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Google Chairman on WhatsApp: $19 Bn For 50 People? Good For Them! 303

Posted by timothy
from the voluntary-exchange-an-ideal-worth-praising dept.
theodp writes "Speaking at an SXSW panel, Google executive chairman Eric Schmidt emphasized that Google is 'very, very worried' about the class tensions that underlie recent Bay Area protests, where high-salaried techies have driven up rents. 'Ninety-nine percent of people have seen no economic improvement over the last decade,' he said, adding that 'the data suggest that the problem gets worse' and will become the 'number one issue in democracies around the world.' Schmidt's solution to this displacement? Foster conditions — e.g., better education, looser immigration laws, and deregulation in strictly-controlled areas like energy and telecommunications — that encourage the creation of fast-growing startups ('gazelles') that generate lots of jobs. When interviewer Steven Levy noted 'gazelles' like the 50-employee WhatsApp which was acquired by Facebook for a reported $19 billion seem to lead to more inequality, Schmidt brushed aside the apparent contradiction. 'Let us celebrate capitalism,' the tax-us-if-you-can Schmidt said, opening his arms. '$19 billion for 50 people? Good for them.' Eric, meet Tom."
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Google Chairman on WhatsApp: $19 Bn For 50 People? Good For Them!

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  • by Anonymous Coward on Monday March 10, 2014 @08:13AM (#46444277)

    Their solutions are not focused on getting higher paying jobs for the "99%." They are focused on lowering the amount they have to pay for their own talent.

    Any time a company starts talking about deregulation and loosening immigration laws, it's french for "make our labor cheaper."

    • by rmdingler (1955220) on Monday March 10, 2014 @08:31AM (#46444323)

      Any time a company starts talking about deregulation and loosening immigration laws, it's french for "make our labor cheaper."

      Or Hindi.

      French programmers only work three hour days.

      • by Anonymous Coward on Monday March 10, 2014 @08:35AM (#46444345)

        Schmidt is a big friend of the "do as I say, not as I do crowd." They want higher taxes for everyone except themselves. Hypocrites.

        • by cayenne8 (626475) on Monday March 10, 2014 @11:52AM (#46445923) Homepage Journal
          His quote of:

          Schmidt's solution to this displacement? Foster conditions â" e.g., better education, looser immigration laws, and deregulation in strictly-controlled areas like energy and telecommunications

          Ok..how will loosening up immigration to allow foreign nationals to drive wages lower in pretty much all sectors help conditions?

          I was with him up until that part.

          • buried.

            usual executive talk:

            "good thing, good thing, good thing, bad thing, good thing, good thing, good thing."

            you are not suppose to notice or think much about that single bad thing. its buried in there. but the bad thing is ALL that the talk or subject was about, in fact.

            we need more h1b's to work cheaply for us. that's all they ever say. the rest is 'feel good' bullshit that is not relevant.

            same old, same old. meet the new uber rich; same as the last uber rich.

            at this point, if eric extends his han

      • by ebno-10db (1459097) on Monday March 10, 2014 @09:26AM (#46444701)

        On the bright side they actually write decent useful code during those three hours. France has higher hourly per capita productivity than the US. Their lower GDP per capita is because they work fewer hours. You can debate how many hours people should work (I actually lean towards US style) but there is no doubt that there is plenty of good work done in France.

        Full disclosure: I also like some of their moldy cheeses, but am adverse to a language that lacks consonants.

        • Re: (Score:3, Insightful)

          by Anonymous Coward

          France has higher hourly per capita productivity than the US.

          Not true. Citation. [wikipedia.org]

          1. Norway (75)
          2. Luxembourg (73)
          3. United States (67)
          4. Belgium (61)
          6. France (59)
          7. Germany (57)
          and so on...

          Those top three have not changed place in some time. France is up there, but the United States is over a dozen percent more productive. Norway is higher than the US by a similar margin.

          • by clovis (4684) on Monday March 10, 2014 @03:08PM (#46448125)

            Or this, which agrees with ebbo-10db: http://www.stat.ee/64454 [www.stat.ee]

            I say neither chart is useful. It's just dividing the GDP by guesses at how many hours are worked by the people in each country. It really just tells us that some countries get their money in different ways than others.
            What we would want to know is how productive a worker is in comparable industries.
            Consider that Norway's economy has a huge component of production and export of natural resources (oil etc) while Luxembourg is almost all financial services and perhaps banking secrecy.
            There is no meaning in comparing the dollars produced by an Norway oil platform worker to that of a Luxembourg bank's US Treasury bond manager.
            I'm surprised France is as high as it is considering how much of its economy is based on agriculture. That is to say a high labor-low pay industry, and similarly for tourism.

