How To Create More Jobs 368
TechDirt is spotlighting a call by Michael S. Malone, a columnist for ABCNews.com, for letting Silicon Valley create jobs once more. Malone argues that Sarbanes-Oxley and other attempts at accounting reform have done little to prevent fraud, but in fact have managed to kill off an entrepreneurship-venture capital-IPO cycle, centered in Silicon Valley, that has taken 30 years to nourish. Here's TechDirt: "...it's time to roll back SarbOx and other accounting rules that have acted more for theatrical purposes rather than any legitimate reason. Basically, all they've done is create new reporting requirements that do little to nothing to either prevent fraud or clarify a company's actual financial position (its intended purpose). I'm all for radical transparency in financial info, but that's not what has been done. Instead, we've made it burdensome to actually grow a company — and that doesn't help create jobs. It helps kill them."
Bypass the VCs and Code (Score:5, Informative)
As I said in a previous comment, the current model of entrepreneurship is broken. VCs have left. In 2009, capital will be really hard to find. But there is a silver lining: capital is no longer necessary to start companies.
Again, fairsoftware.net [fairsoftware.net] among others is allowing people who don't have any money and don't have any VC buddies to start businesses together.
It will work because for software at least, a few smart developers can beat established software giants. Groundbreaking software can now be built quickly and cheaply by reusing a lot of existing code. You can thank the Open Source community's efforts for that.
I have a lot of respect for Mike Malone, the author of the article. He wrote one of my favorite books: "Going Public: Mips and the Entrepeneurial Dream". If you have any ounce of entrepreneurship in you, this book will reveal it. I'm sure it started vocations. But in today's piece, I disagree that Sarbanes-Oxley is the main problem, although it did reduce the number of IPOs.
The best advice I ever received for starting a company? Drop Powerpoint and your VC pitch. Write code instead.
Re:Bypass the VCs and Code (Score:5, Insightful)
But there is a silver lining: capital is no longer necessary to start companies.
That's very true for software-based businesses. However, imagine someone with a great idea for a new type of processor that wants to compete with Intel. There's a LOT of capital required for manufacturing-based businesses in order to do proper R&D, establish factories, and so on... assuming the concept is so radically different that it can't be outsourced to existing fabrication plants.
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However, imagine someone with a great idea for a new type of processor that wants to compete with Intel
No one with any sense will fund them. I talked to someone a couple of years ago who was a former Intel chief architect and considered this. He got VCs to offer him funding to the tune of several millions, but eventually decided his company wouldn't be able to compete and gave up on the idea.
On the other hand, if you want to compete in the embedded processor market, you need a lot less capital. You can produce IP cores and sell them to the likes of Samsung or TI for integration, or you can contract out
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There may not be any "natural" monopolies, but there are circumstances where allowing competition might create more problems than it actually solves. For instance, utilities.
If you don't have one, government sanctioned, provider alone for things like telephone, water, etc, you will end up with a situation where multiple companies are pursuing leans for right-of-way, criss-crossing private and public property and duplicating infrastructure. While certain services such as telephones and power may be able to
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Agree. I can't wait to see where World of Goo [2dboy.com] goes, a game better than most in 2008 made by a team of... 3.
My wife's the accountant, so I can't comment about Sarbanes-Oxley myself.
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Going by his account name it appears that he's likely the CEO. On the Company page you can see the details [fairsoftware.net]. My guess is he will certainly have a bias.
Re:Bypass the VCs and Code (Score:4, Informative)
Correct on all counts. Now, as to bias, it's a chicken and egg problem: am I pretending there is a problem with funding startups because I started a company in that space, or did I believe there was a problem and therefore started a company to fix it?
VCs have a saying (that I really don't like because it sounds arrogant), but applicable here: "no conflict, no interest". It means that if you really were not biased and had no interest in a topic, then how could you possibly have an interesting opinion? I think it's a valid point.
Transparency is the answer. I trust everyone to be smart enough to draw their own conclusions.
Everything is free in the new economee (Score:3, Funny)
"capital is no longer necessary to start companies"
That's right. Food is now free. Power and equipment is free. Rent has been abolished. Accountants are free.
Repeat after meee, everything is freee in the new economeee.
Re:Everything is free in the new economee (Score:5, Funny)
I thought mom and dad provided all that.
proof? (Score:3, Insightful)
Ok, you've got my interest, but please state your affiliation. Are you involved with fairsoftware in any way? I read your previous comment, and that made me look the company up, but I didn't do anything at that point.
I've tried twice to start the same company (MMO games programming software house) in the last two years, but each time I've failed because the people who stated interest weren't really keen on the amount of work involved.
Skeptical I may be, interested I am, but I have a good memory, so be hones
Counterintuitive? (Score:3, Insightful)
I am not quite sure how recycling lots and lots of existing code leads to "groundbreaking" software.
I am not even convinced that code is the roadblock.
Microsoft gambled on "the ribbon" and won.
But Microsoft has the money and manpower to study office work and the office worker in depth.
It can bring graphic and UI design teams into the picture. Experts in a dozen specialties. It can recruit thousands or tens o
Huh? (Score:5, Funny)
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Re:There are too many jobs (Score:4, Interesting)
I would like to know where you are so that I can relocate, around here there are generally 50+ qualified applicants for every real IT/development job advertised. A lot of qualified people with college degrees in CompSci/CompEng are doing first and second line tech support at various call centers in the area because there are so few "real" jobs available...
/Mikael
SOX has created jobs, just sucky ones (Score:5, Insightful)
It created a whole breed of IT "professionals", people who creep out of the woodwork and latch onto the latest buzzword-compliant, (typically) Government-sponsored/mandated thing, and ride it until the next one comes along.
Re:SOX has created jobs, just sucky ones (Score:5, Insightful)
What I don't get is how TFA can say:
"have acted more for theatrical purposes rather than any legitimate reason. Basically, all they've done is create new reporting requirements that do little to nothing to either prevent fraud or clarify a company's actual financial position."
