Over the past two days, I've heard Obama tell the American public that they don't have a clue what a default will do to the government and that he can't guarantee SS checks go out on August 3rd without a deal.

Fear mongering and insulting the intelligence of the public. I thought this was the 'change' president?

Does it matter that both of those statements are true?

Not a good week for the Republicans. They're starting to break on the debt ceiling, as the Tea Party-types have basically guaranteed that no plan can pass the House, so either they twist enough arms that whatever passes is going to be Democrat sponsored (and thus not going to save the country anything), everyone's beginning to snipe at each other..

and then today, President Obama announces he's raised $86 million for re-election, which is more than the entire republican field.

Businesses have been leaving California in droves since at least 2004/2005. Old news.

Except that it has accelerated the past two years and since 2004/2005, California has been ranked last in business climate. It may be old news but it has gotten worse.

And the thing is, unless I've missed it, I haven't heard anything on what's going to be done about it.

It will really have a big impact when a big-time company decides to pull up their headquarters and a key base of employees.

And yet, from a startup perspective, no one does anything in ... oh... Alabama. Out here in the Bay Area, startups are having a grand time - there's no recession out here.

I'm pretty sure California has the highest unemployment rate for a state. The Amazon Tax they passed which will not bring in any revenue will cost the state a lot of jobs too.

This game of chicken is getting old too. Sit in a room and make a fucking deal that makes sense. Enough with the political posturing. I can't believe we're even sitting here arguing about defaulting on our debt.

Yeah, California still has the talent base which is conducive to technology startups. And in my experience, most of that talent base tends to be more socially liberal, which means there isn't a host of people there wishing they lived in Alabama (for instance), so that concept is not even explored very far.

It's a (very) slow process really. One large company relocates at some point(or expands an existing office in say, Atlanta)...brings some of the talent with it...then supporting/affiliated companies follow or sprout up to work with them. Then they close offices in the less friendly area (or reduce to very small presence). This is why businesses have offices all over the place...it's to hedge not only the talent bases in important areas, but also to hold as leverage against local governments that might not be as favorable in the future.

Sure, but according to CNN Money, next-door Georgia is tied with Nevada with the highest startup rate in the country.

I don't think it has nothing to do with being "socially liberal". It has to do with being the No. 1 cluster for tech and where the financial capital is (VCs). It's like people who want to be in the entertainment industry. You go to LA. That's where the action is at.

If Alabama was home to "Silicon Valley", people would still flock their regardless of political views. Austin is becoming a tech hub. So is the Research Triangle.

Yep. People sit on here and say that it's all about the money but then are shocked when a company would leave California for a place with much lower taxes. Sorry either the rich are greedy or they aren't can't frame your arguement both ways.

Good lord. Does Obama seriously have to hold all these 'we're in panic mode' news conferences during 'The Price is Right' every single time? I've lost four episodes of happiness production in exchange for Obama telling me about 500+ politicians who can't act like grown adults, himself included. I'll be glad when the faux panic is over.

Right...but its a chicken or egg thing. And my point is that because the talent trends more socially liberal(obviously not everybody is), they aren't exactly sitting around in a socially conservative area awaiting the arrival of business. It's a slow process of attrition, in other words.

VCs go where talent to innovate is located. Talent groups together where businesses are located but businesses also want talent bases to pull from. So, while I agree that businesses will migrate to more business friendly environments, the fact is the high tech talent is located where they exist already. So, its a bit like...one large business locates to the area, then another couple of supporting businesses, then other business relocates, etc. But it isn't a quick process primarily because the extent of (high caliber) talent base doesn't exist in the more business friendly environment.

I think we're saying something similar, but for 2 different reasons.

Hmm ... that started me pondering this a little more.

Do VC's really "go" anywhere? Or do they simply travel as needed to find marketable/profitable talent?

