August 2, 2006

Voting with Their Feet, International Edition: Irish High Techs, and the Rest of the Country, Are Smiling

Filed under: Economy,Immigration,Taxes & Government — Tom @ 2:11 pm

A TaxBytes e-mail release from The Institute for Policy Innovation (IPI) provided the first clue to the bigger news that is in the UPDATE below (item has not yet posted to IPI’s web site).

The release notes that the Emerald Isle has a “problem” a lot of countries would like to have:

The Associated Press reports that Ireland has its own immigration problem: lots of big, wealthy high-tech companies are moving there, setting up shop, hiring lots of people and paying them good salaries. We’re talking Google, Yahoo and eBay, among others.

Google’s three-year-old Dublin office has 800 employees, according to the AP.

Moreover, many of the companies have landed in a historically rundown, impoverished section in Dublin, giving it new life.

What is Ireland doing right? Why are high-tech corporate giants leaving Europe for the Emerald Isle?

Low taxes.

Ireland’s corporate tax rate of 12.5 percent is the lowest in Europe. Most of the other developed European nations are significantly higher.

I’ll say. The release goes on to note that the five largest EU countries have top corporate tax rates of over 30%. Unfortunately for the long-term growth of high-tech here, so does the United States, at 39.3%.

I could not initially locate the AP article the IPI refers to (found–see UPDATE below — Ed.), but I did find that reports of the country’s high-tech boom are not a bunch of blarney in an Irish Silicon Republic article from last week:

The Republic’s success in the technology industry is well documented: the sector employs 91,000 people in 1,300 companies with a turnover (“sales” — Ed.) of 51bn Euros (2001) and is responsible for producing one third of all PCs sold in Europe. The Republic’s technology sector reads like a who’s who of Silicon Valley, with Microsoft, Intel, Apple, Dell, IBM, HP, eBay, Yahoo! and Google all having bases here.

But Northern Ireland has been no slouch either when it comes to attracting technology investment. In the past year it has attracted notable BPO investments as well as key software research and development (R&D) projects. As well as attracting investments from established businesses in the Republic, such as the aforementioned Imagine and a shared services centre for Grafton Recruitment, the region has won notable international projects, including a €40m, 1,000-job investment by Indian IT outsourcer ICICI OneSource.

The article also credits a “peace dividend” arising from the reduction of Northern Ireland-Irish Republic tensions as improving the business climate.
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UPDATE: I was able to locate a copy of the AP report after learning from Bart Cleland at IPI that is author was Shawn Pogatchnik and doing a search. Pogatchnik latched onto another very important point that ties in to Ireland’s favorable tax situation — people are “voting with the feet” and emigrating there, even from the US:

“A lot of companies are moving out of Europe, but it’s the opposite in Ireland. The companies that have located here, like Google and Yahoo and eBay and so many others, are very attractive. So the place is very young and very international. It’s really quite magnificent,” said Renate Myhrstad, a 26-year-old Norwegian who is Google’s training manager in Dublin.

….. The economic currents that drove millions of Irish to the United States are pulling them back. Since 2001, more than 130,000 Irish people have returned from the U.S. to their homeland, a huge influx in a country of just four million.

Ireland was one of three countries — along with Britain and Sweden — to allow unrestricted access to their labour markets when 10 new members joined the EU in 2004. More than 130,000 Poles live here, and on average 10,000 more Eastern Europeans arrive monthly.

There are three big lessons here:

  1. Economic mobility is greater than it has ever been, meaning that countries have to recognize that they are competing against one another for labor and capital.
  2. Lower tax rates not only improve the lot of citizens already in a country, but also work to attract productive people from elsewhere.
  3. A country CAN handle relatively high levels of immigration, as Ireland apparently has, IF those immigrants are productive people willing to assimilate into the culture and contribute to its enrichment.

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UPDATE: Despite the economic prosperity, Debbie Schlussel has an Ireland story serving as a reminder that certain elements inside the country are making the situation quite a bit less than 100% ideal, primarily because they are not ensuring that the “IF” in Number 3 above always applies.

Letter to the Editor of the Day: “Every Town Is Now a Border Town”

Filed under: Immigration,Taxes & Government — Tom @ 11:36 am

Here’s Judicial Watch President Tom Fitton, in a letter to the editor mentioning a story that was covered here in mid-July:

It took a brutal attack on a construction company owner, but local police in Warren County, Ohio, finally woke up to a grim truth about the illegal immigration problem: Every town is now a border town.

