January 1, 1970 (Vol. , No. )
I’ve debated about this post for a long time now, and not wanting to believe that what I am seeing could possibly be happening. Surely some critical piece of information was missing that could prove me wrong. Well, it probably is missing, but I’ve come to the conclusion that entrepreneurs in the U.S. should be afraid, very afraid. And, lest the point be overlooked, biotech companies ARE entrepreneurial.
Point 1. The U.S. government took over two of our three car companies, tossing out contract law and shareholder rights. Last autumn, the government bailed out banks and later set pay rates for those institutions’ top executives. I can agree that he who pays the bills should control the money. My concern lies in the rumblings that such control may be extended to other organizations that accept government funds. Am I wrong to worry?
Point 2. Now Manufacturing Czar Ron Bloom called the free market system “nonsense” last February, while giving the keynote address to the Sixth Annual Distressed Investing Forum. At the time, Bloom was special assistant to the international president of the United Steel Workers.(Video: http://www.youtube.com/watch?v=azDnT3_FSSE)
Nonsense?! A free market system lets entrepreneurs thrive. It encourages our best and brightest to risk their own security to build something greater than themselves. Isn’t that spirit of innovation, and the willingness of scientists and businessmen (and women) to invent a better way – and then form companies to do just that – the spark that laid the foundation for the biotech industry? Note that big pharma largely ignored the breakthroughs till later, preferring to acquire rather than create. By that same token, the lack of entrepreneurs has thwarted many nations in their quest to develop more innovative cultures. (I’m thinking particularly of Germany’s endeavor several years ago to foster entrepreneurialism as a way to boost innovation.)
Point 3. In September, Representative Barney Frank, chairman of the House Financial Services Committee, laid out his plans in a House of Representatives Financial Services Committee hearing. He said, “We will be providing the mechanism to put non-bank financial intuitions out of everyone’s miseries. There will be death panels enacted by this Congress, but they will be for non-bank financial institutions that will not be considered to be too big to die…” Rep. Frank went on to say the usual euphemism was “resolving these institutions,” but in his experience, resolution meant dissolution. “We are talking about making it unpleasant for the entities,” he said. Video Was he speaking of financially troubled non-bank financial institutions, or all of them? Does the distinction matter, as regulations for one will undoubtedly also affect the others?
To be perfectly clear, venture capital companies are non-bank financial institutions. So are investment houses, development finance institutions, leasing companies and several other categories of firms. So, if those intuitions are dissolved – even if only some of them are dissolved – how will the biotech industry be affected?
These issues are important, and how they are address is important. They will affect the biotech industry. How you respond to your senators, your representatives, your industry organizations and the more than 2,000 agencies that compose our federal government matters. The big question remains. What are you going to do?
Note: These opinions are my own. They do not necessarily reflect the views of GEN, its staff or its publisher.