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John Lounsbury, Managing Editor and Co-founder of Global Economic Intersection, provides comprehensive financial planning and investment advisory services to a small number of families on a fee only basis. He has a background which includes 34 years with a major international corporation, 25... More
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  • Tax Credits and Education 1 comment
    Mar 3, 2010 10:11 AM | about stocks: INTC
    These are the two critical factors highlighted by Thomas Friedman in his New York Times column summarizing the views of Paul Otellini, the chief executive of Intel. 

    Otellini is quoted:

    “The things that are not conducive to investments here are [corporate] taxes and capital equipment credits,” he said. “A new semiconductor factory at world scale built from scratch is about $4.5 billion — in the United States. If I build that factory in almost any other country in the world, where they have significant incentive programs, I could save $1 billion,” because of all the tax breaks these governments throw in.
     
    Otellini says another area that is deficient is taxation on businesses once they are operating.  Tax laws in Korea are cited as an example that give firms there essentially "zero cost of money".  Intel can compete with superior technology, but many other firms can not.

    Education deficiencies are the other defective leg on the U.S. economic stool.

    The column says that the U.S. is still ranked sixth out of 40 countries for innovative competitiveness.  However, when the rate of change for the past decade is ranked, the U.S. is dead last.  The studies cited by Otellini were conducted by the Information Technology and Innovation Foundation

    The conclusion:  The U.S. is still afloat but sinking fast.

    Disclosure: No positions.
    Themes: taxation, education, innovation, Otellini, Friedman Stocks: INTC
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    the education aspect is far more worrisome, coupled with the fact that if you peer down the "innovation supply chain" into our high schools and grade schools there appears to be a paucity of effective scientific and mathematical programs that will support future innovation. I do see point solutions sprouting up from the universities but they all seem to have an "exclusive" bias to them, i.e. Science for girls, etc. Not to disparage them, but quite frankly, this is not the time to promote one group vs. another when both are desperately required and the innovation workplace (R&D) has more women than men coming into it now and the pipeline further out (five years) has a similar gender distribution which suggests that gender oriented goals have been achieved. I am very concerned for the young men in this population absent programs specific for them or a broadening of the existing "girls only" programs to be more inclusive. Where will these young men wind up? As quants? I hope not, they've done quite enough thanks. :-)
    3 Mar 2010, 11:39 AM Reply Like
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