

Here’s How The Government Can Fix Silicon Valley: Leave It Alone - yanw
http://techcrunch.com/2010/06/07/heres-how-the-government-can-fix-silicon-valley-leave-it-alone/

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siculars
This is the first Arrington article I actually wanted to double up vote. This
guy may be a lot of things, but he is dead on when it comes to this subject.
Government really needs to take a breath, relax and stay where they already
are meddling - wall street, automobiles, health care, etc.

What Government should do is lay the groundwork to incentivize a coast to
coast robust fibre optic network with fair access for all it's inhabitants.
Fast, cheap, reliable communications access is the new transportation network.
There are roads and highways that go to every location you can find on a map
in this country. Why can't a lot of these places get good internet
connections?

Speaking of transport, the Government can just keep bettering our
transportation infrastructure. You know, all the shit we need to exist so that
UPS can deliver our Amazon orders overnight.

Has anyone here been on a flight recently? It sucks. I'm just thankful when I
land in one piece, safely. Let's get those newfangled super trains
functioning. What's wrong with America when places like France and China have
train networks that make us look like we're in the stone age?

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barmstrong
Totally agree - TechCrunch really misses the mark sometimes but not on this
one.

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dugmartin
Wasn't Silicon Valley built by major government handouts in the form of
defense spending?

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yummyfajitas
The author doesn't seem particularly opposed to handouts:

 _If the government wants to help innovation in this country they should get
busy with infrastructure. Lay fiber to every home and business in the U.S.
Actually start building some of these high speed train networks to make travel
easier. Get computers into the hands of every child in the country as soon as
they are physically able to press buttons._

The article mainly seems to be asking for better regulation/handouts, not
none. Except for the last paragraph.

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aliston
The entire federal budget was about 500 billion in 1960, inflation adjusted.
The current federal budget is nearly 3 trillion. Yet today, we seem to be
spending less money building infrastructure investments that create economic
booms and more money to pay people to sit around. Perhaps he's arguing that we
should be spending less on entitlement programs (handouts) and more on
infrastructure investments like high-speed internet.

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tptacek
The government is going to screw up the delicate system of venture funding
how, by eliminating the loophole that allows them to dodge taxes on the carry
income they earn for managing other people's money?

I know there's multiple things on the table that could impact VCs (onerous
reporting requirements for small investments among them), but it's hard to
judge them when the valley ( _Arrington clearly among them_ ) is so obviously
militant about retaining bogus tax loopholes.

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hga
Strawman: Arrington _specifically_ referenced Dodd's insane regulations + net
worth increase in the latter's financial regulation bill, which most certain
would have screwed things up. As it is, the current compromise of excluding an
angel's primary home from his calculated net worth is going to remove a _lot_
of angels from the game.

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tptacek
I'm referencing Arrington's comments on Feld's blog.

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hga
Could you supply a link (doesn't have to be to the exact comment)?

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tptacek
Google "VC carry interest". Feld's blog post owns the search results page for
it.

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hga
The first page of my Google results doesn't even have a link to his blog.

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gojomo
My top 100 for [VC carry interest] include no Feld links, either. Perhaps
TPtacek is seeing highly personalized Google results?

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tptacek
Sorry, add "tax" to your query. But if it doesn't come up this time, I'm sure
you can find Feld's post yourself.

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hga
Still no luck, and since it is you who is claiming that Arrington is referring
to the carried interest tax hike proposal " _screw[ing] up the delicate system
of venture funding_ " (something not evident in his comment on Fred Wilson's
blog noted by gojomo), it is incumbent upon you to specifically support it
rather than sending us on a wild goose chase.

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cjoh
This article really doesn't make any sense. My support of network-
libertarianism notwithstanding, Arrington's major bone to pick is raising the
angel limit, and his opening paragraph is about how Obama hasn't pushed
through enough legislation to benefit the valley?

I don't get it. Seems like an article written out of frustrated cognitive
dissonance, not one out of any cogent thinking.

At the end of the day, the system is the system. It's way easier to work the
system's rules to change it (especially with the wealth that silicon valley
has) than to ignore the system and tell it to go away.

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natmaster
Given his view on the government's role in Silicon Valley, why didn't he
endorse Ron Paul? Did he just ignore him?

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anigbrowl
What a heap of self-serving, nutrition-free bullshit.

 _Mostly because of the broken promises. From my interview with [Barack Obama,
pre-election]:

He is staunchly in favor of net neutrality, and has promised to make it a
priority to reinstate it in his first year in office. He has proposed
intelligent programs for increasing technology education and access to
children. He doesn’t believe the FCC went far enough in their proposed rules
for opening up the 700MHz spectrum auctions. He wants to see increases in the
number of H1-B visas given out each year. He strongly supports research into
renewable energy sources and he has a realistic, market based approach to
capping carbon emissions.

None of these things happened, nor seem likely to happen under his presidency.

But it’s more than broken promises. Our government is just way too interested
in mucking around in Silicon Valley by creating and enforcing rules based on
little or no understanding of the consequences. A perfect example – recent
proposed financial reform legislation by Senator Chris Dodd added on a few
random provisions that could have devastated Silicon Valley’s delicate venture
capital ecosystem._

So basically government would be good if it delivered specific results that
you like but it's bad because some of its proposals would lead to results that
you don't like.

Net neutrality? Liked by tech companies, loathed by communications companies.
Shut down (at least temporarily) by the supreme court, not the action of the
executive. Meanwhile the FCC is drawing up a new policy which would enforce
net neutrality, ariousing the ire of libertarians and those who think
governments shouldn't tell telcos and ISPs how to operate their routers and
switches.

Spectrum auctions, I have not paid attention to. Neither has Obama, perhaps.

H1-Bs? Good for investors in tech industry and holders of advanced STEM
degrees, both of whom need each other. Not so popular with voters, many of
whom feel the program has been abused by employers who want lower wages and
onerous employee commitments. Of course some objections are also grounded
simple xenophobia/racism, but given the unlucky coincidence of high
unemployment and a relatively large population of illegal residents,
overcoming the popular antipathy to importing more workers from abroad is
extremely challenging in political terms.

As for renewable energy/carbon markets, surely it can't have escaped
Arrington's attention that issues of fuel sources and environmental policy are
among the most bitterly disputed policy debates between the two main parties,
and that the administration is opposed from the left by hippies who think
solar panels are free and anything which smacks of technology or markets is
evil, and opposed from the right (at least until very recently) by a large
body of people chanting 'drill baby drill'. Not to mention the more
substantive questions of just how we should fund the transition to renewables,
which technologies we should prioritize, and what effect a mandatory market
for carbon credits would have on energy costs and economic growth.

So the financial reform bill first arrived in Congress with a policy tweak
that might have limited the amount of investment $ for startups if interpreted
over-literally by the two regulatory agencies involved. After a fuss was made,
the provision was excised as part of the normal legislative process, and
nobody went broke or had to go to court or got saddled with massive new legal
compliance costs because the policy tweak never even became law.

This editorial is shallow and insubstantive, amounting to little more than
'government never gives me what I want and sometimes saddles me with things I
don't want. All I want is to have a good time and government keeps ruining it
for me and my friends. I hate you, government!' and since there's always a
ready audience of people who like to complain about the government and how
useless it is, at least some of his readers can be relied upon to cheer this
tantrum - though looking at the TC comments, I see I'm not alone in my
skepticism.

