Intel CEO Paul Otellini believes that the US is heading towards a second-rate status as a technology leader, and it's the Obama administration's fault. "The next big thing will not be invented here. Jobs will not be created here," unless government policies are changed, Otellini told a Tuesday gathering at the Technology Policy …
A CEO of a repeatedly racketeering anti-competitive monopoly cannot build factories in the US as cheep as he can in China, therefor he says we will loose lots of factory jobs.
Okay, so what if we do what he says, and protect the large incumbents, cut their taxes, and allow them to continue racketeering against their smaller rivals:
* Smaller less subsidized companies go out of business
* Consumer prices climb
* Innovation moves to China and India
* The US looses lots of high paying office jobs
A Pedant Strikes
"we will loose lots of factory jobs."
What has setting free factory jobs got to do with this?
Or, did you mean "lose"?
Just another illustration of the shortcomings of the 'world economy'. Otellini's happy to take advantage of the, erm, highly business-friendly regulatory system of China. Next question: when are you planning to move there, Paul? I bet it ain't any time soon.
Of course, to the masters of the universe who run big companies, the answer's always 'everywhere should be like the country which gives my business the most tax breaks', but only so long as somewhere which doesn't do that exists for them to live in and raise their kids...
I have no problem with this.
I have no problem with outsourcing low-paying, dangerous jobs to countries like China. There's a big difference between running a factory and knowing how to design and build that factory. It'll be a long time before the Chinese figure out how to design state-of-the-art computer chips by running our factories for us.
Future dictator's note: It's easier to control a population if you give them everything they need to be productive, but not tell them how you got the information in the first place. They'll be nice and happy, since they have food and work, but you can still kick them down if they get too uppity.
At my university, about 90% of the students in the graduate computer science and computer engineering programs are from outside the US. About 85% are from India and about 84% are utterly useless. Sure, we get a lot of students from other countries, but a lot of them are stupider than the freshmen undergrads we get. At least the undergrads pretend they want to learn. The few Chinese students we get seem to be reasonably intelligent and studious, but there aren't that many of them here.
But, hey, it's nice to see that he's thinking of building new chip factories. Last I'd heard, Intel or AMD was actually closing factories, cause there just wasn't enough demand.
History repeats itself.
Business leaders in the US were saying exactly the same thing about the Japanese, back in the 70s.
Until, that is, the Japanese completely beat the US at its own game and nearly put Intel out of business by producing memory of a much higher quality and capacity than the best US companies could, for a much lower price. (Only Andy Grove and Gordon Moore's decision to get out of memory and focus on processors saved Intel.)
Underestimate the Chinese at your peril: They are serious engineers.
racist much ?
I work with some non english guys in a tech job. And when anyone complains about their language skills I ask them if they can do the job in english
When they say no, I tell them to STFU as the guy from china or india is doing it in a 2nd language.
Me and My Microcosm
Sorry to break it to ya! As much as you think you know how populations work, Prof Dictator, understand that the best Indian and Chinese students head for the States and have no reason to bother with the UK/EU.
So you're left with those who couldn't make the cut, trust fund babies, and those who want a shorter Master's course and/or dislike American culture.
If you actually read the AC post you seem to be referring to, the guy appears to have been talking about the quality [his perceptions] of overseas students in a particular university in the USA.
Still, I'm sure that it makes you happy to believe that the only reasons for a student might go anywhere other than the USA are that they're either not good enough, too idle, or that they actually hate America.
Possibly you might try and recognise that despite the undoubted world-class reputations of some leading USA universities, there are places outside the USA which are also pretty highly rated.
Though I guess if /foreigners/ were involved in making those judgements, you could find them pretty easy to dismiss or ignore.
After all, foreigners are only really failed immigrants, who must by definition be dumber than you are.
FFS, some of them *were probably never even forced to worship a flag* as children, and so probably can't even understand simple things like the concept of 'freedom' the way that you do.
Second rate technology
"Intel CEO Paul Otellini believes that the US is heading towards a second-rate status as a technology leader, and it's the Obama administration's fault."
