A couple of things hit me about this short article:
- Instead of saying 'Joe Shmoe founded Teach for America', they give the credit to the University (Prestigious Princeton!!) , i.e. 'Founded by a Princeton Graduate' ... a nameless graduate ! Saying 'Princeton' give the program the imprimatur for it's success .. the actual founder's effort seems secondary .
- They give no reason for the 'surge' in applications , so there is an implied undercurrent in the article that many graduates of top schools are 'giving back' and acting altruistically. My take is that a number of them are probably trying to get their college debt reduced by working 2 years for the program. Also many may have found the job market less than attractive for their particular major. The reporter didn't ask one question about 'why the upsurge in interest' ? He simply implies that the answer is probably positive, whereas the real reason may be more mundane and pessimistic, i.e. Humanities and social science grads , from top schools no less , laden with heavy debt, are being forced to work in the most crime-ridden and impoverished schools in America in a stagnating economy.
It may not be as dismal a picture as I've painted here but these could be significant reasons for the 'popularity' of the program .
- They don't indicate how many people who are placed by the program wind up completing their 1st year . Or go on to try a 2nd year , or more . How many take up teaching as a career? Outside of this program the dropout rate for new teachers is phenomenally high in cities like NY, especially in the toughest schools.
- The surge may be explained more by the economy being not so good at the moment (depending on your major to some extent) than altruism. So some people are looking at teaching as a stable job with good benefits and lots of time off and they have few alternatives.
If some of this is true then the value of a college degree, even at the best colleges, may be less than advertised . This is not something that the colleges want known, as another round of college freshman line up to pay close to $50K/year for their sheepskin.
May 14, 2008
Teach for America Sees Surge in Popularity
By SAM DILLON
Teach for America, the program that recruits top college graduates to teach for two years in public schools that are difficult to staff, has experienced a year of prodigious growth and will place 3,700 new teachers this fall, up from 2,900 last year, a 28 percent increase.
That growth was outpaced, however, by a surge in applications from college seniors. About 24,700 applied this spring to be teachers, up from 18,000 last year, a 37 percent increase, according to figures released by the organization on Wednesday.
The nonprofit program sent its first 500 recruits into American public school classrooms in 1990. It has a large recruiting staff that visits campuses, contacting top prospects and recruiting aggressively. Founded by a Princeton graduate, it has always carefully sifted through applicants’ grade-point averages and other data in recruiting. But with the numbers of applicants increasing faster than the number of teachers placed, it was even more selective this year than before, the organization said.
About 11 percent of the graduating class at Yale applied, 10 percent at Georgetown and 9 percent at Harvard, said Amy Rabinowitz, a spokeswoman.
It was the No. 1 employer on many campuses, including at Duke, Emory, George Washington, Georgetown, New York University, and Spelman, Ms. Rabinowitz said. The campuses with the largest number of recruits, however, were large, prestigious public universities. About 90 recruits are from the University of Michigan, and about 60 from the University of Illinois, while Wisconsin, Berkeley and the University of Texas are each sending 50 recruits, Ms. Rabinowitz said.
The program will place teachers in 29 locations this fall. Those include many of the nation’s biggest cities and some largely rural states, like South Dakota, where about 50 recruits work on Indian reservations. About 1,000 recruits teach in New York City schools.
Teach for America’s budget is $110 million, up from $40 million in 2005.
Wednesday, May 14, 2008
Friday, May 9, 2008
Globalization and security 101
Globalization is a wonderful thing .
Let the countries that can most cheaply produce the product do it and just forego competition with them.
Let free markets reign.
So what's this guy's concern ? Get with the program buddy ! A former Clintonite no less.
“There are enormous vulnerabilities in our defense and national security infrastructure,” said Peter Levin, a former Clinton administration official who is chief executive of DAFCA, a Framingham, Mass., company that designs systems to prevent malicious tampering with computer chips. “We outsource the manufacturing of computer integrated circuits to places that can manufacture these devices cheaply.”
Loss of control? Just relax and let the market handle it.
May 9, 2008
F.B.I. Says the Military Had Bogus Computer Gear
By JOHN MARKOFF
SAN FRANCISCO — Counterfeit products are a routine threat for the electronics industry. However, the more sinister specter of an electronic Trojan horse, lurking in the circuitry of a computer or a network router and allowing attackers clandestine access or control, was raised again recently by the F.B.I. and the Pentagon.
The new law enforcement and national security concerns were prompted by Operation Cisco Raider, which has led to 15 criminal cases involving counterfeit products bought in part by military agencies, military contractors and electric power companies in the United States. Over the two-year operation, 36 search warrants have been executed, resulting in the discovery of 3,500 counterfeit Cisco network components with an estimated retail value of more than $3.5 million, the F.B.I. said in a statement.
The F.B.I. is still not certain whether the ring’s actions were for profit or part of a state-sponsored intelligence effort. The potential threat, according to the F.B.I. agents who gave a briefing at the Office of Management and Budget on Jan. 11, includes the remote jamming of supposedly secure computer networks and gaining access to supposedly highly secure systems. Contents of the briefing were contained in a PowerPoint presentation leaked to a Web site, Above Top Secret.
A Cisco spokesman said that the company had investigated the counterfeit gear seized by law enforcement agencies and had not found any secret back door.
“We did not find any evidence of re-engineering in the manner that was described in the F.B.I. presentation,” said John Noh, a Cisco spokesman. He added that the company believed the counterfeiters were interested in copying high volume products to make a quick profit. “We know what these counterfeiters are about.”
An F.B.I. spokeswoman, Catherine L. Milhoan, said the agency was not suggesting that the Chinese government was involved in the counterfeiting ring. “We worked very closely with the Chinese government,” she said. Arrests have been made in China as part of the investigation, she said. “The existence of this document shows that the cyber division of the F.B.I. has growing concerns about the production and distribution of counterfeit network hardware.”
Despite Cisco’s reassurance, a number of industry executives and technologists said that the threat of secretly added circuitry intended to subvert computer and network gear is real.
“There are enormous vulnerabilities in our defense and national security infrastructure,” said Peter Levin, a former Clinton administration official who is chief executive of DAFCA, a Framingham, Mass., company that designs systems to prevent malicious tampering with computer chips. “We outsource the manufacturing of computer integrated circuits to places that can manufacture these devices cheaply.”
Last month, the Pentagon’s Defense Advanced Research Projects Agency began distributing chips with hidden Trojan horse circuitry to military contractors who are participating in the agency’s Trusted Integrated Circuits program. The goal is to test forensic techniques for finding hidden electronic trap doors, which can be maddeningly elusive. The agency is not yet ready to announce the results of the test, according to Jan Walker, a spokeswoman for the agency.
The threat was demonstrated in April when a team of computer scientists from the University of Illinois presented a paper at a technical conference in San Francisco detailing how they had modified a Sun Microsystems SPARC microprocessor by altering the data file on a chip with nearly 1.8 million circuits used in automated manufacturing equipment.
