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

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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 !!!

    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 etc.
    Again, you are talking about San Jose which is NOT going through a boom. See here:

    And the MBA link data you gave is outdated and from 2007. It has now 7 years later.

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

    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.
    I am just kind of riffing off your comments, so forgive the rambling.

    Basically, yes. I am a firm believer that the US needs another "space race" to get us through the next 50 years. The logical place to do that is in energy, it is the next big crisis to face the planet. Another is high speed rail. Some will insist that the country runs on private sector money alone, that is simply false. The U.S. runs on private business innovating products and services pioneered by U.S. government funded RND for another application. There isn't a single important feature of the internet, computers or even smart phones that doesn't have its roots firmly in the DARPA project during the ICBM standoff of the cold war. Historically we owe our economic booms to big government funded projects (Wars, Damns, Interstate, Space Race, Cold War) that start a tidal wave of private sector businesses from the byproducts of the RND and tech as it becomes cheaper to manufacture. Our government can spend hundreds of billions on things that would bankrupt the wealthiest companies and is an important piece in the economic engine. Just imo of course.

    What Americans are very good at is thinking out solutions to big unsurmountable problems. The RND that goes into answering those questions is far more money than any private company will ever invest. That is why technology is stuck in what is sometimes called "iterative development". We aren't making anything truly new and haven't for decades. What tech companies are doing is incrementally improving on ideas that are 30,40,50,60 years old. The Japanese are true masters of this process.

    On the software side I think one of the most interesting problems is that the big companies, the ones that really change the world aren't really driven by technology as much as just having a really good idea and the best ones have a really good presentation of that really good idea. I believe that is why the U.S. remains the birth place of most of the world changing tech in spite of ourselves. I can think of more companies that were started by kids who just loved to "hack" on things and make cool stuff that turned into multi billion dollar mega stars than companies who started with deep pockets backing them. Maybe our universities should be offering degrees in day dreaming and tinkering.

    I think there are a couple of other issues affecting the appearance of a rebounding economy as well. First is that companies learned during the tight times that they can still get product out the door and make a profit with fewer people. The other is that "telecommuting" is becoming a widely accepted practice for technical jobs. An employer in Seattle may allow you to live in Boston, they may even rationalize that it saves them a lot of money over providing office space.

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

    Quote Originally Posted by invibe View Post
    Basically, yes. I am a firm believer that the US needs another "space race" to get us through the next 50 years. The logical place to do that is in energy, it is the next big crisis to face the planet. Another is high speed rail.

    What tech companies are doing is incrementally improving on ideas that are 30,40,50,60 years old. The Japanese are true masters of this process.

    On the software side I think one of the most interesting problems is that the big companies, the ones that really change the world aren't really driven by technology as much as just having a really good idea and the best ones have a really good presentation of that really good idea. I believe that is why the U.S. remains the birth place of most of the world changing tech in spite of ourselves. I can think of more companies that were started by kids who just loved to "hack" on things and make cool stuff that turned into multi billion dollar mega stars than companies who started with deep pockets backing them. Maybe our universities should be offering degrees in day dreaming and tinkering.

    The other is that "telecommuting" is becoming a widely accepted practice for technical jobs.
    I agree so much!!! All points I was waiting to read on here.

    I just think that there are so many ways that people can create new jobs, and it just isn't happening yet for some reason! Green energy, commuting (high speed rails through out the U.S. or at least starting with California), and social media-like tech apps that improve quality of life (like Uber for example). There's just so many ways people can create jobs, and these jobs can literally be stationed anywhere in the U.S. And the successes of those industries will boom and create more jobs, like the article stated happened in the case of San Francisco (and the East Bay).

    I'm excited to see what the immediate future holds

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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 agree so much!!! All points I was waiting to read on here.

    I just think that there are so many ways that people can create new jobs, and it just isn't happening yet for some reason! Green energy, commuting (high speed rails through out the U.S. or at least starting with California), and social media-like tech apps that improve quality of life (like Uber for example). There's just so many ways people can create jobs, and these jobs can literally be stationed anywhere in the U.S. And the successes of those industries will boom and create more jobs, like the article stated happened in the case of San Francisco (and the East Bay).

