my question.
The original poster implied that we should undertake space exploration, and manned missions to moon in particular, on the basis of "hope and progress," progress meaning some sort of benefit that could not be identified in advance.
I questioned whether such motivation had ever happened before -- asserting that past undertakings had specific goals, most frequently commercial in nature, and so it is reasonable to ask what the commercial benefit there might be from new manned lunar missions.
However, it seems worth challenging some of the implicit claims here.
The economic benefit of the moon landings and the entirety of the international space programs of the 60s and 70s is immeasurable. The medical benefits alone are unmatched in all of history.
As to the first sentence, nonsense.
The total world production of goods and services is finite -- something just over $30T per year.
Total world wealth is also finite.
Some portion of each of those can be attributed to the moon landings or technology developed for that program that would not have emerged otherwise.
I assert that it is a rather tiny portion, not "immeasurable", particularly when you take out the benefits that can be attributed to unmanned craft in LEO or GEO.
The R&D cost to develop the ability to put sizable objects in low-earth orbit can probably be justified just by the savings in human life and property damage due to accurate tracking of hurricanes.
It seems unlikely that there are alternate sensor platforms that could do the same job at reasonable cost.
However, such benefits could be easily postulated, if not quantified, in advance.
It is more difficult to claim that those benefits are the result of Apollo, that the capabilities would not have been developed as part of a LEO-only program.
As to the second, be specific.
For example,
name three drugs in common use that were developed for the Apollo program, or are derived from drugs developed for Apollo, and that match the benefits of the anti-cancer drugs developed in the past ten years.
Name two common surgical procedures that trace to Apollo technology.
Name a material critical to medical equipment that was developed for Apollo that would probably not have been developed otherwise for other purposes.
Personally, I'd love to see 1-2% of GDP (world product would be even better) spent to colonize the moon.
I'm willing to accept the argument that if we colonize the moon, they will eventually produce stuff that we need (goods, services, technology) that we wouldn't otherwise get.
But my question in that case is, if I spend 2% of GDP (about $180B per year for the US), how long does it take to establish a viable colony?
Viable meaning that it has reached the point that, say, 90% of the people that go there don't come back -- they live out their life on the moon.
If I can't send "colonists" it's not a colony, it's a research outpost like Antarctica.
I believe that the true benefits of colonizing will be developed by colonists.
Can't go back to the moon. Nobody can make a "business case" for it... Hope and progress are quaint notions which have no place amongst the cubicles.
With all due respect, I would be interested in hearing examples of historical undertakings on this scale (large numbers of people, measurable pieces of the national income involved, long-term time table) that were done on the basis of hope and progress, since I think they are few and far between.
The Portuguese explorations in navigating around Africa were done in order to break the Italian trade monopoly with the Far East.
Spain funded Columbus for much the same reason.
When the British, Dutch, Belgians, and others established overseas colonies, there were always expectations of commercial profits.
Some groups established colonies in the Americas in order to escape religious persecution (that could count as "hope"), but did so only after commercial transport had become feasible, if expensive.
Apollo was based on neither hope nor progress, but was a response to a perceived Soviet technology threat.
Without a union to focus and crystallize talking points there is no rational reason for this to be adopted as an issue by a political candidate.
Sorry, wrong.
This one's a no-brainer.
It's a presidential election year, and the Democrats desperately need an economic issue.
No one's ever made a go of the deficit issue -- not enough people get excited that their children may suffer 20 years from now.
You can only go so far with arguing that the tax cuts for the wealthy should be repealed -- too many people aspire to be wealthy themselves.
None of the Democratic candidates seem to be willing to discuss tax cuts for the working poor -- because that would mean cutting Social Security taxes and admitting that SS accounting is a farce.
Which leaves jobs.
The media are already getting behind this -- every major paper and news magazine has already run stories about unemployed IT professionals.
It's a natural for the liberal parts of the press -- heartless corporations putting people out of work for the sake of profits.
A handful of states have introduced laws barring companies that provide call centers for state services from moving them offshore.
