Paul Kedrosky riffs on the LinkedIn IPO. First,

Pushing every investor looking for social-media exposure through a single IPO door produced a remarkable crowding effect.

and

Every venture investor I know has changed his plans with respect to taking social-media portfolio companies public. Everyone is thinking … Let’s get everything we have out, like, tomorrow.

One wonders how quickly this boomlet will lose steam. For now, it seems not-crazy to believe that we’ll see a wave of IPOs at eye-popping valuations. And that leads Kedrosky to the following:

California’s prospective state finances just improved dramatically. As I’ve written before, the state is hugely leveraged to equity gains, and we are about to see prodigious numbers as a rush of companies follow LinkedIn in.

Just as the late 1990s saw a revenue boom that helped erase the federal deficit and enabled states like California with a great deal of exposure to equity gains to sharply increase spending, a post-LinkedIn boomlet could delay the fiscal reckoning. Serious conversations about fixing public pensions will abruptly end. The ill effects of counterproductive policy will be masked. We’ll all go back to sticking our heads in the sand. I find this prospect very frustrating.