There have always been audits. The effectiveness of audits to uncover fraud and clarify financial positions has never been questioned (unless the firm conducting the audit was corrupt). The only difference now with SOX is which companies are subject to audit. Saying that audits dont prevent fraud or provide clearer views of finances is a fairly absurd accusation.
After all, these same companies are conducting similar audits during mergers and acquisitions. What's good for the goose...
Misses the point! (Score:5, Informative)
SOX is for publicly traded companies, not startups. By the time they are publicly traded, the need for VC is generally in the distant past.
Re:Misses the point! (Score:5, Informative)
Re:Misses the point! (Score:4, Insightful)
Astounding how we, as a country, can have comments like the ones in this thread, and like the ones in TFA, that continue to stand up for deregulation of the financial markets, having less accountability, requiring less transparency, while the entire system is collapsing precisely because of a lack or regulation, accountability, and transparency.
You all are standing in the lobby of a skyscraper that is collapsing, preaching to the screaming people who are frantically running out the doors that 'this is exactly why we should enforce less standards when we build skyscrapers!' Everyone is looking at you like you are the retarded maniac that you probably are.
*Gasp* an internal control audit, you say!? Why, that doesn't make any sense... that a publically traded company (whose business model relies on their business partners, who are private companies, remaining financially solvent) should require those private companies to attain attestation to the effectiveness of their own internal controls? How dare they. That just sounds, so... so...
Responsible!
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People need to be free to wantonly misrepresent their publically-traded finances, how else can they mazimize their personal gain?
People need to be free to lose their retirement savings because they invested in a company with sham accounting.
Only by allowing people to be misled by the Captains of Industry can we expect them to learn to stand on their own two feet and get rich or die trying.
Why do you hate A
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A test of internal controls has nothing to do with a company's solvency. A company can be hemorrhaging cash and have excellent controls in place to protect from theft of money and information.
The argument is that the law of diminishing returns applies to government regulation and you can reach a point of over-regulation. Since law is not a monolith we have passed that point in some areas and clearly haven't in others.
There are still people who believe that government cannot solve every
Re:Misses the point! (Score:5, Insightful)
Re:Misses the point! (Score:5, Insightful)
seriously. i mean, you might be able to argue that Sarbanes-Oxley is not the correct way to regulate publicly traded companies, but to say that deregulation is the solution is just incredibly stupid considering the history of corporate scandal/corruption we've had in this country.
if companies are being driven out of the U.S. to the U.K., it's certainly not due to the London Stock Exchange being less-regulated. the FSMA 2000, passed by British Parliament two years prior to Sarbanes-Oxley being passed in the U.S., established equally extensive business regulations [opsi.gov.uk] designed to promote responsible corporate governance and protect consumer interests. and even before the FSMA 2000 the U.K. had one of the best regulatory systems in the world.
if anything, it was the lack of sound business regulations in the U.S. in the first place and the corruption which this unregulated environment created that caused such a public backlash forcing the Sarbanes-Oxley Act to be passed. if U.S. policy makers and industry lobbies hadn't been pushing for deregulation all these years, and had instead adopted the principle-based regulations that have long been employed in the U.K. and the rest of Europe, then there would have been no need for the strict rule-based regulation U.S. companies are now faced with.
ignoring the need for sound business regulations is ignoring the realities of capitalist industries [pes.org]. if you resist sensible regulations that are necessary to protect public interest and societal well-being (with minimal enforcement action), then you invite corporate malfeasance and risk repeating mistakes of the past; at best there will be a public scandal and at worst an economic disaster, either of which will cause politicians to overcompensate for the lack of progressive regulations with reactionary ones like Sarbanes-Oxley. so the author's attitude is exactly what got us into the current situation.
of course, then the author goes on to suggest that we return to Reaganomics, as if tax cuts for the rich have never been tried before (or have ever worked in the past).
Re:Misses the point! (Score:5, Insightful)
Re:Misses the point! (Score:5, Interesting)
You don't have to be anti-regulation to be anti-sox. It is entirely possible to simply believe that SOX is excessively expensive and not sufficiently effective while believing that some OTHER form of regulation and transparency would be a good idea.
Remember, SOX has been in effect for several years and did nothing at all to prevent the mass financial irresponsibility (some of which WAS criminal) that has the economy so screwed.
You all are standing in the lobby of a skyscraper that is collapsing, preaching to the screaming people who are frantically running out the doors that 'this is exactly why we should enforce less standards when we build skyscrapers!' Everyone is looking at you like you are the retarded maniac that you probably are.
We are all standing in the lobby of a skyscraper that is collapsing and noting that the required expensive full cataloging of the exact color of each brick in the building did nothing but drive up the cost.
A funny thing happens when you place crazy demands on potential suppliers and partners. The ones with solid products and services tend to say no thanks, leaving the ones with barely adequate products who are just desperate enough for sales to jump through your flaming hoops to get one. You might get lucky and find a good supplier that had a run of bad luck, but probably not.
Either way, all that hoop jumping is expensive. Those costs WILL be passed on to the customer who demanded it. Adding a bunch of non-productive expenses is quite irresponsible!
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To take your skyscraper analogy, we are saying that, while the building is collapsing, that maybe we should have less regulation on the refractive index of window glass, and maybe a bit more on the quality of steel used in the girders. Regulation isn't a yes or no question (unless y
Re:Misses the point! (Score:5, Insightful)
Your post title, "Misses the point!", is quite appropriate, since that's exactly what you did. Sarbox prevents large private businesses, startups, that aren't publicly traded from making the transition to being publicly traded, because of the incredible expense associated with getting into compliance. In other words, the millions a year it costs is acceptable to already publicly traded companies, but the millions that much be spent precludes non-publicly traded companies from making the transition, significantly raising the barriers to entry.
Perhaps we need fewer publicly traded companies. (Score:5, Interesting)
I mean, all those short-sighted boards focused on the next quarter to pacify greedy shareholders don't seem to be good for innovation or the long term.
Be careful what you wish for. (Score:2)
You believe the situation would be better without any public oversight and with large companies being controlled exclusively by select individuals (the people that own the company)? You don't want to see entrenched publicly traded companies challenged by newcomers? You honestly believe that publicly traded companies don't innovate?
