

The Education Visa: It’s Everywhere We Need It To Be - mhb
http://mattmaroon.com/2009/04/11/the-education-visa-its-everywhere-we-need-it-to-be/

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jacoblyles
>"Startups often make money primarily by reducing costs, and cost reduction
nearly always means job reduction."

This is an old, old, old mistake people make when talking economics. "The
Luddite Fallacy" - to be exact.

Yes, technology that reduces costs and automates production means the loss of
jobs. However, it also increases the total production of society, which
increases demand for other jobs.

We used to be a nation of 90% farmers. Now about 2% of workers are involved in
agriculture. What happened to the other 88%? They aren't unemployed. Rather,
they are employed in other jobs that never would have been created if those
agricultural jobs were not destroyed by technology.

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gaika
While your statement is true long term, short term there's still lots of pain
from adjustment.

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jerf
And when you build your economy on the short term, rather than the long
term... well... look around you.

The long term has a way of happening.

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mhb
I think the missing piece of his essay is that the ultimate goal is not job
creation; it's for everyone to be better off. That is accomplished by
increasing productivity.

Increased productivity doesn't necessarily imply fewer jobs. It might mean
that everyone works less hours. There hasn't always been a 40 hour work week.
It's only that low due to society's increasing productivity.

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yummyfajitas
This essay is internally contradictory.

"Startups often make money primarily by reducing costs, and cost reduction
nearly always means job reduction."

"If a company hires an employee whose efforts earn the company three times
their salary, that gives said company the cash flow to hire two more people."

So basically, creating www.replace-your-secretary-with-
web-2point0-technology.com and selling subscriptions destroys jobs. Probably
true. But writing replacethesecretarywithvisualbasic.exe for a salary creates
them?

The only real difference I see is that a startup will (hopefully) have a
bigger impact.

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abstractbill
_Will "startup investors" discover a lucrative black market in selling H1-Bs?
Rich foreigners could pay them $200k under the table to invest $100k in their
new startups, thus buying citizenship._

Just following up on this particular point, what would be the problem with
letting rich foreigners buy American citizenship?

Personally I think Paul's startup visa is a great idea, but orthogonally to
that, I just don't see a problem with letting wealthy people buy their way
into the US.

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yummyfajitas
I've often thought this might be the best way to select immigrants. Pick the
number of immigrants we want, and distribute green cards via dutch auction. We
can give bonuses to areas of national interest, e.g. nurses.

Doing this, we import people who are most likely to be productive. To allow
high human capital pople to compete, we could allow the immigration fee to be
paid out over 10 years with a nation-dependent down payment required up front
(e.g., $75k for brits, $10k for indians).

Of course, politically this is a no go. Politicians push immigration as a way
of importing people to vote for them (e.g. dems want poor Mexicans and reps
want skilled former Soviets); the good of the country comes second.

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lutorm
So you're saying importing more people like those that worked in Bear Sterns
would have been in the national interest? This sounds completely backwards to
me.

Besides, with your particular method, how do you prevent people from over-
bidding and then being unable to pay the fee?

No, whatever algorithm is used to select immigrants, wealth surely is not the
thing to use.

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yummyfajitas
Based on our knowledge back when Bear Sterns was still alive, yes. It would
have been our best guess as to what is in the national interest. It turns out
that the best guess would have been wrong, but that's unavoidable. Perfect
information isn't available, and people make mistakes. Our central planners
didn't know any better than the markets (Bush, Clinton and various other
politicians tried to inflate the housing bubble).

As for those who don't pay up, immediate deportation without the possibility
of re-entry. Combine this with a policy of enforcing immigration law, and we
might get a workable system.

~~~
lutorm
Given how many startups fail, you don't think "life without parole" is a bit
harsh? It certainly will prevent them from trying again...

I also think that if you average over a long enough time span, it seems that
those that hit the moon, money-wise, at one particular time barely break even
over the long run. (Except they've already taken home their _own_ salaraies,
of course.) That's what I meant by it being a bad idea; at any given time the
highest earners will, by selection effect, be those with the riskiest, most
highly leveraged strategies. I can do without those, I think we need people
that create wealth, not concentrate it into their own hands.

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psranga
The book Illusions of Entrepreneurship claims that existing companies create
more jobs than new companies. Starts at page 153: Here's the google books
link: <http://bit.ly/m4vXV>

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gcheong
I don't see how this is an argument against entrerpreurship. Every existing
company started out as a new company at some point. If anything this is an
argument _for_ entrepreneurship.

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falien
Poorly written response with as many bad arguments as good ones, but I agree
with the sentiment. The startup visa idea strikes me more as one that comes to
you and seems good for the first hour until you come to your senses, than one
that is well thought out and backed by good data. Luckily I haven't yet
started to blog, so I don't need to back that feeling up with good data or
reasoning of my own. :)

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dpatru
Here's why the current government won't back PG's startup visa idea: Walmart
is hated by too many in the Democratic party. A program to create a bunch of
Walmarts owned by foreigners will be even more hated.

A distinguishing characteristic of a start-up is that it has the potential to
make big profits for its owners: either by creating an new technology (like
Google did), or by drastically reducing the cost of an existing technology
(like Microsoft did). Walmart is an example of a company that made its
founders rich by reducing costs. Walmart is also hated by many Americans and
their elected politicians because it causes many employees of its competitors
to lose jobs. I don't think that a government program that encourages
foreigners to come to America in order to create businesses that make its
owners rich by drastically reducing costs (including labor costs) will be any
more loved by the Walmart-hating crowd.

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zaidf
"Startups often make money primarily by reducing costs, and cost reduction
nearly always means job reduction."

It seems that is the crux of your argument against Founders Visa.

(1) The flaw of course is that you are only looking at job reduction--and not
the jobs that were created as a result of blogs and online news.

And even if the jobs created were fewer than jobs lost, that is free market:
sooner or later it had to happen. The worst thing we can do is be delusional
that it won't happen. The best thing would be to figure out jobs that are not
going to exist and re-train those people for more sustainable jobs.

(2) You don't seem to be so much against Founders Visa as against startups in
general. You might as well be arguing against ALL startups--not just those
started by immigrants--using this line of argument.

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dbul
Unless you have about the education of a PhD in economics and have studied the
impact of the US economy by allowing more visas (e.g. will the median income
of Americans increase?), then I don't think an essay or a blog post will have
much influence.

 _what we need now isn’t another Google, it’s another Wal-Mart._

Add the adjective "vertically-integrated" before Wal-Mart and you may have
something.

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ggchappell
Another 3 cheers for HN!

Obviously, this place is full of PG worshippers. Therefore, the fact that this
article made the front page, while disagreeing with PG, _suggests_ that lots
of people vote up based on thought-provoking-ness, not on agreement.

And if so, that's cool. :-)

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lutorm
People like a good target... ;-)

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lutorm
_... what we need now isn’t another Google, it’s another Wal-Mart._

Yeah, because Wal-Mart is known as a big net job-creator...

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ScottWhigham
Probably won't go over too well on HN lol. You can't go against pg for
goodness' sake!

