As we have seen from Mike Michaud economic plan for energizing Maine’s economy, upyanking the economically undertrodden, rescuing the middle class, curing the ills, and cultivating carnations on the sidewalks along Congress Street, the Democrats have warmed to the word “invest” and grown chill to the word “spend.” Cynics, Republicans, and citizens blessed with IQ scores north of 85 sense that this is a reaction to the average voter’s growing distaste for governmental extravagance.
In fairness we have to recognize that a growing number of liberal legislators are genuinely convinced of their innate talent for investment. We assume “innate” since few of them have a discoverable record for investment triumphs or academic preparation.
Rep. Seth Berry (D-Bowdoinham), the Democrats House Majority Leader, fits the usual profile of liberal investment titans. His educational credentials, a Bachelors’ degree in education and a Masters in Curriculum and Teaching, do not suggest much theoretical exposure to the rules of successful investment. His work experience—-teaching high school and some graduate level education courses, do not explain how he became Vice President for International Business Development of Kennebec River Biosciences in 2011. It’s true that one of his hobbies, sailing around Maine’s coast, may have given him some insight into marine biology, but it’s hard to see the relevance of his guitar strumming or his experience governing the family chicken coop. The answer may be his fluency in Spanish and some may think the corporation also saw some value in having an influential politician aboard.
Representative Berry’s lack of investment experience and irrelevant education have not deterred him from setting up shop as a venture capitalist. His March 7, 2014 column Entitled “Bond Proposal Emphasizes ‘D’ in R&D,” purports show us how Maine’s government can help small businesses “jump [the economy] to the next level.”
His column explains how money raised by bonds and invested by politicians and bureaucrats will accelerate economic development and add high-quality, high-wage jobs. In fact (wait for it…) government-direct loans leverage $16 for every dollar spent! Sixteen—WOW!
We are left to wonder why he wasn’t advocating a billion-dollar bond issue. Another 16 billions dollars in the state’s economy would be a big, big help. Better yet, why not raise $20 billion in bonds and invest it all? With the kind of returns Rep Berry promises, Maine’s entire population could retire and move to Florida.
The key, he explained is investing the bond money in innovative high-growth company. That makes sense. All the government has to do is choose the right company to receive its loans. This is what venture capitalists do and some venture capitalists are very, very rich. Some are even billionaires. You have to admire a man who has set aside an opportunity to become a billionaire himself in order to put his genetically endowed genius for picking innovative winners at the service of our state.
The rule of thumb for venture capitalists is that they hope for big returns on 20% of their investments while they expect to lose money or break even on the other 80%.
It may be that Seth’s confidence in his own investment acumen derives from the fact that no politician ever seems to suffer from spending public money on failures.
Professor John Frary of Farmington, Maine is a former US Congress candidate and retired history professor, a Board Member of Maine Taxpayers United and publisher of www.fraryhomecompanion.com and can be reached at: [email protected]
The left are perfectly willing to gambling with other people’s money at no consequence to themselves. Take the Obama administration’s picking winners and losers like Solindra as a prime example. A sure winner they gambled and lost all of our money.
Investing the public’s money is non-exclusive to Democrats, Republicans, or Independents. Ever since the legislature deemed “centrally managing the economy” to be an “essential government function” in 1981 when the legislature chartered the Maine Development Foundation Corporation, in absolute violation of Article Iv Part Third Section 14 of the Maine State Constitution, the successive administrations have evenly rotated between Democrats, Republicans and Independents, with each one incrementally and at times aggressively expanding the corporate state and beefing up the ways and means by which the corporate state concentrates capital within it’s own hands to “invest” in the economy” for the “public benefit”.
None is more aggressive than Lepage in escalating public investments with his recently failed jobs bill proposing to extend the tax benefits of the Pine Tree Zone to big business. To date the beneficiaries have been limited to companies employing 250 or less. LePage proposed to extend corporate welfare to companies employing 1500 people. The bill included a list of what makes a “qualified employee” which included the words that the employee must be taxable- meaning that the employee must provide the revenue stream for Maine State Inc in exchange for tax exempting the owners of the means of production. Thus the owners of the means of production must provide a commodity to the state ( taxable workers) . Included in the list of qualifications for said commodity are many benefits that the corporation must provide to the upper crust worker. Such benefits increase the size of the payroll tax bill, for which 80% is covered by targeted sector workers and all of the UN-targeted sector (meaning NOT upper crust employers).
This is in effect a Cloward and Piven strategy being implemented against Maine’s middle class by the entire political class, whatever party. The middle class is burdened with financing both corporate and general welfare. General welfare is necessary to get the public to keep on voting the politicians into office but those on general welfare will find it much more difficult to rise when the middle class has finally collapsed under the burden of all the entitlements for which it is the designated beast of burden.
Central management and corporate welfare are never part of the political debate in Maine despite the massive entrenchment of the corporate state. These are issues that David Brat campaigned on- Lets hope that David Brat’s victory builds a fire under the issues that he made part of the political debate in Virginia! A real Maine Independent would bring these issues out of the darkness and into the political dialogue. That is what an Independent is supposed to do- introduce a new paradigm- which Maine needs new! NOT later!
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