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Small companies like Toyota with hybrid cars? Or the advances in cell phone technology like Samsung and Nokia? High definition television? the International Space Station? The fact is most innovation comes from bigger companies. Google is so amazing because PageRank was an innovation. Most other startups are only applying existing technologies in a new way.
Re:Be careful what you wish for. (Score:4, Insightful)
Toyota didn't invent hybrid drivetrain technology (which has been around for ages) or even the hybrid car; they didn't really invent much, just applied lots of existing technology and used their size and market presence to bring it to market.
Cell phone history seems to include lots of big names like Bell Labs and Motorola, so one point to the big guys there.
HDTV doesn't count as much innovation in my book. It's... TV, just more pixels. Image processing circuitry had been driving computer monitors with higher resolutions for years -- the ball was on the tee for them, all they had to do was not pull a Charlie Brown.
I think you're acknowledging that Google wasn't even a company yet when its founders came up with PageRank, right? Ever since Google got big we've seen them buy more neat stuff than they've written. And generally take on projects that require big size more than big ideas.
Re:Misses the point! (Score:5, Insightful)
Which is why it's better to be compliant long before you are required to be.
Maintaining compliant processes is easy and relatively cheap. Replacing non-compliant legacy processes is expensive. The lesson? Don't have non-compliant legacy processes, and you'll greatly reduce the cost of going public.
Re:Misses the point! (Score:5, Insightful)
People as clueless as Mr. Malone are entitled to their opinion, but should not necessarily be entitled to having that opinion published in a national newspaper. Of course that would disqualify the entire WSJ editorial page.
2008 was indeed a disastrous year for IPOs. Here are the figures for the last several years:
2008: 43 IPOs (not 8)
2007: 272
2006: 221
2005: 214
2004: 217
2003: 70
(source: http://www.ipohome.com/ipohome/Review/2008main.aspx [ipohome.com] and several other places)
Now note: there were 33x as many IPOs in 2007 than 2008. This means that we can't say this was because of SarbOx because we had SarbOx in 2007. It is possible that adjusting to SarbOx was the problem in 2003, the year SarbOx went into effect, but SarbOx can't explain the change from 2008. Still, the writer might not be completely clueless. He knows enough to cherry pick years that were before SarbOx went into effect and which had higher numbers of IPOs than in 2008: 1999 (269), 1996 (272) and 1986 (365). However, it would appear that the years 2004 through 2006 were fairly normal for IPOs, with 2007 being an unusually good year.
So with respect to 2008, I'd venture, without doing any kind of extensive research into this, that something else might happened in the capital markets in 2008. The editors of the WSJ might want to look into it.
Re:Misses the point! (Score:5, Interesting)
He claims SOx has failed, he claims the costs are too high. Perhaps he forgets the cost of NOT having such regulation.
In addition, study after study has found that there are many benefits to becoming SOx-compliant, from risk attenuation to more accurate financial reporting, to streamlining processes via standardization. Googling "Sox benefits" will bring up quite a few, though you might need to wade through some marketing muck from companies whose line of business rests with providing compliance tools.
I can personally attest that Sox compliance has saved a former employer of mine tens of millions... potentially more, if certain practices hadn't been discontinued and happened to be caught by the SEC.
I think the main reason IT professionals hate SOx is that some of their work becomes drudgery. They fail to see the big picture, and from the finance side, I do what I can to make sure they can see how much it helps the company. As for it being an unnecessary burden on companies... tell that to the people who had their retirement savings in Enron stock. Tell that to the people who pinned their ability to put their kids to college on Worldcom stock. It takes a short memory to forget that confidence in large public companies in 2001-2 was similar to the confidence people have in the banking industry now. Would Malone argue that the best thing we can do for the general public now would be to deregulate the banking system further?
I'd also note that the small companies he refers to have a much easier time with SOx compliance, such as a longer period in which to become SOx compliant. Further, it's been demonstrated that the high cost of SOx compliance is in implementation, not in maintenance of compliance. For a start-up, it's easy enough to begin compliant... then you never have to face a huge expense in becoming compliant, since your processes have been compliant all along. Since a lot of the benefits of compliance are "soft" benefits (they are hard to assign an accurate value to), it's difficult to determine whether compliance costs outweigh compliance benefits... but since start-ups do not have to bear the brunt of compliance expense (in converting legacy systems and processes), I feel it's probably beneficial to be compliant.
Of interest, the SEC will be conducting a CBA of SOx compliance for small public companies in 2009. I'm interested to see what their findings are.
Anyway, thanks for doing a mite of research and refuting his cherry-picked data.
Single Tax (Score:4, Funny)
There should be a unified Single tax. This way there would be a lot less paperwork to do. That tax should be a Money transfer Tax, for example 15% when you get paid, buy something, transfer money. etc. It would also promote saving which is quite good at this moment in time.
Re:Single Tax (Score:5, Insightful)
Yessiree, that will keep capital circulating! Nothing inspires a person to move funds into a position to better fund a promising new company or other investment than to take 15% of that money away from you for seeing the opportunity. Yes! Punish investment! That should get some new companies and jobs under way.
Re:Single Tax (Score:5, Insightful)
"Yessiree, that will keep capital circulating! Nothing inspires a person to move funds into a position to better fund a promising new company or other investment than to take 15% of that money away from you for seeing the opportunity."
It will keep the capital moving. Moving to the Cayman Islands, to Switzerland, to Monaco etc.
One coin. Two sides. (Score:4, Interesting)
When you don't tax capital, it moves too quickly, and causes too much boom and bust. That's why western countries have rules against capital flight, and some european countries have a token tax - a fraction of a percent - for every stock transaction to slow people's overreactions.
Personally, I have a somewhat libertarian ideal - eliminate corporations as they are known, and remove the corporate veil of protection for most companies, except for special charters given to insurance companies and other temporary projects - bridge building, mass transit, internet service, etc. There's no reason to grant a corporation special status unless it is doing something beneficial for the community.