There's been at least one scandal -- a San Francisco hospital outsourced some activity involving medical records, it got subcontracted at least twice, and ended up in India where a woman attempted to blackmail one of the subcontractors by threatening to post the private medical records on the Web.
Almost everyone knows someone who has been affected, and the Democrats will attempt to play on that general fear.
To be honest, no one has any idea whether moving these jobs offshore is bad for the economy or not.
At the present time, which do you think is having more effect on IT hiring -- offshoring, or the combination of a general recession, the dot-com bust, and the telecom industry meltdown?
Certainly there are individuals who are hurt in the short term by such actions.
The longer-term effect will depend on what kinds of jobs we create to offset the losses.
If you know what the growth industries are for the next ten years, you can get rich.
The disaster only happens if there are no growth industries...
Two areas where I think there will success are local networks and compelling content.
When I say local networks, I mean last-mile solutions.
Of course, some of the technologies involve longer distances than that -- up to the last 22,500 miles if you happen to own a geosynchronous bird.
There will be opportunities outside of the areas served by the big players -- telcos and cable companies.
This is a business where there are significant economies of scale, so small guys will have to win on the basis of superior service.
Wireless technology is probably important, since wired solutions are CAPITAL-INTENSIVE, and will generally require permission from local regulatory agencies.
Building the devices used in such networks doesn't seem like a particularly profitable business -- if there's a significant market, there's going to be lots of competition and the profit margins are probably quite thin.
There are opportunities to make money if you can provide some form of compelling content.
I've always thought there were opportunities in almost any small city with a university.
There are dozens/hundreds of music majors with performance requirements -- can you create and distribute a library of performances?
Can you design and implement a multimedia tutoring system that connects students and tutors?
Can you make deals with the local last-mile providers so your servers are close to the end user, rather than having to trust the Internet for performance and/or reliability?
A pension for old age? I guess that's good. But the increase in wages should have allowed the workers to save and fund their own pensions.
My attitude towards pensions has changed markedly over the years.
25 years ago, when I got out of school and went to work, I was sort of "The company has a pension plan? I guess that's okay."
Today, it seems a great deal more important.
At some point, when you notice that every time you take that four-hour flight in coach you pay with knees that hurt for two days (or something equivalent), it sinks in that you won't be able to work forever.
Unfortunately, the odds today favor you living quite a bit longer than you can work.
If you want to fund your own pension and look at the numbers, you realize that you needed to be saving 10-15% of your gross pay starting from day one.
For the large majority, who are already having 15% of gross pay (we'll include the "employer's share" as part of gross pay) taken for Social Security and Medicare for existing retirees, plus income taxes, saving at that rate is almost impossible.
You'll also need some luck in your investments.
If you are a bit too aggressive, and take a 25% hit in your balance shortly before you planned to retire (think the stock market in 2001), you have a serious problem.
Or you may get cheated by your company in some fashion (think Enron's 401(k) program).
And if you're not aggressive enough, you'll need to be saving more than that.
Trust me on this, retirement calculators are depressing things to play with.
Full disclosure -- due to a combination of good planning and good luck, when I got laid off a year ago I was in a position to attempt an early retirement.
I figure the odds at something better than 50-50 that there's enough money that I can stay retired.
I'm back in graduate school working on a Ph.D. in economics, with a research interest in the problems of an aging society.
Based on various polls I've seen, I (a) know more than most of my generation about my investing goals and (b) work harder at taking care of the money.
You may well be correct.
However, anytime government regulation is involved, I tend to get suspicious of the bookkeeping about "costs".
I spent years in the local telecom industry, perhaps the most regulated business in the US.
Besides the federal government, each state has its own set of laws and regulations.
Each state has its own rules about which costs can be included in the calculation of profit or loss on a service.
A service might be "profitable" on the books in Colorado because a bunch of the fixed costs are disallowed.
The same service might operate at a loss in Wyoming because those same costs are included.
Large local phone companies have to keep multiple sets of books -- one for investors, one for the IRS, one for the state(s).
Do we know any of the details of the accounting that goes into the Canadian profit?