        • by KingOfBLASH (620432) on Monday March 10, 2014 @10:44AM (#46445341) Journal

          I moved to Europe from America and was shocked when *GASP* people didn't work 60 hour weeks, took 25 vacation days a year (yes 5 weeks!), in many cases worked on an 80% schedule, and *SHOCKING* enjoy a beer at lunch from time to time.

          Even more shocking, as far as I could tell, my colleagues in my new European office were as productive (or more so) than my American counterparts (doing the same job).

          Then I went to Asia and was AMAZED at the hours people work especially when I realized the amount of work actually getting done.

          The truth is, people can't work straight like robots. The more they work, the more small breaks they take during the day (my favorite time waster in america was the i'm-lonely-let's-have-a-meeting meeting). And if you are actually rested, you are much more productive.

          • by ynp7 (1786468) on Monday March 10, 2014 @01:58PM (#46447281)

            It's unAmerican that we let Frenchmen work fewer hours, make more money, and live longer than us. Clearly our tactic of making fun of their laziness and pungent odors has failed. It's time for a race to the bottom of the time clock.

            Fuck Pierre and his 80%, I'll see you guys back at the office in June! Just in time to get things in order for my summer vacation.

          • by TheGratefulNet (143330) on Monday March 10, 2014 @04:45PM (#46449259)

            people didn't work 60 hour weeks

            I recently had an interview with a small company. we discusses hours and pay rates. the hiring manager said that its usual to work 60 hours a week and 'everyone in the bay area does that'. well, that's not quite true, but beside that, he was not willing to pay for such sacrifice.

            think about it: in US law, you are supposed to pay for hours up to 40/week if you are fulltime. beyond that, its considered overtime and should have 'time and a half' (except when you are this unfortunate class called 'exempt' but lets not talk about that right now, its too depressing a concept to bring up in this thread).

            now, 40 to 60 is 50% more time you put in. 1.5 people's job done by 1. the pay rate? LESS than I was making at my last 40/wk job.

            I told him that if you expect people to regularly (not on bursty periods, but day in and day out) put in 60 a week, you should pay that person better so that the personal LIFE TIME they give to you at least is rewarded with higher pay. there was silence on the phone. almost like I called his mother 'ugly'.

            more and more, this is the typical hiring manager and employer. they want more, they pay less and they act SHOCKED, that you ask them to pay for 1 and a half gallons of milk if they want to BUY one and a half gallons of milk. go into a store and offer to pay for one and walk out with two and see how far you get. but in employment, they fucked us over and they expect us to like it.

            the american 'salaried professional' is being screwed left right and center. I wonder when the pitchforks and fires will hit the streets? I hope it comes sooner rather than later.

    • Any time a company starts talking about deregulation and loosening immigration laws, it's french for "make our labor cheaper."

      Just curious, when they start talking about better education, what is that french for?

      • by lagomorpha2 (1376475) on Monday March 10, 2014 @08:57AM (#46444463)

        Any time a company starts talking about deregulation and loosening immigration laws, it's french for "make our labor cheaper."

        Just curious, when they start talking about better education, what is that french for?

        It's one of those classic tricks where you make multiple suggestions and some of them are reasonable and a couple of them are offensive in the hope that the reasonableness of the reasonable suggestions cloaks the chutzpah the offensive suggestions.

      • by Anonymous Coward on Monday March 10, 2014 @08:59AM (#46444473)

        He's not looking for generalized education. He's looking for "high school/college graduates with job skills". More and more coding jobs are essentially clerical: here's a spec, generate code that executes this spec using the algorithms you've been given. This is recognized by the non-exempt nature of entry level programming jobs. I'm not talking here about "architect" or enterprise data store design, I'm talking about "here's a screen layout for each of the 50 states, we need them all coded up by a month from now, so we can roll out the new application" or "here's a document describing the workflow and business rules, implement SQL stored procedures for this"

        Right now, a lot of that kind of work gets offshored, but that's getting expensive. They'd MUCH rather have $15/hr high school grads cranking out the code, particularly if they can collect various subsidies for hiring young people or prisoners or whoever.

        • You are right.

          He wants highly skilled cheap people, as many I.T. companies business people.

          But, there is a problem, I.T. jobs, specially programming, ARE NOT FACTORY jobs, altought many CEO's want to treat it, lik that.

          The "here's a spec, generate code that executes this spec using the algorithms you've been given" talk given from architects, or project managers to coders, doesn't work well. I known it, because I did tried, and went back to the good old Analyst-Programmer way of solving problems.

