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Policy for Growth and Innovation

54 pointsby gatsbyover 10 years ago

22 comments

ecopoesisover 10 years ago
What an incredibly naive view of the world.<p>As others have pointed out, reducing education to &quot;moar money!&quot; is simplistic.<p>Reforming immigration only seems good at lowering employer costs. Are there any studies that show it would help growth? Maybe we should instead focus our efforts on helping the unemployed and underemployed already in the US get training and jobs.<p>Cheaper Bay Area housing only helps people in the Bay Area. There&#x27;s a whole lot more to the United States. Wouldn&#x27;t a better policy be to try to make it so businesses in Detroit, or Buffalo or any other dying city can be as successful as those in Silicon Valley?<p>Reducing regulation: the old cry of business owners everywhere. Regulation can be good. Sam uses the example of drug companies, and yes, bringing new drugs to market is expensive. But the consequences of screwing up or literally deadly. See the example of Vioxx. Isn&#x27;t one of the rallying cry of hackers right now Net Neutrality? How do we think that&#x27;s going to be accomplished outside of regulation? Isn&#x27;t the lack of regulation (not calling broadband Title II) what got us into this mess?
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nhaehnleover 10 years ago
<i>&gt; Very low growth and a democracy are a very bad combination.</i><p>Why? It would be interesting to see a justification for this.<p>Very low growth and <i>capitalism</i> are a problematic combination if you believe Piketty, in the sense that the combination can become poisonous for democracy and many other values of the enlightenment.[0]<p>But I don&#x27;t see how democracy is necessarily incompatible with very low growth (or even a shrinking economy). Note that I still believe growth is a good thing regardless of this (unlike some people especially from an environmentalist bent), but it irks me when statements like this are thrown around with an unjustified air of authority.<p>Other than that, sama really misses the elephant in the room, which is plain old macroeconomics. This is more of a problem in Europe than in the US, but bad macroeconomic beliefs are pretty pervasive within the political elite, to the point where the same person will wring their hands asking for how to enable growth, but refuse to listen to what mainstream <i>academic</i> economists are saying (let alone heterodox academic economists).<p>[0] With the typical rate of growth below the typical rate of return on capital, society necessarily becomes more divided by wealth and poverty.
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sudioStudio64over 10 years ago
Business people often mistake their success in one area as a validation of all their ideas. There is a kind of, and I really don&#x27;t mean to sound condescending or accusatory, naïve optimism about the motives of other members of their class. Getting rid of regulations on the production of medicine, but focusing on regulating AI...a subject which has recently been in vogue among the digerati...kind of illustrates how radically divergent the priorities of that political cohort are from the middle class.
solveover 10 years ago
Student loans! Nothing is more profoundly affecting young American&#x27;s ability to innovate after they&#x27;ve left school, than the growing, crushing debt from student loans.<p>It&#x27;s the primary reason that I&#x27;ve moved out of the US for the last several years. I didn&#x27;t want to waste all of my 20&#x27;s and 30&#x27;s, never being able to take sufficient time off to build the innovation that I want to exist.<p>On the flip side, not having this debt while working in the US is a huge relative advantage for recently-immigrated foreigners.
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Alex3917over 10 years ago
&gt; Fix education.<p>- The disparities in education levels in the US are primarily a product of parenting styles, not the school system. Having a better school system would obviously be good, but it&#x27;s probably not possible to improve our school system enough to overcome the contribution (or lack thereof) from parents.<p>- We currently have a teacher retention problem, which may be more important than the problem of not being able to fire bad teachers with tenure. Roughly 50% of teachers leave the profession within the first five years, and that&#x27;s after investing a substantial amount of time and money to get the relevant masters degree and certifications. While it should be easier to fire bad teachers, the problem is that in places where it&#x27;s easy to fire bad teachers, good teachers often end up getting fired for political reasons. So any system that makes it easy to fire bad teachers may well end up creating a system with a higher ratio of bad teachers to good teachers.<p>I agree that the root of most of America&#x27;s problems revolve around education, but spending more money on education isn&#x27;t going to fix (or even ameliorate) our problems unless it is deployed very judiciously. (And it may well be possible to improve the school system by spending less money than we spend currently.)
