Today I read an article subtitled “” Essentially it is a warning from the executives of HP about how the government’s lack of investment in science and technology could spell the doom of America. A senior fellow at HP Labs named Stan Williams saw first hand that countries like India and China are investing billions in research while America is spending billions on bailouts for failed companies. Here is what I have experienced in this matter.

One thing that stuck out to me is that the reporter pointed out in Williams’ lab, “only 18 of the 75 scientists were born in the United States, and 10 of those American-born researchers are over 50 years old; only six are under the age of 35.” My experience in the Valley is that many people who work in high tech are foreign nationals and most of these people are either Chinese or Indian. So where are all the Americans? I think the problem is really quite complex and is a mixture of culture and the basic fact of population. First of all, the popular American culture is not nearly as obsessed with higher education as Asian countries like China, India, and Japan. In China you are pretty much expected to get at least a Master’s degree and it doesn’t surprise me that China invests a lot in its education system. In America kids are mostly taught that they could be anything they want, and that is a good thing.  However, most kids just want to be popular and accepted, and being a science geek will not win any social points. This is not to say that Americans do not value education, but a major problem is that higher education can be prohibitively expensive in this country. Even public schools cost tens of thousands of dollars a year and I am sure a lot of capable students are just priced out. Recently there was a report and only California got a passing grade of C- for its large system of cheap community colleges. Finally, the irrefutable fact is that the total population of Chinese and Indians in the world is about seven times the population of Americans so there is a much larger talent pool to choose from. When you couple that with the fact that most Chinese and Indians are it is really no surprise that there are less American scientists.

The good news for America is that there are still plenty of foreign nationals who are willing to live in this country and contribute to its economy. I am one of them, but I’m not sure how long America will stay as attractive as a golden mountain of opportunity and freedom. A lot of graduate students my age that come from China these days are going back to China after they graduate because they believe that China has more opportunities than America. As noted, Williams saw that in China a 28 year old recent graduate was able to get a $5 million research grant from the government for her research, but here in America a professor would have a hard time raising $50,000. Additionally, a major issue preventing foreign talent from staying is the draconian and frankly bizarre immigration system in America. It takes years for a foreign national to win legal rights to stay in this country, and while they wait they are often treated like criminals or indentured servants. For many brilliant young scientists, this crazy immigration system is really not worth the trouble. They can go back to their own countries and have all the rights of a citizen and make a difference for their people, so why should they go through the gauntlet here? This loss of foreign talent is an incredible waste for America because many of these students get fellowships and are trained by American companies and schools, but end up bringing all the things they learned back to their own countries. If the immigration system were easier on talent then I am sure more people will consider staying.

So will Silicon Valley become Detroit? I highly doubt that will happen in this generation because this area is still buzzing with innovation and there are also many immigrants here who have made America their home and they will continue to contribute. I know that there are people who hate us for having these high tech jobs here, but we would not have these jobs if there were enough qualified Americans. I do believe that America has to get serious about education and training in science to stay competitive in the world, and it has to start as soon as possible. I think the to upgrade schools around the country is a good start, but it is a drop in the bucket compared to the amount of money that went to failed companies recently. Will the American government ever learn to truly invest in the future long term?

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P.S. Happy everyone!

Recently I read about in the past four years.    It’s really not a surprise to me because I have seen the rapid rise in cost of living, taxes, and unemployment in the past few years.  Combine that with a state government that is in constant turmoil and you have a very stressful and unstable situation to be in. However, is the California dream really dying?

In my mind, the California dream is much more glamorous and adventurous than .   For example, every Chinese person I know still calls San Francisco “Old Gold Mountain” because of the Gold Rush.  The gold ran out, but the legend of sailing halfway around the world to California for treasure still remains. The dot com bubble burst, but some lucky few still made out like bandits and new entrepreneurs are still trying to strike it rich in the Silicon Valley.  The California dream gives people high expectations to become the richest or the most famous, but it also dishes out  big disappointments. The fact of the matter is that most people cannot attain the California dream.  Not everyone can become a movie star, and not everyone can be a dot com millionaire.

I have lived in California for almost 12 years now and I have seen both of my parents’ next door neighbors move out of state.  One of the families sold their home for a dandy profit and headed up to Oregon, and the other packed up to go to Washington.  Now my inlaws have packed up and left for the Philippines after living here for over 23 years and raising two children.  Honestly I am a little jealous, and a little curious as to if they love where they are now, but I think they have achieved their goals in California.

