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kaleberg
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You are right. It was the antitrust driven break up that ended Bell Labs, but it was the antitrust pressures that led companies like Xerox, AT&T, RCA and Kodak to fund prestigious research laboratories, to justify their immense monopoly profits. Yeah, I noticed that about software entering a sort of coma. Still, there has been some progress. For example, Apples new Swift language uses the same type inferencing and compilation strategy as early 1970s MacLisp, and only 40 years later. Granted, I dont think they have the generic/optimized run time control of MacLisp, but they are learning. - K
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I think the real effect we are seeing is that it is so much easier to place a job ad and screen applicants that the number of job posts has soared. You used to have to place an ad in the classified section. That cost money. Now, you can go online and place ads on several job sites for next to nothing. That has to have made a difference. It's the same reason Harvard used to take one out of ten applicants, but now takes one out of sixteen. It's cheaper and easier to apply. You don't have to type out a fresh essay, you can just cut and paste and apply online. Further, Harvard used to charge $25 to apply. That should be $150 nowadays, but the current fee is only $75. If it's cheaper and easier, people will do it more.
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Silicon Valley didn't take us into space. The US government took us into space and span off Silicon Valley as a side product. Silicon Valley isn't going to solve our energy problems. The US government is going to solve our energy problems, and Silicon Valley is going to make a nice profit out of the deal. Silicon Valley isn't going to solve the problem of high telecommunications costs. The US government is going to have to do it, and there might be a few shifts in profit centers in Silicon Valley as a result. Silicon Valley was a creation and client of the US government from day one. Even Xerox PARC was created as a result of government antitrust actions, just like Bell Labs. As someone who has been following the technology since the 1960s, I recognize that we are still just mining the ideas and devices that were developed way back then. Smartphones, tablets, lightweight laptops, the internet, social networking and the like were all basically designed and even prototyped by the 1970s. Silicon Valley hasn't really produced a new idea since then. Unlike some, I'm rather unimpressed with modern social networking. In the old days, we used to copy articles we meant to read and record shows that we meant to watch so we could pretend to be well read and up to date. Now people "communicate" on Facebook and the like so they can pretend they have a social life. Maybe its an antidote to life in the suburbs. For most people I know it's just marketing. All told, I think Noah Smith is being rather credulous.
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Most people will pay more to live in an area with higher taxation. I ran the numbers a while back, and based on real estate prices, the rule of thumb is that people will pay an extra $10,000 to buy a home in an area with a 1% higher tax rate. Within a given region, the real estate agent code phrase indicating higher tax rates is "good schools", and, indeed, people will eagerly pay more for real estate in areas with higher taxes, if they feel they are getting something for their money such as good schools, lower crime rates, public transportation, good roads, medical insurance coverage, or the like.
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It was a good rant though. Software is awful. I love it, but I can't say enough bad things about it.
Toggle Commented Aug 15, 2014 on Links for 8-14-14 at Economist's View
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You are probably right. The three laws of accounting were the precursors to the three laws of thermodynamics: 1) The books have to balance. (Conservation of energy) 2) All the books have to balance. (No isolated systems) 3) The books aren't going to balance themselves. (Entropy increases and so do accounting fees) Accounting tries to capture the state of dynamic process at an instant. It isn't concerned with equilibrium. There are all sorts of identities enforced in the description produced since not everything can be directly measured.
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But raising the minimum wage can and often does have a positive impact as they are almost always spent, not saved. This means that they raise the effective demand level. Raising a CEO salary has a negative impact as the CEO is probably just going to be saved, not spent. This means little or no increase in the effective demand level.
Toggle Commented Aug 15, 2014 on Links for 8-14-14 at Economist's View
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'Any sufficiently advanced magic is indistinguishable from technology.' One of the writers for Doctor Who - possibly Ben Aaronovitch as this was from one of the Battlefield episodes with the seventh Doctor.
Toggle Commented Aug 15, 2014 on Links for 8-14-14 at Economist's View
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Maybe they should stop relying on private companies for building their software and develop the capability in house. If nothing else, the civil service system would get some continuity in the maintenance and development staff so there would be some institutional learning. The current system nearly prohibits that.
Toggle Commented Aug 15, 2014 on Links for 8-14-14 at Economist's View
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I've been involved in enough private sector software development projects to know that they have a pretty crummy on time, on the money success rate. They just don't get dragged out in public and shamed for it. This is just the way engineering projects are. They are always harder than one expects, even when one expects them to be hard. The old joke is that there is a surefire way to improve one's ability to estimate costs and time on projects: multiply your first estimate by one's age.
Toggle Commented Aug 15, 2014 on Links for 8-14-14 at Economist's View
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Replace doctor with plumber, machine operator, car mechanic, fruit picker, computer programmer, truck driver or whatever. The simple fact is that the people whining about skills shortages are almost always dead set against offering higher wages. They've built their business on $1 a gallon gasoline; they deserve to go under.
Toggle Commented Aug 15, 2014 on Links for 8-14-14 at Economist's View
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The gold standard is not only completely synthetic, but it can be gamed. Even when the gold standard was in effect, what limited money supply was the reserve requirements on fractional reserve banking. Basically, there were a set of fixed ratios that determined how much money various levels of banks could lend based on some base quantity of gold: "With a single $25,000 gold brick in its vaults, the United States Federal Reserve System may extend some $71,000 of credit to its member banks. And upon that credit the member banks may extend further credit of $550,000 with which to facilitate the commerce of the world." Fortune - Jan 1932 - Alaska Juneau - Gold Mine p120 There was no real reason that those ratios couldn't be changed. Of course, modern securitization would allow more creative mechanisms for creating large quantities of money out of small quantities of gold. Consider how subprime mortgage loans were turned into "high quality" securities just rather recently. Replace crappy loan with gold and one could easily slice and dice the claims on the gold into tranches, launder them through crooked ratings agencies, and produce certified high quality securities that could then be used as collateral for yet another round of shenanigans. The old fashioned bucket shop operators would stand in awe.