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pen2lover 10 years ago
Good essay, but one small nitpick:<p><pre><code> The problems with education are well-documented—teachers make far too little, it’s too difficult to fire bad teachers, some cultures don’t value education, etc. Many of these are easy to fix—pay teachers a lot more in exchange for a change in the tenure rules, for example—and some issues (like cultural ones) are probably going to be very difficult to fix. </code></pre> As another HN&#x27;er has pointed out, teacher pay or funding is absolutely not the issue. Per rayiner:<p>Judge Posner on such comparisons: <a href="http://www.becker-posner-blog.com/2011/01/the-pisa-rankings-and-the-role-of-schools-in-student-performance-on-standardized-testsposner.html" rel="nofollow">http:&#x2F;&#x2F;www.becker-posner-blog.com&#x2F;2011&#x2F;01&#x2F;the-pisa-rankings-...</a><p>More numbers: <a href="http://super-economy.blogspot.com/2010/12/amazing-truth-about-pisa-scores-usa.html?m=1" rel="nofollow">http:&#x2F;&#x2F;super-economy.blogspot.com&#x2F;2010&#x2F;12&#x2F;amazing-truth-abou...</a><p>The solution is not to pay teachers more or have better teachers. I&#x27;m not convinced test scores are even all that sensitive to teacher quality within a wide range. The solution is to figure out a way to deal with inner city Chicago and places like it. The legacy of slavery, segregation, and white flight. A place where kids come from generations of uneducated parents and go to school fearing for their physical safety in the face of gangs, drugs, etc.<p>&gt; Sometimes the government people ask “Would you ever move YC out of the US?” with nervous laughter? I really like it here and I sure hope we don’t, but never say never.<p>Hah. :) No you won&#x27;t. Or, not that you won&#x27;t, rather, it seems beneath you guys to say something like this. Of course you would, and should move out of the US if it proves to be a profitable decision, it just seems a little underhanded to use it as a political bargaining tool to get your aims. But I understand now that this is how the game works, so I guess I&#x27;m undecided about how I feel about this.
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bokonistover 10 years ago
&quot;<i>Aside from the obvious and well-documented economic benefits (for high-skilled workers especially, but for immigration more generally), it’s a matter of justice—I don’t think I deserve special rights because I happened to be born here, and I think it’s unfair to discriminate on country of birth.</i>&quot;<p>I&#x27;m going to leave aside the issue of high-skilled immigration for moment and talk about Sam&#x27;s addendum of &quot;immigration more generally.&quot;<p>Low-skilled immigrants from Africa and Latin America have not yet shown evidence of assimilating into the American mainstream. Income and educational attainment is still much lower, the communities are still segregated, etc.<p>So there are two possibilities:<p>Possibility 1) It will be just a matter of time before they assimilate, just as it took time for the Irish or Italians to assimilate.<p>Possibility 2) For a variety of reasons, assimilation across racial lines is much more difficult. It is even more so when there is a fluid border with Mexico, and the U.S. no longer does the same sort of cultural imperialism it did in the early 1900&#x27;s in order to assimilate immigrants. Thus long term, assimilation will not occur. Long term, the U.S. will end up looking a lot like Brazil, with a white overclass, a brown helot class, and a black underclass. Technology growth will slow as it becomes low status for the educated white overclass to do real work. Political corruption will grow as voters will vote as tribal blocks, and votes are determined by buying the votes, rather than making good policies for the nation.<p>I don&#x27;t want to get into an argument about whether 1) or 2) is more likely. But I will argue that there is at least a 5% chance that 2) is true. If 2) is true, it would fundamentally change the character of the U.S. in a very negative way.<p>If we slow down immigration, and 1) turns out to be right, then we can always let more immigrants in later. If we accelerate immigration, and 2) turns out to be true, <i>it cannot be undone</i>. Not ever. Thus even if there is a 5% chance that 2) is right, it makes sense to slow down third-world immigration, until we can prove that assimilation will occur.