          The funny

      • by mvdwege (243851) <mvdwege@mail.com> on Monday March 10, 2014 @09:04AM (#46444509) Homepage Journal

        "Turn your schools into training camps for us"

      • Re: (Score:2, Interesting)

        by Anonymous Coward
        It's French for "we need more workers that come pre-equipped with a huge debt so they're more obedient". Clear enough? School = scam. Education is free, we have libraries and the web now.
      • by ebno-10db (1459097) on Monday March 10, 2014 @09:22AM (#46444671)

        when they start talking about better education, what is that french for?

        "Better education" is French for "red herring".

        Of course everybody wants better education, but that doesn't mean education is what's causing increased income disparity. It also doesn't mean poor education is the source of any supposed shortage of STEM workers. STEM people mostly come from the better educated range of our populace. There is no shortage of such people, and we have some of the best universities in the world to educate them. The actual education problem is with those who are not in the upper range. While praising Finnish education, and their results in international tests, they overlook that serving the less well performing students is the great emphasis of Finnish education.

        It's also a regional issue in the US. For example, Massachusetts if judged by itself ranks right up there with the vaunted Asian countries, and yes that includes poor kids in Boston and whatnot.

        Lastly, the nice thing about blaming education is that you can say that if we fix the education in this country, it will still take at least 10 years to bear fruit. Therefore we need interim measures, like increased H-1B quotas. Did you think it's a coincidence that pro-H-1B outfits like fwd.us are linked to silly things like "hour of code"?

      • by JDG1980 (2438906) on Monday March 10, 2014 @09:32AM (#46444759)

        Just curious, when they start talking about better education, what is that french for?

        It's about blaming income inequality on teachers and schools rather than the 1%. And also about washing one's hands of any social responsibility for the well-being of the roughly 70% of Americans who don't have a college degree. (Not that a college degree guarantees middle-class success these days.)

        • by sjbe (173966) on Monday March 10, 2014 @11:57AM (#46445977)

          It's about blaming income inequality on teachers and schools rather than the 1%.

          Blaming a specific group of people for income inequality kind of misses the point. That's just scapegoating. Just because someone was fortunate enough to gain a lot of wealth doesn't mean they are responsible for others not being so fortunate. Economic growth is not a zero sum game except in the short run. In the long run it is possible for economic rewards to be shared and everyone to benefit. The top 1% of the population does not have the power by themselves (in a democracy) to dictate income inequality. That can only happen if a very large portion of the remaining 99% permits it to happen. People regularly support policies that are demonstrably not in their best interest or that of society if they were deciding rationally.

          Too many people have bought into the notion that social structures that keep the playing field relatively level are somehow a bad thing. Everyone should have the chance to become rich but after a certain point some have more money than they could ever possibly need. More accumulation by one person at that point does not benefit society. Nobody likes paying taxes but a sensible progressive tax policy (or a flat tax with a floor) can have the side effect of minimizing income disparity. Healthcare is a cost that everyone experiences but in the US we historically have forced low income people to pay a disproportionate share of their income on it. We subsidize large corporations (oil companies, big agriculture firms, etc) that don't need the help. We refuse to balance our taxation levels with our expenditures. We spend a disproportionate amount of our tax revenue on maintaining an overly large military rather than on economic growth, research and jobs. These are choices we have made as a society and they aren't just the fault of the so-called 1%.

          And also about washing one's hands of any social responsibility for the well-being of the roughly 70% of Americans who don't have a college degree.

          Approximately 40% [wikipedia.org] of Americans have at least an Associates degree and over 50% have at least some college education. Your point is valid but the data isn't correct.

          (Not that a college degree guarantees middle-class success these days.)

          No degree ever guaranteed success.

          • If you look at the lessons of history- every time the 1% pushes the 99% hard enough- it ends badly in mass quantities of blood for the 1% as well as the 99%.

            So, the 1% better consider it part of their responsibility to care about the 99% or they'll find their heads in baskets, or in brainwashing reeducation camps while they make left shoes 12 hours a day.

      • by The Cat (19816)

        Getting someone else to pay to train your employees.

    • Their solutions are not focused on getting higher paying jobs for the "99%." They are focused on lowering the amount they have to pay for their own talent.

      Any time a company starts talking about deregulation and loosening immigration laws, it's french for "make our labor cheaper."

      This, yes, this. Better education, yes, but Schmidt is just envious of Gates' success in turning a corporate drone curriculum into a national standard via Common Core. And deregulation, yes, but for energy and telecommunication? Those are the last industries that need deregulation, being natural monopolies. Deregulation of power companies (a natural monopoly) has been tried and was a massive failure. Frankly, I'm all in favor of looser immigration laws, but I suspect what Schmidt wants is more H1-B's,

    • I keep saying the same about education. The rich can afford to take an incorrect career path, or predict that their career path will be... MBA so they can be an executive of daddy's company. The poor have to speculate on what's going to be hot in 4-6 years, shell out cash, and hopefully get a job. The businesses profit from this: They get a flooded market and can pay $40k salaries for skilled laborers because there's as many of those as there are McDonalds workers.

