Peter Rip wrote a post about VC and the economy where he writes:

Couple of things.

• It's not like the tech bubble, this one is much worse.  This one is based on fraud and excessively risky debt which has permeated our entire economy, debt which MUST be lanced before we can recover.  This bubble was blown to avoid the crash that SHOULD have happened in the early 2000's, and we now have much farther to fall as a result of irresponsible serial bubble-blowing by Alan Greenspan and crew.
• Venture capital is not dead, but it is in its death throes.  It reminds me of a drunk in the gutter taking another drink to try to cure the hangover.  The Silicon Valley VC's will continue to throw good money after bad until they are insolvent, and at that point VC will be dead.  The business models of 99% of Web 2.0 companies are proving to be nothing more than an illusion, but this hasn't quite sunk in yet.  VC's are still running on Hope.
• The consumer is not dead, but he sure as hell ain't consuming much anymore.  He's over-extended, scared, his housing costs are grossly inflated, and his credit is tapped out.  If a consumer isn't consuming, what do you call him?
• Of course the Web is not dead.  Irrelevant nonsense.

It's not the end of the world, but please face up to reality.

The bottom line is this:  Growth cannot resume until the fraud and excessive risk is flushed from the system.  Unfortunately, everything the current administration has done has only tried to prevent this from happening, and everything Obama says indicates that he plans to continue this not-so-proud tradition.

Propping up fraud and excessive risk is NOT the way to start healthy growth again.  It only prolongs the decline.

The clowns in Washington are trying to prevent the natural healing process from taking place--all they are doing is picking at the scab.  Over, and over, and over again.  People are stupidly cheerleading while they do this.

It amazes me that people who are putting capital at risk can be so Pollyanna-ish about the current economic situation.  A fool and his money are soon parted.  Redirect all this hope and positive energy towards fixing the problem and then we'll have something to talk about.