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Bell Labs Kills Fundamental Physics Research

Posted by timothy on Thu Aug 28, 2008 03:19 PM
from the having-solved-all-the-really-important-problems dept.
An anonymous reader writes with this snippet from Wired: "After six Nobel Prizes, the invention of the transistor, laser and countless contributions to computer science and technology, it is the end of the road for Bell Labs' fundamental physics research lab. Alcatel-Lucent, the parent company of Bell Labs, is pulling out of basic science, material physics and semiconductor research and will instead be focusing on more immediately marketable areas such as networking, high-speed electronics, wireless, nanotechnology and software." Jamie points out this list of Bell Labs' accomplishments at Wikipedia, including little things like the UNIX operating system.
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  • therefore (Score:5, Insightful)

    when the next laser, the next solid state transistor, is invented, it will be done in China and India

    • Re:therefore (Score:5, Insightful)

      by raddan (519638) on Thursday August 28 2008, @03:29PM (#24784451)
      Why, are China and India doing basic science research? My impression that pretty much *everyone* is getting out of the game. Deregulating telecom and breaking up AT&T did wonders for telephone customers, but it did not do good things for smart people with big budgets. Consider the fact that UNIX started as an excuse to hack on computer games [harvard.edu].
      • china or india aren't doing basic research either, i was merely making an appeal to nationalism

        why do nations invest billions in space programs? its nothing but tribal chest thumping. now you can complain that nations should invest in space programs and basic research for noble goals, or you can swallow your high-mindedness and appeal to what gets you cash. appeal to tribal pride, and you will squeeze some coin out for basic research

        scare americans with stories about chinese and indian basic research. forget the truth or distruth or mistruth or truthiness of those stories. just make an appeal to nationalism. in this way, you will get american funding for basic research

        • Re:i agree with you (Score:5, Interesting)

          by antirelic (1030688) on Thursday August 28 2008, @05:11PM (#24786069) Journal

          Why appeal to such an ugly thing? Why not appeal to humanity? Do you really, honestly and sincerely believe that all Americans just run around saying "we're the best!" and have some primitive need to "be the best!"?

          I know its "in fashion" to hate America and stereo type Americans as club wielding hate machines that dont do anything except for "profit" or "oil", but a lot of American innovention came from "foreigners" who came to our country to ink out a life that the failed social states of Europe simply couldnt/wouldnt provide.

          I know this is going to get modded troll (because I am posting after 6pm, aka: non-Us slashdot time), but the United States will continue to remain the research and technology leader tommorow for the same reason it has been for the past 100 years: The United States is more welcoming to foreigners.

          You may think I kid, but Germans hate the Turks and the Poles (and other Eastern immigrants), Switzerland has one of the highest bars to entry for immigrants (save refugees, but thats a different crowd), and the same goes for most Socialist nations. Many European nations have elected political parties into power that are very, very outwardly anti-immigrant / pro-nationalist.

          Regardless of what the media portrays, the United States is still the most welcoming country to immigrants who want to make a better life. Regardless if they stay and become American citizens, or go back to their home countries (where they can help to make a better life for their families), this is only possible because of US capitalism, and being a non socialism.

        • by ScrewMaster (602015) on Thursday August 28 2008, @06:51PM (#24787371)

          scare americans with stories about chinese and indian basic research. forget the truth or distruth or mistruth or truthiness of those stories. just make an appeal to nationalism. in this way, you will get american funding for basic research

          That's not how it works. Joe Public couldn't care less about basic research, and it doesn't really matter what country he lives in. Fact is, research is expensive, and there's no way to predict whether a given line will pay off. We only know that, in the long run, the payback is worth every penny we invest and more. Unfortunately, long-term thinking has always been in short supply.

          Now, if you look at the history of basic research and the resultant leaps in technological capability, there are sharp discontinuities every time there's a major conflict. Forget "tribal chest thumping", think more about "tribal mass murder" and you'll see that nothing gets more funds directed into fundamental scientific research and applied technology than war. Hell, even when there's no active conflict, the mere threat of such serves to justify massive expenditures on all sides. World War II, the Cold War (and concomitant Space Race) are classic examples of how the military demands (and gets) untold billions of dollars (rubles, whatever) to spend on R&D. Yes, that money is primarily for military purposes, but the public benefits from (often pretty directly too) at least in the U.S. Our government has spun off a lot of military tech into the private sector over the years. Is that the most efficient way advance the state-of-the-art? No, probably not, but still a lot of good has come from it.

