
Neutron Bomb - johns
http://www.cringely.com/2009/08/neutron-bomb/
======
fnid
Here is the problem with this debate. On one hand, people say, "We need more
H1B visas to handle the engineering workload in the U.S. There aren't enough
skilled americans." They also say, "We must make engineering more attractive
to Americans. Stop focusing on sports, et al and focus on creating brilliant
minds."

Similarly, groups argue that outsourcing jobs is acceptable, another that it
is not.

The problem is that we cannot have both. You cannot convince students in
america to invest 6 figures into their education if they know those jobs will
be filled with immigrants or shipped overseas. If there is no opportunity for
jobs or an income that can absorb the investment in the education, then
students will not enter that profession.

Technology employers in America argue that limiting H1B visas is stiffling
creativity and the ability of companies in the U.S. to innovate. If this is
the case, rather than paying individuals from other countries less to do the
same job, pay locals more to do the same job. Give them more of an incentive
to enter the work force. Value the work appropriately to the difficulty and
investment level needed to complete the task. Being an engineer is difficult.
Not everyone in the world, can, or wants to do it. There has to be an
incentive to perform these difficult tasks.

The reason that we need to curb H1B visas and the outsourcing of jobs is
precisely for the same reasons that the employers say we need to increase
them. We need to curb them because we need america to remain more competitive.

There is a difference between America remaining more competitive and American
corporations remaining more competitive. The former means american citizens
and our nation remains strong. The later does not. If, for example, we
continue to increase H1B's and off-shoring of technical work, then the logical
conclusion is that there are no longer _any_ native born americans to fill
these positions. If this is the case, then America -- the nation -- is
vulnerable to those countries with citizens and patriots to foreign entities
who do have those skills.

This will leave America at an extreme disadvantage in the long run.

If engineers, who, arguably produce much more value to society than athletes
or even CEOs were to earn as much money, the professions would be more
popular. Instead, we have individuals who could make lasting changes to the
benefit of our infrastructure, our technology, and our culture are entering
other fields because they are more lucrative and are more _appreciated_ by our
society.

If we continue to outsource the jobs, it is a big sign that those who perform
these tasks are not really appreciated. Engineers are not appreciated in
America. They are appreciated in other countries. Compare our culture to
Germany. Germany appreciates technology savants and the result is evident in
their current account. Relatively speaking, they are the richest nation in the
world.

And America is the poorest.

~~~
roc
America doesn't need native-born Americans to be competitive. Our entire
history has been contingent on the labor of immigrants. Surely _any_ American
will do.

The failure of the H1B program is that we bring these engineers to America,
shackle them to a single employer (relying on that employer's good nature
alone to not take advantage of them) and --most egregiously-- after a few
years we _send them home_.

The H1B program _should_ be a simple 'green cards for technical experts'
program. Bring in as many technical people as you can reasonably employ: but
ffs _keep them_.

------
tjic
IBM is shipping jobs overseas because

... wait for it ...

(1) the complete cost of employing an American, including taxes, regulations,
compliance, etc., is much higher than employing an Indian national.

That's it.

That's the complete list.

Question: when we raise taxes by 40% [
[http://business.theatlantic.com/2009/08/ya_know_plus_or_minu...](http://business.theatlantic.com/2009/08/ya_know_plus_or_minus_2_trillion.php)
] to close the budget gap, and start taxing employers even more for universal
health coverage, and do X and Y and Z over the next 10 years ... will this
make American workers more or less affordable as compared with off-shore
workers?

~~~
dreish
This is either misleading or just confused. India funds roughly 25% of health
care costs through the government, and has lower employment costs, yet you
imply that if we were to incrementally approach their health-care system, the
difference in employment costs would widen.

Edit: incidentally I agree with your point that IBM's issue is as simple as
lower employment costs, but I'd suggest it's lower because Indians have a
lower overall cost of living and lower standard of living, and the best
students generally want to move to a country where they aren't climbing over
mountains of trash and starving people all the time. I think we ought to let
more of them do so, but in the meantime, of course companies are going to move
to where the cheaper resources are.

~~~
randallsquared
Surely you cannot fail to have noticed how much Americans currently spend on
health care, and how moving from private industry to state industry
consistently increases the amount spent (at least in the US!)? Now, a case
could be made that health care is an exception, largely because it's so
heavily regulated already as to be effectively a poorly-run state industry
with private profits. However, taking any other country's efficient or well-
run government program and trying to build one like it in the US is probably
doomed to failure. The US government has very bad incentives for "efficient"
and "well-run".