Let's say this trend continues, and one day, only a tiny percentage of the population needs to work to meet the needs of all. What happens then? Does this minority get all the money and power? Do we split up the work so that everybody only "works" a few hours per week?
Of course things can change, but this is the direction society is currently heading. What will the capitalists do when people don't need to work anymoe?
How many science fiction stories have been written speculating about that?
Assuming outcomes from the idylic to the opposite extreme?
I'm feeling pessimistic today, so I'll bet on the ugly outcome.
The proceeds from any economy's output are divided between labor and capital.
Labor's share in the US is currently about two-thirds.
If labor's share declines, capital must get a bigger share.
Capital's share never goes to 100% -- there will probably always be some services that require labor, eg, doctors and hookers.
If capital ownership is sufficiently widespread, things could work out -- everyone gets some sort of basic income from their capital (interest, dividends, etc).
But the trend in the US today is towards greater concentration of capital (wealth), so it could get REALLY ugly -- what do you do if your parents didn't leave you enough capital to generate an income, you're too dumb to be a doctor, and too ugly to be a hooker?
Of course, the poor people will have some sort of economy where they exchange goods and services.
Can you build a shanty?
Set a simple fracture?
Catch and cook rats?
There might be opportunities in the military -- the rich folks will need an armed force to keep the rabble in their place.
Yes, we've seen examples of serious excesses of late.
In the late 1990s, a relatively small number of people discovered that they could literally loot the company for their own benefit and the board of directors would let them get away with it.
Some of the worst cases (eg, the Rigas family) will be going to jail eventually.
On the other hand...
I spent 25 years working for large corporations, the last 10 of that in positions where I had regular encounters with the senior management.
They all worked 60-80 hours per week, every week.
They were on call to their bosses 24/7/365 -- and got called regularly.
Even the CEOs -- who had to deal with the calls from institutional shareholders pissed off the pension fund they managed had lost $1B in value.
They spent at least three out of five days per week on the road -- exotic locales, I suppose, if you count Pittsburg and Omaha and Jacksonville and Washington, DC as exotic.
All of the ones that I knew were called back to work from the middle of a long-planned family vacation at least once.
Several had work-related health problems -- ulcers were common, and at least one case of life-threatening blood clots attributed to six weeks of almost daily time spent in the cramped cabin of the corporate jet.
A surprising number of them donated extensive amounts of time to charity -- actively helping with fund-raising (weeks lobbying a foundation to make a $10M donation) and management (trying to hire honest people to handle a million-dollar budget).
The ones that I knew that were involved with large layoffs agonized over the decisions.
At least for me personally, you couldn't get me to touch one of those jobs unless you were offering enough that after three years I could retire comfortably.
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No, they wouldn't.
In any standard macro model, the size of the economy is the sum of all goods and services produced, not the size of the money supply. Production requires labor and capital, both of which may be enhanced by "technology" (which doesn't necessarily mean the same thing to an economist that it does to an engineer). Money is a convenient medium of exchange, and a nice way to measure things, but has value only in the sense that it represents labor or capital. Unless NASA's contract makes use of labor and capital that would otherwise not have been used (that is, otherwise unemployed workers and idle machinery), more stuff made for NASA means less other stuff made. Your companies A-F may prosper, but there are companies G-L somewhere that are worse off.
Government spending can influence what things get produced -- take money that would have been spent on plasma TVs away from people by taxing them, spend it on Saturn V boosters instead (note that money is still just a medium of exchange here -- it's easier for the government to take $100 than it is to tell you, "Don't go to your regular job on Tuesday, show up in Houston to work on the Saturn V instead.") Deficit government spending can temporarily stimulate demand for goods -- borrow money that would otherwise have been saved/invested, and spend it on goods instead. If the government simply prints money and spends it, but the total output of goods is unchanged, you get inflation -- each dollar in the money supply represents a smaller quantity of goods. Of course, the real-life situation is enormously more complex than what we're discussing here.