      If the public education system didn'

    • Re: (Score:3, Insightful)

      by James-NSC (1414763)
      I'm a Visa holder, and even I don't get the need to loosen the immigration laws. I'd like to make things easier on myself, sure, but for American's seeing improving wages?? how is that anything but counter productive? Further, if they really wanted to help JQP, they would tie all wages to inflation (so they grow at the same rate, at minimum) and stop paying themselves 100's of times more than their lowest paid employee. Anyone who sits on a Scrooge McDuck stack of cash DOES NOT have your best interests in
  • by Rich0 (548339) on Monday March 10, 2014 @08:33AM (#46444337) Homepage

    Tech startups don't create the kinds of jobs that the 99% actually need. Oh, sure, many of them will eventually hire one secretary, and will pay into their building's contract for one part-time janitor.

    As pointed out in the WhatsApp example, most tech startups employ a dozen or so high-skill kids at low wages. In most cases they then work for 5 years and lose their jobs, not having really made much of anything. The ones that make the papers are the ones where the kids become millionaires. They then grow into 20-50 person firms that never really hire anybody who isn't technically skilled. As modern companies they don't have the kinds of legacy processes that involve heavy manpower. If they sell widgets then they do the design with a few local employees, send the manufacture to Asia, and then warehouse the goods in some 3PL company that puts part-timers lacking benefits through a meat grinder to get packages shipped (those companies create jobs for sure, but as few as they can possibly manage at low pay and they're anything but desirable jobs).

    I think startups are important for the economy, but not because they create jobs.

    I think we need to get past the model where the typical person is employed by a private company. Private companies just don't need the sorts of skills that the typical person has. Nobody wants to hire an average programmer (at least, not at US wages), or an average marketer, etc. Today we have hyper-specialization and if you're in the top 1% of whatever you do you'll have a job for life, and if not you'll be lucky to ever have a job. We're still in transition, but all the trends are there.

    We life in a country which has a huge economy, and yet tons of people who are unemployed. And yet, our roads and bridges are falling apart. Just tax a small bit of the wealth flowing through the country and give people part-time jobs fixing potholes or whatever. When we run out of those they can fix bridges, dig trenches for municipal broadband, and so on.

    You'll never hear businesses lobbying for that, however, because then they might actually have to pay their janitors a living wage to keep them. I'm not suggesting private enterprise is evil/bad/etc, but ultimately these companies are not stewards of the public interest. Let's run the economy in a way that actually allows people who are unemployable to survive, and which helps the private economy as well. After all, wouldn't better transportation in the Bay Area help companies like Google?

    • Re: (Score:3, Informative)

      And yet, our roads and bridges are falling apart. Just tax a small bit of the wealth flowing through the country and give people part-time jobs fixing potholes or whatever.

      We already tax a small bit of the wealth flowing through the country to fix roads and bridges. They're called "gasoline taxes" and "road use taxes".

      And we already pay people (full time! none of this part time crap) to fix potholes and other issues with the roads.

      • by drinkypoo (153816)

        We already tax a small bit of the wealth flowing through the country to fix roads and bridges. They're called "gasoline taxes" and "road use taxes".

        And neither gasoline taxes nor road use taxes are sufficient to pay for the roads. You can have a balkanized network of toll roads that would cripple commerce and personal travel alike, you can raise fuel taxes to european levels which is probably the fairest approach, or you can have what we have here where money from the general fund is spent on interstate highway maintenance. Of course, that could be done at the state level rather than the federal level, which would prevent states like California with th

        • by dkf (304284)

          And neither gasoline taxes nor road use taxes are sufficient to pay for the roads.

          Anything that's actually fair should be proportional to the damage caused to the roads by the vehicle, so that's approximately the first power of the distance traveled and the fourth power of the axle weight. (I think.) Expect the road haulage industry to be utterly against any form of fairness, despite the fact that they objectively cause the majority of problems (due to miles travelled and weight moved).

      • You do realize that "Small bit of wealth" is at least six times as much as "big oil" is making in profits? Probably a lot more.