I think it would keep companies small and healthy, and keep large, sensible corporations very well regulated. Just require total transparency, and you'll keep the crooks out. But while the crooks are still ruling the White House [rawstory.com], the rich are still making the rules.
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Yes, saving is exactly what we need right now. Everyone should put their money in the bank, and not spend anything. That way, all your neighbours might go broke slightly before you do.
As for a simple flat tax, you realise what effect that would have on small business, don't you? Buy a product from a company that produces products from scratch, and you'll be paying 15% on that; buy a product from a shop that bought it from a manufacturer, who bought the components from another manufacturer, and there's go
Re:Single Tax (Score:4, Interesting)
There should be a tax on credit transactions. Credit transactions are based on the assumption that if the joker doesn't pay you, you can take him to court. At this point, the gubmint steps in and gives you your cash. If 2 individuals exchange goods or cash for goods, there is no need for any government intervention, and thus no justification for taxing it.
How is this new? (Score:4, Insightful)
Ummmm, that's been the plan for YEARS. The only thing that changes is the name of the company that you hope will buy you.
I could make the argument that it is "IP" patents that are the real problem.
If Sarbanes-Oxley isn't working (Score:4, Insightful)
Currently, part of the problem is that the financial world is hidden. Oh just trust us, we know what we are doing. Well after 2 bubble bursts, people are really wary of investing in anything, because there isn't any reliable information and there isn't any repercussion if someone lies about financial dealings.
So I don't think repealing Sarbanes-Oxley is the answer, unless something is put in its place that will help give investors confidence in their investments.
I for one have pulled completely out of the market and I know of others that have also. Now the big question is if and when do we get back in. Right now there is nothing happening in the financial market, that indicates to me that things are going to improve. So why should I put my money into something that is going to crash again in 2 or 5 or 7 years.
Re:If Sarbanes-Oxley isn't working (Score:4, Informative)
We agree, except that taking the transparency components behind SarBox and making them both more easily audited and standardized would be helpful. Accountability and transparency ought to be key, but instead, SarBox isn't scrutinized by auditors, who are sufficiently comprimised by their engagements that the information is of no merit or use. The data might be there (and expensively, with lots of incongruencies) but there's no one to analyze it and act on it.
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As for acting on SOx reporting, I'm not so sure you're correct. I can think of several companies whose financial statements yielded results from investigation, that probably wouldn't have been caught without SOx (Rockstar Games being the one closest to the Slashdot crowd). And from a company's internal perspective, SOc compliance a
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I agree that useful financial regulation may be helpful. But I'm baffled as to why you think we need to leave in place something that you agree doesn't work until we get something that does.
If your car had razor blades instead of seat belts, would you leave them in place until you could have seat belts installed or would you take them out as an entirely separate process, possibly while also working to find seat belts?
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If the example of managed funds is any example, a disturbingly large component of the world's wealth lives nowhere else but the common spreadsheet. Oh there are registries, of course, the ledger is there -- but I've seen a lot of institutional financial reporting that is based entirely on opaque spreadsheet macros. It isn't like the information isn't there, it's just bloody inaccessible due to the medium. The stuff is largely written in VBA with less than perfect QA. At least the stuff is portable, anyway.
Yes I wonder how auditors could get reliable data. In the old days you had centralised mainframe based accounting. Now the code is contolled by in house financial people and the spreadsheets can be made to report anything you want.
Nothing learned, Nothing Remembered (Score:5, Insightful)
SOX was the reaction to a series of big financial scandals, with the Enron affair being the best remembered. But back then, the reaction of many financial experts was to point out the deficiencies of SEC oversight and the weaknesses of the American GAAP accounting rules. The suggested answer was to seriously improve SEC oversight and adopt international IAS standards for accounting.
Instead we got SOX, an only too typically American solution, which puts its faith in forms and auditing. I think at the root of this is the Protestant mindset brought along by the Pilgrim Fathers, which insists that if something is printed on paper it must be true. It is the same mindset that requires travellers to the USA to confirm in writing that they are not terrorists.
And we got -- yes! -- another big financial crisis, caused by lax SEC oversight and creative financial practices. Well, even bigger and badder, if that helps.
Some people never learn...
There are other things first. (Score:2, Interesting)
Such as "lock patents to people" (Score:2)
Re:There are other things first. (Score:4, Interesting)
I wouldn't cancel the H1 programs, but I'd tighten standards. Yes, that comes from someone who'd love to move to the US and work there, and someone whose country has the same problem of people coming here to "steal" our jobs.
Face it, like it or not, there are sometimes not enough people available with a certain skill. Over here, we have a crippling shortage of nurses, doctors and skilled pharmacologists. If we didn't get them from abroad, certain services would simply cease to exist and our living standard would plummet. So I'm all for inviting them in.
What we do NOT need, and neither does the US, is more unskilled labour and more people who can do only what people already in the US can do as well, often to the same or even better quality, but they'd cost more. What I'd rather demand is that whoever gets hauled in from overseas has to be paid AT LEAST as much as a local resident would cost (it's not hard to figure out an average, is it?) and you'd suddenly see how companies stop to gobble up all the open H1 spots to get cheap slaves from abroad.
Re:There are other things first. (Score:4, Interesting)
What's that you say? The companies wouldn't be able to get another Visa replacement because all the H1/L1s Visa quotas are filled up on the first applicable day of the calendar? Make the above change and that will cease to be a problem.
Re:There are other things first. (Score:5, Interesting)
Or you could make the application fee on the H1-B optional in size, non-publicized, and non-refundable. And the highest 'bids' get to have the H1-B.
At this point it really becomes a matter of 'we MUST have this guy because he's the only guy in the world that can do this work' and kick in a massive $40,000 as your application fee, guaranteeing that you get him. The top 65,000 applications (ie, the ones that sent in the highest application fee) get visas. The rest of them get absolutely nothing, but they don't get their application 'processing' fee back.
Make the visa good for 1 year, and they need to repeat the process each year or the guy goes back home.
All of a sudden, the companies that really need a certain skill get it. That's what the program is all about, so lets insure it works in a strong fashion.
