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Thread: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

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    Default Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    Current Economic Boom Surpasses Dot-Com Boom In Half The Time


    "Call it the Early Twenty-Teens Tech Boom, or whatever you want to call it, but it has officially surpassed the late-'90s Dot-Com Boom with no slowing in sight. In fact, as Ted Egan of the city controller's office tells Matier & Ross, this economic surge grew in about three years, while the dot-com boom took six years to get to this point.

    And while many say that all bubbles must burst, Egan points to strong earnings in the tech sector that set this era apart from the untethered stock speculation of fifteen years ago.
    San Francisco may just be at the front of a larger wave of economic recovery happening across the country, and we happen to be home to several industries that are performing the strongest in today's economic, including tech and biotech.
    "


    So if the tech world is doing THAT well, how are we still in a recession, and why is the world not pushing the unemployed and the people with outdated resumes to work in tech? If people channeled the same energy they put into formal schooling, into building an at-home startup company from where they currently live, wouldn't the recession be over with pretty quickly?

    What are your thoughts on this? My thoughts are that the immediate future is definitely based in the social media world, apps and things to make life easier (ex: how Uber/Lyft/Sidecar hijacked taxi's business using a more modern business model), entrepreneurship, etc. This seems like good news for camming, and bad news for dancing.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    without risking a political discussion, it is an established fact that the VAST majority of recent 'tech boom' earnings / profits actually went to the top 10% of American earners who actually own the majority of the tech company stock shares !!! The amount of 'tech boom' earnings that went directly to tech company employees, while of great local significance ( i.e. San Francisco / Silicon Valley ), was far outshadowed by the money that went to investors in the form of dividends and capital gains on their stock share values.

    As to what portion of a strip club customer base, or what portion of a camgirl's customer base, is actually made up of top 10% earners is a huge question mark. If the dancer is able to work in a very upscale big city strip club, and if the camgirl has something 'sophisticated' to offer, then odds are that they have potential to lots of top 10% earning customers' money. On the other hand, if the dancer works at a suburban/ neighborhood strip club, or the camgirl's offerings are 'mainstream', then odds are they are dealing with customers whose paychecks aren't rising, whose taxes, energy bills, and insurance bills ARE rising, and whose only 'gains' from the tech boom are trapped in a 401k or IRA that can't be touched until they reach retirement age.

    Also note that, from the standpoint of 'damned statistics', attempting to measure economic performances via a raw comparison of stock index values inserts a whole bunch of 'sleight of hand' ... it isn't adjusted for inflation or US dollar purchasing power, it is allowed to 'forget about' failed companies which are dropped from the index, while 'counting' exceptional performance of alternate new companies that are added to the index, etc.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    Many of the tech jobs went overseas, particularly to India. Outsourcing is still very big in the manufacturing and tech sectors! Most older Americans were forced to sell their portfolios early in the recession as well.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    ^^^ true enough ^^^ It's difficult for many people to absorb the fact that a fair amount of nominally US based tech company profits actually stem from ...


    - very low cost actual production outsourced to China ... which is now moving to other Asian countries because China's $3 per hour labor costs are now considered to be 'too expensive', and China's environmental regulations are starting to actually be enforced ( which adds to production costs ).

    - low cost 'design' and tech support work outsourced to India etc.

    - insourced work provided by lowly paid H1-B visa based skilled foreign workers the tech companies 'temporarily' import into the US

    - sales profits earned from countries outside the US ... which, thanks to various legal tax avoidance schemes, allow multi-billion dollar tech companies to actually pay near zero US or foreign taxes on those foreign sales profits.

    - sales profits earned in currencies other than the US dollar ... which, thanks to FED money printing, provided a de-facto 'boost' to foreign earnings as the US dollar exchange rate declined versus these foreign currencies.

    - government contracts which amount to US taxpayers paying 'exorbitant' prices for tech company products and services

    - outright US taxpayer 'subsidies' via direct 'R&D' grant money, via gov't guaranteed loans which are not repaid when the tech company goes bankrupt, by tax credits provided to purchasers of some tech products, etc.


    And, of course, when someone talks about a 'tech boom' measured by increasing stock share values, lots of other factors come into play besides actual after-tax profits of the tech companies. Many of these tech stock share valuation factors actually stem from 'wishful thinking', or from 'herd mentality', or from a 'desperate search for yield' in light of declining bond prices, on the part of uber-rich investors, fund managers etc.

    The arguable 'high flyer' tech stock of 2013 was Tesla Motors ... which actually continues to lose money despite millions in ( indirect ) taxpayer subsidies ... see and

    I would also point out that 'clouds are gathering' regarding foreign operations / profits of nominally US based tech companies. The FED 'taper' has resulted in the US dollar gaining strength versus some foreign currencies, which reduces apparent foreign earnings when booked in US dollars. Various foreign gov'ts are beginning to challenge the tax avoidance schemes employed by the tech companies, seeking a way to tax the tech company profits earned in their countries.
    Last edited by Melonie; 12-31-2013 at 04:59 AM.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    You made some points, but it doesn't pertain the article.

