solution: government invests in venture capitalism

90+% of the federal government's politicians are likely unfit to effectively manage a lemonade stand; yet, their hubris combined w/ an increasingly spineless populace has created an orgy of octopus and a nearly unfathomable set of tentacles extending in ever-reaching directions. the latest capitalization upon a hyped vagary of a robust economy may simply be the consummation.

interestingly, the NYT had a cool piece by Thomas Friedman, where he suggests:

“You want to spend $20 billion of taxpayer money creating jobs? Fine. Call up the top 20 venture capital firms in America, which are short of cash today because their partners — university endowments and pension funds — are tapped out, and make them this offer: The US Treasury will give you each up to $1 billion to fund the best venture capital ideas that have come your way. If they go bust, we all lose. If any of them turns out to be the next Microsoft or Intel, taxpayers will give you 20 percent of the investors’ upside and keep 80 percent for themselves....

GM has become a giant wealth- destruction machine — possibly the biggest in history — and it is time that it and Chrysler were put into bankruptcy so they can truly start over under new management with new labor agreements and new visions. When it comes to helping companies, precious public money should focus on start-ups, not bailouts.”

i disagree w/ the first paragraph (insofar as it is not nearly optimal), but it's certainly provocative, and in the right direction: startups are the best opportunity to create new jobs in dynamic industries -- and in an expedient fashion. the SBA estimates that small businesses created 70% of all new jobs in 2007, and account for ~50% of all employment in the US economy (small business as defined as 1-500 employees).

an entrepreneur (Don Dodge of AltaVista/Napster fame) whose blog i follow posits the following:

"How about government funding for startup incubators similar to Ycombinator and TechStars. These startup mentorship programs are very successful in creating startups and driving innovation but they only cover 30 to 50 companies a year, investing about $20K in each one. Why not start 50,000 companies a year? It would only cost $1B, and could incubate the next Facebook, Google, or Microsoft…and millions of jobs. How many jobs will $1B invested in General Motors create? Government funding for VCs is probably not a good idea, but maybe a small amount of funding for startup incubators would create the jobs that VC backed companies won’t. $1B invested in 50,000 startups would conservatively create 250,000 jobs immediately. If just 2% of those startups became wildly successful they would create 3 million to 5 million jobs.

Government should create incentives for investment. It is probably best not to make the investments directly. There are already some good programs and incentives in place that have been forgotten or underfunded for too long. Pouring money into these programs is certain to stimulate investment, inspire innovation, and create jobs."

the four primary programs cited to facilitate this monumental accomplishment:

SBIC – Small Business Investment Company "A program managed by the SBA, SBICs are privately owned and managed investment funds, that use their own capital plus funds borrowed with an SBA guarantee to make equity and debt investments in qualifying small businesses. The U.S. Small Business Administration does not invest directly into small business through the SBIC Program. This program encourages private investment in startups and small businesses."

SBIR – Small Business Innovation Research "Another SBA managed program, the SBIR encourages small business to explore their technological potential and provides the incentive to profit from its commercialization. SBIR targets the entrepreneurial sector because that is where most innovation and innovators thrive. By reserving a specific percentage of federal R&D funds for small business, SBIR protects the small business and enables it to compete on the same level as larger businesses. SBIR funds the critical startup and development stages and it encourages the commercialization of the technology, product, or service, which, in turn, stimulates the U.S. economy."

R&D Tax Credits – "There a 20% R&D tax credit for 'incremental' R&D spending, over and above what you spent the previous year. There are lots of restrictions on expenses that qualify. Unfortunately startups are limited to a 3% credit because they don’t have lots of prior years spending base. This program could be significantly enhanced by loosening the restrictions, which would in turn stimulate research investment."

