10 ms·

i am a bull. i just think that we should talk about what the problems are. ignoring them is not a good way to fix them.

by sama 12y ago

sachinag 12y ago
Debt to GDP isn't a problem: http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP322.pdf http://www.peri.umass.edu/fileadmin/pdf/working_papers/worki... (very widely circulated paper, given that they lowered the boom on Reinhart/Rogoff)
- muzz 12y ago
  Yes, Altman's point #2 is essentially the Reinhart-Rogoff fallacy that was widespread a few years ago, before being debunked.
joelhaus 12y ago
You missed the trend of growing inequality. I think this is important because the marginal propensity to spend for someone low on the income scale is much higher than the wealthiest. Otherwise, good points.
toomuchtodo 12y ago
What if growth in the US is being prevented by technology innovation? If I replace 100 jobs with 1, and no further jobs are need for those 99 people, and that's the core of what technology does, growth in the traditional sense isn't possible. I agree that a basic minimum income may be necessary; I don't believe it'll fix the growth problem though.
- hipcactus 12y ago
  Tech Innovation kills existing jobs by replacing 100 humans with one machine, this is true. If you're a cab driver, you may not be ecstatic about self-driving cars. But those same technological advances invent new goods and services for an ever increasing population. More people are fighting over the same set of resources, which technology allows markets to distribute more efficiently. The new tech creates new demand no one knew was needed (e.g. the mainframe, the internet, mobile web, the blockchain). While it's tough luck for the 99 workers who are not in a position to learn new skills, the bet is that tech advancing will create more economic opportunities for the next generation (while improving the quality of life) and upgrading society like 'aging up' in Age of Empires or Civilization.
  - toomuchtodo 12y ago
    > But those same technological advances invent new goods and services for an ever increasing population. While I'd agree this has been the case historically, I'd argue this is no longer the case. > While it's tough luck for the 99 workers who are not in a position to learn new skills, the bet is that tech advancing will create more economic opportunities for the next generation (while improving the quality of life) and upgrading society like 'aging up' in Age of Empires or Civilization. Seems like a pretty big bet to take. Where are ~4 million drivers going to go when self-driving cars roll out? Bus boys? Service jobs? Technology is going to saturate the labor market with surplus labor (that labor having been automated away). History has shown us this does not end well.
    - JetSpiegel 12y ago
      >> But those same technological advances invent new goods and services for an ever increasing population. >While I'd agree this has been the case historically, I'd argue this is no longer the case. Better kill ourselves now, we've reached the End of History.
    - Rodeoclash 12y ago
      They'll live in a utopia free to pursue artistic and self improvement endeavours!
  - lsc 12y ago
    >While it's tough luck for the 99 workers who are not in a position to learn new skills, the bet is that tech advancing will create more economic opportunities for the next generation (while improving the quality of life) Sure. Personally, long-term, I think that will be true. The thing you have to understand, though, is that in the short-term, this hasn't been happening, for whatever reason, and the short-term, if it goes on for long enough, becomes the long-term. This is a problem that needs human effort before it will be solved. Now, some people argue that it's a macro thing; Corporations are sitting on a bunch of cash right now, and not hiring. Some of those people say that we need some inflation so that those corporations are incented to do something (which usually means hiring people) with that money. Personally, I don't understand macro. I understand Micro, though, and on the Micro level, I don't see a lot of entrepreneurs putting a lot of effort into figuring out how to create at-least-minimum-wage jobs for the less than awesomely skilled. I do see some effort being put into commoditizing third-world labor, you know, fiver and mturk, which you could argue is probably good on the global scale, but if you are focused on America, is decidedly counterproductive. I think solving this problem using market-based tools would be an awesome project. I think it would be a possible project, especially if we are okay with another "service sector revolution" type deal where unemployment is low, but most of the jobs are kinda shitty. (which would certainly be better than the current case.) Do you have an idea for a business that scales that could pay relatively unskilled folks better than minimum wage? The thing I do see is that many companies seem to be cutting customer service more than I think makes sense; Most of the time, I'd pay another 10% if I could get good customer service rather than a bad robot. Of course, I'm one of those nerds who would prefer a robot to a human, for most service, assuming the robot was good enough... but the robot usually isn't good enough, and I think most people would prefer a human, if the human and robot were equally good at solving the problem at hand. I think the problem, though, is good customer service isn't a low-skill job. If you can do customer service all day, every day, if you can do so without developing a deep hatred for humanity, you are a better person than I am.
lmg643 12y ago
i think the only point in here that represents a potential risk to startup investing is #1 - declining GDP. Basically, if we run into a recession, the risk is that asset values decline based on negative projected growth. when asset values decline, startup values decline even harder, since they are a risky/"high beta" asset. The rest of these charts are basically the background on the decline-and-fall of america, and I would say only tangentially relate to the startup ecosystem. the most important chart that you left out was the stock price of Facebook, which is riding/causing a wave of investor (and corporate) enthusiasm for all things social, which in turn benefits the startup eco system because they buy lots of companies, and drive the hype that a given company could be the "next" facebook or sell to them. Facebook (more so than google) seems appropriate for ecosystem barometer because: * they do the most audacious acquisitions, with due diligence that consists of weekend meetings eating strawberries - $17bn for whatsapp, etc. * Facebook is valued at $170 billion dollars, based on selling ads which I've never seen (because i use adblock+) and peddling to brands i also never engage with (because i only use FB to keep up with friends). that seems unsustainable IMHO.

i am a bull. i just think that we should talk about what the problems are. ignoring them is not a good way to fix them.

by sama 12y ago

i am a bull. i just think that we should talk about what the problems are. ignoring them is not a good way to fix them.

