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Clear Our Your Desk -- We've Got Apu Now
January 29th 2004, 17:42 CET by Caryn

For those who hate discussion about what affects the U.S., I apologize for the U.S.-centric nature of this topic. But I'm assuming this isn't just affecting the U.S., so I'm curious to hear from people outside of the U.S. on this.

My dad's been working as a CAD designer on chips for a couple of decades now. He's worked for Digital, IBM, Harris Semiconductor, and most recently Intel, working on their next-generation processors. But that was a year ago. When his contract with Intel came up for renewal a year ago, they chose not to. Since then he's been looking for more work in his industry and he can't find it, because all the jobs have now gone to India. It's been over a year now, so he's decided the tech industry doesn't have room for him anymore, and he's looking at other options for work.

Wired has an article about this very subject. While this was also linked at Slashdot, I was really interested in getting some discussion about it here, and I mean real discussion. I didn't create this topic to complain about said jobs going to India. I'm curious about discussing some of the things that the article -- which is very good -- brings up. Things like, how do you think this will effect the US economy in both the near and far future? What do you think about the article's assertion that the next phase for the US, now that we've moved out of both agriculture and industry, is one of discovery and innovation? Do you think this is going to affect the gap between the very, very rich and the current middle class?

To inject a little personal opinion into the topic, I'm torn on this issue. My dad has been directly affected by this, and I can see what it's done to him personally to find that no one wants to hire him, and for him to have to go looking for a new job in something he's not interested in or trained to do. On the other hand, I find that people who are trying to pass laws against outsourcing are ridiculous -- no one, including Americans, has a god-given right to these jobs. The world changes, and this is something that's a natural part of a global economy. And somewhere in the middle, I'm concerned about these changes occuring too fast for Americans to keep up with and how that's going to affect the current middle class. But when all is said and done, I believe what the article says when it talks about these type of changes having occured in the past and been for the greater good, despite individuals losing their jobs.

What do you think?
C O M M E N T S
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#12 by UncleJeet
2004-01-29 17:53:13
Research and development is the future of western society, while implementation and manufacturing is the realm of the people still playing catch up.


  Right, and also starships and replicators and no need for money.  Oh yeah, and no more hard angles.  In the future, everything with be rounded.

I'm fighting terrorism by playing violent video games!
#13 by Matt Perkins
2004-01-29 17:53:15
wizardque@yahoo.com http://whatwouldmattdo.com/
Personally, I think it's ridiculous for a company to be able to operate in America, but then farm out all of its work to other countries where they can get the labor cheaper.  Who benefits from that?  The companies that do it.  They may or may not pass along any savings to the consumer (compare how much it costs for a Nike sneaker to how much it costs to make), but even if they do, at what actual cost are we paying?  Are our jobs worth saving a few bucks on a particular item or service?  Not in my opinion.


That said, in the long run (that being 20 - 50 years, maybe longer) it'll all work itself out because there will not be cheaper, useful labor in other countries anymore.  See countries taking their factories and out sourced labor to countries beyond Mexico and India because it's now cheaper to go to places like China or the like for examples.  In other words, it'll all balance itself out at some point if the current course continues.

That's not a great solution, but I don't see American companies getting together and deciding they are screwing American's and changing things.  The WTO is all about the opposite of worrying about anything beyond the button dollar.

"Good, good. Now, and here is where I'm going with this - I'll be fucked if I can remember how to farm."
- LP
#14 by G-Man
2004-01-29 17:55:17
UncleJeet in #3 said:
I'm against exporting jobs to other countries so mega corporations can save money to pass on to their administrators' bonuses.  I also think America should be an isolationist country with an ultra-conservative application of government
So you are stupid then? Good to know.
#15 by LPMiller
2004-01-29 17:55:50
lpmiller@gotapex.com http://www.gotapex.com
The problem with this, unlike tradition labor positions, is that we are literally training our corporate competition. We are sending them training, and showing them how to run a business, all the while pissing away whatever brain trust we have.

While I'm not really into protectionism overall, this is a concerning trend for any country hoping to stay competitive and productive 20 years down the road.

I believe I can fly......urk.
#16 by Charles
2004-01-29 17:55:52
www.bluh.org
As it said in the wired article though, they aren't going to india just because they are cheaper, but because they are good at what they do.  I think western society is extremely lazy when it comes to doing real work, and because of that, they get leapfrogged.