    The article is saying that unemployment in SF has gone from 10% down to 5%, so clearly there are people in SF getting jobs and its not just the rich. 5% of the population gaining employment is HUGE in just a "couple years" as the article states. So these are not jobs going overseas, or money going to the 1%. These are the working and middle class getting jobs. And the East Bay where I grew up, is now rapidly building and expanding with all these new companies and shops moving in... when, what seems like the rest of the U.S. has halted all building due to the recession. Its crazy.

    I know this all to be true because I am from the Bay Area and have also lived directly in SF. When I moved out of SF a couple years ago, the monthly rental cost for my 2 bedroom apartment in one of the nicest neighborhoods was suddenly the cost of a studio in crime-ridden neighborhoods. I knew something was up at that point, and there were whispers of a second tech boom coming.



    So is this a trend that will affect the rest of the U.S.? Something that will only affect the Bay Area? (LA is starting to have a similar trend where no one can even purchase a house because they are selling so fast & above the asking price.)

    I personally think we are starting to see a big trend of entrepreneurs taking over and pulling us out of a recession/high unemployment society. Because that's what I saw in SF right before I left, and what I'm seeing in LA right now. LA has always been entrepreneurial, but not like this. I feel like technology is leading people in the arts to be able to own successful small businesses like never before.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    I do know that there is a tech boom going on right now. My closest friend who works in the industry is trying to convince me to check it out. Apparently lots of companies are going through visas faster than they can be processed. O.O

    Edited to add: I forgot the most important part! The reason that people aren't just being employed left and right is because they are looking for a specific type of tech person with a certain amount of experience in the field. They aren't really interested in kids right out of school. That is why there is a shortage of workers again.

    Double edited to add: As far as I understand it, just like when the last bubble rolled around -- this is mostly a bay area thing. That is why so many workers are being imported from other countries.
    Last edited by justanothercamgirl; 12-31-2013 at 07:37 AM. Reason: Morning brain, sorry!

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    Quote Originally Posted by sarah101 View Post
    Many of the tech jobs went overseas, particularly to India. Outsourcing is still very big in the manufacturing and tech sectors! Most older Americans were forced to sell their portfolios early in the recession as well.
    There are actually some tech sector jobs that are still growing that they are unable to outsource. An example would be code 'architects', you are pretty bullet-proof from your job being outsourced because of the language barrier.

    The language barrier keeps most tech writing jobs from being outsourced too.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    clearly there are people in SF getting jobs and its not just the rich. 5% of the population gaining employment is HUGE in just a "couple years" as the article states. So these are not jobs going overseas, or money going to the 1%. These are the working and middle class getting jobs.
    ummm ... not exactly !!! From


    (snip)The unemployment rate in San Francisco ticked down to 5.3 percent in October, the second lowest level since the 5.2 percent rate in June of 2008 when 434,000 people out of a labor force of 457,800 were employed in the city.

    The drop in San Francisco’s October unemployment rate, however, was driven by a 4,100 person decrease in the current labor force to 481,900 rather than an increase in employment, with the number of employed in San Francisco dropping by 3,600 as the number of unemployed dropped by 500. That being said, some impact from the Federal shutdown was likely in play.

    The number of employed in San Francisco now totals 456,400 which is up by 12,600 workers on a year-over-year basis but is 9,100 workers below a December 2000 dot-com peak at which point the unemployment rate measured 3 percent."(snip)

    also from

    (snip)"The tech boom can’t solve all problems — such as pervasive unemployment among black and Latino youths, many of whom are also not in school.

    In the Bay Area, 12.3 percent of youths aged 16 to 24 — more than 58,000 people — are both not working and not in school"(snip)


    There is obviously a huge incompatibility between the assertion that '5% of San Franciscans have gained jobs' and the objective measure that, in the latest month reported in the above news blurb, the number of 'employed' dropped by 3,600 while the number of ( officially ) 'unemployed' dropped by 500. In point of fact, the decrease in the official BLS unemployment rate for San Francisco was primarily achieved by the BLS deciding to 'drop' another 4,100 people from the 'labor force'.

    In terms of 'raw' employment numbers, the news blurb states that the San Francisco area did add some 12,600 workers over the past year. However, compared to a total population of some 808,000 people, this represents ~1.56% not 5%.

