Why Republicans Won't Retake Silicon Valley 445
An anonymous reader writes "Republican consultant Patrick Ruffini, who counts Google as one of his clients, sketches out a way that the GOP could 'win back' Silicon Valley — but he gets smacked down by tech businessman Francis Cianfrocca. 'Patrick's basic thesis is that the VC firms that fund the Valley will rebel at being regulated by [Treasury Secretary] Tim Geithner, who is talking about increasing reporting requirements for both private equity and venture capital. Assuming I understand them both correctly, something tells me that neither Geithner nor Ruffini understand deeply what venture capital is all about.'"
Re:A lot of geeks are libertarian leaning (Score:3, Interesting)
Political leaning is a stupid way of identifying yourself, thus I doubt VCs will care about the slant.
I think the silicon valley probably doesn't like seeing its jobs shipped overseas. VCs don't benefit much from offshoring, but the rest of Si Valley only gets murdered by it. VCs won't like being regulated, but they aren't profiting by so much of the tech industry being in jobs they're petrified of leaving either. They can't get people to take risks in small start ups in the present market.
I don't think either side of politicians in general understand the impacts of what they're doing. What's new.
VCs don't pose any systemic risk (Score:5, Interesting)
There's no plausible reason I've heard or can think of to regulate VCs more closely. They don't pose any systemic risk in the way that lending, derivatives, or insurance can. They're one manifestation of the big virtue in a sea of mixed issues with capitalism: entrepreneurship. If you lose, you lose your money, the business ceases to exist. If you win, you make money (potentially lots of money) creating and selling a viable business. That's it. No bailouts. Investors lose, people may lose jobs, but there's nothing else for anybody to do. All the arguments for regulation that make a certain amount of sense in other sectors tend don't seem to apply well here.
Heck, even if VCs for some reason COULD pose systemic risk, it's a small enough part of the economy (yearly less than what we're probably going to end up loaning to the auto industry) that it probably still wouldn't.
GOP is captainless, rudderless, clueless (Score:1, Interesting)
The eastern wing of the Republican party used to be a vibrant home of mavericks, statesmen, and swing voters. Now how many Congressmen and Senators from the entire northeast US are Republicans? And those pitiful numbers may decline even further in 2010.
The first priority of the RNC should be restoring the vitality of the moderate wings of the party, especially on the two coasts. To make this happen, they need to take the party back from the talk show crowd, the party litmus tests and RINO gybes, and fundamentalist "God, Guns, and (anti) Gays" posturing of the last 15 years or so. Not that those folks don't belong in the party, but they should be a constituency (think of anti-war protesters and civil rights activists on the Democratic side) and not as the prime movers.
Re:A lot of geeks are libertarian leaning (Score:3, Interesting)
You know...I worried about the fascist leanings the last Bush admin put us on a path towards...but, they way the Obama admin is trying to creep in and own and control all aspects of business in the country, scares the hell out of me, and they've only been in power for like 3.5 months!!!
I expected the spending, but, this part of taking over banks and businesses and now something as far away from the economic problems as venture capitalists is really surprising me.
Venture Capital isn't doing its job (Score:4, Interesting)
http://blogs.harvardbusiness.org/haque/2009/04/asleep_at_the_wheel_of_creativ_2.html [harvardbusiness.org]
It *is* harvard business school, so perhaps a grain of salt is required.
Although others may not agree with me, there is an important point in both the Democrat article linked by the summary and in the link above: Venture Capital is not a systemic risk to the financial system. Why? The articles disagree on that point, but I tend to think they are not doing what they are supposed to, and the reason why they aren't might be worthy of a moment of cogitation (or whatever).
Haque makes the argument that one major reason the downturn has been so bad is that VCs have not done what they are supposed to for the last 15-odd years: Invest in risky technology and bring in the new companies/ideas as the old ones crumble, not try to be completely safe and make a a gazillion dollars! The new technologies, processes, and ideas that are supposed to sweep in and replace the old broken ones (is there anyone to replace GM, Ford, and Chrysler, for instance?) are not here, they're 5-10 years out, such as Tesla Motors. Venture capital is supposed to be the creative force behind our economy (please argue with me here), while the market determines the worth of the product created and ultimately leads to the destruction of companies that do not pass muster.
The reason we had this bubble is because there was no real blockbusters worth investing in. Something had to be mocked up to look like a good investment, not only Real Estate, but things like social networking sites. There was even a recent Slashdot article, I believe, on Facebook's issues. Why are we pouring money into things like this (I'll cover my opinion on that in a moment)?
Haque's argument also states that America was the only really booming economy in the world for the last 100 years because it was the only real venture capital country. I'm not sure I completely agree (it's obviously more complicated than that) but I wonder if the point isn't partly true. By deciding to not take big risks in technology and science, by not funding the education necessary for people to actually take those risks, and by creating a culture where style matters over substance, perhaps the state of Venture Capital firms (and even silicon valley) is a reflection of the mindset that has led to the current economy.
In that regard, I'm not sure any political party should really want to control them. How innovative are they really going to be without visionaries willing to take big risks for their visions?
Yes, I know there are visionary benefactors out there, but if there's a discussion to be had surrounding VCs should we tie it back into innovation since this is Slashdot?
Are there any people here involved marginally with VC (I know I have been recently and have a story for another post) that can give us some perspective?
Re:I haven't found that (Score:5, Interesting)
In my experience, geeks are generally in favor of civil liberties, but also in favor of significant government provision of public services, such as high-speed rail, NASA, and funding for the National Science Foundation. Many also support significant regulation of markets, such as more vigorous enforcement of antitrust law, and institution of net-neutrality rules.
I'm intrigued by your ideas and would like to subscribe to your newsletter.
Seriously, that's me exactly. It doesn't fit the usual labels, so I call it "game theory politics." Namely, preserve people's rights to the utmost practical limit, and have government only involve itself in programs that would otherwise fail due to game theory considerations. Example: building roads is really bad if left to the individual to do ad-hoc. Building a space program requires such massive collaboration that it will never happen if left to individuals. People generally want clear air - but aren't willing to unilaterally buy a cleaner car if others won't. We all know that taxes are necessary to some extent, but try like hell to minimize our own burdens.
To me, all those examples are where the majority of the individuals want a given outcome, but nobody wants to take the first step. Government is good at fixing that. Problems that a person can, could, or should solve on their own, no thanks. In particular, I really hate "the government is your daddy" taxes, and would opt out of Social Security in a second if I could.
Re:I haven't found that (Score:4, Interesting)
Many also support significant regulation of markets, such as more vigorous enforcement of antitrust law, and institution of net-neutrality rules.
That's a very specific type of regulation that is designed to encourage capitalism and competition rather than to limit it.
Re:Venture Capital isn't doing its job (Score:3, Interesting)
Here is the original, unsummarized version. Sorry 'bout that.
Re:Troll? Really? (Score:5, Interesting)
Plenty of research shows that high education level and liberal political positions are well correlated. As far as what causative relationships might be responsible for this correlation, we can only speculate.
Out of curiosity, how much time have you actually spent with Harvard undergrads? The ones I knew, particularly the rich-prick types, tended toward libertarianism - they expected to be at the top of the economic pile and liked philosophies that said they deserved it. The scolarship types, who got there by being smart and hard working, understood that they also got there thanks to the help of the society of which they were a part, and tended toward liberalism.
Re:Troll? Really? (Score:4, Interesting)
Just tell them that:
Having attempted to help the LP in the Pacific Northwest I'm never surprised when such ignorance of one's party history, let alone etymology of Libertarianism continues to abort new still births of ideals.