Doug Ross sounds the alarm as democrats begin efforts to take control of your health care.

(N)ow the Statist Democrats are launching the most massive attack on the American people in the history of government.

They promise health care for everyone, but they will not — and they can’t possibly — deliver it.

While our health care system is certainly imperfect — because all humans are imperfect, including doctors, nurses, hospitals and insurance companies — they are more perfect, more competent, more informed, more capable than all of the bureaucrats to whom they’ll be forced to report: a bureaucracy that will make all decisions about your health care.

And it is easy to confirm the havoc that socialized medicine will wreak on American society. All you need to do is to look at how Democrats are trying to ram home socialized medicine: they’re doing it as fast as possible with as little debate as possible. For the indigent and the poor, we already have programs like Medicaid and SCHIP and dozens of state programs. Yet we’re told tens of millions of us must give up our private insurance and pay for a government-run program.

Democrats claim it will be more cost-effective and efficient. … The man who’s had the least experience at running anything is going to unleash the most massive federal leviathan in history, nationalizing nearly 20% of the economy.

This has been the dream of the Statist Democrats since FDR: to force each and every one of you, whether you like it or not, into a strait-jacket form of health care. It controls you; the actual being, the person.

Nameless, faceless bureaucrats substituting their decisions for those of your doctor.

Deciding whether you will have an operation or not. Whether you will have an MRI or not. Whether you will receive a life-saving, life-extending drug or not.

And we know this, because this is what occurs in Canada and Britain and other centralized bureaucracies, where you simply can not have access to advanced health care, period.

Where will their new drugs come from, since we produce half of them? Who will invent the new medical technologies for them, since we invent roughly three-fourths of them?

Who will run the hospitals and what will they look like when the government unions run them? …

They’ve been lying about the number of people without health care. They’ve been lying about whether the public is satisfied with health care. They’ve been lying about every aspect of health care.

They unleashed the slip-and-fall lawyers on the medical system, causing untold higher costs for medical practitioners. They’ve attacked the health care system relentlessly, driving up costs just like they’ve attacked the energy industry and the automakers.

And even when they have complete monopolistic control of a system, like the educational system in America, they want more control. It’s never enough. They want more money, more regulations. More. They need to “invest”. They need to raise taxes. They need to repress. They need to compel.

Read the whole thing.

Hat tip to the News Junkie.

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David B. Rivkin Jr and Lee A. Casey, in the Wall Street Journal, argue that, if the 14th Amendment protects a “central right of privacy” entitling freedom of choice on abortion, wouldn’t the same right protect freedom of choice in health care generally, precluding government confiscation, redistribution, and subsequent rationing of individual health care resources?

The Supreme Court created the right to privacy in the 1960s and used it to strike down a series of state and federal regulations of personal (mostly sexual) conduct. This line of cases began with Griswold v. Connecticut in 1965 (involving marital birth control), and includes the 1973 Roe v. Wade decision legalizing abortion.

The court’s underlying rationale was not abortion-specific. Rather, the justices posited a constitutionally mandated zone of personal privacy that must remain free of government regulation, except in the most exceptional circumstances. As the court explained in Planned Parenthood v. Casey (1992), “these matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to personal dignity and autonomy, are central to the liberty protected by the Fourteenth Amendment. At the heart of liberty is the right to define one’s own concept of existence, of meaning, of the universe, and the mystery of human life.”

It is, of course, difficult to imagine choices more “central to personal dignity and autonomy” than measures to be taken for the prevention and treatment of disease — measures that may be essential to preserve or extend life itself. Indeed, when the overwhelming moral issues that surround the abortion question are stripped away, what is left is a medical procedure determined to be “necessary” by an expectant mother and her physician.

If the government cannot proscribe — or even “unduly burden,” to use another of the Supreme Court’s analytical frameworks — access to abortion, how can it proscribe access to other medical procedures, including transplants, corrective or restorative surgeries, chemotherapy treatments, or a myriad of other health services that individuals may need or desire?

Read the whole thing.

The Competitive Enterprise Institute’s annual Ten Thousand Commandments report on the growth and costs of federal regulation has some startling figures.

Given 2008’s government spending of $2.98 trillion, the regulatory “hidden tax” stood at 39 percent of the level of federal spending itself. (Because of the months-old spending surge, this proportion will surely be lower next year.)

Trillion-dollar deficits and regulatory costs in the trillions are both unsettling new developments for America. Although FY 2008 regulatory costs are more than double that year’s $459 billion budget deficit, the more recent deficit spending surge will catapult the deficit above the costs of regulation for the near future.

