Why We Should Open Up The Border With Canada (And Other Political Tips From Tim Draper)
What a legendary venture capitalist thinks the government should ( and shouldn't) do now.
I've been at the AlwaysOn OnDC conference, and I just heard an interesting speech from legendary venture capitalist Tim Draper. Draper was a key figure in the launch of Skype, Baidu, and many other companies that took off. He also was an early developer of the concept of viral marketing.
So what does a guy who is so prescient about business think about the role of government in jumpstarting the economy?
Here's my summary of what he thought the government should do:Open up the border with Canada: They've got the oil, and they want more trade.Drop Sarbanes-Oxley regulations for the first ten years in the life of a public company. Sarbox is just too costly for the small public firms getting off the ground, Draper said. Thanks to Sarbanes-Oxley, Draper argued, the U.S. has seen a decline in the number of public companies, while European and Chinese stock exchanges have seen increases.Green incentives: Use carrots, rather than sticks like carbon taxes, to encourage businesses to address public goods problems like global warming.The federal government should make more secure loans to innovative companies like Tesla Motors. But, I should note that Draper has invested in Tesla.More free trade: If we didn't have trade with China, we wouldn't have semiconductors, flat screens, computer memory, etc.
Now here's what he said government should not do:Don't invest in equity capital: The government should not be in the business of owning companies, and should sell off any ownership that it has.Don't hire and spend: Government jobs are not permanent jobs that lead to economic growth. There has been a strong correllation over time and across countries that as government spending goes up, GDP does down, Draper argued.Don't scrutinize entrepreneurs.