          The net effect of all this, of course, is that Progress becomes a damned expensive proposition. Nevertheless, I'm happy to be a beneficiary of high tech that resulted from the last few big ones. I'm just hoping that I won't be a casualty in the next one.

          • by Free the Cowards (1280296) on Thursday August 28 2008, @09:57PM (#24789355)

            I can be argued that the sharp discontinuities produced by war are not drivers of overall progress, and in fact take away from it in the long run. There are really two possibilities (at least):

            1. War pushes more funding, people, effort, and motivation into research, resulting in the obvious consequences. (This is effectively what you're claiming.)
            2. War pushes researchers out of long-term pie-in-the-sky theoretical areas and into instant-gratification practical areas which produce the things that the generals need yesterday. This gives the appearance of vastly advancing the state of the art, while actually doing nothing for overall progress, or even hurting it.

            As a practical example, consider the Manhattan Project. These high powered physicists spent years as effectively glorified engineers. A lot of really practical knowledge was gained on nuclear technology, which drove both bomb and power technology for decades to follow. But no new physics were discovered there, and that is the real driver in the long term.

            Now of course you could go the other way. You could say that physics has advanced as much as it has since 1945 because these practical results gave the theorists something to strive for. It's certainly not cut and dried. I don't really even know which way I lean on the question. But it's interesting to consider whether the sharp upticks in technological advancement due to war are really as beneficial as they look at first glance.

      • Re:therefore (Score:5, Interesting)

        by Colonel Korn (1258968) on Thursday August 28 2008, @03:55PM (#24784877)

        Why, are China and India doing basic science research? My impression that pretty much *everyone* is getting out of the game. Deregulating telecom and breaking up AT&T did wonders for telephone customers, but it did not do good things for smart people with big budgets. Consider the fact that UNIX started as an excuse to hack on computer games [harvard.edu].

        My old advisor has been spending a lot of time in China and India lately. In his eyes, India really is moving in the direction of major fundamental research. China...not so much. He thinks that if things move at their current pace, there will be a crossover in about 20-30 years when India passes America in innovation. America's technical lead is still quite pronounced today, but not remotely secure.

        • Re:therefore (Score:5, Informative)

          by homer_s (799572) on Thursday August 28 2008, @04:34PM (#24785503)
          My old advisor has been spending a lot of time in China and India lately. In his eyes, India really is moving in the direction of major fundamental research. He thinks that if things move at their current pace, there will be a crossover in about 20-30 years when India passes America in innovation.

          I'm 29. I'm from India. I've lived in America for the last 6 years. Your advisor must be smoking something good. Please ask him to stop.
        • Re:therefore (Score:5, Informative)

          by budword (680846) on Thursday August 28 2008, @07:23PM (#24787759)
          India is still asking women to list their menstrual cycle on job applications. They aren't passing anyone anytime soon.
          • Re:therefore (Score:5, Insightful)

            by meringuoid (568297) on Thursday August 28 2008, @05:25PM (#24786303)
            Oh please..it's highly unlikely that India or China will pass the US. The US is still the magnet for global talent.

            And while the US is still leading the way in science research that will surely remain true. How's the Superconducting Supercollider coming along, by the way? How about those breeder reactors that are going to solve the whole nuclear fuel issue? And are we still on schedule to finish the space station?

    • Re:therefore (Score:5, Interesting)

      by Spy der Mann (805235) <spydermann,slashdot&gmail,com> on Thursday August 28 2008, @03:41PM (#24784657) Homepage Journal

      when the next laser, the next solid state transistor, is invented, it will be done in China and India

      *ahem* What about the "such as networking, high-speed electronics, wireless, nanotechnology" part?

      IMO nanotechnology is today's "basic science research".

      • Re:therefore (Score:5, Insightful)

        by klaun (236494) on Thursday August 28 2008, @04:30PM (#24785415)

        IMO nanotechnology is today's "basic science research".