There are a lot of things about this state that I love even though sometimes I am so frustrated by all the things going wrong.  I love the innovative energy in the Silicon Valley, and the mostly sunny skies.  I love the diversity of people here and the availability of cuisines from all over the world.  This is also the state where I got a pretty decent college education even though my parents paid for it through tuition and oodles of taxes.  California is where I grew from a child into an adult, and for better or worse it is  a part of who I am.

It is very unlikely that I will leave California since pretty much my entire immediate family is here.  My husband is adamant that he would probably never leave California since he has lived here since he was two and my parents have worked pretty hard to be here.  This is home, and it is messy and screwed up, but it is still home. I am pretty sure it is going to get worse, but I also think that the innovations of Californians will make this the place to be once again. The California dream will live on because everyone dreams of a life beyond the ordinary, but perhaps right now it doesn’t seem like California is the best place to realize that dream.

I’m sure you have heard about President-Elect Barack’s Obama’s new push to pass a stimulus package.  I couldn’t find a a comprehensive article about the details of the plan, but what’s being reported the most in the media are the tax cuts which make up about 40% of the package.  Here they are, and here is why I think they are mostly nonsensical and probably would not do much to lift the economy.

buy viagra online canadabuy viagra online canada- I know that every bit of money helps, but is this really the best way to spend billions of dollars in stimulus money?  $500 per person works out to be about $40 per month.  I guess it’s good for a cable bill, but will $40 per month stop a family from going into foreclosure?  Will $40 per month be enough to stop local shops from closing?  Another thing is, didn’t we just have a round of stimulus like this from the Bush administration?  That one was actually $600 per worker or $1200 per couple plus $300 per kid.  Just look at how much that helped and you’ll see how much this one will help.

buy viagra online canada – This one has so many holes that it’s like a piece of moldy Swiss cheese.  First of all, if a person lost a job at business A and then finds a job at business B, is business B really buy viagra online canada a job? It seems like that would be a net gain of 0 jobs to me.  Additionally, some businesses are doing well and some are doing poorly.  The ones that are doing poorly are very unlikely to hire someone just for the tax benefit because adding an employee is very expensive and it would only make sense to add an employee if the employee’s output of work can bring a profit.  On the other hand, the businesses that are doing well may already be planning to hire people and they will get stronger due to the tax rebate, but they probably did not need that money to begin with and again this tax rebate would have been pointless.    Another thing is that it’s unclear how long a company needs to keep an employee to claim this tax benefit and what type of employment it would be.  If those details are not clear I can see shady businesses exploiting this by hiring some person part time for half a month and then claiming the credit for a profit.  Anyway, I don’t think this tax stimulus will actually be an incentive for any logical business to add to their payrolls and I highly doubt that this will bring about a net gain in employment numbers.

buy viagra online canada- This particular item isn’t mentioned a lot on the big news sites probably because it’s just bizarre.  I see this particular clause benefiting the giant financial firms the most because they have had the most significant losses in the last year, and they also had the biggest profits in the years prior.   A lot of companies in other industries did not suffer as badly, and the good responsible companies that were still making a profit in 2008 will not get a boost.  Again, there is no guarantee that the companies that receive this benefit will create jobs and expand the economy.  In fact, I think in this economy only the strong companies that still have a profit are still hiring because they know that they can get discounted labor and they are in a good position to use the extra labor effectively.  It is almost like Obama wants to punish the companies that had good management to make a profit despite difficulties by giving their tax dollars to those who may have been extremely irresponsible and I think it’s plain stupid.

Finally, there is a question that everyone should be asking “WHERE THE  (insert your favorite expletive here)  WILL ALL THIS MONEY COME FROM?” Oh that’s right, they will just add it to the national debt, and that will be paid by Americans for generations to come.  I know that Obama’s plan isn’t finalized, but so far I haven’t heard a single good idea from him, yet.

A year ago I wroteabout the government’s plan to freeze mortgage rates and how ridiculous it was. I also suggested that people should just walk away from their gigantic loans and buy something cheaper. A lot has happened since then. There were countless attempts by the government to revive the housing market with very little success, and many people did walk away from their underwater loans and buy cheaper homes. Yesterday, showed that more than 50% of borrowers who received loan modifications end up defaulting again anyway.

When I read the news I thought to myself, “well, what did you expect?” Many of these loan modifications either changed the loan term from 30 years to 40 years or lowered the interest rate, but the borrowers still owe a gigantic debt on a depreciating asset. There is no incentive for them to pay the debt if they can find a place to live in for even less money than the reduced mortgage payment.   Seriously, who would want to pay a $400,000 debt on an asset that is worth only $200,000?