    The concept of using 'labor force' instead of 'working age population' as the denominator used for official unemployment statistics is, at the very least, misleading. The official 'labor force' only counts those who are actively looking for work and/or actively receiving unemployment benefits. It does not take into consideration people who have been out of work so long that they have given up trying, young people who have never held an 'on the books' job since leaving high school, etc.


    I personally think we are starting to see a big trend of entrepreneurs taking over and pulling us out of a recession/high unemployment society. Because that's what I saw in SF right before I left, and what I'm seeing in LA right now. LA has always been entrepreneurial, but not like this.
    Well there has certainly been a trend by entrepreneurs who are now on a relentless search for 'yield' ... which has led to hedge funds building / buying up rental properties ( with associated increase in property / rent prices in the specific areas where this investment is taking place ). There is also a large amount of entrepreneurial investment in businesses that cater to the 'top 10%' of earners, from upscale restaurants to upscale coffee shops to upscale car dealers to upscale retailers. San Francisco benefits disproportionately from the increased earnings of the 'top 10%', both via tech industry workers and via gov't workers / contractors



    Note that adding the four highest earning bar graphs shows that ~38% of San Franciscans earned more than $100,000 per year ... and these 2010 statistics have only gone up due to the recent tech boom. The basic point of course is that San Francisco's percentage of 'top 10%' earners is much higher than that of California in general, and MUCH higher than the USA as a whole. Thus the economic improvements seen in San Francisco are very definitely a 'localized' phenomenon.
    Last edited by Melonie; 12-31-2013 at 09:42 AM.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    ^^^^^
    giphy.gif

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    Quote Originally Posted by justanothercamgirl View Post
    I do know that there is a tech boom going on right now. My closest friend who works in the industry is trying to convince me to check it out. Apparently lots of companies are going through visas faster than they can be processed. O.O

    Edited to add: I forgot the most important part! The reason that people aren't just being employed left and right is because they are looking for a specific type of tech person with a certain amount of experience in the field. They aren't really interested in kids right out of school. That is why there is a shortage of workers again.

    Double edited to add: As far as I understand it, just like when the last bubble rolled around -- this is mostly a bay area thing. That is why so many workers are being imported from other countries.
    Again, this is not what the article is saying though. Its not just tech jobs that are increasing, its everything. Here is the article:
    "It isn't just tech, though: There are now a record 600,000 jobs in San Francisco proper, with 5 percent unemployment (down from a high of 10 percent a couple years ago), and only about 20,000 of the new jobs are in tech. The rest are in health care, business services, hospitality, and other traditional industries — some of which may, arguably, be growing as a result of the deep pockets and high-paid workers of the tech industry."

    But why not push tech jobs, if it leads to booms in other industries, thus benefiting everyone?

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    Quote Originally Posted by Melonie View Post
    ummm ... not exactly !!! From


    (snip)The unemployment rate in San Francisco ticked down to 5.3 percent in October, the second lowest level since the 5.2 percent rate in June of 2008 when 434,000 people out of a labor force of 457,800 were employed in the city.

    The drop in San Francisco’s October unemployment rate, however, was driven by a 4,100 person decrease in the current labor force to 481,900 rather than an increase in employment, with the number of employed in San Francisco dropping by 3,600 as the number of unemployed dropped by 500. That being said, some impact from the Federal shutdown was likely in play.

    The number of employed in San Francisco now totals 456,400 which is up by 12,600 workers on a year-over-year basis but is 9,100 workers below a December 2000 dot-com peak at which point the unemployment rate measured 3 percent."(snip)

    also from

    (snip)"The tech boom can’t solve all problems — such as pervasive unemployment among black and Latino youths, many of whom are also not in school.

    In the Bay Area, 12.3 percent of youths aged 16 to 24 — more than 58,000 people — are both not working and not in school"(snip)


    There is obviously a huge incompatibility between the assertion that '5% of San Franciscans have gained jobs' and the objective measure that, in the latest month reported in the above news blurb, the number of 'employed' dropped by 3,600 while the number of ( officially ) 'unemployed' dropped by 500. In point of fact, the decrease in the official BLS unemployment rate for San Francisco was primarily achieved by the BLS deciding to 'drop' another 4,100 people from the 'labor force'.

    In terms of 'raw' employment numbers, the news blurb states that the San Francisco area did add some 12,600 workers over the past year. However, compared to a total population of some 808,000 people, this represents ~1.56% not 5%.

    The concept of using 'labor force' instead of 'working age population' as the denominator used for official unemployment statistics is, at the very least, misleading. The official 'labor force' only counts those who are actively looking for work and/or actively receiving unemployment benefits. It does not take into consideration people who have been out of work so long that they have given up trying, young people who have never held an 'on the books' job since leaving high school, etc.




