Obama-Endorsed VC Program Promises 6,000 New Startups • Hacker News Board

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#31

Post by anamax » Thu, Feb 17, 2011, 5:58 PM UTC

nkassis wrote: post #13

nika wrote: post #9

Earlier quoted context omitted.

When this was first announced a couple weeks ago, I read the "fact sheet" posted. In it they talked about an emphasis on putting the money into "disadvantaged areas" and "focusing on innovative technologies like clean energy". So, your concern about investments being made more based on political pull than on merit is well founded. Over 50 years ago an environment of heavy government regulation and anti-competitive le…

"The money must come from taxes or inflation," that's not how gov economics work. You borrow that money, hence you only pay the interest (until you can't). Now this model can be sustained as long as the economy grows faster than the interest you have to pay. This is why deficits spending isn't in itself that bad, it's the size of the deficit that's the issue. (probably oversimplified the whole issue but that's what I…

> "The money must come from taxes or inflation," that's not how gov economics work. You borrow that money, hence you only pay the interest (until you can't).

Not so fast. Borrowed money is money that is unavailable for other purposes. That happens immediately.

It's not like the borrowed money was under a mattress.

The payback is from taxes or inflation, and the latter works only if the inflation is a surprise to the lender. Expected inflation is factored into the interest rate.

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#32

Post by hnal943 » Thu, Feb 17, 2011, 5:59 PM UTC

jarin wrote: post #19

megamark16 wrote: post #14

There's a big billboard here in KC for the Kauffman Foundation's Education Startup Funding program. I thought "heck, that would be awesome, to be backed by the Kauffman Foundation!". Then I looked into it, you pretty much have to live in the ghetto to be involved in the program. Well, my wife wasn't too keen on moving to the ghetto, so I guess I'll try somewhere else.

There are a lot of people who HAVE to live there. So just be glad you have a choice.

Anyone living in the ghetto currently also has a choice.

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#33

Post by [deleted] » Thu, Feb 17, 2011, 6:03 PM UTC

credo wrote: post #17

I find it amusing that the top-ranked comment describes the program as "fascist" For decades, big corporations and venture capitalists (and their lobbyists) have used every trick in the book to get themselves special advantages. Huge loopholes mean that the effective US corporate is the fourth lowest rate in the OECD (though the official tax rate is the second highest in the OECD). This is a great example of dysfunct…

[deleted]

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#34

Post by nika » Thu, Feb 17, 2011, 6:03 PM UTC

mconnors wrote: post #18

I sense a little cynicism here. I currently work for a startup and most of their capitol was NIH funded. We are currently releasing 3 or 4 commercial products this year. We are hiring like crazy. I understand a certain distrust of government but I think there is a disservice to assume everything government touches is corrupt (or at least 100% corrupt) You really don't have to look further than the scientific communit…

This is an expression of the broken window fallacy illustrated by Fredric Bastiat (I believe). You see the advantages to your company in the economy as a result of the program, but you do not see the damage to the economy that the program cost. Plus its worth noting that only priviledged groups and politically correct businesses will be getting this money (according to the fact sheet)... so it isn't even going to be allocated based on merit.

Neither of these are evidence of corruption, they are just the nature of both economics and political influence peddling and electioneering.

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#35

Post by hnal943 » Thu, Feb 17, 2011, 6:05 PM UTC

_pius wrote: post #22

megamark16 wrote: post #14

There's a big billboard here in KC for the Kauffman Foundation's Education Startup Funding program. I thought "heck, that would be awesome, to be backed by the Kauffman Foundation!". Then I looked into it, you pretty much have to live in the ghetto to be involved in the program. Well, my wife wasn't too keen on moving to the ghetto, so I guess I'll try somewhere else.

The nerve of them, trying to encourage entrepreneurs to come to "the ghetto." How dare they want to spur economic growth among those ... people!

If the startups are not founded by "those people" in the ghetto, they will be unaffected by its presence.

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#36

Post by nika » Thu, Feb 17, 2011, 6:09 PM UTC

silverbax88 wrote: post #20

watchandwait wrote: post #7

Earlier quoted context omitted.

From Wikipedia: "An inherent aspect of fascist economies was economic dirigisme, meaning an economy where the government exerts strong directive influence, and effectively controls production and allocation of resources. In general, apart from the nationalizations of some industries, fascist economies were based on private property and private initiative, but these were contingent upon service to the state."

Not to be flippant, but 'strong directive influence' and 'contingent upon service to the state' for the entire economy is a far cry from a tiny fund of money.

The fund only backs businesses "contingent upon service to the state". Literally it is in the fact sheet that his money will go to "disadvantaged" (eg: politically connected businesses that can be counted on for electioneering) and to "clean energy", which is a category of businesses serving the political agenda.