-chris
#17 by UncleJeet
2004-01-29 17:56:11
Well, that was a little harsh.

I'm fighting terrorism by playing violent video games!
#18 by gaggle
2004-01-29 17:58:31
Bailey
Read the fucking article. It specifically mentions this also happens in Europe


There's a fucking article? Fucking occurs in Europe?
No, Bailey, I'm responding to the topic description, which specifically mentions US-centricity. Which I thought it wasn't at all.
#19 by UncleJeet
2004-01-29 17:58:55
G-man, so what you're saying is that having a govenment that doesn't do deficit spending, keeps itself small and efficient, and minds the affairs of the nation instead of micromanaging its citizen at absurd levels of cost and energy is stupid?  I just want to be clear, hippie.

I'm fighting terrorism by playing violent video games!
#20 by Hoe Muffin
2004-01-29 17:59:04
poontanger@hotmail.com
#13- You're neglecting the fact that the programmers in India/China/Wherever are directly benefitting from it as well. The additional income allows them to pay the bills, feed their family, etc. This phenomenon is nothing new, its just that for the first time globalization is finally affecting the so-called white-collar folk.

Also, technically speaking a public traded company is owned by and is designed to serve shareholders, and it does not follow that a company is required to "pass the savings onto the consumer" unless it somehow increases the value of the company to shareholders (although it usually does).
#21 by UncleJeet
2004-01-29 18:00:39
I think western society is extremely lazy when it comes to doing real work, and because of that, they get leapfrogged.


  There's that, and they like to live at least at the poverty level.  Things like food and shelter and a future for their children are important to the lazy gluttonous slobs of the west, and these things drive up the price of their labor.

I'm fighting terrorism by playing violent video games!
#22 by Bailey
2004-01-29 18:01:05
I think it'll be about five to ten years before the Indian centers get too accustomed to the wealth and demand enough for companies to look elsewhere. At the moment, they've got talent and they're willing to work dirt cheap, because the nation they live in is dirt poor. However, this influx of US dollars is going to create some radical changes in the local economies over time (I mean, they're sipping cappuccinos, so you know they're already decadent), and they'll want paychecks that equal Lexus SUVs and gold-stylus palm pilots. The major obstacle preventing China from being in this position is that, as a nation, they've got a horrible grasp of the English language, but they're currently under a massive push to rectify that by the 2008 Olympics. They've certainly got the technical talent, as evidenced by their 0-day street warez and billions of Diablo clones.

If Bangalore can't feel China breathing down their necks, it's only due to the aforementioned decadence.

Life without shame.
#23 by Hoe Muffin
2004-01-29 18:05:06
poontanger@hotmail.com
#22 - Actually, China is already taking much of the manufacturing roles from India (as well as Korea and other Asian countries). So India is accutely aware of the problems that China presents. On a vaguely related note, the outsourcing to India is interesting in so far as it represents a structural shift in the American economy - much in the same way that manufacturing shed many jobs that are not going to come back, I would expect the same to happen with the software/tech-support industries as well.
#24 by Jibble
2004-01-29 18:06:01
Americans want only one side of the global economy.  We like exporting products, not jobs.  I don't know whether I can say that it's unfair to outsource jobs, as the benefits are obviously there for corporations.  The salary gap is obviously huge, and Americans have, as we previously discussed, a bit of an ego problem.  I agree with Jeet here that the salary problem doesn't just apply to tech workers, but all the way up through the echelons of management systems.

This, of course, raises the question of why we overvalue ourselves.  To me, it's because of the relative value of things.  In Texas, a 3 bedroom apartment costs around $800-$1000 a month.  In India, the same type of dwelling can cost $132/month.  Why do we get paid more here?  Cost of living.  You can barely survive on $11,000/year here, but there you can get by just fine.

I think an interesting question here is this:  Would the cost of living would go down if widespread salary cuts happened?

If I had to choose between the '80s classics "Beat Street" or "Breakin'" for a prestigious award, I'd probably have to go with the latter, since its sequel introduced the mind-shattering concept of marrying *electricity* with the boogaloo.
#25 by Hoe Muffin
2004-01-29 18:06:05
poontanger@hotmail.com
#21 - I suppose it would be redundant to note that those sorts of desires are appealing to people throughout the world. It isn't just a Western ideal.
#26 by Bailey
2004-01-29 18:06:22
gaggle

No, Bailey, I'm responding to the topic description, which specifically mentions US-centricity. Which I thought it wasn't at all.

