crushing entrepreneurs' capital
For years, James Taranto quoted novelist and journalist Mark Helprin in a running gag called “Homeless Rediscovery Watch”. In that quote, the latter (correctly) predicted the media would suddenly, magically, rediscover social problems that mysteriously disappeared from 1993 to 2001. Similarly, I’d like to introduce a new segment on this blog which will highlight things I predicted on Election Night to someone very close to me, when she asked why I wasn’t happy about something so “historic” happening. She can corroborate my story, though I no doubt bored her to tears with my sermon.
Today’s thing I predicted: the Obama administration and its Democratic Congress, despite being backed by tech pundits and the venture capitalists whose investments keep the employed, will destroy the capital necessary to keep the tech revolution going. The new bill proposed by retiring Sen. Chris Dodd (D-CT) will tightly regulate the financial instruments of any company it deems risky to the financial system. As the WSJ notes, that fly-by-night venture Apple Computers was once deemed too risky by state regulators:
[B]efore 1996, certain initial public offerings of stocks were subject to merit review in certain states, where the state decided if a security is a “bad” investment and thus not appropriate to be offered to its citizens. In fact, this is exactly what happened to Apple Computer when it first went public in 1980. Massachusetts prohibited the offering of Apple shares because they were “too risky,” and Apple did not even bother to offer its shares in Illinois due to strict state laws on new issues. What if federal bureaucrats had had the power to impose their judgment on a “risky” financial product (such as an IPO) on a nationwide scale, or every state followed Massachusetts’ lead? Would Apple have become the successful company that it is today?
So now we’re going to put this power in the hands of the Feds. Yeah, this is going to end well.