@lance (an ATDC startup guy) pointed me to a pretty good Op/Ed from Thomas Friedman in the New York Times.
Let me say that of all the NYT people, I respect Friedman the most. His Lexus and the Olive Tree sits up there with Mystery of Capital as one of the best economics books of recent years. It also sits up there with The Pentagon’s New Map as one of the best national-security books of recent times.
His Op/Ed today was that Obama should shift his focus away from health care reform, regulation and stimulus and more towards “stimulation”, ie the creation of a start-up culture among America’s youth.
Obama should make the centerpiece of his presidency mobilizing a million new start-up companies that won’t just give us temporary highway jobs, but lasting good jobs that keep America on the cutting edge. The best way to counter the Tea Party movement, which is all about stopping things, is with an Innovation Movement, which is all about starting things. Without inventing more new products and services that make people more productive, healthier or entertained — that we can sell around the world — we’ll never be able to afford the health care our people need, let alone pay off our debts.
I couldn’t agree more. If you look at most transformative technologies that weren’t created for military purposes, they’re all done by the small businesses. DARPA created the internet, but AOL and Mindspring put it in every American household. Xerox created the GUI, but Steve Jobs and Bill Gates put it on every PC. Bell Labs created Unix, but geeks in Berkley and Finland created the versions that run most of the Internet.
There is very little Government can do to create stimulation that doesn’t involve getting the f— out of the way. And getting the government out of the way doesn’t suit the politicians of either party.
Starting your own business involves risk. The current left-of-center administration is about eliminating risk. Everyone must have Health Insurance. Everyone must have retirement insurance. With the Unions, everyone (who is a member) must have job security. You can’t take risks when the Government prevents you from doing so.
Not that the typical right-of-center politicians are much better. They are beholden to the large companies who fear transformative change. They fear it because all large organizations, be it Fortune 500 or Government are dysfunctional. They can’t innovate like the small guys. What they can do it hire lobbyists to make it harder on the small guys.
Friedman also illustrates he doesn’t get the “Tea Party” backlash. The Tea Party Movement isn’t all about stopping things. It’s about the ability for people to make their own choices. It’s about stopping the one-size-fits-all equal-outcome-for-all mentality of the far left. The Tea Party Movement is about letting the individual succeed or fail based on their own merits, not on the whim of government bureaucrats. In short, it’s about freedom. Something that has been missing off the agenda’s of the last several Presidential Administrations.
If Barack Obama wants to create an Innovation Movement here are my suggestions:
o Drop Health Care Reform. People can’t quit their W2 jobs and strike out on their own when they have no idea of they’ll be hit with a massive financial penalty for not carrying bloated all-you-can-eat healthcare insurance. Encourage catastrophic plans, and medical savings accounts.
o Commit to a repeal of the death tax, or at worst no more than 10%. Small Businesses can’t survive if at the time of the owner’s death his/her heirs have to pony up 50% of the value of the business to the IRS.
o Reform S-Corp taxes so that money re-invested into growing the business doesn’t appear as taxable on the individual’s 1040 form.
o Grant capital-gains tax relief for people who sell assets to re-invest them in small businesses. If an Angel Investor wants to sell the Apple stock they bought in 1984 into the next big thing, let them do so without penalty. Set the basis at the 1984 purchase price.
o Fire anyone in your administration who suggests the idea of raiding people’s 401ks.