August 2009 Archives
August 9, 2009
I would rather see the White House and Congress work on a pro-growth and pro-jobs agenda first and foremost that would include lowering, not raising taxes and less, not more intervention in private industry. While I feel better about the short term than I did six months ago, since we were then facing the possibility of Armageddon, I am now more pessimistic about the long-term outlook.
Here's the unabridged version:
I think many in Silicon Valley would like to see the administration pursue more pro-growth policies. The start-up, angel investor and venture capital industry has helped build companies that have created a huge amount of jobs and with unemployment moving towards 10% it's an industry that should be encouraged and supported. While the Obama campaign said it would eliminate capital gains taxes for start-ups, instead the industry is looking at substantial tax increases on business, income, capital gains, and carried interest -- not to mention the energy and healthcare taxes now being debated in Congress -- and the administration has suggested it might force VC funds to register with the SEC. This is not what the Valley needs in order to resume being an engine of job creation.
There is real concern here that spending has been excessive and not been used wisely, and may in fact be crowding out private investment. I've heard anecdotes of companies in the telecom, energy, and healthcare industries holding off on investments because they are waiting to see if they can get bailout money.
On the issue of free trade, the "buy American" provision of the stimulus bill was probably unhelpful to the cause, and I'm concerned that agreements with the likes of Colombia and South Korea may be stalled. When it comes to the issue of H-1B visas, this is still important to the Valley, but with such high-unemployment I doubt there will be any political will to raise caps.
My concern is that while we may have avoided the worst of it, unemployment keeps rising and the danger of a double-dip still looms. It seems as though the Obama Administration has moved on from the economy and is focusing more on its healthcare and energy agendas. While those are important issues, I would rather see the White House and Congress work on a pro-growth and pro-jobs agenda first and foremost that would include lowering, not raising, taxes and less, not more, intervention in private industry. I am very concerned that the tax and spend policies of this Administration will result in very slow growth for the foreseeable future. While I feel better about the short term than I did 6 months ago, since we were then facing the possibility of Armageddon, I am now more pessimistic about the long term outlook if the heavy taxing, spending, and intervention into private industry doesn't abate.