The innovation incubators

[Whereisup]

Most of you have probably read or seen reports on the new innovation incubators which provide space for people starting new businesses, provide them with advice, and get them to interact with and help each other.

This is one of the major creative new developments in American history. Of those new small businesses which make a product, some will grow into larger companies, and so replace American jobs which have been exported. There aren't enough of these incubators at the moment, but new ones are being set up every year.

The Obama administration has also stepped in with some changes in regulations to help people develop their new small businesses. For example, banks tend to refuse to lend money to new start-up businesses, which is rather unpatriotic of the banks due to the great value to America that start-up businesses are, and can be in the future.

To help correct that, the Obama administration has changed regulations so that now, small businesses are allowed to raise money directly from the public when banks refuse to help. Since this is beneficial for America, and basically nonpartisan, I would guess that Republicans will continue to allow small businesses to do this when they next come into power.

Jim

 

[Mr. H.]

Kickstarter has also helped a lot of businesses/ventures get off the ground.

 

[Whereisup]

Kickstarter has also helped a lot of businesses/ventures get off the ground.

We need to do more of everything which works.

Jim

 

[expat_panama]

...Obama administration has also stepped in with some changes in regulations to help people develop their new small businesses...

Let's look at this together (from here):

In 2005 alone, North American incubation programs assisted more than 27,000 companies that provided employment for more than 100,000 workers and generated annual revenues of $17 billion.*

*Linda Knopp, 2006 State of the Business Incubation Industry. Athens, Ohio: National Business Incubation Association, 2007.[3]​

​

Back then the policy was for private groups to pool resources and foster economic activity. Now the idea is when people (like Joe the plumber) raise money to start a business, the government confiscates the start up money to-- [ame=http://www.youtube.com/watch?v=BRPbCSSXyp0]Meet Joe Plumber/ Obama talks to Joe Plumber (FULL VIDEO) - YouTube[/ame] --spread the wealth around. This kills jobs. Since the Joe/plumber conversation, ten million Americans aged 15-65 years have lost their jobs.

...banks tend to refuse to lend money to new start-up businesses, which is rather unpatriotic of the banks...

Ten years ago the call was for banks to ignore risks and make more loans to minorities. Five years later with a major economic collapse following the resulting massive debt failure, banks were accused to 'predatory lending' to those with bad ratings.

Careful lending is not 'unpatriotic'.

 

[Whereisup]

...Obama administration has also stepped in with some changes in regulations to help people develop their new small businesses...

Let's look at this together (from here):

In 2005 alone, North American incubation programs assisted more than 27,000 companies that provided employment for more than 100,000 workers and generated annual revenues of $17 billion.*

*Linda Knopp, 2006 State of the Business Incubation Industry. Athens, Ohio: National Business Incubation Association, 2007.[3]​

​

Back then the policy was for private groups to pool resources and foster economic activity. Now the idea is when people (like Joe the plumber) raise money to start a business, the government confiscates the start up money to-- [ame=http://www.youtube.com/watch?v=BRPbCSSXyp0]Meet Joe Plumber/ Obama talks to Joe Plumber (FULL VIDEO) - YouTube[/ame] --spread the wealth around. This kills jobs. Since the Joe/plumber conversation, ten million Americans aged 15-65 years have lost their jobs.

...banks tend to refuse to lend money to new start-up businesses, which is rather unpatriotic of the banks...

Ten years ago the call was for banks to ignore risks and make more loans to minorities. Five years later with a major economic collapse following the resulting massive debt failure, banks were accused to 'predatory lending' to those with bad ratings.

Careful lending is not 'unpatriotic'.

1:There is a major difference in in the effect on the economy between lending money for a house and lending money for a business start-up. When the economy is in danger, everyone is obligated to help. If everyone helps, then there is no need for government action. For free enterprise to work, people must be responsible.

2: Pressure to lend to minorities was not the cause of the crisis. The cause of the crisis was banks acting in a criminal way. They made bad loans so that they could deliberately put together mortgage bundles guaranteed to fail so that people on the inside could purchase credit default swaps as sure thing high return investments. This was a scam that almost destroyed the American economy and the world economy.

A credit default swap is essentially an insurance policy on an investment. If the investment fails, the credit default swap pays the holder for the loss.

A really clever and diabolical aspect of credit default swaps was that many people could buy credit default swaps on the same investment. So if the investment failed, all the people with credit default swaps on the investments who didn't own the investment were paid the amount of the investment also.