The US has been heading towards a second rate status as a technology leader long before the obama administration was in office.
For over a decade, big business and government put the pedal to the medal offshoring technology and jobs in hopes of being competitive and maximizing return on investment. It's only in recent years we're beginning to see significant the ramifications of that behavior. Maybe corporate headquarters did well, but everywhere else the US has lost a lot of ground with offshoring and lack of investment.
Otellini is partially right to blame the government, but corporations including intel need to share the blame for failing to invest domestically. Did anyone really think that funneling investments overseas would not affect the domestic ecosystem?
Shut The Fuck Up Otellini
Innovation and wealth generally come from the bottom. Startups in garages will always be the inventors of the next big thing. This scares the crap out of you of course so what you are demanding is that governments do more to protect the incumbents such as yourself from being nibbled at from below by upstarts.
Companies like intel and Microsoft don't give a toss about innovation, they just want to further entrench their own stagnant business models and protect themselves from the true innovators through government mandated artificial barriers to entry.
liberal foaming at the mouth
"Innovation and wealth generally come from the bottom. Startups in garages will always be the inventors of the next big thing."
Thanks to the current tax structure in the US, as of 2011 the typical "small business" will now be taxed at a far higher percentage of their income than even a mid-sized corporation. Due to the way they are structured "sole proprietor" and similar methods of starting a small company while limiting liability to the founder's personal assets, these businesses will be taxed at the personal income rate. So, a small business that makes more the $200K per year will be taxed nearly 33% as income tax. On top of that, you have health insurance costs that have been driven up 25% in less than a year, unemployment insurance costs that went up, in some states, 400% in the last 2 years, and local municipalities adding their fees and taxes on top of that.
Mr Obama is a theorist. He has wonderful "theories" that are based on academic assumptions and stances. He forgets that yes, small companies create jobs. Small companies have 2 sets of customers - the average end consumer, most of whom work for larger corporations (startups and small companies cannot afford to offer competitive wages due to the difference in volume of sales) and the corporations themselves. If the consumer cannot afford to buy your product, and the corporations cannot afford or do not want to buy your product, you are out of business.
Keep in mind that the mass exodus of jobs started when the government started forcing corporations to have higher and higher overhead for their local employees and the current crop of liberally educated business majors started cooking the books.
Too many people think of "Big Companies" as the enemy, instead of thinking of "Big Government" as the thing to watch out for. After all, Intel, Dell, AIG et al will not tax away a part of your income to curb behavior that they don't like-and since they don't like it it must be bad for you.
The US Government is the only entity that can take a million dollar company with 0 overhead and run it into the ground within 12 months due to over regulation and trying to squeeze every nickle and dime out of the public.
Not that this political diatribe will see the light of day.
Bravo. But come on its not like we need to make anything in America anymore. We have the Chinese to do that for us. Instead our brave new world will be selling worthless paper junk bonds to each other that keeping getting so complex that eventually even the quants don't understand them. Heres to yippies in the early 70s showing the true face of Wall Street by throwing hundreds of one dollar bills onto the floor of the NYSE from above and nearly causing a riot. Give me, Give me.
I love the way you guys say anything other than rampant capitalism is liberal.
A shred of proof would be nice
"Due to the way they are structured "sole proprietor" and similar methods of starting a small company while limiting liability to the founder's personal assets, these businesses will be taxed at the personal income rate."
This was ALWAYS the case!!! I've had a sole proprietorship for nearly 20 years and we've done our taxes exactly the same way each year and that will continue. What's irritating is that people like you point this out and claim it's something new. You also think that someone making $200k a year would have a sole proprietorship. What kind of idiot would not be incorporated at that level? Generally once you break $60k you incorporate. My health insurance costs have not gone up. It's easy to make up numbers...
"Keep in mind that the mass exodus of jobs started when the government started forcing corporations to have higher and higher overhead for their local employees and the current crop of liberally educated business majors started cooking the books."