        Technology is knowledge about the means and methods for producing goods and services.

        Science is systematically acquired knowledge about the natural world and more broadly the system of acquiring that knowledge.

        Technology is not science, full stop.

        The surface physics and materials physics research that will no longer be done is the science that gave rise to nanotechnology. In as much as we have nanotechnology, it is because of surface physics. In as much as we don't do basic science research, we will no longer have new technologies like nanotechnology.

      • Re:therefore (Score:4, Informative)

        by StrategicIrony (1183007) on Thursday August 28 2008, @04:38PM (#24785567)

        Negative.

        Nanotech is on the leading edge of engineering disciplines, but is hardly pure science, unless you're talking about atomic or quantum level manipulation of matter.

        The idea of making really small electronics and things are really not fundamental science questions, but just a matter of refining manufacturing techniques.

    • Re:therefore (Score:5, Insightful)

      by avandesande (143899) on Thursday August 28 2008, @03:41PM (#24784659) Journal

      Many won't like to admit this but the Ma Bell monopoly is what enabled bell labs to dump so much money into basic research.

        • Re:therefore (Score:5, Interesting)

          by trb (8509) on Thursday August 28 2008, @04:39PM (#24785583)

          True, but prodding and breaking up monopolies/centralized control structures allowed for greater innovation, such as: cell phones, ability to choose phone providers, and being able to actually purchase your own home phone.

          I disagree. Breaking up the service monopolies (like the Bell System) enabled greedy companies to skim cream from centers of high profit (like businesses and dense urban areas) at the expense of residential and rural customers.

          Your examples of innovation are weak. Bell Labs invented AMPS, an early cell phone system, and did lots of cell communication research before that. They did scads of other basic research too. Choice of phone providers and buying your phone aren't great innovation.

          I'm not saying that the Bell System monopoly was good or bad, but its monopoly position enabled it to finance true research and innovation. Today's competitive commerce does not allow that kind of research and innovation at all - any "research" investment is in applied research, and is all about short term profits.

          One Bell System, it worked.

          -trb (at BTL 1978-83)

        • by Ungrounded Lightning (62228) on Thursday August 28 2008, @05:32PM (#24786435) Journal

          That, and, IIRC a federal law that obliged it to finance research with 50% of its profits in exchange for the monopoly.

          As I recall it wasn't a requirement that they do research. It was permission to include the cost of research related to telephony in their cost of doing business - on which they got to set monopoly phone rates so they got a specified rate of return (6% if I recall correctly).

          The result was that the more money they spent on research, the more profit they made.

          So they set up Bell Labs to spend as much money as possible, on anything even vaguely related to telephony.

          And it "was an abysmal failure". From year one they made more money on the results of the work (by things like licensing patents) than it cost to run the labs. So basic research was profitable all by itself. B-)

          But this counterintuitive effect also has a counterintuitive downside. The rewards for a research project start once it's done and keep coming in for quite a while after it's finished. Most of us would consider this good. But the Harvard Business School approach to management comes into play: The incentive structure on managers is to show as big a profit as possible for a few years and move on, thus looking better than your predecessors and successors and getting progressively better paying positions. So by killing the CURRENT research and just collecting on the results of the previous work they can cut their costs to near nothing while the benefits keep rolling in. For a while. Then they move on. Without new work the revenue gradually dries up and their successors take the rap. (And their successors would have to increase costs while the income was ramping down, which would look even worse, to turn things around.)

          Regardless:

          Without the guaranteed profit they're in the same boat as every other large cashflow company in the world. Perhaps basic research would continue to be profitable beyond the dreams of avarice. But there are other profitable things to do with the money where the return is more visible in advance, rather than crapshooting on what basic research might come up with. So (like all those other companies), the new generation of management reacts to the new situation by doing the standard thing - which doesn't include basic research.

          (And it doesn't help that they already went through the "cut expenses and look good on the return on old work" phase a few years back. IMHO this is the house of cards coming down.)

          = = = =

          As I understand it, Xerox PARC had something similar going on but for a different reason: a strange accounting system.

