TomW: Can VCs/investors continue to “over-invest” in green enterprises, knowing that the future opportunities afforded by gov’t subsidies are evaporating? How can any investor in good-conscience invest in a business that intends to live off the lie of human-caused climate change or the thievery inherent in “cap and trade”?

ROI and exist strategy calculations now must include outright confiscation; eg, when the subsidy ceases and the alternative whatever producer fails to profitably deliver, they simply fall under the management of some regulator/Czar at the local, state or federal level. What are stock options worth in that environment? And they need to be expensed?

Start the assessment of future business velocity with the entreprenueurial risk. An entrepreneur is someone with a clear concise vision of the future, which no one else currently shares, who intends to develop a new product/service (that isn’t another iPhone app). Their whole incentive used to be the potential to acquire life-changing wealth by building a great new business, in exchange for toiling to implement their innovation in an open market. Now? The end-result of this idiotic policy direction is the de facto creation of 10s of thousands of real-life John Galt replicants.

tom

Oh, it will come to pass. The regulation will create rents for the large institutions that contributed to Obama (read: Government Sachs) and will increase costs to prohibitive levels for smaller competitors as well as jacking up the barriers to entry for new entrants. This will drive out all real competition and consolidate the financial sector into an oligopoly of too big and politically connected to fail institutions beholden to their political overlords and that are free to charge more for services than they would if the environment were actually competitive.

Regulation 101.

Currently, the financial system is in dire straits. It would be surprising if venture capitalists were active. In the future, the outrageous deficits may suck up capital, and impede growth.

Obama keeps promising to vastly increase financial regulation. Considering how much money he has taken from Wall Street, I doubt it will come to pass. However, if it does, it would probably have a negative effect on new ventures.

I won’t be surprised if those things happen. But they haven’t. The dominant factor in the economy is the recession, not White House rhetoric.

and the president, and the former ‘green jobs’ czar, and the manufacturing czar, and anita dunn, and the science czar, and the speaker of the house, and the senate majority leader and….

http://www.hackwilson.blogspot.com

- Expensing of stock options. Expensing the “mark to market” value of employee stock options burdens the income statement of small companies. Given liquidation preferences and the market risk of early and midstage companies, the actual realized value at a liquidity event is more likely to be far lower than the expensed levels. This expense burden makes small companies look far less profitable than they actaully are, and harms their “marketability”

- Risk vs. Reward. With the government choosing winners and losers via too big too fail, “smart” (or should I say “sly”?) money will flow to ventures which are socialized for risk and privatized for profit – all made possible by political connections. Why should anyone take the risk of earning money the old fashioned way when their buddies in DC can give them a place at the government trough?

Of course, maybe we shouldn’t be to surprised considering that the origin of the word “noble” means having the values of military aristocrats who exploited and oppressed all others by force of arms. Compare this to “villain” which originally meant ” a person of the village” i.e. the people who farmed, made and traded.

We’ve got the same moral inversion going on today where people who create and produce are viewed as venal and untrustworthy while those who take, oppress and attack are venerated.

The current administration is every bit as hostile to enterprise as you suggest, but while maybe an outlier it is hardly a total break with the past, specifically things the GOP and Bush-43 either led on or were complicit in.

If we want an economy that produces wealth and good-paying jobs, we have to consciouslt look at teh trade-offs that make capital welcome, and most of our rulers seem not only to be incapable of that, but really to not care except fro lip-service.

Both parties. Almost all of them by the time they get to Washington, let alone Sacramento, Albany, Springfield, Harrisburg, Lansing, Trenton…