Comments on: The Incentive Structure

By: Jim H

Jim H — Fri, 26 Dec 2008 20:02:42 +0000

Zoltan,
Since you are clearly taking a shot at the Reagan years,and promoting the Clinton years, I wonder if you could elaborate on what you mean by:
“During 1980, the business community engaged in unproductive, or what we call rent-seeking activities. These take from Peter and give to Paul.”

The only taking from Peter to give to Paul is coming out of the Obama camp, a la wealth redistribution

By: Jim H

Jim H — Fri, 26 Dec 2008 19:59:29 +0000

Hayden,
my opinion might be based on ideology, so long as you know that my ideology is based on what works versus what doesn’t, regardless of whether I get a warm fuzzy feeling inside from it.

The best way for a government to improve the lives of it’s citizens and economy is for it to get out of the way. Look at what the good intentions of white politicians did for the african-american community starting in the 60’s. Nothing hurt the black community more than the disappearance of a family unit (fatherless households),welfare (no incentive to work), government subsidized housing (ghettos). Time and time again when the government tries to “fix” anything they make a bad situation worse.

You’re right in that the role of the government should be making a better country, better business climate and creating more opportunity for it’s citizens. I believe they can do that by keeping a low-tax system (based on consumption, not income) and protecting it’s citizens as needed.

By: Zoe B

Zoe B — Thu, 25 Dec 2008 21:11:22 +0000

I’ve said it before: Government investment in basic science (eg: National Science Foundation, NASA, National Institutes of Health…) IS a form of venture capital that reaps widespread societal and economic benefit for generations to come.

By: hayden fisher

hayden fisher — Tue, 23 Dec 2008 15:21:54 +0000

Swordsman, by the way, I agree completely. The current proposal is absurd!

By: hayden fisher

hayden fisher — Tue, 23 Dec 2008 14:24:42 +0000

Jim,

Your view is rooted in ideology, I view the role of government with an eye towards making a better country, business climate and creating more opportunity for citizens. Conservatives want more government when it comes to abortion (putting doctors and women in jail) and more government when it comes to national security (more wiretaps, a preemptive strategy, etc) but conveniently less government when it comes to banning handguns that are only designed to kill other people (and usually innocent people); but less government (I think) when it comes to governmental policy in the markets, even sound governmental policy. Also less government when it comes to sensible environmental regulation. Etc. Sadly, the so-called conservatives seem, by and large, hypocrites in my view. That’s why I left the GOP and have become an independent and voted straight Democrat in the recent elections for the first time ever. I agree with conservatives on some positions but we need to get away from ideology and begin looking at government’s role more creatively in order that we can evolve political theory rather than remain saddled in stagnation. New eras demand new solutions.

FYI, I personally don’t need the help of government, I’m doing quite fine. But I care about my country and fellow citizens.

By: Jim H

Jim H — Tue, 23 Dec 2008 14:01:51 +0000

Hayden,
no the government should not be in the venture capital business. That unavoidably puts them in the position of deciding what companies fail or make it, which is basically what is happening right now, and failing miserably I might add. The government is not in existence to take care of you or any company. The most important function of a government is to protect you from harm (military-hostile foreign nations, police-criminals) and protect your civil rights. I guess this is the heart of the fundamental disagreement of how liberals and conservatives view the role of the government. I say less is more

By: Swordsman

Swordsman — Tue, 23 Dec 2008 01:12:42 +0000

Fully in agreement. GM is worth 3 billion and yet we’re handing them a loan of how much? Easier to just buy them outright, get them back on their feet and sell them for a profit.

By: hayden

hayden — Mon, 22 Dec 2008 22:53:56 +0000

There was a great article today in the WSJ explaining how Sarbanes-Oxley and similar regulations choked-off venture capital opportunities and IPOs. I’m not a fan of the publicly traded company model personally but the article was compelling. No doubt that this decade has seen a lot of waste due to lots of different factors, some policy-driven and others driven by a natural transition from one era to the next. It’s hard to ferret out the good from the bad and plain ugly. What companies, if any, should be saved; which ones should be allowed to die; and which ones must be taken over by government for at least the short-term, for better or worse.

My personal take: the government should become the new venture capital firm and instead of lending to banks who then re-lend and claim the profits for themselves; why not lend directly to entrepreneurs and retain the interest payments, warrants and options for the taxpayers. Companies that are too big to fail are too big to exist; nationalize them and let the government keep the profits too if it has to underwrite the risk. Government could be the quintessential venture capital player because it’s a cash cow; it needs to start using that cash to create public wealth so it can deliver more services to more citizens and create fertile conditions for new businesses. We don’t need to be saving Fortune 500 companies in the long-term, we need to be growing them. And unlike most vulture private capital firms, government could be a venture capital player that creates sustainable long-term public wealth without always looking to steal the new propped-up company as soon as it has begun to fly.

…I could go on and on