~~~
dreish
I don't think you get to just make assertions like that without any facts.

Medicare, which is already a government-run health insurance plan, and one
whose customers are so satisfied they are militantly protective of it, has
lower administrative costs than private insurance companies:

[http://wallstreetpit.com/7500-does-medicare-actually-have-
hi...](http://wallstreetpit.com/7500-does-medicare-actually-have-higher-
administrative-costs-than-private-insurers)

~~~
randallsquared
I don't have specific data on Medicare, but you aren't exactly arguing against
what I said, I notice. One would _expect_ the beneficiaries of a government
program to be militantly protective of it, and the less efficient, the more so
-- no one hires lobbyists to reduce money or services they're getting.

~~~
dreish
I am if you read the link, which is actually a good survey of what turns out
to be a somewhat complicated question, due to the differing populations
served. I don't think it's fully settled, but I think the assertion "Medicare
has lower administrative costs that private insurance" has a much better shot
at surviving than the negative of that assertion.

The government is unbeatably efficient at writing checks. I don't know where
you get this notion that somehow the government would be an inefficient
purveyor of health insurance. It simply isn't true.

~~~
anamax
> I don't think it's fully settled, but I think the assertion "Medicare has
> lower administrative costs that private insurance" has a much better shot at
> surviving than the negative of that assertion.

It doesn't matter whether that assertion is true. It's almost a dumb a
question as wondering about whose check writing costs are lower. (I've never
seen someone wonder about that wrt defense spending.) The closest relevant
question is whether govt healthcare is more effective. The folks currently
covered by US govt paid healthcare aren't being covered for less and aren't
having better outcomes than the folks covered by the private system. (I'm
ignoring horrorshows like the Indian Health Service. They'd almost be better
off if we gave them blankets infected with diseases and cases of whiskey.)

Then there's the "fairness" question. I know several folks who pay a lot of
taxes who are "heavy" and/or old. On what basis are you planning to deny them
govt funded healthcare?

On the other end of the scale, your choice to subsidize an activity does not
obligate the recipients of that subsidy to minimize your costs.

~~~
dreish
You're drifting far, far away from the issue that was raised at the beginning
of this thread. tjic asserted, I believe as an article of ideological faith,
not based on any facts or evidence, that the proposed medical insurance bills
in Congress would raise overall employment costs in the U.S. That assertion is
what I took issue with, because I hate to see people blindly voting up stuff
they agree with without thinking about it. Nothing else.

In any case, I don't think your "closest relevant question" is well-formed.
For one thing, no one is proposing "govt [sic] healthcare". For another,
though what you write is frustratingly vague, it looks like you're proposing
to compare outcomes between those 65 and over who are covered by Medicare with
those who are young and healthy and covered through their employers --
obviously the populations are going to have very different outcomes.

~~~
anamax
> the proposed medical insurance bills in Congress would raise overall
> employment costs in the U.S. That assertion is what I took issue with

Your response was to claim that the govt could write checks cheaply. It's fair
to point out that that response isn't relevant to the question.

> For one thing, no one is proposing "govt [sic] healthcare".

Sure they are - that's what the "govt option" is.

We have experience with lots of experience with "govt healthcare" in the US
outside of Medicare and the VA. We have the Indian Health Service. We have the
various state programs. and so on.

Besides, proponents of ObamaCare can't honestly ignore Medicare. They're fond
of saying "we can save 30%". Since the elderly get 70% of today's spending,
getting close to 30% savings means that Obamacare must reduce the cost of
Medicare or it has to cut all other healthcare spending to near 0.

I'm actually all for letting Obama experiment on folks who get healthcare from
govt funding (both actual govt programs and govt employees who get private
healthcare). If you include federal, state, and local, that's about as many
people as are currently in the private system

I think that he should have free rein to do whatever he thinks will work with
those folks and the amount of money that we're spending on them today.
However, in 2011, 2012, 2013, and 2014, the per-person budget should be cut by
5%. Since that's less than 20% and he's promising 30%, that's a slam dunk, and
he can even use the savings to bring more people into the program.

If he's right, folks on this govt plan will be healthier and so on and the
savings will be too big to ignore. If he's wrong, govt employees and the like
will revolt.

Deal?

~~~
dreish
You're obviously not serious. I'm done wasting my time on this.

~~~
anamax
I'm completely serious. I think that Obamacare should be given a large scale
trial, to see if it can deliver what he promises.

Why don't you want to give him a chance?

Or, are you still trying to argue that check writing efficiency determines
health care cost and quality?

------
tjic
> _Companies like IBM that take this position [i.e. buying the most affordable
> engineering talent they can, even if it's off shore ] are hurting America._

B.S.

If you can purchase one apple for $1 or an identical apple for $10, failing to
buy the $10 apple is (a) smart; (b) maximizes societal utility.

It's spending money uselessly that destroys valu.