There's been lots of speculation that the whole case was a pump-and-dump stock exercise. If the dismissal is with prejudice, suggesting that SCO never really had a case, or at least that they seriously misrepresented the strength of their case in public filings, can that be part of an SEC investigation?
These statements, at least those about why there is no capital available, are certainly open to debate.
Consider the large business case first. Microsoft and Cisco fit the description of having substantial capital, as they have large amounts of cash on hand and little or no debt. In fact, Microsoft has been criticized for years for sitting on their mountain of cash. Let's pick another of the very largest companies, GE. Cash, $8.32B. Debt, $290.43B. This latter situation is much more common than the former. In the US, large companies are pretty much up to their eyebrows in debt. In that situation, for almost any business opportunity, you have to ask the question, "Will this make me more money than paying off some of my existing loans?"
Consider small companies with big plans. The most recent period where there were lots of those was the "new" telecom companies in the late 1990s. They borrowed mountains of money on the basis of highly-suspect projections of growth in Internet traffic. The US now has millions of strand-miles of long-distance optical fiber, most of which will never be lit. Many of those companies have been through bankruptcy court. In bankruptcy court, the shareholders lost everything they had put into those ventures (we'll leave the issue of how much was pocketed by the top executives for another day). When approached by small firms with big plans, investors who might have money want to hear a good story about why it's not another telecom bubble.
Let's look at the various governments' situations, just to be sort-of complete. Total US debt sits just below $7T. Annual interest payments on that debt are something over $300B per year. Estimates put this year's addition to the debt at between $400B and $500B, with near-future years only somewhat smaller. Existing committments to entitlement programs make it likely that the annual deficit will really ballon starting several years from now. So the government already has to make hard choices about where to spend its money.
Japan's economy has been in the doldrums for the last 10-12 years because too many of their large companies have debts they can't pay, the banks won't call those loans because they're technically bankrupt if they do, and the government has been spending its money to prop the whole thing up. China's banks are in the same sorry shape due to bad loans held by state-owned companies. The largest countries in Europe have situations similar to the US -- already running deficits and faced with potentially large growth in their deficits due to future committments.
In short, there's no capital because it's all been bloody spent, and then some! Not because someone's sitting on it.
Canada has a surface area of about 9.971M square kilometers. The United States comes in at about 9.372M square kilometers. Canada is about 6% larger, not all that much.
Close. Beer had been around for a long time. When the Catholic church began spreading into the area that is now Germany, there was some question as to whether German priests would have to give up beer. A sample was sent to the Vatican, and the Pope made some comment to the effect that if the German priests wanted to do this additional penance, it was fine with him. Imagine what kind of condition the beer was in by the time it got to Rome. Non-pasteurized, probably transported by ox cart, over the Alps in the summer when the passes were clear. Skunky doesn't even begin to describe it!
Assuming that they can afford such repairs without insurance. If these guys are onto something and can forecast large earthquakes at least several months in advance, and I'm an insurance company, I will not renew policies on buildings in those areas. Same kind of ethical problem that comes out of our increasing understanding of the human genome -- "Your genes make it quite probable that you will develop cancer by the time you're 50, so no medical insurance (or at least no cancer coverage) for you."
Well, yes, but only in the sense that it's embedded within (or at least directly accessable from within) Excel. Not in the sense of writing embedded software for real-time control. That was careless of me :^)
Since I retired and went back to school, I have discovered large groups of people that use Excel as a general-purpose everybody-has-it environment for numerical computation. They make heavy use of tools like the embedded Visual Basic and Solver (general nonlinear constrained optimization). Some of those features, such as Solver, will be quite difficult to duplicate. If an OSS alternative uses a different algorithm, for example, it may have quite different convergence properties that cause the alternative to get different numerical solutions than Excel. Similarly, an embedded programming language that is almost-but-not-quite Visual Basic will break a large number of existing spreadsheet applications.
Are there OSS apps that provide "sophisticated" compatibility?
I tried using OpenOffice, and ran into constant small problems with opening documents prepared by MS Office tools. The problems with Word were mostly annoying -- the spacing slightly wrong here, a font size different there, etc. The problems with Excel and PowerPoint were much more serious. A noticable fraction of the slides were simply not readable. All of the spreadsheets except the very simplest ones had serious problems.
