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: firstname.lastname@example.org