    I'm excited to see what the immediate future holds
    You may be interested in this, I don't agree with all the points but it is interesting and talks about these issues (long, 1'04" ish).

    http://www.youtube.com/watch?v=ceEog1XS5OI

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

    If anybody can make a documented case that green energy, ( California ) high speed rail etc. create new 'wealth' to fund new jobs, rather than transferring existing 'wealth' thus funding new jobs at the expense of lost jobs elsewhere, I'm all ears !!!





    Again, it's a wonderful thing to be located in a particular area where all of the taxpayer subsidy money is actually being spent, where new jobs are being created, and where this transferred money is being injected into the local economy. It is quite another thing to be located in a different area, where your own tax money is being collected to subsidize these businesses / projects in another area, thus jobs are being lost / not being created in your own area due to reduced money remaining in your own local economy. But to most of the 'lucky' recipients of this transferred wealth who happen to live in booming areas, the thought that their economic 'good fortune' is actually coming at the expense of state taxpayers living in different cities, and at the expense of federal taxpayers living in different states, usually doesn't 'register'.


    I don't agree with all the points but it is interesting and talks about these issues
    It's also interesting to read the posted comments !


    And the MBA link data you gave is outdated and from 2007. It has now 7 years later.
    True enough. However, the basic point remains true ... that ( partially and fully ) taxpayer funded jobs play a huge role in 'booming' areas of California.


    The U.S. runs on private business innovating products and services pioneered by U.S. government funded RND for another application.
    This was true for government funded R&D in the past. However, in today's world, the long term beneficiaries of such US gov't funded R&D efforts, in terms of new jobs, are mostly offshore. I offer the example of gov't funded R&D for electric vehicle batteries as a modern example. The US gov't has spent tens of millions in direct DOE grants, and hundreds of millions in gov't guaranteed loans, with the following results ...







    ^^^ the arguable 'bottom line' on the above is that, while the development of lithium ion battery technology was heavily subsidized by US taxpayers, when the evolution of the market for the new product reaches the point where the resulting product can approach high volume production levels ... and thus create significant new 'wealth', thus create self-funding new jobs, thus create corporate profits on it's own merits, thus creating 'positive' tax revenues for the US gov't etc. ... the high 'costs of doing business' in the USA now almost immediately drives that high volume production, thus new jobs, to China etc. And, as before, the actual US based beneficiaries of the US gov't subsidized R&D are the company's top management and key employees, plus ( already rich ) shareholders. And, typically, the extent of middle class US job creation is limited to a comparatively small number of US employees who 'assemble' all of the imported components, and stick a 'Made in USA' label on the final product. Thus, arguably, present day taxpayer funded R&D now causes more economic 'damage' than benefits created, in strictly US terms ... with whatever benefits ( again ) flowing to a fortunate few, and with US taxpayers saddled with the additional 'bill' ( which indirectly results in other job losses, reduced economic activity etc. )

    Again, the 'Broken Window Fallacy' plays a large part in all of the above. If wer're in the mood for videos, see
    Last edited by Melonie; 01-01-2014 at 06:54 PM.

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

    Quote Originally Posted by invibe View Post

    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
    Software development is extremely labor intensive and does require a great deal of manpower. Microsoft XP required 45 million lines of code.

    http://en.wikipedia.org/wiki/Source_...f_code#Example

    I'm sure other major applications, such as Google Search or Facebook also had massive amounts of code written for them.

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

    Quote Originally Posted by eagle2 View Post
    Software development is extremely labor intensive and does require a great deal of manpower. Microsoft XP required 45 million lines of code.

    http://en.wikipedia.org/wiki/Source_...f_code#Example

    I'm sure other major applications, such as Google Search or Facebook also had massive amounts of code written for them.
    Labor intensive, yes. Manpower intensive not necessarily, in fact there is a book called The Mythical Man Month (http://en.wikipedia.org/wiki/The_Mythical_Man-Month) in which these concepts have held up over time.

    With XP you are talking about an iteration of the software, they did not write all 45 million lines of code from scratch just for XP but rather extended the existing source from NT 3.5 onwards. Code re-use is a big deal, you don't resolve problems that have well established solutions. Microsoft didn't even invent it's own Sockets for example, but rather ported BSD sockets directly into Windows for TCP/IP. This is smart and how all good software is written.