    Well there has certainly been a trend by entrepreneurs who are now on a relentless search for 'yield' ... which has led to hedge funds building / buying up rental properties ( with associated increase in property / rent prices in the specific areas where this investment is taking place ). There is also a large amount of entrepreneurial investment in businesses that cater to the 'top 10%' of earners, from upscale restaurants to upscale coffee shops to upscale car dealers to upscale retailers. San Francisco benefits disproportionately from the increased earnings of the 'top 10%', both via tech industry workers and via gov't workers / contractors



    Note that adding the four highest earning bar graphs shows that ~38% of San Franciscans earned more than $100,000 per year ... and these 2010 statistics have only gone up due to the recent tech boom. The basic point of course is that San Francisco's percentage of 'top 10%' earners is much higher than that of California in general, and MUCH higher than the USA as a whole. Thus the economic improvements seen in San Francisco are very definitely a 'localized' phenomenon.
    This is not accurate. Most people who work in San Francisco do NOT live in SF. They live outside SF, and communte into SF via public transportation (BART) which is a very good system. Most are moving into the East Bay right now, which, like I said, is causing housing and businesses like cafes and chain stores to boom.

    You cannot compare the employment rate in SF to the income people in SF make because most do not live in SF the city. SF the city is tiny, only 7 square miles, and everyone I know who lives there is a student who rents a room, or inherited property from a relative who has owned it awhile.

    Additionally, I was just there and saw all the building development with my own eyes. The East Bay especially is booming with brand new townhouses, tiny businesses, and chain restaurants. 2 new Neiman Marcuses in the last few years too. There is definitely growth and money there.


    Quote Originally Posted by Melonie View Post
    "The tech boom can’t solve all problems — such as pervasive unemployment among black and Latino youths, many of whom are also not in school.

    In the Bay Area, 12.3 percent of youths aged 16 to 24 — more than 58,000 people — are both not working and not in school"
    That sounds about right? Do you know how many trust fund kids I came across in San Francisco? Many of them were working on their projects and ideals for self-employment, but hadn't generated income yet... and many generated income under the table but didn't report it. Why is this an issue though? Sounds about right to me. Its probably higher in NYC.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    ^^^ your author did not state what criteria he was using to determine the area covered by 'San Francisco Proper'. As my news blurb points out, the official San Francisco employment level is 456,400 ... which is actually 9.100 fewer jobs than existed during the 2000 tech boom ... thus NOT a record. I understand that some authors wish to place as positive a face as possible on their reports ( just as certain other authors wish to place as negative a face as possible on their reports ), but in this particular case it would appear that your author is playing 'fast and loose' regarding the actual facts.


    Do you know how many trust fund kids I came across in San Francisco? Why is this an issue?
    It isn't an issue for the 'trust fund' kids. It's a BIG issue for the black and latino kids. And I suspect that the number of 'trust fund' kids, while high versus national statistics, still comprises a tiny fraction of the 58,000 San Franciscans age 24 and under who do not have, and cannot find, an 'on the books' job. However, the larger point was that, where official unemployment statistics are concerned, these 58,000 unemployed San Franciscans age 24 and under are 'invisible' when the 5% official unemployment rate statistic was calculated.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    Quote Originally Posted by Melonie View Post
    ^^^ your author did not state what criteria he was using to determine the area covered by 'San Francisco Proper'. As my news blurb points out, the official San Francisco employment level is 456,400 ... which is actually 9.100 fewer jobs than existed during the 2000 tech boom ... thus NOT a record. I understand that some authors wish to place as positive a face as possible on their reports ( just as certain other authors wish to place as negative a face as possible on their reports ), but in this particular case it would appear that your author is playing 'fast and loose' regarding the actual facts.
    Yes it does. it literally says, and I quote "in San Francisco proper" That means SF the city. Otherwise they would use terms like Bay Area, North Bay, East Bay, South Bay, etc.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    Quote Originally Posted by Melonie View Post
    It's a BIG issue for the black and latino kids. And I suspect that the number of 'trust fund' kids, while high versus national statistics, still comprises a tiny fraction of the 58,000 San Franciscans age 24 and under who do not have, and cannot find, an 'on the books' job.
    That's because you included stats for the entire Bay Area, NOT SF the city. The entire Bay Area includes places like east Oakland where it is very, very, poor. San Francisco has, I believe, one of the lowest % of black people out of all major metropolitan cities. Its likes Manhattan minus Harlem.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    ^^^ then the 600,000 jobs cited by your author versus the 456,000 official statistic for employed San Franciscans is a 25% exaggeration on your author's part !!! Again, I don't imply that this was a deliberate deception, more likely that the 'San Francisco Proper' used by your author also includes 'select' surrounding areas. Either way, the basic point remains ... that household incomes in the San Francisco metropolitan area are significantly higher than for the rest of California, and MUCH higher than for the US as a whole. This is great for the San Francisco metropolitan area, but unlikely to be a sign of widespread improvement ( i.e. your own comments about Oakland ). Also, the income demographics I posted, your own author's comments about 'high income deep pockets tech workers', and the anecdotal reports of Nieman-Marcus etc., point to this being a 'top 10%' phenomenon.