CBO now projects 2009 federal spending to hit $4.004 trillion and the deficit to soar to $1.845 trillion. The game has changed; although these spending levels eclipse federal regulatory costs now, unchecked government spending translates, in later years, into greater regulation as well.

Regulatory costs are equivalent to 65 percent of 2006 corporate pretax profits of $1.8 trillion.

Regulatory costs rival estimated 2008 individual income taxes of $1.2 trillion.

Regulatory costs dwarf corporate income taxes of $345 billion.

Regulatory costs of $1.172 trillion absorb 8 percent of the U.S. gross domestic product (GDP), estimated at $14.3 trillion in 2008.

Combining regulatory costs with federal FY 2008 outlays of $2.978 trillion implies that the federal government’s share of the economy now reaches 29 percent.

The Weidenbaum Center at Washington University in St. Louis and the Mercatus Center at George Mason University in Virginia jointly estimate that agencies spent $49.1 billion to administer and police the 2008 regulatory enterprise. Adding the $1.172 trillion in off-budget compliance costs brings the total regulatory burden to $1.221 trillion.

The 2008 Federal Register is close to breaking the 80,000-page barrier. It contained 79,435 pages, up 10 percent from 72,090 pages in 2007—an all-time record high.

Federal Register pages devoted specifically to final rules jumped nearly 16 percent, from 22,771 to a record 26,320.

In 2008, agencies issued 3,830 final rules, a 6.5-percent increase from 3,595 rules in 2007.

The annual outflow of roughly 4,000 final rules has meant that well over 40,000 final rules were issued during the past decade.

Although regulatory agencies issued 3,830 final rules in 2008, Congress passed and the President signed into law a comparatively low 285 bills. Considerable lawmaking power is delegated to unelected bureaucrats at agencies.

According to the 2008 Unified Agenda, which lists federal regulatory actions at various stages of implementation, 61 federal departments, agencies, and commissions have 4,004 regulations in play at various stages of implementation.

Of the 4,004 regulations now in the pipeline, 180 are “economically significant” rules packing at least $100 million in economic impact. Assuming these rulemakings are primarily regulatory rather than deregulatory, that number implies roughly $18 billion yearly in future off-budget regulatory effects.

Household Net Worth as Percentage of GNP

Well, we’ve recently on the average lost the last decade’s growth of personal assets.

Household Net Worth, according to the Fed, is down $14 trillion from its peak in 2007, and as the chart above illustrates, is down to levels very much like those of the 1990s when we were just beginning to emerge from a painful recession.

All over the country, current bad times have forced families to dip into savings, to sell equities at drastically reduced values, and to liquidate real estate in a very unfavorable market.

The impact of Barack Obama’s spending binge, of course, and the new regime of government regulation, intrusion, and control over the economy is really still yet to be felt.

Arthur Laffer, in the Wall Street Journal, contemplates what government has done so far, and shudders at the consequences yet to come.

It’s difficult to estimate the magnitude of the inflationary and interest-rate consequences of the Fed’s actions because, frankly, we haven’t ever seen anything like this in the U.S. To date what’s happened is potentially far more inflationary than were the monetary policies of the 1970s, when the prime interest rate peaked at 21.5% and inflation peaked in the low double digits. Gold prices went from $35 per ounce to $850 per ounce, and the dollar collapsed on the foreign exchanges. It wasn’t a pretty picture.

When I was a small child, my parents, member of the WWII generation, were buying ordinary working class houses in prosperous places like California for $10 or $12 thousand dollars. An executive’s house might cost $25 thousand. In provincial low income locations like the small Pennsylvania town I lived in, you could buy a house for $5 or $6 thousand dollars.

Recently, when I was living in the Bay Area in California, I was appalled to find 1500 sq. ft. two bedroom, one bathroom, ranch houses on postage stamp lots, needing complete renovations, selling for half a million. In some fashionable communities out there, the worst house in town was selling for well over a million dollars.

How did this happen?

In the old days, mortgages did not grown on trees. Banks lent money grudgingly and only successful people with very stable jobs could obtain long-term financing. Ordinary people had to save the money to pay all cash or find a motivated seller willing to hold a mortgage for a few years. Of course, that meant you might get a five year mortgage if you were very lucky. More likely, you’d get three years. Nobody was going to give you 30 years financing.

