RSSObama’s Attack on Capitalism
Tom Bowler | April 23, 2009
This economic crisis is most assuredly not going to waste, according to Scott Powell, a vice president of ELP Capital. In his Investors’ Business Daily editorial Mr. Powell offers three possible motivations for the sudden urge by President Obama and his Treasury Secretary Geithner to regulate venture capital firms.
‘The first is that the Obama administration’s faux pas resulted from
a lack of understanding the intricacies of the free market and
conflating venture capital with Wall Street, banks and hedge funds. If
job-creating venture capital is elusive to our current political
leaders surely we are in deep trouble. How then can we trust their
judgment on an ambitious restructuring of the national economy, which
next targets 15% of U.S. gross domestic product in health care?
A second possibility is that venture capital needs to be
constrained, lest its free-market reliance to pick winners and losers
highlights the deficiencies of central planning and socialized sectors
of the economy.
As the administration attempts to regulate decision-making in every
industry in which it gets involved, price distortions and misallocation
of resources will become glaring.
[...]
The third and most plausible answer is the administration’s distrust of
venture capitalists is simply an extension of its antipathy toward the
free market. It suspects that venture capital seeks economic returns
over political ends and will not direct enough funding to politically
favored sectors — particularly after recent disappointments with
clean-tech investments in fuel cells and ethanol. Regulating VCs is an
indirect but very real means of forcing alignment with the political
objectives of the administration.
Speak Up
In any case, U.S. recovery and progress is surely jeopardized if
venture capitalists and entrepreneurs are diverted from economic to
political calculation.
There is plenty of blame to go around for our current economic mess,
with moral ambiguity and weak leadership from big business being
increasingly acquiescent to the encroachment of the federal government.
Now is the time for entrepreneurs everywhere and those specifically
in venture capital and Silicon Valley who delivered a
disproportionately large Obama vote to speak up and demand some candor
and accountability about all this.’
Option three is the winner. Obama is all about political objectives, and foremost is keeping a firm grip on power. And won’t there be great opportunity for the exercise of power when federal approval is necessary for the normal conduct of all business. Future campaign contribution harvests will be massive.
But don’t hold your breath waiting for any Obama voters to admit they got it wrong.
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