    • Reality Check (Score:2, Interesting)

      by Anonymous Coward

      Someone just spent $850 Billion on shovel ready jobs. We were told it was to fix bridges, fix unemployment, and give jobs to people filling pot holes. In addition we just bumped up the top tax rate, removed the 2% tax cut on SS wages, and tossed on about 17 tax increases on healthcare. (Bonus, that $850 billion became part of the base budget so has been spent for 5 years now making this year's budge $3.9 Trillion)

      The result of all that is you saying unemployment is too high, the roads and bridges are fall

      • Are you siting the continued existence of potholes in America as your only evidence of corruption in the government, or do you have some references you are not showing? As someone who works indirectly for the government, I take offense that there is constant presumption of corruption in the public sector. I've worked several weekends and late nights recently to make deadlines, with no extra compensation, and no one has showed up to line my pockets with bribes or kickbacks. No one ever has. I'll let you

    • Re: (Score:3, Informative)

      Private companies just don't need the sorts of skills that the typical person has. Nobody wants to hire an average programmer (at least, not at US wages), or an average marketer, etc. Today we have hyper-specialization and if you're in the top 1% of whatever you do you'll have a job for life, and if not you'll be lucky to ever have a job. We're still in transition, but all the trends are there.

      We life in a country which has a huge economy, and yet tons of people who are unemployed.

      Oddly enough, a libertarian economist, Tyler Cowan, wrote a book that agrees with you. Average is Over. [aei-ideas.org]

    • by njnnja (2833511) on Monday March 10, 2014 @09:01AM (#46444487)

      Today we have hyper-specialization and if you're in the top 1% of whatever you do you'll have a job for life, and if not you'll be lucky to ever have a job. We're still in transition, but all the trends are there.

      We life in a country which has a huge economy, and yet tons of people who are unemployed. And yet, our roads and bridges are falling apart. Just tax a small bit of the wealth flowing through the country and give people part-time jobs fixing potholes or whatever. When we run out of those they can fix bridges, dig trenches for municipal broadband, and so on.

      I agree that this appears to be occurring but it is because the top 1% (in all sorts of professions - entertainment and media, mobile startups, finance, etc) are able to use technology to leverage their talents in ways not possible before, in order to reach more and more people. By reaching more people, they are able to make more money.

      However, note that the infrastructure that they use is still not free (and probably never will be). The cost of building and maintaining the network needs to be borne by somebody. And a lot of that network building and maintenance is done by guys with hardhats climbing cell phone towers. A lot of the $19 billion valuation of Whats App is due to the hard work of those guys making a basic middle class wage. If Verizon or AT&T wasn't paying them, Whats App would have to, and then Whats App is not a 50 person company, but rather a 50,050 person company.

      So the trick is to get the money from the 1% who use the leverage to the 99% who build the tools that the 1% use. Maybe Whats App (Facebook) should be responsible for paying a big bonus to the people who work on the towers. It would surely encourage more young people to become skilled tradesmen who could improve our cellular network. Heaven knows we need more/better cell towers more than we need another app writing software firm.

    • Tech startups don't create the kinds of jobs that the 99% actually need. Oh, sure, many of them will eventually hire one secretary, and will pay into their building's contract for one part-time janitor.

      I have to admit that saying they're jobs we don't need sounds a bit misguided. Who says? Why wouldn't they be? Are you suggesting we shouldn't have a technical work force? That's what it sounds like... but if I were to guess how you'd respond if asked that, you'd say that's not what you're trying to say at all.

      That being said, technology already permeates every industry. Even service, manufacturing, construction, and it continues to increase more and more every year. There's a growing need (and gap

    • by StandardCell (589682) on Monday March 10, 2014 @09:20AM (#46444653)
      Aggregating $19B in wealth in the hands of 50 people plus a handful of investors is indeed not the way to create jobs. It slows down the flow of money within the broader economy. I'm sure those $20M homes in Woodside and Los Altos Hills and Seacliff are worth every penny.

      These megadeals also have the effect of creating a startup lottery environment where anyone can put together a ten page business plan and the "trend du jour" and try to make out like bandits. This is what led to the first dotcom crash and will also eventually lead to the second crash at some point. Anyone who makes an alternative to this content with having the user watch ads in the background every ten app starts will murder Whatsapp because $0 is cheaper than $1.

      I think it's also important to note that Eric Schmidt wholeheartedly approves of this deal because I suspect he thinks it's to the ultimate detriment of Facebook, and a blessing \for Google in some ways. Much like unbridled immigration is to existing workers in this country for his business.
    • by bondsbw (888959)

      Providing jobs for the unskilled is not the problem with our economy. There are plenty of people who have the skills, the education, and/or past experience. Many have to settle for jobs that don't have anything to do with those skills.