Then along came the government. The federal government supplied the leverage which allowed idiots all over America to bid up prices of houses, offering to pay major chunks of their income for 30 years. And Voila! people a bit older than me who bought nice homes in booming areas for a few tens of thousands found the value of their investment multiplied astonishingly over a couple of decades. I know one executive couple from Bedford, NY, who often told me ruefully that, though they had worked hard and saved and invested all their lives, the only thing that ever earned them serious money was the decision to buy their house.

Of course, the windfall avalanche of gold that came to the lucky homeowner who purchased in the old days was really just a wealth transfer from members of a younger generation facilitated by our obliging uncle.

Younger people didn’t really mind backing up the pickup trucks full of dollars in the driveways of that older generation and pitchforking out the money, because they all believed the party would continue. Real estate prices would just keep on growing to the sky, and their own turn would come. Some fine day, members of a generation still younger would come along, this time with box car loads of dollars.

Pity that the music recently stopped. No more growth to the sky. No generational wealth transfer for you.

Steven Malanga, of City Journal, says that government-sponsored housing booms have happened several times before, always followed by busts. We’ve just forgotten, and you know what Santayana said: Those who fail to learn from history are condemned to repeat it.

I don’t think that it is only a belief that home ownership inspires the bourgeois virtues that causes government to subsidize housing. Housing subsidies serve large, deeply interested constituencies and are inevitably popular.

Human Events reports that the British Labour Party had managed to identify and serve the ultimate left constituency: the invertebrates.

But all this goes beyond jokes, liberal politicians in America, too, are working hand-in-glove with Animal Rights extremists to introduce covertly in the guise of animal welfare protection a range of artful provisions subjecting pet owners to warrant-free supervision by self-appointed animal guardians and erecting a regime of expensive and impractical care requirements that would eliminate private dog breeding and the keeping of packs of hounds.

Yes, it really is now a criminal offense in Britain to abuse an ant, a worm, a slug, cockroach, a scorpion, a stick insect or whatever creature you care to name. The moment you decide to keep it as a pet you are obliged by our Animal Welfare Act to take full account of its welfare needs — or face a $30,000 fine or a twelve-month prison sentence.

And if you think cockroach rights sound crazy, wait till you hear how the law applies to the way you keep your dog or your cat. The Department for Environment, Food and Rural Affairs (DEFRA) — one of the numerous, busybody branches of our socialist New Labour administration — recently issued guidelines to pet owners clarifying the law.

You risk prosecution if:

— You fail to groom your long-haired dog or cat once a day.

— You feed your dog from the table.

— You use your hands or feet when playing with your cat (as this may encourage aggressive behavior).

— You fail to provide every cat in your household with its own litter tray (even if the cat has access to a garden).

— You try to make your cat vegetarian by denying it meat.

None of these provisions is in itself a criminal offense, a DEFRA spokesman has explained helpfully. But failure to comply with several of them “may be used in evidence to support a prosecution for animal cruelty.”

Hat tip to the News Junkie.

A lot of Americans were delighted to hear that, once Barack Obama was elected, absolutely everyone would be getting exactly the same kind of health care enjoyed by US senators. If you believed that, you need to talk to me about this bridge I have for sale.

Today’s Daily Mail has a story illustrating how government-provided health services really work: by rationing.

Thousands of patients with terminal cancer were dealt a blow last night after a decision was made to deny them life prolonging drugs.

The Government’s rationing body said two drugs for advanced breast cancer and a rare form of stomach cancer were too expensive for the NHS.

The National Institute for Health and Clinical Excellence is expected to confirm guidance in the next few weeks that will effectively ban their use.

The move comes despite a pledge by Nice to be more flexible in giving life-extending drugs to terminally-ill cancer patients after a public outcry last year over ‘death sentence’ decisions. Leading campaigners last night said Nice had failed the ‘acid test’ of whether it really intended to give new priority to people with just a few months to live.

One drug, Lapatinib, can halve the speed of growth of breast cancer in one in five women with an aggressive form of the disease.

Dr Gillian Leng, Nice deputy chief executive, said ‘The committee concluded that Lapatinib is not a cost-effective use of NHS resources when compared with current treatment.’

Up to 1,500 stomach cancer patients also face a ban on Sutent – the only drug that can extend their lives.

Sent to my class list this morning in response to the contention that “government had to step in” because capitalism failed, because businessmen “made such a mess.”

Government created a credit crisis by arm-twisting lenders to make uncreditworthy loans while supplying securitization of the same. Government (at more than one level) additionally laid the groundwork for a housing bubble by forcing prices upward by making 30 year financing of home loans universal and easy to obtain and by creating regulatory environments that made building extremely expensive and nearly impossible in some of the housing markets featuring the greatest demand. Government lent people money to fuel bidding wars, while doing everything it could to keep new housing in short supply.