If I'm a business person preparing a proposal or any other document for the government, and I know that the government official is going to open it with OpenOffice, I'm going to want to prepare it with OpenOffice.
Of course, in the somewhat longer term, losing that 3-4% of the market will put pressure on the remainder of their sales in Israel. I'm sure that there will be a lot of businesses that will need to communicate with the government electronically. If MS Word and similar file formats can no longer be assumed to be correctly readable by government employees, then businesses will start shifting to software that produces files/attachments that they know can be read properly.
There hasn't been time for additional investment to show up as economic growth yet -- it takes at least a couple of years for such stimuli to work their way through the system. Mainstream economists attribute almost all of the quick stimulus effect not to the tax cuts, but to the fact that the government simply continued to spend, and in some areas, increased its spending dramatically.
Huh? The dividend tax cut doesn't cut the taxes paid by corporations -- it cuts the personal income tax of those who receive the dividends. Your goal, as well as the administration's stated goal of eliminating the "double tax" on dividends, could be accomplished by the much simpler change of making dividends a before-tax expense for corporations, the same way that interest payments are handled. I have no problem with that, but THAT'S NOT WHAT THEY DID.If it works, fine. More than fine, terrific! But at what cost? Do you really believe that the US can withdraw in the near future and the "stable" democracy will continue to function that way? $80B per year for how many years? How much of that $80B as profit for large American companies? At least, let's have a plan for putting that profit in the hands of Iraqi companies as soon as possible -- getting their economy up and stable will improve the chances for a stable democracy.
No, I'm one of those who claim that, as the law stands, the three-sided game involving beneficiaries, corporations, and the taxpayer is set up to be a win-win-lose affair. Please note that I'm not against the notion of a prescription drug benefit -- medical care has changed dramatically since Medicare was created, and as long as the government is in the health insurance business, drug costs should be covered in some fashion. However, every state that currently administers a prescription drug benefit (there are several) negotiates bulk discounts with the drug companies. So do most insurance companies. Other than protecting drug company profits, why would the federal government be specifically forbidden from negotiating such discounts? Further, the law contains provisions that allow insurance companies to dump high-cost beneficiaries back into the government program -- preserving their profits, because they can pick and choose who they cover. For me, the correct order of consideration has to be (1) provide the benefit, (2) minimize the cost to the taxpayer, and finally (3) allow private companies to profit if they are helping with cost minimization in a global sense.
No, he's the president whose main goal seems to be to make sure tax funds make it into the hands of the giant corporations, or people wealthy enough to hold large shares in giant corporations.
We may not get anyone to the moon or to Mars, but I'll bet the effort is organized so that several giant companies have a chance to make major profits. I have a friend who works in Washington, just below the appointed level, who says the word is out that Mr. Bush knows who funded his election and is determined that they will get repaid.
Sorry, feeling cynical this evening.
I was working at a Fortune 500 company in an R&D job. In order to provide demonstrations of new network services under a variety of conditions, I had built a real-time network emulator. I was testing it, on a test subnet, which was supposed to be isolated by the gateway router from the company's production network. I wanted to "soak" things, looking for odd error conditions, and left it running on Saturday morning with every intention of coming back Sunday evening to shut it down. A sick kid kept me at home Sunday night so I didn't get back to it until 7:30 Monday morning. I walked in, the packets-per-second being forwarded was off the scale, hit the interrupt key and everything shut down gracefully.
The problem involved multicast packets and some bug in the Linux kernel which caused, occasionally, packets to be reported as being received from a different interface than where they had actually arrived. One line of added code fixed things nicely, but as it turned out, I had code running on multiple boxes that caused such packets to be bounced back and forth forever. Complicate the situation further when it turns out that the gateway router was not configured as I had been told, and it only isolated unicast traffic; my multicast flood had leaked out onto the production network. I had intentionally run a small TTL so the packets didn't propogate past the Denver headquarters (could have been ugly if they had gotten to Atlanta, Boston, LA, etc). I'm in early, got the problem shut down, and think that no one has noticed, right?