          One of the first things PARC did was to design a "new control panel" (and brain) for Xerox copiers. This replaced a bunch of relay logic with a microcomputer/early logic chips. And that saved a LOT of money.

          PARC got credited with that savings on all the copier products sold from then on (and with similar stuff it did later). So it could spend money hand-over-fist on whatever it wanted and still look profitable.

          (This was the same accounting department that, if I've got THIS right, screwed up big time when Xerox went into the mainframe business as the first company to take on IBM's core business, 'way back in the early days of "foreign attachments" opening up the IBM big-iron market. They built a CPU. After a while they decided that they were in the red on it big time, folded the division, and sued IBM on antitrust. In those days equipment was all leased. As a result of the suit IBM got hold of their accounting info and discovered the hadn't really understood how to interpret lease income. They were actually VERY profitable, and had folded the division because of this accounting screwup. Of course this discovery folded the suit.)

  • by Tenrosei (1305283) on Thursday August 28 2008, @03:23PM (#24784353)
  • Another vicim (Score:5, Insightful)

    by Nerdfest (867930) on Thursday August 28 2008, @03:24PM (#24784363)
    of the "all that matters is the next quarter" school of thought? Between that and over the top IP laws, North America is headed for trouble.
    • Re:Another vicim (Score:5, Insightful)

      by LithiumX (717017) on Thursday August 28 2008, @04:39PM (#24785581)
      Welcome to the markets of the 21st century! Every company hemorrhages cash just to stay operational, and everyone is owned by stockholders who are only interested in profit. If you're not expanding, you're losing - and if you lose more than a few times, you're done.

      (and if you're not constantly on top of things, you'll be eaten alive by the pseudo-third-world, undisputed master of Cheap Plastic Crap(tm))

      It's ultimately consumers who are to blame. Almost all of us would rather buy low-quality mass-produced items instead of a higher quality product that costs 10% more. We'd rather go for the comfort of eating at a major chain instead of a one-location restaurant (which usually costs about the same). We'll howl about trade deficits, but end up almost exclusively buying foreign-made products. We'll lament the effect of crushing steamroller BigBox stores, but don't even notice the smaller shops we drive by on the way there.

      I'm as guilty as anyone else here, and you know that there's an extremely high probability that you are too - useless token gestures aside.
  • by Anonymous Coward on Thursday August 28 2008, @03:24PM (#24784373)
    "will instead be focusing on more immediately marketable areas such as networking, high-speed electronics, wireless, nanotechnology and software."

    If they truly wanted to focus on these areas, and the future of these areas, they would continue the research. Bell/Lucent would not be where they are today without those now basic, but groundbreaking at the time discoveries that they've made in the past.

    This seems very shortsighted of them, which unfortunately seems to be the new American way.
  • Restructuring? (Score:5, Insightful)

    by Sockatume (732728) on Thursday August 28 2008, @03:24PM (#24784385) Homepage
    With no basic materials science or semiconductor research, I'm not sure what they're going to be able to develop in the fields of "high-speed electronics" or "nanotechnology". Perhaps they're going to restructure so that the existing basic science researchers are more "product driven", being put into marketable research areas with specific goals, but that strikes me as a sure-fire way of duplicating effort and limiting their scope for innovation.
  • by halsver (885120) on Thursday August 28 2008, @03:26PM (#24784417)

    That America has been losing its edge for years and every time you look around, the problem is accelerating? Do new research labs not get any press? Or is it really the case that more and more corporate research labs are being shut.

    I know American Universities are still considered tops, but how much longer will that even matter?

    • by Darkness404 (1287218) on Thursday August 28 2008, @03:36PM (#24784591)
      It is all the stupid patent issues. It has become that you can't even write a new OS without it being attacked by patent threats, let alone anything in hardware.
        • by DancesWithBlowTorch (809750) on Thursday August 28 2008, @04:46PM (#24785695)
          Actually, we have slightly more nuanced picture over here (Europe). The proverb is that America has the world's five best universities, but also 500 of the worst ones.