It's this abject laziness that's sending your job to India! Click the fucking link! Fucking ensues!

MattP

Who benefits from that?  The companies that do it.

There's also a group known as "stockholders", and they're the same ones grousing about losing their job to Hadji.

Life without shame.
#27 by Matt Perkins
2004-01-29 18:06:33
wizardque@yahoo.com http://whatwouldmattdo.com/
#13- You're neglecting the fact that the programmers in India/China/Wherever are directly benefitting from it as well. The additional income allows them to pay the bills, feed their family, etc. This phenomenon is nothing new, its just that for the first time globalization is finally affecting the so-called white-collar folk.

Maybe...maybe not.  I heard interesting piece on the factories in Mexico being shutdown because mexicans are asking for may pay and the labor is cheaper in China.

In other words, it's a temporary solution for them.


Also, technically speaking a public traded company is owned by and is designed to serve shareholders, and it does not follow that a company is required to "pass the savings onto the consumer" unless it somehow increases the value of the company to shareholders (although it usually does).

Of course, that's the basic problem with corporations and how they are allowed to operate, but that's a different discussion.

"Good, good. Now, and here is where I'm going with this - I'll be fucked if I can remember how to farm."
- LP
#28 by Caryn
2004-01-29 18:07:52
carynlaw@pacbell.net http://www.hellchick.net
#22 Bailey
However, this influx of US dollars is going to create some radical changes in the local economies over time (I mean, they're sipping cappuccinos, so you know they're already decadent), and they'll want paychecks that equal Lexus SUVs and gold-stylus palm pilots.


This is something that stuck with me from the article. The author went to great pains to show how the areas these people live and work in are like another world when compared to the incredible poverty that exists in India sometimes right on the same street next to them. While people in the US talk about the growing disparity between the very rich and the middle class that's occuring here, I wonder if the influx of US dollars is going to trickle out into the rest of Indian society and bring that poverty level up, or if it's going to further divide it (which doesn't seem possible since the poverty there is so bad already).

I am in Kyoto
Yet at the voice of the Hototogisu
Longing for Kyoto
- Basho
#29 by Hoe Muffin
2004-01-29 18:10:55
poontanger@hotmail.com
#24 - This is the nasty part of Globalization that no one really likes to talk about. Jobs will be lost, and their will be signficant structural changes to the economy. By definition, if everyone in America took a massive salary cut of say, 50%, the money would have to go somewhere. Most likely in the form of dividends to share holders, so I doubt it would have a great effect other then screwing the common worker.
#30 by jjohnsen
2004-01-29 18:11:02
http://www.johnsenclan.com
I think an interesting question here is this:  Would the cost of living would go down if widespread salary cuts happened?



It would have to.  If nobody is buying houses for $200,000, somebody is going to start building them for $150,000.  More layoffs and suddenly houses cost less than $100,000.  Aply that to everything over a few years and bread would be back down to 50 cents a loaf.  It would only happen after a huge amount of salary cuts for everyone though.

-Jeremy
#31 by Bailey
2004-01-29 18:11:43
Jibble

Why do we get paid more here?  Cost of living.  You can barely survive on $11,000/year here, but there you can get by just fine.

Quite. In China, I was being paid roughly $600 USD a month, with a palatial apartment included, and was able to eat out at a quality restaurant for three meals a day without making much of a dent in that. I mean, what's left? Living it up? Imported scotch? Pirated DVDs? Moreover, that salary is considered a starting wage for an English teacher, and can easily double in the first year. That's dick all on this side of the Pacific, but it really puts things in perspective about how we pay too much for pretty much everything.

Mind you, if I'm paying for sanitary living conditions, food, and water, I really can't put a price cap on that.

Life without shame.
#32 by Charles
2004-01-29 18:13:11
www.bluh.org
Well, the indian goverment could always just do the tax thing, and use that to slowly shape up the country.  