The researchers were able to create a stealth system that would allow them to automatically log in to a computer and steal passwords. The danger of such hidden circuitry is that it could potentially undermine the strongest computer security protections by essentially giving an attacker a secret key to gain access to a network or a computer.
“It’s very difficult to detect and discover these issues,” said Ted Vucurevich, the chief technology officer of Cadence Design Systems, a company that provides design tools for chip makers. “That was one of the reasons” for the testing program.
Modern integrated circuits have billions of components, he said: “Adding a small number that do particular functions in particular cases is incredibly hard to detect.”
The potential threat of secret hardware-based backdoors or kill switches has been discussed for several decades. For example, the issue came up during the 1980s with a Swiss cryptography company, Crypto, which has been under suspicion of having installed back doors in its systems to give the National Security Agency access to encoded messages.
The issue was raised again during the first Iraq war and more recently in the Israeli bombing of a suspected Syrian nuclear plant. In both cases there has been speculation that booby-trapped antiaircraft equipment had been remotely turned off.
Let the countries that can most cheaply produce the product do it and just forego competition with them.
Let free markets reign.
So what's this guy's concern ? Get with the program buddy ! A former Clintonite no less.
“There are enormous vulnerabilities in our defense and national security infrastructure,” said Peter Levin, a former Clinton administration official who is chief executive of DAFCA, a Framingham, Mass., company that designs systems to prevent malicious tampering with computer chips. “We outsource the manufacturing of computer integrated circuits to places that can manufacture these devices cheaply.”
Loss of control? Just relax and let the market handle it.
May 9, 2008
F.B.I. Says the Military Had Bogus Computer Gear
By JOHN MARKOFF
SAN FRANCISCO — Counterfeit products are a routine threat for the electronics industry. However, the more sinister specter of an electronic Trojan horse, lurking in the circuitry of a computer or a network router and allowing attackers clandestine access or control, was raised again recently by the F.B.I. and the Pentagon.
The new law enforcement and national security concerns were prompted by Operation Cisco Raider, which has led to 15 criminal cases involving counterfeit products bought in part by military agencies, military contractors and electric power companies in the United States. Over the two-year operation, 36 search warrants have been executed, resulting in the discovery of 3,500 counterfeit Cisco network components with an estimated retail value of more than $3.5 million, the F.B.I. said in a statement.
The F.B.I. is still not certain whether the ring’s actions were for profit or part of a state-sponsored intelligence effort. The potential threat, according to the F.B.I. agents who gave a briefing at the Office of Management and Budget on Jan. 11, includes the remote jamming of supposedly secure computer networks and gaining access to supposedly highly secure systems. Contents of the briefing were contained in a PowerPoint presentation leaked to a Web site, Above Top Secret.
A Cisco spokesman said that the company had investigated the counterfeit gear seized by law enforcement agencies and had not found any secret back door.
“We did not find any evidence of re-engineering in the manner that was described in the F.B.I. presentation,” said John Noh, a Cisco spokesman. He added that the company believed the counterfeiters were interested in copying high volume products to make a quick profit. “We know what these counterfeiters are about.”
An F.B.I. spokeswoman, Catherine L. Milhoan, said the agency was not suggesting that the Chinese government was involved in the counterfeiting ring. “We worked very closely with the Chinese government,” she said. Arrests have been made in China as part of the investigation, she said. “The existence of this document shows that the cyber division of the F.B.I. has growing concerns about the production and distribution of counterfeit network hardware.”
Despite Cisco’s reassurance, a number of industry executives and technologists said that the threat of secretly added circuitry intended to subvert computer and network gear is real.
“There are enormous vulnerabilities in our defense and national security infrastructure,” said Peter Levin, a former Clinton administration official who is chief executive of DAFCA, a Framingham, Mass., company that designs systems to prevent malicious tampering with computer chips. “We outsource the manufacturing of computer integrated circuits to places that can manufacture these devices cheaply.”
Last month, the Pentagon’s Defense Advanced Research Projects Agency began distributing chips with hidden Trojan horse circuitry to military contractors who are participating in the agency’s Trusted Integrated Circuits program. The goal is to test forensic techniques for finding hidden electronic trap doors, which can be maddeningly elusive. The agency is not yet ready to announce the results of the test, according to Jan Walker, a spokeswoman for the agency.
The threat was demonstrated in April when a team of computer scientists from the University of Illinois presented a paper at a technical conference in San Francisco detailing how they had modified a Sun Microsystems SPARC microprocessor by altering the data file on a chip with nearly 1.8 million circuits used in automated manufacturing equipment.
The researchers were able to create a stealth system that would allow them to automatically log in to a computer and steal passwords. The danger of such hidden circuitry is that it could potentially undermine the strongest computer security protections by essentially giving an attacker a secret key to gain access to a network or a computer.
“It’s very difficult to detect and discover these issues,” said Ted Vucurevich, the chief technology officer of Cadence Design Systems, a company that provides design tools for chip makers. “That was one of the reasons” for the testing program.
Modern integrated circuits have billions of components, he said: “Adding a small number that do particular functions in particular cases is incredibly hard to detect.”
The potential threat of secret hardware-based backdoors or kill switches has been discussed for several decades. For example, the issue came up during the 1980s with a Swiss cryptography company, Crypto, which has been under suspicion of having installed back doors in its systems to give the National Security Agency access to encoded messages.
The issue was raised again during the first Iraq war and more recently in the Israeli bombing of a suspected Syrian nuclear plant. In both cases there has been speculation that booby-trapped antiaircraft equipment had been remotely turned off.
Friday, May 2, 2008
Female Hispanic engineers forced to work as cleaning ladies
This article has a curious quote in it, at the very end . Even more curious is why the reporter did not pursue this unusual and possibly major story:
Lisa Melendez, a community-college librarian from Long Island, said she attended the Union Square rally to advocate legalization for her students, many of whom are Mexican or Ecuadorean.
“For young women, it’s especially difficult, because you study so hard to get an engineering degree and then you end up having to baby sit or clean houses,” Ms. Melendez said as she stood by five students who had come with her.
So, illegal immigrant women are studying engineering ?
And when they get their degrees they still wind up cleaning homes ?
Many of the cleaning ladies we see everyday are engineers ?
Curious that many can barely speak english ... if they got their engineering degrees in the US it would be hard to do so without a good command of the English language, although perhaps the language of math and engineering is universal .
And if they got their engineering degrees back in their home countries and then decided to illegally immigrate here because of the lack of opportunities for engineers there and the lure of high-paying house-cleaning jobs here , then this is a major new phenomenon that has gone unreported .
OK economists ... what say you to this? That cleaning ladies in the US do better financially than engineers in Latin/South America?
Why should American students study math/science/engineering if cleaning services is the more lucrative field of work?
May 2, 2008
Crowds Are Smaller at Protests by Immigrants
By RANDAL C. ARCHIBOLD
LOS ANGELES — Thousands of immigrants and their supporters marched in several cities on Thursday to demand civil rights at a time when crackdowns against illegal immigrants are rising.
