> The most important question is whether they make or lose money on each customer, independent of their fixed R&D costs.
The ZIRP era called and wants its business strategy back. Half the problem is as frontier models are released free as in free beer models with "good enough" performance pop up. Half the arguments about LLMs are "you're not holding it right", which borders on indicating that it's unable to distinguish between two sufficiently close LLMs.
> Higher salaries aren't always better, especially when you're almost willfully ignoring more important things like purchasing power and quality of life.
Senior SWE salaries I'm finding in a quick google search in Spain are 80k eur. According to levels.fyi [1] Google (and presumably the other clouds) are paying 170k eur. The comparison isn't even "is 4x the salary better in the US?" it's "is 2x the salary better in the same place?" which is obviously yes.
But you still won't get with 170k in the Bay Area, what you get in Paris, Madrid, Nantes or Barcelona with 80k.
In France, if you get 80k net, you do actually get ~160k, half of which is collected/distributed before by your employer to various mutualised funds (health, retirement, unemployment, state taxes, employee benefits, etc.).
And the mechanism is somewhat similar in other EU countries.
80k net is 6.6k. If you're getting 80k (which is the very upper end of the range) it's likely you are in Paris, where you're gonna give at least 2k of that on rent for a shitty damp place, and double that for something decent.
Trust me I would love to quit consulting and be able to have a chill permanent job that can afford me a good flat and lifestyle. I'm still searching. Spain situation is very similar last time I ran the numbers.
Definitely no fucking way I'm helping anyone build a cloud provider (a cash cow considering the margins in there) for such pay. If I want to sell my soul to the devil, the one across the pond is gonna give me twice as many bucks for it.
2k for a rent in Paris gets you nice places if you have the time to spend to look for it. Cooking your own food at home definitely makes a huge difference every month.
As a SRE, I got 65k in Nantes before I quit, and I've never had to think about any single expense at all, not once (having kids, house, dog, car, garden). That would still have been quite confortable in Paris (swapping the house for a smaller flat, and without the car/dog/garden though).
As an American these numbers are super depressing, haha. Big city US vs Europe cost of living & wages are almost like an order of magnitude different at this point.
Big house & garden 30min from Manhattan center in practice does not even exist due to the sprawl and poor transit here.
As crazy as this sounds, 65k is the wage paid here now to a doorman/concierge at the type of apartment building an NYC SRE/SWE lives in.
If you want big house & garden that looks like the listings at your link, they are maybe 45-60min commute and 2x the price.
Dining out in NYC ends up like 2X+ as expensive as London/Paris or 4X+ Madrid due to labor/real estate costs. Maybe worse, I just looked up Michelin star 5 course menus in Paris and these are like regular Thursday night 2 course dinner prices in NYC.
So in many ways we collect a much higher gross wage here to then spend it all for a lower quality of life.
> But you still won't get with 170k in the Bay Area, what you get in Paris, Madrid, Nantes or Barcelona with 80k.
Note the 170k eur is in Spain -- not the bay area. I compared salaries of Google in Spain to the average salary of a senior SWE in Spain. The point isn't that the big tech pay more in the bay area compared to Spain. The point is the big tech companies pay more in Spain compared to other Spanish companies.
And 170k eur in Spain is much more than 80k eur in Spain.
Again, by focusing solely on the salary you're missing the bigger picture. I know y'all are conditioned to just focusing on the salary, but there is so much more to life.
While this sounds like great philosophical advice, in practice big salaries do attract employees regardless. If you want to solve the "brain drain to American companies" problem, ignoring the fact that they pay better isn't likely to help.
I don't think I am. Spanish employees of Google benefit just as much from Spanish employment law as Jose's Web Dev Shop. It's the purest comparison considering it's within the exact same country.
> Ontario alone has a larger GDP than 45 of the 50 US states, and a bigger GDP than New Hampshire, Hawaii, West Virginia, Delaware, Maine, Rhode Island, Montana, North Dakota, South Dakota, Alaska, Wyoming and Vermont put together.