~~~
swombat
I think Cringely is talking about a kind of vicious cycle where since you buy
your apples for 1/10th the price, you fire 90% of your workforce. If everyone
does this, and if there aren't new jobs to take in that redundant workforce,
you could end up in a death spiral where you find that even though your apples
are dirt cheap, there's no one left to buy your expensive apple tarts. So you
drive yourself out of business by reducing your costs.

Obviously this can only happen if the assumption holds, that there are no new
jobs to absorb the redundancies, and that this is happening across the
economy.

That said, a case could be made that these assumptions are correct - what's
your argument against them?

~~~
andreyf
_That said, a case could be made that these assumptions are correct - what's
your argument against them?_

There are tons of new jobs, and a whole new middle class - in India and China.
Corporations do not share your nationalistic interests - IBM doesn't _owe_
America anything. If Germany were to have won WW2, IBM would now be a great
German company. As America's broken system of government slowly bleeds this
nation to death, IBM will have no remorse over becoming a company focused on
India/China.

~~~
mds
That is certainly not an argument that IBM's actions are not "hurting America"

~~~
req2
But if IBM doesn't "hurt America", it will "hurt the world".

~~~
gloob
I would suspect that many Americans would be willing to make such a sacrifice.

~~~
IsaacSchlueter
There's a big difference between "hurting America" and "hurting Americans".

Maximizing societal value may mean moving industry to places where the
government is less of an impediment to efficient value creation. In the long
(and usually, short) run, that's good for people. But it may mean that
American jobs move to India, and American workers can a) follow their jobs, b)
create new jobs by starting a new company in America (and deal with whatever
caused their old job to leave), or c) whine and moan until someone gives them
a handout.

Move, build, or cry about it. Doesn't sound like anyone's really being hurt.
It's not like IBM is stabbing their workers, they're just telling them that
they can work somewhere else, or get another job. Seems fair enough to me.

~~~
missile
> "Maximizing societal value may mean moving industry to places where the
> government is less of an impediment to efficient value creation."

Sure. Because after all, China is a paragon of good government.

------
biohacker42
This is a fascinating view into how Bob thinks. This article, right up until
the conclusion is excellent.

It lays out in great detail how the ever rising health care costs are hurting
companies. It also in detail explains how the car companies were only focused
on the short term and that ended up bankrupting them. But IBM takes the long
view and that's why they are still in business.

And Bob concludes that the problem is short tern thinking? That took me by
surprise since it's almost the exact opposite of the case he just made.

Bob thinks this is all because of focus on short term profits and we somehow
need to stop that. But how?

Isn't it obvious that instead we should make the US worker more competitive?

For labor intensive industries that may only go so far when people in the
developing world work for A LOT less. But not all industries are labor
intensive. And the standard of living in China is rising fairly fast. A bit
slower but still rising in India.

Isn't reducing the costs of health care and pensions the most obvious answer
to how to make US workers more competitive?

Exactly how to do it for health care is a political topic, so lets not discuss
that on HN. But even Bob mentioned severing the pension from the company.

~~~
dkarl
He's saying that what's good for IBM -- a long-term plan to outsource work and
replace Americans with foreign workers -- is bad for the US and bad for US
workers. So the problem for companies is short-term thinking, and the problem
for US workers is that intelligent long-term corporate planning leads to some
combination of outsourcing and importing foreign workers.

~~~
biohacker42
OK that makes more sense then what I thought he meant. But it doesn't make
that much sense when you consider that the ultimate end is economic collapse.

If corporations just put up with what ever conditions we force on them, in the
short therm great, but in the long term we're screwed.

~~~
rubinelli
The ultimate end is more likely a new equilibrium, in which the difference
between the cost of living in the BRIC is closer to the industrialized Western
world than it is now. Also, don't forget productivity gains are fueled by new
technologies, and the US are still way ahead of the competition in research.

~~~
krakensden
I don't understand your point.

There's not a huge barrier to new discoveries in the US being utilized in
other countries, and our only advantage in conducting research is
infrastructure for distributing money. Over the next ten years, that could be
closed by a cash-rich nation that wanted to (China).

~~~
biohacker42
But as they close the gap over the next 10 years, their standard of living and
their wages are also going to keep rising. And at some point the gap is small
enough that the extra cost of shipping it from China to the US isn't worth it.