The May Day demonstrations were significantly smaller than in previous years, and gone were calls for a nationwide boycott of businesses and work, as protest leaders had urged last year. The Spanish-language D.J.’s who had heavily promoted previous marches stuck largely to their regular programming. And disagreements among advocates over the best approach to winning legal status for illegal immigrants had diminished organizing firepower, with many groups turning their attention to voter registration and citizenship drives.
In many cities, including New York, Chicago, Houston and Los Angeles, crowds were a small fraction of those in previous years, with few people outside protest areas even aware that marches were under way.
Some supporters said they had lost a rallying cry in the stalled effort in Congress to revamp immigration law. At the same time, with the government stepping up border and immigration enforcement, a cloud of fear has settled over immigrants who were worried that the rallies would lead to more sweeps.
Milwaukee had one of the more robust turnouts, with thousands of people gathering, as they did last year. Protesters called on the presidential candidates, each of whom has supported Congressional efforts to allow a way for certain illegal immigrants to gain legal status, to make immigration issues a priority.
“We want a commitment from the three presidential candidates to pass humane immigration reform in the first 100 days in office,” said Christine Neumann-Ortiz, director of Voces de la Frontera, the main organization behind the Milwaukee march.
In Los Angeles, where riot police officers beat and shoved demonstrators and journalists last year, some marchers were concerned about trouble, though across the nation the marches were largely peaceful.
“Today the police didn’t bring their batons,” Jorge Reyes called out in Spanish from a truck in downtown Los Angeles. “Today they came in peace to help us legalize the 12 million immigrants in this country.”
Messages on T-shirts and signs and protest leaders with bullhorns demanded an end to immigration raids that have led to an increasing number of deportations. The United States deported 280,000 people last year, a 44 percent increase over the previous year.
Mayor Antonio R. Villaraigosa of Los Angeles, who has called on the Department of Homeland Security to halt most workplace raids, joined business and labor leaders on Wednesday to announce the results of a study that found the raids harmful to the economy. The study said 50 percent or more of workers in some local industries were in the country illegally, and it projected great harm to the region if businesses closed or moved because of the immigration sweeps.
Supporters of tighter controls on immigration said the rallies had done little but energize their backers. Leaders of NumbersUSA, one of the larger groups advocating a clampdown on illegal immigration, urged its members to call members of Congress and use the rallies to help make their case.
“The marchers say suspend the rule of law and reward illegality,” said Roy Beck, executive director of NumbersUSA, which says its membership has swelled to more than 600,000 from 112,000 three years ago.
“Our callers say what your constituents really want is enforcement,” Mr. Beck added. “We want to take away the jobs magnet and basically create an inhospitable environment for immigration law breakers so more and more will decide to go home or not come.”
Counterdemonstrators appeared at some rallies, including in Boston, where the police had to separate demonstrators who became embroiled in profanity-laced exchanges.
Though meager, the crowds were often festive and melded a variety of causes. A rally in Union Square Park in Manhattan drew several hundred people invoking socialism, police violence and Sept. 11 conspiracy theories, in addition to immigrant rights.
Lisa Melendez, a community-college librarian from Long Island, said she attended the Union Square rally to advocate legalization for her students, many of whom are Mexican or Ecuadorean.
“For young women, it’s especially difficult, because you study so hard to get an engineering degree and then you end up having to baby sit or clean houses,” Ms. Melendez said as she stood by five students who had come with her.
Lisa Melendez, a community-college librarian from Long Island, said she attended the Union Square rally to advocate legalization for her students, many of whom are Mexican or Ecuadorean.
“For young women, it’s especially difficult, because you study so hard to get an engineering degree and then you end up having to baby sit or clean houses,” Ms. Melendez said as she stood by five students who had come with her.
So, illegal immigrant women are studying engineering ?
And when they get their degrees they still wind up cleaning homes ?
Many of the cleaning ladies we see everyday are engineers ?
Curious that many can barely speak english ... if they got their engineering degrees in the US it would be hard to do so without a good command of the English language, although perhaps the language of math and engineering is universal .
And if they got their engineering degrees back in their home countries and then decided to illegally immigrate here because of the lack of opportunities for engineers there and the lure of high-paying house-cleaning jobs here , then this is a major new phenomenon that has gone unreported .
OK economists ... what say you to this? That cleaning ladies in the US do better financially than engineers in Latin/South America?
Why should American students study math/science/engineering if cleaning services is the more lucrative field of work?
May 2, 2008
Crowds Are Smaller at Protests by Immigrants
By RANDAL C. ARCHIBOLD
LOS ANGELES — Thousands of immigrants and their supporters marched in several cities on Thursday to demand civil rights at a time when crackdowns against illegal immigrants are rising.
The May Day demonstrations were significantly smaller than in previous years, and gone were calls for a nationwide boycott of businesses and work, as protest leaders had urged last year. The Spanish-language D.J.’s who had heavily promoted previous marches stuck largely to their regular programming. And disagreements among advocates over the best approach to winning legal status for illegal immigrants had diminished organizing firepower, with many groups turning their attention to voter registration and citizenship drives.
In many cities, including New York, Chicago, Houston and Los Angeles, crowds were a small fraction of those in previous years, with few people outside protest areas even aware that marches were under way.
Some supporters said they had lost a rallying cry in the stalled effort in Congress to revamp immigration law. At the same time, with the government stepping up border and immigration enforcement, a cloud of fear has settled over immigrants who were worried that the rallies would lead to more sweeps.
Milwaukee had one of the more robust turnouts, with thousands of people gathering, as they did last year. Protesters called on the presidential candidates, each of whom has supported Congressional efforts to allow a way for certain illegal immigrants to gain legal status, to make immigration issues a priority.
“We want a commitment from the three presidential candidates to pass humane immigration reform in the first 100 days in office,” said Christine Neumann-Ortiz, director of Voces de la Frontera, the main organization behind the Milwaukee march.
In Los Angeles, where riot police officers beat and shoved demonstrators and journalists last year, some marchers were concerned about trouble, though across the nation the marches were largely peaceful.
“Today the police didn’t bring their batons,” Jorge Reyes called out in Spanish from a truck in downtown Los Angeles. “Today they came in peace to help us legalize the 12 million immigrants in this country.”
Messages on T-shirts and signs and protest leaders with bullhorns demanded an end to immigration raids that have led to an increasing number of deportations. The United States deported 280,000 people last year, a 44 percent increase over the previous year.
Mayor Antonio R. Villaraigosa of Los Angeles, who has called on the Department of Homeland Security to halt most workplace raids, joined business and labor leaders on Wednesday to announce the results of a study that found the raids harmful to the economy. The study said 50 percent or more of workers in some local industries were in the country illegally, and it projected great harm to the region if businesses closed or moved because of the immigration sweeps.
Supporters of tighter controls on immigration said the rallies had done little but energize their backers. Leaders of NumbersUSA, one of the larger groups advocating a clampdown on illegal immigration, urged its members to call members of Congress and use the rallies to help make their case.