Then, the clever and diabolical banks started putting together mortgage bundles guaranteed to fail. With a mortgage bundle guaranteed to fail, it would fail and everyone with a credit default swap on that mortgage bundle would be paid.The banks then told insiders which mortgage bundles were guaranteed to fail, so that those insiders could buy credit default swaps on those bundles.

Soon, the mortgage bundles guaranteed to fail began to fail, and soon, the issuers of the credit default swaps, like AIG, owed much more money to the holders of credit default swaps than they could pay. In one article, it was said that there were several hundred trillion dollars in credit default swaps outstanding. Uncorrected, this would have destroyed the American and world economy. Some people made about a billion dollars from their credit default swaps, although if the economy had collapsed, their profits might well have been greatly reduced.

The Bush administration developed a plan to deal with this. Bad mortgages would bought from many mortgage bundles, so the bundles didn't fail after all as the banks had promised they would fail. Also, some bail-outs were needed. Obama continued the Bush plan, and the economy was saved, barely. So both presidents deserve credit for the save.

Jim

 

[flacaltenn]

Whereisup---

Great thread. Americas headed farther down without capital flowing to innovation. But you spun out in the weeds going after Bush and believing its the banks that innovators turn to..

Spent 15 years in Silicon Valley and the BANKS were not in picture until you had an income stream. They dont FUND ideas and they dont want to be partners in business. That idea ended with Jimmy Stuart.

ExPatPanama summarized part of the reason the Govt is in the way of capital being risked on the innovation that America needs to survive. But they also need to get the message that making special exemptions to onerous regulation is a sham. Because regulation favors ALWAYS the large and the arthritic Corps. That need to have their socks blown off by the newbies.

An entreprenuer should never seek money from sources who dont understand the concepts or visions.
There should be an enthusiasm about the development and a sense investment. Not just a loan. Thats what GOOD incubators provide.

 

[expat_panama]

...Obama administration has also stepped in with some changes in regulations to help people develop their new small businesses...

In 2005 alone, North American incubation programs assisted more than 27,000 companies that provided employment for more than 100,000 workers and generated annual revenues of $17 billion...

Back then the policy was for private groups to pool resources and foster economic activity. Now the idea is when people (like Joe the plumber) raise money to start a business, the government confiscates the start up money to spread the wealth around. This kills jobs. Since the Joe/plumber conversation, ten million Americans aged 15-65 years have lost their jobs.

...banks tend to refuse to lend money to new start-up businesses, which is rather unpatriotic of the banks...

Ten years ago the call was for banks to ignore risks and make more loans to minorities. Five years later with a major economic collapse following the resulting massive debt failure, banks were accused to 'predatory lending' to those with bad ratings. ...

...There is a major difference in in the effect on the economy between lending money for a house and lending money for a business start-up...

That's true, and at the same time having the State force private banks to ignore risks increases defaults and afterward acussing the banks of 'predatory lending' is a mindless gimick for placing blame on banks that should have been borne by the State.

...Pressure to lend to minorities was not the cause of the crisis. The cause of the crisis was banks acting in a criminal way...

While that opinion may or may not be true what we know for sure is that forcing banks to accept excessive risks was followed by defaults which was then followed by a massive economic contraction. Thirteen trillion dollars in wealth was lost and and ten million workers lost their jobs. Sure, those losses are fun to imagine in some comic book about an evil nefarious conspiracy, but they never showed up in any real life arrest warrant or pretrial hearing.

Off topic comic books and Bush-bashing aside, this thread is supposed to be about innovation incubators. We know they did well in '05. That year the average unemployment rate was 5%. If we want to look at changes made by the current administration then we have to understand that the average unemployment rate for the past five years has been 9%.

 

[william the wie]

I concur expat.

 

[Whereisup]

Whereisup---

Great thread. Americas headed farther down without capital flowing to innovation. But you spun out in the weeds going after Bush and believing its the banks that innovators turn to..

Spent 15 years in Silicon Valley and the BANKS were not in picture until you had an income stream. They dont FUND ideas and they dont want to be partners in business. That idea ended with Jimmy Stuart.

It's normal to miss points in what one reads, and I do it too.

Note that I did not go after Bush. Rather, I praised Bush for having been part of the Bush-Obama actions to save the American and world economy. In the media, neither Bush nor Obama are given credit for the skillful thing they did. That might be the reason you didn't see the point. I am talking about the facts, not the media spin.