George W. Bush’s administration pursued simple-minded conventional policies attempting to placate the economy with characteristic timidity and inconsistency. Obama has taken the housing-bust induced recession as an excuse to throw funding at every democrat party special interest and constituency and to justify a power grab socializing large segments of the economy. Bush did not succeed in calming economic turmoil largely because he could not persuade the markets that he had not already lost the next election to a democrat party radical. Obama has, in a very short time in office, demonstrated that he isn’t simply a bloviating and benign big city machine crook, but is rather an extreme radical leftwing ideologue philosophically committed to every form of economic destruction. The economy is cratering as a result.

Former Senator Phil Gramm dispels with clarity and precision the liberal malarkey about deregulation being responsible for the credit crisis, and puts the blame where it belongs.

I believe that a strong case can be made that the financial crisis stemmed from a confluence of two factors. The first was the unintended consequences of a monetary policy, developed to combat inventory cycle recessions in the last half of the 20th century, that was not well suited to the speculative bubble recession of 2001. The second was the politicization of mortgage lending. …

In the inventory-cycle recessions experienced in the last half of the 20th century, involuntary build up of inventories produced retrenchment in the production chain. Workers were laid off and investment and consumption, including the housing sector, slumped.

In the 2001 recession, however, consumption and home building remained strong as investment collapsed. The Fed’s sharp, prolonged reduction in interest rates stimulated a housing market that was already booming — triggering six years of double-digit increases in housing prices during a period when the general inflation rate was low.

Buyers bought houses they couldn’t afford, believing they could refinance in the future and benefit from the ongoing appreciation. Lenders assumed that even if everything else went wrong, properties could still be sold for more than they cost and the loan could be repaid. This mentality permeated the market from the originator to the holder of securitized mortgages, from the rating agency to the financial regulator.

Meanwhile, mortgage lending was becoming increasingly politicized. Community Reinvestment Act (CRA) requirements led regulators to foster looser underwriting and encouraged the making of more and more marginal loans. Looser underwriting standards spread beyond subprime to the whole housing market. …

The 1992 Housing Bill set quotas or “targets” that Fannie and Freddie were to achieve in meeting the housing needs of low- and moderate-income Americans. In 1995 HUD raised the primary quota for low- and moderate-income housing loans from the 30% set by Congress in 1992 to 40% in 1996 and to 42% in 1997.

By the time the housing market collapsed, Fannie and Freddie faced three quotas. The first was for mortgages to individuals with below-average income, set at 56% of their overall mortgage holdings. The second targeted families with incomes at or below 60% of area median income, set at 27% of their holdings. The third targeted geographic areas deemed to be underserved, set at 35%.

The results? In 1994, 4.5% of the mortgage market was subprime and 31% of those subprime loans were securitized. By 2006, 20.1% of the entire mortgage market was subprime and 81% of those loans were securitized. The Congressional Budget Office now estimates that GSE losses will cost $240 billion in fiscal year 2009. If this crisis proves nothing else, it proves you cannot help people by lending them more money than they can pay back.

Blinded by the experience of the postwar period, where aggregate housing prices had never declined on an annual basis, and using the last 20 years as a measure of the norm, rating agencies and regulators viewed securitized mortgages, even subprime and undocumented Alt-A mortgages, as embodying little risk. It was not that regulators were not empowered; it was that they were not alarmed.

With near universal approval of regulators world-wide, these securities were injected into the arteries of the world’s financial system. When the bubble burst, the financial system lost the indispensable ingredients of confidence and trust. We all know the rest of the story.

The principal alternative to the politicization of mortgage lending and bad monetary policy as causes of the financial crisis is deregulation. How deregulation caused the crisis has never been specifically explained. Nevertheless, two laws are most often blamed: the Gramm-Leach-Bliley (GLB) Act of 1999 and the Commodity Futures Modernization Act of 2000.

GLB repealed part of the Great Depression era Glass-Steagall Act, and allowed banks, securities companies and insurance companies to affiliate under a Financial Services Holding Company. It seems clear that if GLB was the problem, the crisis would have been expected to have originated in Europe where they never had Glass-Steagall requirements to begin with. Also, the financial firms that failed in this crisis, like Lehman, were the least diversified and the ones that survived, like J.P. Morgan, were the most diversified.