Additionally, all of these loan modifications encourage bad behavior.  The borrowers probably think that if they don’t pay they will be bailed out again because bailouts are all the rage right now.  Everyday the news is reporting some kind of government action to deal with foreclosures.  So if you already got free housing for 3 to 4 month and then got a modification on your loan, then you have another 3 to 4 months until a foreclosure comes.  That’s 6 to 8 months of no housing payments even if there is no second modification, and that seems like a good financial incentive to default.

Another driver in re-defaulting is the worsening economic state of the world.  , and perhaps a lot of people no longer have the amount of income they had when they received the loan modification.  For now, I think the unemployment situation is only going to get worse.

I think the lesson in this is that the government should stop messing with the free market and let foreclosures happen naturally.  These modifications and bailouts are just prolonging the pain for everyone involved.  I suppose that more than 40% of these borrowers are still paying for their modified loans,  but they really  may be better off by renting and saving for a down payment on a cheaper home.  Home prices have come down more than 25% in many parts of the country, and it is slated to go down even further.  It would take a while for a foreclosure to come off someone’s credit report, but that might be the perfect time for that person to build up a sizable down payment.

I think home prices will go down for at least another 4 to 5 years and recover if the government stops with the interventions.  If they continue to manipulate the market through interest rates and loan modifications then it may take the housing market a longer time to recover precisely because the bad apples will still be hanging on.  For example, if a person gets a foreclosure now then  it would take seven years for it to come off their credit report.   So in seven  years this person would be a prime borrower again.  However, if he hangs onto the mortgage through various bank and government deals and then redefaults after two years, then it would take nine years from now for that person to become a prime borrower again.  The sooner people get foreclosed on, the sooner they can rebuild their credit and become suitable homebuyers again.  The housing market will only recover when the demand returns, and I truly believe that  all of these government polices to prevent foreclosure will simply stall the recovery of the housing market.

Despite censorship and propaganda, Chinese people are very aware of what is going on in their country and around the world.  Every person I met knew of the financial crisis in America, and even the masseuses knew of Obama and McCain. I’m fairly sure most people here in America have no idea who the Chinese president is. (Funnily enough the Chinese president’s last name is “Hu”).   Here are some of the tidbits I heard about how the financial crisis and other factors are affecting China’s economy and the lives of everyday folks.

First of all, the stock market in China plunged more than 70% from its highs.  The central government called this a correction, but the people I talked are pretty aware that it’s more than that. However, the percentage of people in China with skin in the stock market is very small.  Most people put their money in the four large government capitalized banks and collect interest and many people still have traditional pensions for their retirements. However, orders for Chinese goods are down significantly for next year and many factories are closing down due to lack of sales since the United States is China’s largest trading partner.  Everything from shoes and plastic forks are seeing decreases in orders.  Unemployment is fairly high since China has way too many people.

Another event that affected China’s economy is the Olympics.  In order to ensure that the event was a success with the least amount of restrictions China created new Visa rules to curtail the entry of foreigners.  As a result, the amount of tourists dropped by quite a bit.  Most of these Visa restrictions have been lifted, but the outlook for tourism is still lower than previous years because many foreigners are not travelling in the current economic climate.

The people I spoke to were also quite curious about home and car purchase in America.  Cars carry a tariff as high as 25% to 100% in China, but people still buy them.  Condos in large cities like Beijing and Shanghai are extremely expensive, and yet people still manage to pay in cash or put at least 30% down. The tour guide in Shanghai told us that most people also get very short term mortgages where they pay a home off in 5 years.  She thought that a 0% down loan is absolutely ridiculous and said that the bankers in America must be idiots. Home prices in China hasn’t really fallen because people save up so much cash to buy something, but home sales have slowed significantly after a rapid run in prices.

Most people I spoke to believe that the Chinese government is doing the best it can under the current economic climate.  Everyone agreed that their lives have vastly improved in the last two decades of reform, and even though some people said that they were dubious about China’s large purchase of American government debt, they seem to agree with the fairly conservative economic policies of the central government.  China is also focusing on education and scientific research much more than before to cultivate its own engineering and scientific talent.  Another emerging trend is that more and more Chinese students of my generation who go abroad are returning to China after they graduate.  This is a big difference from my parents’ generation, who went abroad and never returned.

For the most part,it seemed like business as usual in China. In my hometown, the restaurants we went to were packed to the brim and my grandfather said, “I bet you can’t see a financial crisis here.”  There weren’t as many tourists, but I guess that’s better for pictures.  In Shanghai it was hard to hail a cab, and car license plates are auctioned off each month for more than $5000 each.  In Beijing, the construction cranes were still working overtime to erect modern and bizarre skyscrapers.  China is definitely still growing amidst this global financial turmoil, and there is definitely a sense of pride and optimism in the misty polluted air.

To be continued…