What I'm trying to get at is this vague notion that struck me that "money" at the serious VC level seems to be wherever it is and operates from that spot. We're mobile enough now that it doesn't have to cluster itself except to the extent that it was already in certain places (mostly CA & NY). The VC's don't have to be where the talent is, nor where the businesses ultimately end up. And aren't most VC's largely hands-off anyway, i.e. they aren't involved in operations except to the extent of being the controlling hand behind the curtain?

Not sure I'm explaining my thought very well, maybe I managed to get it across though.

While you are right with the money, Jon, it is a lot easier to build your company in the valley. I know of at least 3 startups founded by college classmates here in Boston that moved to SF solely because it's easier to get funding out there.

I think that kind of helps me crystalize what I was trying to say with less clarity before.

Talent goes where the money is ... but that doesn't necessarily = the money being where the talent is to begin with. It really goes back to what SteveMax said about "chicken & egg" I think, I may just be looking at a different chicken & egg.

Looks like the crisis is coming even if they raise the debt ceiling if they don't also fix the deficit issues, as several of us mentioned when being chastised for being okay with the crisis hitting now since it was coming anyway if they don't drastically change the way things are done:

U.S. credit: Raising the ceiling isn't enough - Jul. 15, 2011

There is another option. If the GOP would agree to raising some taxes they could get a deficit reduction package worth over 4 trillion. We don't have to have a crisis.

Raising taxes one iota more IS a crisis as far as many Americans are concerned.
Needs to become the new "third rail" of politics at every level.

I think I'm in agreement that the VC isn't necessarily "living" or necessarily located in the location where the talent resides...only that it is where the VC will most typically associate funding a tech startup (for instance). No different than that same VC will go to a more traditional (i.e. rural) location to invest in a farming opportunity for the next cash-crop (if inclined to invest in such things).

By contrast...if you told the VC you were starting a new tech startup in Sebastian, FL (example...just trying to not pick on Alabama all the time) because the business climate is favorable...the VC is not likely to see your talent base being overly vast to sustain anything beyond a couple of "smart guys".

...could also simply let previous unfunded tax cuts expire {shrug}

VCs go where the brains are. It's not crazy that some of the best Universities in the country are in CA and MA, hence why everyone flocks to these places. There is also a lot of infrastructure already in place. I think the "favorable" business climate has a smaller impact in these sort of decisions. I mean, Mississippi could make the most awesomest tax laws and such tomorrow and people will not flock there to open their businesses (except maybe to rent a room in a building and call it headquarters for tax purposes).

That just means you can't realistically solve the deficit problem. Which is more important?

Richard Florida has covered all of this in Rise of the Creative Class. His conclusions are a bit more than he can prove, but the basic idea is that tolerant, educated cities with lots of activities(arts/sports/dining/etc) are where creative people want to live and creative industries naturally spring where the creative people are.

4 trillion in one year, amazing!

I know, I know, but unless you specify a timeframe, numbers like "4 trillion" are worthless. Plus we need a 14 trillion debt reduction package.

But the point remains, if prior to this fight over the debt ceiling they had just blindly raised it, we were ready to drive off a cliff anyway. Yes, Dems are finally willing to discuss real spending cuts for the first time ever, so that's worked out finally. Without the fight over the debt ceiling, would anyone be seriously talking about these cuts.

If that's actually the case then let it crash & we'll start over (with something that actually works this time around).

Additional taxation is not an option under any current scenario I can come up with, most damned sure not an option when existing revenue isn't applied to appropriate priorities first.

Yep...its also worth noting a difference between Angel-VC funding(or the more serious players & entities), business investment(i.e. investing their own money into their own business), and then the smaller VCs who could also be the talent in some cases.

That's why I believe mass migrations usually start by business investment which has an established presence(and the larger one's at that), followed by smaller VCs, followed by the larger VCs eventually. Obviously there are loads of variables & these aren't quite that linear but the key to me is that it can and does happen...just very slowly.

Nice bumper sticker "America - Love It and Destroy It"

Why are the republicans not wanting to raise the debt ceiling? Or am I reading it wrong? The ceiling has been raised 10 times since 2001. Why is this 11th attempt causing such a ruckuss? I'd say because of an election cycle, but, I don't seem to remember such a big stink about any of the previous ten.