    The companies bringing innovative software to market don't start out with hundreds of developers, testers, QA people, managers etc. If you take a look at what most successful software companies looked like when their first big product hit the market they were usually small if not tiny. That was my point, it is even more common today with Mobile apps for 1 or 2 people to work on something that is profoundly successful especially in games.

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

    Quote Originally Posted by Melonie View Post
    If anybody can make a documented case that green energy, ( California ) high speed rail etc. create new 'wealth' to fund new jobs, rather than transferring existing 'wealth' thus funding new jobs at the expense of lost jobs elsewhere, I'm all ears !!!
    One way that might happen is in the physical/skilled labor side of actually installing and maintaining all of those wind/tide/solar sites which there will need to be a lot of.

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

    One way that might happen is in the physical/skilled labor side of actually installing and maintaining all of those wind/tide/solar sites which there will need to be a lot of.
    Well, installation jobs are a short-lived 'one shot deal'. Maintenance jobs last as long as the equipment does. However, whatever net benefit additional green energy maintenance jobs may create has to be balanced against the additional loss of 'conventional' jobs caused by green energy technology's higher resulting energy prices, as well as against the 'unseen' new jobs which might have been created in other sectors had the taxpayer money used to subsidize green energy been invested in another business venture or left in people's pockets to be spent on existing businesses.

    Bloomberg reported on a study performed on Spanish solar and wind effects on the overall economy, which showed that for every ( taxpayer subsidized ) green energy jobs created, two ( self-sustaining ) conventional jobs were eventually lost. See . Without getting political, the point raised by the study is that solar and wind economics is dependent on taxpayer subsidies and/or above-market prices being paid for the power they generate ... which in turn increases average electricity prices ... which in turn motivates energy intensive businesses to not expand / to relocate / to shut down. Again the Broken Window Theory ... counting only the 'seen' but discounting the 'unseen' makes for happy headlines, but the real world economic effects can't be as easily discounted.

    Would-be strip club and/or webcam customers having to pay higher electric bills, having to pay higher prices for products which require a lot of energy input ( example - food ), having to pay higher taxes to fund green energy grants, tax credits and subsidies, etc. can translate into fewer lap dances or fewer paid webcam sessions able to be purchased by those customers. However, it is unlikely that dancers or camgirls will actually 'connect the dots' in this regard, or realize that they are now being cast in the role of the 'tailor' in the original Broken Window Theory example.

    Granted that, as is the case with other types of ( taxpayer subsidized ) tech industries, areas that are the 'lucky' recipient of solar and wind dollars do benefit significantly on a localized basis. But, as before, this arguably comes at the 'cost' of slower economic conditions in other areas which have lots of taxpayers, but few or no local solar or wind industries.
    Last edited by Melonie; 01-02-2014 at 07:04 AM.

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

    and by 'pure coincidence', this piece was just published by

    (snip)"If you come to San Francisco or Silicon Valley and look around, you’d arrive at the conclusion that California is booming, that companies jump through hoops to hire people, that they douse them with money, stock options, and free lunches. You’d see engineers spend lavishly and drive up rents and home prices to where landlords react with record evictions of the less-lucky. You’d see Google buses bring in people and trigger mini-demonstrations. You’d see entire layers of long-time residents getting pushed out because it has just gotten too expensive. In San Francisco, you’d see throngs of tourists from China and other places, spending money hand over fist. And there are a few other pockets in California where money is no objective.

    But in the rest of the state, the picture isn’t that rosy. Total unemployment, officially, is still 8.5%, though that’s far better than the hellish 12.4% in February 2010. Of those unemployed, 28% have been jobless for over a year. Those receiving unemployment benefits – a fraction of the total unemployed – have dropped from 1.5 million to 712,000, whether they found jobs or just fell off the list. But, as the LA Times reported, there are still 400,000 fewer jobs in the state than there were before the crisis. So finding a job, if you aren’t into software, consumer tracking, or life sciences, is tough.

    The unemployment debacle has been expensive. Employers pay payroll-based unemployment insurance into a fund that then covers the 26 weeks of unemployment benefits that the state pays. But during the crisis, unemployment skyrocketed, and by January 2009, California’s unemployment system became one of the first in the nation to go broke.

