Date: Thu, 17 Feb 2005 23:01:45 -0800 From: Norm Matloff To: Norm Matloff Subject: another poor Dobbs show To: H-1B/L-1/offshoring e-newsletter Last night I reported on a shockingly bad Lou Dobbs Show broadcast that evening. My posting is at http://heather.cs.ucdavis.edu/Archive/DobbsDropsTheBall.txt I was then flooded with e-mail messages in response, asking me whether Dobbs had sold out or lost his sanity or both. I'm sorry to report that Dobbs ran an equally bad, if less blatant, segment today. He apparently has a new theme for the future, judging from last night's and tonight's shows: Instead of all that offshoring being due to American firms' quest for cheap labor, which Dobbs used to claim, his new claim seesm to be that the American educational system is in a shambles, and the only educated workers available are in India. In last night's show, Dobbs claimed to have a "two-fer." He highlighted a school which has, literally, offshored its tutoring to workers in India. He gets two points out of this: First, American schools are so bad that outside tutors are needed, and second, American schools are so bad that they aren't producing adults who are capable of tutoring! Dobbs seems to think that all those laid-off engineers he used to sympathize with are incapable of tutoring fifth-graders; well, then, hey, NO WONDER those engineers lost their jobs to offshore workers. :-) Dobbs also failed to mention that the "poster school" Dobbs showed consisted mostly of impoverished immigrant kids designated as English Learners by the state. Viewers were led to believe that this school typified the American educational system. The whole thing was Orwellian or Kafkaesque. Tonight, he continued his theme that American schools are drek. He even had a slick lead-in, with his interview with Sen. Kennedy on new bankruptcy legislation. Kennedy ends by saying, what are we going to do about globalization, which allows Dobbs to lead in to his next subject, the alleged poor state of American education. The message is apparently that Kennedy won't be able to protect Americans regarding globalization unless Americans establish a decent educational system. Here is Dobbs' first "witness": JIM SIMONS, PRESIDENT, MATH FOR AMERICA: I can't find Americans. That is, the majority of the people that I've hired in the last seven or eight years, high-quality research people, are not U.S. people. They're not born in America, and they weren't educated in America. First, a bit of explanation. Math for America is just Simons' sideline. His company is Renaissance Technologies, which as alluded to below, does hedge fund analysis. The researchers he refers to are mathematical modelers of investment instruments. This kind of activity became popular on Wall Street perhaps 15 years ago. The models are typically inspired by mathematical models in physics, so often PhDs in physics are hired for this kind of work, in addition to PhDs in math. (Ironically, one former U.S. native mathematician who was a big critic of the H-1B program wound up doing this kind of work.) Basically, these people are hired for their pure mathematical intellect. They don't need specialized knowledge of the financial industry, and in fact Simons has said such knowledge would be a disadvantage. (See http://www.turtletrader.com/trader-simons.html) In other words, any sharp PhD in math and physics would be a candidate for such jobs. In fact, within 10 seconds, with almost no effort, I came up with three names of Americans I know whom I believe would do a great job. So how come all Simons' hires are foreign-born? And, judging from my quick Google search, most or all of them seem to be from Russia. Simons would appear to have some pipeline going, with him relying on that rather than trying to find Americans to hire. And I'll bet rubles to peroshki that he only hires the young ones. Now, why would Simons want to hire H-1Bs? Recall that I've always cited TWO reasons for hiring H-1Bs: (a) They're cheap, and (b) they're essentially immobile (if they are being sponsored for a green card). Let's look at these in Simons' case: First of all, Simons does hire quite a few H-1Bs, as seen on Rob Sanchez's and the Dept. of Labor's H-1B databases. Simons' researchers are in such a niche field that it's hard to tell whether he is paying them fairly or not. But he's hiring a lot more than just researchers; he's got a lot of H-1B system analysts, accountants and so on. Does he really expect us to believe he can't find system analysts in the U.S.? I think it is very clear that something is wrong here. My guess is that his main interest is the immobility of the H-1Bs. He doesn't want them taking his secret recipe for fried certificates of deposit, roasted arbitrage and pureed derivatives to some rival hedge