Some weeks later, I was at a presentation done by the network support group, talking about the kinds of things they measure and monitor. The guy doing the talk, whom I don't know at all, puts up a slide showing an enormous spike in traffic early one Monday morning. "We're not sure what caused this," the guy says, "but we think it was Mike up in Westminster." Emberrassing when problems that cannot be otherwise explained are attributed to you.
Of course, there's Wynne Godley's (who's certainly entitled to have an opinion on the subject) take:
Certainly the first condition is not currently satisfied, at least in terms of goods and services. There is a convincing argument that the rest of the world has, in fact, been "loaning" us the difference in the trade balance by using their excess dollars to buy US government and private debt. As to the second, if offshoring results in countries like China and India "exporting" their own unemployment and underemployment problems to the US, then the US does not necessarily see a net benefit from trade. If exporting that type of macroeconomic variable is possible, the US has a serious problem -- estimates of unemployment in China run as high as 150M people, almost as many as are employed in the US. The manufacturing jobs that went overseas were replaced, at least in part, by knowledge-based jobs in the service sector. If these jobs are gone permenantly, it remains to be seen if we can replace them with something else of comparable value.
With all due respect, I have to disagree at least somewhat. At least, I have to say that while the prime responsibility within "the game" may be to make money for the share holders, there are other considerations in terms of the field on which the game is played. A company incorporated in the US receives a number of benefits that do not show up in any quarterly or annual statement. Strong property rights, the rule of law to enforce them, and little probability of change in that situation. Ability to move capital freely. Little or no civil unrest. A stable government with sufficient authority to help protect the company's overseas interests.
Unfortunately, these benefits apply to all companies equally. So the standard economic problem arises -- if one company finds a way to avoid the costs of these obligations, that firm benefits. However, if all companies succeed in avoiding their obligations -- well, the "tragedy of the commons" problem is one of the oldest in economics, and it occurs with monotonous regularity. There is an implicit obligation on each company to maintain the stability of the beneficial environment in which they operate. The hard policy questions involve decisions about restrictions that should be imposed on companies in order to enforce that obligation.
Out-sourcing core portions of your business is an extraordinarily bad idea. Of course, sometimes companies make bad choices about what their core business is. Many years ago, Honda and Chrysler both conducted exercises to decide what their core competencies would be and how to ensure that they were world leaders in those areas -- it was a "hot" management technique at that time. Honda decided that, as an auto company, they would be world class in engines -- and since they needed a place that could test new technology, they created the Honda factory racing teams. Chrysler decided that they would be world class in marketing and selling cars -- and disbanded their factory racing teams and signed contracts to buy engines from Japan.
We're a Honda family now.
As to the first sentence, nonsense. The total world production of goods and services is finite -- something just over $30T per year. Total world wealth is also finite. Some portion of each of those can be attributed to the moon landings or technology developed for that program that would not have emerged otherwise. I assert that it is a rather tiny portion, not "immeasurable", particularly when you take out the benefits that can be attributed to unmanned craft in LEO or GEO.
The R&D cost to develop the ability to put sizable objects in low-earth orbit can probably be justified just by the savings in human life and property damage due to accurate tracking of hurricanes. It seems unlikely that there are alternate sensor platforms that could do the same job at reasonable cost. However, such benefits could be easily postulated, if not quantified, in advance. It is more difficult to claim that those benefits are the result of Apollo, that the capabilities would not have been developed as part of a LEO-only program.
As to the second, be specific. For example, name three drugs in common use that were developed for the Apollo program, or are derived from drugs developed for Apollo, and that match the benefits of the anti-cancer drugs developed in the past ten years. Name two common surgical procedures that trace to Apollo technology. Name a material critical to medical equipment that was developed for Apollo that would probably not have been developed otherwise for other purposes.
