That the U.S. government under pressure of right-wing propaganda ("Stop wastin' muh tax-dollahs!") continues to slash funding is no counterproof, not as long as we don't see industry taking up the slack.
I have read your comment for a second time - and I don't think my initial response was spot on.
First, I will stand that government underinvest in public goods. It’s not right wing republicans. It is hard to point to a government that invest wisely significant funds into public goods over the long term. Japanese, French, Soviet, etc. All governments proclaim that they should spend more on infrastructure, education, research, etc. – and most fail to do so. (That being said, trying to figure out the right level of spending on long term public goods is hard.)
Second, I will reject your counter proposal on industrial research. If the government fails to invest in basic research why should private industry? Basic research is long term high risk stuff – where the people who do the initial research rarely reap the rewards. These tend to be basic ideas which are hard to patent. And by the time they marketable they have been morphed and combined beyond anything the original patent holder had ever immingled.
Take Bell Labs for example. They did a lot of great basic research (Which they had to – AT&T had a monopoly and this was part of their payoff. Most of their great ideas was not exploited by AT&T but by other companies? Why would a corporation do this?
You are right - Government does pay for most basic research - but I think you missed my point.
What is the correct amount to spend on R&D and are we spending enough?
People tend to underinvest in public goods. Since everybody will enjoy the benefit everybody thinks they are paying more than their fair share. i.e. If the US were to fund R&D the jobs to make the pills would go to India, Israel, etc. so US citizens would tend to underpay.
Also, people tend to underinvest in projects with long payback times. During a budget crunch it’s hard to increase R&D for drugs that will cut Medicare 10 years down the line.
That is why Apple stores are succeeding and Best Buy is failing.
Apple cares that you buy Apple products. Bonus points if you buy it at the store but I am sure they make plenty if I bought a IPod on Amazon. So they focus on high customer service.
Best Buy cares if you window shop at their store and buy it online via your smart phone. That's a loss sale.
So yeah, there is going to be places for instant gratification but retail is changing.
OK, you have given me something to crew over - but let me try to give you a partial response.
1. Governments tend to under invest in long term projects like basic medical research.
2. Bureaucrats tend to be conservative and would not fund high risk high return ventures. Craig Venter and the human genome project is an example that I love. He wanted to go the public rout but was denied funds because his approach was too radical. He did it faster and cheaper then the public rout.
Of course Pharm only researches drugs it can patent and sell, so there is underfunding of research on older drugs and drugs for poor people.
I would like to see some type of hybrid approach. More public funding of course. Maybe offer prizes in lieu of patents? Still thinking about this.
Amazon bought Kiva Systems last year - a company that specializes in pick and pack robots. If I remember my dot.com history correctly it was the picking and packing aspect of the business that killed on-line grocery WebVan. (Which Amazon was an early investor in. I wonder f Amazon has any of the old WebVan stuff around.)
So what is your solution? How would you allocate money to drug R&D?
Patented drugs send a clear signal market signal if we are overspending / underspend on drugs in general or on specific types of drugs. Do I have specific issues with the current system that I would like to see reformed? Yes. Do I want to throw out the baby with the bathwater? Not until I hear a better idea.
Like democracy, it is a horrible system whose only saving grace is that it is better than all others.
Fair question but one that is hard to answer. For the US, reading the tea leaves, I would guess stable.
For example, a company that shifts from high end desktops to servers might be increasing IT spending but it would show up as a decrease in this survey.
Gartner takes a survey of leading PC sells and complies the numbers. Fast – but it misses a lot of data. They excluded tables and servers – but that distinction can be fuzzy. They miss smaller manufactures, etc.
Backward looking numbers are more accurate but they take up to 2 years to compile. You need to dig though national accounts and annual reports.
The market has been flat for the past 7 months – so it’s just not people waiting for Win8. And I have heard nothing dramatic that makes Win8 a must have (Unlike the jump from XP to 7).
But it could explain the last quarter or 2. I know people who are on the fence about replacing an older computer and have decided to limp along for another 3 to 6 months or so until Win8.
Because in past recessions (~30 years) spending on technology has held up pretty well. Most of the time IT growth only slowed – it did not stop. That implies that technology generated a lot of productively gains. Now – today – maybe not. It may be that we have reached a level of technology where productive gains level out. Does a office worker need a 2nd computer?