What the save of the American economy shows is that there is much really HIGH LEVEL skill in the government. Saving the economy from criminal actions involving several hundred trillion dollars was a really major accomplishment, and much more of an accomplishment than the public knows. In all of history, there has never been that much criminal action at the top of the economy, compared with Gross Domestic Products. We still have some serious problems, but with that much skill, the government might be able to resolve them.

I try to develop ideas from time to time, some of which might be useful. I don't run a political movement, so I don't expect the ideas to reach the public. However, it is my hope that the intelligence agacies might notice what I have been saying these last few years, and will pass the ideas on to groups of experts in the goverment for their evaluation.

My point about the banks is that if they are so willing to do risiky loans on real estate, they should be willing to do riskly loans to get new businesses started. I am sort of using something from ancient Athens. In ancient Athens, each wealthy person was required to build and maintain one warship. This is of course not something we usually see in history, but the American economy is in deep long term trouble.

Of ccourse, there are the venture capitalists who give start-up businesses start up funding in return for part ownership in the new businessrs. This has worked well at times. The only problem I see is that we're not developing new start-up manufacturing businesses quickly enough. We need to develop many more new small manufacturing companies per decade than we are doing now.

Jim

 

[Whereisup]

Back then the policy was for private groups to pool resources and foster economic activity. Now the idea is when people .

That's true, and at the same time having the State force private banks to ignore risks increases defaults and afterward acussing the banks of 'predatory lending' is a mindless gimick for placing blame on banks that should have been borne by the State.

...Pressure to lend to minorities was not the cause of the crisis. The cause of the crisis was banks acting in a criminal way...

While that opinion may or may not be true what we know for sure is that forcing banks to accept excessive risks was followed by defaults which was then followed by a massive economic contraction. Thirteen trillion dollars in wealth was lost and and ten million workers lost their jobs. Sure, those losses are fun to imagine in some comic book about an evil nefarious conspiracy, but they never showed up in any real life arrest warrant or pretrial hearing.[/QUOTR]

Now that we have recovered enough that it wouldn't panic the public to know what was going on, the government is beginning to charge bank executives with having sold mortgage bundles they knew would fail. So your information on no action by the government is wrong. During the crisis, all the information was available in news reports, including the Wall Street Journal, but different parts of this were scattered through different articles so that the public wouldn't realize exactly what was going on. The public would have begun to act in a panic, and made the crisis worse. If you want to go back and research this, you will find the material. This is not a comic book thing.

The banks were not forced to make risky loans. The government was only pressuring the banks not to discriminate, and to give loans to minorities if the minorities could objectively handle the loans.

The defaults caused by people losing their jobs was not part of the risky loans. That was an unexpected economic crisis.

Some of the risky loans were made so that the banks would have risky loans to put into their mortgage bundles guaranteed to fail, so that their friends and relatives could make millions up to a billion dollars or more from credit default swaps on loans guaranteed to fail. Many people gained great wealth, and many became billionaires, but I don't know exactly how many.

Other loans were risky because banks were manipulating their customers in a way which is history is called "debt slavery". In debt slavery, a lender gets people into too much debt for them to repay, and then can collect steady interest for a very long period of time. In places like Roman Empire, many debt slaves had to sell their children into full slavery in order to make their payments.

The banks did this by giving variable rate loans, and then raising the interest rates and payments far beyond what the borrower thought they would be.

Jim

 

[expat_panama]

...normal to miss points in what one reads, and I do it too. Note that I did not go after Bush. Rather, I praised Bush...

Excellent point, and it's glad to know we're all normal here too.

...My point about the banks is that if they are so willing to do risiky loans on real estate, they should be willing to do riskly loans to get new businesses started...

That's just it, they weren't willing to make those risky loans on real estate because they knew it would cost them. What happened is back in 1995 the Community Reinvestment Act was revised to "put added pressure on banks to lend in low-income neighborhoods" that became entangled in --and many say was the principle cause of-- the '08 crisis.

Bank management, philanthropy, and venture funding are three separate roles that individuals can play in the market place. Each has distinct goals and strategies and confusing these functions usually leads to heartache.

 

[flacaltenn]

Whereisup---

Great thread. Americas headed farther down without capital flowing to innovation. But you spun out in the weeds going after Bush and believing its the banks that innovators turn to..