Personally, I'd love to see 1-2% of GDP (world product would be even better) spent to colonize the moon. I'm willing to accept the argument that if we colonize the moon, they will eventually produce stuff that we need (goods, services, technology) that we wouldn't otherwise get. But my question in that case is, if I spend 2% of GDP (about $180B per year for the US), how long does it take to establish a viable colony? Viable meaning that it has reached the point that, say, 90% of the people that go there don't come back -- they live out their life on the moon. If I can't send "colonists" it's not a colony, it's a research outpost like Antarctica. I believe that the true benefits of colonizing will be developed by colonists.
With all due respect, I would be interested in hearing examples of historical undertakings on this scale (large numbers of people, measurable pieces of the national income involved, long-term time table) that were done on the basis of hope and progress, since I think they are few and far between. The Portuguese explorations in navigating around Africa were done in order to break the Italian trade monopoly with the Far East. Spain funded Columbus for much the same reason. When the British, Dutch, Belgians, and others established overseas colonies, there were always expectations of commercial profits. Some groups established colonies in the Americas in order to escape religious persecution (that could count as "hope"), but did so only after commercial transport had become feasible, if expensive. Apollo was based on neither hope nor progress, but was a response to a perceived Soviet technology threat.
Sorry, wrong. This one's a no-brainer. It's a presidential election year, and the Democrats desperately need an economic issue. No one's ever made a go of the deficit issue -- not enough people get excited that their children may suffer 20 years from now. You can only go so far with arguing that the tax cuts for the wealthy should be repealed -- too many people aspire to be wealthy themselves. None of the Democratic candidates seem to be willing to discuss tax cuts for the working poor -- because that would mean cutting Social Security taxes and admitting that SS accounting is a farce. Which leaves jobs.
The media are already getting behind this -- every major paper and news magazine has already run stories about unemployed IT professionals. It's a natural for the liberal parts of the press -- heartless corporations putting people out of work for the sake of profits. A handful of states have introduced laws barring companies that provide call centers for state services from moving them offshore. There's been at least one scandal -- a San Francisco hospital outsourced some activity involving medical records, it got subcontracted at least twice, and ended up in India where a woman attempted to blackmail one of the subcontractors by threatening to post the private medical records on the Web. Almost everyone knows someone who has been affected, and the Democrats will attempt to play on that general fear.
To be honest, no one has any idea whether moving these jobs offshore is bad for the economy or not. At the present time, which do you think is having more effect on IT hiring -- offshoring, or the combination of a general recession, the dot-com bust, and the telecom industry meltdown? Certainly there are individuals who are hurt in the short term by such actions. The longer-term effect will depend on what kinds of jobs we create to offset the losses. If you know what the growth industries are for the next ten years, you can get rich. The disaster only happens if there are no growth industries...
When I say local networks, I mean last-mile solutions. Of course, some of the technologies involve longer distances than that -- up to the last 22,500 miles if you happen to own a geosynchronous bird. There will be opportunities outside of the areas served by the big players -- telcos and cable companies. This is a business where there are significant economies of scale, so small guys will have to win on the basis of superior service. Wireless technology is probably important, since wired solutions are CAPITAL-INTENSIVE, and will generally require permission from local regulatory agencies. Building the devices used in such networks doesn't seem like a particularly profitable business -- if there's a significant market, there's going to be lots of competition and the profit margins are probably quite thin.
There are opportunities to make money if you can provide some form of compelling content. I've always thought there were opportunities in almost any small city with a university. There are dozens/hundreds of music majors with performance requirements -- can you create and distribute a library of performances? Can you design and implement a multimedia tutoring system that connects students and tutors? Can you make deals with the local last-mile providers so your servers are close to the end user, rather than having to trust the Internet for performance and/or reliability?
My attitude towards pensions has changed markedly over the years. 25 years ago, when I got out of school and went to work, I was sort of "The company has a pension plan? I guess that's okay." Today, it seems a great deal more important. At some point, when you notice that every time you take that four-hour flight in coach you pay with knees that hurt for two days (or something equivalent), it sinks in that you won't be able to work forever. Unfortunately, the odds today favor you living quite a bit longer than you can work.