          It's true that the Ivy League Schools and MIT, Berkeley, Stanford, CalTech are amazing places to do research. I wouldn't want to leave my beautiful old and very good university in the old world for a random place in the States, though. I find it funny how more or less every American I come across maintains a belief that his particular alma mater is "a very good school" and "everybody is trying to get a place there".
  • The End (Score:5, Interesting)

    by Animats (122034) on Thursday August 28 2008, @03:27PM (#24784429) Homepage

    That's sad.

    I've seen so many of the big labs die. I happened to be at IBM Alamaden the day IBM exited the disk drive business, a sad day and the beginning of the end for Alamaden. I saw Xerox PARC in its heyday; I've used and programmed an original Alto. DEC's labs are long gone, killed in the Compaq/HP takeover. HP Labs is a shadow of its former self.

    Who in American industry is still doing basic research?

    • Re:The End (Score:4, Informative)

      by afabbro (33948) on Thursday August 28 2008, @03:42PM (#24784677)

      I've seen so many of the big labs die. I happened to be at IBM Alamaden the day IBM exited the disk drive business, a sad day and the beginning of the end for Alamaden. Who in American industry is still doing basic research?

      Well, IBM still is [ibm.com], and on a lot cooler stuff that just disk drives.

      • Re:The End (Score:5, Insightful)

        by Goldsmith (561202) on Thursday August 28 2008, @08:12PM (#24788347)

        IBM researchers whom I've talked to at APS meetings say they must either produce something to fund their research or get outside funding. The answer was to compete with academic labs for federal grants and do contract research for other companies. The problem is this takes away what made the industrial labs so great: the ability of a scientist to work on what they felt was important rather than do what some grant reviewer thought was important.

              • Re:The End (Score:4, Insightful)

                by Abcd1234 (188840) on Thursday August 28 2008, @04:33PM (#24785499) Homepage

                Of course, if you posit the elimination of "government and private financing" for any industry, it is equivalent to assuming the elimination of the industry. So what?

                My problem is that there are those who erroneously believe that government should completely step out of the world of fundamental science funding (I presumed, perhaps incorrectly, that the original responder, who suggested that "startups" are doing this work, was among them). My belief is that, if you do this, those university facilities that you made mention of will disappear. Combine that with the continued shutdown of large private labs, and guess what: no one will be performing fundamental science in the United States. Now, you may not believe that's a bad thing, but I do, and I believe the right-wingers are living in a fantasy world if they believe that market forces will solve this problem.

  • Fundamental physics research has really taken on a life of its own, and is conducted with really big, really expensive toys.

    I don't think Lucent now (or even Bell back in the day) could really justify building something like the Large Hadron Collider.

    So, yes, a lot of good work was done, but perhaps they've gone as far as they can within the constraints of what's reasonable for them to do as an entity.

    And hey, if the best and brightest minds on their payroll instead work on something that makes my connection faster, it's not like I'm gonna complain.

    • by Btarlinian (922732) <bjcbell&gmail,com> on Thursday August 28 2008, @03:35PM (#24784575)
      There is more to fundamental physics research than particle physics though. There's still plenty of work being done in condensed matter physics and AMO (atomic, molecular, & optical). However, I actually don't fault Bell Labs for getting out of this area. Fundamental physics research provides very little for the company. AT&T never made money off of the transistor. They haven't turned into a laser manufacturer. Scientific research is a public good and as such, should be funded by the government. Without the benefit of a monopoly, Bell Labs can't really afford to spend money on fundamental research, which costs a lot of money, and results in very little private gain.
  • Six Sigma (Score:5, Funny)

    by turgid (580780) on Thursday August 28 2008, @03:29PM (#24784461) Journal

    Maybe someone's been hob-nobbing with GE? Core business! Core Business! Eliminate waste! Exterminate!

    • Re:Six Sigma (Score:5, Informative)

      by Avohir (889832) on Thursday August 28 2008, @04:29PM (#24785395)
      humorous, considering the precursor to Six Sigma was actually developed at Bell Labs...

      from Wikipedia:

      In 1924, Bells Labs physicist Dr. Walter A. Shewhart proposed the control chart as a method to determine when a process was in a state of statistical control. Shewart's methods were the basis for statistical process control (SPC) - the use of statistically-based tools and techniques for the management and improvement of processes. This was the origin of the modern quality movement, including Six Sigma.
  • by Junior Samples (550792) on Thursday August 28 2008, @03:30PM (#24784483)

    "After six Nobel Prizes, the invention of the transistor, laser and"

    This was all technology appropriated from the Roswell Crash anyhow.