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There are two things going on here. The laws of accounting are simple. Raising the CEO pay has to reduce something else somewhere. Usually, that is worker pay, though sometimes the company borrows, stops depreciating, or uses some other tactic, but this is rare. Accounting only describes the corporate balance sheet at a synthetic instant. In theory, the compensating decreases entailed by raising CEO pay could drive overall increases in revenue which would, over time, raise worker pay, but this has never been observed on this planet, at least not since the 1970s. In other words, the CEO pay increases have come at the expense of worker pay as has been observed locally. It is possible that the Kepler satellite or one of its successors may discover a planet where this is not the case.
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Actually, Lambert never argues that there is nothing the government can do. He argues that the demand limit is related to labor's share of the economy, and that places limits on employment and capital. If the government raises labor's share by changing labor laws, minimum wages, bargaining rules or changes the tax structure, then that could change labor's share and change the constraint.
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People resent their dependency. The harder they suck the teat, the more they hate mommy.
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Perhaps this is an "if the shoe fits" sort of situation, and Larry Kotlikoff recognizes his own shoe size.
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Basically, capitalism has failed. The only thing keeping it going in through the 1970s was fear of the Soviet Union.
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The problem is that pro-business policies result in weak economies. They suck money from labor and give it to capital. They can't respond to emergencies that affect large numbers of people; they can only help selected wealthy individuals and industries. Louis Pasteur said something about luck favoring the prepared mind. In this case, anti-business policies are much better for dealing with economic problems and kindling growth. This is related to the reason wealthier individuals prefer pro-business policies, but states that prefer anti-business policies are wealthier. It's a package. There are all sorts of economic shocks, but government response and policy determine their impact. European historians have been studying this for maybe 100 years now. During a stable century, a plague or famine will be shrugged off, but during an unstable century, it would be catastrophic. (Compare the effects of the plagues in the 14th and 17th centuries in Europe. There was quite a difference.) I'm glad to see more and more "serious" economists and opinion makers are finally waking up to these contradictions in conventional wisdom. Historians have always had to deal with the facts. It's nice to see economists being forced to face reality as well.
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That New York Times article "Hold the Phone: A Big-Data Conundrum" was hilarious. The author measures the speed of his iPhone by seeing how many search hits it can find for "iphone slow". I presume he measures the speed of his car by doing a search for his license number and "too fast".
Toggle Commented Jul 27, 2014 on Links for 7-27-14 at Economist's View
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We, and those of our generation might resist, but there is a new generation who will regard certain jobs the way we regard elevator operators, ice men, hat check girls, watch repairmen or washroom attendants. The real challenge remains coming up with enough moderately well valued jobs to keep effective demand from collapsing.
Toggle Commented Jul 23, 2014 on 'Will Automation Take Our Jobs?' at Economist's View
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Look at the rapidly shrinking occupations - telephone operator, bank teller, paralegal - and at the massively deskilled jobs that once commanded a premium - retail shift manager, delivery dispatcher, secretary. In 1939, a man could make a good middle class living allocating phone numbers by looking through phone company wiring charts or by spraying paint on car doors on a production line. I chose these two examples, because Fortune magazine ran articles on the workers in question back in the 30s. Even by 1939, the latter job was being automated out of existence and it was only the painter's superior speed and skill that kept him employed as paint quality and painting gear improved. There is probably no such job today, just as phone numbers for land lines are allocated by computers. Look for falling wages and shrinking job counts. There are lots of them, and automation is behind a lot of it. (Hell, my local supermarket has been cutting hours now that they have an automatic checkout bank. One clerk runs six stations. We shoppers do the rest.)
Toggle Commented Jul 23, 2014 on 'Will Automation Take Our Jobs?' at Economist's View
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Microsoft was a sclerotic bureaucracy. It wasn't the government that kept them from releasing an operating system to follow up XP. It was their own internal problems and Steve Ballmer's failure to address them. Microsoft built its empire by controlling one very important standard, and it tried to use it as a platform to capture other standards like HTML, Java and Javascript. This strategy grew increasingly untenable as the computing world started demanding broad standardization.
Toggle Commented Jul 22, 2014 on Paul Krugman: The Fiscal Fizzle at Economist's View
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The problem with things like the "natural rate of interest" is that they cannot be measured, not even asymptotically. In fact, it may not even exist. Where is the proof that there actually is an equilibrium with the appropriate properties. Has it ever been achieved? Can it be achieved? Drawing a pair of lines and making a topological argument is confusing the map for the territory.
Toggle Commented Jul 22, 2014 on Paul Krugman: The Fiscal Fizzle at Economist's View
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A better analogy might be that rational expectations are the hidden local variables of economics. They might explain things, but they don't exist.
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The finest thing Von Neumann ever did was keep Mauchly and Eckert from patenting the digital computer. They tried, but Von Neumann beat them to the punch and published first. They could easily have delayed innovation by 20-40 years. The Wright brothers had such a broad airplane patent that innovation moved to Europe until well after WWI. Ford spent a decade fighting off a patent troll who might have crushed the automobile in its crib. Marconi was so worried about patent trolls when sound transmission radio was developed that he invented the patent pool, lest the industry be completely stifled. Patents are definitely a mixed bag. I always like to point out that Gore-tex [tm] dental floss was invented when the original Gore-tex patent ran out.
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