Is There Too Much Venture Capital?

[James Baird]

Working out here in the belly of the Sillycon Valley beast, I've been
wondering recently if part of the continued strength of the economy could be
due to a sort of "IPO Keynesianism".  Most of the Internet companies I see
out here not only have no chance of ever making any money, but no remotely
rational person could ever believe they will.  And yet they're taking all
this extra capital sloshing around the markets and spending it on my
ridiculously overpriced labor, on TV ads, on construction, etc.  Wasn't
Keynes's perscription large amounts of investment with no productive outcome
("hiring one set of men to dig holes, and another to fill them in")?   I'm
not entirely sure I'm joking about this...

Jim Baird

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