If you want to fund your own pension and look at the numbers, you realize that you needed to be saving 10-15% of your gross pay starting from day one. For the large majority, who are already having 15% of gross pay (we'll include the "employer's share" as part of gross pay) taken for Social Security and Medicare for existing retirees, plus income taxes, saving at that rate is almost impossible. You'll also need some luck in your investments. If you are a bit too aggressive, and take a 25% hit in your balance shortly before you planned to retire (think the stock market in 2001), you have a serious problem. Or you may get cheated by your company in some fashion (think Enron's 401(k) program). And if you're not aggressive enough, you'll need to be saving more than that. Trust me on this, retirement calculators are depressing things to play with.
Full disclosure -- due to a combination of good planning and good luck, when I got laid off a year ago I was in a position to attempt an early retirement. I figure the odds at something better than 50-50 that there's enough money that I can stay retired. I'm back in graduate school working on a Ph.D. in economics, with a research interest in the problems of an aging society. Based on various polls I've seen, I (a) know more than most of my generation about my investing goals and (b) work harder at taking care of the money.
You may well be correct. However, anytime government regulation is involved, I tend to get suspicious of the bookkeeping about "costs". I spent years in the local telecom industry, perhaps the most regulated business in the US. Besides the federal government, each state has its own set of laws and regulations. Each state has its own rules about which costs can be included in the calculation of profit or loss on a service. A service might be "profitable" on the books in Colorado because a bunch of the fixed costs are disallowed. The same service might operate at a loss in Wyoming because those same costs are included. Large local phone companies have to keep multiple sets of books -- one for investors, one for the IRS, one for the state(s). Do we know any of the details of the accounting that goes into the Canadian profit?
How many science fiction stories have been written speculating about that? Assuming outcomes from the idylic to the opposite extreme? I'm feeling pessimistic today, so I'll bet on the ugly outcome.
The proceeds from any economy's output are divided between labor and capital. Labor's share in the US is currently about two-thirds. If labor's share declines, capital must get a bigger share. Capital's share never goes to 100% -- there will probably always be some services that require labor, eg, doctors and hookers. If capital ownership is sufficiently widespread, things could work out -- everyone gets some sort of basic income from their capital (interest, dividends, etc). But the trend in the US today is towards greater concentration of capital (wealth), so it could get REALLY ugly -- what do you do if your parents didn't leave you enough capital to generate an income, you're too dumb to be a doctor, and too ugly to be a hooker? Of course, the poor people will have some sort of economy where they exchange goods and services. Can you build a shanty? Set a simple fracture? Catch and cook rats? There might be opportunities in the military -- the rich folks will need an armed force to keep the rabble in their place.
Yes, we've seen examples of serious excesses of late. In the late 1990s, a relatively small number of people discovered that they could literally loot the company for their own benefit and the board of directors would let them get away with it. Some of the worst cases (eg, the Rigas family) will be going to jail eventually. On the other hand...
I spent 25 years working for large corporations, the last 10 of that in positions where I had regular encounters with the senior management. They all worked 60-80 hours per week, every week. They were on call to their bosses 24/7/365 -- and got called regularly. Even the CEOs -- who had to deal with the calls from institutional shareholders pissed off the pension fund they managed had lost $1B in value. They spent at least three out of five days per week on the road -- exotic locales, I suppose, if you count Pittsburg and Omaha and Jacksonville and Washington, DC as exotic. All of the ones that I knew were called back to work from the middle of a long-planned family vacation at least once. Several had work-related health problems -- ulcers were common, and at least one case of life-threatening blood clots attributed to six weeks of almost daily time spent in the cramped cabin of the corporate jet. A surprising number of them donated extensive amounts of time to charity -- actively helping with fund-raising (weeks lobbying a foundation to make a $10M donation) and management (trying to hire honest people to handle a million-dollar budget). The ones that I knew that were involved with large layoffs agonized over the decisions.
At least for me personally, you couldn't get me to touch one of those jobs unless you were offering enough that after three years I could retire comfortably.