More Funding for Universities Hurts the Economy

Stephen Downes points us to an article about the apparent negative correlation between economic growth an university funding. Here are some good quotes:

Universities, while they’re virtuous institutions … do not necessarily promote economic growth and development, because resources have to be taken from the private sector or somewhere to pay for them

There is very, very, very weak evidence that more spending on state universities actually leads to more college graduates — let alone higher-quality ones.

See also my posts An upcoming revolution in science? The end of academic journals?, A Tectonic Shift in Global Higher Education and Big schools are no longer giving researchers an edge?

Warren Buffet Says the Rich Do Not Pay Enough Taxes

Warren Buffet, who used to be the second richest man in the world, ran an experiment in his office. He asked his staff to check which fraction of their income they paid in taxes. Surprisingly, he pays a much lesser fraction in taxes than his staff does. This is a great quote:

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

How can this be, when the majority of the people are much poorer than Warren and thus, ought to tax Warren a lot. No, Warren says he does not even do tax planning: he pays whatever he is being asked to pay.

This is explained away by the fact the poors tend to vote for more tax breaks for the rich. I couldn’t find a quote, but I think it is a well known fact that the poors tend to mistrust the governments to redistribute the wealth.

“People can’t do elementary mathematics” is another explanation. I don’t like this explanation, but that is what it comes down to. In Quebec, we used to have a child care system where poors got lots of money in tax deduction whereas the rich got very little. Then the government created child care programs so that everyone pays the same and gets more or less the same. The problem with this is that it is a measure that benefits the wealthy only, but gives the illusion of wealth distribution because everyone is suddenly apparently equal (except that the rich pay less taxes than they used to).

I’m often amazed at how uneducated about money people are. Take “tax returns”. A tax return is the government sending you back the extra money you paid. This is not an income. Having a large tax return is also a bad thing: this means that you gave the government a large interest-free loan. Yet, time after time, I see people who consider tax returns an income. Heck! The government could probably start taxing tax returns and many would agree!!!

Another one I like is how many people in Canada think that the goods are cheaper in the USA. For example, if you see a $30 printer in the USA, is it cheaper than the corresponding $40 printer in Canada? Depends on the exchange rate, doesn’t it? You’d be amazed how many people do not get that part for the simple reason that they never understood rules of 3.

Repeat after me: income-neutral costs favor the rich. All you need to understand are basic fractions here. The rich should pay more for government services whenever a cost is involved.

(Why am I writing about politics these days? Must be a reaction to Dion’s coming to power.)

Yahoo and MSN cannot compete?

According to Greg Linden, despite their best efforts, Yahoo and MSN keep losing the search war against Google.

What is the problem at Yahoo and MSN? After four years of trying, they just seem to be slipping further and further behind. First, MSN showed a drop in web search market share, down to 12.9% from 15.3% a year ago.

As someone who does not own any stock in any of these companies and who does not have a vested interest in any of these companies, I am actually quite pleased that a company run by engineers wins over “traditionnally managed” companies. Naturally, Microsoft is a large company and places like Microsoft Research are not exactly full of suits seeking the latest acronyms. I am quite certain that Yahoo has also large components mostly run by engineers, but I do get the feeling that Google is unique in that the entire company is ran by engineers and scientists. When Google wins, creative technology people win.

Greg Linden is a good example of what a technology person can do despite the suits running the show. Greg is responsible for making collaborative filtering ubiquitous through the Amazon recommender system.

Microsoft, Yahoo, and Google were all founded by people who dropped out of school

Paul Graham gives us excellent startup advice:

Time after time VCs invest in startups founded by eminent professors. This may work in biotech, where a lot of startups simply commercialize existing research, but in software you want to invest in students, not professors. Microsoft, Yahoo, and Google were all founded by people who dropped out of school to do it. What students lack in experience they more than make up in dedication.

What Paul is saying is that you may know a lot more than the other guy, you may have trained your brain a lot longer and a lot harder, but if you are not as dedicated, as desperate as the other fellow, you’ll lose.

This is why, a lot of eminent professors have what we called, when I was still a graduate student, the accident. What is “the accident”? That’s what happens when a brilliant guy becomes an academic success and he has 20 or 30 graduate students working for him and $2 millions in grant money. He becomes as brain dead as any CEO. He can’t think of new ideas. His students have to explain everything to him twice and he still doesn’t understand what they are talking about. He can’t write code anymore. He can’t build anything anymore.

(And no, becoming a big shot doesn’t imply you can’t build anything because you are out of time. Tim Berners-Lee still writes code. Paul Graham writes his own essays. Scott Adams draws his own cartoons.)

This is also why, when you see someone you know succeeding, you may think to yourself that such a person is a fraud. “I’m much smarter than he is, so he must be cheating his way to the top.” You might be smarter, but if you aren’t as desperate, as dedicated, forget it.

The Cost of Graduation

From Ian I got to this Observer article. The story is that university education is becoming less attractive as the costs increase and the salaries for graduates don’t correspondingly increase. The net result is that universities might be in an increasingly competitive game as western universities progressively lose their edge in the world wide market and as students look for more cost efficient alternative.

(…) more and more A-level students ask about alternatives to university, said the author of the research, Peter Brown, director of Gabbitas Educational Consultants. (…) we are seeing Chinese universities [are also] more financially attractive.

Asian universities stand to win big. In the western world, the first university to offer high quality, but significantly cheaper university education, by essentially cutting down on the fat and keeping what really matters, is going to win big time.

We are at a pivotal point where it might be good timing for a radical rethinking of university education.

Did I mention that you can listen to Stanford lectures on your ipod? See http://itunes.stanford.edu/. Chances are good that Stanford will be among the winners.

Sex.com sold for $14 million dollars

Slashdot reports that the sex.com domain name sold for $14 million. Recall that people spend billions every year buying software, which effectively costs nothing to copy.

The best route, these days, to become really rich is to find a way to create something that effectively costs nothing to produce, though it may cost a lot to design, and then, find a way to make sure you are the only one who can make an infinite number of copies for free. The problem is that we are collectively wising up to this get-rich-quick scheme.

I think that a more durable model, though a much less effective one, is to find a way to offer a service nobody else can match. Google comes to mind. It is a model based on constant hard work which appeals a lot more to the Catholic boy in me.

Balmer Vows to Kill Google

According to slashdot, Microsoft CEO, Ballmer, wants to kill Google:

Ballmer then launched into a tirade about Google CEO Eric Schmidt. ‘I’m going to f***ing bury that guy, I have done it before, and I will do it again. I’m going to f***ing kill Google.’

I just don’t get this type of behavior. I strongly suspect these people are not very happy.