Friedman Misses the Point and Economic Reality of Silicon Valley
Thomas Friedman is a very smart man and a very good writer. He’s certainly sold more books than I ever will. But in reading his latest column arguing $20 billion in bailout money should go to VCs not auto companies, one thing was crystal clear: This man doesn’t live in Silicon Valley. Has he even ever visited? I totally agree we shouldn’t be bailing out “loser” companies and industries. Car companies should be going bankrupt, and their stockholders and bondholders should lose their money for betting on an industry that clearly wasn’t adapting and was spending like drunken trust fund kids. (Trust me, they’re worse than sailors.) Yes, the inevitable job losses will be hard to absorb. But these companies will fail eventually, so you’re really just stalling when it comes to the pain, and inevitably dragging out the recession longer—especially in areas like the rust belt that were hurting before the recession hit. My above views are precisely why I live in Silicon Valley: A place that not only lacks an artificial reverence for an old stodgy company, it actually celebrates when a younger, nimble startup takes it down. How, could Friedman so get why the Valley continually creates strong multi-billion dollar companies and then turn around and propose a government subsidy for us? Investments in agencies like DARPA are one thing, but government subsidies are crutches for non-performing industries. And hit by the recession or no, Silicon Valley doesn’t want or need that crutch.