John Lounsbury

Turning Nothing Into Something

Ferdinand E. Banks and Rob Viglione - - -

You both touch on truths and what you each say is not excluding the other.

Fred Wilson - - -

I found your premise interesting: many great things are created, seemingly, from nothing but human ingenuity. It brings to mind some history: the technology revolution grew out of the recovery from the last deep recession in 1981-82. Not that Microsoft grew entirely out of the creative genius of Bill Gates, the programmer. In fact it was someone else's creative genius and Bill Gates' business genius that got things started. Gates succeeded in getting a contract from IBM to provide a disc operating system for the (then in development) PC and then bought the DOS system from its creator. The IBM contract was worth many millions; I have read reports that Gates paid $50,000 for DOS.

Fred, you are not saying anything specific about what the needed changes are. I think the needed changes are in the area of wealth distribution. Whenever, wealth is concentrated in too few hands, be it Wall Street, Washington or Moscow, credit needed by the entreprenuer is frozen out. The Soviet Union fell because it could not find the flexibility to overcome this problem. When income is concentrated too much with a few wealthy executives, it freezes out compensation rewards for many who actually have more to contribute in terms of innovation and entreprenurial ventures. All these points may or may not relate to the situation of bonae. I can't say because I don't have the details.

If we are to truly come out of the current crisis stronger, I feel it will be because we find a way to prevent giving hundreds of millions in compensation to executive failures, find a way that government can move from directing commerce to enabling commerce and establish a set of rules that put boundaries on the use of leverage to compound money but do not unduly hinder the use of leverage to build the means of production.

I have heard the term "class warfare". I think we have had a battle of class warfare in the past few decades and the wealthy class (not only the financial sector, although they are the most conspicous at the moment) has won the battle. But I firmly believe they have not won the war. At least I hope not.

The changes we need will result in a system where the innovative have access to the resources to develop and implement their ideas, and a system that will reward the successful with wealth WHEN THE LONG-TERM RESULTS show that the success has lasting merit.

No longer would we have a system where a CEO can receive $100 million in compensation the year before his corporation goes bankrupt.

Then we would have a system where wealth would be created for those who EARN IT and not for those simply in a position to grab it.