bostonbubble.com

[john p]

MPR:

Thanks for answering the Tea Party question.

I understand your viewpoint in that you don't see many of them as being "on the level" because they weren't up in arms about the Bush spending but now have a big problem with Obama's spending.

I think what you're missing, most likely because of where you get your news, is that there was a fault line in the Republican Party with respect to the spending. Even Sean Hannity and Laura Ingram during the Bush years were calling themselves "Conservatives" versus "Republican" and were protesting government spending. They were Republicans because they felt that Democrats would spend MORE, as they have. Even John McCain in the Republican Convention said that Republicans had lost their core conservative values of smaller government. In a Presidential Debate when asked where Government could cut, McCain offered the Military, and Obama never identified anything. Having a former Navy guy saying that we ought to cut Military Spending was a big deal and I think liberals didn't get how out on a limb McCain went with that. McCain used to work with Ted Kennedy so he was someone who would try to bridge differences.

I think the Tea Party was more about the Republican Party Primaries. It was also about the mounting pressure for politicians to take special interest money and fuel the graft machine. The Tea Party basically said that if you actually say "No" to spending, you will actually have a base that will support you.

Honestly looking at Bush, he came in when the Tech and Internet Bubble were collapsing:

http://www.marketvolume.com/info/stock_market_crashes.asp

from above:

[Boston ITer]

MPR, the reason why I'm highly critical of management consulting, as a profession, is that companies already have executives and managers in place.

When an executive decides to hire an MC firm to do a jointed venture between let's say his parent tire company and one of its distributors, what he's really doing is telling his CEO/CFO that if the venture is a bust, then it's not really his fault but that of ABC Strategy Consultants. Like some others, I see that as a 'rent' against the liability of upper managers where in effect, they buy an entire firm, as insurance for their true, lack of executive know-how or confidence in delivery. Now, there might be this sort of rationalization that it's better to have 'research analysts', who're not a part of the total headcount, but then given the fact that many of America's offices are white collar, isn't there already overhead for that kind of activity to begin with?

I concur that software, by itself, is an *intangible* but it's hard to not infer that software is attached to all the sensors, networks, production facilities, quality control/assurance, and everything else which is a part of the authentic economy so that's why you have engineers of all different backgrounds, whether they be mechanical, electrical, chemical, or biomedical engineers or research/production chemists/biologists with a lot of software know-how or experience. Thus, software in itself, has evolved into a type of subprofession, software engineering vis-a-vis IT.

[mpr]

[mpr]

[john p]

MPR said:

[Boston ITer]

[mpr]

[Boston ITer]

[john p]

I think this discussion relates to mortgage rates because what people benchmark is their earning potential versus everyone else.

If the Market flattens for an extended period, which many here seem to think, individuals need to assess their job security first, and then if they too will either have a flat few years or do they see any salaryor investment growth. Is my moving walkway going faster or slower than the one everyone else is on.

On top of that, you've got the influences of government intervention and globalization and corporations mergers and acquisitions.

If we are in an "Asset Bubble / Bust Cycle" world, we have to then try to figure out what's next.

When we went into an asset bubble of stocks, that tied nicely to salary growth and with salary growth, it provided a ton of tax revenues (Clinton's Surplus). This past asset bubble of real estate has actually made a ton of people house poor so consumer consumption is down. The WSJ had a nice chart of the Babyboomer's spending changes over the past ten years. Today, they have a nice chart showing the components of Projected U.S. government spending. Nondefense and Defense are basically flat lined and the biggest gains are in Social Security, Medicare, Medicaid and other Mandatory Programs, and Net interest and disaster costs. The Net Interest and disaster costs appear to be almost the size of the entire Defense Budget.

I think politically, the Tea Party will be empowered in the Mid Term. My hope is that they aren't too misguided and actually target what needs to be looked at (Social Security, Medicare, Medicaid and other Mandatory Programs). Non Defense Spending isn't causing the problems but these Entitlements are taboo to most politicians. Beyond that, the States are in trouble due to the Pensions and Health Care costs. Apparantly, the Unions are trying to get legislation passed which will roll their Pensions into the Federal System so the Taxpayer backstops their unfunded Plans. It might be too aggressive a move given the political climate, which is why I am supporting the Tea Party's presence, because without it, the Unions would run over everyone. I'm waiting to see politicians dispositions in these issues. If the sanctuary for investors is long term debt, it will slow the economy down in the short term.

[john p]

The Net Interest and disaster costs appear to be almost the size of the entire Defense Budget in 2020.

[balor123]

Asia Is Outpacing U.S. on R&D Spending

US is increasingly rewarding short term professions like sales and marketing and punishing long term activities like R&D. Result is that R&D workers are underpaid due to the surplus of workers here. Costs are rising in Asia for those workers but far below US still. Some have argued that Asian workers are worth less than American workers except most American workers are actually immigrants from Asia. Anyway, schools like IIT are very competitive with top American schools and graduate many more students than we do. China publishes more research papers than America now.

It seems to me that America is canabilizing the success of 50 years worth of R&D investment and plowing it into finance (including housing, which is larger than the economy of China currently), management, and sales and marketing. We deserve what's coming to us.

Most of my peers will move back to Asia I think once China and India overtake the US in ~10 years (Pentagon's estimate). I'll probably tough it out. I'm guessing the trade deficit and public debt will force some hard choices, which will result in significant reductions in the compensation for a lot of professions here. R&D workers who stay will likely be ok since it is largely an export, though I'm guessing compensation won't rise much as we'll have to start competing on price with Asian countries. An alternative would be to move to another Western country like Israel which still have a thriving innovation based economy.

[Boston ITer]

[mpr]

[Kaidran]

I'm enjoying reading your back and forth. Our dept has just become infested with management consultants so I understand the sentiment.

I heard this podcast a few days back, thought it might be interesting. It is an interview with the guy who wrote "Black Swan". He seems like quite a character but he says at one point that the stimulus only works if you can see an immediate way out. If not as we appear to have here then you have to knuckle down and ride it out ride it out.

http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=129276793&m=129279731

[mpr]