“The marchers say suspend the rule of law and reward illegality,” said Roy Beck, executive director of NumbersUSA, which says its membership has swelled to more than 600,000 from 112,000 three years ago.
“Our callers say what your constituents really want is enforcement,” Mr. Beck added. “We want to take away the jobs magnet and basically create an inhospitable environment for immigration law breakers so more and more will decide to go home or not come.”
Counterdemonstrators appeared at some rallies, including in Boston, where the police had to separate demonstrators who became embroiled in profanity-laced exchanges.
Though meager, the crowds were often festive and melded a variety of causes. A rally in Union Square Park in Manhattan drew several hundred people invoking socialism, police violence and Sept. 11 conspiracy theories, in addition to immigrant rights.
Lisa Melendez, a community-college librarian from Long Island, said she attended the Union Square rally to advocate legalization for her students, many of whom are Mexican or Ecuadorean.
“For young women, it’s especially difficult, because you study so hard to get an engineering degree and then you end up having to baby sit or clean houses,” Ms. Melendez said as she stood by five students who had come with her.
Immigrant labor is no threat to 'educated'
It's very unclear whether they include illegal immigration when they say:
Economists attribute the lower unemployment rate for immigrants to several factors.
Perhaps the biggest one: Immigrant workers are willing to work for lower wages in low-skill jobs.
Illegal immigrants will work for far less money than legal immigrants since they have no legal safeguards.
And how many legal immigrants are allowed into the US who are low-wage workers? Virtually none outside of special programs for seasonal and transient workers. So they are really using the term 'immigrant' to mean 'illegal immigrant' .
Brusca said the higher unemployment rate for college-educated immigrants may be due to their inability to get the work visa they need to get a job
work visa? they are already here via H1-b program. They cannot stay here if they are not working.
Economists attribute the lower unemployment rate for immigrants to several factors.
Perhaps the biggest one: Immigrant workers are willing to work for lower wages in low-skill jobs.
Illegal immigrants will work for far less money than legal immigrants since they have no legal safeguards.
And how many legal immigrants are allowed into the US who are low-wage workers? Virtually none outside of special programs for seasonal and transient workers. So they are really using the term 'immigrant' to mean 'illegal immigrant' .
Brusca said the higher unemployment rate for college-educated immigrants may be due to their inability to get the work visa they need to get a job
work visa? they are already here via H1-b program. They cannot stay here if they are not working.
Immigrants and jobs: A closer look
Foreign-born unskilled workers are less likely to be out of work than their U.S.-born counterparts, but educated Americans have an edge on foreign-born.
NEW YORK (CNNMoney.com) -- As the U.S. economy sheds jobs, concern is growing over competition between native-born and foreign-born workers.
That will come into clear focus this week. Thursday has been declared "Immigration Day" by groups seeking reforms of laws to allow a path for citizenship for many illegal immigrants. And on Friday the government is expected to announce more woes for the labor market.
Economists surveyed by Briefing.com forecast that the report will show employers shaved 75,000 jobs from U.S. payrolls in April. If they're right, it would be the fourth-straight monthly decline. The economy lost a total of 232,000 jobs in the first quarter.
The unemployment rate is also forecast to climb to 5.2% from 5.1%, which would mark a three-year high.
The Labor Department's monthly report does not distinguish between immigrant and native-born workers. But its latest annual reading on the issue shows that while the unemployment rate rose for foreign-born workers in 2007 - to 4.3% from 4.0% in 2006 - it was still lower than for native-born workers (4.7% in each year).
Low wages for lower-skill jobs
Economists attribute the lower unemployment rate for immigrants to several factors.
Perhaps the biggest one: Immigrant workers are willing to work for lower wages in low-skill jobs.
"It's pretty clear that low-skill [workers] are hurt by the availability of immigrant labor," said Daniel Hamermesh, an economics professor at the University of Texas.
On the other hand, Hamermesh said most educated Americans see limited competition for jobs from immigrants. "For most high-skill workers, there's little if any impact," he said.
For U.S.-born workers aged 25 and older with a high school degree or less, the unemployment rate was 5.2% last year, while the rate for foreign-born workers with the same characteristics is only 4.6%. Among educated workers, however, the unemployment pattern was reversed: 1.9% for the native born and 2.5% for immigrants.
Economist Robert Brusca of FAO Economics said it makes sense that immigrant workers are more willing to accept low wages associated with low-skill jobs.
"If you come from the country with a standard of living that's a lot lower, it looks like a great opportunity," said Brusca.
Brusca said the higher unemployment rate for college-educated immigrants may be due to their inability to get the work visa they need to get a job.
"Employers with unskilled positions may be willing to accept a made-up social security number or let someone work off the books," said Brusca. "The more you move up the food chain, the more likely you're going to be asked for a green card."
Staying on the job
Another reason the unemployment rate for unskilled immigrants is lower is because they may be more willing to move to find a job. And in just about any market, there is a greater availability of minimum wage jobs, said Brusca.
"If you're a minimum wage immigrant, you're going to find another job unless you've done something egregious to get fired," he said.
In addition, the lower unemployment rate for immigrants is driven by the fact that American workers can receive unemployment benefits and other government assistance when they lose their jobs. Illegal immigrants are not eligible for such help.
"The immigrants have no choice but to work," said Abraham Mosisa, an economist with the Bureau of Labor Statistics. "That's the big difference. If you are native born, you can get welfare, unemployment."
Wednesday, April 30, 2008
China's ascendancy
This is the first time I've heard anyone say just 'give up' , you won't be able to compete with cheaper workers overseas, particularly you IT workers :
For individuals: You can avoid competition with Chinese workers by doing place-based work, which ranges in value from highly skilled (emergency-room surgery) to menial (pouring concrete). But the many people who do information-based work, which is most subject to competition, will have to get dramatically better to be worth what they cost. For government leaders: Improve U.S. education above all.
Of course he throws in the obligatory 'more education' argument , but leaves out the critical part: What industry/jobs should anyone pursue education in that can't be done overseas and cheaper ? He does mention that we should do 'place-based' work ... so maybe he wants everyone to go back to school to learn to work in 'emergency-room surgery' ?
The vast majority of the new jobs and industries that will be created in the coming years will be work that is digitized. Because of this, it can be performed anywhere in the world . So new technologies do NOT hold hope for Western workers .
Even a lot of medical work is moving overseas (perhaps not emergency room work) from analyzing test results that are digitized and sent around the work in seconds to doing surgery and dental work overseas for a fraction of the cost.
And teachers are viewed as place-based work but teaching may soon shift dramatically to being online or at least having some significant component of coursework being online.
There is not enough 'place-based' work to substitute for the mass of work being shifted overseas and at the same time, even if this could happen , there would be a surplus of people competing for 'place-based' work leading to significantly lower wages.
