Lost in all the hundreds of billions of dollars in Fed handouts to banks, the automakers and others is how we — and in California in particular — really pump up our economy, balance our government budget and fuel home sales.
It’s the stock options, stupid, largely the ones from Silicon Valley. It’s fun to joke about the dot.com boom and all the failures, such as Webvan and Pets.com.
But Silicon Valley innovation also propelled the stocks of a wide range of tech and NASDAQ companies in the late ’90s. It even prodded some Dow stocks out of their slumber.
More important, people forget that the wealth created by Silicon Valley stock options — and people cashing them out — helped pay for government’s mounting bills. You know, CALPER’s generous pensions and social services in rural counties (with little job creation) such as ours.
When I worked at CNET (taking a career risk) I got taxed up the wazoo for cashing out stock options, including the dreaded alternative minimum tax.
Living in a rural county now, in a land dominated by government jobs and “double- and triple-dippers,” I see where the tax money went. Much of that is OK, though not the double-dipping part.
The money also helped propel our housing market, and the housing market in Tahoe. That’s OK too, though real estate and mortgage people who accelerated the trend with questionable loan practices, ruined it for the rest of us.
(Thomas Hastert of Loan Sense in Grass Valley is just one of them who comes to mind. There are others around here.)
Most people, including the press, doesn’t understand the “trickle down” from Silicon Valley to the rest of the state or nation. They’re too busy chasing down scoundrels on Wall Street.
I’m glad Google chief executive Eric Schmidt is an adviser to President Obama. Bush never got that.
(Schmidt’s connections in Silicon Valley, more than phenomenal smarts, got him that job. Schmidt’s tenure at Sun Microsystems wasn’t that successful. You know, the “good old boys network,” just like here. In this case, it was venture capitalist John Doerr of Kleiner Perkins in Silicon Valley who was Schmidt’s “rainmaker.” Doerr invested in Sun and Google.)
Still, recruiting Google’s Schmidt is a step in the right direction for Obama, just like having ex-Ebay chief executive Meg Whitman run for governor in our state. Both of them get the SV-California connection.
So maybe we should get some policies in place to encourage innovation in Silicon Valley again. Not every venture succeeds, but the ones that do can drive our economy and balance our growing government budgets.
Nowadays the bet in Silicon Valley is on “green” technology. Despite the naysayers, the idea has legs.
Maybe it’s time to roll the dice with the Silicon Valley VCs instead of the banks or automakers. That’s where I’d put my money.
In fact, without it, we’re in deep trouble. Our governments have shown time and time again they don’t know how to cut costs, so we better raise some revenue. The banks and automakers are a defensive play, not an offensive one; AKA “yesterday’s lettuce.”