Most venture also wants to see ideas that can scale well non-linearly with employee count. This leads to the few ballpark successes being pretty job light compared to their revenue. Which is better for the economy, cash hoarding and dividends or continual reinvestment in expanding into new markets?
Further this concern that the US manufacturing industry is dying or dead is a myth (and quite handily, type in 'myths of US manufacturing' and you come up with the following article among many) - an excerpt "U.S. workers produce 21% of all factory goods made globally, or about $1.7 trillion worth per year. That's significantly lower than the peak of 28% in 1985 but only slightly below the long-term average of 23% for 1970 through 2006.": http://articles.moneycentral.msn.com/Investing/CompanyFocus/...
What Gomory doesn't seem to address and why innovation factors so importantly (if Friedman, overstates his case, Gomory understates the value of innovation), ideas have far higher margins than their underlying component and fixed goods. A contract manufacturer in China might make 5% or less (that Gomory argues are already subidized by the Chinese government which implies that the Chinese government is losing money in this process) while Apple makes 30+ on the overall products it sells (and these products presumably aren't subsidized by the US government). So for that same dollar of trade that an American consumer is buying from China, more profit is retained in in the US as those same products are sold globally. This is why it's not necessary for there to be "balanced trade" and why countries like the UK had been able to run trade deficits for large periods of modern history.
If history is instructive, it's useful to also consider what's happened to Japan over the past few decades. The ascent of China, who Gomory targets, is very very far from trouble free or certain. Further, he seems to have this assumption if the US aims for balance of trade with China, those same deficits won't simply go to other developing nations. Ultimately it is consumers who bear the costs of imposing protectionist policies.
The counter-meme that US manufacturing is still strong is also something of a myth. The biggest components of the manufacturing sector are things that most people probably don't immediately associate with manufacturing. For example, agricultural products are a huge component. As are primary industries like logging. Processed chemicals represent another big chunk. Most of the factory goods that fit the traditional definition of manufacturing are industrial equipment like earth-movers or electrical transformers. Note that these are all capital-intensive industries that are either protected by tariffs and subsides, or bulky, cost-sensitive goods that aren't as easy to build at a profit overseas.
On the other hand, the mass-market consumer product industries that most people think of as synonymous with manufacturing have been wiped out in the US.
The ability to innovate, like most abilities, is probably a bell curve, and the fraction of people capable of coming up with valuable innovations is probably small.
Since these innovations need to be able to provide jobs for "average" people who are less innovative, relying on innovation alone to "feed" a country this size is unlikely to work.
If they can keep the USPS afloat by cutting expenses instead of using taxpayer money, I'm all for it.
These aren't exactly archetypes of free market competition, being oligopolies, at best. I can't speak for NJ, but, in California, I consider it telling that they all have a state regulatory agency.
Number portability has improved telephony competition, but I don't think we're yet free of the effects of the old A/B cellular duopoly in the US.
Also - 39 cents to send a letter anywhere in the country? Still a pretty good deal.
A 12.8% increase (not sure how you came up with 15%) over a period where inflation was only around 7.8% (based on month-to-month consumer price index report) sounds pretty bad, but you seem to have missed the previous four years, where inflation was 10.1% and the price only went up 5.4%. For the interval between raising to 37¢ and raising to 44¢ (an 18.9% increase), inflation totaled 18.7%. If a difference of 0.2 points makes all that much difference, you probably shouldn't be using the first class rate anyway.
Why go back only 4 years more - postal rates were 2 cents in July 19 and 44 cents in May 2009 - a 2200% increase. However, inflation was only 1129%.
So who is cherry picking?
Historical Postal Rates: http://www.usps.com/postalhistory/_pdf/DomesticLetterRates18...
Inflation Calculator: http://inflationdata.com/Inflation/Inflation_Calculators/Inf...