On July 15, James Parsons Jr. was beaten with a baseball bat in retaliation for the firing of a suspected illegal alien. Parsons’ offense? He had asked the worker to produce papers proving he was legally eligible to work in the United States, and then dismissed the worker when he failed to produce them. The disgruntled man and eight accomplices later returned with three handguns and several baseball bats to take their revenge.

While it is true that the majority of illegals flood across the U.S. southern border with Mexico, it is becoming increasingly obvious that many do not stay in the Southwest. They migrate to points all across the United States, bringing with them significant social problems, including violent crime. In other words, what begins as a federal issue–border security–quickly becomes a local one.

I have seen no follow-up to this story in the local press since the news broke. Anyone with an update should e-mail me.

Fitton goes on to note something that Porkoplis covered a short time ago, namely that local police can get the ability to enforce federal immigration law at a very reasonable cost:

According to records obtained through the Freedom of Information Act, the 1996 Immigration and Nationality Act “authorized the Secretary of Homeland Security to enter into a written agreement to delegate the authority of enforcing federal immigration laws to a state or political sub-division of a state.” Moreover, through Immigration and Customs Enforcement, local law enforcement officers can receive immigration enforcement training–called 287(g) cross-designation training. The cost for the five-week program is a very reasonable $520 per officer.

Now for the important question: Does the program work?

As of June 2006, 136 officers received 287(g) training from four states: Alabama, Arizona, California, and Florida. These officers have accounted for 820 immigration-related arrests since the program began in 2002. And while many of the arrests relate to fraudulent documents, others involve rape, drug possession, firearm possession, driving under the influence, and burglary.

More local law enforcement agencies should jump at the chance to get their officers into this training.

Another Red Flag That Paperless E-Voting Is Flawed, and Dangerous

Filed under: Business Moves,Consumer Outrage,Taxes & Government — Tom @ 9:55 am

The Open Voting Foundation (HT Techdirt) did an investigation (bold is mine), and has the pictures:

“This may be the worst security flaw we have seen in touch screen voting machines,” says Open Voting Foundation president, Alan Dechert. Upon examining the inner workings of one of the most popular paperless touch screen voting machines used in public elections in the United States, it has been determined that with the flip of a single switch inside, the machine can behave in a completely different manner compared to the tested and certified version.

“Diebold has made the testing and certification process practically irrelevant,” according to Dechert. “If you have access to these machines and you want to rig an election, anything is possible with the Diebold TS — and it could be done without leaving a trace. All you need is a screwdriver.” This model does not produce a voter verified paper trail so there is no way to check if the voter’s choices are accurately reflected in the tabulation.

….. The most serious issue is the ability to choose between “EPROM” and “FLASH” boot configurations. Both of these memory sources are present. All of the switches in question (JP2, JP3, JP8, SW2 and SW4) are physically present on the board. It is clear that this system can ship with live boot profiles in two locations, and switching back and forth could change literally everything regarding how the machine works and counts votes. This could be done before or after the so-called “Logic And Accuracy Tests”.

A third possible profile could be field-added in minutes and selected in the “external flash” memory location, the interface for which is present on the motherboard.

No company would accept using a computer system to help coordinate and manage its day-to-day operations that was so insecure. Why in the world are these flawed systems being used to tabulate votes, without a paper trail?

Bizzy’s AM Coffee Biz-Econ-Life Links (080206)

Filed under: Economy,Taxes & Government — Tom @ 8:04 am

Free Links:

  • The car business realignment continues — For the first seven months of this year, General Motors, Ford, and DaimlerChrysler’s unit sales have fallen 14%, 10%, and 10%, respectively, compared to a year ago. Toyota, Honda, and Nissan? +10%, +7%, and -8%. The month of July was especially awful for the old Big Three — GM, Ford, and Chrysler were down 22%, 35%, and 37%. They’re feigning lack of concern, with a GM spokesman claiming that last year’s sales were “inflated” by “employee pricing” incentives and the like. No amount of cleverness will solve GM’s or Ford’s problems if they don’t ship more vehicles.
  • I would be remiss if I didn’t mourn OH02′s graceful and hopefully not permanent exit from the blogosphere. Despite the claims of a lot of lefty-come-latelys, OH02 did more than anyone to bring attention to the Paul Hackett campaign and help it get to the critical mass it achieved in its near-upset of Jean Schmidt last August. Your place on the blogroll isn’t going anywhere, Chris, and I look forward to the return of the Ohio Happy Funtime Blog.

