[FoRK] Obama: communitarian, redistributionist, confused? (from NYT)
J. Andrew Rogers
andrew at ceruleansystems.com
Tue Aug 26 12:00:14 PDT 2008
On Aug 26, 2008, at 11:37 AM, Lucas Gonze wrote:
> On Tue, Aug 26, 2008 at 11:05 AM, J. Andrew Rogers
> <andrew at ceruleansystems.com> wrote:
>> ) Explain why more capital should be put into "startups" and made
>> available to companies that would produce a superior rate of return
>> in a
>> free and fair market. You are suggesting that redirecting capital
>> from more
>> viable companies to less viable companies is an "improvement". What
>> happened to the economy the last time the government effectively
>> risk to encourage low-quality investment? See: sub-prime lending
> So your feeling that Obama's tax policies would be disastrous is based
> on the idea that favoring startups is bad for the economy?
Simultaneously favoring low-quality "startups" and disfavoring high-
quality non-"startups" in capital allocations is most assuredly
disastrous to the economy. It encourages the non-productive allocation
of capital in industries that have to compete globally. This is
aggravated by the fact that no one seems to be able to objectively
define "startup" in a way that is not badly biased toward certain
types of businesses, unfair, and easily gamed.
> That's an interesting idea which is worth exploring, but a bit out of
> the mainstream. Consensus is that tax policy which encourages
> startups is pro-business.
Tax policy which encourages startups is good for the economy. Tax
policy which encourages startups while simultaneously actively
discouraging all other business is bad for the economy, since startups
are only a small percentage of high-value activity in a well-
functioning economy. The economic distortion in the former is *much*
less severe than the latter and net benefit to the economy, but that
is not what is being proposed.
The consensus that does not understand the difference is the same
consensus that gave us George W. Bush, DMCA, etc. I love startups,
but they are not some kind of absolute objective good. Merely *being*
a startup is not the value a startup can provide to an economy.
J. Andrew Rogers
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