    California itself went broke; in July that year, it issued IOUs instead of checks to pay its bills. To keep state unemployment benefits flowing, the state had to beg the federal government for a bailout. By now, according to Loree Levy, a spokeswoman for the California Employment Development Department (EDD), the state owes the federal government $9.7 billion for state unemployment benefits.

    How can California ever pay this back? Jacking up taxes on employers, raising eligibility requirements, and/or chopping benefits. None of them are palatable. None of them will help the economy. And the Legislature has not yet found, or even looked for, a solution.

    Meanwhile, taxpayers – not employers – have paid $870 million in interest on this loan to the federal government. In its out-of-money desperation, the Legislature has been borrowing the interest from the State Disability Insurance (SDI) fund, which is funded by workers through payroll deductions. It’s up to taxpayers to put that money back in, explained to the National Employment Law Project. Shuffling money around like this is a common shell game in broke California."(snip)

    (snip)"222,000 people will be cut off. Many of them live inland, don’t write code, and don’t have PhDs in the life sciences. They’re living hand to mouth and have been plowing every dime of their benefits back into the economy. But no more. That $3.5 billion will no longer reach California. And then there are the $9.7 billion that California has to extract from taxpayers, employers, or workers to pay back Uncle Sam.

    The newly benefit-less unemployed are going to join the other benefit-less unemployed in California, and they’re going to have to redouble their efforts to find a job. It will be tough, with 400,000 fewer jobs to go around.

    But in Silicon Valley it’s easy to lose your sense of proportion when it comes to a few billion bucks. It’s a hotspot for Big Data and associated government spy-services, a juicy market. Investors clamor to get in. Scores of startups have sprung up. The hottest one is Palantir. Its valuation jumped 50% in three months – to $9 billion! Its technologies, designed for the CIA to track terrorists, have transitioned to track you and me"(snip)

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

    Quote Originally Posted by GlamourRouge View Post
    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?
    The tech jobs didn't actually lead to the boom. The economic boom is due to various other factors working in together.

    Correlation is not the same as causation. It would be a mistake to assume that the addition of new jobs is related to the tech boom, especially when only a few of the jobs created are in the tech fields.

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

    ^^^ arguably, it would also be a mistake to assume that any new jobs have actually been created in the state of Califonia as a whole, and a mistake to assume that the state of California as a whole is experiencing any sort of economic 'boom'. As pointed out in previous posts, California is still net negative some 400,000 jobs, and the 'concentration' of increased economic activity happening around San Francisco and Silicon Valley are ( at least partly ) the result of the concentrated spending of state and federal taxpayer money ... the increased collection of which has arguably decreased economic activity in other areas of the state and in other US states.

    The classic definition of an economic 'boom' involves improvement across an entire region, and economic improvement that does not come at the expense of economic decline in other areas. Gas and oil fracking industries fit that economic 'boom' description. Tech industries arguably do not.

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

    Quote Originally Posted by RedWine View Post
    The tech jobs didn't actually lead to the boom. The economic boom is due to various other factors working in together.

    Correlation is not the same as causation. It would be a mistake to assume that the addition of new jobs is related to the tech boom, especially when only a few of the jobs created are in the tech fields.
    Well considering I lived there, I saw what happened with my own eyes. People with 6 figure jobs kept moving in, pushing people without 6 figure jobs out to a nearby neighborhood/area/city... which led to the gentrification of each city one by one. And now almost all of them have been completely gentrified. Companies like Twitter have just moved into San Francisco. A bunch of them. Like a good 20 different ones in the last 3 years.

    The East Bay is being gentrified right now because more and more people are forced to move there when they cannot afford (or refuse to pay) San Francisco rental costs anymore. Which, like I said, people are flocking to once lower-priced cities and neighborhoods, creating more jobs, and continually pushing people out city by city.

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

    Quote Originally Posted by Melonie View Post
    Well, installation jobs are a short-lived 'one shot deal'. Maintenance jobs last as long as the equipment does. However, whatever net benefit additional green energy maintenance jobs may create has to be balanced against the additional loss of 'conventional' jobs caused by green energy technology's higher resulting energy prices, as well as against the 'unseen' new jobs which might have been created in other sectors had the taxpayer money used to subsidize green energy been invested in another business venture or left in people's pockets to be spent on existing businesses.

