Arnold Kling  

What Nick is Reading

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Nick Schulz sends me three interesting links.

1. A shining example of what I call a bogus mortgage lender.


In 2004, Bohan Group, a due diligence underwriting company, was hired by a bank to double-check the suitability of mortgages written by Quick Loan Funding that the bank was looking at buying and turning into securities. Bohan sent Nicole Singleton, 39, to the Irvine office. She reviewed 40 loans and rejected every one, she says.

Read the whole thing. It's a great yarn.

2. The Post-Scientific Society.


In view of the increasing sophistication of the scientific contributions of other nations, the United States has become a high-cost place in which to do science. One needs look no further than the recent rush of U.S. companies to establish research laboratories in China and India for confirmation that the costs of research are lower there.

...The positive side of the transition to a post-scientific society story is that the United States has increasingly turned its attention to matters that are more complex than fundamental science. It is moving up the scale of intellectual and societal complexity by specializing in activities that require the integration of all knowledge and capabilities...

In the next few years, it may be desirable to reinstate the foreign language requirement for the Ph.D. in science and engineering, not to put up additional barriers to success but to emphasize the multicultural basis of good practice. Programs for study abroad should expand their reach to include students in science and engineering as well as the humanities and social sciences.


Read the whole thing.

Finally, a clinker, from Wired.


the proportion of US household budgets spent on tech products and services — computers, game consoles, cell phone service, cable, TVs — has held steady at about 5 percent for most of the past decade. We're just spending that money — more than we pay for health insurance — on different stuff.

The data that they use on consumer spending shows personal spending on health insurance of $1361 a year. But that is a low number--I'm guessing that it does not include employer-provided health insurance or government-provided health coverage. So any suggestion that we could afford health insurance if only we threw away all our gadgets is baloney.



COMMENTS (5 to date)
John writes:

Most people studying for Phds in science and engineering are foreign already.

Dave writes:

I'm sure Britain in the 1700's was an expensive place to have an industrial revolution. Undoubtedly it would have been cheaper to have it in India or China.

But Britain was a place where a University mechanic like James Watt could invent a steam engine and where intellectual capital was respected so someone could make money on the spinning jenny, etc.

Oh well.

Dr. T writes:
In view of the increasing sophistication of the scientific contributions of other nations, the United States has become a high-cost place in which to do science. One needs look no further than the recent rush of U.S. companies to establish research laboratories in China and India for confirmation that the costs of research are lower there.
Here we find yet another writer who does not understand the differences between science and technology. Many countries have become good at advancing technology. No country comes close to the United States in its ability to advance science. Why do so many foreigners come to the U.S. to study science? It isn't because their nations are now powerhouses of scientific research.

Corporations build technology research operations in other countries primarily for two reasons: 1. The costs of building and staffing new technology research facilities are much less (even after the expenses of relocating some of their top U.S. researchers) or 2. The building of a corporate technology research facility is a quid pro quo for doing other business with that nation.

I doubt that many U.S. corporations are building research facilities in other countries because they have large pools of skilled technology researchers. I have not heard of any U.S. scientific research moving to other countries except in situations where the research would be illegal or unethical. Does anyone know of such cases?

Heather writes:

I think the science and engineering article is bogus. Based on experience with companies like IBM and Intel and work in a research institute, I can tell you that companies are not outsourcing much in R&D to other countries. I actually recently read an article from the CEO of Creative Networks (they make graphics cards for computers), a company based out of Hong Kong, who said they were outsourcing their R&D to the US because we are more creative.

The technological work I have seen outsourced to India and China is largely derivative work (size reductions of existing parts). The work that has not been derivative I have seen sent back here because of inability to execute. I would agree with the author that cross collaboration is becoming increasingly important, but it will not replace the importance of technological innovation in the US.

Jeff writes:

My favorite quote from the mortgage lender article:

"``When they started catapulting Porsche Carrera GTs and he says, `What the hell, what are a couple of cars being thrown around?' I'm thinking, `That's the guy you want to bet against,''' Bass says."

Jeff

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