Gongol.com Archives: June 2012
Brian Gongol

June 24, 2012

Socialism Doesn't Work Rhode Island is going to lose tens of millions because of economic-development incentives
They used the incentives (in the form of a loan guarantee) to get former Red Sox pitcher Curt Schilling to move his video-game company to Rhode Island from Massachusetts. Private investors make and lose money all the time -- but especially on startup-type ventures, they often lose and lose badly. It still defies all kinds of reason to understand how anyone believes that state employees -- who aren't even taking risks with their own money -- can be any more likely to pick the right winners from all of the possible "investments" out there, when it comes to economic development. Government should be exclusively in the business of creating the right climate for the private sector to succeed generally, then getting out of the way for individual firms to succeed or fail on their own. This absurd socialism-by-incentive-package is no more in keeping with the free market than public ownership of particular companies. In fact, it might even be more corrosive, since no-strings-attached government funding routinely means that governments are on the hook for all liabilities, but are never really compensated for the risks to the people's money they put up. Congress has to step in and stop the economic infighting between the states. No other authority has the power to do so.

News Living like a sharpened sword

Business and Finance Yes, a little borrowing in youth can lead to "income smoothing" over time
But by the same token, if we enjoy the same degree of life satisfaction (particularly material satisfaction) from the start of our careers until the end of retirement, then what psychological gain do we see from our own standards of living rising over time? There must be some differential kind of reward from youth through old age, if only to encourage us to keep working.

Business and Finance China's looking to make foreign investment there just a little bit easier
The country's regulatory agency for stocks is looking at making it easier for some investment companies to get involved in their stock markets. This reflects the efforts they've been undertaking to encourage people to save less (in bank accounts) and borrow more, as a way to stimulate the private-sector economy there. Too much heavy-handed management, though, has never really paid off for any economy. Keep an eye on this.

Computers and the Internet Who wants to join the Kremlin's version of Facebook?
Nobody? Good.