Seed Capital Tax Credit – "Maine has a 40% Seed Capital Tax Credit for startups, that can go as high as 60% for startups based in high unemployment areas. This is a good example of targeted support for private investment to create startups, jobs, and innovation. More states should adopt Seed Capital investment tax credits."

ironically, none of this is would be terribly difficult to execute. innovation, investment, and entrepreneurial job creation has been a linchpin of America's rise, and it will be the linchpin in America's recovery.

if the "stimulus package" was to be fruitless....

gleefully; at best, we look to follow the (circa 1990's) Japanese model of orgiastic authority and spending stemming from the federal government.

if this latest "stimulus package" was to simply be something of an ipso facto waste contained to the sectors of the economy its tentacles reach i'd sign on in a nanosecond; i forget what radical said this, but "every time congress meets we lose a little bit of liberty". i do know it was milton friedman who said something akin to:

"the decentralized production and accumulation of wealth in diffuse private hands counterbalances the power that the government wields over individual lives. The ability of the private sector to produce and allocate resources without any central control prevents any single authority from controlling many large and important spheres of human activity."

the slope isn't slippery so much as it is steep: one step doesn't transport you from point A to point Z; rather, each movement causes action to be increasingly difficult and labored, strength is sapped, and control evaporates into the hands of others (in the political sense, the few who harbor power within government). the threat to liberty has a marriage w/ the suffocating psychological effects that an increasingly activist government has on a society's citizenry -- let alone the brave, vital souls inclined towards entrepreneurship.

in that vein, we will get out of the recession (and any self-conflated depression) once Obama Clause and his little helpers let the important people of our society -- the salutary workhorses that are business owners and entrepreneurs, e.g. -- do their thing. slash taxes across the board, particularly for the wealthiest of Americans and those inclined towards the dynamic proliferation of wealth; eviscerate government regulations on business, with particular respect to promoting its creation and growth; and start following that relic of a document affectionately known as the Constitution while gutting the federal government accordingly.

quite simple, but unfortunately on the 7th day god not only rested but allowed man to have ideas much stupider than their "IQs".

the past/present/future plans of Obama Clause and his little helpers (this government orgy of a bill, included) will do donkeyshit for the economy, aside from concocting conflagrations on weaknesses within the vagaries of a normal economic system. once this "stimulus" fails; rather, when the 21st century mandarins arbitrarily deem it a failure we will get told the sky is "really" falling, we will "really" have to start making "touch choices" and "dignified sacrifices". thus, the latest "stimulus" is tantamount to the head of Mandingo's cock -- we have yet to reach full penetration, and the current state of affairs will soon be a wet dream.

if a silver lining exists it is that Obama Clause will most likely lose re-election -- save for a swift conservative takeover of congress, in which he acquiesces to their demands out of political expediency, and the three aforesaid tenants of policy get enacted to varying degrees.

a less likely (but no less effective) political maneuver would entail the conservative minority in Congress finding a way to pass a mandate giving lobotomies to their counterparts. this all aside, the economic landscape will continue to burn, feverishly, and its extinguishing will come much later than necessary, at a much greater cost to citizens.

"The Wackness" -- NWP Required Seeing

Perverse, witty, oft repugnant but ultimately endearing movie. Indie flick that overcomes pretentious indie-movie cliques (mostly) and has a supersick soundtrack. Disaffected, drug-dealing youth on cusp of adulthood during the Giuliani years of NYC; is existentially fucked by being a virgin (among other things) and traverses summer before graduation trying to undo his virginity while shedding his existential wreckage with his quasi-therapist (among other things).

Do I hear an amen?

Sup?

Well, I'm hobbled metaphysically and otherwise at the moment, and decided to regress into some "inane solipsitic fetish" -- I kid, sorta ()....but yes, I couldn't resist searching into the proverbial past at this particular time, and, above all else, didn't want my posts/day to dip sub-2....it was always a bizarre desire of mine to remain above that number.

So, I'm back; could be an exceedingly brief stint (read: tonight), but who knows and who really cares.....hmmm, I'd also like to apologize to those who know who you are for "bailing", though I can't say I fault my reasoning.....if you read this: sorry. But, the reaming I took by the searing hands of men like Macon_Marc and cosmo-titans like O was just too much for my 18yr old soul to handle.

Well, I've been blowing semen into rigged poker sites the past week, abiding by my sporadic belief that Hell is Other People, and it's culminated with this post. Life lull, eh?

Bodog Fights

later tonight. any card with Fedor is worth a view, especially vs. a relatively worthy opponent in Lindland; Fedor's bro is also fighting a giant, BJJ dude which should be solid as well.