      As for the unskilled, I would say they have it better in this economy than someone who has skills but is looking for a job that doesn't need them. An MBA provides little or no value compared to an unskilled worker when applying for a job as a waiter, janitor, etc. And most

  • Economics of envy (Score:5, Insightful)

    by LordLucless (582312) on Monday March 10, 2014 @08:44AM (#46444391)

    When interviewer Steven Levy noted 'gazelles' like the 50-employee WhatsApp which was acquired by Facebook for a reported $19 billion seem to lead to more inequality, Schmidt brushed aside the apparent contradiction.

    50 people getting a split of $19b is seen as a bad thing because it "increases inequality". Why? Would the rest of the area be better off if those 50 people were still poor? It was a transfer of wealth from Facebook's war chest to 50 individuals - the money wasn't taken from the rest of the population. Surely the measure of increasing prosperity should be how much your buying power has grown, rather than the fact that someone down the street's buying power increased more than yours.

    • Re: (Score:2, Insightful)

      by MrL0G1C (867445)

      50 people getting a split of $19b is seen as a bad thing because it "increases inequality". Why?

      That statement is beyond dim, do you not understand what the definition of inequality is?

      How many decades of there being no "trickle-down effect" do you need?

      Let me put it simply, rich people redistribute wealth from poor people to rich people by getting them to create goods and services for the lowest wage that they can get away with and the profits get paid to rich shareholders and directors.

      Inequality is some

      • That statement is beyond dim, do you not understand what the definition of inequality is?

        I'm the dim one, when apparently you cannot perform basic comprehension. I was questioning why 50 poor people getting rich was considered a bad thing, not why it was considered inequality.

        How many decades of there being no "trickle-down effect"....profits get paid to rich shareholders and directors.

        Blah, blah, blah, off-topic ranting on "trickle-down" economics that has nothing to do with what I posted. I guess a keyword in my post must have tripped a spinal reflex, or something.

      • by nedlohs (1335013)

        You're going to have to explain for us stupid people.

        How does transferring $19 billion from Facebook to 50 people with less money that Facebook possibly increase inequality?

        The richer party now has less. The poorer parties now have more. Isn't that a decrease in inequality?

        • by bondsbw (888959)

          Because math is too hard.

          And the same people who cry about such "inequality" tend to be the most vocal about gambling. Somehow, the poor giving up anywhere from $1 to $100 (or more), so that one person can be added to the 1%, is their definition of true equality.

          I take it back. It's not about math, it's mostly about polarizing politics that cause people to believe a lot of stupid things because they want to be identified with a few ideals. (The same applies on the other side of the aisle too... don't thi

    • That was the argument for the past 40 years. And all boats have not lifted.

      The entire problem is not represented with overpaying for a little software company and a few individuals getting the benefit. The problem is constantly rewarding the rewarded. People with opportunity and education do creative things because it is rewarding and make choices based on rewards available.

      We just need to transfer wealth from those with a lot to everyone else -- like we did when America was the greatest economic power and

    • This "Economics of Envy" title really pisses me off. What a smug point of view. The people who are doing great with the current system, will be really surprised one day when a rich person has to hire mercenaries with machine guns to protect their home. Escort their kids to private schools in bullet proof cars.

      Other countries that have a huge wealth inequality do experience "trickle down" but it's usually as a ransom payment to return a loved one unharmed. There is buying and selling of guns and bullet proof

  • Reference please (Score:2, Interesting)

    by jamesl (106902)

    'Ninety-nine percent of people have seen no economic improvement over the last decade,' he said ...

    I'd like to see an authoritative reference for this statement.

    • Re:Reference please (Score:5, Informative)

      by wombatmobile (623057) on Monday March 10, 2014 @09:29AM (#46444733)
    • Well I found that median income (adjusted for inflation) is down over the past 15 years;
      http://billmoyers.com/2013/09/... [billmoyers.com]

      The income range to be considered middle class:$25,500 – $76,500

      The median middle class household income in 2012: $51,017
      and in 1989: $51,681

      Year inflation-adjusted median household income peaked at $56,080: 1999

      Income needed in a two parent, two child home in St. Louis for an adequate living standard: $64,673
      and in New York City: $94,676

      The Problem

      Share of self-described middle-class adults who say it’s more difficult now than a decade ago for middle-class people to maintain their standard of living: 85

      85% say it's harder. I'd say another large chunk are kidding themselves. 99% might be a slight exaggeration -- but not by much.

      Then there is the productivity increase (which means they need fewer workers) coupled with reduced pay -- and we can look at record corporate profits and know that it is not an equitable distribution.

  • by lagomorpha2 (1376475) on Monday March 10, 2014 @08:45AM (#46444405)

    "looser immigration laws"

    No you clown, that's most of the reason wages in the US have stagnated in the first place. Supply and demand. If you supply more labor the equilibrium price will fall.

    • by Xest (935314) on Monday March 10, 2014 @09:31AM (#46444751)

      I don't know why this myth persists, it's such a pathetic populist simplification.