    Bloomberg reported on a study performed on Spanish solar and wind effects on the overall economy, which showed that for every ( taxpayer subsidized ) green energy jobs created, two ( self-sustaining ) conventional jobs were eventually lost. See http://www.bloomberg.com/apps/news?p...d=a2PHwqAs7BS0 . Without getting political, the point raised by the study is that solar and wind economics is dependent on taxpayer subsidies and/or above-market prices being paid for the power they generate ... which in turn increases average electricity prices ... which in turn motivates energy intensive businesses to not expand / to relocate / to shut down. Again the Broken Window Theory ... counting only the 'seen' but discounting the 'unseen' makes for happy headlines, but the real world economic effects can't be as easily discounted.

    Would-be strip club and/or webcam customers having to pay higher electric bills, having to pay higher prices for products which require a lot of energy input ( example - food ), having to pay higher taxes to fund green energy grants, tax credits and subsidies, etc. can translate into fewer lap dances or fewer paid webcam sessions able to be purchased by those customers. However, it is unlikely that dancers or camgirls will actually 'connect the dots' in this regard, or realize that they are now being cast in the role of the 'tailor' in the original Broken Window Theory example.

    Granted that, as is the case with other types of ( taxpayer subsidized ) tech industries, areas that are the 'lucky' recipient of solar and wind dollars do benefit significantly on a localized basis. But, as before, this arguably comes at the 'cost' of slower economic conditions in other areas which have lots of taxpayers, but few or no local solar or wind industries.
    Scale is the main issue with green energy, it hasn't reached reached the point where costs are lowered by production/consumption. I look at it in the same light as any kind of proto type which often cost a heck of a lot more than the mass produced production model. Oil is very expensive to find, drill and refine so I am optomistic that green energy would on a large enough scale dilute the cost and actually make companies money, create jobs and provide cheaper energy. As far as tax dollars, well our government has been bullying everyone that has some oil since 50s on our dime so it could be a big improvement to get that monkey off our back lol.

    Not to be calloused but job displacement is always going to be there with revolutionary changes in business and technology. Every generation of Americans since the Industrial Revolution has had to deal with this. One of the interesting ideas that I have been following is that laws and regulations are not agile enough to keep up with the rate of progress; which presents another possibility of job displacement as industries relocate to where they can be competitive and lead the market for reasons other than cheap labor/real estate.

    I still think Americans are capable of making very high quality products and that may be our edge in the new economy. Highly skilled trades people are becoming rare though, as everyone goes off to college to check the box and get their mostly useless four year degree and become a highly replaceable office worker. I am definitely pro education, but think we need to expand that idea to include actual job skills, trades, in additon to the academia etc.

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

    Well considering I lived there, I saw what happened with my own eyes.
    Nobody including my authors or myself is denying that the greater San Francisco area hasn't been the recipient of a proverbial 'rising tide'. What my authors and I have been attempting to point out is that, in this case, the 'rising tide' in San Francisco hasn't 'raised all boats'. Instead San Francisco's 'rising' tide is the result of 1/2" of 'water level' being 'sucked' out of other California areas, and 1/4" of 'water level' being 'sucked' out of other areas of the USA, to create the 'high tide' in San Francisco. The larger point is that the localized tech 'boom' in the San Francisco area isn't indicative of a general economic improvement.


    Scale is the main issue with green energy, it hasn't reached reached the point where costs are lowered by production/consumption
    I'm trying very hard not to get dragged into a green energy discussion because the economics always get mixed with the politics. However, at this point, green energy development in western Europe is well ahead of the USA ... thus whatever available economies of scale are pretty well 'matured' ( to the point of installed energy generation being able to meet a large percentage of total electrical demand at times ) ... and the net operating costs of green energy are clearly still not economically 'competitive' without large and ongoing injections of taxpayer money and/or electric ratepayer green energy 'surcharge' money.

    See and also ... about the European outcome.

    And see as an example that the European-esque green energy scenario is quickly developing in some areas of the USA.

    The most telling quote from my links is as follows ...

