In last week’s election in California, Proposition 8, a measure to reverse the right of same-sex couples to marry (a right that had been granted them by the State Supreme Court in May with a 4-to-3 vote), passed 52% to 48%. An interesting wrinkle here is that, according to exit polls, Black voters came out in favor of the proposition more than any other voting group, by a 70/30 split. In an election year when as many as 90% of Black voters supported Obama and the Democrats, a large majority of them also voted to take away a right that had been granted same-sex couples in their state. (In all fairness, Obama voiced opposition to Prop 8 as well, though that was widely considered to be a political move.) Many of the articles I’ve read on this topic point to churches and religious groups as key influencers on this vote that drove many to vote the way they did. No matter, it strikes me as odd that so many people care so much about the behavior of others. Has there ever been an initiative on a ballot that contained so much hatred? A vote in favor of Prop 8 is a vote that same sex couples SHOULD NOT have the right to marry, a right that had already been granted. The only rational reason I can think of for someone to feel this way stem from fundamental religious beliefs or severe homophobia. Though even in the case of the homophobic voter, I have a hard time envisioning why they would want to strip the rights from this group that scares them so. Keith Olberman gives a particularly poignant op-ed on this topic comparing it with slavery, during which rights were stripped from fellow human beings. In this case, we’re repeating the exact same injustices, except the rights are being stripped because of their behavior or lifestyle rather than the color of their skin. Is being gay legal? If so, then gay people deserve the same rights as everyone else. Exerting control over who has the right to marry and who doesn’t seems to me to be a gross merger of church and state and a bastardization of one of the fundamental principles on which this country was founded.
I’m riding on the train back to New York from a whirlwind two nights in DC. On Monday night, I went with some friends to the Redskins-Steelers game – a Monday night tradition before Election Day – and the mood was electric. Last night, after the results arrived and we watched Obama’s acceptance speech, we left The Willard and walked two blocks away to the White House. On the street closest to the front of the house, thousands crowded the plaza to revel and celebrate. All sorts of people – white, black, arab, asian – gathered to celebrate together. On 16th Avenue, throngs of cars crowded the street forming a huge traffic jam of honking horns with people hanging out of windows and sunroofs, slapping high-fives to all who passed. Never, in my 18 years of living in DC (which included several Super Bowl victories) did I ever see anything like last night. It seemed like the whole country collectively exhaled. Exhaled from nearly a decade of injustice and unpopular leadership. Exhaled from the knowledge and reassurance that this country is still of and by the people. Exhaled with rejoice in the confirmation that we live on a more level playing field today, where nearly any one individual can achieve any thing to which they commit themselves. While I would have supported Obama regardless of his race, I do believe his victory represents a particularly special achievement for black men and women in the country. Though there are plenty of racial injustices committed daily still, President Barack Obama and the Obama family will serve as role models with which black men and women can identify far better than any leader before. I think that for the first time in our nation’s history, black men, women and children will truly feel that they have a voice and a leader who understands their position. That is just an incredibly powerful occasion. Moreover, Barack Obama is not just a role model for African Americans, but a role model for us all, and this reality should accomplish much to heal wounds within communities and reduce racial divisions. Beyond our shores, some of the effects have already begun to be felt. I received messages from friends in Europe with whom I hadn’t spoken in years. Friends of friends from Spain showed up at our party, which was already attended by several expats, to help us celebrate. CNN showed video from Kenya and Time reported on Desmond Tutu’s reaction from S. Africa, where a good friend, Tal, also commented as he watched from afar. I truly believe that some of the “hate” directed towards us around the world softened last night and some of the militants rested their arms. It’s just a lot harder to hate a country led by Barack Hussein Obama, than the one led by George Walker Bush. There is a ton of work to do and Obama has just won an incredibly difficult job, but should he accomplish absolutely nothing during his term, the significance of his election will still remain. It truly is a new morning in America.
One of my next posts, that has been coming together in my head for a while, will be on the role hedge funds play in our economy and what responsibility, if any, they should assume for current conditions.
This farewell letter was sent to me recently by a friend in the industry. Andrew Lahde is a guy who formed a relatively small hedge fund, made an enormously successful bet on subprime (his fund is up 1,000% this year) and is now calling it quits. His insights are simple, yet profound and I find his comments about our government and legislation policy of particular interest.
One of my next posts, that has been coming together in my head for a while, will be on the role hedge funds play in our economy and what responsibility, if any, they should assume for current conditions.