      Consider this scenario. Your company has an idea for a new product, but it requires an AI expert. There are other AI experts with the required skillset in the country getting paid on average $200k a year. You can poach one by paying $250k a year and in doing so increase the average salary for that skillset but that then deprives another company of one which means they have to shut their project down, and people lose their jobs as the project cannot continue. The loss of jobs means instead average salaries decline because whilst one guy is getting paid $50k more, a bunch of others are going from $80k to $0k.

      So instead you bring in someone from overseas for $200k, this lets the other company keep going, and sure it doesn't increase the average salary for that profession, but then you need to hire some additional devs to help your expert, you hire three more great programmers at $100k each - that's $30k above the average and so guess what? you just increased average salaries by hiring someone that enabled this.

      Of course your next argument, the next argument used by populist immigrant haters will of course be "well train someone up in the country" - great, train them up how? if we're talking cutting edge or highly advanced stuff who is going to train them? Even if you can and do train them then this puts your project back years and when that happens what if another country develops your idea? They get the wealth and jobs from it instead.

      So no, if you supply more labour that doesn't inherently mean that salaries will decrease. The problem is entirely about what types of labour you let in. Done right, it can increase average salaries.

      I've pointed it out before, the list of H1-B hires by the likes of Facebook, Google, Microsoft, Apple and so forth shows salaries far above the national average salaries and so you simply cannot accuse big tech companies of having an agenda to drag salaries down with immigrants - the very fact their immigrant hires are paid more on average by definition means that these companies are increasing average salaries by bringing in these people and paying them what they do.

      The immigration issue isn't as simplistic as people like you seem to think, it can be a massively important tool in driving growth and increasing salaries, and certainly the major tech companies are using it in a way that they're increasing average salaries.

      As an aside, FWIW, the reason salaries have stagnated in the first place is actually mostly because of the work of indigenous American bankers and has absolutely nothing to do with immigration - immigration was still happening even pre-recession and wages were still going up. It actually declined slightly when the recession hit and wages also declined, they certainly didn't go up when there were less immigrants arriving.

      • by Casca (4032) on Monday March 10, 2014 @10:16AM (#46445081) Journal

        You have some interesting points. From my perspective though, which is coming from a very large American company, sitting in a large IT department, surrounded by H1B workers getting paid around $40k to do the work that used to pay $80-100k, I find your points to be lacking.

        • by Xest (935314)

          All I can go on is the lists of H1-B hires and so forth that are about on the internet e.g.:

          http://www.immihelp.com/h1b-sp... [immihelp.com]

          So sure, maybe you do work at one of the companies that does bring in cheap overseas hires, but my point remains that all the big boys are not doing this. The big tech companies are all paying well above the average. I can't find the site I used last time I looked into this as it had more uptodate data, this one only goes to 2010, but if you find such a site with more recent data you'

        • They're nice hypotheticals though. You can come to any conclusion you want if you start with the right assumptions - like $200/250k jobs being the typical case for H-1B's (perhaps he could look at the actual statistics showing that H-1B's on average are paid less than equally skilled Americans). Lastly, for something like real AI gurus, there are the 'O' series visas, which nobody objects to.

          • by Xest (935314)

            "They're nice hypotheticals though. You can come to any conclusion you want if you start with the right assumptions - like $200/250k jobs being the typical case for H-1B's"

            Oh stop making stuff up putting words into my mouth. I made no such claim that $200k was typical, I merely used it as an example of the fact that a $200k hire can actually increase the average paid to American workers by creating jobs and that hiring such a person doesn't inherently guarantee a decrease in average salaries.

            "(perhaps he co

        • by bberens (965711)
          I think this argument always boils down to nationalism. Do you support the idea of restrictions on business practices that are intended to promote your own country's citizens over that of another's? It's certainly fair and reasonable to do so, but I think a lot of people think the best person for the job should get the job no matter where they come from. And "best" of course is defined by the business owners and lower pay is obviously a factor. I think there's some merit to both schools of thought. In
        • by Xest (935314)

          If you didn't understand my original post I'm not sure you're really smart enough, but I'll try and explain it you in perhaps more simplistic terms.

          Mr Apple seller has 10 customers, his sale price has reached $1 per Apple after reaching equilibrium under the laws of supply and demand. He sells 1 Apple to each customer a week and so makes $10 a week from his Apples. Mr immigrant comes along with his wife and 3 children. They also buy Apples at $10. The price doesn't need to change because Mr Apple seller has

          • by JoeyRox (2711699)
            You'll need to come up with a different analogy because time-limited goods and services like perishable items and airline seats have multiple intersection points on a supply and demand curve.
      • by The Cat (19816)

        So instead you bring in someone from overseas for $200k

        BZZZZZZZZZZZZZZZZZZZZZZZZZT

        Thanks for playing.