Yeah, I think there's a lot of truth to what he writes but I'm not sure I agree with how he seems to think it happens(or at least in part).

I think it's more about the income earnings of younger people today driving things more vs previous generations due to technology breakthroughs & enabling. So, with that comes a different preferred lifestyle of people in that age/demographic vs the traditional 30/40 yr old couple with 2.5 kids.

There has never been anything more than token opposition to raising the debt ceiling. It's different this time, 1) Because Obama is the President, and 2) The GOP wants to tear down as much of the New Deal as possible and they think the debt crisis may allow them to do so if they threaten to blow up the world's economy.

Ah, the 'Needs of the few, out weigh the needs of the many' game plan. Never let the suffering of the citizens get in the way of putting the party's interests first.

I think its a catch-22 though. If you dont speak up on the 11th, then you're questioned when you do on the 12th, etc.

Not that I think we shouldn't raise the debt ceiling...but at some point, it does have to stop going up. I still think this is the Repubs' playing hardball to lower spending. Let's hope it works and as a compromise they close the loopholes for some of the big corps that apparently profit without paying taxes.

We don't need a 14 trillion debt reduction package - that's a nice bonus. We need a deficit reduction package that stops the debt from growing. If the debt stayed at 14 trillion, the U.S. just keeps paying the same interest payments and renews the debt when it reaches maturity (i.e. borrow another dollar to pay off a dollar). The debt as a % of GDP is not at crisis levels today (but it is heading that way). As GDP grows and debt stays constant (or even if it grows at less than the GDP rate), any problem with the level of debt goes away with time.

The corporation tax "loophole" will be hard to fix. (If anything, I think it needs to reduce significantly or eliminated).

That does make sense and I agree, it does have to stop going up. I just think if both sides were actually committed to reducing spending and getting the deficit/debt under control, they would have not had to raise the debt ceiling 10 times since 2001. Quite frankly, this is making both sides look very bad.

If there is a third party contender that actually has a chance to win, right now, that's where I'm leaning.

It's a democrat in office and it helps them mobilize their base. I mean, these 3 (McConnell, Boehner, Cantor) voted for every debt ceiling increase under Bush. They also voted for the unfunded tax cuts, the wars, and Medicare expansion, but now spending is out of control.

So what you're saying is...this is nothing more than rallying the lemmings?

Of course...no different than the same game the Dems are playing by being against the debt ceiling raising under Bush but now the world will end if it doesn't raise just one more time...and oh btw we should not pull out of Afghanistan & Iraq immediately any more.

It's a game, but I think both sides will compromise in the end. Though...the Repubs will naturally get more of what they want because they are in a little more control.

Have the Democrats or Obama actually put forth a budget plan? I keep seeing that they are doing the same thing that they're accusing the Republicans: Not willing to give up their sacred cows (GOP=Taxes; Democrats=Medicare/Medicaid, SS).

Good point.

Not true.

I posted this on the previous page. This is a summary of various Dem plans according to a GOP staffer talking to National Review.


Even the Dem congress folk are careful to say they are opposed to "benefit cuts" which would seem to imply other cost control measures would be acceptable.

One side is willing to compromise and the other isn't.

Honestly, this is BS. I work in VC and am speaking from experience - I'll tell you the social liberal atmosphere and tech conglomeration go together.

One who is of a clear political persuasion only tends to see what they know or at least, care to see. In my town, lots of VC going to the military tech complex and defense contractors.

A raise in taxation <> raise in revenues. There is a clear relationship between taxation and behaviorial changes. For many, esp. those with expensive CPA can find more ways to not pay more in net taxations.

Regardless of who is right or wrong etc. I think Obama is winning the PR war. Not being able to agree on the "grand bargain" implies the other team is unreasonable etc.

Interesting if Cantor does lead us into "Armageddon".

Obama renews push for grand bargain on debt - CNN.com