  • by Anonymous Coward on Thursday August 28 2008, @03:33PM (#24784535)

    Here's this old myth being repeated once more.

    Sorry, Bell Labs never invented the transistor. The transistor had been invented (and patented) back in the 1920's. It was in use during WWII (see "A Different Kind of War" by Commodore Myles).

    What Bell Labs DID invent was the SILICON transistor. And of course this was an incredible breakthrough.

    Unfortunately, they also have tried claiming complete credit for the creation of the transistor in general, by propagating the myth that no transistors existed before the invention of the Silicon Transistor.

    Please get your facts right, as it's a discredit to the people who did the original pioneering work in this field. Thanks.

        • by imsabbel (611519) on Thursday August 28 2008, @04:29PM (#24785383)

          If you cannot see the fundamental difference between a vakuum tube (electrostatic principle) and a solid state device (exploiting of the bandgap, the whole new dimension of doting semiconductors), i cannot help you.

          One was a neat invention, the other a revolution that opened a huge new field of solid state physics AND a completely turn the world of technology upside down...

  • by amorsen (7485) <benny+slashdot@amorsen.dk> on Thursday August 28 2008, @03:45PM (#24784739)

    Luckily governments across the world have realized the need for basic research. They have provided universities and other public research institutions with practically unlimited funds, without making demands that the research must lead to products or patents.

    Due to these happy circumstances, there is no longer a need for the private sector to do basic research. It can focus on what it does best: Turning theoretical results into practical products.

  • by blind biker (1066130) on Thursday August 28 2008, @03:53PM (#24784849) Journal

    Pulling out from materials science research AND focus on nanotechnology and high-speed electronics? That's nonsense.

    Look at Intel: what keeps them one step ahead from an otherwise very creative company as AMD, (apart from the great team Intel has in Haifa) is huge and continuous investments in materials science. A little bit less electromigration, a bit better control of dielectric coefficients, a few nanometers less here and there - it all adds up.

    As a researcher in nanotechnology, I have huge, HUGE respect for my materials science colleagues (as well as physical chemists).

  • We are becoming an economy of people selling insurance to each other. We don't make build or invent much of anything anymore. And the few things we are good at the Christian fundamentalists make sure never get done.

  • USA? (Score:5, Informative)

    by Anonymous Coward on Thursday August 28 2008, @04:34PM (#24785505)

    Why is this tagged USA? Alcatel-Lucent is a French company.

  • Empty c-shell? (Score:5, Interesting)

    by OldCrasher (254629) on Thursday August 28 2008, @04:57PM (#24785855) Homepage

    I live in this small town, at the top of the hill is a large edifice to modern technology. The town's zipcode is immortalised in "The C Programming Language" book. K&R both used to be seen in the local Friendly's.

    Things are different now, though. The huge carparks have been empty for years, some of the multiple entrances are often closed on workdays. I have been in the buildings and they smell of history, but sadly they don't smell of the future. This story is simply the black filling in the final period in a long story. The fact is the place has done little of it's famous research in more than a decade. It's an empty shell of a place. C was created there, Unix too, even C++. Many local businesses have failed or moved out as the Labs have withered away. The gist of this story is long overdue.

    • Re:Greed. (Score:5, Insightful)

      by MightyMartian (840721) on Thursday August 28 2008, @03:29PM (#24784453) Journal

      It's beginning to look more Rome's last century; Emperors being crowned amidst the decay of the once-great city, old monoliths being torn down to make new ones, because the coin had been so devalued that no one could afford to pay artisans of any skill.

      Little by little the American Empire erodes, its more distant conquests taxing it more and more, its currency faltering, more of its talent having to be imported.

      I'm looking the Democratic National Convention and its soon-to-come Republican counterpart, and I can't help but thinking that they are indeed fiddling while Rome burns.

