The juxtaposition in my RSS reader of Kedrosky's Venture Capital is an Attractive Nuisance, II and Organizations and Markets' Against Government Subsidized VC seems like a sign for me to comment on something I was striving to ignore.
Bloomberg announces a taxpayer subsidized venture capital fund just after the NBER publishes a paper on what a bad idea it is for the government to get involved in venture investing. Coincidence, of course, but shouldn't it be obvious to everyone that this is a bad idea?
I really don't understand why the bureaucrats think they can do better than the dozens of private venture capitalists and the hundreds of active angel investors in the city. We need more great startups in the city, not more investors vying to fund the few there are.
The best thing the city could do to encourage startup formation here is to make it easier to live here on a reasonable salary--startups can't afford to pay programmers like the banks can, at least not in the short-term. The City should encourage improvement of the physical infrastructure (mass transit, housing, office space, etc.) and let the invisible hand take care of the market.
"I really don't understand why the bureaucrats think they can do better than the..."
ReplyDeleteYes you do understand that. But it's so wrong, provably wrong that you don't believe it.
But it's the essence of politics.
To take just one area where the Congress behaves like this - look at energy. (Cap & Trade, Restrictions on Shale exploration, Drilling, etc.) Health Care as well...
The belief that the next big government initiative will defy the failure of the previous 99% is a key tenet of any politician's existence.
The one thing about subsidized VCs is that at least the money gets wasted quicker and slightly more efficiently...
That's funny, I thought the essence of politics was providing do-nothing jobs for your supporters...
ReplyDeleteOn a different topic, I wonder who will be running the new investment fund?