Perhaps ONE example would be nice or maybe Rush Limbaugh didn't provide any proof. The mass exodus started happening when we moved all of our corporations out of the country because people work for $3000 a year in China and people in the U.S. make on average $46,000. Look around... It doesn't matter what government we have our corporations only worry about the bottom line - making money. If the average income of the entire planet was identical we'd have those corporations making stuff here.
The tax rate on small business and self-employed is iniquitous to the point that it's not worth working*. However, I fail to see how this is the fault of the Obama administration - it's the way things have been forever. Those bold tax-cutting not-liberals we just threw out of office could have done something about it, if they gave a fuck; but they didn't - forgive me then if I dismiss their current enthusiasm for small business as cynical electioneering. So, Obama hasn't done anything either? I'm shocked - SHOCKED! Damn it, the man's had 18 months and it's not like anything else has been going on.
* Except for the increasing number of jobs that are now being done for cash
Interesting comment on Obama's "theorist" tendencies. Couple of questions for you:
1) Aren't all economists, and thus people who make decisions based on advice from economists, theorists?
2) Wasn't the main, conservative (republican, if you like) US and UK economic movement in the 80s based on Friedman's theories, which proved to be spectacularly wrong (in essence that the "market", when left completely to itself without any regulation or interference, self-regulates; an idea which wonderfully ignores human drives)?
More on topic, I'd like to understand better from Otellini how exactly he can save a $B in factory costs in "almost any other country in the world" if it doesn't in fact come down to labour costs. Did anyone question his figures?
I love the way you say "you guys" and clump everyone into a single stereotype.
Re: Anonymous Cowards
Yeah, best to avoid that, really.
So higher taxes and excessive regulation helps startups how exactly?
re: liberal foaming at the mouth
"Not that this political diatribe will see the light of day.", giggle, shades of the tards mocked on ifyoulikeitsomuchwhydontyougolivethere.com..
I'm calling bullshit on the simple statement that your healthcare costs haven't gone up.
Mine have gone up by more than the rate of inflation every year for the last 20 years except this one. And the reason they aren't going up this year is the plan the company offered last year got so damned expensive they couldn't afford to offer it to me at twice my previous contribution. So it actually got switched out for and HSA which may or may not cost me more than last year. Won't know until the end of the year.
Mostly right. Your description of the government problems is spot on.
The bit you missed is that Big Companies these days are mostly in bed with Big Government because it is easier to pay off, I mean donate to a candidate who can then pass laws that inhibit or prohibit competitors from cutting into your customer base. We saw this when Big Pharma and Big Healthcare Insurance were the first ones to sign off on Obamacare after they ensured their own profit streams. In short, Fascism at its finest, only when I say 'Fascism' I mean it's technical definition of Government controlling the country by controlling key parts of Big Business, not the usual libtard definition of 'I don't agree with what you are saying.'
Not saying you won't find any Big Companies that are actually engaged in the American entrepreneurial spirit, just that they are damned rare.
I guess he can't do double-entry
At the end of the day, tax breaks, subsidies and other "incentives" equal gov't spending.
How can this clown support one and whine about the other without a massive case of cognitive dissonance?
Tax breaks and gov't spending have equivalent direct effects on the gov'ts funds, but if you really think that "not taking money from you" is indistinguishable from "taking money from you and giving it to someone else", then I'd be happy to be the recipient of all your money...
Looks like Otellini wants a Japanese system.
The government protects businesses. The reasoning is that if businesses prosper their employees also prosper. Sadly that is no longer the truth here.
Japanese businesses also have found the way to maximize profit is to minimize costs. This translates in nobody getting hired as a real employee but only as temporary workers. I know friends who have been a temporary worker at the same company for the last 5 years. Being a temp does not oblige the business to pay for health insurance nor pay raises, nor bonuses.
Now that the economy is hurting bad in Japan too consumers don't buy and manufacturers are blaming consumers for the failing market. Of course nobody buys anything anymore they don't have the money since paychecks have been cut.
Large businesses record monster profits but the population is becoming poorer. I can see Otellini liking this since he is in the large business part.
A quick summary
Intel chief is upset that Obama's stimulus spending isn't subsidizing his particular industry.
Pirates, because huge multinationals will take whatever they can get from a government, then sail away for richer seas.