The wired article mentioned that the salary of 11k was over twenty times as much as the average... if you consider that here, what's the average in north america?  30k?  I'd like to make 600k a year.  I realize it's not a linear comparison like that, but it's not like they are getting paid peanuts, because their livings costs and such are low enough that they can live as easily on their wages as a programmer here can live on 60-70k.  

As for fixing the rest of the poverty... I think just having a group of people willing to spend more money will increase the amount of jobs needed for their service industries, if nothing else.

-chris
#33 by Hoe Muffin
2004-01-29 18:15:32
poontanger@hotmail.com
#28 - Caryn, the levels of poverty in China and India are leagues away from American standards. In absolute terms, there may be a greater disparity in wealth from the very rich to the very poor in America. But one glance at the Western boundaries of China would indicate that it is far better to be poor in America then China. Disparity only leads to social unrest when the poor/middle-class/whatever can no longer economically sustain themselves, not when they cannot afford several BMW's.

#27- Matt, true, the theory behind globalization (assuming completely free markets and all that, which isn't currently the case) is that the invisible hand will ultimately distribute manufacturing and services in such a way that they are produced in the most efficient location possible. This may or may not be China/India, but as of right now, it is more efficient to produce Nikes in Thailand then in New York, for example.
#34 by LPMiller
2004-01-29 18:16:18
lpmiller@gotapex.com http://www.gotapex.com
The problem with this, unlike tradition labor positions, is that we are literally training our corporate competition. We are sending them training, and showing them how to run a business, all the while pissing away whatever brain trust we have.

While I'm not really into protectionism overall, this is a concerning trend for any country hoping to stay competitive and productive 20 years down the road.

I believe I can fly......urk.
#35 by Charles
2004-01-29 18:17:14
www.bluh.org
I don't like the term 'brain trust'.

-chris
#36 by Bailey
2004-01-29 18:17:33
Caryn

While people in the US talk about the growing disparity between the very rich and the middle class that's occuring here, I wonder if the influx of US dollars is going to trickle out into the rest of Indian society and bring that poverty level up, or if it's going to further divide it (which doesn't seem possible since the poverty there is so bad already).

I can't imagine why, the poor don't have anything the rich want. Maybe they could pay them a small monthly stipend to move their shantytown off the sidewalk out front, but that's about it. At the most, we'll see an explosion in the daycare and houseservant industry, possibly in construction as well. But generally speaking, you're talking about people whose resume would consist of things like "Can carry gallon buckets of water over long distance. Resilient against most major diseases and parasites. Excellent survival skills."

Possibly, there may be social reform if the government taxes the new bourgeoise heavily and redistributes the wealth, but I have the feeling that's an unlikely development.

Life without shame.
#37 by Hoe Muffin
2004-01-29 18:18:39
poontanger@hotmail.com
#34 It is an unfortunate and vaguely sadistic side effect of the whole outsourcing issue. It should, however be noted that America is still the "brain drain" drawer of the world. I suspect we're going to see a fundamental shift towards the sorts of industries wherein the services offers are not commodities, ie easily replicable at a lower cost in a different location. As much as it loathes me to say this, management, provides an excellent example.
#38 by Bailey
2004-01-29 18:19:11
LPM

Is there an echo in here, or did you feel that everyone missed your point? I agree with you, so I have nothing to say.

Life without shame.
#39 by LPMiller
2004-01-29 18:19:13
lpmiller@gotapex.com http://www.gotapex.com
Well, that's pretty fucked up, LP.

I believe I can fly......urk.
#40 by LPMiller
2004-01-29 18:19:52
lpmiller@gotapex.com http://www.gotapex.com
No, our server here is acting like ass.

I believe I can fly......urk.
#41 by Bailey
2004-01-29 18:20:46
Wacky!

Life without shame.
#42 by Charles
2004-01-29 18:21:01
www.bluh.org
At the most, we'll see an explosion in the daycare and houseservant industry, possibly in construction as well. But generally speaking, you're talking about people whose resume would consist of things like "Can carry gallon buckets of water over long distance. Resilient against most major diseases and parasites. Excellent survival skills."


And like I said, the service industry.  I think there is always a lot of potential there for growth, once you have more people in the area spending more money.  And for a lot of service industry jobs, there aren't exactly requirements.  On top of that, BECAUSE education will result in reaching those better jobs, there will be more focus on it, and in the end, things'll probably balance out.

