Hillary Clinton is on to something but she's not thinking big enough.
On Wednesday, the Democratic presidential nominee wannabe issued another one of those insufferably boring candidate white papers on how she would improve the country as its 43rd president. The main news? Clinton wants to spend $7 billion to promote what she terms an "insourcing" agenda, offering a package of tax incentives and investments to companies that create jobs in America.
OK, nothing wrong with a little pork barrel action this time of the campaign season. And some of the ideas are not half-bad: So, for example, she favors:
At least 15 new "Innovation and Research Clusters" across the country
New "Insourcing Markets Tax Credit" to spur business investment communities facing global competition
$500 million annual investments to encourage the creation of high-wage jobs in clean energy manufacturing technologies
An increase in the existing R&D credit by 50% and the creation of a new 40% R&D credit for basic research
On the flip side, Clinton would end tax incentives that allow companies to ship jobs and capital overseas. She also wants to end the practice that lets companies defer paying U.S. taxes on income earned by their foreign subsidiaries. But the reforms offered by Clinton, Obama, and McCain are primarily focused on big companies. It's a page out of the Willie Sutton handbook of political nose-counting: you suck up to the places where the most votes are.
Apart from the big companies, however, the start-ups and entrepreneurs that provide the tech industry with its lifeblood must wonder why they don't get included in the conversation. It's not as if they can't use the help. With the VCs spooked by an increasingly gruesome economy, the days of easy money are over.
More venture capitalists are taking a magnifying glass to deals they previously would have funded. You want a new round of cash? Assume the position.
In the first three months of 2008, the number of VC-backed mergers and acquisitions f ell to an all-time quarterly low for the decade
The pace of VC investment in Web 2.0 companies has begun to decline. Might 2008 be the make-or-break year for many advertising-based start-ups?
I don't buy the end-of-the-world scenario that another mega-bust is on the horizon. Still, these are turbulent times and start-ups will get knocked around a bit before things calm down. Instead of being forced into ridiculous choices between political camps, they have more issues to attend to. Such as how to survive when times get tough. And they could use friends in high places--that is, assuming the folks in Washington will pay attention.