Why Government Sucks at Picking Economic Winners and Losers

[bone]

There's been some threads created on this forum about how Governments should be subsidizing economic development - and as of late even more grotesquely taking pension funds and using them to invest in nascent commercial enterprises as venture capital investors and intellectual property owners.

The track record for this is abysmal for modern, Western economies.

https://www.wortfm.org/matthew-mitchell-on-targeted-economic-development-subsidies/

https://fortune.com/2015/08/27/remember-solyndra-mistake/

https://www.washingtonpost.com/politics/specialreports/solyndra-scandal/
Documents show that politics infused Obama "green" programs

 

[morganist]

There's been some threads created on this forum about how Governments should be subsidizing economic development - and as of late even more grotesquely taking pension funds and using them to invest in nascent commercial enterprises as venture capital investors and intellectual property owners.

The track record for this is abysmal for modern, Western economies.

https://www.wortfm.org/matthew-mitchell-on-targeted-economic-development-subsidies/

https://fortune.com/2015/08/27/remember-solyndra-mistake/

https://www.washingtonpost.com/politics/specialreports/solyndra-scandal/
Documents show that politics infused Obama "green" programs

If it is me you trying to detract you have it completely wrong. There is no intention for the government to 'take' pension funds to invest in commercial enterprises. My intention with the direction of pension funds through Pension Fund Easing was to increase or start an investment requirement for pension funds to be in corporate bonds so they could receive the security they offer through the order of payment hierarchy if the company enters administration. Corporate bonds also offer fixed return payments, which is valuable for pension schemes near to maturity and for annuities.

By making annuity incomes fixed it stabilises the return of investments and makes pensioner income regular. The investment in corporate bonds would also speed up the number of transactions within an economy to increase the velocity of transactions, companies only borrow to spend to avoid the premium, fast expenditure would be expected. This is Pension Funds Easing and in the United Kingdom it has already happened, over the last decade the issuances of corporate bonds rose from £100 billion to £350 billion making more secured fixed return investments available for pension funds.

In terms of the business aspect of intellectual property ownership, you state it is a venture capital project on the part of the government. This is not true there is little start up cost, just the cost of the patent on the new product. The idea is not to start a big corporation and invest billions of pounds to do it but to simply have a contract with an innovator who has developed an efficiency, patent it, market it and then get a cut of the profits. By finding efficiencies and simply allowing other companies or governments to use them for a commission from the profits it generates money can be made globally.

You are seeing it as a massive financial investment to start a new industrial project or a new corporation. The business entities already exist it is a matter of offering them new techniques, formulas, software, materials, or whatever else and then get a cut of their profits. Not venture capitalist but joint venture business operations, governments are good at getting authority and approval to develop new innovations and they can enforce payment easily too. If they can do it in their own country they can sell the process or products to other countries, generating an income outside of taxation.

 

[murray t turtle]

There's been some threads created on this forum about how Governments should be subsidizing economic development - and as of late even more grotesquely taking pension funds and using them to invest in nascent commercial enterprises as venture capital investors and intellectual property owners.

The track record for this is abysmal for modern, Western economies.

https://www.wortfm.org/matthew-mitchell-on-targeted-economic-development-subsidies/

https://fortune.com/2015/08/27/remember-solyndra-mistake/

https://www.washingtonpost.com/politics/specialreports/solyndra-scandal/
Documents show that politics infused Obama "green" programs

%%
Founding father had it right=limited gov.
ACA is a trainWreck/good thing Pres Trump killed it .=======================
For the latest example, look what happened when gov tried to manage the virus/healthcare; isolated the whole nation/its supposed to isolate the sick.

 

[morganist]

There's been some threads created on this forum about how Governments should be subsidizing economic development - and as of late even more grotesquely taking pension funds and using them to invest in nascent commercial enterprises as venture capital investors and intellectual property owners.

The track record for this is abysmal for modern, Western economies.

https://www.wortfm.org/matthew-mitchell-on-targeted-economic-development-subsidies/

https://fortune.com/2015/08/27/remember-solyndra-mistake/

https://www.washingtonpost.com/politics/specialreports/solyndra-scandal/
Documents show that politics infused Obama "green" programs

These links seem to be about subsides or capital investment. I am not interested in this, I am interested in innovation and getting a new formula that saves time, materials, fuel, labour hours or any other efficiency. Then I want to patent that formula, software, process or whatever it is that makes that efficiency viable and then license it for use in exchange for a commission.

