Can Hot Companies Survive Obama, McCain?

Yet, in the debate over how to 'fix' America's current economic mess, they are the forgotten men and women. They alone have the ability to not just slice the economic pie more fairly, but actually make it larger, rewarding everybody -- just as they have over the past century.

Indeed, at a time when we are arguing over income redistribution, no one seems to have noticed that the greatest income redistribution mechanism ever created is entrepreneurship -- which essentially creates each year, from nothing, hundreds of thousands of new jobs, and billions of dollars of new wealth -- money that is less likely to go to the same old fat cats, but smart young inventors, veteran middle managers, even secretaries and factory workers.

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Entrepreneurial start-ups are also brilliant trust-busters, because they pull down or render obsolete older, less competitive big companies and replace them with smart, fast-moving upstarts. The result is a fairness, and equality, and a virtuous upward economic spiral that has never been duplicated by government fiat.

But to do that, entrepreneurs have to be protected. And they have to be unleashed. And even though I've heard Obama and Republican vice presidential nominee Gov. Sarah Palin both mouth the word "entrepreneur" in recent days, nothing I've seen in either platform suggests that this is much more than lip service.

The Republican Party, for example, despite being genetically pro-business, has over the last eight years done its level-best to slowly strangle all new high-tech business creation in the U.S. From the crushing cost and bureaucracy of the Sarbanes-Oxley corporate reform legislation, to the board of directors-gutting new governance rules or the forced valuation of stock options, the current administration couldn't have done a better job of gutting new business creation in the U.S. (Yes, I know many of these new regulations emanated out of Congress, but where was the fight from the White House?) and strengthening the power of big business.

That, of course, may have been the plan all along. As I've written many times, entrepreneurs, busy with company-building, have little influence in Washington and no distinct constituency to argue their case.

Meanwhile, established and big companies understandably hate entrepreneurship and will do almost anything to slow the progress of entrepreneurs -- like all of those onerous regulations described above. And it has worked: This year has seen almost no high tech company IPOs, traditionally that moment when entrepreneurs gained their freedom and rewarded their teams.

These days, the only recourse for a hot start-up company is to sell out to an established company -- further consolidating power and wealth. And meanwhile, of course, those older companies find it much more pleasant to buy these new competitors than compete with them.