250,000 applications averaging $10,000 apiece = $2.5 Billion. That is a LOT of money that could be poured into the education system, teaching our next generation to do the work that needs to be done by our employers. Pretty simple.
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Re:There are other things first. (Score:4, Insightful)
Re:There are other things first. (Score:5, Insightful)
And if you get busted, do the fines exceed the money you saved by hiring a cheap foreign slave? No? Then why bother comply with it?
In a business, the question whether or not a law is heeded hangs on three questions: How much do I save by breaking it? How likely is it that I get caught? How much is the fine when I get caught? There's nothing else that determines whether a company breaks a law.
Yes, we have laws against dumping oil in the ocean. Why is it still done widely? Because it saves you heaps of money, because it's almost impossible to get caught and the fines are a joke. When the fines do not exceed the money you save by breaking the law, fines are seen as part of the cost of operation.
How about shutting down companies that break the H1 visa laws for a few months to audit them throughly and make them ineligible for more H1 applications? AND create an agency that actually watches over you like a hawk when you hire people from abroad (it's not like the government doesn't know if you do, ya know, you had to get them through a process that involves the government...). You'll weed out those abusers of the worker visa program pretty quickly. Either they stop doing it or they get caught and are forced to stop.
Re:There are other things first. (Score:4, Informative)
Yep, government regulations to restrict supply work out so well in other industries.
Ask your self, what advantage is it immigrants have over native workers? lower cost right, and why is that? because they are willing to consume less. Why don't you give up all the things I know you think you deserve.
Hauled in from over seas you say? more like risks life and limb to get here. You're right though, FORCE companies to pay immigrants the same as everyone else and they will no longer be hired. just like when minimum wage goes up the first to be fired are minorities. It's bad to have the Goobernment create wage structures to isolate certain groups the state deems undesirable.
They are not "Slaves" they are people who practice the right to sell their labor, they just can keep overhead lower than you. And they don't "steal" your jobs, they are more valuable at the price they are selling themselves for than others, meaning they are a net value. As a person starting out, I know full well the Labor laws aren't designed to benefit up and comers, but the entrenched interests who have the money. I've worked alongside immigrants while sharing a studio doing the same work as someone 20 years my senior who gets higher pay because his wage is grandfathered in. I'm sorry you have an overinflated sense of entitlement, but it isn't the state's job to enforce it. By hook or by crook were going to take what you have.
Thats Just on the supply side too, don't even talk about the loss to consumers that raising prices arbitrarily would have, or the fact that businesses that can't use labor here will be more tempted to go over there.
If you pay attention to facts your "Ideas" are little more than nationalist discrimination that will not benefit society, so that a few overpaid workers can ride the gravy train thanks to uncle Sam. Your plan would create jobs for citizens, by stealing them from the poor and paying for them at the expense of society in general.
Re:There are other things first. (Score:5, Insightful)
I am for essentially open immigration into the US. ... provided that we back way-off of the redistributionist, cradle-to-grave welfarism that our government has descended into.
The statue of liberty doesn't say "give me your top 1%, at any cost, and let them contribute to our tax base". It talks about the tired, the hungry, etc. If they're willing to work, I want them. If they want to be looked after, I don't. And I want the federal government to stop "looking after" people born within US borders first.
Ideally, foreign born people who work hard will come to the US and kick _out_ the lazy asses who were born here and expect to be waited on hand and foot by their government (which really means their harder working neighbors).
Unlike many other cultures or nationalities, definitionally, there is no common ethnicity, culture, bloodline, geography, or anything else that makes citizens of the USA "Americans". We are (historically) United only by our voluntary adherence to the rule of law. When we lose sight of our shared law, what are we? We have nothing else in common.
It is my opinion that the current generation of Americans (and who knows how many prior generations) are hardly Americans at all. We're more than willing to dispense with the rule of law and to vote ourselves or our interests more powers than are strictly legal, should it so suit us. The new generation of Americans thinks themselves something different than those bound by a common constitution that is applicable to any man who chooses to live under it. And the result is that we're back to the same old tricks of juding people based on where their parents came from, rather than how hard they work and how well they can keep our laws.
Rules regarding how much a man can sell his labor for (i.e. minimum wage laws) are some of the most insidious repressants of the poorest and least talented members of society.
The H1B system is quite odd: people who are talented wage earners cannot afford to float between jobs looking for something better and must jump at unattractive positions in order to stay employed. Yet people who are low-skilled or who elect not to work at all are not deported, and if they score the trifecta and add _another_ dependant entity to our welfare system (i.e. they have a kid) then they have cemented their place in the US legally.
As usual, our foolish government meddling works against us. We ensure that unemployed people stay in the US and "in the system". And we make it hard for high-skilled people to negotiate effectively for their true worth.
Finally, I do a fair bit of tech interviewing. There is a real shortage of US-born/US-resident workers that meet our requirements. I'm not talking about a shortage of people that will work for the palrty wage we're offering: I'm talking about people that we're willing to make an offer to at all. We look for them anywhere and everywhere, and I interviewed 25 people at a college campus recently. Half of them where white-bread America and half of them were foreign-born US students.
Paperwork (Score:4, Interesting)
Sick and tired of people ragging on mark-to-market (Score:2, Interesting)
should be:
FASB's acc
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FASB's "mark-to-market" accounting rules forced AIG and Bear Stearns to admit that their liabilities had exceeded their assets, instead of allowing the companies to invent a price for the assets until the assets were finally sold.
For too darn long, companies could just make up prices for assets they wanted to value. Forcing the assets to be valued at what they're actually worth (i.e., what somebody will pay for them) is just common sense.
Re:Sick and tired of people ragging on mark-to-mar (Score:5, Informative)
The problem is how does one value an asset that one is holding and that one has not sold yet, since the real value of an asset is what I could get for it on the open market.
Mark to market simply says that I need to value that asset at the current going rate for similar assets on the open market.
Now here is where the banks got screwed, and the fun part about this example is that it is currently going on today. Say I bought a 10-year treasury bill for $70 five years ago which will mature in 10 years at a face value of $100, earning around 4% annual interest. What is that asset worth?
