Notes &
You want to spend $20 billion of taxpayer money creating jobs? Fine. Call up the top 20 venture capital firms in America, which are short of cash today because their partners — university endowments and pension funds — are tapped out, and make them this offer: The U.S. Treasury will give you each up to $1 billion to fund the best venture capital ideas that have come your way.
Please let the car companies fail. Please let the banks fail. Please let failing businesses fail and let new, better, stronger businesses replace them. Tom Friedman is spot on here. The best use of our $20 billion cannot possibly be to shore up broken balance sheets at Citigroup and BofA and keep broken products coming from the assembly lines of GM and Chrysler. There are too many hungry and bright entrepeneurs that we are actively batting down by subsidizing their broken competition.
Better banks and better car companies will come forth; we just need to give them the chance. The sooner, the better.
UPDATE: Also, can someone please explain the “doomsday” scenario of a bank like Citigroup or Bank of America going under? What is systemic risk? Why do incredibly bright people always feel the need to “defer” to the experts on this question and say they’re “unqualified” to evaluate the consequences of private banks failing (as Marc Andreesen did in his interview with Jim Lehrer the other night)? Why do we accept at face value the unbacked claim that these banks are “too big to fail”? Why can’t someone explain this scenario? Shouldn’t we just be a little skeptical when the executives of financial services companies tell us to simply accept something as true even if we can’t fully understand it? Isn’t that what got us to where we are? Why is no one asking these questions in the press? Are we all just too dumb?
UPDATE 2: From AK’s Grandpa, one answer: corporate deposits. Could these be secured in some way?
UPDATE 3: A better take on supporting innovation than the Friedman article I cited above.
