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Incentive packages and your bottom line. The story of the Beverly Hills liposuctionist who claims to have run his car with biodiesel from human fat is really more creepy than anything else -- but it serves as a jumping-off point for a matter that's of huge importance to Iowa today. As a state, we are heavily invested in the biofuels industry (ethanol and biodiesel alike) since they have had a big effect on the major crops grown here. But we've also had some trouble lately with some of the plants closing down because of the ups and downs in the prices of oil and corn. Let this serve as a lesson to us as taxpayers: Whenever politicians ask us to pour money into subsidizing the next "hot" industry, we ought to be skeptical at the very least. And it doesn't matter whether that "hot" industry is biofuels (which the governor wanted to subsidize with the Iowa Power Fund), or mortgages (for which the state and local governments ponied up $56.5 million in incentives in just one recent case), or data centers (for Microsoft or Google or anyone else). That doesn't mean we should always say "No," but we certainly have to hold those subsidies up to tough, tough scrutiny. Many small businesses will never receive any incentives at all -- but every big business today started small. And many big businesses today may not be around in the future. At other times, rotary phones, black-and-white televisions, and zeppelins were all "hot" technologies, too.
Long-term planning. It never seems to get enough attention, but the case for long-term planning has never been stronger. Today's troubles in Pakistan can be traced back sixty years to the partition of India. The fighting today in the Gaza Strip is easily ninety years old, dating back to the League of Nations and its mandate to the British to oversee Palestine. GM and Chrysler are struggling to survive in the wake of decades of bad decisions. It's frightening just how long our problems will persist when we fail to deal with them and choose not to take a long-term approach to fixing them. None of this goes to say that problems like the India-Pakistan conflict could have been solved easily in the past -- just that the problem is much bigger today because now they're both nuclear powers. Putting off our problems doesn't make them easier to fix.
Problems we should get to fixing. Nationally, we have a $10.7 trillion debt (your personal share today: $35,017). That can't be ignored forever. But here in Iowa, we have our own budget problem -- a combination of over-spending and accounting trickery about which the state auditor has been ringing the alarm bells for some time. We have falling test scores in too many schools. And we have the profound need for more disaster-mitigation work, which looms especially large in the shadow of this past summer's flooding and the huge tornado in Parkersburg. These problems demand our ingenuity and concern -- not our ignorance. We have the wisdom and intelligence to overcome...but what about the motivation?
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Keywords in this show: biodiesel • biofuels • British Empire • business • Chrysler • data centers • disaster mitigation • disasters • economic-development incentives • economics • education • ethanol • fat • Federal debt • future • Gaza Strip • General Motors • Google • incentives • India • industrial targeting • Iowa Power Fund • liposuction • long-range planning • Microsoft • nuclear weapons • Pakistan • Palestine • planning • state budget • subsidies • taxes • technology