Mark Andreesen points out that the Federales virtual extermination of the IPO has shut small investors out of the most dynamic and wealth creating part of the market. All for their own good, don'tchaknow. That has to have negative wealth distribution effects. It's amazing how often the Feds are implicated in schemes to increase income or wealth inequality - reverse robin hoods indeed. Hattip Tyler Cowen
The result of all that is the effective death of the IPO. The number of public companies in the US has dropped dramatically. And then correspondingly, growth companies go public much later. Microsoft went out at under $1 billion, Facebook went out at $80 billion. Gains from the growth accrue to the private investor, not the public investor…
Most American retirement savings is invested in the public stock market. Most Americans can’t invest in private companies and most Americans can’t invest in venture capital and private equity funds. They’re actually prohibited from doing so by the SEC. If you both prohibit them from investing in private growth and wire the market so they can’t get into public growth, then you can’t be invested in growth. That raises the societal question of how are we going to pay for retirements. That’s the question that needs to be asked that nobody asks because it’s too scary.
The full interview is here.
- See more at: http://marginalrevolution.com/#sthash.7IlTEnEd.dpuf
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