This farewell letter was sent to me recently by a friend in the industry. Andrew Lahde is a guy who formed a relatively small hedge fund, made an enormously successful bet on subprime (his fund is up 1,000% this year) and is now calling it quits. His insights are simple, yet profound and I find his comments about our government and legislation policy of particular interest.
There’s been a lot of focus recently on the macro economy, sub-prime debt exposure and a recessionary or even depressive economic outlook. A quiet, but growing sub-plot though on a micro level, is what this means for the technology industry in New York City. So far this year, the city comptroller estimates 40,000 jobs have been shed on Wall Street and it’s expected that this number may rise to 50-60,000 before it’s all over. Large Wall Street firms have dominated the New York economy for much longer than I’ve been relevant. There’s been plentiful discussion in tech circles, over the past few years, that one of the pitfalls of growing the tech industry in NYC is the difficulty in luring IT professionals away from deep-pocketed Wall Street firms. Now that there are two fewer Wall Street firms though and far fewer jobs, the local economy is poised for a transformational repositioning. An obvious sector to absorb some of that vacuum is technology. Crain’s NY reported a few weeks ago that New York added 1,100 technology jobs in the first half of the year to bring the overall number to 42,700. While the broader economy purges jobs by the minute, we’re adding them in droves. This is super exciting.
The WSJ reported that, in the first six months of this year, there were 67 NYC-based startups who received VC investment totaling $828 million compared to $480 million in the same period last year. I believe that growth rate will accelerate. With the flood of newly unemployed financial markets-focused professionals, there are more smart, hungry and creative people looking for opportunity than ever before. As the few i-banks remaining recast themselves as bank holding companies and accept federal funds and the compensation limits that come with those funds, high pay-grades that once lured many of the best and brightest IT professionals and managers may no longer be as significant of a factor. Compensation reform, generally on the verge of sweeping through all facets of our economy anyway, is only one more factor encouraging the aspiring business owner to finally go for it. The alignment of incentives that once made the leap difficult are severely diminished and in some cases (for employees of Lehman or Bear as examples), eliminated. Also, as other areas of the local economy decline – real estate prices fall, office space becomes more affordable, etc – other historical barriers to starting a company here also diminish. With the city’s history around financial services and the experience of the recently unemployed, I think financial services technologies is one area, in particular, that will likely see a lot of innovation in the coming years. When you combine this new reality with recent trends, NYC becomes an increasingly attractive market for VC investors. We’ve been ranked third behind the Bay Area and Boston for several years and while our growth has been accelerating versus Boston for a little while, I think these recent local developments lend reason to believe that we will inch even closer to them in the coming years.
As recently as August, I had continued to consider a professionally-motivated move back to the Bay Area. I’m convinced it’s something that every young aspiring technology professional occasionally thinks about. At the moment though, those thoughts are diminished as I see enormous opportunity for NYC early-stage technology. Boston should be on high alert because New York is biting at its heels.
On sixth avenue today, I passed a street vendor who offered the standard wares – statuettes of nyc scenes, the statue of liberty, the empire state building, photos of Malcolm X, Che Guevara, Mother Theresa, Barack Obama and even one of the entire Obama family. I stopped to ask him why (and to also express my displeasure) and he explained that he offered them because they sell. Every day. In fact, they’re some of the first photos to go.
I voiced my displeasure despite my political support of Barack Obama as a candidate because I find this dangerous, on so many levels. First, Obama hasn’t yet fulfilled even a fraction of what the others pictured accomplished in their lifetimes. I hope he does and even exceeds the expectations being set, though as those expectations continue to rise, in part as a result of such displays, that becomes a more and more distant possibility. Second, and even more importantly, several of the others pictured met unfortunate fates, taken from us before their times, largely because they were fighting for wholesale change against the establishement. Grouping Obama in the same camp concerns me because it fuels the ire of those most resistant to his candidacy and what an Obama administration may represent. Selling photos of a senator and presidential candidate on the street rubs the possibility of his leadership in their faces, almost daring them to do something about it. I can’t think of a single example where excessive pride or hubris ever helped a cause. More often than not, it’s a cause of downfall. In this case, let those of us supporting his cause display a quiet pride and a quiet excitement for what may come. Let’s avoid rubbing it in others’ faces. Doing so does nothing towards advancing our own efforts, but rather puts them further at risk.
No words are necessary with this one. Sarah Palin is on the verge of becoming the leader of our nation and one of the most important players on the world stage.