Debt to GDP isn't a problem: http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP322.pdf http://www.peri.umass.edu/fileadmin/pdf/working_papers/worki... (very widely circulated paper, given that they lowered the boom on Reinhart/Rogoff)

muzz 12y ago
Yes, Altman's point #2 is essentially the Reinhart-Rogoff fallacy that was widespread a few years ago, before being debunked.

joelhaus 12y ago

You missed the trend of growing inequality. I think this is important because the marginal propensity to spend for someone low on the income scale is much higher than the wealthiest. Otherwise, good points.

toomuchtodo 12y ago

What if growth in the US is being prevented by technology innovation? If I replace 100 jobs with 1, and no further jobs are need for those 99 people, and that's the core of what technology does, growth in the traditional sense isn't possible. I agree that a basic minimum income may be necessary; I don't believe it'll fix the growth problem though.

hipcactus 12y ago
Tech Innovation kills existing jobs by replacing 100 humans with one machine, this is true. If you're a cab driver, you may not be ecstatic about self-driving cars. But those same technological advances invent new goods and services for an ever increasing population. More people are fighting over the same set of resources, which technology allows markets to distribute more efficiently. The new tech creates new demand no one knew was needed (e.g. the mainframe, the internet, mobile web, the blockchain). While it's tough luck for the 99 workers who are not in a position to learn new skills, the bet is that tech advancing will create more economic opportunities for the next generation (while improving the quality of life) and upgrading society like 'aging up' in Age of Empires or Civilization.
- toomuchtodo 12y ago
  > But those same technological advances invent new goods and services for an ever increasing population. While I'd agree this has been the case historically, I'd argue this is no longer the case. > While it's tough luck for the 99 workers who are not in a position to learn new skills, the bet is that tech advancing will create more economic opportunities for the next generation (while improving the quality of life) and upgrading society like 'aging up' in Age of Empires or Civilization. Seems like a pretty big bet to take. Where are ~4 million drivers going to go when self-driving cars roll out? Bus boys? Service jobs? Technology is going to saturate the labor market with surplus labor (that labor having been automated away). History has shown us this does not end well.
  - JetSpiegel 12y ago
    >> But those same technological advances invent new goods and services for an ever increasing population. >While I'd agree this has been the case historically, I'd argue this is no longer the case. Better kill ourselves now, we've reached the End of History.
  - Rodeoclash 12y ago
    They'll live in a utopia free to pursue artistic and self improvement endeavours!
- lsc 12y ago
  >While it's tough luck for the 99 workers who are not in a position to learn new skills, the bet is that tech advancing will create more economic opportunities for the next generation (while improving the quality of life) Sure. Personally, long-term, I think that will be true. The thing you have to understand, though, is that in the short-term, this hasn't been happening, for whatever reason, and the short-term, if it goes on for long enough, becomes the long-term. This is a problem that needs human effort before it will be solved. Now, some people argue that it's a macro thing; Corporations are sitting on a bunch of cash right now, and not hiring. Some of those people say that we need some inflation so that those corporations are incented to do something (which usually means hiring people) with that money. Personally, I don't understand macro. I understand Micro, though, and on the Micro level, I don't see a lot of entrepreneurs putting a lot of effort into figuring out how to create at-least-minimum-wage jobs for the less than awesomely skilled. I do see some effort being put into commoditizing third-world labor, you know, fiver and mturk, which you could argue is probably good on the global scale, but if you are focused on America, is decidedly counterproductive. I think solving this problem using market-based tools would be an awesome project. I think it would be a possible project, especially if we are okay with another "service sector revolution" type deal where unemployment is low, but most of the jobs are kinda shitty. (which would certainly be better than the current case.) Do you have an idea for a business that scales that could pay relatively unskilled folks better than minimum wage? The thing I do see is that many companies seem to be cutting customer service more than I think makes sense; Most of the time, I'd pay another 10% if I could get good customer service rather than a bad robot. Of course, I'm one of those nerds who would prefer a robot to a human, for most service, assuming the robot was good enough... but the robot usually isn't good enough, and I think most people would prefer a human, if the human and robot were equally good at solving the problem at hand. I think the problem, though, is good customer service isn't a low-skill job. If you can do customer service all day, every day, if you can do so without developing a deep hatred for humanity, you are a better person than I am.

lmg643 12y ago

i think the only point in here that represents a potential risk to startup investing is #1 - declining GDP. Basically, if we run into a recession, the risk is that asset values decline based on negative projected growth. when asset values decline, startup values decline even harder, since they are a risky/"high beta" asset. The rest of these charts are basically the background on the decline-and-fall of america, and I would say only tangentially relate to the startup ecosystem. the most important chart that you left out was the stock price of Facebook, which is riding/causing a wave of investor (and corporate) enthusiasm for all things social, which in turn benefits the startup eco system because they buy lots of companies, and drive the hype that a given company could be the "next" facebook or sell to them. Facebook (more so than google) seems appropriate for ecosystem barometer because: * they do the most audacious acquisitions, with due diligence that consists of weekend meetings eating strawberries - $17bn for whatsapp, etc. * Facebook is valued at $170 billion dollars, based on selling ads which I've never seen (because i use adblock+) and peddling to brands i also never engage with (because i only use FB to keep up with friends). that seems unsustainable IMHO.