    (snip)"Electricity prices have fallen from over €80 per MWh at peak hours in Germany in 2008 to just €38 per MWh now. (These are wholesale prices; residential prices are €285 per MWh, some of the highest in the world, partly because they include subsidies for renewables that are one-and-a-half times, per unit of energy, the power price itself). "(snip)

    This has the conbined effect of 'starving' utility companies of sufficient profits to self-fund maintenance and end of life replacement of the existing electrical transmission and distribution infrastructure, while at the same time greatly increasing bottom of the bill prices for electricity customers ... with green energy 'surcharges' actually exceeding the cost of 'conventionally' generated electricity. In essence the 'deep pocket' green energy investors are guaranteed a profit from the ratepayer subsidized 'above market' prices they must be paid by electricity customers ( via gov't mandate ), combined with the taxpayer funded green energy 'production tax credits' wiping out liability for taxes on both green energy operation profits as well as taxes due on income from other sources.


    A major 'problem' with wind, solar, wave generation etc. is that, unlike hydropower being able to store water behind dams, there is no practical way to storing latent moving air, sunshine, or waves, for the steady levels of power generation that all power grids require. Instead, the use of wind, solar, wave etc. generation must use 'throttling' of other forms of electrical generation to make up for power not generated when the wind stops blowing, a cloud floats by, etc. This 'throttling' requirement forces other forms of electrical generation to operate inefficiently ... leading to higher costs / lower profits for the owners of those other forms of electrical generation, or to those higher costs being passed on to ratepayers.

    Of course, per the Broken Window Fallacy, this electrical system inefficiency and associated additional costs to ratepayers are 'unseen'. Or at least they are 'unseen' until the percentage of power grid generation coming from wind, solar, etc. becomes a significant percentage of total power system generation. When that happens, you get scenarios like German and Washington State ones pointed out in my links.

    A full understanding of the 'economics' of green energy requires that it be understood that green energy's main 'product' is NOT green energy. In point of fact it is ( production and other ) tax credits ... which can be used by 'deep pocket' green energy partner investors to 'cancel out' the ( recently increased ) tax rates applying to their other, more conventional, forms of earnings. And, as is the case with any form of taxpayer subsidy, the 'cost' of those green energy tax credits granted to the deep pocket green energy investors must ( eventually ) be paid for by other, mostly 'middle class', Americans.
    Last edited by Melonie; 01-03-2014 at 11:41 AM. Reason: me

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

    I wholeheartedly agree. This is a simple case of numbers being manipulated to prove a point. I see no evidence of an economic boom.


    Quote Originally Posted by Melonie View Post
    ^^^ arguably, it would also be a mistake to assume that any new jobs have actually been created in the state of Califonia as a whole, and a mistake to assume that the state of California as a whole is experiencing any sort of economic 'boom'. As pointed out in previous posts, California is still net negative some 400,000 jobs, and the 'concentration' of increased economic activity happening around San Francisco and Silicon Valley are ( at least partly ) the result of the concentrated spending of state and federal taxpayer money ... the increased collection of which has arguably decreased economic activity in other areas of the state and in other US states.

    The classic definition of an economic 'boom' involves improvement across an entire region, and economic improvement that does not come at the expense of economic decline in other areas. Gas and oil fracking industries fit that economic 'boom' description. Tech industries arguably do not.

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

    Quote Originally Posted by Melonie View Post
    Nobody including my authors or myself is denying that the greater San Francisco area hasn't been the recipient of a proverbial 'rising tide'. What my authors and I have been attempting to point out is that, in this case, the 'rising tide' in San Francisco hasn't 'raised all boats'. Instead San Francisco's 'rising' tide is the result of 1/2" of 'water level' being 'sucked' out of other California areas, and 1/4" of 'water level' being 'sucked' out of other areas of the USA, to create the 'high tide' in San Francisco. The larger point is that the localized tech 'boom' in the San Francisco area isn't indicative of a general economic improvement.

    Please show your sources and figures for your claim. San Francisco is one of the wealthiest cities in the country in terms of income. This means that residents of San Francisco pay more in state and federal taxes than residents of most other cities, and most likely receive less in government spending than they pay in taxes. At the state level, California pays more in taxes than it receives in Federal spending.

    http://en.wikipedia.org/wiki/Federal...nding_by_state

    This means the rest of the country is "sucking water" out of California's rising tide, not the other way around.