Well, you could say that the asset's value is growing at 4% compounded interest, so the bond is worth $85 today.
WRONG!!!
Mark to market says that the asset is worth what I could get for it if I sold it today on the open market. Well, in the open market there is such a rush for cash liquidity that people have been dumping their bond holdings (including treasury bonds). And as we all learned in Economics 101, high supply, low demand translates to depressed prices.
Which means that if I tried to sell that $100 treasury on the bond market, I may only get $50 for it.
So, according to mark-to-market accounting, my $100 treasury bought five years ago for $70, whose face value if I simply computed it's value by compound interest would be $85 is actually only worth $50. And it means if I have the regulatory requirement to have a certain asset to liability ratio, my treasury bonds, which are completely and totally secure--the U.S. Government so far has not defaulted on a single treasury--is insufficiently "secure" for accounting purposes.
It's the primary reason why some people want to do away with mark-to-market rules: because many mortgage backed securities were trading at perhaps 10 cents to 20 cents on the dollar, even when the most pessimistic default rates in the mortgage market would cause the underlying assets (the houses themselves) which comprise the mortgage backed security to be worth maybe 85 cents or 90 cents to the dollar. This 9x deflation in the face value of the instrument was what killed AIG: they had no choice but to value the asset lower than the underlying homes would have been worth in the event 50% of the land mass of the United States was destroyed in a nuclear exchange with the Soviet Union.
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The first pillar of Basel II already addresses your issue regarding the risk of sovereign debt.
AIG was killed by ridiculous exposure to credit default swaps, not CMOs on their books. It was predefined how they were to pay out in response to mortgage defaults (which they failed to model accurately).
With regard to banks, it's ridiculous to say that they got "screwed" as they were using the value of overpriced assets to overleverage during the credit boom. That rule works to their "benefit" i
Re:Sick and tired of people ragging on mark-to-mar (Score:4, Interesting)
Those securities may be worth more than 20% of face value, but they're worth a lot less than 80% or 90%, because the values of the houses they covered was often hyper-inflated due to too easily accessible credit and occasional deliberate over-assessment by some involved in the house purchase cycle (realtors, mortgage brokers, speculators). The house prices those securities depend on are now adjusting to the real value of that real estate in a sane lending environment.
The reason why the mortgage-backed securities are at 20% of face value is that the banks or managing agencies don't want to have to pay the property taxes on empty houses for 10 years and yet there's no qualified buyers to sell to. Renting the properties isn't a solution because market rental prices can't cover the mortgage payments. If the defaulters can't pay the mortgage payment, then they won't be able to pay rent to cover the same so the owners will still take a partial monthly loss even if they managed to rent the place while looking for buyers. The boomers with cash are retiring and they don't want their money tied up for the 20 years it's going to take before those homes can be sold without taking a bath at even half of the last assessed value. Due to deregulation, the banks are over-leveraged, so they can't afford to take the loss over that long a period of time. So the house prices are dropping and they are going to continue to drop (in real terms initially or against inflation longer term) for quite a while and the value of those securities is reflecting that.
That's what you get when you try to treat a durable good as a commodity that people can play speculation games with. When enough speculators decide to leave the inflated market for some reason, market values readjust to their natural state. Have you checked the price of crude oil lately? An inelastic demand curve can account for some of the recent roller-coaster ride in that market, but oil demand isn't so inelastic as to account for >3x price fluctuations on relatively small consumption changes (percentage wise). Speculators who manipulate prices suddenly developing a need for liquidity and pulling out of the market on the other hand...
In the telecom's it seems to help at least (Score:3, Informative)
I work in disconnects for businesses for a major telco, and we have a lot of auditing requirements due to SOx. I'd hate to think of what records would look like without these requirements. Sure people can still cheat, but it's also a CYA for the company that is doing the reporting.
There is still slamming now and then, but there are far fewer disconnects in error, where the telco is at fault. Usually it is the business customer not knowing which location they actually wanted to disconnect on their side, or not reading what they wanted to disconnect.
It would be nice to not have the reports. But you know if a business is not required to do it then there will be no tracking of any type done, which is where major abuses take place.
I don't mind doing the reports in addition my normal workload because I'd been able to go over others work that I am auditing and get it back on track if there is a mistake in it.
cancel the h1bs (Score:2, Insightful)
Too many qualified Americans rejected so that H1Bs can replace them (for the same money). Makes no sense whatsoever. Cancel the H1Bs.
Re:cancel the h1bs (Score:4, Insightful)
In the industries that have large number of H1Bs, the bulk of the unemployed aren't actually "qualified". This is especially true in the IT and software industries. People got jobs during the late '90s because companies were hurting for help. A lot of those people sucked, and are now out of work and bitter that there are H1Bs with "their job". The fact of the matter is that most of those people weren't qualified for the job in the first place. There is still a short supply of people who are actually qualified for IT and software jobs. Hell, the group I work for has been trying to hire a DBA for 6 months. Every time we think we've found one (after interviewing a bunch of unqualified people) they get a better offer from somebody else.
H1Bs aren't the problem. It's people like you having a sense of entitlement that are the problem. Unemployment is only 6%. Go earn yourself a job instead of sitting around bitching about how somebody else has one that's rightfully yours.
(People who *are* qualified, but work in an industry that's out of business also have a problem... But there aren't H1Bs taking their job. Their job is just gone.)
The whole SOX compliance thing was silly. (Score:5, Insightful)
SOX was passed so that politicians could look like they were "doing something" after the whole Enron debacle. Okay, fine; politicians have to look like they're "doing something"--but unfortunately for us, "doing something" involves passing new laws, and every law that passes is a minor freedom that is revoked.
The real irony of Enron was not that it was a failure of having the right regulations in place, but a failure of enforcement: the guys running Enron went to jail for breaking pre-SOX laws.
That's the thing that irritates me the most: politicians always have to look like they're doing something, when in fact, the right thing for them to do is nothing, except, perhaps, hold a hearing to find out why enforcement failed. And sadly, enforcement fails more often than not because we don't spend enough money on enforcement because we're busy trying to figure out how to enforce the new legal requirements.