As a rule of thumb, if your gut tells you that a particular service is essential to a civilized society the service belongs in the public sector. As a nation we've decided the ability to affordability correspond with others around the country is such a service. Education is another. These two examples are extraordinarily complex problems which the US public sector solves well, all things considered. Yet every time we discuss these services someone always wants to privatize them.
For the most fundamental components of our society, privatization is never the answer.
See the issue? The priority in the private system is on making profit and providing diplomas to people. The priority in the public system is on actual learning. The rampant grade inflation at Ivy League schools is a great example of learning taking a back seat in favor of producing graduates that look good on paper.
Don't make the mistake of thinking that "public" universities are any better. At my university (UIUC), research grants account for the vast majority of the funding for the engineering college. Consequently, research is the priority, not the education of the students. Simply put, the priority is where the money is. If the money is tied to the learning of the students, the students will actually learn. If it's tied to producing diplomas or publications, that's where the priority will be placed. UIUC can get away with it because its engineering graduates are still extremely highly paid. The prestige of UIUC's faculty is responsible for that, but it would be erroneous to attribute it to the educational curriculum. I can tell you from personal experience that the vast majority of graduates are average programmers at best and many haven't really internalized essential CS skills like algorithms, data structures, etc. One example that really sticks out in my mind: I went to a talk by Alan Kay last semester. Hardly any undergraduates attend, or even know or care who Alan Kay is. Alan puts up a few slides with pictures of McCarthy, Sutherland, Church, etc. Not a single undergraduate can name their primary contributions to the field. No one even knew the importance of Lisp! As Alan aptly put it, "you all are lucky your field isn't Physics; if it were you would be kicked out of the department and sent back to high school for not knowing the fundamentals of past research" (paraphrasing).
So why doesn't your grocery store example hold up? The success of a grocery store is strongly coupled to the quality of its product. Spoiled food is spoiled food. Education? Turns out the diploma, not learning, is what matters the most. The USPS is a similar situation, true value of the service (essentially free communication for all citizens everywhere) is only loosely coupled with the financial success of the service.
Some government programs accomplish a useful goal, and the USPS is one of these. But many government programs accomplish goals which are orthogonal or counter to their stated, useful purposes.
Please don't even get me started on public education in United States. I would gladly allow 3 more USPS organizations to waste taxpayer's money if they get rid of public schools and adopt a school voucher system.
Please look for 'Stupid in America' show on YouTube and watch it. It will seriously change your opinion about public schools. Also, how many times have you heard people moving to certain district because they have better public schools? Have you ever heard anyone moving to certain district just because they have better grocery store?
I fail to comprehend why you think profit motive is a bad thing. Just like a private school has a profit motive, the customer (parents in case of private schools) have an incentive to get best value for their money and trust me, they will.
I'm aware of the documentary, and as usual, it completely misses the point. I'm intimately familiar with the inner workings of America's public and private schools (both the best and the worst on both sides). For the past several years I've had daily exposure to pretty much all angles of this issue. I suspect you've simply watched a 45 minute Youtube video and liked how microfoundations sounded when it was taught to you in school. I could write for hours on the horrors of private school vouchers alone (did you know when they tried it in Arizona, 3/4ths of the money ended up going to students who were already in private schools? [1]). And lets not even get into the fact that private schools actually don't perform that much better than public schools [2] when you account for the diversity in public schools. Considering that private schools mostly teach to a homogeneous student body, they should be blowing the public schools out of the water. They're actually not that much cheaper either, when you consider that private schools don't need to spend nearly as much money on special education programs and psychological therapy [3]. If I was a school admin I could post the most impressive numbers in the country if I'm allowed to skim from the cream of the crop, but public schools by law are not allowed to do so. However, I suspect at this point expending any more energy on this issue wasted effort since you seem dead set in your ways.
[1] http://www.gregpalast.com/no-childs-behind-left/
[2] http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2006461
[3] http://mjperry.blogspot.com/2007/10/private-school-tuition-1...
If we haven't quite reached that point yet, can't you see we will?