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

    ^^^ as is often the case, your figures regarding DIRECT transfers of taxpayer funds is correct. But as is often the case as well, they don't tell the whole story. Going back to the Broken Window Fallacy to some degree, the INDIRECT transfer of taxpayer funds goes mostly 'unseen'.

    How many billions of federal tax dollars have to be made up for by US taxpayers because Apple, Google, Twitter, et al have been granted an income tax break which allows the vast majority of their corporate earnings to escape US taxes ? See

    How many federal tax dollars flow indirectly to Tesla motors as the result of Tesla customers each receiving $7,500 federal tax credits for purchasing one ?

    How many federal tax dollars flow indirectly to Palantir et al as the result of 'black project' DHS / CIA contracts ?

    Based on your Wiki info regarding DIRECT transfers of taxpayer money, California is supposedly $34 billion in the negative. But, the special tax breaks allowed for California based tech companies alone are estimated to have a value far higher than this. The above aren't any different from a functional standpoint than if the US gov't had directly handed billions of dollars to these companies, but routing the money through the IRS via tax breaks / credits, through 'opaque' federal agencies, etc makes sure that this money doesn't appear in the direct accounting figures you cite.

    And we're still only talking about taxpayer money, not 'deep pocket' investor money being drawn to various California based tech companies because of the 'paper profits' made possible by the Dutch Sandwich tax breaks, to green tech companies because of the 'production tax credits', etc.
    Last edited by Melonie; 01-04-2014 at 06:15 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
    How many billions of federal tax dollars have to be made up for by US taxpayers because Apple, Google, Twitter, et al have been granted an income tax break which allows the vast majority of their corporate earnings to escape US taxes ? See http://techcrunch.com/2013/10/28/the...x-liabilities/
    No tax dollars have to be made up by US taxpayers. That’s not how our system works. Everyone else would have to pay the exact same amount of taxes, regardless of how much tax Apple, Google, and Twitter pay. When Apple and Google, and Twitter pay more in taxes, tax rates don’t go down for everyone else, and when Apple and Google, and Twitter pay less in taxes, tax rates don’t go up for everyone else. If Apple and Google, and Twitter paid more in taxes, there would be an even bigger gap between how much California pays in federal taxes, and how much of federal tax dollars go to California.
    Quote Originally Posted by Melonie View Post
    How many federal tax dollars flow indirectly to Tesla motors as the result of Tesla customers each receiving $7,500 federal tax credits for purchasing one ?
    Zero tax dollars flow indirectly to Tesla motors as a result of federal tax credits. The tax credits go the person purchasing the car. Considering there is a long waiting list for people who want to purchase a Tesla, sales would probably be the same without the tax credit. Regardless, the total dollar amount for tax credits going to Tesla buyers is insignificant compared to the more than $30 billion gap there is between California tax dollars paid and received.
    Quote Originally Posted by Melonie View Post
    How many federal tax dollars flow indirectly to Palantir et al as the result of 'black project' DHS / CIA contracts ?
    As far as I know, Panantir is a public company and their revenue they get from government contracts is public. I doubt the money that goes into California from ‘black projects’ is anywhere close to the $34 billion gap.
    Quote Originally Posted by Melonie View Post
    Based on your Wiki info regarding DIRECT transfers of taxpayer money, California is supposedly $34 billion in the negative. But, the special tax breaks allowed for California based tech companies alone are estimated to have a value far higher than this. The above aren't any different from a functional standpoint than if the US gov't had directly handed billions of dollars to these companies, but routing the money through the IRS via tax breaks / credits, through 'opaque' federal agencies, etc makes sure that this money doesn't appear in the direct accounting figures you cite.
    Again, the tax breaks only mean California is paying less in taxes, and without those tax breaks, the $34 billion dollar gap would be even larger.
    Since this thread is moving towards politics, this will be my last post on the subject.

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

    Since this thread is moving towards politics, this will be my last post on the subject.
    Agreed. I'll wrap up with the comment that, when gov't spends more money than it takes in via tax revenues, the growing 'gap' between spending levels and levels of tax revenue does eventually have economic consequences. Detroit and San Bernardino residents can vouch for those consequences on a localized basis. At the national level, those economic consequences still exist but the cause and effect is often obscured - i.e. mortgage and other interest rates rising, prices of food and energy rising etc - but still a negative drag. And where the 'smart' money investors are concerned, it's a win-win all around since, besides their rising Twitter and Tesla stock shares, they're also cashing in on rising food and energy stocks !