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bokonistover 10 years ago
Question for Sam about the issue of high-skill immigration: Does YC have any sort of tracking of the number of engineers blocked from going to YC companies because they could not get a Visa? Could Sam write an essay with some anonymized examples of what happens when a skilled worker is prevent from working for a YC company? This kind of first-hand evidence can go a long way toward convincing other people of your point.
apiover 10 years ago
What I keep saying about SF&#x27;s housing crisis is that it&#x27;s this:<p>&quot;Economic growth, affordable housing, NIMBYism, pick two.&quot;<p>The Bay has picked the first and the last. I also get the sense -- though I don&#x27;t live there -- that the people protesting the explosion of rents and house prices are the same people who insist that nothing too tall or big be built and that every new construction be subjected to a whole slew of restrictions around how &quot;green&quot; it is, how it will &quot;impact the local community,&quot; etc.<p>While these concepts aren&#x27;t bad in and of themselves, when applied at the civic scale in this way they typically just provide opportunities for obstructionists who want to keep prices high. So in the end it ends up being a kind of Baptists-and-bootleggers alliance -- in this case greens and preservationists with slumlords and banks working hand in hand to keep rents and costs high.<p>Activists of virtually every political persuasion tend to be horribly naive about the ways their interests and concerns can be twisted to serve agendas they may not otherwise support.
hugsover 10 years ago
I&#x27;m glad he specifically mentioned the cost of housing. This is the main reason I&#x27;ve moved away from the Bay Area and currently live in Chicago (Oak Park, just west of the city). ($300-400K gets you a nice 3BR&#x2F;2Bath single-family detached house with a yard near good schools near public transportation and 10 miles from downtown.)
Zikesover 10 years ago
I find it odd that this plan for &quot;fixing innovation&quot; doesn&#x27;t mention anything about patent reform.
saosebastiaoover 10 years ago
I realize this is an essay, and I realize that it intentionally takes the normative over the positive, but there really needs to be some [citation needed] tags all over the place. There are always some liberties that can be taken when you speak from a position of authority, but this is like listening to a presidential debate. If you are trying to influence the policy and not the election, you need to be able to influence people that can read past your authority and posturing.
justizinover 10 years ago
I&#x27;ve really liked a lot of what I&#x27;ve read from Sam since he has taken the reigns, but I really don&#x27;t like the jingoism in the immigration language.<p>The United States needs to stop trying to be &quot;the greatest nation in the world&quot;, and we need to participate in a globally and locally aware economy.<p>I&#x27;m certainly not against all immigration, but the problem is, an essay like this is better used to support that argument than to make any substantive change to education. I started training for my craft at 12 years old, under the direction of my grandfather, who was the Director of Engineering at one of the largest research institutions in the world.<p>Having all that going for me, he still used the fact that my poor, stupid parents had to ask him for help to cover the cost of raising me to discourage me from developing the skills that actually made me employable - he was adamant that I become Microsoft certified instead of learning Linux. A bit of a tangent intended to illustrate the american exceptionalism, the greatest generation. This old fart wanted me to work with Windows, and work for the NSA, at 15. For friendship, mentorship and often employment, foreigners were my greatest resource, in their home lands, over The Internet. Why do all the &quot;smartest&quot; and &quot;best&quot; need to live here, on land that&#x27;s already stolen?<p>It&#x27;s been a great struggle over the past 21 years to continue educating myself and to find opportunities to cover my living costs that wouldn&#x27;t forcibly detract from what I would learn. I lived in SF for nearly ten years under the poverty line, sometimes working for entrepreneurs for under minimum wage.<p>People in the Bay Area tend to stop looking for workers in the US when they reach Fremont, sometimes when they reach the end of their own driveway.