I don’t think that is the answer – I think consumers are moving to tablets and Business is moving towards servers.
Kind of. Nobody knows what bulk cost is. The devices often have custom pieces. Big contracts for standardized items are almost always individually negotiated. So the piece quotes on these are always based on rules of thumb – which assumes some discount for large orders.
I don't think MSFT is doing a "Big Bath" - just a normal sized one.
Taking a "big bath” happens when new management is installed or some other type of structural change
When new management is installed they will look for every dubious investment and declare it worthless. They want the biggest write offs and ascribe all of the loss & blame to the prior management. If any of junk comes back to life it is because of current management’s brilliance and they grab the credit.
One could make the argument that MSFT is setting us up for next year. Nothing much happened this year but Windows 8 comes out next. Make this year look trashy so next year really pops?
When they sell it they move it from a unrealized capital loss (a.k.a. write down) to a realized loss. They can use the realized loss to offset other profits (lots of exceptions) lowering their tax bill.
If you look at the annual reports you will find “book value of assets” which is the cost of the asset minus any depreciation.
Then take a look at MSFT’s “Goodwill”, which will be a subcatagory of book value. This is the difference between the book value of a company (ifor example aQuantive) being bought vs. the purchase price.
However, sometimes the asset you have purchased is not worth anything, It’s been burnt to the ground or some such thing. You can’t hold onto this defunct asset at book cost if there is a “permanent material” event . So one makes a accounting judgment and write down the asset to correct level.
Book and Goodwill are are “hard” numbers – in the sense that there is little accounting judgment involved. You can only write these down - Unlike financial institutions you can’t “mark to mark” these assets to a higher level during a bubble to generate fathom profits.
Which answers the OP question about Razorfish. An accountant had made an accounting judgment that Razorfish was dead. It affects the balance sheet (assets / debits), is reported to the shareholders but does not trigger any tax questions. This year they were able to find a little value. It affects the Income (Revenue / Expenses) and triggers taxes.
What – objective jourlims is hard so don’t do it? Take a look at “Transplant Surgeon Called Dibs On Steve Jobs' Home” on today’s Slashdot.
Fact: Surgeon buys a house though backdoor channels.
Implication: Steve Jobs needed to jump the line to get a liver transplant. In order to jump the line he would have paid money under the table. The types of transactions (murky, not arms length) are the types of transitions one would use.
Question: Did Jobs jump the line or is this just yellow journalism for the hype? Here is where old media vs. new media breaks down. New Media is better at grabbing one or two bits of information and putting them together – it has breath. Old media can put a couple of people on the issue and pull together the research needed, probe the ready answers, purse leads for weeks, etc. – it has depth.
I understand that truth is hard – but being hard is not a reason to purse.
I am going to have to disagree with you. It is one thing that old media did well. News editors did a decent job of insulating reports from the owners and ad staff and hiring professional staff. It is better to strive to create unbiased data – and acknowledge where there are weaknesses – then to throw in the towel.
Now, mind you, I like and listen to NPR. I also think they are factual, and I think that is important. There are some “news” channels that live on manufactured hype and will not let facts get in the way of a good story.
However, NPR does cater to the people who pay the bills – Members like you – white, urban, college educated, professional, liberals. I remember hearing a story last year about a electric company trying to build more coal fired gas plants. NPR focused on the environmental impacts. The Wall Street Journal focused on the economic impacts. Both stories where true but both outlets had used their editorial control to focus on different aspects of the same story.
You can’t be unbiased. What you can do is state what your bias is and report the facts.
But where is the money going to come from to hire these “qualified agents”? That’s the issue for me, and I think Derkmead has it right.
Newspapers where a bundled item. You got 1. “qualified agents” (a.k.a. reporters) and 2. A distribution channel.
The Internet does a wonderful job of distribution and aggregating information. Wiki, Google, and it’s ilk do a decent job of promoting and editing important stuff. What it does not do well is original, unbiased research.
But you still need a unbiased reporter on the ground in Syria taking pictures gathering data. This is something the Internet is good a providing. It’s got ADD and has a hard time concentrating on a single issue at depth.
Here are my 2 cents. I have never worked directly with a Hong Kong bank, and programing is programing, but.
