Slashdot Mirror
Will a Tighter Economy Rein In Startups?
Nerval's Lobster writes: It's been quite a ride for the stock market this week. In China, markets cratered; in the U.S., stocks dove for two days, only to rebound on Wednesday. That made many tech firms nervous, both about the Chinese economy (which some of them depend upon) and the continuing flow of money from VCs and investors. While the economic jitters don't seem to be affecting some tech firms' ability to implode themselves, more than one pundit is wondering whether the tech industry will shift into 'fear mode,' which could be bad for the so-called 'unicorns' that need funders to keep partying like it's 1999. Are we going to see money start drying up for startups?
Actually no. That's the problem. The rich do not spend their money. Money being spent makes the economy go. That is why giving economic stimulus to less well of people helps the economy--they spend it. The rich do exactly the economic equivalent of keeping it in a mattress. Sure some don't but most do.
Therefore economic stimulus that benefits the stock market has only a very marginal effect on the real world economy most people live in. Of course conservative leaders know this, which is why that's their favorite kind of stimulus.
So no, you're wrong. Rich people are bad for poor people. What's good for Wall Street was only coincidentally good for Main Street back in the days when we didn't have insane trade policies, when we had effective tariffs, and a government that actually didn't wage economic war on workers all the time.
A prosperous economy is always good for Wall Street and everyone else, but what's going in now is theft from everyone who's not rich in favor of those who are, and this is not a prosperous economy.
On the bright side, if VC funding dries up for silicon valley we can finally stop having to put up with idiotic startups, 20 something "CEOs", and their latest smartphone app that's going to change the world that nobody gives a crap about.