The only things that will slow this globalization down are:
1- Political instability in the world (good chance)
2- Energy getting expensive makes the world larger , not smaller (happening now)
3- Unchecked markets destabilizing countries (happening now with food and also oil)
April 30, 2008: 5:41 AM EDT
You have 7 years to learn Mandarin
Forget cheap imports. China's rise will soon be a force on Wall Street and Main Street and in Silicon Valley.
By Geoff Colvin, senior editor at large
(Fortune Magazine) -- Back in 2001 when the International Olympic Committee chose Beijing as the site of this summer's games, the event was meant to mark China's debut as a player on the global economic stage. But a recent study by the economist Angus Maddison projects that China will become the world's dominant economic superpower much sooner than expected - not in 2050, but in 2015.
While short-term investors are already cashing in on China's growth by playing the global commodities boom, smart long-term thinkers are contemplating what happens when China matures from an exporter of cheap goods to a competitor in sectors where the U.S. is dominant - technology, brand building, finance. China has almost wiped U.S. makers of low-value items like toys and socks, but by 2015 it may threaten Apple (AAPL, Fortune 500), J.P. Morgan Chase (JPM, Fortune 500), and Procter & Gamble (PG, Fortune 500). It will increasingly influence the S&P 500 and the mutual funds in our 401(k)s. So it's worth looking at how that will happen, what it means, and what anyone can do in the seven years before the baton is passed.
Just using the exchange rate to convert China's GDP into dollars isn't helpful in comparing the two economies, because China controls its exchange rate; by that method, China's economy might not pass America's for decades. Exchange rates apply only to tradable products and services; they aren't very useful in valuing nontradable goods in a country like China that is much poorer than the United States. So we need some way to compare the real value of China's economic output with America's, and economists have developed one. It is called purchasing power parity.
For example, Chinese construction workers earn a whole lot less than Americans do, yet they can still build top-quality buildings. If we used the exchange rate, the value of a new skyscraper in Shanghai would count much less toward China's GDP than an identical building in Chicago would count toward America's, which makes no sense. Purchasing power parity corrects the problem.
Will China take the crown?
Angus Maddison's forecast (which uses purchasing power parity) isn't built on outlandish assumptions. He assumes China's growth will slow way down year by year, and America's will average about 2.6% annually, which seems reasonable. But because China has grown so stupendously during the past decade, it should still be able to take the crown in just seven more years.
If that happens, America will close out a 125-year run as the No. 1 economy. We assumed the title in 1890 from - guess who. Britain? France? No. The world's largest economy until 1890 was China's. That's why Maddison says he expects China to "resume its natural role as the world's largest economy by 2015." That scenario makes sense.
China was the largest economy for centuries because everyone had the same type of economy - subsistence - and so the country with the most people would be economically biggest. Then the Industrial Revolution sent the West on a more prosperous path. Now the world is returning to a common economy, this time technology- and information-based, so once again population triumphs.
So how should we make the most of our seven-year grace period? For companies: Focus on getting better at your highest-value activities. Just because the Chinese will be fighting you in the same industries doesn't mean you'll lose. (Investors, remember that China bought $3 billion of Blackstone (BX) at the IPO price of $31 last summer, and the firm is now trading at $19.) It only means you'll have to work harder to win.
For individuals: You can avoid competition with Chinese workers by doing place-based work, which ranges in value from highly skilled (emergency-room surgery) to menial (pouring concrete). But the many people who do information-based work, which is most subject to competition, will have to get dramatically better to be worth what they cost. For government leaders: Improve U.S. education above all.
Those are the issues in China's becoming No. 1 that we most need to focus on. And as with so much else in China's recent history, we'll need to worry about them much sooner than we expected.
For individuals: You can avoid competition with Chinese workers by doing place-based work, which ranges in value from highly skilled (emergency-room surgery) to menial (pouring concrete). But the many people who do information-based work, which is most subject to competition, will have to get dramatically better to be worth what they cost. For government leaders: Improve U.S. education above all.
Of course he throws in the obligatory 'more education' argument , but leaves out the critical part: What industry/jobs should anyone pursue education in that can't be done overseas and cheaper ? He does mention that we should do 'place-based' work ... so maybe he wants everyone to go back to school to learn to work in 'emergency-room surgery' ?
The vast majority of the new jobs and industries that will be created in the coming years will be work that is digitized. Because of this, it can be performed anywhere in the world . So new technologies do NOT hold hope for Western workers .
Even a lot of medical work is moving overseas (perhaps not emergency room work) from analyzing test results that are digitized and sent around the work in seconds to doing surgery and dental work overseas for a fraction of the cost.
And teachers are viewed as place-based work but teaching may soon shift dramatically to being online or at least having some significant component of coursework being online.
There is not enough 'place-based' work to substitute for the mass of work being shifted overseas and at the same time, even if this could happen , there would be a surplus of people competing for 'place-based' work leading to significantly lower wages.
The only things that will slow this globalization down are:
1- Political instability in the world (good chance)
2- Energy getting expensive makes the world larger , not smaller (happening now)
3- Unchecked markets destabilizing countries (happening now with food and also oil)
April 30, 2008: 5:41 AM EDT
You have 7 years to learn Mandarin
Forget cheap imports. China's rise will soon be a force on Wall Street and Main Street and in Silicon Valley.
By Geoff Colvin, senior editor at large
(Fortune Magazine) -- Back in 2001 when the International Olympic Committee chose Beijing as the site of this summer's games, the event was meant to mark China's debut as a player on the global economic stage. But a recent study by the economist Angus Maddison projects that China will become the world's dominant economic superpower much sooner than expected - not in 2050, but in 2015.
While short-term investors are already cashing in on China's growth by playing the global commodities boom, smart long-term thinkers are contemplating what happens when China matures from an exporter of cheap goods to a competitor in sectors where the U.S. is dominant - technology, brand building, finance. China has almost wiped U.S. makers of low-value items like toys and socks, but by 2015 it may threaten Apple (AAPL, Fortune 500), J.P. Morgan Chase (JPM, Fortune 500), and Procter & Gamble (PG, Fortune 500). It will increasingly influence the S&P 500 and the mutual funds in our 401(k)s. So it's worth looking at how that will happen, what it means, and what anyone can do in the seven years before the baton is passed.
Just using the exchange rate to convert China's GDP into dollars isn't helpful in comparing the two economies, because China controls its exchange rate; by that method, China's economy might not pass America's for decades. Exchange rates apply only to tradable products and services; they aren't very useful in valuing nontradable goods in a country like China that is much poorer than the United States. So we need some way to compare the real value of China's economic output with America's, and economists have developed one. It is called purchasing power parity.
For example, Chinese construction workers earn a whole lot less than Americans do, yet they can still build top-quality buildings. If we used the exchange rate, the value of a new skyscraper in Shanghai would count much less toward China's GDP than an identical building in Chicago would count toward America's, which makes no sense. Purchasing power parity corrects the problem.
Will China take the crown?
Angus Maddison's forecast (which uses purchasing power parity) isn't built on outlandish assumptions. He assumes China's growth will slow way down year by year, and America's will average about 2.6% annually, which seems reasonable. But because China has grown so stupendously during the past decade, it should still be able to take the crown in just seven more years.