fund. Note, by the way, that when he says, the majority of the people that I've hired in the last seven or eight years, high-quality research people, are not U.S. people that roughly coincides with the era of high H-1B quotas. Now consider this: DOBBS: Tonight, in our special report "Culture in Decline," this country is losing its edge in mathematics and science. The number of American students now studying math, science and engineering is on the decline, and, over the past 20 years, the number of students graduating from American colleges with engineering degrees is down almost 25 percent. Let's check this out. I went to the Digest of Educational Statistics, 2003 at http://nces.ed.gov/programs/digest/d03/ch_3.asp and looked at Table 252, which shows data from 1970 to 2002. I looked at computer science in particular, since the industry lobbyists' battle cry in 1998 was that CS enrollment was way down since the 1980s, that American young people weren't smart enough to study CS, etc. Well, it turns out that the number of CS students in 2002, was 47,299, a 32-year record high! But what did that give those CS students? Answer: A lousy job market, due in large part to H-1Bs and offshoring, which those same lobbyists have promoted. Since 2002, of course, CS enrollment has plummeted as a result. In fact, as I've pointed out before, CS enrollment has risen and fallen exactly with the job market (with a lag), and each period of falling enrollment has coincided with high levels of H-1B hiring. Since James Simons seems to like applied math, let me point out that this is a nonconvergent dynamical system, whose lack of convergence is due in large part to the program he seems to like so much, H-1B. It is true that the above Web page also shows a drop in math majors over that period of time. And there should be! My PhD is in math, and I still think it's a wonderful subject to study, but there are no jobs in math. No, Simons' firm and the others like it don't count, as they are simply a tiny niche, nothing more. There would be no economic justification for increasing the number of math PhDs attained by Americans, given the minuscule chance of being hired in that niche. That of course is especially true given the apparent refusal of Simons to even consider hiring Americans. As numerous studies have shown, it is pure folly for Americans to pursue a PhD in math or physics in the expectation of getting a job in the field. For Simons to ignore the huge numbers of surplus PhDs we already have is just criminal. So, THAT is what is wrong with Dobbs' statements, folks (which, as Rob's newsletter has pointed out, bear an eerie resemblance to those made by the industry lobbyists): THE ENROLLMENT NUMBERS ARE MEANINGLESS, BECAUSE WE'RE NOT USING THE PEOPLE WE ALREADY HAVE. I've been making this statement repeatedly since 1997. For Dobbs to say we should be producing even more engineers, after stating so many times that there are tons of laid-off engineers who can't get work in the field, is baffling and in fact offensive. He also brings up the fact that about half the PhDs in science and engineering in the U.S. go to foreign students. I've answered this point until I'm blue in the face (including, I believe, to Dobbs' staff), but to no avail. Once again, here is the short form: Even in a field like CS where there ARE jobs for PhDs (as opposed to math and physics; see above), it simply doesn't pay to pursue a PhD. In the five years it typically takes, that's five years of forgoing industry-level pay, a loss one never makes up for later on. Meanwhile, foreign students have a nonmonetary incentive in the form of a potential green card. See all the details in my previous postings, e.g. http://heather.cs.ucdavis.edu/Archive/ProposedMSPhDExemption.txt As to China graduating hordes of engineers, that's way more than China needs too. The vast majority are NOT doing real engineering work. It's a totally misleading statistic. For the record, U.S. has the second-highest per-capita number of engineers in the world, second only to Israel. (Michael Hiltzik, Israel's High Tech Shifts Into High Gear, Los Angeles Times, August 13, 2000.) So, the implicit claim that "Johnny Can't Do Engineering" is way off base. If only those engineers had some engineering work available to them... Norm http://transcripts.cnn.com/TRANSCRIPTS/0502/17/ldt.01.html LOU DOBBS TONIGHT Aired February 17, 2005 - 18:00 ET ... DOBBS: And, Senator, as you say, it's not what this country's about, yet we're having to deal with personal bankruptcies, your amendments, the legislation itself. Working men and women in this country being forced into bankruptcy when productivity has never been higher. The broader arc of this is that the middle class is simply under assault. What is the mood there in