3rd party data sources. You will be dealing with importing / exporting data from many different systems, all with their unique quirks. You may well be given relational data in the form of a Spreadsheet- hopefully it will be in csv. These “3rd” parties may be other departments. Banking and Brokerage software tend to be sold by different people and do not talk to each other.
System of Systems: Most banks have multiple enterprise systems that have been lashed together.
Legacy systems. Banks were one of the first business to jump into computers a big way. So the system of systems tend to sit on top of really old undocumented code.
Integrity. This is not the exact word that I am looking for and I am not saying this is unimportant in other areas – but the level of paperwork will be high. Don’t expect to do much sandboxing with production systems. Don’t expect to be able to pick out your own tools – or have much influence over the tools you can use. Expect lengthy testing and “buy in” sessions before new code is installed.
Dig into the HEPI numbers a bit - you may find it interesting.
That being said I still believe that faculty wages have increased faster than inflation – in particular for top researchers. But even if individual salaries did not increase faster than inflation this does not mean wages have not increased faster than inflation.
Base salary normally excludes fringe benefits. Medical and Pension costs have both increased faster than inflation.
The mix of staff can change. I know at my wife’s school the accreditation agency has pushed for more full time faculty and few adjuncts. Other schools are hiring more PhDs instead of Masters. I know of school libraries who have been hiring people with degrees in library science instead of untrained professionals. I would assume this would be more expensive.
I don't have time to do the numbers, but it faculty, not dropoing state aid, that is driving the cost increases. Salaries of people who hold graduate degrees have been growing faster than inflation. Unlike other industries, professor productive has not grown. Higher Education Price Index (HEPI) goes back for years.
Colleges want to 1. Attract the best students and 2. Charge them as much as they can.
Colleges have been raising their headline price. They then look at the kids finances. If the kid has big grants then they don’t have to drop their tution as much.
Slashdot Mirror
That the U.S. government under pressure of right-wing propaganda ("Stop wastin' muh tax-dollahs!") continues to slash funding is no counterproof, not as long as we don't see industry taking up the slack.
I have read your comment for a second time - and I don't think my initial response was spot on.
First, I will stand that government underinvest in public goods. It’s not right wing republicans. It is hard to point to a government that invest wisely significant funds into public goods over the long term. Japanese, French, Soviet, etc. All governments proclaim that they should spend more on infrastructure, education, research, etc. – and most fail to do so. (That being said, trying to figure out the right level of spending on long term public goods is hard.)
Second, I will reject your counter proposal on industrial research. If the government fails to invest in basic research why should private industry? Basic research is long term high risk stuff – where the people who do the initial research rarely reap the rewards. These tend to be basic ideas which are hard to patent. And by the time they marketable they have been morphed and combined beyond anything the original patent holder had ever immingled.
Take Bell Labs for example. They did a lot of great basic research (Which they had to – AT&T had a monopoly and this was part of their payoff. Most of their great ideas was not exploited by AT&T but by other companies? Why would a corporation do this?
You are right - Government does pay for most basic research - but I think you missed my point.
What is the correct amount to spend on R&D and are we spending enough?
People tend to underinvest in public goods. Since everybody will enjoy the benefit everybody thinks they are paying more than their fair share. i.e. If the US were to fund R&D the jobs to make the pills would go to India, Israel, etc. so US citizens would tend to underpay.
Also, people tend to underinvest in projects with long payback times. During a budget crunch it’s hard to increase R&D for drugs that will cut Medicare 10 years down the line.
That is why Apple stores are succeeding and Best Buy is failing.
Apple cares that you buy Apple products. Bonus points if you buy it at the store but I am sure they make plenty if I bought a IPod on Amazon. So they focus on high customer service.
Best Buy cares if you window shop at their store and buy it online via your smart phone. That's a loss sale.
So yeah, there is going to be places for instant gratification but retail is changing.
OK, you have given me something to crew over - but let me try to give you a partial response.
1. Governments tend to under invest in long term projects like basic medical research.
2. Bureaucrats tend to be conservative and would not fund high risk high return ventures. Craig Venter and the human genome project is an example that I love. He wanted to go the public rout but was denied funds because his approach was too radical. He did it faster and cheaper then the public rout.
Of course Pharm only researches drugs it can patent and sell, so there is underfunding of research on older drugs and drugs for poor people.
I would like to see some type of hybrid approach. More public funding of course. Maybe offer prizes in lieu of patents? Still thinking about this.