This is not correct as of 2024. In 2024, Ontario had a GDP of CAD 1.17B. [1] In USD, this is (at .73 exchange rate, which is favorable for these calculations) this comes to US 854B.
In 2024, the following US states had greater GDPs [2]: California, Texas, New York, Florida, Illinois, Pennsylvania, Ohio, Georgia, and tied with Washington. GDP growth in 2025 was worse for Ontario than these states, and it would be expected Ontarios' position to continue to decline.
The figures I provided are for 2024. You would need to compare USD/CAD ratios for 2024 versus 2025. Annual GDP figures for 2026 are not yet available as 2026 has not yet come to pass, so usage of 2026 data is not accurate in this context. To compare, I would consider USD/CAD on December 31, 2024 which was 1.386 [.72] and USD/CAD on December 31, 2025 which was 1.4359 [.69] which are both less favorable than the .73 given.
As stated above, the usage of more accurate figures would render Ontario with a lower GDP than more states.
> Also - There aren't many more things that are more toxic in Canada politics than Trump and Annexation. He single handedly handed the Federal election to the Liberals - it was the Conservatives who were going to win until he but his thumb on the scale.
Watching these discussions from the outside are statistics like four in ten (43%) Canadians age 18-34 would vote to be American if citizenship and conversion of assets to USD guaranteed [1]. I don't think the political similarities or differences between the American right and the Canadian right are what can result in one or more Canadian provinces joining the US; I think it's economic discontent.
You are thinking about this in terms of today. To put it in perspective, the same question polled 17% in the 55+ age group. Canada has serious generational problems, and as the boomers die the number of Canadians who vote that way naturally declines.
> I recall years of hints that the affordable housing crunch would eventually be helped by developers - even tho they're only building tons of not-affordable housing.
If I may ask, what cities? For example, Austin has seen a 6.6% asking price decrease for 0- to 2-bedroom units [1]. The big problem is there is an absolutely massive hole, and very few places are building "enough" to make a dent.
> The "industrialisation" concept is an analogy to emphasize how the costs of production are plummeting. Don't get hung up pointing out how one aspect of software doesn't match the analogy.
Are they, though? I am not aware of any indicators that software costs are precipitously declining. At least as far as I know, we aren't seeing complements of software developers (PMs, sales, other adjacent roles) growing rapidly indicating a corresponding supply increase. We aren't seeing companies like mcirosoft or salesforce or atlassian or any major software company reduce prices due to supply glut.
So what are the indicators (beyond blog posts) this is having a macro effect?
> But no one wants to hold them because they devalue and will continue to do so at an accelerating rate.
Devalue against what is the main question though, isn't it? The real longer term issue is that the USD is devaluing against the Euro, but even that has serious issues for Europe's export oriented economies [1].
> Devalue against what is the main question though, isn't it? The real longer term issue is that the USD is devaluing against the Euro...
I don't think that FOREX rates are the best way to think about this, but if you work in that world or otherwise have an intuition for it, then go ahead.
Most of us only handle 1 currency, and reasoning in terms of 2 isn't exactly an intuition pump.
Instead think about:
1. The dollar valued against itself a year earlier, and a year in the future. That is the interest rate or yield of the asset if held.
It should have a positive real yield, but right now it doesn't.
2. How much your personal basket of monthly expenses costs in terms of dollars.
Ignore a basket that someone on the news told you to care about, like CPI.
I mean your personal basket, all the stuff you personally buy, how much is it in dollars, now, a year in the future, a year earlier.
If you stored value in business or a precious metals in the last year and then converted back, you would probably have more dollars, or be able to buy more stuff, that's all there is to it.
> I don't think that FOREX rates are the best way to think about this, but if you work in that world or otherwise have an intuition for it, then go ahead. Most of us only handle 1 currency, and reasoning in terms of 2 isn't exactly an intuition pump.
Forex rates, balance of trade, and relative strengthening are great ways of understanding international fluctuations. They are exactly the way to understand reserve currency movements
> 2. How much your personal basket of monthly expenses costs in terms of dollars. Ignore a basket that someone on the news told you to care about, like CPI. I mean your personal basket, all the stuff you personally buy, how much is it in dollars, now, a year in the future, a year earlier.