If that happens, America will close out a 125-year run as the No. 1 economy. We assumed the title in 1890 from - guess who. Britain? France? No. The world's largest economy until 1890 was China's. That's why Maddison says he expects China to "resume its natural role as the world's largest economy by 2015." That scenario makes sense.
China was the largest economy for centuries because everyone had the same type of economy - subsistence - and so the country with the most people would be economically biggest. Then the Industrial Revolution sent the West on a more prosperous path. Now the world is returning to a common economy, this time technology- and information-based, so once again population triumphs.
So how should we make the most of our seven-year grace period? For companies: Focus on getting better at your highest-value activities. Just because the Chinese will be fighting you in the same industries doesn't mean you'll lose. (Investors, remember that China bought $3 billion of Blackstone (BX) at the IPO price of $31 last summer, and the firm is now trading at $19.) It only means you'll have to work harder to win.
For individuals: You can avoid competition with Chinese workers by doing place-based work, which ranges in value from highly skilled (emergency-room surgery) to menial (pouring concrete). But the many people who do information-based work, which is most subject to competition, will have to get dramatically better to be worth what they cost. For government leaders: Improve U.S. education above all.
Those are the issues in China's becoming No. 1 that we most need to focus on. And as with so much else in China's recent history, we'll need to worry about them much sooner than we expected.
Monday, April 21, 2008
What's left for the American worker?
Research science, the final frontier (in offshoring/outsourcing) .... let them do it overseas and we can then ' convert the scientific know-how from abroad into market gains and profits. ' .... Like Einstein and the European physicists who did the work on subatomic structures and then Americans raced to create the bomb and also the nuclear industry ...
We'll be more and more just the 'idea people' and marketeers . What makes these guys think that overseas people can't also figure out how to use new scientific findings and turn them into marketable products ?
Remember when offshoring supposedly meant shipping dirty, hard or mindless, repetitive work overseas ?
Some of the comments are pretty blatant and extraordinary .
The bad news is that there is no work left for anyone in the US that can be done economically.
The good news is that at least we don't have to crack open math or science books.
I particularly liked this quote:
In the short-term at least, higher spending on scientists by India and China could create a glut of them in these countries, driving wages down further and making the costs of acquiring science even lower.
More workers drives down wages ? This directly contradicts what Bill Gates and other corporate business people say, that we need lots more H-1B workers here because of the high demand for their unavailable skills.
April 20, 2008
Ping
How Scientific Gains Abroad Pay Off in the U.S.
By G. PASCAL ZACHARY
AT a time of economic belt-tightening, might cheap science from low-wage countries help keep American innovators humming?
Americans have long profited from low-cost manufactured goods, especially from Asia. The cost of those material “inputs” is now rising. But because of growing numbers of scientists in China, India and other lower-wage countries, “the cost of producing a new scientific discovery is dropping around the world,” says Christopher T. Hill, a professor of public policy and technology at George Mason University.
American innovators — with their world-class strengths in product design, marketing and finance — may have a historic opportunity to convert the scientific know-how from abroad into market gains and profits. Mr. Hill views the transition to “the postscientific society” as an unrecognized bonus for American creators of new products and services. ( Steve's note -> note that this bonus is only for the 'creators' of products)
Mr. Hill’s insight, which he first described in a National Academy of Sciences journal article last fall, runs counter to the notion that the United States fails to educate enough of its own scientists and that “shortages” of them hamper American competitiveness.
The opposite may actually be true. By tapping relatively low-cost scientists around the world, American innovators may actually strengthen their market positions.
“We shouldn’t fear the rise of science in Asia and other poorer countries. We should figure out how to take advantage of it,” says Patrick Windham, a lecturer in technology policy at Stanford and a former staff member of Congressional science committees.
Optimism about scientific globalization is a wrinkle on the familiar story of outsourcing. Just as United States companies have contracted out physical production, they can do the same for scientific “goods,” which range from formulas and ideas to the results of experiments.
In the short-term at least, higher spending on scientists by India and China could create a glut of them in these countries, driving wages down further and making the costs of acquiring science even lower. (exactly the process that business denies is happening now in other fields) .
“Science is the ultimate global activity,” says Richard B. Freeman, a labor economist with the National Bureau of Economic Research. “You can outsource research.”
Mr. Freeman, among others, questions whether there is a shortage of scientists in the United States. He cites evidence suggesting that American dominance in science will decline over time and that we should worry less about purported shortages at home and more about “developing new ways of benefiting from scientific advances made in other countries.”
Of course, scientific knowledge isn’t a thing, like a child’s toy or an electric motor, so the day may never come when “science” can be purchased from a Chinese or Indian catalog. For the foreseeable future, United States companies will need their own highly paid scientists “to evaluate the purchase of foreign science and to make sense of it in their own labs,” says Daniel Sarewitz, director of the Consortium for Science, Policy and Outcomes at Arizona State University.
While the United States is expected to remain the home of choice for the world’s best scientists for some time, industry is increasingly striking deals with scientists in developing countries eager for wider exposure.
Seagate Technology, a leader in digital storage, pays scientists in Singapore to do basic studies, and even benefits from subsidies given those scientists by Singapore’s government, making the relationship even more affordable. Seagate runs a research laboratory in Pittsburgh. Roughly 10 to 20 percent of the lab’s budget for outsiders goes to scientists working abroad.
Benefiting from foreign science isn’t new. Last October, the Nobel Prize for physics, for instance, was shared by French and German scientists for their basic discovery of what is known as the “giant magnetoresistance” effect, which enables much more digital data to be stored on a disk drive. The breakthrough, by Albert Fert and Peter Grünberg, had essentially no commercial impact in Germany or France. But by using open scientific literature and attending conferences, Seagate found ways to capitalize on the breakthrough, which had been financed by European governments.
“This is a really good example of how foreign scientists help,” says Mark Re, Seagate’s senior vice president for research and head of the company’s research center in Pittsburgh.
Commercializing science isn’t easy, which is the main reason that rising scientists from India, China and other countries can’t readily achieve business success. In the case of the magneto effect, Seagate engineers ended up using different materials — at different temperatures — than the Nobel winners.
“We made the big step to get the scientific advance into products,” Mr. Re says. “And then we had to manufacture hundreds of millions of them. This is a very different challenge.”
PRECISELY because the gap between basic science and commercial innovations is large, Mr. Hill’s postscientific society makes sense to innovators on the front lines. One implication for the future is that the United States “won’t have to import so many scientists,” says Stephen D. Nelson, associate director of policy programs at the American Association for the Advancement of Science.
The association, which for decades has generally favored policies to expand the ranks of American scientists, is devoting a portion of its annual policy seminar next month to talk about the “postscience” situation.
Industry, meanwhile, is adapting to a world where scientific goods can come from anywhere — and fewer scientists work on abstract problems unrelated to the market. “It is no accident that many corporate labs have fallen apart,” Sean M. Maloney, executive vice president of Intel, says. “They were science farms looking for problems.”
