While this regulation will clearly be disastrous for America, can you imagine the windfall of campaign contributions and lobbying frenzy that will ensue as a result of this thing passing?<p>Timothy Geithner or whoever is crafting this proposal is probably licking his/her lips at the thought of a $200bln industry on their knees willing to write a check to anyone who has the power to decide who are the winners and who are the losers in this regulation madness.<p>Administration: 1, Rest of America: 0<p>Could it be that the political system in Washington is corrupt beyond belief?
OMG, this is the most absurd thing I've heard in a long time.<p>I think it's really a symptom of a much deeper problem with American government and that is that the "system" is getting so big that no one really knows how to fix it. I see this kind of thing happen with software too. Your IT department buys software or adopts a new platform and builds all these great interconnected applications with messaging busses and information silos and then one day everyone who knows anything about the system is gone and what to do now?<p>Well, you start building systems on the platforms that are easier to understand and try to work around problems and in the meantime, the people who don't know what to do are trying to keep their jobs by <i>doing something</i> at all which is just making the whole package even worse!<p>At some point, a company has to make a very tough decision to "rip and replace." It's costly. It takes time. And while you are ripping and replacing you have to try to do the best with what you have working now. But the consequences of <i>not</i> ripping and replacing are just going to continue crippling you and eventually, you are going to be leap frogged by an agile startup who doesn't have the legacy deficit you've run up by not doing things right in the first place!
From the article: <i>Treasury’s position is that if it doesn’t drag VC firms into the bureaucratic swamp, then high-rolling hedge funds playing with borrowed money will present themselves as venture funds to avoid regulation.</i><p>How does this work? Isn't there a clear distinction between hedge funds and venture funds?
Politicians, lawyers, and regulators impeding entrepreneurs and investors in the name of protecting against non-existent systematic risks to our economy.<p>This type of regulation originated many years ago with the broad idea that unsophisticated persons (the "little guy") needed various forms of disclosure to enable them to make informed decisions about their investments. How that rationale can even begin to apply to VCs and their LPs (who are typically large institutional investors) is an absurdity only Washington could possibly begin to fathom.<p>The article nails it when viewing this development as a further extension of Sarbanes-Oxley and other recent regulatory changes: much more of this and it will be time to put the IPO on the endangered species list.<p>This will definitely hurt startups in the long run.
I always wonder if the cost of complying with new regulations is contemplated. If I think of how long our family take just to do stupid and inane administrative tasks (VAT, Union payments, tax, unemployment insurance, etc…). All this administration is really hampering small businesses.<p>Why aren’t these regulations simplified? Why aren’t employees paid on a
cost to company” basis and are responsible for their own administration (i.e. own union payments, own unemployment insurance, own health insurance, etc…).<p>Maybe it is just because I hate admin – but I doubt that admin should take up 40% of a small business owner’s time.
"As part of their regulatory redesign, Team Obama and Congress still don’t have a plan for reforming the giant taxpayer-backed institutions like Fannie that caused the credit crisis. Yet they’re moving to rewrite the rules for investing in tiny technology companies that had nothing to do with the meltdown. Under the proposed rules, venture firms will be declared systemic risks until they can prove themselves innocent."