The argument goes like this: if the private sector invests in something risky and fails, it is Capitalism and it is Good; when the government does it, itis Socialism, and it is Bad.
All the argument is specious: CEOs invest in their golfing friends' companies, and they don't invest their own money: they invest the shareholder's. Think of the governement as a very large, highly diversify corporation (really, it is not very diversified, it mostly does insurance and has an army; but it also has a whole buch of minor subsidiaries doing a bit of everything). The question is, since the government is this huge corporation which cannot go bankrupt, what should it invest in?
Clearly, high risk, long-term stuff. In a way, like IBM. The only problem with those failed investments (and if you invest in high-risk stuff, you will fail most of the times) is that they clearly were way too application oriented and short-term!
On a more philosophical note, it is wholly reasonable that the governement does the high-risk stuff: it cannot fail. Also, we expect corporations to be profitable every quarter, whereas the government has the luxury of needing only to stay solvant -- which, when you can print your own money is not overly difficult.
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