    You started out by asking for 'other people's thoughts' on this !!! My thoughts are that A. your author is attempting to paint a rosy picture that isn't wholly supported by real world data, B. that the economic improvement in the greater San Francisco area is in fact very real, C. that this economic improvement is driven by the tech industry as well as by taxpayer money, D. that the economic benefits are very definitely helping the 'top 10%' in far greater proportion than 'main street', and E. that the economic improvement is highly 'local' in nature, thus unlikely to be the fore-runner of a statewide or national trend.
    Last edited by Melonie; 12-31-2013 at 10:19 AM.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    Quote Originally Posted by Melonie View Post
    ^^^ then the 600,000 jobs cited by your author versus the 456,000 official statistic for employed San Franciscans is a 25% exaggeration on your author's part !!!
    "Not only is there an all-time high of more than 600,000 jobs in the city, San Francisco's unemployment rate is 5 percent, a drop from a 10 percent recession high."
    Probably originating from these (which are a few months old) combined with new data: & & &


    Quote Originally Posted by Melonie View Post
    that household incomes in the San Francisco metropolitan area are significantly higher than for the rest of California
    Its pretty on par with Los Angeles and San Diego. The difference is, LA and SD have more pockets of low income families whereas SF has gentrified most of them out already, which is what skews the data. Obviously San Francisco the city is expensive, but not moreso than West Hollywood (which is its own city in the center of los angeles which further skews data and makes LA look cheaper than it is), Santa Monica (same thing), and Malibu (same again). Those are often more expensive than San Francisco proper. But the data is skewed because they are considered their own cities, and because LA has several pockets that are about to gentrify but haven't yet.


    Quote Originally Posted by Melonie View Post
    This is great for the San Francisco metropolitan area, but unlikely to be a sign of widespread improvement ( i.e. your own comments about Oakland ).
    It is most definitely a sign of widespread improvement. Even in Oakland, I see on craigslist that 1 bedrooms still go for $1,500-$2,000 per month. The difference is, most of the people who are low income moved in before it gentrified, so they are paying much less to be the neighbors of the people paying 1.5-2k per month for the same size place in the same building. Like mentioned here: and here:

    East Oakland is still one of the last places to gentrify in the Bay Area. West and North Oakland are already gentrified and like I said, go for rates much higher than what I've seen in Los Angeles for similarly gentrified areas (Echo Park, Highland Park, etc.) What I see happening is, in non-gentrified areas or areas that have yet to gentrify, its people trying to hold on to their culture and shun change... but its still only a matter of time until it gentrifies.

    I'm just wondering if, given the tech model for success, if other areas will catch on and do the same. Kind of a rhetorical question without an answer though. Los Angeles kind of has already in the last year or two, as I see filmmakers and various other creatives utilize technology-based applications to make their small business successful which was not possible before. And stuff like uber cab, kickstarter, and various apps leading to success and inspiring people to make their own type of businesses.


    Quote Originally Posted by Melonie View Post
    D. that the economic benefits are very definitely helping the 'top 10%' in far greater proportion than 'main street'
    The top 10% will always benefit, because money just brings in more money obviously. But like the original article states: "and only about 20,000 of the new jobs are in tech. The rest are in health care, business services, hospitality, and other traditional industries" and I have seen this personally with friends, family, and just driving around. The amount of development is insane. Its like practically half a new city is built every time I venture up there.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    At least the unemployment rate is going down!

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    Quote Originally Posted by GlamourRouge View Post
    I'm just wondering if, given the tech model for success, if other areas will catch on and do the same.
    Not to side-track the thread.....but I am totally confused! What do you consider the 'tech model for success?'

    I know I have seen more start ups go under than ones that have become successful.

    Start ups this time around have also seemed to have changed a lot since the last bubble I experienced. Last time around it was all about 'angel investor money' and being bought out and then making a mint from your stock options. From what I have seen so far this time around they have changed the model.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    Quote Originally Posted by Melonie View Post
    without risking a political discussion, it is an established fact that the VAST majority of recent 'tech boom' earnings / profits actually went to the top 10% of American earners who actually own the majority of the tech company stock shares !!! The amount of 'tech boom' earnings that went directly to tech company employees, while of great local significance ( i.e. San Francisco / Silicon Valley ), was far outshadowed by the money that went to investors in the form of dividends and capital gains on their stock share values.
    A lot of tech employees get stock options so a lot of the gains did go to them. When Facebook went public, a significant number of their employees became millionaires.

    http://www.dailymail.co.uk/news/arti...rank-file.html

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    My take on this is that there are three reasons why a tech boom doesn't translate to a turn around. Some of this is echoing the excellent comments above.

