Global Investing

State vs entrepreneurial capitalism

The post-crisis world has been in part shaped by the growing presence of sovereign wealth funds, which have become an important source of funding with their $4 trillion assets, replacing private equity and hedge funds. But some people are wondering whether state capitalism really is the way forward, to boost the potential growth rate of the post-crisis world.

Robert Litan, senior fellow at the Brookings Institution, believes that in fact it’s entrepreneurs who would play a key role, and it’s important for policymakers to come up with a mechanism to help them.

Litan estimates that the United States needs 30-60 new “home-run” firms a year with annual sales of $1 billion to boost U.S. growth rate by one percentage point beyond its post-war average of 3 percent. This is double the past 150-year average of 15 firms a year.

“Enterpreneurial capitalism is the defining concept of 21st century economics. The state firm model might work for countries that are behind, but at some point we need entrepreneurship,” Litan told a briefing hosted by Legatum Institute, an independent public policy think tank.

Litan, who is also vice president for research and policy at Ewing Marion Kauffman Foundation, says “crowd funding” is one innovative way to help entrepreneurs.

from DealZone:

Allen Stanford: Tales from Mexia

stanfordTrying to report the comprehensive story of Allen Stanford, the Texan billionaire that the U.S. Securities and Exchange Commission has accused of perpetrating an $8 billion fraud, is like trying to reassemble 100 documents after they've been through the shredder.

Stanford's business and sports interests and the subsequent investigations into them stretch across the ocean, through numerous government agencies and courts and into the lives of people in places big and small.

As usual, there was too much to fit into any one story.

Last week I flew from New York to Houston and drove about three hours north to Mexia, Texas the small town where Stanford grew up. I wrote about Mexia here, and about Stanford's complicated personal ties -- apparently he charmed women as well as investors and has left an angry trail of both, including an estranged wife, several girlfriends and six children with four women.