I wrote a comment, but the page load lost it. This particular flavor of comment submission is broken.

For many years now, starting with the hostile takovers of many businesses, financial people have been taking a large part of the pie, without adding any value the process. Instead, as Krugman says, they actually destroy value and wealth while rewarding themselves hugely with money.

Those who went into finance would have gone into marketing and sales. Careers will always shift to where money is. The closer you are to the money, the more you are compensated. If a 25 year old had written the article I would have understood, I am puzzled by the author's wishful thinking that more people will go into science and engineering. The trend of the past 20+ years has been an ongoing expansion of engineering talent in R&D offices in Asia and shrinking in the US and Europe (Western World). Market place has driven engineering out of the western world and it will not return. The future is in bioscience and not classical engineering.

I agree with Engineer that people will go to where the money is. The fact is that we have too many scientists and engineers. As a result, the "worth" of scientists and engineers in the eye of executives is small - and therefore not deserve a high salary. The cry about engineer shortage is bogus. There is only a shortage of even cheaper engineers. As long this persists, even bioscience do not have much a future.

What the US should worry about is not the amount of Engineering that has been outsourced over the last 20 years, but how much of our Blue chip companies have pushed IP which is uncontrolled outside of the US. Most of the countries have very lacks IP containment and what this means is that we are giving away the most important part of Engineering, the technology. Don't worry about the software coding jobs. It is the research jobs that are the ones that matter.

My son's take upon graduation from high school with a 700+ on his Math SAT was, "How can I compete with all those Chinese?" He majored in finance and thankully will ride out the financiers debacle as a U.S. Navy officer. To restore our Engineering pool of talent we need to stop importing engineers, stop exporting engineering work, and go to a flat tax to help eliminate the demand for financiers. How many Harvard MBAs does it take to collapse an economy?

The shortage of engineers in the country is very serious. Look around you. Everything, and I mean EVERYTHING, you see, taste, touch, smell, or feel has been affected by engineers. Without engineers, we, as a nation, cannot prosper. Someone has to make the products. Look at our manufacturing base. It's disappearing. Go to a engineering college. English is the second language. As long as this country values marketing, finance, or entertainment higher than engineering, we are doomed to be a third world nation.

Classic case of the chicken & egg equation. Unless engineers are paid better, we will never be able to more of the countries talents to join the profession.

Quite simply, engineering does not create income.
It creates products.
Products create income.
Marketing creates markets for products.
Marketing, therefore, creates wealth.
And Finance is the ultimate marketing tool, buying worthless derivatives, and reselling them for multiples of the purchase price.
Here it is again.
"The problem with communism is communism. The problem with Capitalism is Capitalists."