the Senate on Capitol Hill to begin to focus on the true needs of working men and women in this country, providing real, real jobs with living wages? KENNEDY: Well, that's the $64 question. It seems to me, as we hear time and again on your program, the real challenge is globalization, and are we going to be run out of this country because of the globalization, with the rush to outsourcing, the rush to the bottom with poorer jobs, part-time jobs? Are we going to accept the challenge of globalization and prepare every person in this country to be able to deal with globalization, prepare our country to deal with globalization and, as a result of it, still be the economic giant in 20 and 30 years from now, and, most importantly, have the national security capability to defend our nation and our interests around the world? We just cannot continue to sit back, see outsourcing and see a rush to the bottom. That's what we're seeing at the present time. DOBBS: Senator Kennedy, we thank you for being with us. KENNEDY: Thank you very much. (END VIDEOTAPE) DOBBS: And as Senator Kennedy spoke, globalization and the challenge to future generations in this country, our special report "Culture in Decline," why the United States is now losing its edge in mathematics, science and engineering and how that threatens not only our prosperity, but our national security, next. (COMMERCIAL BREAK) DOBBS: Tonight, in our special report "Culture in Decline," this country is losing its edge in mathematics and science. The number of American students now studying math, science and engineering is on the decline, and, over the past 20 years, the number of students graduating from American colleges with engineering degrees is down almost 25 percent. Bill Tucker has the story. (BEGIN VIDEOTAPE) BILL TUCKER, CNN FINANCIAL CORRESPONDENT (voice-over): The most challenging question isn't on the blackboard. JIM SIMONS, PRESIDENT, MATH FOR AMERICA: I can't find Americans. That is, the majority of the people that I've hired in the last seven or eight years, high-quality research people, are not U.S. people. They're not born in America, and they weren't educated in America. TUCKER: Simons has been called the world's most successful hedge fund manager. He started Math for America last year to encourage math teachers. UNIDENTIFIED MALE: The total integrand has to be continued. TUCKER: He calls what's happening with math a crisis. Between 1995, and 2002, the number of American-born college students pursuing graduate degrees in science and engineering fell, while at the same time foreign grad students at U.S. colleges rose by 50 percent. More teachers with the knowledge and a passion for the subject are key to exciting students. DAMAN BOUYA, HIGH SCHOOL MATH TEACHER: I explain to them how CDs work and how cell phones work and how trigonometry is used. Without trigonometry or advanced trigonometry, you would not have cell phones today, you would not have television UNIDENTIFIED MALE: We all use math every day. Every day. TUCKER: The head of the math department at the California Institute of Technology serves as a consultant on the CBS show "Numb3rs," which features a mathematician as the hero. He says that we not only have to get kids excited at an early age, we also have to overcome a cultural bias. GARY LORDEN, CALTECH MATH DEPARTMENT CHAIR: I think the financial rewards of working in math, science and engineering are greatly underestimated. The idea that going into law or medicine kind of sets you up for life is very prevalent in many parts of this country, and I think it's an exaggeration. TUCKER: What's at stake is simple. We've exported manufacturing. We're increasingly exporting product design. C.D. MOTE, JR., PRESIDENT, UNIVERSITY OF MARYLAND: If we lose our edge in innovation, then it's hard for me to see how we'll maintain our quality of life and even our national security going forward. TUCKER: The biggest part of the problem may be that most people don't understand there's a problem. (END VIDEOTAPE) TUCKER: It's not like we woke up and learned Russia had put a satellite into space, which back then sparked a national initiative on science education. This time, Lou, the threat has snuck up on us quietly, and we have yet to recognize that, in fact, it's upon us. DOBBS: Well, we haven't been too quiet on this broadcast. A lot of people are waking up to this fact. We need to wake up to it now. The policymakers in Washington, whether in the Senate, the Congress or the White House, they should frankly be ashamed of the duplicity on the issue of the importance of this and what is being done about it because this -- they're playing literally games with future generations of this country and the national interests. Thank you. Excellent report, Bill. Bill Tucker.