-chris
#43 by Jibble
2004-01-29 18:27:32
I think the biggest threat to the national job market is the absolute excessive nature of advertising.  People tend to confuse "living comfortably" with "living in a $200,000 house and driving a $70,000 SUV with heated leather seats and optional hand-job attachment".

If I had to choose between the '80s classics "Beat Street" or "Breakin'" for a prestigious award, I'd probably have to go with the latter, since its sequel introduced the mind-shattering concept of marrying *electricity* with the boogaloo.
#44 by LPMiller
2004-01-29 18:28:50
lpmiller@gotapex.com http://www.gotapex.com
Only, a 200,000 home ain't much, these days.

I believe I can fly......urk.
#45 by mgns
2004-01-29 18:31:45
*shrug*

This is what makes Alan Greenspan all warm and fuzzy. Why can't people see that this system is flawed and try to change it? Anyone with a little common sense could reason out that this would eventually happen. When Thatcher and Reagan says it's good for you, it isn't. But no, free market is gr-r-r-eat.

I mean, seriously, why should the economy of a country half-way around the globe have an immediate, short-term, effect on my pension funds? It just doesn't make any sense on the grass-root level of things, where most of us live and work. To hell with the yuppies, I don't want my economy hi-jacked by assholes in three-pieces.

Socialize it. Lock, stock and barrel.

(assuming completely free markets and all that, which isn't currently the case)

Won't ever happen either. And I absolutely adore how the cute liberals likes to chime in with a 'but the system isn't completely free yet, you just wait and see' whenever someone points out that the horrible clay-giant we're currently relying on is in fact not very efficient.

He leans on the hood telling racing stories, the kids call him Jimmy The Saint.
#46 by Hoe Muffin
2004-01-29 18:32:34
poontanger@hotmail.com
Housing Bubbles, and the average American consumer leveraged far too much. Part of the problem of being the global engine of growth, I guess.

I agree with Charles regarding the importance of continued higher education.
#47 by Charles
2004-01-29 18:34:58
www.bluh.org
I mean, seriously, why should the economy of a country half-way around the globe have an immediate, short-term, effect on my pension funds? It just doesn't make any sense on the grass-root level of things, where most of us live and work. To hell with the yuppies, I don't want my economy hi-jacked by assholes in three-pieces.


How about because if you don't treat other countries good, one day they'll stop making your shoes?

-chris
#48 by Hoe Muffin
2004-01-29 18:35:47
poontanger@hotmail.com
I agree with the fact that free markets are a misnomer (European CAP, tariff's and restrictions everywhere), but on a more arbitrary level, I'm not eactly certain why a loss in an American job and a gain in of an Indian job is necessarily a bad thing. Globalization, for all its warts and imperfections, has done more to help the developing world then any sort of aid thus far. Efficiency is king, I guess.
#49 by Charles
2004-01-29 18:38:03
www.bluh.org
I'm not eactly certain why a loss in an American job and a gain in of an Indian job is necessarily a bad thing. Globalization, for all its warts and imperfections, has done more to help the developing world then any sort of aid thus far. Efficiency is king, I guess.


Because helping other people isn't worth it the instant any kind of sacrifice, on any level, enters in to the equation.

-chris
#50 by Bailey
2004-01-29 18:40:40
Treat other countries good? How about much gooder?

Life without shame.
#51 by mgns
2004-01-29 18:47:20
charles,
How about because if you don't treat other countries good, one day they'll stop making your shoes?


I'm sorry, what? Please elaborate.

He leans on the hood telling racing stories, the kids call him Jimmy The Saint.
#52 by Your Friend
2004-01-29 18:47:32
While I don't think pure globalization is evil, my big problem with the current situation is that in almost every case, it is a one-way street.  If the jobs are moving to India, that's fine, but in theory I should be able to move to India too to compete for those jobs. The reality is I can't because India has a large amount of protectionist policies in place that would stop me from doing this, as a foreigner.   That creates an unfair imbalance, IMO.  Of course, I'd work at McDonalds before I lived in India, since I'm not a big fan of crowds, and it is hard to avoid them in a small nation with billions of people, but that is somewhat besides the point of the fact that I couldn't even if I wanted to.