    At any rate, this is the wrong forum for that sort of economic discussion.

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

    The general assumption is that becauee the stock market began improving in 2010 that the recession is over. Of course that should mean millions of jobs, only it won't as was my earlier point. How much of those earnings is being reported in the U.S. market but produced by a labor force overseas. Companies are not hiring to replace jobs at a 1:1 from layoffs, some of those companies no longer exist, the jobs they are hiring for may exceed the qualification level of those laid off.
    Job growth as opposed to stock market performance will probably take a brand new hot industry here at home. Amazing that common knowledge hasn't caught up with the fact that anything at a stage where it can be mass produced at low cost to profit margin is not going to be made here in the U.S. We need to be focused on the front of the pipe, that is where thr big money and jobs Americans will be actually doing is going to happen.

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

    ^^^ this is not going to happen while mandated US wage + benefit costs are 3+ times as high as those available overseas. This is also not going to happen when foreign country 'production' of a product sold to foreign market customers is 'exempt' from US corporate taxes ( see the Dutch Sandwich ), whereas US 'production' for export to foreign market customers is taxable !!!

    from

    (snip)"To reduce its overseas tax bill, Google uses a complicated legal structure that has saved it $3.1 billion since 2007 and boosted last year's overall earnings by 26 percent. While many multinationals use similar structures, Google has managed to lower its overseas tax rate more than its peers in the technology sector. Its rate since 2007 has been 2.4 percent. According to company disclosures, Apple (AAPL), Oracle (ORCL), Microsoft (MSFT), and IBM (IBM)—which together with Google make up the top five technology companies by market capitalization—reported tax rates between 4.5 percent and 25.8 percent on their overseas earnings from 2007 to 2009. "It's remarkable that Google's effective rate is that low," says Martin A. Sullivan, a tax economist who formerly worked for the U.S. Treasury Dept. "This company operates throughout the world mostly in high-tax countries where the average corporate rate is well over 20 percent." The corporate tax rate in the U.K., Google's second-largest market after the U.S., is 28 percent.

    In Bermuda there's no corporate income tax at all. Google's profits travel to the island's white sands via a convoluted route known to tax lawyers as the "Double Irish" and the "Dutch Sandwich." In Google's case, it generally works like this: When a company in Europe, the Middle East, or Africa purchases a search ad through Google, it sends the money to Google Ireland. The Irish government taxes corporate profits at 12.5 percent, but Google mostly escapes that tax because its earnings don't stay in the Dublin office, which reported a pretax profit of less than 1 percent of revenues in 2008."(snip)


    The other 'unseen' impact of Google and other tech industry profits coming in significant part from tax breaks is that the 'costs' of those tax breaks ( i.e. 'loss' of billions of dollars worth of US corporate tax revenues ) winds up being 'made up for' by other segments of the US economy ... via higher than necessary taxes on other businesses and individuals, via increased money printing / US gov't debt, via loss of US dollar purchasing power, etc. Of course, lacking any direct cause and effect, this secondary effect is typically overlooked as well.

    Not wanting to swing off topic, but mainstream media has recently reported that some 'manufacturing' is returning to the USA. This does not primarily involve tech companies. Instead it involves 'manufacturing' companies who are concerned about long foreign origin supply chains, shipping costs, commodity price risk during shipping delays, rising labor costs and tightening regulations in China, etc. The business model typically involves shutting down a semi-automated very labor intensive manufacturing facility in China, to be replaced by a new ultra-automated manufacturing facility in the US ... which employs comparatively few but very highly skilled workers to set up and maintain the automation, and which also receives significant state and local tax breaks to 'subsidize' a profit margin ( at the expense of state and local taxpayers ).
    Last edited by Melonie; 01-07-2014 at 10:14 AM.

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

    My friends say SF is still booming, and many of them have gotten really good jobs in tech now, right in the heart of SF! It used to be you had to go all the way to San Jose (1+ hour south of SF in the South Bay) for those jobs. Now they are popping up hard in SF (basically the West Bay) and in the East Bay.

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

    Well, Great! Can I come out there & stay w/ya?


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


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