    1. Software doesn't require much man power. A software company can do very well with a team of under 20 people which includes developers, artists, editors and web/retail. It may seem counter intuitive but it is a well known issue that adding more developers to a project tends to slow down and complicate the end product being ready to go retail

    It is also common to outsource parts of a project rather than hire staff that can do the work in house. In addition to all of that there is a lot less infrastructure needed to sell a product now that digital download is the way software is "shipped".

    2. Education. We are in a weird time where Americans, despite college graduation rates being historically high, are not qualified for jobs in engineering fields. Dr. Michio Kaku had a great speech about this, but basically Americans are going to college but getting degrees in non-engineering fields. Most of the people who are qualified for these jobs are foreign born and many at some point go back to their home country to get rich in the tech boom happening there.

    3. The almighty market share. It is common for larger companies to buy out the smaller competitors to increase their market share and to eliminate competition at the same time. These acquisitions often results in most at the acquired company being fired after the deal goes through. The bigger company gets to record increased profits, gets a stock boost and potentially saves a fortune on marketing and/or legal.
    Last edited by invibe; 01-01-2014 at 12:01 AM.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    lot of tech employees get stock options so a lot of the gains did go to them. When Facebook went public, a significant number of their employees became millionaires.
    Indeed this has been the case all the way back to the 90's tech boom. The driving force for 'paying' key employees with stock options versus very high paychecks in the long term is that those paychecks would be subject to high tax rates for 'ordinary' income, while the executed stock options would be subject to much lower 'capital gains' tax rates. The reason for 'paying' key employees with stock options in the short term is to reduce the 'cash burn' rate for new tech businesses which have yet to turn an actual profit. Also, as invibe points out, stock options are a way for key employees of a successful new tech company to 'cash in' when the company is bought out and that key employee is no longer part of the new owner's plans.

    Indeed stock options have made a lot of millionaires. I have met a few personally. However, in the grand economic scheme of things, you're talking about thousands, perhaps tens of thousands of people at most, whereas a widespread economic improvement would have to involve tens of millions of Americans !!! Yes high spending by these millionaires does boost the local economy where they live and work. But it helps Ferrari and Nieman Marcus far more than it helps Chevrolet and JC Penneys.


    Not to side-track the thread.....but I am totally confused! What do you consider the 'tech model for success?'
    Well, 2013's tech sector 'wunder stock' is undoubtedly Tesla Motors - located in Palo Alto, California. Their 'tech model for success' goes pretty much as follows ...


    - Start with a CEO with a good reputation earned by previous success in the tech sector

    - secure a $ 465 MILLION dollar low interest loan from the Dep't of Energy to get the business off the ground, with limited 'equity' attached

    - secure gov't approval that guarantees all retail buyers of your product will receive a taxpayer funded 'credit' amounting to a significant percentage of your product's purchase price ... i.e. arrange de-facto funds transfer of ~12% ( depends on state ) of the product's retail price from taxpayers through the customer to the company.

    - secure gov't tax concessions which eliminate any corporate tax bill for the company.

    - secure 'refundable' tax credits for R&D and under other basis, which will provide federal and state taxpayer funded 'refund checks' to Tesla regardless of whether they are operating at a profit.

    - market your product to the top 1% of American earners only, with limited investment in 'brick and mortar' sales and maintenance facilities ... i.e. cut 'commission' costs and labor costs of having independently owned local retail outlets out of the equation.

    - demanding big 'up front' cash from retail buyers which can in turn finance ( some of ) the product's manufacturing cost

    - play up your product with the co-operation of mainstream media to make sure your product is seen as a must have 'sexy new toy' for the top 1%

    - draw in 'smart' private sector investment money ( i.e. IPO and 'limited' sales of initial stock shares ) based on product sales to the 1% ers and very favorable mainstream media coverage

    - use early private sector 'smart' money from the initial stock share purchases to buy back shares from early investors, thus raising the price of those stock shares ( providing some of those 'smart' money investors with a very quick profit )

    - play up your stock with the co-operation of mainstream media, to attract wider interest from 'main street' investors

    - use the 'dumb' private sector money resulting from the new round of 'unlimited' ( and now higher priced ) stock share purchases by 'main street' investors to pay off the gov't loan ( and extinguish US taxpayer 'equity' in the company )

    - ( partially ) pay off key employees who were issued stock options

    - try to 'quietly' arrange for the sale of the company to a 'deep pockets' semi-competitor company, at which point owner and key employees will be fully paid off

    ^^^ please note that nowhere in the above sequence of events is 'turning an actual profit' on a regular / repeatable basis involved ^^^

    see

    also

    also



    As Slate points out, the key to Tesla's success was the gov't loan, which essentially forced US taxpayers to assume a near 100% potential risk of principal loss ... which actually happened with some other ( failed ) tech companies receiving similar gov't loans i.e. Solyndra ... in exchange for near zero percent interest payments and NO participation in 'equity' earnings if the company turns out to be successful.

