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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (87257)	12/19/2000 11:21:49 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 132070

economic gdp is growing at about 2-3% So we're generating a $230 Billion budget surplus on 2-3% GDP growth eh? keep in mind that earnings are not factored into gdp, revenue is. And I noted that the link that was provided only provided examples of decreased earnings, but failed to provide data on revenue increases. If earnings don't factor in, why did the author provide earnings data to explaing the alleged fallacy of US GDP growth? Why didn't he provide corporate revenue data to prove his point about this alleged "two sets of books". You and I both know that in periods of intense capital improvements earnings often suffer temporarily until project completions. But if revenues are increasing, which they clearly have in most cases, then this is setting the stage for future earnings growth as efficencies bear fruit. invest b/c we have cool technology that won't support financial growth. So I take it that you are answering in the affirmative with regard to major US corporations spending billions on economic pipedreams that add nothing to their ability to increase financial results for the corporation. i work in electronics manufacturing and i can tell you that there is incredible room for improvement in many areas. Well, I guess that bodes well for companies like Manugistics, doesn't it? And if we're in need of such improvement, I wonder how the rest of the world is faring? >>Are these expenses or assets?<< and this is related how? Go back and look at that page again. One major argument the author posed was the manner in which software was being accounted for. He claiming that changing the manner in which software is accounted for -formerly as an expense and now as an asset- has skewed GDP growth upward. And I provided a clearcut example where Boeing INVESTED in a 3D CAD system that completely revolutionized the design, test, and simulation process in the aircraft manufacturing process. Is that an asset, similar to purchasing machines like wind tunnels (which they still use as confirmation), or stress testing machinery for determining load failures of critical components, or is it an expense? becoming more efficient (reduce cost, all else being equal = more profit) is different than an increase in productivity (more revenue per hour worked). Sounds to me like they go hand in hand. If I produce x number of widgets per hour which net a certain profit margin, then it only makes sense that if I derive a manner in which I can increase my production of widgets per hour, then I can share overhead expenses among more widgets sold. The only downside to this is that I become more productive than the demand side desires, whereupon I have to reduce inventories or reduce my JIT output to decreased demand. THAT can make productivity disappear, the fact that people no longer want as many of my widgets. But then I compensate by laying off workers and reducing my overhead costs until demand picks up again. One more point... that author DOES make an important point about how options have been abused by many companies with regard to using them as a substitute to wage compensation. Obviously for companies like MSFT and many internutz, this policy just came back to bite them in the butt BIG TIME, and now they find themselves having to compete for IT talent with hard cash. But the lack of such IT talent represents a market failure in US governmental policy, not the private market. There are PLENTY of people out there who would love to immigrate to the US and work in our IT industry. But immigration quotas prevent it. And our own educational system has failed private industry miserably by not providing the necessary skills to graduates. But these are both market failures that can be alleviated just as they have in the past, namely the brain drain from other economies who fail to reward such talent properly. Regards, Ron