Google Chairman on WhatsApp: $19 Bn For 50 People? Good For Them! 303
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."
Read between the lines (Score:5, Insightful)
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."
Comment removed (Score:1, Insightful)
Re:Read between the lines (Score:5, Insightful)
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.
Economics of envy (Score:5, Insightful)
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.
looser immigration laws (Score:5, Insightful)
"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.
Re:Read between the lines (Score:5, Insightful)
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.
Re:Economics of envy (Score:2, Insightful)
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 people being substantially more wealthy than others.
Re:Looser immigration (Score:4, Insightful)
you only allow immigrants with provable skills to immigrate
Which provable skills? In terms of guest workers or even real immigrants, the problem is that which skills are "critically needed" are determined by politics, money (oops, redundant) and myth, rather than anything silly like objective facts. TPTB have been pushing the idea of a STEM shortage for decades, despite a complete lack of objective evidence. The obviously unbiased claims of tech CEO's and academicians are the only "evidence". The objective statistics say otherwise (that was even the conclusion of a study commissioned by congress during the tech boom - which of course did nothing to stop raising H-1B quotas).
Labor rates have to be competitive to get work (Score:5, Insightful)
It's well-established by now that one of the most significant factors in destroying the lives of the unskilled and semi-skilled workers across the country has been the influx of similar immigrants from around the world.
Bullshit it's "well-established". What you are talking about is essentially a subsidy to labor by limiting the size of the labor pool. Limit supply and prices for the labor and every product that labor produces has to rise. Make labor cost more and you will pay more for the results of that labor. What you are forgetting is that we are in a GLOBAL economy. There are very few unskilled jobs that cannot be done elsewhere. Limit the supply of labor in the domestic market and much of that production will migrate elsewhere. If labor costs are too high relative to those available elsewhere then labor-intensive work will migrate to areas with lower labor costs like osmosis. Try to stop it and you will only drive prices higher and hurt the economy in the long run.
Here's how you enact a sensible immigration policy. You crack down on the employers of illegals such that no one will hire them.
You think that is the basis for a "sensible" immigration policy? You think a police state is somehow a good thing? It's unenforceable at any reasonable economic or humanitarian cost. It drives up costs making it harder to compete globally. Furthermore it doesn't address why they are coming into the country in the first place. They come because there is work available. What you should worry about is not whether people are coming into the US illegally. What you should worry about is if they STOP coming to the US because that means there are some serious economic problems.
hen, you only allow immigrants with provable skills to immigrate as singles or with their immediate family if they're married with children.
How does this work with unskilled workers? You think those crops are going to pick themselves? There is lots of vital work that does not depend on skilled labor. Furthermore if a family wants to migrate to the US then that is not a bad thing. Who the hell are you to tell them they cannot come?
That's just a recipe for waking up one day and finding a large ethnic enclave in an American city
Oh so it's really about race. I get it. You don't want those brown people who don't speak English immigrating to the US. Never mind that your ancestors were immigrants too and probably came here illegally as well and probably lived in "a large ethnic enclave in an American city". It's not as if we asked the Native American population if it was ok if we moved in.
Re:Startups Aren't Really Job-Creators In Practice (Score:5, Insightful)
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.
Re:Read between the lines (Score:5, Insightful)
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"?
Re:Read between the lines (Score:5, Insightful)
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:Read between the lines (Score:4, Insightful)
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.)
Raise the top marginal tax rate (Score:2, Insightful)
That is what I think every time I hear this idiot speak. 95% should do nicely.
Facebook bought the userbase (Score:4, Insightful)
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.
Re:Read between the lines (Score:3, Insightful)
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.
Re:Read between the lines (Score:5, Insightful)
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.
Re:Read between the lines (Score:5, Insightful)
Re:Read between the lines (Score:5, Insightful)
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.
We allow policies that permit income iequality (Score:4, Insightful)
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.
Re:Read between the lines (Score:3, Insightful)
Re:Read between the lines (Score:4, Insightful)
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.
Re:Read between the lines (Score:4, Insightful)
I don't think most Slashdotters are against STEM education funding. What they are against, is the idea that America has a shortage of STEM students, so talent must be imported.
Re:Read between the lines (Score:4, Insightful)
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.
Re:Read between the lines (Score:4, Insightful)
I suspect most of the people reading this thread are exempt employees.