Amazon bought Kiva Systems last year - a company that specializes in pick and pack robots. If I remember my dot.com history correctly it was the picking and packing aspect of the business that killed on-line grocery WebVan. (Which Amazon was an early investor in. I wonder f Amazon has any of the old WebVan stuff around.)
So what is your solution? How would you allocate money to drug R&D?
Patented drugs send a clear signal market signal if we are overspending / underspend on drugs in general or on specific types of drugs. Do I have specific issues with the current system that I would like to see reformed? Yes. Do I want to throw out the baby with the bathwater? Not until I hear a better idea.
Like democracy, it is a horrible system whose only saving grace is that it is better than all others.
Fair question but one that is hard to answer. For the US, reading the tea leaves, I would guess stable.
For example, a company that shifts from high end desktops to servers might be increasing IT spending but it would show up as a decrease in this survey.
Gartner takes a survey of leading PC sells and complies the numbers. Fast – but it misses a lot of data. They excluded tables and servers – but that distinction can be fuzzy. They miss smaller manufactures, etc.
Backward looking numbers are more accurate but they take up to 2 years to compile. You need to dig though national accounts and annual reports.
From the article, “Including mini-notebooks but not media related tables such as the IPad”
I think you are both right.
The market has been flat for the past 7 months – so it’s just not people waiting for Win8. And I have heard nothing dramatic that makes Win8 a must have (Unlike the jump from XP to 7).
But it could explain the last quarter or 2. I know people who are on the fence about replacing an older computer and have decided to limp along for another 3 to 6 months or so until Win8.
Because in past recessions (~30 years) spending on technology has held up pretty well. Most of the time IT growth only slowed – it did not stop. That implies that technology generated a lot of productively gains. Now – today – maybe not. It may be that we have reached a level of technology where productive gains level out. Does a office worker need a 2nd computer?
I don’t think that is the answer – I think consumers are moving to tablets and Business is moving towards servers.
Or Tablets (which are not PCs)
Or Web Services (I know the cloud is hyped, but I know I have delayed in buying a new desktop because I am doing more work online.)
Kind of. Nobody knows what bulk cost is. The devices often have custom pieces. Big contracts for standardized items are almost always individually negotiated. So the piece quotes on these are always based on rules of thumb – which assumes some discount for large orders.
I don't think MSFT is doing a "Big Bath" - just a normal sized one.
Taking a "big bath” happens when new management is installed or some other type of structural change
When new management is installed they will look for every dubious investment and declare it worthless. They want the biggest write offs and ascribe all of the loss & blame to the prior management. If any of junk comes back to life it is because of current management’s brilliance and they grab the credit.
One could make the argument that MSFT is setting us up for next year. Nothing much happened this year but Windows 8 comes out next. Make this year look trashy so next year really pops?
I am not sure what "profit untaxed" means.
When they sell it they move it from a unrealized capital loss (a.k.a. write down) to a realized loss. They can use the realized loss to offset other profits (lots of exceptions) lowering their tax bill.
I have not read the article but
If you look at the annual reports you will find “book value of assets” which is the cost of the asset minus any depreciation.
Then take a look at MSFT’s “Goodwill”, which will be a subcatagory of book value. This is the difference between the book value of a company (ifor example aQuantive) being bought vs. the purchase price.
However, sometimes the asset you have purchased is not worth anything, It’s been burnt to the ground or some such thing. You can’t hold onto this defunct asset at book cost if there is a “permanent material” event . So one makes a accounting judgment and write down the asset to correct level.
Book and Goodwill are are “hard” numbers – in the sense that there is little accounting judgment involved. You can only write these down - Unlike financial institutions you can’t “mark to mark” these assets to a higher level during a bubble to generate fathom profits.
Which answers the OP question about Razorfish. An accountant had made an accounting judgment that Razorfish was dead. It affects the balance sheet (assets / debits), is reported to the shareholders but does not trigger any tax questions. This year they were able to find a little value. It affects the Income (Revenue / Expenses) and triggers taxes.
What – objective jourlims is hard so don’t do it? Take a look at “Transplant Surgeon Called Dibs On Steve Jobs' Home” on today’s Slashdot.
Fact: Surgeon buys a house though backdoor channels.