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vasilipupkinover 10 years ago
&quot;If I had to take a company public, I’d love to only have my shares priced and traded once every month of quarter.&quot;<p>sorry, that&#x27;s a bit non-sensical. The enormous uncertainty associated with lack of transparent pricing would lower both private and public market equity valuations. We want prices to be as transparent as possible
bdcsover 10 years ago
&gt;A third change would be something to incent people to hold shares for long periods of time. One way to do this would be charge a decent-sized fee on every share traded (and have the fee go to the company); another would be a graduated tax rate that goes from something like 80% for day trades down to 10% for shares held for 5 years.<p>&quot;However most empirical studies find that the relationship between [Financial Transaciton Tax] and short-term price volatility is ambiguous and that &quot;higher transaction costs are associated with more, rather than less, volatility&quot;.&quot; - <a href="https://en.wikipedia.org/wiki/Financial_transaction_tax#Effect_on_volatility" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Financial_transaction_tax#Effe...</a>
ap22213over 10 years ago
Regarding education, do the people who need it the most (underutilized adult workers) clearly understand how to pursue it? Do they understand the costs, benefits, risks, and rewards? I doubt it.<p>Policies should emphasize the of dissemination information that ties education to opportunity. That way people can make informed decisions (e.g. &#x27;if I do these things, spend this much money, spend this much time, then I can expect to make this much money, in these metro areas&#x27;).<p>Maybe education is partly a design problem? What if education was just easier to plan for, obtain, validate, and apply?
ojbyrneover 10 years ago
Feeling some dissonance:<p>&quot;Public companies end up with a bunch of short-term stockholders who simultaneously criticize you for missing earnings by a penny this quarter and not making enough long-term investments.&quot;<p>&quot;Target a real GDP growth rate. You build what you measure. If the government wants more growth, set a target and focus everyone on hitting it.&quot;<p>I can&#x27;t fully express what I dislike about these two statements, they just seem conflicting. Perhaps suggesting some of the Tea Party-ish coddling the &quot;job creators&quot; and punishing the &quot;welfare mothers.&quot;
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gautambayover 10 years ago
&gt; <i>It amazes me that I can become relatively proficient on any subject I want, for free, from a $50 smartphone nearly anywhere in the world.</i><p>As the internet increases parity in education globally, immigration reform will become even more important for the US to retain its edge, as people born outside the US will comprise a larger percentage of the world&#x27;s best entrepreneurs.<p>As an immigrant trying to fix education, #1 (fix education) and #3 (education reform) ring especially true for me, but it&#x27;s also fascinating to think how closely-tied the two are.
jqmover 10 years ago
The fairness angle (regarding immigration) is kind of strange. If the country was actually concerned about &quot;fairness&quot; for non-citizens, it would have had a substantially different foreign policy over the last 50 years.<p>&quot;Don&#x27;t deserve special right because I was born here....&quot;. Uh, ya, that is kind of the definition of a citizen of a sovereign country. At least until the emergence of an enlightened global citizenship system (eventually inevitable, and I for one will welcome the day...).
pskittleover 10 years ago
No offence to sam but how many people who can affect policy changes read his blogs?