This hits at a major part of the issue: goods that have no importable replacement good (housing and healthcare, namely) are a huge part of what lead to the huge bout of inflation. But those are domestic economics, not international economics.
>The dollar valued against itself a year earlier, and a year in the future. That is the interest rate or yield of the asset if held. It should go up, but right now it goes down.
It depends.
Positive real interest rates do not necessarily mean deflation, and deflation isn't necessarily a bad thing.
As an example, you could give a loan for $1 to someone for 5% interest.
In a year they pay you back, so now you have $1.05.
That dollar could get you exactly the same amount (of real goods or services that you personally want) as last year, or it could get you more, or it could get you less.
Inflation and deflation typically refer to the price of a basket of intrinsically valuable goods and services.
That is separate from the interest rate which is just what you, the creditor, and the debtor shake hands over.
If the dollar gets you the same basket as last year, then you are net better off because now you can buy the basket and you have $0.05 for lending to someone who was able to pay you back.
The missing variable here is the productivity of the rest of the economy, if the economy is growing, then you can see a decrease in dollars per basket (deflation), but that's not necessarily a bad thing.
The interest rate is sort of like a best guess for the productivity of the debtor.
The EUR/USD FX rate has been pretty stable for about 10 years. I think (sadly, didn't check notes before I wrote this), the trade balance between US and EU is well-balanced. As a result, the FX rate should also be well balanced.
> Hum... There are no reliable numbers out there, but I don't think the dollar devaluation has been keeping up with the US inflation.
There isn't anything like "dollar devaluation has been keeping up with the US inflation". You are interested in what is called the import/export price index [1] and for imports that has been relatively flat for the past ~24 months(import +.3%, export +3.8% for TTM). So in a sense, imports for a fixed good are relatively unchanged in constant-currency terms.
It's more along the lines of "if the EUR goes to 1.5, what does this do to eurozone economies?" and the answer to that isn't pretty for europe. This would greatly impair the economy of Germany and other large eurozone economies pretty substantially(see this article for why [2]).
And finally, remember: the US actually exports inflation [3]. Most economies cannot simply say no to this effect.
> If all the prices rise in the US to compensate, Europe stays exactly as competitive as before.
Yes, but my point is exactly the opposite has occurred for imports: the US is still roughly flat in terms of import inflation. Since Nov '22, import inflation has been sub-3% without exception and sub-2% since 2023 without exception. The US is still exporting inflation effectively, and US inflation is due to factors other than currency fluctuations.
That's the real issue: the USD weakened 8% against the EUR, and prices remain the same. For eurozone exporters to the US that's an absolute disaster.
What other choice is there? About 10% of all US healthcare spending is on end-of-life care [1]. It's not pleasant to talk about, but it is a discussion that needs to take place.
Speaking only of the financial aspect, not any other ethical issues:
Those end-of-life patients paid into the system, earlier in their lives, financing the cost of earlier generations of end-of-life patients. It would be unfair to change the social contract now.
In my opinion, it is no different from how adult taxpayers finance public education for children. It is a rolling responsibility from generation to generation.
You may be able to alleviate this financial issue (and not any other ethical issues) by phasing-in this policy change with the youngest generation of Medicare taxpayers, somehow.
> Those end-of-life patients were paying into the system, earlier in their lives, financing of the cost of earlier generations of end-of-life patients. It would be unfair to change the social contract now.
> In my opinion, it is no different from how adult taxpayers finance public education for children. It is a rolling responsibility from generation to generation.
This hits upon the core issue: the next generation is substantially smaller than the last and relative costs have ballooned due to greater availability of therapies. The generational contract is that you pay your taxes a percentage of wages -- in effect, a PAYG mechanism. If wages do not rise sufficiently to cover increased costs, that does not imply that the generational contract was unfulfilled; the taxes were paid.