  • by xxxJonBoyxxx (565205) on Monday March 10, 2014 @08:52AM (#46444443)

    Here's how I read that:

    >> "$19 billion for 50 people? Good for them."

    Which really means: "If Facebook wants to eliminate themselves as a threat to Google (and Google+) by peeing away mound of cash on stupid deals, I'm all for it. Meh heh heh heh ha!'

  • That is what I think every time I hear this idiot speak. 95% should do nicely.

  • by Daniel Hoffmann (2902427) on Monday March 10, 2014 @09:43AM (#46444829)

    Just like Google bought Youtube for its userbase. They could have made Google Videos a lot better than Youtube, but the userbase would have taken years to migrate (if at all). The point is, being the first person in the party is a very good thing if you are a startup.

  • by dane23 (135106) on Monday March 10, 2014 @10:01AM (#46444981) Homepage
    "...where high-salaried techies have driven up rents" The "techies" didn't drive up the rent, the landlords drove up the rent because they could. Who the hell says, "Hmm, this is a nice place for $XX but I'd really rather pay $XXX for it"?
  • I suspect that one of the reasons house prices increase is the desire on the part of existing residents to make their house go up in value, so they erect thickets of permitting procedures and regulations that can mean a 2-3 year delay before you can build on a lot you have acquired.
    This is the problem in Toronto, where complex zoning restrictions, green ratios and green zones and a 30 foot limit have made house prices increase dramatically over the past 10 years.
    Any loosening of these restrictions is fough

  • by bigpat (158134) on Monday March 10, 2014 @12:36PM (#46446359)

    For Free Market Capitalism to work as a social good it must encourage the equitable distribution of capital rather than the concentration of capital in very few hands.

    Yes, in some ways it does make sense for individuals who demonstrate exceptional talent, contributions or even dumb luck to be rewarded with exceptional rewards. But for the most part we should be aiming for a society where meaningful capital investment decisions are made through the collective wisdom of hundreds of millions of people not just thousands of people.

    If not then Capitalism will fail for the exact same reason that communism fails, because centralized control leads to corruption. Whether it be a king, or other dictatorship, business leader or elected leader with too much power. Self interests and incompetency will always lead to inefficiencies that are laid bare during times of natural disaster or other natural scarcity.

    The beauty of the American model was that prosperity was not only shared by many based on merit, but that the merit was decided by our peers and not some oligarchs deciding from on high what people were worth. With much of our economy now stratified with various expensive credentialing legal or de facto requirements we are very much becoming the type of rigidly corrupt society which we tried to counter over two hundred years ago.

    Capitalism is all too quickly devolving into a neo-fascist feudalism with just a few well connected, well bred, well educated people collecting the vast majority of the wealth, spending it foolishly to invest in their friends stupid "tech" or other start-ups which are often no more than fly by night flim-flam outfits with no lasting value or even profitability. People without even the merit that the elite define for themselves are getting rich in this way and it sets up a clear moral hazard where the elite do not suffer the consequences for the decisions they impose on others.

    Governments are also in direct control of a vast portion of the economy with the same sorts of centralized pyramid style decision making being dominant. I support the Audit the Fed initiative, not because I think we can afford to put an end to loose monetary policy, but because we now have trillions of new dollars flowing into the economy through public policy, but that is creating another imbalance in society where the new money is trickling down from the top through banks and government rather than being distributed more equitably.

    Much better would it be to distribute that trillion dollars in new money to every many woman and child in the US with each getting a check for $3,000 rather than funnel it through a few select banks and government programs with billionaires and millionaires taking cuts at each level as it trickles down into the real economy. Individuals themselves are usually the best decision makers about what their specific needs are.

    With a very expensive education system funded with loans and other debt here in the US, increasing immigration will help some few lucky people at the expense of devaluing labor here in the US and undermining the education investments that people here have made in themselves to better their own lives. It will further social and economic displacements, but yet on paper will grow the economy, but not to the betterment of most Americans who will see their lives increasingly disrupted by forced (and expensive) migrations to find work.

    "Better" Education is another false promise as the costs in the US for more and more education are being born by individuals and the result is that those with more wealth are able to better themselves and education becomes a barrier to entry for families without wealth rather than an enabler. Universities will always trumpet the few that they give special access to and enable, but as gate keepers to income growth they are doing as much harm as they are good while leaving millions of equally meritorious students behind. Education must be reformed to be more affordable and more applicable to the

  • Everything he said helps his company and does nothing for the poor people.

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