      • Re:Greed. (Score:5, Insightful)

        by bendodge (998616) <bendodge@bsgpro g r ammers.com> on Thursday August 28 2008, @05:52PM (#24786741) Homepage Journal

        The problem is that we're quickly losing the ability to think and act for ourselves. Britain is a perfect picture of what happens when you follow that road. A lot of British I talk to simply can't comprehend why you ought to carry a gun, pay for your own healthcare, or prefer terrorists over big brother. We don't seem to realize that our freedoms are being eroded by a pressure-washer congress. Just yesterday there was that Slashdot article about wind power advocating that the Feds mandate/fund a new electrical grid. Uncle Sam is already worse than broke. Quit aggravating the problem.

        I was listening to an old Ronald Reagan broadcast the other day, and he talked about how Social Security initially promised that you'd never pay more than $.03 on the dollar. What a laugh. Social Security is looking to pay out trillions more than it has in coming years, and guess who will pay the bill? You'd make more money if your put your retirement into a savings account than into Social Security.

        Also, the FDIC is slowly but surely ruining our financial economy. Why do you think lenders gave out so many subprime loans? Because the owners know that whatever happens, they are personally immune. Why do people no longer care to ensure that the S&L's they put their money in are financially sound? Because they know that they are immune, all this thanks to the FDIC, which Congress paid $166 billion to bail out in '89. Folks, there is no such thing as free lunch. Unless we can get the government to quit fiddling with the economy and loosen the grip of the environmentalists on the energy resources we already posses within out borders, we are going to continue to fall.

        You'd think that after 200 years we'd get the idea; the best market is a market left alone. It actually works. We didn't get where we are by relying on Uncle Sam to bail us out of everything. Look at a chart of per cent deviation in business activity. Things go up and down and up and down, and then there is a sudden boom in 1928. By the end of 1929 deviation is negative, and by '32 it's almost -50%. Then it rises steadily until '38, when it falls nearly as low as it did in '32. We recovered from the depression in spite of the New Deal, not because of it.

        Now Congress is looking to bail out Fannie Mae and Freddy Mac, simply because they control half of America's mortgages (~$10 trillion) . No company is "too big" to let fail. If we continue to reward financial irresponsibility, it will only get worse in the future. True, it wouldn't be pretty if something that huge fell flat, but postponing it will only make the future worse.

        It's high time we quit turning to Congress to solve our problems. We need real, long-term solutions to problems. Our children should not have to reap the fruits of our irresponsibility.

        • Re:Greed. (Score:5, Insightful)

          by Chyeld (713439) <chyeld@NospAm.newsguy.com> on Thursday August 28 2008, @04:13PM (#24785111)

          I remember the same thoughts being shared with me in 98. And in 88, and in 78. What people forget is Rome 'fell' for a very, very long time and 'fell' for a number of reasons.

          No, this isn't a great development. But there should be some corollary to Godwin's that covers comparing stuff to the "Fall of the Roman Empire".

    • Re:Greed. (Score:5, Insightful)

      by afabbro (33948) on Thursday August 28 2008, @03:38PM (#24784623)

      Welcome to modern western culture... it's all about making a quick buck.

      Modern? At what point wasn't it like that?

      Any and every company out there is all about making as much money as possible as quickly as possible... what ever happend to making a modest amount of money while actually taking risks?

      You can do that with your own money. Making as much money as possible as quickly as possible is pretty much the point of capitalism, where you're using other people's money.

    • by philspear (1142299) on Thursday August 28 2008, @03:29PM (#24784457)

      You can't convince me that the transistor didn't make them a lot more money than they put in when you look at the big picture. I'm willing to belive that on paper, Bell labs may have been a loss, but of course that's not the same as the division being dead weight. I'd be suprised if this decision wasn't based entirely off of myopic buisness decisions. Want to raise your stock? Maybe if you fire everyone and cut costs to zero, your investors will be pleased.

      I of course don't know the inside story, but sounds stupid enough. If this is the case, here's hoping Alcatel-Lucent loses a lot of money quickly and opens it back up.