The demographic pyramid and weaker than necessary wage growth really renders the care demanded burdensome to the point where we have already provided elderly cost advantages in insurance in the form of cost premium multiple maximums and medicare from payroll taxes while beggaring the rest of the population in the process.
> In my opinion, it is no different from how adult taxpayers finance public education for children. It is a rolling responsibility from generation to generation.
Fundamentally, children are an investment. They produce cash flow (taxes) from increased public health. The end-of-life are not; by definition, they will be dead soon. It's a horrible thing to say, but in the face of ever increasing elder care burdens and weak public debt/gdp ratios, what real choice is there?
> If wages do not rise sufficiently to cover increased costs, that does not imply that the generational contract was unfulfilled; the taxes were paid.
That's an interesting alternative view I had not considered. I think it is debatable. I believed the generational contract to be "healthcare for 65+ with 20% copay, etc., no gov. expense spared" whereas you argue the generational contract to be "Medicare payroll tax of X% is constant over all time; spend it wisely." I would argue the first option was the original intent of the Medicare law.
> Fundamentally, children are an investment. They produce cash flow (taxes) from increased public health. The end-of-life are not
You could argue the same for the end-of-life, in at least two ways:
* the end-of-life patient has already produced cash flow to the government, just in reverse order from the student
* Good education produces a higher taxpaying adult, the investment you refer to. I would argue the assurance of end-of-life healthcare also produces a higher taxpaying adult.
I acknowledge the costs have gone up faster than wages+population.
> I believed the generational contract to be "healthcare for 65+ with 20% copay, etc., no gov. expense spared" whereas you argue the generational contract to be "Medicare payroll tax of X% is constant over all time; spend it wisely." I would argue the first option was the original intent of the Medicare law.
I appreciate this view, but it is ahistorical and does not reflect the history of Medicare law.Taken from [1]:
> By the late 1970's, the growing expenditure trends and the changing demographics (an increasing proportion of the U.S. population 65 years of age or over) combined to endanger the solvency of the Medicare Trust Fund. The rapid increases in expenditures for the Medicare program, as well as health care services in general, constrained the ability of the Federal Government to fund other health and social programs. To a certain extent, the growth in expenditures also endangered the Nation's overall economic productivity.
> At the same time as health care expenditures were escalating, some say uncontrollably, the political landscape began to change dramatically. The national mood brought calls for fewer taxes, for reduction of budgets, and for deregulation of market sectors, such as transportation and health. This conviction of less general involvement by Government was reinforced by mounting public pressures surrounding growing budget deficits; Medicare, like other Federal programs, increasingly competed with more global policy objectives. In the space of a few years, the Nation moved from an era when health care was considered a right for all citizens to an era when cost considerations became the dominant issue.
And bear in mind, this was just ~10 years after Medicare was introduced. The nation has always prioritized the future over the past, and has either reduced or restructured benefits to ensure a healthy economy ahead of Medicare.
> You could argue the same for the end-of-life, in at least two ways: * the end-of-life patient has already produced cash flow to the government, just in reverse order from the student * Good education produces a higher taxpaying adult, the investment you refer to. I would argue the assurance of end-of-life healthcare also produces a higher taxpaying adult.
This lacks an understanding of Medicare. Medicare is fundamentally a PAYG mechanism; the trust fund was a short term surplus which is slated to be depleted by 2033 [2]: a mere 8 years from now. Part of this occurs due to poor investment strategy (treasuries only, effectively) but the biggest contributing part of this was the demographic boom. The time for "more cash flow to save for Medicare" isn't today it was 30 years ago. A failure to raise taxes 30 years ago should not constitute an obligation on the youth of today and placing the burden of an excessive tax because of poor demography and unwillingness of prior generations to raise taxes on themselves only harms economic growth at the expense of the elderly.
That's a reasonable question with several answers.
One is that US healthcare cost inflation is very high. The average family premium in 1999 was $6k, it is now $27k, for an annual cost increase of 6.1% per year. The long term rate of productivity increase is much lower than that, at only 2.1% per year.
So costs have just risen a lot more than productivity has.