Spent 15 years in Silicon Valley and the BANKS were not in picture until you had an income stream. They dont FUND ideas and they dont want to be partners in business. That idea ended with Jimmy Stuart.

It's normal to miss points in what one reads, and I do it too.

Note that I did not go after Bush. Rather, I praised Bush for having been part of the Bush-Obama actions to save the American and world economy. In the media, neither Bush nor Obama are given credit for the skillful thing they did. That might be the reason you didn't see the point. I am talking about the facts, not the media spin.

What the save of the American economy shows is that there is much really HIGH LEVEL skill in the government. Saving the economy from criminal actions involving several hundred trillion dollars was a really major accomplishment, and much more of an accomplishment than the public knows. In all of history, there has never been that much criminal action at the top of the economy, compared with Gross Domestic Products. We still have some serious problems, but with that much skill, the government might be able to resolve them.

I try to develop ideas from time to time, some of which might be useful. I don't run a political movement, so I don't expect the ideas to reach the public. However, it is my hope that the intelligence agacies might notice what I have been saying these last few years, and will pass the ideas on to groups of experts in the goverment for their evaluation.

My point about the banks is that if they are so willing to do risiky loans on real estate, they should be willing to do riskly loans to get new businesses started. I am sort of using something from ancient Athens. In ancient Athens, each wealthy person was required to build and maintain one warship. This is of course not something we usually see in history, but the American economy is in deep long term trouble.

Of ccourse, there are the venture capitalists who give start-up businesses start up funding in return for part ownership in the new businessrs. This has worked well at times. The only problem I see is that we're not developing new start-up manufacturing businesses quickly enough. We need to develop many more new small manufacturing companies per decade than we are doing now.

Jim

Its a real shame .. Because the thread was on a hiway to identifying the KEY COMPONENT for American economic salvation. And you turned off into the banking ditch and then hijacked your own rescue mission into a cave where even the GPS doesn't shine in order to fantasize about the omniscent SKILL of govt to RESCUE us from the evil-doers..

Government FAVORS the evil-doing large multi-nationals to the detriment of free market attempts to get capital to the places where innovation strives to stay alive. And I'm really not impressed by your beliefs and missed estimates of the wisdom, competence, and skill of GOVT to get that job done. Or their feeble atttempts to write special wavers AROUND the barriers that they place in the path of progress...

 

[william the wie]

...normal to miss points in what one reads, and I do it too. Note that I did not go after Bush. Rather, I praised Bush...

Excellent point, and it's glad to know we're all normal here too.

...My point about the banks is that if they are so willing to do risiky loans on real estate, they should be willing to do riskly loans to get new businesses started...

That's just it, they weren't willing to make those risky loans on real estate because they knew it would cost them. What happened is back in 1995 the Community Reinvestment Act was revised to "put added pressure on banks to lend in low-income neighborhoods" that became entangled in --and many say was the principle cause of-- the '08 crisis.

Bank management, philanthropy, and venture funding are three separate roles that individuals can play in the market place. Each has distinct goals and strategies and confusing these functions usually leads to heartache.

This is also why no bankers have gone to jail for the meltdown for fear of the defense you just gave.

 

[expat_panama]

...Government FAVORS the evil-doing large multi-nationals to the detriment of free market attempts to get capital to the places where innovation strives to stay alive...

We hear that a lot on these threads, though specifics are harder to come by. The thing is that the use of corporations (whether local or 'multi-national') is how most free people participate in the marketplace, and while many here are at war with humanity I personally like people and don't consider my fellow human beings as 'evil'.

Just the same, for the past half dozen years many Americans have bought into a pathology of hatred for success. So when we vote for leaders that say they won't do favors for fatcat investment bankers, we shouldn't be surprised when investment capital runs and hides.

 

[jasonnfree]

Back then the policy was for private groups to pool resources and foster economic activity. Now the idea is when people (like Joe the plumber) raise money to start a business, the government confiscates the start up money to spread the wealth around. This kills jobs. Since the Joe/plumber conversation, ten million Americans aged 15-65 years have lost their jobs.Ten years ago the call was for banks to ignore risks and make more loans to minorities. Five years later with a major economic collapse following the resulting massive debt failure, banks were accused to 'predatory lending' to those with bad ratings. ...

...There is a major difference in in the effect on the economy between lending money for a house and lending money for a business start-up...

That's true, and at the same time having the State force private banks to ignore risks increases defaults and afterward acussing the banks of 'predatory lending' is a mindless gimick for placing blame on banks that should have been borne by the State.

