A Troubling Pattern Emerging?

Friday’s Globe has two articles on recent actions by the Governor — a view on his $1B biotech initiative and news of a $3.6 million bailout for the dairy industry.

The biotech story discusses how this funding will help start-up companies through the ‘valley of death’ when financing is scarce. Having had a ringside seat to the internet bubble’s expansion and eventual collapse, I’d suggest that the valley of death has some utility and the notion that the government understands the science and market well enough to determine who should make it through strikes me as highly unlikely.

The dairy farmer bailout is more direct. Dispensing with the typical niceties of concealing subsidies in tax credits or rebates, the bailout is reported by the Globe to take the form of checks ranging from $16k to $20k to each dairy farmer in the state. Milk is a special case, an industry so trapped in a web of regulations, that a small convenience store chain was sued several years ago for selling milk at too low a price. To be fair, its not entirely clear who’s making the money here, it may be the dairies and not the farmers.

Two overarching points:

1) State government is clearly wading deep into the waters of picking winners and losers.

2) This is a zero sum game. The money we spend on these initiatives is money that won’t get spent on things like transportation infrastructure and education.