We'll be more and more just the 'idea people' and marketeers . What makes these guys think that overseas people can't also figure out how to use new scientific findings and turn them into marketable products ?
Remember when offshoring supposedly meant shipping dirty, hard or mindless, repetitive work overseas ?
Some of the comments are pretty blatant and extraordinary .
The bad news is that there is no work left for anyone in the US that can be done economically.
The good news is that at least we don't have to crack open math or science books.
I particularly liked this quote:
In the short-term at least, higher spending on scientists by India and China could create a glut of them in these countries, driving wages down further and making the costs of acquiring science even lower.
More workers drives down wages ? This directly contradicts what Bill Gates and other corporate business people say, that we need lots more H-1B workers here because of the high demand for their unavailable skills.
April 20, 2008
Ping
How Scientific Gains Abroad Pay Off in the U.S.
By G. PASCAL ZACHARY
AT a time of economic belt-tightening, might cheap science from low-wage countries help keep American innovators humming?
Americans have long profited from low-cost manufactured goods, especially from Asia. The cost of those material “inputs” is now rising. But because of growing numbers of scientists in China, India and other lower-wage countries, “the cost of producing a new scientific discovery is dropping around the world,” says Christopher T. Hill, a professor of public policy and technology at George Mason University.
American innovators — with their world-class strengths in product design, marketing and finance — may have a historic opportunity to convert the scientific know-how from abroad into market gains and profits. Mr. Hill views the transition to “the postscientific society” as an unrecognized bonus for American creators of new products and services. ( Steve's note -> note that this bonus is only for the 'creators' of products)
Mr. Hill’s insight, which he first described in a National Academy of Sciences journal article last fall, runs counter to the notion that the United States fails to educate enough of its own scientists and that “shortages” of them hamper American competitiveness.
The opposite may actually be true. By tapping relatively low-cost scientists around the world, American innovators may actually strengthen their market positions.
“We shouldn’t fear the rise of science in Asia and other poorer countries. We should figure out how to take advantage of it,” says Patrick Windham, a lecturer in technology policy at Stanford and a former staff member of Congressional science committees.
Optimism about scientific globalization is a wrinkle on the familiar story of outsourcing. Just as United States companies have contracted out physical production, they can do the same for scientific “goods,” which range from formulas and ideas to the results of experiments.
In the short-term at least, higher spending on scientists by India and China could create a glut of them in these countries, driving wages down further and making the costs of acquiring science even lower. (exactly the process that business denies is happening now in other fields) .
“Science is the ultimate global activity,” says Richard B. Freeman, a labor economist with the National Bureau of Economic Research. “You can outsource research.”
Mr. Freeman, among others, questions whether there is a shortage of scientists in the United States. He cites evidence suggesting that American dominance in science will decline over time and that we should worry less about purported shortages at home and more about “developing new ways of benefiting from scientific advances made in other countries.”
Of course, scientific knowledge isn’t a thing, like a child’s toy or an electric motor, so the day may never come when “science” can be purchased from a Chinese or Indian catalog. For the foreseeable future, United States companies will need their own highly paid scientists “to evaluate the purchase of foreign science and to make sense of it in their own labs,” says Daniel Sarewitz, director of the Consortium for Science, Policy and Outcomes at Arizona State University.
While the United States is expected to remain the home of choice for the world’s best scientists for some time, industry is increasingly striking deals with scientists in developing countries eager for wider exposure.
Seagate Technology, a leader in digital storage, pays scientists in Singapore to do basic studies, and even benefits from subsidies given those scientists by Singapore’s government, making the relationship even more affordable. Seagate runs a research laboratory in Pittsburgh. Roughly 10 to 20 percent of the lab’s budget for outsiders goes to scientists working abroad.
Benefiting from foreign science isn’t new. Last October, the Nobel Prize for physics, for instance, was shared by French and German scientists for their basic discovery of what is known as the “giant magnetoresistance” effect, which enables much more digital data to be stored on a disk drive. The breakthrough, by Albert Fert and Peter Grünberg, had essentially no commercial impact in Germany or France. But by using open scientific literature and attending conferences, Seagate found ways to capitalize on the breakthrough, which had been financed by European governments.
“This is a really good example of how foreign scientists help,” says Mark Re, Seagate’s senior vice president for research and head of the company’s research center in Pittsburgh.
Commercializing science isn’t easy, which is the main reason that rising scientists from India, China and other countries can’t readily achieve business success. In the case of the magneto effect, Seagate engineers ended up using different materials — at different temperatures — than the Nobel winners.
“We made the big step to get the scientific advance into products,” Mr. Re says. “And then we had to manufacture hundreds of millions of them. This is a very different challenge.”
PRECISELY because the gap between basic science and commercial innovations is large, Mr. Hill’s postscientific society makes sense to innovators on the front lines. One implication for the future is that the United States “won’t have to import so many scientists,” says Stephen D. Nelson, associate director of policy programs at the American Association for the Advancement of Science.
The association, which for decades has generally favored policies to expand the ranks of American scientists, is devoting a portion of its annual policy seminar next month to talk about the “postscience” situation.
Industry, meanwhile, is adapting to a world where scientific goods can come from anywhere — and fewer scientists work on abstract problems unrelated to the market. “It is no accident that many corporate labs have fallen apart,” Sean M. Maloney, executive vice president of Intel, says. “They were science farms looking for problems.”
Monday, April 7, 2008
Winning a lottery every day
Remember Steve Austin, the $6 million 'bionic' man ? That was supposed to be an amount of money to inspire awe in the vast majority of TV viewers back in the '70s .
Nowadays compensations for Hedge fund managers have regularly topped $1billion , for ONE YEAR's 'work' . Here's the new record, double last year's record, $3 billion .
Is one person worth $3 billion to any enterprise on earth ? Probably not, but there it is .
Most of us don't understand very large numbers (such as a $3 trillion ANNUAL federal budget !!) but their meanings become clearer when brought down to some easily understood context ... such as an hourly wage .
For those interested :
$3 billion (top Hedge Fund compensation) is 500 times the $6 million cost of a bionic man in the '70s .
$3 billion is $250 million / month .
$3 billion is $57.7 million / week .
$3 billion is $11 million / day
$3 billion is $961,500 / hour (assuming he works 60 hour weeks , for 52 weeks)
If he takes off a month to enjoy his earnings, bump everything up by another 8% or so , i.e. his hourly would be around $1.04 million / hour .
This is something we can all understand:
$11 million / day !!! Imagine winning an $11 million lottery every day for 365 days in a row !!!!
Pity the poor CEO today who gets only $30- 50 million or so ... $30 million is only 1% of $3 billion . Or to put it another way, the CEO would have to work 100 years at $30 million to get one year's compensation of this top hedge fund manager.
The hourly rate for the $30 million CEO is 1% of the Hedge Fund mgr's, or about $9,600 / hour.