...Pressure to lend to minorities was not the cause of the crisis. The cause of the crisis was banks acting in a criminal way...

While that opinion may or may not be true what we know for sure is that forcing banks to accept excessive risks was followed by defaults which was then followed by a massive economic contraction. Thirteen trillion dollars in wealth was lost and and ten million workers lost their jobs. Sure, those losses are fun to imagine in some comic book about an evil nefarious conspiracy, but they never showed up in any real life arrest warrant or pretrial hearing.

Off topic comic books and Bush-bashing aside, this thread is supposed to be about innovation incubators. We know they did well in '05. That year the average unemployment rate was 5%. If we want to look at changes made by the current administration then we have to understand that the average unemployment rate for the past five years has been 9%.

You're saying the government forced banks and lenders to loan to flakes?

 

[flacaltenn]

...Government FAVORS the evil-doing large multi-nationals to the detriment of free market attempts to get capital to the places where innovation strives to stay alive...

We hear that a lot on these threads, though specifics are harder to come by. The thing is that the use of corporations (whether local or 'multi-national') is how most free people participate in the marketplace, and while many here are at war with humanity I personally like people and don't consider my fellow human beings as 'evil'.

Just the same, for the past half dozen years many Americans have bought into a pathology of hatred for success. So when we vote for leaders that say they won't do favors for fatcat investment bankers, we shouldn't be surprised when investment capital runs and hides.

But I wasn't talking about the construct of corporations. I was referring to SIZE AND MATURITY of the venture. Those with armies of lawyers and compliance officers and lobbyists run THROUGH the regulation hoops and even assist in creating them.

As big a fan as I am of free market Capitalism (i have the certificate ! ), I realize that MOST regulation has the intentional or unintentional consequence of increasing the infant mortality and COST of innovative young startups.. And that -- is not helpful to our national free-fall into technological irrelevence..

 

[expat_panama]

...You're saying the government forced banks and lenders to loan to flakes?

There's a lot of controversy on that and I can respect much of the evidence to that affect. That's not the issue. What we're talking about here is the fact that banks don't want to loan their deposits to flakes, and governments should never force banks to make such loans --even if Whereisup thinks turning down the flaky borrowers is

...rather unpatriotic of the banks...

 

[jasonnfree]

...You're saying the government forced banks and lenders to loan to flakes?

There's a lot of controversy on that and I can respect much of the evidence to that affect. That's not the issue. What we're talking about here is the fact that banks don't want to loan their deposits to flakes, and governments should never force banks to make such loans --even if Whereisup thinks turning down the flaky borrowers is

...rather unpatriotic of the banks...

But this is what I was getting at because I don't believe any banks or other lenders were ever forced to loan money. I think they were getting while the getting was good and they knew the loans would be bundled in packages and sold soon thereafter. I've had dealings with banks in several real estate and business transactions and I wouldn't put it past them and nobody went to jail that I know of but then I could be wrong.

 

[william the wie]

...You're saying the government forced banks and lenders to loan to flakes?

There's a lot of controversy on that and I can respect much of the evidence to that affect. That's not the issue. What we're talking about here is the fact that banks don't want to loan their deposits to flakes, and governments should never force banks to make such loans --even if Whereisup thinks turning down the flaky borrowers is

...rather unpatriotic of the banks...

But this is what I was getting at because I don't believe any banks or other lenders were ever forced to loan money. I think they were getting while the getting was good and they knew the loans would be bundled in packages and sold soon thereafter. I've had dealings with banks in several real estate and business transactions and I wouldn't put it past them and nobody went to jail that I know of but then I could be wrong.

The smart money is that the bankers can produce documents that demonstrate political arm twisting and blackmail. They don't have to produce records that they bribed the wrong party to get the bailout because that is a matter of at least partial public record.

Two rather prominent Ds were effectively forced out of congress, Frank and Dodd, for more or less openly accepted bribes that could be and were reconstructed from their tax returns. I think Holder and his minions would hesitate to put any banker on the stand.

 

[expat_panama]

... don't believe any banks or other lenders were ever forced to loan money. I think they were getting while the getting was good ...

--and if you want we could highjack this thread into an anti-banker bash. I'd bet this would please the loopy left wingers here that want to divert attention away from the fact that current public policies --which include those for 'innovation incubation'-- have gotten us massive wealth destruction and horrific unemployment.