Another reason is that productivity increases aren't evenly distributed. Most productivity growth has been in other sectors, primarily oil+gas and tech i.e. sectors dominated by men who aggressively automate. Healthcare has seen no increase in worker productivity for decades:
Output is up, but only because of more hours worked. And much of that output is growth of administrative overhead, not actual healthcare as most people perceive it.
Soaring demand + zero productivity growth + cost inflation 3x higher than inflation + no political will to control costs = a death spiral in which the lowest risk decide to go it alone and drop out, leaving ever higher premiums for the rest.
And productivity in society has gone up by huge amounts since the 1960s. Just since the 90s it's more than doubled, but going back to the 1960s it's much more than that. So you can't just say 'but population dropped'.
Fundamentally what is the purpose of society if the improvements it makes over time don't improve its's citizens lives? If even with tripling it's economic output it can't care for it's people (just because they are old doesn't make people not part of society)?
This argument is a moral event horizon and the problem should be resolved by other means.
Once one decides to ration healthcare based on estimated remaining QALY, the same logic says we shouldn’t subsidize, e.g., healthcare for people who suffer from cystic fibrosis, or HIV, or aggressive cancers, or. . .
Or if you’d rather, there are millions of children without healthcare in the United states. Would you forgo your access to healthcare for them?
> $365 billion of it went for end-of-life care. [1]
That’s all? Musk alone is worth twice that, and who knows how many QALYs he has left but it can’t be that many. He seems pretty miserable most of the time.
> Once one decides to ration healthcare based on estimated remaining QALY, the same logic says we shouldn’t subsidize, e.g., healthcare for people who suffer from cystic fibrosis, or HIV, or aggressive cancers, or. . .
Those are risks. Risks are insurable. However, death is a certainty. It is very reasonable to discuss what we believe society should subsidize for end-of-life care as it will impact everybody, myself included.
> Or if you’d rather, there are millions of children without healthcare in the United states. Would you forgo your access to healthcare for them?
I don't see what pediatrics has to do with end-of-life care in the context we are discussing (Medicare), but I would much rather subsidize pediatrics than elder care.
> That’s all? Musk alone is worth twice that, and who knows how many QALYs he has left but it can’t be that many. He seems pretty miserable most of the time.
Musk is worth 244B [1]. Even if we could tax wealth 100% into cash, we would fully exhaust the wealth of the 25 wealthiest American families within 7 years. These expenses, however, will likely continue for the next ~20 years. We need to discuss benefit cuts or tax hikes on the American population writ large.
> Once one decides to ration healthcare based on estimated remaining QALY, the same logic says we shouldn’t subsidize, e.g., healthcare for people who suffer from cystic fibrosis, or HIV, or aggressive cancers, or. . .
Not everybody gets cystic fibrosis, or HIV, or aggressive cancers. These are a risk. That is fundamentally an insurable risk. However, we will all die. No matter how much money is spent, death comes for us all in old age. Discussing how much is an appropriate cost for end-of-life care when aged is very much a societal question.
> Or if you’d rather, there are millions of children without healthcare in the United states. Would you forgo your access to healthcare for them?
This remains a question, even in Europe. See [1] for a discussion as early as 2000 regarding rationing in the NHS.
> That’s all? Musk alone is worth twice that, and who knows how many QALYs he has left but it can’t be that many. He seems pretty miserable most of the time.
That is a cost each year, and Musk is currently at 244B [2]. We have roughly 20 years of this level of spending or greater. Even if we assumed we could tax Musk 100% (which isn't practically possible because who liquidates his positions), where do you propose to acquire that level of ongoing cashflow? Within 7 years, we would fully exhaust the wealth of the 25 wealthiest American families, even at 100% tax rate. End-of-life care is mind-bogglingly expensive for the United States economy. This either needs to be a tax hike which realistically will it everybody or a benefits cut.
The ZIRP era called and wants its business strategy back. Half the problem is as frontier models are released free as in free beer models with "good enough" performance pop up. Half the arguments about LLMs are "you're not holding it right", which borders on indicating that it's unable to distinguish between two sufficiently close LLMs.
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