Moreover, GLB didn’t deregulate anything. It established the Federal Reserve as a superregulator, overseeing all Financial Services Holding Companies. All activities of financial institutions continued to be regulated on a functional basis by the regulators that had regulated those activities prior to GLB.

When no evidence was ever presented to link GLB to the financial crisis — and when former President Bill Clinton gave a spirited defense of this law, which he signed — proponents of the deregulation thesis turned to the Commodity Futures Modernization Act (CFMA), and specifically to credit default swaps.

Yet it is amazing how well the market for credit default swaps has functioned during the financial crisis. That market has never lost liquidity and the default rate has been low, given the general state of the underlying assets. In any case, the CFMA did not deregulate credit default swaps. All swaps were given legal certainty by clarifying that swaps were not futures, but remained subject to regulation just as before based on who issued the swap and the nature of the underlying contracts.

In reality the financial “deregulation” of the last two decades has been greatly exaggerated. As the housing crisis mounted, financial regulators had more power, larger budgets and more personnel than ever. And yet, with the notable exception of Mr. Greenspan’s warning about the risk posed by the massive mortgage holdings of Fannie and Freddie, regulators seemed unalarmed as the crisis grew. There is absolutely no evidence that if financial regulators had had more resources or more authority that anything would have been different.

A must read analysis.

Tony Blankley looks at Barack Obama’s approach to governing, and finds it astonishingly passive and uninvolved. So far, Obama has seemed happy to preside as a sort of non-participant host to the orgy of looting and misrule by his party.

President Obama’s performance at the Gitmo executive order, provided brief but revealing insight into the president’s personal involvement in vital decision making. He had campaigned hard on closing Gitmo. His first public signing as president was that executive order to close it down. The central issue of Gitmo’s closing was and is: What do we do with the dangerous inmates? President Bush kept it open primarily because his administration couldn’t figure out an answer to that question.

Thus, it was breathtaking that at the signing ceremony, President Obama didn’t know how — or even whether — his executive order was dealing with this central quandary.

President Obama: “And we then provide, uh, the process whereby Guantanamo will be closed, uh, no later than one year from now. We will be, uh. … Is there a separate, uh, executive order, Greg, with respect to how we’re going to dispose of the detainees? Is that, uh, written?”

White House counsel Greg Craig: “We’ll set up a process.”

To be at the signing ceremony and not know what he was ordering done with the terrorist inmates is a level of ignorance about equivalent to being a groom at the altar in a wedding ceremony and asking who it is you are marrying.

Is it an epidemic? an earthquake? a fire? a flood? No, it’s Barack Obama’s inauguration.

Mark Steyn observes:

The proposition that a new federal administration is itself a federal emergency is almost too perfect an emblem of American government in the 21st century.

Mencius Moldbug, most prolix of bloggers, goes on at great length, but is still often worth a read.

The mysterious Moldbug, it has been learned, is a 1992 Brown graduate who majored in Computer Science. Further details here.

In this alleged introduction to his blog, Moldbug accurately identifies the enemy (complete with whimsical H.P. Lovecraft allusions).

[I]n post-1945 America, the source of all new ideas is the university. Ideas check out of the university, but they hardly ever check in. Thence, they flow outward to the other arms of the educational system as a whole: the mainstream media and the public schools. Eventually they become our old friend, “public opinion.” This process is slow, happening on a generational scale, and thus the 45-year lag.

Thus whatever coordinates the university system coordinates the state, through the transmission device of “public opinion.” Naturally, since this is 100% effective, the state does not have to wait for the transmission to complete. It can act in advance of a complete response, as in this case the Supreme Court did in 1967, and synchronize directly with the universities.

This relationship, whose widespread practice in the United States dates to 1933, is known as public policy. Essentially, for everything your government does, there is a university department full of professors who can, and do, tell it what to do. Civil servants and Congressional staffers follow the technical lead of the universities. The residual democratic branch of Washington, the White House, can sometimes push back feebly, but only with great difficulty. …

There are a few brief periods of true reaction in American history – the post-Reconstruction era or Redemption, the Return to Normalcy of Harding, and a couple of others. But they are unusual and feeble compared to the great leftward shift. Nor, most important for our hypothesis, did they come from the universities; in the 20th century, periods of reaction are always periods of anti-university activity. (McCarthyism is especially noticeable as such. And you’ll note that McCarthy didn’t exactly win.)

The principle applies even in wars. In each of the following conflicts in Anglo-American history, you see a victory of left over right: the English Civil War, the so-called “Glorious Revolution,” the American Revolution, the American Civil War, World War I, and World War II. Clearly, if you want to be on the winning team, you want to start on the left side of the field.