Implication: Steve Jobs needed to jump the line to get a liver transplant. In order to jump the line he would have paid money under the table. The types of transactions (murky, not arms length) are the types of transitions one would use.
Question: Did Jobs jump the line or is this just yellow journalism for the hype? Here is where old media vs. new media breaks down. New Media is better at grabbing one or two bits of information and putting them together – it has breath. Old media can put a couple of people on the issue and pull together the research needed, probe the ready answers, purse leads for weeks, etc. – it has depth.
I understand that truth is hard – but being hard is not a reason to purse.
If this thing is going to fly because of paid viewership you don’t want a quick death. You want something long and cinematic.
“Perfect is the enemy of good”, Voltaire
I am going to have to disagree with you. It is one thing that old media did well. News editors did a decent job of insulating reports from the owners and ad staff and hiring professional staff. It is better to strive to create unbiased data – and acknowledge where there are weaknesses – then to throw in the towel.
NPR is biased.
Now, mind you, I like and listen to NPR. I also think they are factual, and I think that is important. There are some “news” channels that live on manufactured hype and will not let facts get in the way of a good story.
However, NPR does cater to the people who pay the bills – Members like you – white, urban, college educated, professional, liberals. I remember hearing a story last year about a electric company trying to build more coal fired gas plants. NPR focused on the environmental impacts. The Wall Street Journal focused on the economic impacts. Both stories where true but both outlets had used their editorial control to focus on different aspects of the same story.
You can’t be unbiased. What you can do is state what your bias is and report the facts.
But where is the money going to come from to hire these “qualified agents”? That’s the issue for me, and I think Derkmead has it right.
Newspapers where a bundled item. You got 1. “qualified agents” (a.k.a. reporters) and 2. A distribution channel.
The Internet does a wonderful job of distribution and aggregating information. Wiki, Google, and it’s ilk do a decent job of promoting and editing important stuff. What it does not do well is original, unbiased research.
But you still need a unbiased reporter on the ground in Syria taking pictures gathering data. This is something the Internet is good a providing. It’s got ADD and has a hard time concentrating on a single issue at depth.
None. Both Russia and China both have veto powers. Just like there are none on US, France or Britain. It is impossible to censor those countries.
Here are my 2 cents. I have never worked directly with a Hong Kong bank, and programing is programing, but.
3rd party data sources. You will be dealing with importing / exporting data from many different systems, all with their unique quirks. You may well be given relational data in the form of a Spreadsheet- hopefully it will be in csv. These “3rd” parties may be other departments. Banking and Brokerage software tend to be sold by different people and do not talk to each other.
System of Systems: Most banks have multiple enterprise systems that have been lashed together.
Legacy systems. Banks were one of the first business to jump into computers a big way. So the system of systems tend to sit on top of really old undocumented code.
Integrity. This is not the exact word that I am looking for and I am not saying this is unimportant in other areas – but the level of paperwork will be high. Don’t expect to do much sandboxing with production systems. Don’t expect to be able to pick out your own tools – or have much influence over the tools you can use. Expect lengthy testing and “buy in” sessions before new code is installed.
Dig into the HEPI numbers a bit - you may find it interesting.
That being said I still believe that faculty wages have increased faster than inflation – in particular for top researchers. But even if individual salaries did not increase faster than inflation this does not mean wages have not increased faster than inflation.
Base salary normally excludes fringe benefits. Medical and Pension costs have both increased faster than inflation.
The mix of staff can change. I know at my wife’s school the accreditation agency has pushed for more full time faculty and few adjuncts. Other schools are hiring more PhDs instead of Masters. I know of school libraries who have been hiring people with degrees in library science instead of untrained professionals. I would assume this would be more expensive.
I don't have time to do the numbers, but it faculty, not dropoing state aid, that is driving the cost increases. Salaries of people who hold graduate degrees have been growing faster than inflation. Unlike other industries, professor productive has not grown. Higher Education Price Index (HEPI) goes back for years.
http://www.commonfund.org/CommonfundInstitute/HEPI/Pages/default.aspx
Well, kind of.
http://www.npr.org/blogs/money/2012/05/11/152511771/the-real-price-of-college
Colleges want to 1. Attract the best students and 2. Charge them as much as they can.
Colleges have been raising their headline price. They then look at the kids finances. If the kid has big grants then they don’t have to drop their tution as much.