      • by catchblue22 (1004569) on Thursday August 28 2008, @05:48PM (#24786693) Homepage

        I would argue that decisions like this are to a large extent the result of a way of thinking specifically associated with business schools and their MBA graduates. It is a type of thinking that looks at the operations of businesses through the lens of a limited set of parameters, as if these parameters can be a substitute for concrete knowledge of the nuts and bolts details of a company's operations. MBA thinking causes managers to close their minds, to limit their decisions to what is immediately measurable and graphable. Extreme adherents to this way of thinking often fail to see the big picture in their business and in the economy.

        The best example of this that I can think of occurred during the Mad Cow crisis in the UK a few years ago. In the lead-up to that crisis, MBA manager types were loathe to listen to the warning signs about growing incidents of BSE found in British cattle. They didn't want to act because they feared it would have a drastic impact on their bottom line profits. Although they clearly saw the huge costs of pre-emptive action to deal with the disease, what they failed to see were the costs of inaction. They didn't understand that their inaction would lead to the destruction of the entire British cattle stock. They failed to see that the British meat industry would remain a pariah for many years to come. They failed to balance the huge cost of acting pre-emptively with the destruction of their entire industry as a result of inaction.

        Another example occurred when Carly Fiorina, former CEO of Hewlett-Packard changed that corporation from one of the most creative companies in the world to a commondity PC maker, whose main contribution to the economy is in marketing and distribution. More recently, Maple Leaf foods of Canada has had to institute a massive meat recall, due to Listeria contamination. The contamination was due to its nickel and diming of its quality assurance and sanitation departments. This recall, and the ensuing lawsuits could result in the destruction of the company. All caused because bean counters wanted to save a few dollars on bacterial testing and cleaning.

        I am saying what I am because I genuinely believe it. I believe that the people running most of our corporations have little sense of history, of culture, and little sense of what actually makes our economy work. I once had a conversation with an MBA type in which he argued that food was not economically important because it only made up 3% of the Gross Domestic Product. I'd like to see what would happen if he reduced his food budget to zero.

        • Subset of MBAs (Score:5, Insightful)

          by wasted (94866) on Thursday August 28 2008, @09:53PM (#24789321)

          I would argue that decisions like this are to a large extent the result of a way of thinking specifically associated with business schools and their MBA graduates. It is a type of thinking that looks at the operations of businesses through the lens of a limited set of parameters, as if these parameters can be a substitute for concrete knowledge of the nuts and bolts details of a company's operations. MBA thinking causes managers to close their minds, to limit their decisions to what is immediately measurable and graphable. Extreme adherents to this way of thinking often fail to see the big picture in their business and in the economy.

          It isn't the business schools, it's the people. Good MBA programs focus on improving the value of a business, both long and short term, which requires nuts-and-bolts knowledge. Unfortunately, the most self-centered folks in the USA (or greater, for all I know,) figure a business education will show them how to use the capitalist system to their advantage, working toward doing whatever is needed to stroke their egos, including writing a resume that inflates their "paper-route" to "managing district distribution and revenue collection functions for a citywide printing enterprise." The board or powers-that-be of their prospective employer are often too busy to see past the smoke, or are too limited in thought to look outside of their limited search, and end up employing the great, lying, salesman as a manager in a position needing critical thought rather than the extremely qualified candidate who is very slightly outside of their nanoradian focus. I've seen similar thinking in many HR departments - someone with no direct experience but lots of otherwise stellar relevant experience is passed over in favor of someone who had years of lackluster experience.

          Back to the Executive cycle - Once the egotistical, lying, salesman has his position, the folks with MBAs who adhere to principles such as long-term-profitability, accounting standards and procedures, risk management, and sustainability are shown the door, since unexpected large short term profits get a bigger ego boost to the egotistical lying salesman than sustained long-term above-sector-average performance. Thus, long term profitability is traded for short term results, and the lying, egotistical salesmem get bonuses and severance packages.

          This cycle is self-perpetuating, since the egotistical, lying, salesman hires (or is hired by) folks with similar personality attributes, even though they may be unqualified for the position, so that there is mutual support of their incompetent decisions. After these folks wring all of the short term profit out of a particular business, and everyone realizes what happened, they resign, and move on to looking for the next job, with a resume bullet of "increased profitability XX% in X quarters", which others who are too lazy to research will find impressive, and then hire to run their business (in to the ground), restarting the cycle.

          Not that I have personally seen it, or anything like that...