fivedogitover 10 years ago
Here we go again on the immigration thing. Very disappointing. It&#x27;s as simple as this: If you increase supply to meet a demand, then prices will go down. That benefits businesses and, in turn, VCs.<p>Two things, specifically, irritate me about Paul&#x27;s and Sam&#x27;s argument in favor of immigration reform.<p>1. It&#x27;s stated with this phony &quot;non-discrimination&quot; angle. &quot;How dare you xenophobes deny others the right to come into the country and compete for jobs?&quot; My (and others&#x27;) opposition to immigration reform is based on a desire to stop the ever-progressing tilt of power and leverage towards businesses and away from labor. To suggest that we are scared of competition (or worse) is offensive.<p>2. The idea that there aren&#x27;t enough engineers to go around is simply not true. I know several capable engineers (myself included) who have struggled to find work because companies (a) want you in a tech hub already (b) seem unwilling to train someone from 90% to 100% to do the job and (c) want to pay as little as possible. It feels lazy. &quot;We really don&#x27;t want to relocate and train folks, so let&#x27;s just change the immigration laws.&quot;
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bokonistover 10 years ago
Sam says &quot;<i>It amazes me that I can become relatively proficient on any subject I want, for free, from a $50 smartphone nearly anywhere in the world.</i>&quot; but he also says, &quot;<i>I think it’s most important to fix the broken parts of the current system, but also to decide we need to spend more money on education....Spending money on education, unlike most government spending, actually has an ROI—every dollar we spend on it ought to return more dollars in the future.</i>&quot;<p>So the cost of learning has become much cheaper ... but we need to spend even more money on education? Just because something is important does not mean you can spend money to improve it.<p>It is important to be healthy and strong. But there is literally no way I can spend more money than I do now to be substantially healthier or stronger. Once I spend enough to eat lots of meat and veggies, get some training on proper lift weighting form, get a gym membership with access to weights, etc, there is nothing else I can do.<p>The same goes for most forms of learning and skill improvement. Once you spend enough to pay for equipment and a few hours a week of mentorship, there is literally no way to spend more money to improve outcomes.<p>So my question for Sam is, what is the amount of money we need to spend to &quot;max out&quot; on learning? What specific things do we need to spend that money on?<p>Learning consists of four components:<p>1) book learning<p>2) practice<p>3) mentorship&#x2F;coaching<p>4) motivation to do the above 3 things<p>As Sam points out, it costs very little money to grant access to an almost infinite amount of book learning. For #2, practice, you just need time. So you only need to spend enough to free someone from the need to work a job, so they have time to practice, you don&#x27;t have to spend much on the school itself. Component #4, motivation, is usually a matter of peer group, role models, and rational expectations, it shouldn&#x27;t need to cost money.<p>Component #3, mentorship, does cost money. However, the implication of &quot;spending more on education&quot; is usually that we should spend more money on schools and teachers. School teachers and professors, usually make very poor mentors, because they are not practitioners. In software, most people I know got much better practical mentorship on their first few years on the job, than they did in school.<p>So if we want to &quot;fix education&quot;, we need to get students good mentors. That would mean replacing our teachers and professors with practitioners who maybe spend a couple years on the job, then a year teaching, then a couple years on the job, etc. Or it would mean instituting an apprenticeship system, so people could learn in a workplace environment in a safe and productive way.<p><i>If the government wants more innovation, then it should stop cutting the amount of money it spends producing it.</i><p>It seems like every week there is new post in Hacker News about how broken the grant system is. If we want to spend more money on research, we also need to fix the funding system so that the money isn&#x27;t just going down a black-hole.<p><i>Target a real GDP growth rate.You build what you measure. If the government wants more growth, set a target and focus everyone on hitting it.</i><p>Need to be very careful here. Futurists of the early 20th century thought that as technological progress advanced, more people could transition to activities of arts, craft, and leisure. If you target the GDP, or some new variation of GDP that still measures material output, you will make it official government policy to keep everyone on the treadmill, to produce more and more at the expense of transitioning to a art based economy.<p><i>One way to do this would be charge a decent-sized fee on every share traded (and have the fee go to the company); another would be a graduated tax rate that goes from something like 80% for day trades down to 10% for shares held for 5 years.</i><p>I agree with this. Another way to do it would be to simply enforce a 5% transaction tax on all stock sold within a year of buying it. That said, is there really anything preventing a CEO from just ignoring the ups and downs of the market?
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