andrewlgood

So how do the people effect change? As career bureaucrats generally cannot be fired, how does a government elected in a landslide make change when they only people they can solicit information from are the career bureaucrats from the prior regime?

The industries have many of the most knowledgeable people. Ideally you would have an adversarial process similar to US courts. People representing different viewpoints vigorously representing their opinions with agreement on facts and on what the actual points of difference are.

Agreed. That is why there is a Constitution with Amendments that describes the rules and why it requires a supermajority to change them.

How does the author think Democratic Republics work? How do the representatives become knowledgeable about the numerous topics they need to vote on?

If one group puts more resources on a specific topic, they may have an outsized impact. We certainly see this with the teachers unions.

How is this different than anything else? Legal matters? Healthcare? Automobile purchases?

I must confess, I do not understand the point the author to make. Are they saying that there is no lobbying in Europe, that it is a uniquely American pasttime? That is not my understanding given a cursory internet examination.

So then, are they stating that all lobbying is corruption, including European lobbying, and Americans refuse to understand this while Europeans understand they are corrupt?

Is the author suggesting that only in the US is lobbying corruption while in Europe lobbying is just and moral activity?

Full agreement. The world is moving forward. This just happens to be the current area of aggressive advancement.

Drive deeper. Why is Wolfram Alpha ok and LLM not? Are calculators ok or too high tech?

Why are people giving mathematicians such delicate treatment? When steam-powered looms elimnated thousands of textile worker jobs; farm machinery took farming from roughly 50% of US labor in mid-1800's to 2% today; coal mining mechanization eliminated 80% of US mining jobs from 1920 to today; automated phone switches eliminated the entire profession of switchboard operators; etc. Even low tech improvements such as standardized containers for ocean transport eliminated thousands of jobs as longshoremen were no longer need to load and offload each item.

Does anyone bemoan these improvements?

I have seen hundreds of accounts receivable and accounts payable jobs eliminated as software developers created programs that could do much of their work faster, more accurately, and cheaper. Did the software development community bemoan the lost profession ap AP/AR Clerk? No, they bragged about the increased efficiency and cost savings.

Why are we bemoaning that technology is making PhD mathematicians less necessary? What is the goal, a better understanding of the world around us or employment for select professions?

So how do you solve the problem of the company investing in their employees to make them more valuable and then the employees go to another company to get paid more (because that company does not spend on developing employing employees) or the employees leave to start their own company to compete with their original employer?

Silly argument. Everything in gravitational physics goes back to Newton? Who cares about Convex Optimization if you do not undertand gravity? Math goes back to Euclid and the Greeks?

Mankind has consistently built upon existing knowledge. "If I have seen further, it is by standing on the shoulders of giants. (Newton)"

IMHO, what we are seeing is the US was generating 50% of the world's GDP at the end of World War II. In that era it could afford to many non-economical things - Marshall Plan, funding research at universities, etc. The US is no longer the dominant economic engine. It actually has to prioritize its spending. Money spent on research is money not spent on food stamps, housing the homeless, defense.

What is never mentioned in these discussions is how much money has been spent on research that did nothing. Advanced nothing. When that is factored in, what is the ROI of university-based research?

Not correct. Capital Gains taxes depend on the holding period. Short term capital gains (stock held less than a year) are taxed at the same rate as salaries (ordinary income rate). Long term capital gains (stock held at least a year), are taxed on a reduced level that peaks out at 20% (depends on total taxable income) with a possible additional 3.8% Obama Net Investment Tax.

Have you ever been a c-staff? C-staff are employees as well. Usually more expensive employees. Well run companies are trying to figure out how to win in the marketplace. To do this they hire the employees they need to win. Investors do this with CEOs.

I agree that it is much more difficult for a CEO to get fired than a line employee as CEOs have significant influence in picking their boarda. However, the consequences to a company of replacing a CEO are generally more significant as well.