The convergence of our economic woes and the presidential election is producing some of the most creative and entertaining soundbites from those in the public eye. Sarah Silverman, always hilarious, campaigns here to help get out the bubby vote in Florida. She’s also the spokesperson for an impressive grassroots campaign called The Great Schlep to influence the Florida vote.
What a time we live in. The past few weeks have been fascinating, historic, scary, depressing, opportunity-laden, transformational and ominous all at the same time. The convergence of the economic meltdown with the presidential election is a one-two power punch combo. Since the two topics are virtually intertwined at this point, I think the handling of the economic situation will probably go a long way towards determining the outcome of the election, though that’s nothing particularly new. I’ve had a bunch of interesting conversations over the past week about the economy and felt like jotting down a few (sometimes disconnected) thoughts on it.
My dad forwarded me this article by William Chafe (a Duke prof) on the parallels between 1929 and today. I find it quite frightening. Similarities between the two eras are:
Growth in salaries of workers fall way short of growth in executive pay (480x difference in current wage rates).
Strong Wall Street growth fueled by only 10% in equity.
No consumer savings, consumption growth on credit (living beyond our means).
Employment decline causes tightening of credit beginning downward spiral.
There are multiple possible solutions to fixing any problem, but two high-level approaches are (1) pump a bunch of money into the economy to prop it up or (2) focus on the structural weaknesses in the overall system and fix them. The first approach is faster and easier, but might only be a short-term fix. The second is harder and more rigorous, but could set us up for the future. Of course, a combination of the two may also be best.
The article digs into the differences between McCain and Obama’s approaches, and to avoid making this post too partisan, I’ll let you read it yourself if its of interest. There are several other structural questions that have arose in recent conversations though, that I want to raise for discussion:
FDIC Insurance – The current FDIC insurance cap of $100,000 was set in 1980. Inflation-adjusted, $100,000 then is worth approx $250,000 today. By keeping the cap at $100,000, the program discourages saving and encourages investing. Since a predominant form of investing is in the stock market, the bond market or mutual funds, keeping this cap low serves the economy well and fuels growth at the expense of savings. I’d argue that growth under those circumstances is somewhat artificially produced.
SBA Governance – On the surface, the SBA is a great program that gives citizens the opportunity to be entrepreneurs and start business, something I support. From what I understand though, in recent years, the SBA has been judged by the number of loans issued, rather than the quality or credit-worthiness of those loans. This smells a little fishy to me given the current credit crunch and rate of default.
Tax-Free Housing Sales – Since 1997, Americans have enjoyed the benefit of claiming up to $500,000 in real estate appreciation tax-free on sale of a home, provided they’ve lived in the house for two of the past five years. First, this really benefits the wealthy, because the average home doesn’t cost anywhere near half a million dollars, let alone achieve that in appreciation. Second, this makes selling a home easier and more attractive, which encourages flipping and discourages stability. Third, since you can live in two separate homes for two years each, it encourages second home consumption. It also encourages borrowing, building and increase in housing supply. When the supply outstrips demand, we have problems.
Finally, on a political note, undecided voters keep telling me that Obama wants to spend, spend, spend. Yes, its true that Obama probably plans to spend more than McCain. I’d argue that much of that investment in domestic programs is long overdue. Regardless of one’s opinion on that issue though, what’s planned and what actually transpires during a presidential term are often very different things. To use the past eight years as an example, Bush certainly didn’t have a spend philosophy when he came into office. He brought a classical Regan Republican small government approach to Washington. But look what’s happened since he’s been there. We’ve spent more annually during his administration (inflation-adjusted), and incurred more debt, than during any administration in the country’s history. Now, he’s pressuring congress to approve a somewhat hastily assembled plan that would increase the cap on national debt from $10.6 trillion to $11.3. The morale of the story is that making poor, short-sited decisions costs far more in the long run than spending money intelligently today. This is as true in the startup world where I operate as it is in the national government. Given the circumstances our country finds itself in, every American should vote for the candidate he/she believes is best equipped to (1) represent our country on the international stage and (2) invest the necessary resources to setup a framework that will assemble the sharpest minds, open dialogue, explore and make the best decisions possible. That is the primary role of a president so let’s put everything else aside.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=5617b37f-6706-4a17-8f58-f61ab53e0456)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=4252ecc6-24ed-47a5-b0f1-ce606fb7fe1b)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=021cb876-439a-47f5-95fa-17a2d3a456ef)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=c6b80bdc-b59b-47a7-a99a-aa9653398921)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=28273034-e5bb-4c0e-91d0-58c07422ef8e)