February 03, 2013

Matt Yglesias Makes a Profound Discovery

That name....it means politics is afoot, so the post is below the fold.

For those of you uninterested in such things here's a shorter, less comprehensive version of the post.

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Matt Yglasias recently tried to become a productive member of society and start a business.

BEHOLD!

He discovers that all those progressive regulations he's so fond of; all those stalwart civil servants; They don't exactly help people start their own businesses.

There is the potential beginning of an epiphany in this:

 And incumbent, already licensed businesses gain a minor advantage from making new entry difficult.



However his observation there is the WHOLE POINT of the right-wing critique of these asinine regulations. This is the crux of what Sarah Palin argues in her Tea Party Speeches. These regulations inherently favor the big established companies that can hire the lawyers, and have the personnel to deal with them. This is why there are so few new tech startups in California anymore. Oh there are new names to be sure, but they aren't actual start-ups. They are new divisions of existing companies. The reasons for this have to do as much with financial and stock-market regulations like Dodd-Frank and Sarbanes-Oxely which make it very hard (and legally perilous) to start an IPO. The new policy is to go to an established tech company with your new idea and sell all your patents, become a new division of said company and hope that your new idea is not disruptive to the companies bottom line.

Which brings us to Yglasias's ending paragraph...

Red tape, long lines, inconvenient office hours, and other logistical hassles probably won’t stop tomorrow’s super-genius from launching the next great billion-dollar company. But it’s a large and needless deterrent to the formation of the humble workaday firms that for many people are a path to autonomy and prosperity.


Emphasis mine. The last sentence is dead on, but the highlighted portion is proof that Yglesias doesn't get it. The next super-genius is very kikely not going to be able to start his company. He must go to the current ones and if his tech idea is too disruptive to their business model....he'll be fired after selling his patents and his 'new division' will work on something else entirely.

What kept Steve Jobs and Bill Gates and all the others up at night in the '90s was not IBM...or Jobs...or Gates. It was some kid in his garage doing what THEY did 20 years earlier, developing some new hardware or software and starting up a company to blindside them the way they did IBM. After Sarbanes-Oxely and especially after the more recent wave of regulations, this is hardly a factor.

 This is one reason so many tech companies are big Democrat donors...the regulations the Dems favor keep new start-ups out of their hair. Of course this is true for most really big businesses that don't deal in something the Donks consider politically incorrect.  It's why the Dems and not the Republicans got the most donations from big firms. Leftist policies discourage competition.

After the crazy evil outlier that was Hitler discredited  the term Fascism, technocrat lefties looked for a new term.  Third way socialism is re-branded Fascism...(on the Italian rather than the crazy evil German model) and the essence of Fascism is corporatism. Corporatism is what Palin and the tea party refer to as 'crony capitalism'. Thus we get major Democrat donors put money into economically dubious, but politically correct ventures such as Solyndra and then get huge subsidies right up until they fire their workers and retire with a tidy profit.

Someone working on a new oil extraction technology or an inherently safe nuke plant...well they get no subsidies and have to fight the headwind of regulation.  It gets worse because of the David Gregory factor. If you are connected the laws can simply be waived. If you're not a major Democrat donor or a member of a favored organization....those regs actually apply.


It should be mentioned that the late George McGovern, who I rarely agreed with but always respected, had a similar revelation after he left congress. He tried to start a Bed and Breakfast after he retired but discovered that the mass of regulations, many of which he had fought for in Congress made it untenable. This is why it's important to have people with actual business experience (preferably small business) in government. To recognize when these regulations go off the rails.

The Schandenfruede of seeing someone like Yglesias inconvenienced by the sort of thing he has long advocated is certainly amusing. However, as he himself notes for people who are not as well off as him or have the easy hours of the hipster douche lifestyle this sort of thing is far from funny. It's an impregnable wall between them and the American dream.

And that's not funny...it's a tragedy.

Posted by: The Brickmuppet at 03:24 PM | Comments (4) | Add Comment
Post contains 817 words, total size 6 kb.

1

I think that Mr. Yglesias has had his first contact with liberal hell:

http://sultanknish.blogspot.com/2013/02/the-three-types-of-people-youll-meet-in.html

Of course, being a member of the ruling class unlike the rest of us he could probably found a connection to "take care of it."

Posted by: J Carlton at Mon Feb 4 22:16:28 2013 (i0RQw)

2

 Jerry Pournelle's page had this little comment on his mail section a while back, which I thought was appropropriate.

http://www.jerrypournelle.com/chaosmanor/?p=10667
Important comment:
"on the end of entrepreneurship


Being a founder of a startup here in silicon valley, I can comment on Spengler's essay. In the EDA business (Electronic Design Automation) everyone expects to get bought by one of the large EDA companies. No one expects to go IPO. Why? All of those wonderful laws the democrats passed after the fake energy crisis. Once you pass the small business threshold and enter big business, the cost of doing business goes up prohibitively. Further, the extra burdens placed on IPO's in the last 10 years, make it much harder to go public. The net result is we all (if we are lucky) join the collective. We get paid for our stock or get new company stock, stay the minimum required time and leave. Those of us with the energy, do it all over again. The unintended consequence is we build bigger and fewer large companies. Just what the democrats like. As Amity Shlaes pointed out in "The Forgotten Man", bigger companies act more like the government and are easier to manipulate. Resistance is futile."
The Spengler column:
http://pjmedia.com/spengler/2012/11/07/if-you-believe-in-staples-clap-your-hands/
the big problem right now is that we need 100 Facebook IPO's a year right now just to make good on the recession and we are not going to get them.

Posted by: J Carlton at Mon Feb 4 22:29:32 2013 (i0RQw)

3 J Carlton. Thank you for that comment and the links! You very succinctly conveyed what I was trying to.

Posted by: The Brickmuppet at Wed Feb 6 15:42:08 2013 (vp6an)

4 Your welcome.  Ever since I was "restructured" out of a job, I've had a fair amount of time to catch up on reading stuff like this.  It beats running around and looking at all the "for rent" signs. 

Posted by: J Carlton at Wed Feb 6 16:04:00 2013 (i0RQw)

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