Gongol.com > Radio > Show Notes > November 29, 2009

The Brian Gongol Show on WHO Radio
Brian Gongol



One of the things you might've noticed this Thanksgiving and "Black Friday" season is that prices on things like televisions and laptop computers are falling like mad. A netbook found in a store today -- and by store, we mean anywhere from an electronics retailer like Best Buy to a discount retailer like Target to a department store like Younkers -- commonly packs a 160-gigabyte hard drive and a processor with a gigabyte of RAM. And it sells for about $300. Compare that to computers from ten years ago, when a gigabyte was the size of the hard drive. This kind of progress is making life better even at a time when all the news about the economy is still dominated by doom and gloom. It sure beats living under socialism.

Speaking of socialism, though, the state of Iowa is going to spend a lot of time debating whether to revive tax incentives for moviemaking -- and perhaps all of the other tax incentives that are used to target particular businesses and industries. There are many, and at a time like now, when government officials are looking for ways to bring in new tax dollars, there's a lot of talk about targeting industries for special help. We tried to take a balanced look at the good and bad of industry-specific tax incentives, but to be honest, there's very little good to say about them. They get a lot of attention because the people who benefit from them benefit very directly. If you're an actor or a film producer, then you have a whole lot of incentive to do just about anything you can to keep the credits in place. But for everyone else, most of these industry-specific incentives really just seem like boondoggle. For every dollar "credited" by one industry, another dollar has to be taxed from another. And government isn't in the business of hiring investment professionals.

Think of what's happened in Detroit, a city where automotive-industry interests have had incredible power for generations. It sure made things look nice during the boom in the middle of the 20th Century, but Detroit became so dependent upon the industry that today it's a complete mess. Business durability doesn't come from being protected and coddled by government -- it comes from creativity and innovation. Charles Schultz created in the Peanuts franchise an institution that still reaches everyone today. "A Charlie Brown Thanksgiving" still shows up on television 36 years after its creation, and it'll still be relevant 50 years from now. "Peanuts" had to compete for readers' attention every single day on the comics pages, and Schultz wasn't taking tax credits to do his work. In the process, he built something that endures well past his own life.

Speaking, though, of taxation and innovation, the IRS is going to be collecting a lot of new information on how companies use credit cards and handle credit transactions. It's hard to see this turning out to be anything more than a big new paperwork burden that won't do anything to encourage economic innovation, which is the thing we need most right now in America.

But all is not hopeless; people still show creativity on their own. Like the BBC radio newsreader who, when faced with a catastrophic computer crash, used her iPhone to get her script. It's when we figure out lots of little problems along the way that we solve the big problems of life.

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Gongol.com -- posted 2009.11.29