    It is estimated that if US taxpayers had been given stock shares in exchange for their $465 million, US taxpayers could have been 'paid back' more than a billion dollars. Instead, the 1/2 billion 'difference' is being paid to Tesla's owners, key employees, and 'smart' money first round investors. And, of course, there is no accounting for the cost to US federal and state taxpayers of the electrical vehicle tax credits given to Tesla buyers, no accounting for cost to US federal taxpayers of the R&D tax credits given to Tesla directly, no accounting for cost to California taxpayers of the 'sales and use tax' exemption given to Tesla directly, etc.

    In Wall St jargon, the model for tech company success is to 'privatize the profits' and 'socialize the losses'. For what it's worth, a more detailed explanation specific to Tesla can be found at
    Last edited by Melonie; 01-01-2014 at 06:41 AM.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    Quote Originally Posted by justanothercamgirl View Post
    Not to side-track the thread.....but I am totally confused! What do you consider the 'tech model for success?'

    I know I have seen more start ups go under than ones that have become successful.

    Start ups this time around have also seemed to have changed a lot since the last bubble I experienced. Last time around it was all about 'angel investor money' and being bought out and then making a mint from your stock options. From what I have seen so far this time around they have changed the model.
    If you guys took the time to read the original posted article (and its short), you would see what I'm talking about. Its not my tech model for success, it is a documented model for success that the article talks about, and one I saw with my own eyes growing up when the first dot com boom hit in my neighborhood, and again right now.

    Again, I will quote the original article I posted:

    "It isn't just tech, though: There are now a record 600,000 jobs in San Francisco proper, with 5 percent unemployment (down from a high of 10 percent a couple years ago), and only about 20,000 of the new jobs are in tech. The rest are in health care, business services, hospitality, and other traditional industries — some of which may, arguably, be growing as a result of the deep pockets and high-paid workers of the tech industry.

    Earlier this month we noted that this boom had already exceeded the last in terms of , and now it's official that the job numbers back that up.
    "


    When a successful industry that is relevant and helpful to society's current state moves in, it creates jobs for OTHERS who are less (or more) skilled. It creates all sorts of jobs for all different kinds of people.


    So all of you keep commenting stuff like ~*but to work in tech and create this boom, you need a degree!!!*~ NO, its NOT true! When a successful industry creates jobs for the upper or upper middle class people, it creates jobs for everyone. It means more "health care jobs, business services, hospitality, and other traditional industries" as the article states. Like I said, I saw this with my own personal eyes when I just went back home to the Bay Area. Suddenly there were more shopping centers evvvvverywhere! Both mom & pop and chain stores, hospitals, tech companies, etc which gives jobs to both small business owners and those who wish to be employed for someone.


    So I am wondering, if there are more tech companies opened all around the U.S. (which looks like its going to happen because the future is in technology) or industries/companies that benefit our now high-tech digital world, wouldn't that create more jobs for EVERYONE and not just tech people, thus pulling us out of the recession? Because that is what I personally saw in the Bay Area when I lived there, and what I am seeing right now in LA living here.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    When a successful industry that is relevant and helpful to society's current state moves in, it creates jobs for OTHERS who are less (or more) skilled. It creates all sorts of jobs for all different kinds of people.
    I'm in total agreement with this statement, provided that the real world definition of 'successful' means generating a sustainable profit on its own merits, such that it isn't reliant on 'stealth' taxpayer funding of that industry. Unfortunately, where many California based tech businesses are concerned, this simply isn't the case. Besides 'newcomer' Tesla, mature California tech companies like Intel, Cisco, Qualcomm etc. all rely on A. the ability to shield actual profits from 'normal' state and federal taxes via moving 'intellectual property' ownership offshore, and B. tax deductions granted to their ( primarily business ) customers for purchasing their products. And when you get to California's tech related government contractors like Boeing, Northrup Grumman, etc., taxpayer funding is a huge percentage of their sales revenues.

    Not meaning to go off topic, but have a look at with an eye towards the number of California jobs that stem from 'successful' companies that regularly earn a profit via their own efforts, versus California jobs that are totally or partially taxpayer funded !!!

