Investing in Innovation
With so much bad news in the financial press, it is always nice to read something upbeat. In "The Big Myth of Painful Choices," economics professor Robert H. Frank (New York Times, September 22, 2012) asserts that problems can be solved if we just put our thinking caps on. He advocates the urgent need to reduce wasteful spending, alter the tax code to encourage job creation, savings and invesments and consider spending on infrastructure projects as a way to get people back to work. While ardent free marketeers may eschew the notion of more government outlays, at least this Cornell scholar is putting some ideas out there with a focus on solutions versus handwringing. For that, we can all be grateful.
Some assert that public financing is critical to the development of innovations, adding that venture capital investors need a short-term return. Others counter that it is the road to ruination.
Certainly the role of big government versus private capital is getting attention in this current election season. I think this is a good thing. A serious debate about the role of federal, state and city "largesse" (courtesy of the taxpayers) is long overdue.
For those who enjoy popcorn and capitalism, check out the Hollywood version of Ayn Rand's famous (and still best-selling) tome, Atlas Shrugged. A rendition hits the big screen on October 12, 2012. Click here to read more about Atlas Shruged, Part II, the movie. A major premise is that intellectual property must be protected by the rule of law because it belongs to the creator and not to Congress or local politicians. Why would entrepreneurs, visionaries and other types of innovators take risks unless they know that their blood, sweat and tears will bear fruit? Deny that individual the opportunity to solve a problem and earn a risk-adjusted return and you put the nail in the coffin for anyone with a great idea that can help humanity.