Maybe China should just up its taxes a bit so he only saves $0.5bn and they bank the rest.
He should remember that taxes can change very quickly when needs suffice but multi-billion dollar factories are a bitch to relocate.
The Democrats and Keynes Mr Otellini?
Whose version of capitalism brought us the two biggest economic disasters in the history of capitalism, roughly about eighty years apart? The second of which blew in about two years ago? I'll give you a little clue, Keynesianism had nothing to do with it. J M Keynes' analysis arose as a _response_ to the first time the bastards succeeding in frakking us all over on a global scale and his thoughts were/are completely rejected by their politcal/economic greatgrandchildren who frakked us all over on a global scale for the _second_ time recently.
The Demoncrats who insisted on socialist banking practices and wouldn't
let Bush correct the programs initiated by Rahm Emmanuel et al when they ran Fannie Mae and Freddie Mack under Bill "can't find my pants" Clinton.
Oh please do give us a break from the idea that.....
......America's problems are due to sosialism!
Bush administration gave business everything it wanted
Business had 8 years of fellatio from the Bush administration.
There wasn't much job growth outside of government, defense, and the real estate bubble. The stock market is about where it was 10 years ago.
Frankly, I think you could give Otellini everything he wants (dumping chemicals in rivers, etc, like in China) and he'd still bitch, and the US would see no benefit.
Otellini is incorrect that the US is heading for second-rate status - it's already achieved that as far as domestic industry is concerned. Maybe he meant third rate. Certainly Government policies need to be changed to correct the situation, but I doubt if Ortellini would like the medicine, which would be a shift in taxation policies away from favoring unearned income such as capital gains and stock dividends and making it more rewarding to put in an honest day's work actually making things in the USA. The present situation, where managements prefer to pay themselves in stock and thus pay a lower tax rate than their receptionists, has been the driving force behind decades of internal asset stripping with the objective of pushing the stock price higher and higher. Now with the stock market looking distinctly wobbly and the specter of dollar hyperinflation feasting at the door, these vultures expect the government - sorry, the taxpayer - to step in and rebuild the industrial base they gutted in pursuit of private wealth. After all, they claim, we did it for the banks.
I'm not quite sure how blaming the Obama administration figures into this, but then I guess it's an election year. Perhaps if things go Ortellini's way in November, then after the new representatives have been introduced to all the lobbyists and taken their free trip to Israel, maybe they'll direct the Federal Reserve to print a bail-out for Intel too.
Interesting to see that anti-semitism is alive and well out there in Britain....
What is so difficult to believe? The US said a long time ago, "Never Again". That some believe in the principle that a country should keep it's word? Not find excuses to break that word?
Damn, if the same crap happened to Britain, we'd be there too. Doesn't matter who. We're usually there for some reason or another. I would prefer we wouldn't because we screw around too much - there's much to be admired with your basic Roman Legion... lol
And no, not a republican or democrat - Maybe a Constitutionalist perhaps. I vote for the guy/chick who doesn't strike me as a moron.
@StrongType. Let us also hear it for the......
..........Canadians whose "boring" and rather regulated banking and finance sector (so long the butt of many a joke from the masters of the universe on Wall st) survived the recent "unpleasentness" rather well.
The likes of BMW / VW who ship more out of Deutschland than sell at home were damn lucky the sillly Brits and Yanks were buying with credit otherwise they would have no car industry to speak of. Stick that in your pipe and smoke it.
..China will be the most important VW/BMW/Mercedes export market in less than three years at the current growth rates.
Then we have India, Brazil, Russia as export markets. All quite peaceful countries who don't start wars for nothing and have finance under control.
Actually we have to isolate our financial system from the Anglosaxon one, as we will otherwise be infected by the next plague being invented in NY and London.
That was a real tonic.
A sort of Teu-Tonic.
..to break the new to you, but it was the idiots of NY and London who brought the world economy on its knees recently.