The whole legal framework is bug laden and a perfect example of the Lava Flow Anti-pattern. [wikipedia.org] What we need is for politicians to go through and rewrite the law to simplify it, rather than to add more and more layers of nonsense.
As a footnote, every time someone says that some section of our economy is insufficiently regulated, I laugh out loud: nearly every aspect of the financial system (such as financial derivatives) exist as a side effect of the current regulatory framework. It's not that we don't have enough regulations--it's because the existing framework is buggy.
Re:The whole SOX compliance thing was silly. (Score:5, Interesting)
That's exactly the problem SOX has today, too. I was in the middle of a SOX audit at some large company over here that should remain unnamed to protect the guilty.
Aside of some rather ... fantastic requirements (like, administrators being not allowed to be able to read data but are responsible for its backup), we were doing checklists. Do this, check. Do that, check. Why? Don't ask. Just do it. Yes, it's pointless, yes, we know that (this is not a coworker talking, this is from the auditor), but it's in the book, so do it. We documented features that didn't exist anymore, we documented workflows that are neither relevant to the software nor ever used (or, if used, could be interpreted in any way wrong), and we were delayed by over two months in a project (costing about a manyear of work, for fluff).
The data we produced this way does in no way document the software, neither technically nor as an instruction manual. It does not show what the software does. It does not inform anyone about how values are calculated or why certain flags are being set. It does not give an auditor any relevant information that could enable him to identify something that could be used to "steal" money or hide a leak. It is utterly and completely worthless, but it does adhere to the SOX requirements.
And that's what's wrong about it. Companies don't want SOX to work. The people in the company that deal with SOX view it as a nuisance and something they want out of the way because it cuts into their actual work. Auditing companies only want to check off the requirements because it's the fastest way to get their money for auditing the company.
In short, NOBODY involved actually wants SOX to work.
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My slogan will be, "Status quo is the way to go."
I have one sure way (Score:3, Funny)
One sure way that would work is to mandate that all products sold in the USA have a particular percentage of American Content; and this does not refer to simple "value added" per se.
What I am talking about is the gross importation of finished, ready-to-use goods like automobiles and other big ticket items. If this mandate were in place, there would be thousands of jobs created across this great land.
There was talk that Boeing's 787 Dreamliner is more than 67% "foreign!" This is unacceptable. There was a report that if the liner were just 70% American made, this would create 27,000 jobs.
Can we even count the jobs that have gone to Mexico and Canada? GM's Silverado and Suburban are all made in Mexico. Those jobs would be right here.
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Once local workers are willing to compete with workers in the rest of the world, then you'll start seeing more products made locally. As long as they keep demanding compensation disproportionate to their value, they'll be passed over.
(For the record, I live in metro Detroit.)
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Ok, define "American Content" in a way that can't be twisted and turned by companies. How about an US company manufactoring the product abroad. It's a US company, so it's "American Content". Or how about an "American Company" constructed near the border to Mexico, employing Mexicans for slave labour wages (or anyone who'd work for a few cents an hour)? Or only employing people who can't really complain about bad working conditions because it's either this job or none (ex-cons come to mind)?
And how would you
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I suspect rules like that (which lead to tariffs and import duties) are against the WTO rules.
We signed onto this plan so we are pretty much stuck with it now. It mandates global free trade amoungst member countries. So you can't select preferences like this - it is called "protectionism" and isn't allowed.
Bush tried this with steel imports already and got smacked down. Bet Obama tries again, soon. He will likely suffer the same fate.
The whole financial system is corrupt (Score:2)
SOX is a bit player in a giant swindle. The jobs problem has nothing to do with the lack of venture capital. The problem is the economy is up to its eyeballs in debt, and there's no money to pay the interest due.
This is due to the debt-based nature of our financial system. See Money and the Crisis of Civilization [realitysandwich.com] and I Want the Earth plus 5% [relfe.com].
If the congress wanted to create jobs, it would issue interest-free money (such as Abraham Lincoln's United States Notes [themoneymasters.com]) and spend it directly into circulation on wort
SOX created lots of Director jobs (Score:2)
By limiting the number of boards you could participate on, there are now more job available to serve on the Board of Directors.
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The only thing that changed is that some top level managers now have a lot more spare time since they don't have to rush from meeting to meeting anymore and stuff their faces with appetizers.
You don't think limiting their income would give them any incentive to take their job more serious, do you?
Axe red tape and management (Score:4, Interesting)
Simple as that. The boat sinks when you try to make it float with too much brass on board, and you don't win wars with more officers than soldiers. Likewise, you don't run a business sensibly when most of your workforce is concerned with administration and organisation instead of production. There are productive companies here (Siemens, I'm looking your way) that are already called "banks with a real estate branch, and a production department so they don't have to adhere to banking standards".
Get back to production. Produce something that the economy needs instead of administrating your own demise.
And to do that, I do agree with the original poster. Get rid of worthless "auditing standards" that didn't produce anything but new jobs for more beancounters. The SOX doesn't do anything. It is another standard to fulfill to the barest minimum whenever some auditing goon arrives, who in turn doesn't care jack whether the company's bosses embezzle money but who just wants to check whether the requirements are met. Tell you something: The requirements are pointless. There are already more than enough ways to circumvent them and go ahead with the old fashion ripping off of investors that always existed. Either start really auditing (but then, some companies would get into serious troubles...) or do away with it. What we have now is a band aid that does at best cover up the bleed, but only 'til it's soaked. Then we slap on another band aid and hope nobody notices that the wound does not close and needs surgery. Yes, that's expensive and it could kill the patient, but either is better than having a thousand people bleed for blood donations time and again.
Ok, away with bad analogies. I'm sick of seeing my taxes being poured into companies that should by all means crash and burn. If you want to save them, save them. Pick them up, fire everyone from management (NOT the workers, please, they're the one that MAKE money, management is what BURNS it!) and replace them with people who can do their job. I really don't understand why one would give people who have clearly shown they are incompetent and unable to handle the responsibility even MORE money to sink MORE money. Fire those fuckers, replace them with people who know their job, and you can have my tax money!