All in all, this isn't as big of a problem as it now seems and is a trend that will reverse itself fairly quickly.  While there is technical talent in India, it isn't infinite (just as companies found out it wasn't infinite here in 1999/2000).  The late-comers to the party will soon find out that they're being sold on the Alpha Indian performers, but are really getting the Deltas because there are only so many Alphas to go around.
Also, at least in the case of software development (less true for chip design), management will soon find out that their overhead costs skyrocket to the moon (quickly erasing any developer savings and then some) when they need to create the perfect requirements documents and design specifications required for an outsourcing project to succeed (not just in India, but anywhere off-site, where issues can't be resolved over an informal lunch meeting).

Mostly, this is just the latest management fad.  It'll work OK for a few companies, but a lot more are going to have egg on their face over the next 2-3 years when they realize that the dream they are being sold by the consulting companies who are advocating offshoring aren't the silver bullet they've been lead to believe.

I don't think any legislation is required to handle this situation, so I'd rather the politicians just stay out of it and let it run its course.  As a nation, we got really panicked by the Japanese manufacturing sector back in the 80s and assumed they'd be running the world any day now (go read some William Gibson to get a feel for how this changed our perception of the future), and look how that turned out...  The same will happen with India, I'm sure of it.  Nothing to really panic about, though yeah it does suck for people who need to find new lines of work in the near-term.

Comment Signature
#53 by Bailey
2004-01-29 18:53:13
True enough. I can't remember the company in question, but there was an article on Reuters or something about how one or two major corporations are pulling their tech support out of Bangalore and outsourcing elsewhere, because they people willing to work for the shitty wage call center workers get are generally the bottom of the Indian barrel when it comes to technical talent and English skills. Of course, they didn't say they were coming back stateside, but hey.

Life without shame.
#54 by Bailey
2004-01-29 18:53:38
They people!

Life without shame.
#55 by mgns
2004-01-29 18:54:59
Globalization, for all its warts and imperfections, has done more to help the developing world then any sort of aid thus far.

I disagree. The globalization trend has done nothing but plunge developing countries in even greater national debts. Highly specialised industries completely depending on over-seas contracts, crop burning and free-trade zones. The globalization so far has been nothing but a brand-aware extension of gunboat diplomacy.

He leans on the hood telling racing stories, the kids call him Jimmy The Saint.
#56 by jjohnsen
2004-01-29 18:59:31
http://www.johnsenclan.com
Only, a 200,000 home ain't much, these days.


That is crazy.  In this area you can get a 5 bedroom/three bath/huge kitchen with a basement for $200,000.

-Jeremy
#57 by jjohnsen
2004-01-29 19:00:30
http://www.johnsenclan.com
And no need to chime in with the "but you have to live with Mormons" so the price is still too high.

-Jeremy
#58 by "bago"
2004-01-29 19:02:33
What YF said. Anything bigger than the simplest components requires too much inter-communication to be efficiently outsourced.

I've worked with teams in Japan and Ireland, and despite having state of the art videoconferencing and being able to fly the leads back and forth regularly, the foreign teams were always at least 3 months late on their deliverables, and that was for a 3 month long project. The quality was so sub-standard that we had to re-do at least half of their work stateside. A 20 man product team with good communication and management will kick the ass of 400 outsourced contractors.
#59 by Your Friend
2004-01-29 19:03:00

 In this area you can get a 5 bedroom/three bath/huge kitchen with a basement for $200,000.


With bunkbeds in each bedroom you could fit 10 wives in comfortably.

Here in San Diego, $200,000 will get you a crack house in the worst part of town.  And I'm pretty sure the crack doesn't come with it.

Comment Signature
#60 by Hoe Muffin
2004-01-29 19:05:53
poontanger@hotmail.com
Your Friend: it really is only a matter of time before the China/India bashing books become popular, just like the 80's. I agree with you that management will most likely go overboard with the outsourcing idea, and we're going to see a gradual stablization. But there are many jobs that will disapear. Which does stink for people in the IT industry.
#61 by chris
2004-01-29 19:06:11
cwb@shaithis.com http://www.cerebraldebris.com
200k in most normal areas of the country will get you a very nice house. My brother and his wife just bought their first house here in Syracuse. It's a very nice two-bedroom ranch with a finished basement. They paid less than 100k for it.

200k's not going to cut it if you're looking for something in the immediate suburbs of any major city (NY, Boston, LA, SF, etc), is all.

-chris
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