When someone starts talking stock market at me I ask: "What is the per-capita dollar value of the productive assets of the US?". One could start by simply taking a cubicle, totalling up the dollar value of the furniture, PC, phone, floor space, and common area. At $100 per square foot times 100 square feet, one gets $10,000 for real estate, and maybe $5,000 for the furniture and computers.
~~~
When looking at the Fortune 500, annual revenues per capita can run from 2.5x to 5x annual salary, so for a workforce making, on average, $40,000 per year their employer might be booking $100,000 to $200,000. The flow of cash through the system (via rents, taxes, materials costs, insurance, etc.) suggests that the labor of one individual (2000 work-hours per year) is probably enough to pay reasonable expenses for that person, one dependent (perhaps a child or spouse), and one other person, say someone on social security. Financiers have been successful in concentrating tiny slivers of wealth from a large number of people into massive personal compensation. In cases where a few industries need massive capital (semiconductor manufacturing, airlines, steel mills, etc.) their role is positive. However, as financiers are added their marginal utility diminishes. Having someone create a junk bond issue for a home improvement chain forgets that at one time there were privately owned lumberyards in every small town across the country. Is there really a meaningful difference between these and Home Despot?
~~~
If 100 million American households are attempting to build million dollar asset portfolios for retirement, one might guess that after some point additional captial investment yields almost no subsequent value creation. It might create more buildings, although they're empty. It might create more semiconductor fabs, resulting in forcing down the sales price of chips due to overcapacity. It might give airlines addition airplanes, some of which sit in the Arizona desert waiting for demand to perk up.
~~~
There is a belief that someone 'out there' is going to make something magic happen with one's nest egg. Mr. Madoff has provided a particularly stark demonstration of what happens when people invest uncritically. Even the 'legitimate' operations, however, are going to have to face truth as retiring investors want their money back. Meaningful asset growth can only mean productivity growth. Productivity has been growing at about 3% per year since 1992. Therefore, the total pool of assets is growing at about 3%. At that rate, it doubles every 25 years, and increases by one order of magnitude in one's lifetime.
~~~
If someone asks me how to get in on the ground floor of a start up, I ask: "How much do you know about chemistry, or physics, or software, or biotech?". In short, could you bring something to the table as a founder/owner? Someone what wants to throw passive money at such a venture is likely to get taken. What matters is the people that can design products, troubleshoot processes, analyze data sets, code algorithms, and discover user needs. Passive investors, by definition, don't do these things.
~~~
In the same context, the engineer that isn't coming into a business as a principal is going to get the short end. This may be due to their need to trade the risks of exposure to the marketplace for the security of steady income and benefits (for the family, more than likely), or because they don't want to think about business concerns and simply focus on engineering. This tranlates into a lack of regard for the economic and social consequences of the work. This may have something to do with the lack of respect (and compensation) offered to engineers in the current environment.

When someone starts talking stock market at me I ask: "What is the per-capita dollar value of the productive assets of the US?". One could start by simply taking a cubicle, totalling up the dollar value of the furniture, PC, phone, floor space, and common area. At $100 per square foot times 100 square feet, one gets $10,000 for real estate, and maybe $5,000 for the furniture and computers.
~~~
When looking at the Fortune 500, annual revenues per capita can run from 2.5x to 5x annual salary, so for a workforce making, on average, $40,000 per year their employer might be booking $100,000 to $200,000. The flow of cash through the system (via rents, taxes, materials costs, insurance, etc.) suggests that the labor of one individual (2000 work-hours per year) is probably enough to pay reasonable expenses for that person, one dependent (perhaps a child or spouse), and one other person, say someone on social security. Financiers have been successful in concentrating tiny slivers of wealth from a large number of people into massive personal compensation. In cases where a few industries need massive capital (semiconductor manufacturing, airlines, steel mills, etc.) their role is positive. However, as financiers are added their marginal utility diminishes. Having someone create a junk bond issue for a home improvement chain forgets that at one time there were privately owned lumberyards in every small town across the country. Is there really a meaningful difference between these and Home Despot?
~~~
If 100 million American households are attempting to build million dollar asset portfolios for retirement, one might guess that after some point additional captial investment yields almost no subsequent value creation. It might create more buildings, although they're empty. It might create more semiconductor fabs, resulting in forcing down the sales price of chips due to overcapacity. It might give airlines addition airplanes, some of which sit in the Arizona desert waiting for demand to perk up.
~~~
There is a belief that someone 'out there' is going to make something magic happen with one's nest egg. Mr. Madoff has provided a particularly stark demonstration of what happens when people invest uncritically. Even the 'legitimate' operations, however, are going to have to face truth as retiring investors want their money back. Meaningful asset growth can only mean productivity growth. Productivity has been growing at about 3% per year since 1992. Therefore, the total pool of assets is growing at about 3%. At that rate, it doubles every 25 years, and increases by one order of magnitude in one's lifetime.
~~~
If someone asks me how to get in on the ground floor of a start up, I ask: "How much do you know about chemistry, or physics, or software, or biotech?". In short, could you bring something to the table as a founder/owner? Someone what wants to throw passive money at such a venture is likely to get taken. What matters is the people that can design products, troubleshoot processes, analyze data sets, code algorithms, and discover user needs. Passive investors, by definition, don't do these things.
~~~
In the same context, the engineer that isn't coming into a business as a principal is going to get the short end. This may be due to their need to trade the risks of exposure to the marketplace for the security of steady income and benefits (for the family, more than likely), or because they don't want to think about business concerns and simply focus on engineering. This tranlates into a lack of regard for the economic and social consequences of the work. This may have something to do with the lack of respect (and compensation) offered to engineers in the current environment.

Sorry about the duplicate post. I get error messages saying the post hasn't been accepted.

There is an article in today's WSJ about the percentage of housing price decline in 20 major cities. What's notable is that 'tech havens': Seattle, Dallas, North Carolina, Boston, etc. have relatively little decline while 'star havens' and smokestacks (LA, Miami, SF, and Detroit, Cleveland, Chicago) got the worst. I'm working in Austin right now, and I'm not seeing a recession there. "Money" people like to live in high-maintenance locations. Kiss it goodby.

On the long run any countries or Companies prosperity will be prapotional to number of engineers they have & how they have been treated and paid. Coming from India I could see that. India was not doing well when engineers were treated like genetors now it is changed & hence the prosperity of the nation. Similary here in USA, now Engineers are paid low,loosing jobs fast & finding it difficult to find better paying jobs with more experience/ age & hence creating loss of national prosperity. fOR usa to get competative & attract kids towards eng edcuation, goverment need to create different tax benefits & unemployment benifits (extended) for people with Eng background.
Better benefit, pay & respect is the only solution for attracking kids to Eng & enhancing national prosperity otherwise it is just a talk & another article that jobs are moving to China & India.

Just found out: my ex-wife from 30 years ago, who started as a bank teller with a high school diploma and 'maybe' has an on-line MBA, is a senior vice president pulling down over 3X my salary and lives in a semi-mansion. I just have a BSEE, MSEE, PE license, ~12 years of college work and 30 years in aerospace industry. Remind me again: WHY should I encourage ANYBODY to get into this business???

Just look at Forbes list of Billionaires. How many made their fortunes from hedge funds? Its amazing these people made billions by actually not producing anything, but by inflating the price of financial services by selling what seemed to be guarantees against risk, and we wonder why the bubble burst. No wonder our cleverest people go into Wall St or Law firms with insane amount of money to be made.
Society has become so lopsided, to many of us seem to expect to get something for nothing, we really need to review our ethics and get back to basics.