The short term versus the long term

(written by Lawrence Krubner, however indented passages are often quotes)

I don’t think there is a right answer here, but to the extent that some later investors get ripped off, the laws should be changed to better align the incentives of owners with potential investors.

Let’s come up with an analogy and then torture it like we’re the Cheney administration: imagine you’ve just purchased a plot of land. What are you going to do, mine or farm?

If you farm, you’ll have to purchase seed up-front, and work on it for a season before you see any profits. And every season you’ll plow most the profits (literally) back into the land and salaries and your mortgage. You husband the soil to ensure that it’ll keep providing for you for years and years. If you’re lucky, and if you do a good job, you’ll gather a following, sales will increase, and eventually you may make a tidy living. But every season, no matter how rich you get, you’re going to be back out there, breaking your back and working with the soil. When you finally retire, if you’ve done a good job, the soil is as good as when you first got it, and your farm will live on.

Or, you could mine; you’ll need some initial money to lease mining equipment, and to hire some people to work the mine. Then, bam: profit. You’re making money. You tear a giant hole in the ground and eke every last bit of metal out as quickly as possible; there’s nothing to preserve, there’s no soil to keep in condition. You’ll make a big score, then the land will be spent, and you move on, leaving an unusable crater.