Obama's Attack on Capitalism

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. 

Comments

[A Realist]

Believe it or not Obama is trying to save Capitalism! He is trying , rightly, to save it from itself and those who are unable or unwilling to see that when capitalism is taken to extremes and is totally unfettered it is self defeating and leads to just the problems we are facing now. Capitalism is great when greed and corruption are not introduced into the equasion. Extreme, unfettered Capitalism has, in the last few years, caused many in the business world to take the wrong assumption that making as much money as you can make off everyone and everything you can is healthy and good for the economy.

This is wrong for many reasons but most of all is is just plain stupid! No one is satisfied with thier piece of the pie, they all want the whole pie! This means that the end consumer (mostly the middle class) is paying for several pies when they are only getting one pie. Then the middle class goes broke and there is nothing left for the top money earners to get. Then everyone goes broke and we have a total economic crisis like the one we're in now. The real answer is that the business world should grow a concience, not for morality's sake, but because it is the smart thing to do. If Wall Street and the rest of the financial sector will not regulate itself and cut the greed, then we will have to regulate them against their will. Self-regulation would be the best, but it probably won't happen. The financial sector was the first to crash, but it won't be the last. You can write it on the refrigerator: the health care system will soon follow... they are pricing themselves right out of business. The insurance industry will follow soon after that.

[Tom Bowler]

"Extreme, unfettered Capitalism has, in the last few years, caused many in the business world to take the wrong assumption that making as much money as you can make off everyone and everything you can is healthy and good for the economy.

This is wrong for many reasons but most of all is is just plain stupid! No one is satisfied with thier piece of the pie, they all want the whole pie!"

"Extreme, unfettered Capitalism..."? I'd say you live in a leftist dreamworld, except that yours must be a nightmare -- filled with greedy, evil capitalists poised to enslave the oppressed and downtrodden.