Just clone him (Score:3)
If only... (Score:2)
If only more companies followed the Ferengi rules of acquisition.
Rule of acquisition #35. War is good for business.
We are currently at war. If more businesses catered to the war effort there would be more jobs... Doesn't matter if it is in Silicon Valley or not.
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"Rule of acquisition #35. War is good for business."
That's rule #34
Rule #35: Peace is good for business.
Source:http://memory-alpha.org/en/wiki/Rules_of_Acquisition
I remember that Jadzia also mixed those two up.(forgot which episode though)
Now where's my official geek-card.
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Take in each other's laundry (Score:2)
Everyone knows that taking in each other's laundry is the key to economic activity. We need a Federal law making it a crime to do your own laundry and a trillion dollars appropriated for the SBA to sudsidize laundry startups and soon we'll all have jobs.
What? You don't like folding laundry? Not to worry. The laundry industry will have to be properly regulated, of course: now that the free market has been discredited you'll be able to get one of the hundreds of thousands of Federal jobs inspecting and au
Why would anyone want to CREATE jobs? (Score:2)
Progress would be the elimination of jobs. Then we sit back in leisure as our robot slaves toil for our benefit.
PWC & Madoff (Score:2)
Price Waterhouse Cooper - one of the biggest SOX auditors - are also the brilliant investigators who audited Madoff [reuters.com].
If you can't find billions of dollars worth of fraud - the largest Ponzi scheme in history - I must question the purpose of audits.
Baloney. It's "offshoring" that killed SV (Score:4, Insightful)
Silicon Valley used to be about manufacturing. ICs were actually made here, along with many of the products that used them. Intel, National Semiconductor, and HP all had big manufacturing facilities in Silicon Valley. National Semi watches and HP calculators were made in Silicon Valley. Amdahl mainframes were made here. Dozens of disk drive companies made hard drives. Apple used to make Macs in Fremont.
When the manufacturing went offshore for cheaper labor, the production engineering followed. Slowly the fab technology industry moved to Japan and Taiwan. Then the actual IC design work went offshore. Now, the entire consumer electronics industry is outside the US.
Anyway, Sarbanes-Oxley doesn't apply at all while you're venture-funded. Only at the IPO stage does it matter. At that point, you have to provide a very detailed prospectus, which isn't a new requirement. Sarbanes-Oxley isn't that much of a hassle to comply with for a straightforward manufacturing company. Only when the financial structure is "creative", with special-purpose entities, multiple corporations under one parent, and similar gimmicks, is compliance a problem. That's why the WSJ is grumbling - it makes financial gimmicks less desirable.
Sarbox kills productivity (Score:5, Interesting)
Sarbox kills productivity. I have a customer who won't let me log in to do work because their auditor claims that if they ACTUALLY LET ME WORK, they'll have no control over, nor knowledge of, what I've done -- and Sarbox requires that they have both. It's an evil law and MUST DIE.
So creating jobs is a good thing? (Score:3, Interesting)
'Creating jobs' isn't necessarily a good thing, no matter how many times people say it.
What really matters is output and a person's time. It's possible that more jobs will output more, whilst also offsetting the disadvantage of the time taken for that new job.
However, ideally, we should be looking to *reduce* jobs, whilst maintaining efficiency/output, or even increasing efficiency. When certain tasks become automated, that happens naturally, and it doesn't become a loss of output, but frees up someone's time. Which is a Good Thing.
In the end, we can use that time for socialising and become explorers, artists, composers, writers, thinkers, recreationists and scientists/researchers (that's not so easy to automate of course).
Leaving the work to robots/computers.
Re: (Score:3, Interesting)
With a social security type setup (where jobless people will get at least enough money to survive), that shouldn't be a problem. One needn't be jealous of those people, because they're getting less or far less than the paid workers. But in the end we all prosper.
There's also the risk of an economical downturn where maybe a proportion of those jobless people will suddenly be needed. So not only is everybody richer, but the economy has a safety net.
Comment removed (Score:3, Interesting)
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I agree with your points to an extent, but unfortunately we are in an era of extremely popular class warfare. "I have less money because that guy has more money".
It's an incredibly simplistic economic worldview, and it is closely tied to the worldview that doesn't understand that corporations don't pay taxes. If the corporation can't pass it's expenses onto the consumer or customer, it is no longer in business. Every expense is and should be passed on to the customer in the form of pricing.
But for people
Re: (Score:3, Interesting)
Comment removed (Score:4, Interesting)
SOX sucks, but it is NECESSARY (Score:3, Interesting)
If you don't think that SOX is necessary, then you don't understand what it does.
Sarbenes-Oxeley is forcing all public companies to formalize their financial processes. What it is akin to is forcing programmers to document their code, not just comment it, but to create product and design specifications. This is so that it creates transparency so that outsiders, such as investors or auditors, can understand the flow of finances throughout the company. For most large companies, it probably didn't make a huge impact, but where it did make the most impact was for small and medium-sized public companies. It sucks, but it protects investors.
Why did they implement it? Because of the widespread fraud from the dot-com boom/bust. Before some fly-by-the-night startup can go IPO and make billions of dollars, they will need to submit themselves to this formalization of financial processes so that people can understand exactly what is going on. It sucks, it is onerous, but it is necessary.
Simple Answer (Score:3, Insightful)
Remove the veil of corporate protection from officers and members of the board of directors. Make them, explicitly, jointly and severally, personally liable for all debts and obligations of the corporation. Make them criminally liable for any acts committed by the corporation.
Then you can eliminate SOX. There will still be problems, but you'll have asses to kick.
Re: (Score:2)
It has been argued, actually, that all the additional regulations over the last few years have made fraud *easier*. The regulators are so busy dealing with the additional regulations and paperwork that they don't have time to investigate other stuff.
Meanwhile, fraudsters just lie to the regulators like they do to everybody else. If somebody is already breaking the law, they're generally not going to have any problem breaking the new law too. You know... That whole "If you outlaw guns" thing...