And we are starting to piece the puzzle together. The leftward direction is, itself, the principle of organization. In a two-party democratic system, with Whigs and Tories, Democrats and Republicans, etc, the intelligentsia is always Whig. Their party is simply the party of those who want to get ahead. It is the party of celebrities, the ultra-rich, the great and good, the flexible of conscience. Tories are always misfits, losers, or just plain stupid – sometimes all three.

And the left is the party of the educational organs, at whose head is the press and universities. This is our 20th-century version of the established church. Here at UR, we sometimes call it the Cathedral – although it is essential to note that, unlike an ordinary organization, it has no central administrator. No, this will not make it easier to deal with. …

Whatever you make of the left-right axis, you have to admit that there exists some force which has been pulling the Anglo-American political system leftward for at least the last three centuries. Whatever this unfathomable stellar emanation may be, it has gotten us from the Stuarts to Barack Obama. Personally, I would like a refund. But that’s just me. …

intellectuals cluster to the left, generally adopting as a social norm the principle of pas d’ennemis a gauche, pas d’amis a droit, because like everyone else they are drawn to power. The left is chaos and anarchy, and the more anarchy you have, the more power there is to go around. The more orderly a system is, the fewer people get to issue orders. The same asymmetry is why corporations and the military, whose system of hierarchical executive authority is inherently orderly, cluster to the right.

Once the cluster exists, however, it works by any means necessary. The reverence of anarchy is a mindset in which an essentially Machiavellian, tribal model of power flourishes. To the bishops of the Cathedral, anything that strengthens their influence is a good thing, and vice versa. The analysis is completely reflexive, far below the conscious level. Consider this comparison of the coverage between the regime of Pinochet and that of Castro. Despite atrocities that are comparable at most – not to mention a much better record in providing responsible and effective government – Pinochet receives the full-out two-minute hate, whereas the treatment of Castro tends to have, at most, a gentle and wistful disapproval. …

[T]he problem is not just that our present system of government – which might be described succinctly as an atheistic theocracy – is accidentally similar to Puritan Massachusetts. As anatomists put it, these structures are not just analogous. They are homologous. This architecture of government – theocracy secured through democratic means – is a single continuous thread in American history.

Business Week’s Steve Hamm says the problem is greedy investors’ short term thinking and aversion to risk, and those stingy VCs should start funding “bold new directions” while waiting for Uncle Obama to open up the federal tap.

Hamm’s article lit the fuse of Michael S. Malone at Live from Silicon Valley.

Since Steve Hamm and Business Week aren’t willing to give you anything but their own big government/big business solutions to the perceived crisis, let me give you the real story – and real solutions – from somebody who has been on the ground here in Silicon Valley for 45 years:

Yes, Silicon Valley – and by extension, the U.S. high technology industry, is in something of a crisis right now. Part of it is the fact that, as the largest manufacturing sector in the US economy, electronics is not immune to the larger financial crisis currently impacting the world.

But there a lot of other problems as well. For one thing, the venture capital industry is in real trouble – not because of a lack of courage, but because government interference – most notably, Sarbanes-Oxley – has proven almost fatal to the new company creation process. With almost no potential for a big pay-out on the back end (because companies don’t ‘go public’ any more), VC’s are having to be much tighter on the front end. That’s good business, not gutlessness.

As for the entrepreneurs themselves, to charge them with a lack of courage or character is truly insulting. Instead of hob-nobbing with senior executives, Steve should have called me. I would have taken him to the little Peet’s Coffee shop in nearby Cupertino where I get my lattes twice per day. There, I would have shown him that on any given day you can see at least two entrepreneurial teams – a half-dozen guys huddled over a single laptop editing spreadsheets – almost always different, and all dreaming of starting the Next Big Company. There are hundreds of these start-up teams all over the Valley right now – indeed, I think there is more entrepreneurial fervor going on right now than just about any other time in Valley history.

Are these folks thinking small? Are they short on courage? No, what they are is pragmatic. That’s the essence of being an entrepreneur. They know what the business landscape is out there, and they are adjusting their plans to succeed in that new reality.

No, the problem is not that entrepreneurs and investors in Silicon Valley and the rest of high tech aren’t thinking big, it’s that they aren’t being allowed to. If Business Week would just take off its ideological blinders, it would realize that if Washington really wanted to help a sick Silicon Valley, it would get out of the way, and strip away all of those worthless regulations that are inhibiting the imagination and the creativity of this town.