Start-ups Not Bail-outs

As I was reading the papers this morning I found myself looking almost desperately for some hint of even some mediocre good news, but finally decided that I had to agree with Thomas Friedman, Op-Ed Columnist for the New York Times, who said in his column today, that reading the news that GM and Chrysler are now lining up for another $20 billion or so in government aid – on top of the billions they’ve already received or requested, left him with the sick feeling that we are subsidizing the losers and for only one reason: because they claim that their funerals would cost more than keeping them on life support. But, as he says, this is not the American way. Bailing out the losers is not how we got rich as a country in the first place and it is definitely not how we’ll get out of this crisis now.

We don’t need anymore any more wealth-destruction machines and it is time both GM and Chrysler were put into bankruptcy so they can truly start over under new management with new labor agreements and new visions. When it comes to helping companies, precious public money should focus on start-ups, not bailouts.

Try spending tax payer money creating jobs! Call up the top 20 venture capital firms in America, which are short of cash today because their partners, university endowments and pension funds are tapped out, and make them this offer: The U.S. Treasury will give you each up to $1 billion to fund the best venture capital ideas that have come your way. If they go bust, we all lose. If any of them turns out to be the next Microsoft or Intel, taxpayers will give you 20 percent of the investors’ upside and keep 80 percent for themselves.

We can’t be spending billions of taxpayer dollars on office-decorating bankers,over-leveraged home speculators and auto executives who year after year have spent more energy resisting changes and lobbying Washington than leading change and beating Toyota.

Our country is bursting with innovators looking for capital. Please, let’s not let all the whining losers clamoring for help drown out the potential winners who could lift us out of this mess. Some of this country’s best companies, such as Intel, were started in recessions, when necessity makes innovators even more inventive and risk-takers even more daring.

We’re down, but we’re not out. If we’re going to invest taxpayer money, then let’s do it with an eye to starting a new generation of biotech, info-tech, clean-tech companies with real innovators, real 21st century jobs and potentially real profits for taxpayers.

I couldn’t agree with Friedman more when he says that our motto now should be “Start-ups, not bailouts: nurture the next Google, don’t nurse the old G.M.’s.”

The stimulus package that the Obama team and the Democrats in Congress recently passed – with no real help from Republicans – goes some way toward doing just that. And my hat’s off to them for that, but we need to do more. We desperately need to look forward, not backward to the same old crap.

The wind and solar industries in America have a chance to go ahead now with thousands of jobs – finally, with this new legislation, we finally have gotten something right according to John Woolard, chief executive of Bright Source Energy.

And this is how taxpayer money should be used to stimulate: limited financing, for a limited time, targeted on an industry bristling with new technology start-ups that, with a little push from Uncle Sam, won’t just survive this crisis, but help us thrive when it is over. We need, according to Friedman, an America that is thriving not just surviving.

Amen to that!