Different markets. Companies are created to allow investors to create profits selling something (things, services, etc). Companies compete with other companies to attract capital. Companies which offer higher expected returns for comparable levels of risk will attract more capital. This reflects supply and demand for capital.

Employees are part of a labor market. Supply and demand in the labor market drives compensation levels. When you have a rare skill that is perceived to be valuable, you can get higher compensation - e.g. Meta AI researchers getting $100M contracts or Juan Soto getting a $750M baseball contract.

As mentioned elsewhere, some companies give stock to employees. In my experience this is for one of two reasons. 1) Employee retention - stock grants tend to have multiyear vesting periods designed to keep the employee at the company. 2) Start up companies that do not have the cash to pay employees.

None of these explanations would lead to simply paying employees more with excess cash (unless the cash was created by a group of employees that you were trying to retain).

Buybacks do not necessarily create an increase in stock price. Economically no value has been created. Cash on a balance sheet has simply been exchanged for shares. The people selling their shares in the buyout get the "value" of the company at that moment. The remaining shareholders now own a larger percentage of a smaller company i.e. a company that no longer has the cash used for the buyout.

Markets tend to reward companies that use buybacks as there is a belief the buybacks are a demonstration of discipline by the management team. Conceptually COMPANIES SHOULD BUY BACK STOCK IF THEY DO NOT HAVE BETTER ROI PROJECTS IN THE PIPELINE. This frequently happens in mature industries.

As noted above, buybacks are another means to return cash to investors. Today, in the US, the tax rate on qualified dividends and long-term capital gains are equivalent for most shareholders. This has not always been the case. When tax rates for capital gains are lower than dividends, buybacks are a more efficient means to return capital to investors.

Buybacks also allow for more tax planning. When dividends are issued, the investors have to pay taxes on them at that time. Stock buybacks allow investors to choose when they want to pay taxes. They can sell into the buyback and pay taxes now or hold the stock and pay taxes at a later time.

Buybacks are can be part of normal corporate capitalization decisions - what is the appropriate debt to equity ratio for the company.

Finally, changing dividend levels has its own impact on stock price. If a company increases its dividend, them market expects it to remain increased. In this case the stock price goes up as investors expect more dividends in the future. When a company cuts its dividend (rare event), the stock price drops dramatically as the market punishes company not only for the reduced expectation of future dividends but also because companies only cut dividends when they are having severe problems. Some companines issue a special dividend related to a one-time event such as selling a division. The stock price does not do much in these events.

All of this is to say that stock buybacks are not why corporations reduced basic research investment. I was at GE watching the famous research centers getting cut. The bottom line was the research coming out of the centers was not creating a meaningful ROI. At one point the researchers went to the various GE businesses looking for projects where their expertise could add value - an internal consulting group. They gave up after a year as there was so little success. Corporate research centers are expensive. They need to earn their keep.

As a former Finance person, it is interesting to see the panicked attitude of programmers toward AI and the resulting loss of job opportunities. Programmers have eliminated more jobs than almost any other group of people on the planet.

I began working in the late 80’s. Throughout my career I saw the steady reduction in Finance organizations as roles were reduced and/or eliminated by the introduction of computers and software. First it was spreadsheets that eliminated the tedious work of writing on 13-column sheets to create financials. Then it was accounts payable clerks who were eliminated as EDI sent better quality information that needed less reconciliation and fewer humans touching it. I watched 90% of accounts receivable clerks who were eliminated as software could create the invoices from data in the system and automatically match payments to invoices. Then it was the bank reconciliations teams that were reduced as better information flow between the banks and companies allowed the automation of daily bank reconciliations. All of these were thought by the companies to be great advances due to technology. They eliminated “non-value-added” work and made companies more efficient. They also eliminated lots of jobs, particularly entry-level jobs.

My intuition is that other functions saw similar increases in labor productivity. Why is what is happening to programmers today any different?