Contrast this to an 'average' IT employee. The rule of thumb is that companies save $100K for every employee laid off. This is an average individual compensation, plus benefits and some other 'overhead' (room, electricity, office supplies, printing, etc) amortized per employee . A good round number to work with.
$30 million (CEO) = $100K (employee) x 300 . It would take the average employee 300 years to earn what the CEO earns in one year.
Hedge Fund mgr = $961,500 / hour (60 hour week)
CEO @ $30 million = $ 9,600 / hour (60 hour week)
Avg IT worker = $ 38 / hour (50 hour week)
April 7, 2008
Hedge Fund Managers Make Mint on Housing Crisis
By REUTERS
Filed at 7:08 a.m. ET
BOSTON (Reuters) - Millions of Americans may be facing the prospect of losing their homes, but a handful of fund managers have become the best paid in their industry -- taking home 10-figure paychecks last year -- by betting against mortgages.
John Paulson, who ran a medium-sized fund until last year, zoomed to the top of the industry's earnings table when he took home an estimated $3 billion in 2007, double what the top earner made in 2006, according to data released by magazine Trader Monthly on Monday.
By standing conventional wisdom on its head and deciding that housing prices could decline on a national level, and that investment-grade mortgage bonds would be subject to default in record numbers, Paulson, 52, set a new record for payouts on Wall Street, industry analysts said.
Paulson's $3 billion payout is equivalent to $26 for every U.S. household (114.4 million in 2006).
This year seems to be no worse for Paulson as his Advantage Plus fund was up roughly 8 percent through the middle of March. Many other hedge funds, however, are suffering heavy losses, with industry analysts estimating the average fund lost 5 percent in the first quarter. Hedge funds often promise to make money in all markets by using tools, such as shorting, that are off limits to other money managers.
Following behind is Phil Falcone, 45, whose shrewd housing market bets at Harbinger Capital Partners netted him a $1.5 billion payout. Falcone, a former Harvard hockey star, also made headlines by demanding changes at the New York Times Co.
As a group, the 100-best paid hedge fund managers earned $30.3 billion last year, 26 percent more than they took home in 2006, the magazine reported.
Both Paulson and Falcone squeezed past Jim Simons of Renaissance Technologies and Steve Cohen of SAC Capital Advisors, perennial top earners who each took home between $1 billion and $2 billion in 2007.
Some of the previous year's top earners, however, fell far down the list and ESL's Edward Lampert dropped off completely as his investments in Sears Holdings Corp and Citigroup Inc soured last year. Citi wrote down billions on housing market losses.
John Arnold, who topped the 2006 list with a $1.5 billion payout he earned by taking the other side of a bet that felled Amaranth Advisors, made between $400 million and $450 million in 2007, the magazine reported.
Veteran oil trader T. Boone Pickens topped up his personal fortune with a $300 million to $350 million payout in 2007, a lot less than the $1 billion he took home in 2006.
Nowadays compensations for Hedge fund managers have regularly topped $1billion , for ONE YEAR's 'work' . Here's the new record, double last year's record, $3 billion .
Is one person worth $3 billion to any enterprise on earth ? Probably not, but there it is .
Most of us don't understand very large numbers (such as a $3 trillion ANNUAL federal budget !!) but their meanings become clearer when brought down to some easily understood context ... such as an hourly wage .
For those interested :
$3 billion (top Hedge Fund compensation) is 500 times the $6 million cost of a bionic man in the '70s .
$3 billion is $250 million / month .
$3 billion is $57.7 million / week .
$3 billion is $11 million / day
$3 billion is $961,500 / hour (assuming he works 60 hour weeks , for 52 weeks)
If he takes off a month to enjoy his earnings, bump everything up by another 8% or so , i.e. his hourly would be around $1.04 million / hour .
This is something we can all understand:
$11 million / day !!! Imagine winning an $11 million lottery every day for 365 days in a row !!!!
Pity the poor CEO today who gets only $30- 50 million or so ... $30 million is only 1% of $3 billion . Or to put it another way, the CEO would have to work 100 years at $30 million to get one year's compensation of this top hedge fund manager.
The hourly rate for the $30 million CEO is 1% of the Hedge Fund mgr's, or about $9,600 / hour.
Contrast this to an 'average' IT employee. The rule of thumb is that companies save $100K for every employee laid off. This is an average individual compensation, plus benefits and some other 'overhead' (room, electricity, office supplies, printing, etc) amortized per employee . A good round number to work with.
$30 million (CEO) = $100K (employee) x 300 . It would take the average employee 300 years to earn what the CEO earns in one year.
Hedge Fund mgr = $961,500 / hour (60 hour week)
CEO @ $30 million = $ 9,600 / hour (60 hour week)
Avg IT worker = $ 38 / hour (50 hour week)
April 7, 2008
Hedge Fund Managers Make Mint on Housing Crisis
By REUTERS
Filed at 7:08 a.m. ET
BOSTON (Reuters) - Millions of Americans may be facing the prospect of losing their homes, but a handful of fund managers have become the best paid in their industry -- taking home 10-figure paychecks last year -- by betting against mortgages.
John Paulson, who ran a medium-sized fund until last year, zoomed to the top of the industry's earnings table when he took home an estimated $3 billion in 2007, double what the top earner made in 2006, according to data released by magazine Trader Monthly on Monday.
By standing conventional wisdom on its head and deciding that housing prices could decline on a national level, and that investment-grade mortgage bonds would be subject to default in record numbers, Paulson, 52, set a new record for payouts on Wall Street, industry analysts said.
Paulson's $3 billion payout is equivalent to $26 for every U.S. household (114.4 million in 2006).
This year seems to be no worse for Paulson as his Advantage Plus fund was up roughly 8 percent through the middle of March. Many other hedge funds, however, are suffering heavy losses, with industry analysts estimating the average fund lost 5 percent in the first quarter. Hedge funds often promise to make money in all markets by using tools, such as shorting, that are off limits to other money managers.
Following behind is Phil Falcone, 45, whose shrewd housing market bets at Harbinger Capital Partners netted him a $1.5 billion payout. Falcone, a former Harvard hockey star, also made headlines by demanding changes at the New York Times Co
As a group, the 100-best paid hedge fund managers earned $30.3 billion last year, 26 percent more than they took home in 2006, the magazine reported.
Both Paulson and Falcone squeezed past Jim Simons of Renaissance Technologies and Steve Cohen of SAC Capital Advisors, perennial top earners who each took home between $1 billion and $2 billion in 2007.
Some of the previous year's top earners, however, fell far down the list and ESL's Edward Lampert dropped off completely as his investments in Sears Holdings Corp
John Arnold, who topped the 2006 list with a $1.5 billion payout he earned by taking the other side of a bet that felled Amaranth Advisors, made between $400 million and $450 million in 2007, the magazine reported.
Veteran oil trader T. Boone Pickens topped up his personal fortune with a $300 million to $350 million payout in 2007, a lot less than the $1 billion he took home in 2006.
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