I want approval from the government, plus I would like help with enforcement and it would be great if they would also pay for the patents of the product to justify their cut of the profits. This is inexpensive and a great way to introduce efficiencies to the market, there is a massive market for efficiencies in government operations so they are an ideal partner for this type of business.

This type of business operation is far away from government capital investment and government subsidies. It is the advancement of processes and innovations, which allows a share of the global patent market to be taken. The use of smart thinking and engineering around problems from extreme costs within business operations to the efficient use of materials that are expensive.

Reengineering, redesign, new materials, new processes, new layouts, new production techniques, new science, new software, new technology, new machinery, new fuels, new energy, new communication systems, new computers, new printers, new laws, new regulations, new transportation, new engines, new programming languages, new ides, new fashions etc.

 

[morganist]

%%
Founding father had it right=limited gov.
ACA is a trainWreck/good thing Pres Trump killed it .=======================
For the latest example, look what happened when gov tried to manage the virus/healthcare; isolated the whole nation/its supposed to isolate the sick.

You can limit a government's size by them not having to take so much money in tax. They can do this if they have other income sources. They can be involved in the process of new innovation and development and get a share of the profits they make when they are marketed to the world. Governments have the authority to allow new developments and they have the power to enforce the patents. It is an ideal way for the government to make money inexpensively and to get a new income source to reduce the need to tax the domestic population.

 

[murray t turtle]

You can limit a government's size by them not having to take so much money in tax. They can do this if they have other income sources. They can be involved in the process of new innovation and development and get a share of the profits they make when they are marketed to the world. Governments have the authority to allow new developments and they have the power to enforce the patents. It is an ideal way for the government to make money inexpensively and to get a new income source to reduce the need to tax the domestic population.

%%
That;
+ user fees........................................ Like on ammo, none pays that user fee except ammo buyers.

 

[bone]

State owned enterprises and all their forms are subject to countervailing tariffs and this has been confirmed by WTO findings. So a Country may be able to take in XX dollars in export income, but they will be directly tariffed XX dollars by the affected Countries - offsetting the gain.

The Patent Cooperation Treaty will not allow one government to monopolize intellectual property. So this idea of one country taking in tens of billions of dollars annually from Countries around the World in IP royalties is utter nonsense.

No free lunch. No magic new money for the government beast to waste.

%%
That;
+ user fees........................................ Like on ammo, none pays that user fee except ammo buyers.

 

[morganist]

%%
That;
+ user fees........................................ Like on ammo, none pays that user fee except ammo buyers.

What if that innovation that the ammo makers have chosen to use in their new ammo makes it cheaper for them to produce it and the price stays the same for consumers? The ammo manufacturer gets an increase in profit from the lower cost of production and the patent holder gets a cut of that. It could be something like a new design of bullet that uses less material, a new cheaper material, gives more power or it could be a breakthrough in gunpowder that gives it the same power for 40% less material use. Things like this, the government has the power to authorise it and they can enforce it, there are efficiencies and savings and the product becomes better. Innovation and advancements, that is the way forward.

 

[murray t turtle]

State owned enterprises and all their forms are subject to countervailing tariffs and this has been confirmed by WTO findings.

The Patent Cooperation Treaty will not allow one government to monopolize intellectual property. So this idea of one country taking in tens of billions of dollars annually from Countries around the World in IP royalties is utter nonsense.

%%
That;
+ Smoot Hawley Tariff proves it can get out of control/national temper tantrums/trade war

 

[morganist]

State owned enterprises and all their forms are subject to countervailing tariffs and this has been confirmed by WTO findings. So a Country may be able to take in XX dollars in export income, but they will be directly tariffed XX dollars by the affected Countries - offsetting the gain.

The Patent Cooperation Treaty will not allow one government to monopolize intellectual property. So this idea of one country taking in tens of billions of dollars annually from Countries around the World in IP royalties is utter nonsense.

No free lunch. No magic new money for the government beast to waste.

What if the government invests in a private business that owns the patents and they get a share as a joint venture?

There are other ways of doing to, through contractual agreements for the franchised use of new regulatory systems and products. This happens a lot in finance.