The Next Wave of Innovation: Where Will the Money Come From?

I'm going to apologize up front to the people I'm about to offend - this entry is about politics, not technology. I'm a somewhat-reformed politician; yes, I once won an election to public office, and I'm still a political junkie, although I am trying to kick the habit. But politics is, to me, anyway, just like the environment - if we get it right, it sustains us, and when we screw it up, it kills us. The political environment, at present, is functioning more along the lines of the latter, and this must be addressed - and soon - if we are to get back on a path to real, sustainable growth anytime soon. Keep in mind that such growth depends upon technology, as well as my little corner of the world, communications. We talk, we grow. We innovate, we grow, We build, we grow. We screw it up, we die.

Well, we're screwing up. The financial meltdown was the consequence of an unsound (to say the least) financial services industry, outright fraud, lack of effective governmental regulation, and more fraud. It's being sustained, however, by ineffective and wasteful government spending coupled with the usual bickering between Republicans and Democrats over who caused the problem and who will get the credit for fixing it, when both are clearly at fault. In short, it's a freakin' Greek tragedy with no good outcome now possible in the short run.

My major concern is that shoveling money into blast furnaces with incompetent management, like AIG, coupled with running up trillions in new debt that can never be paid off, coupled with unrealistic expectations of improved standards of living (health care and education are in the news) via major new government spending programs, will ultimately result in a colossal meltdown of civilization. This is not hyperbole, and that's the kind of language I typically reserve for more private venues. But the madness must stop.

Let's face it, there is no way that raising taxes on upper-income taxpayers, the only solution to the revenue problem on the table, will work. These folks already pay most of the taxes while receiving little in return. And, once you're in the 50% bracket, what's the incentive to save, invest, or even work in the first place? These are the people who create most of the wealth available to the rest of us to invest in new innovations, the kind of activities that generate wealth and value for us all. I wouldn't blame anyone today who just said enough is enough, it's vacation time. And what about the political sense (or, more appropriately, the lack thereof) in confiscating the wealth of a minority that cannot fight back politically? How can that be even remotely acceptable in a democracy? We can't legislate prosperity - we have to earn it.

The hobbling of wealth creation is thus my biggest concern going forward. Recessions inevitably end because we get bored with them. Poverty sucks; people consequently get busy and off we go. But without the incentive, in the form of ROI, to get going, we by and large won't. We are, in fact, trying to solve problems with government that government is simply not equipped - or even suited - to address. The government should regulate, to be sure, but the private sector must otherwsie be as free as possible to create the goods and services that benefit us all. And we shouldn't be at all concerned that someone might get rich in the process, nor should we practice ethically-bankrupt confiscatory tax policies that serve only as a disincentive to wealth creation. Indeed, we should be proud that we have a system that provides the incentives to create wealth and value in the first place, not just redistribute the meager assets that would otherwise accrue (remember the USSR?). We are, unfortunately, now pursuing policies that are incompatible with the objective we ultimately must achieve.

Don't get me wrong - I wish our new President well. I must however confess that I did not vote for him; I didn't vote for any of the candidates for President this as none were acceptable to me. President Obama's soak-the-rich strategy, which he did, after all, promote during the campaign, was the key reason why he didn't get my vote. He's smart. He's articulate. But he also believes that only government has the answer. But apart from enhancing regulation, government should be turning the private sector loose, not punishing it. As the old saying goes, when all you have is a hammer, everything looks like a nail. And when all you have is government, everything looks like a political problem. Both of these statements are true - and both lead, at best, to little more than pounded thumbs.

• General discussions
• economy
• federal budget
• government
• obama
• politics
• taxes