No, mail is not the fundamental component I've identified. As I said, the fundamental component is: "the ability to affordability correspond with others around the country".
If we haven't quite reached that point yet, can't you see we will?
Oh, we'll get there. I think it's high time the USPS started providing free email accounts to every United States citizen with no advertisements. The USPS can provide privacy guarantees for the data on their servers that private companies cannot offer. Plus, imagine the optimizations that would be possible in business and government methodologies if every US citizen was guaranteed to have an email address. Hell, in this day and age I'm far less likely to change my email address than my mailing address. If I had a government issued email, it would never change.
Private market has already found out the solution. Email, facebook, twitter.
And if you think that USPS (or any government organization for that matter) can do a better job hosting free email than Google, Yahoo or Microsoft (they all provide free email), I have serious questions about your sanity.
Yes I do. It's called the United States Postal Service. It was founded in 1775. Given its track record, I think the government could implement a digital system that will be good for another couple hundred years.
Private market has already found out the solution. Email, facebook, twitter.
The public sector has its share of successes as well. How about the postal service, the census, and national elections? The US government has been handling large scale projects since the 1700s.
And if you think that USPS (or any government organization for that matter) can do a better job hosting free email than Google, Yahoo or Microsoft (they all provide free email), I have serious questions about your sanity.
Hrm, well lets think about what happened when we privatized part of our elections (Diebold) or our defense (Blackwater). Let's compare that to the USPS which has been running successfully for over 2.5 centuries. Damn right the government can handle some problems better than the private sector. Diebold is an gross embarrassment to this country and you're fooling yourself if you think similar things wouldn't happen with a privatized postal service. The government doesn't need to have a technically superior product to Gmail, just as the USPS doesn't need to have a superior product to UPS (hint: UPS is better). The government simply needs to provide a reliable, stable service with the privacy and civil guarantees that can only be provided by a public entity. The government cares about integrity. Diebold cares about profits, and look where that got us. Untraceable election fraud in the world's most powerful democracy.
If you actually think about it, USPS has government granted monopoly on delivering first class mail and somehow they still manage to lose billions.
I completely fail to comprehend how USPS is a success. Could you please explain what is your criteria for success is? For me, success for any organization is when they create value (produce more than they consume).
Again, the programs you have mentioned (Diebold and Blackwater) are actually government run private programs. And I am not surprised that they have failed. Compare this with Google, Apple, Microsoft, Exxon and other businesses where they serve their customers extremely well and has produced billions of dollars of wealth.
Also, if you already accept that government is not able to produce a superior product, why should they be allowed to spend the taxpayer's money? In light of national wiretapping done by Bush administration, I would really question your stance that government will be able to maintain privacy of my emails.
The USPS does what it does very well, and any naysayers should try living in a country with an unreliable postal service. That having been said, I wouldn't trust them to do anything innovative. That dog's too old to learn new tricks.
How do you explain FedEx and UPS?
I can see both sides of this argument.
I think GP's claim is not that private parcel services cannot exist, but rather that if they were to deliver first-class mail, they would charge more than $1 per letter.
So if you believe that this sort of communication is a fundamental right for all citizens, than the service needs to be provided by the public sector. It's impossible to build a profitable business in the private sector out of it.
They can afford ridiculously low postage because they have a government granted monopoly on mail so they can price their rates at a level to subsidize Remote, Oregon with profit from Portland. If they didn't have to deliver to the middle of nowhere they could probably lower prices significantly.
Which is why they need the monopoly, if I could set up a mail company in just the top 20 cities in the country I could undercut the USPS and then they'd suffer enormous revenue shortages because they'd still be mandated to deliver everywhere.
Actually, such polices are usually quite easily explained by the simple logic that there isn't any money in caring too much about edge cases.
I suspect that HN is a massive advantage over other incubators that really doesn't ever seem to get talked about. The treasure trove of data for finding and keeping the best candidates alone... and it's not something that can be easily copied - though how the magic can be kept alive as it grows seems to be an open question.