At the next election, Obama can talk about how he gave $2B to politically correct businesses (though he won't use that term) and he'll have lots of "high tech" plants to tour where he can say "they said we couldn't, but I say we can, and we did, build this company! Making clean energy solar cells for the future!"

That's "contingent upon service to the state". He didn't say the "entire economy" was fascist, just that the fund was.

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#37

Post by nika » Thu, Feb 17, 2011, 6:11 PM UTC

ijuyhgtfrgth wrote: post #26

watchandwait wrote: post #5

So policymakers have wrecked traditional capital markets through regulations on raising capital, interest rate distortions, twisted tax policy, patent law abuse, and anti-hiring labor policy, and now they are going to "fix" VC markets for us. Thanks. The feds can't even protect the border or catch Osama bin Laden and now they want to run some fascist incubator to give the political class even greater control over our…

Yes it will distort the startup market slightly - but the people creating startups are smarter than the government! We started a company in "a special development area" = 30 years of high unemployment since the shipyards closed and a civil war didn't help. Every government department was queuing up to give money to create new entrepreneurial industries. Department 'A' required you to have less than 5 employees - no p…

So, you're arguing against someone claiming that people will game the system by talking about how people gamed a similar system?

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#38

Post by anamax » Thu, Feb 17, 2011, 6:27 PM UTC

jbooth wrote: post #24

yoyar wrote: post #8

Earlier quoted context omitted.

Let's call if corporatism. It means the same thing but people will whine less about the semantics.

But it's not corporatism or fascism, or socialism, it's a frickin seed program that may be a small waste of money. The government funds basic research all the time, with a pretty good track record. Fascism is telling Volkswagen to make tanks.

> The government funds basic research all the time, with a pretty good track record.

Maybe, but this isn't basic research.

> Fascism is telling Volkswagen to make tanks.

This is saying "we'll fund {you} to make {whatever}" when folks spending their own money don't believe in the combination of {you} and {whatever}.

Synfuels anyone?

Which reminds me, what fraction of the US govt-seeded/assisted solar biz haven't moved much of their operations to China?

The decision will be made on a political basis. That's how govt always works.

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#39

Post by wybo » Thu, Feb 17, 2011, 6:30 PM UTC

smokeyj wrote: post #25

wybo wrote: post #12

I don't think this sounds that bad, to be honest. Traditionally, and for various reasons, some to do with bargaining-power in the market, some with (good, but patronizing) care for citizens, others with bureaucracy, gave benefits to large, international corporations (tax breaks, complicated regulations that keep small competitors out, and the occasional bailout...). And now startups get some support too. I see where…

What the government is doing here is 'tinkering' with a process that doesn't involve them. When such tinkering occurs, societal and market distortions are introduced in unanticipated manners. How could the government, sponsoring a few thousand startups, be harmful to anyone? If they start competing with existing VCs, angels and incubators, they may become the ONLY source of funding. Look at the Dodd-Frank Act, they'r…

Yes, but wheter you like it or not, the government is tinkering with the rest of the economy anyway.

So it becomes a choice between anti-startup tinkering, or both pro- and anti-startup tinkering.

I prefer the latter, but then I am no VC.

(an additional thing to note is that the government is generally slow to respond to the economy, so if and when the tech economy goes into another winter, the government will at least be there like an old lady, putting out seeds in the snow, for startups to feed on :)

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#40

Post by jbooth » Thu, Feb 17, 2011, 6:48 PM UTC

anamax wrote: post #38

jbooth wrote: post #24

Earlier quoted context omitted.

But it's not corporatism or fascism, or socialism, it's a frickin seed program that may be a small waste of money. The government funds basic research all the time, with a pretty good track record. Fascism is telling Volkswagen to make tanks.

> The government funds basic research all the time, with a pretty good track record. Maybe, but this isn't basic research. > Fascism is telling Volkswagen to make tanks. This is saying "we'll fund {you} to make {whatever}" when folks spending their own money don't believe in the combination of {you} and {whatever}. Synfuels anyone? Which reminds me, what fraction of the US govt-seeded/assisted solar biz haven't moved…

Good god, man, you can't be defending this tripe.

Fascism has a definition, and it involves getting all of the biggest corporations on the same page with the government to create a totalitarian state. (Communism differs in that the government is the whole deal).

We've been funding energy research for decades, and there are a lot of reasons for the government to try and kickstart green energy. This is an experiment with the funding mechanism, people complain about the grant system all the time, silicon valley works, so someone said hey let's give this a shot. It's not fucking fascism.

If it was under the DARPA line item would you be more ok with it?