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    Quote Originally Posted by Melonie View Post
    I'm in total agreement with this statement, provided that the real world definition of 'successful' means generating a sustainable profit on its own merits, such that it isn't reliant on 'stealth' taxpayer funding of that industry. Unfortunately, where many California based tech businesses are concerned, this simply isn't the case. Besides 'newcomer' Tesla, mature California tech companies like Intel, Cisco, Qualcomm etc. all rely on A. the ability to shield actual profits from 'normal' state and federal taxes via moving 'intellectual property' ownership offshore, and B. tax deductions granted to their ( primarily business ) customers for purchasing their products. And when you get to California's tech related government contractors like Boeing, Northrup Grumman, etc., taxpayer funding is a huge percentage of their sales revenues.

    Not meaning to go off topic, but have a look at with an eye towards the number of California jobs that stem from 'successful' companies that regularly earn a profit via their own efforts, versus California jobs that are totally or partially taxpayer funded !!!
    That's more engineering. And most of those companies you listed are NOT in SF, they are in San Jose. No one goes to San Jose because there's nothing there, as with the rest of Silicon Valley. The same is not true about San Francisco, the East Bay, and the North Bay.

    I'm talking about digital tech. Companies like Twitter who just moved into SF, Yelp, Disqus, Airbnb, Pinterest, StumbleUpon, Reddit, etc. Companies such as those can be started from anywhere, so the industry can literally move anywhere and create new jobs in other fields along with it.

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    Default Re: Current Economic Boom Surpasses Dot-Com Boom In Half The Time

    When a successful industry that is relevant and helpful to society's current state moves in, it creates jobs for OTHERS who are less (or more) skilled. It creates all sorts of jobs for all different kinds of people.
    I'm in total agreement with this statement, provided that the real world definition of 'successful' means generating a sustainable profit on its own merits, such that it isn't reliant on 'stealth' taxpayer funding of that industry. Unfortunately, where many California based tech businesses are concerned, this simply isn't the case. Besides 'newcomer' Tesla, mature California tech companies like Intel, Cisco, Qualcomm etc. all rely on A. the ability to shield actual profits from 'normal' state and federal taxes via moving 'intellectual property' ownership offshore, and B. tax deductions granted to their ( primarily business ) customers for purchasing their products. And when you get to California's tech related government contractors like Boeing, Northrup Grumman, etc., taxpayer funding is a huge percentage of their sales revenues.

    Not meaning to go off topic, but have a look at with an eye towards the number of California jobs that stem from 'successful' companies that regularly earn a profit via their own efforts, versus California jobs that are totally or partially taxpayer funded !!!

    Back on topic, another 'famous' economic principle ( or topic of discussion, for those who disagree ) is the 'Broken Window Fallacy'. See

    (snip)"The broken window fallacy also demonstrates the faulty conclusions of the onlookers; by only taking into consideration the man with the broken window and the glazier who must replace it, the crowd forgets about the missing third party (such as the shoe maker). In this sense, the fallacy comes from making a decision by looking only at the parties directly involved in the short term, rather than looking at all parties (directly and indirectly) involved in the short and long term."(snip)

    The relevant point in today's economy is that when gov't entities decide to 'take money away' from taxpayers and redirect it toward a particular business, the positive effects on that gov't assisted business can be clearly seen. However, what cannot be so easily seen is alternative successes which did not happen because that money could not be used for other purposes. So yes, admittedly from the 'git-go', the ( de-facto gov't assisted ) tech industry is adding jobs, both directly and indirectly, in areas where tech industries are located. However, what has not been mentioned is the other economic activities and jobs which 'might have been' had the tax money used to assist the tech industry been left in the hands of people who could have started other businesses, who could have spent that money at their own discretion ( i.e. buying lap dances ), etc.

    In regard to your 'new' tech companies, taxpayer funded subsidies continue just like the 'old' tech companies

    for Twitter ... see

    for Yelp ... see

    Also, in many ways, Twitter's 'success' has been following some of the same 'tech model for success' elements as Tesla Motors, including an inability to actually earn a profit, and using co-operative mainstream media to appeal to 'dumb' money investors ... see . The owners, key employees, and 'smart' money investors have been paid off via an IPO sale of 'limited' company stock shares, and the 'dumb' money investors ( who, along with taxpayers, 'paid' for the company's 'success' ) are keeping their fingers crossed ...

    Arguably, this latest 'tech model for success' doesn't create a whole lot of new 'wealth' ( if it did, these companies would be profitable on their own merits ). Instead, it 'transfers' existing wealth from other places ( i.e. federal taxpayers, state taxpayers,'main street' investors, etc. ) to the place where the tech companies are located. Obviously this provides a major economic improvement in and near the places where these tech companies are located. However, this also arguably causes unseen economic 'damage' to other places where these tech companies are NOT located. Thus it's possible to wind up with scenarios like San Francisco's economy booming while San Bernardino is filing for bankruptcy.
    Last edited by Melonie; 01-01-2014 at 07:55 AM.

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