If you wanted to rape the state financially only thing to do was to hand out a big credit to a broken company at 12% interest, pocket your bonus of 2% and then take out a "credit insurance contract" with American International Group who would "insure" that credit for 3%. Only that AIG never had the financial strength to *really* insure that credit. Instead they went belly-up and the government had to step in with hundreds of billions.
"Insuring" a credit is an unheard-of stupidity here and that's why we are really pissed off with Anglosaxon finance. I could go on to write about Lehman "moving" their liabilites off their balance sheet during certain times (quaterly reports) and thereby effectively Cooking Books.
I am sorry, but any Chinese Banker generates more trust in me than your Bankers. The first one knows he will go to jail (or firing squad) if he rapes the state.
Good point but if we had pulled it off it would have a classic move. Markets are a risk and poeple only yelp and cry when it goes wrong and forget the massive amount of tax the city pays when it goes right. It isn't great but thats at Tertiary economy for you. Congratulate yourself that you still have manufacturing base that we dumped years ago.
Not just with technology...
The U.S. economy is also falling off a cliff with incresaing unemployment, lowered home sales, few new jobs, drop in consumer purchases and confidence, etc.
You can fool some of the people some of the time but the jig is almost up with a double-dip recession being acknowledged by friends and fow of Bama-nomics.
Chickens Coming Home To Roost
One American commentard on The Economist always argued that saving money is "hoarding" and thereby immoral behaviour.
Probably because "hoarding" does not contribute to that hot straw fire which AIG & Co lighted up.
The stunning incompetence of the American (and British, Irish) government(s) to control finance is now translating into *real* job losses.
The refusal to spend money on training workers makes American workers little more than very expensive illiterates. Here in Germany everyone gets vocational training for two or three years, including rigourous exams. Haircutters, policemen, bakermen, machine tool mechanics, car mechanics, nurses - all have vocational training and proper exams. This is done in the workplace and State Schools (called Berufsschule). It costs quite a bit, but made Germany a world leader in cars, tool machines of all sorts, munitions plants, main battle tanks, highest quality optics, chemicals and lots of other things.
Those who do not take vocational training go to university, of course.
According to wikipedia, we have 342 different vocational-trained occupations here.
That's the reason why all wealthy Americans buy an VW,Audi, BMW or Mercedes and avoid GM like the plague.
Maybe Mr OBama could get the troops back home and help educate Americans ? Less glory, smaller number of mutilated limbs and more economic strength on the long run.
Having a ton of money pumped into Germany after the second world war to rapidily improve your manufacturing capability had no hand in this of course. Unlike the UK who has paid back every single cent to the US for all the lend lease equipment she used in the war to remove your manufacturing capability ;-)
Actually the UK used their money to set up most of the Welfare State.
The German approach does seem to have worked out quite well for them. But then Germany values engineers and gives them status more akin to *other* professionals like doctors, lawyers and accountants.
he has one thing right regardless...
Obama is an idiot that's driving the US off a cliff. In November we take away his keys. Take that to the bank.
List Of Official German Apprenticeships
(Google translate might help you)
Some of the jobs might seem superfluous and over-specialized, but others are a core reason for German industry being able to produce complex products at very high quality levels and competitive prices.
Not all is perfect here, but in the last quarter the economy grew by 2 % and unemployment is on the levels of the early 1990s.
When in the early 90's?
Not to be too pedantic but, from when (and possibly where) in the "early 90's" are you comparing employment figures? As I recall the period surrounding the opening of the border between the DDR and the Bundesrepublik and the ensuing reunification of East and West Germany was not a great time for German employment figures, unless you are using pre-reunification Bundesrepublik employment numbers. Things certainly picked up fairly well not too long afterward.
Regardless, I do have to agree that the Germans do seem to have things right at the moment.
"...He also told his audience this year that the US lead in technology training and research has dissipated. "We [once] seemed a generation ahead of the rest of the world in information technology. That simply is no longer the case,..."
Recent surveys have suggested as much as 40% of the US population may belive the Earth to be about 10,000 years old. I am sure that figure has been grossly exagerated but even so, these are not the people who are going to come up with the next technological breakthrough, are they? Oddly enough, these are people are not typically Democrats either.
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