Requires Paid Subscription:

  • The Wall Street Journal’s Alan Murray investigated why so many initial public offerings are taking place overseas, and found additional culprits besides Sarbanes-Oxley:

    Is Wall Street having its Detroit moment? After a century as the undisputed financial capital of the world, New York has suddenly discovered there’s competition out there.

    The threat has been captured in a single fact: 24 of the top 25 initial public offerings of stock last year were issued on exchanges outside of the U.S.

    That statistic is repeated frequently as financiers and policy makers wring their hands over what’s happened to the nation’s capital markets. Eager for a simple solution, some point to Sarbanes-Oxley, the law passed in response to Enron and other U.S. corporate scandals.

    ….. I went to the London Stock Exchange’s Web site. What I discovered was a detailed study by Oxera Consulting Ltd. that looked at the cost of raising capital in various markets.

    And guess what? The biggest source of the U.S.’s disadvantage, according to this study, wasn’t the cost of complying with Sarbanes-Oxley — although that was certainly noted. Instead, it was the high fees charged by Wall Street investment banks. In the U.S., those fees equal 6.5% to 7% of the value of shares offered. Across Europe, they are 3% to 4%. In Asia, they can be even lower.

    For a big IPO, that difference easily swamps estimates of the cost of Sarbanes-Oxley. If the U.S. is losing its competitiveness, maybe some of the blame goes to its financial houses for charging excessive fees in their home market. Does anyone really believe they deserve 7% of the value of a newly listed company?

    I sure don’t. But before I would dismiss SarBox’s relative significance, I’d want to know how much in the way of SarBox compliance costs is built into the fees the investment bankers charge, especially if those percentage fees are now higher than they were before the law took effect.

Positivity: The Golden Anniversary of the Hard Drive

Filed under: Business Moves,Marvels,Positivity — Tom @ 5:54 am

Unless you’re a complete technophobe (you can’t be, because you’re reading this), this anniversary is worthy of celebrating:

The Hard Disk That Changed the World
IBM delivered the first disk drive 50 years ago. It was about the size of two refrigerators and weighed a ton.
By Steven Levy
Newsweek
August 7, 2006 issue

If there’s a bottle of vintage champagne you’ve been saving, next month is the time to pop it open: it’s the 50th anniversary of hard-disk storage. Don’t laugh. On Sept. 13, 1956, IBM shipped the first unit of the RAMAC (Random Access Method of Accounting and Control) and set in motion a process that would change the way we live.

The RAMAC, designed in Big Blue’s San Jose, Calif., research center, is the ultimate ancestor of that 1.8-inch drive that holds 7,500 songs inside your pocket-size $299 iPod. Of course, the RAMAC would have made a lousy music player. The drive weighed a full ton, and to lease it you’d pay about $250,000 a year in today’s dollars. Since it required a separate air compressor to protect the two moving “heads” that read and wrote information, it was noisy. The total amount of information stored on its 50 spinning iron-oxide-coated disks—each of them a pizza-size 24 inches—was 5 megabytes. That’s not quite enough to hold two MP3 copies of Elvis Presley’s “Hound Dog.”

Yet those who beheld the RAMAC were astonished. “It was about the size of two large refrigerators, about as tall as a person stands, and though it used vacuum tubes, it was always running,” recalls Jim Porter, who worked at Crown Zellerbach in San Francisco in the mid-’50s and would proudly take people to the basement to see what he claims was the very first unit delivered by IBM. “It really turned the tide [in the Information Age],” he says. “It was the first to offer random access, whereas before you would have to wind a tape from one end to the other to access data.”

That feature, and the fact that every year scientists have managed to compress more and more information on hard drives for less and less cost, has led to a revolution just as dramatic as the one triggered by the much more celebrated microprocessor. Massive storage has allowed huge businesses to thrive. Without astronomically capacious random-access hard disks, you couldn’t imagine the likes of Google, eBay or Amazon. Yet the wizards in the storage field, who constantly fight the boundaries of physics to eke out more density on increasingly tiny disks, don’t get respect. “Instead of Silicon Valley, they should call it Ferris Oxide Valley,” says Mark Kryder, chief technical officer of Seagate. “It wasn’t the microprocessor that enabled the personal video recorder, it was storage. It’s enabling new industries.”

Experts agree that the amazing gains in storage density at low cost will continue for at least the next couple of decades, allowing cheap peta-bytes (millions of gigabytes) of storage to corporations and terabytes (thousands of gigs) to the home. Meanwhile, drives with mere hundreds of gigabytes will be small enough to wear as jewelry.