How do you get it right?…
Mike’s response to a short note from me I lifted and summarized from an advertisement/advice for investors on Brazil. Mike’s response below the fold:
Today, Brazil moved aggressively to ensure that the widening global financial crisis will not reach its shores, taking several measures to stimulate consumption and investment in the world’s seventh largest economy. Finance Minister Guido Mantega estimates that the moves will help Brazil’s GDP reach 5 percent next year.
The following will take effect immediately:
– Producers of 8,500 manufactured products will receive tax credits of up to 3% for sales abroad
– The IOF transaction tax will be eliminated on foreign purchases of Brazilian stocks (previously 2%) and on corporate bonds with maturities of more than four years (previously 6%)
– Stock receipts of Brazilian companies traded abroad, such as American Depositary Receipts (ADRs), will be cancelled
In fairness, Brazilian trade policy has often been poorly designed and managed even worse. When I was growing up there were 500% tariffs on imported electronic goods, the idea being to protect the burgeoning Brazilian electronics and computer industries. (Needless to say, it didn’t work.)
On the flip side, protection of aircraft has led to Embraer making some pretty good planes. Similarly, as I noted before (this isn’t exactly trade policy, but it is economic policy) actions by the Brazilian government in the late 1970s, 1980s and 1990s are responsible for the fact that a Brazilian can walk into a car dealership today and buy a tri-flex vehicle that runs on any combination of gasoline, ethanol or natural gas. I doubt Americans will be able to do the same thing before my 17 month old son is able to drive, and perhaps not for decades later.
The trick, I guess, is… how do you get it right? To come back to the US, how do you increase the ratio of Arpanets to Solyndras?
Hmmm. It seems to me that how you get it right is probably different for Brazil and the U. S. The global crisis has become more of a North Atlantic crisis. Brazil can try to insulate itself, the U. S. really can’t. Our tentacles are everywhere. It may be galling to see the U. S. more willing to help Europe than Main Street. We shoud do both, of course. But we do need to help Europe, for our own protection, don’t we?
Min,
Yes, but I was in more of a big picutre mood when I wrote what I wrote. Forget the current crisis, in general, how do you raise the ratios of Arpanets to Solyndras. Arpanet has changed the world, and if (to be Churchillian) the US were to last another 1,000 years, men will still say this one of their finest hours.
Well, Arpanet was developed for defense. Hard to beat. Tang, anyone?
I do not know all that much about the DARPA model, but isn’t it basically that people compete for a big payoff? Pretty cheap in terms of gov’t expenditure, I understand. And maybe it’s not so bad for the also rans. I hear that there are some research institutions that compete for nearly everything.
National security refers to profits of the military industrial complex.
The DAPRA input to the failing trillion dollar F-35 is very minor, the production of weapons has nothing to do with defense missions nor applying new technology. F-35 has no better technology than the A-12 which was as poorly progressing and was killied by Dick Cheney in 1991.
ARPAnet was devised as an open info sharing system between researchers most of whom were university types working basic science for DoD.
ARPAnet is to the www as Graham Bell’s telephone is to TV.
DARPA is socialism, seed money for basic science which may someday be applied to war profiteering, paid solely by the US taxpayer.
HHS sends a lot of basic research money to university centers similar to DARPA, and the medical industry complex is becoming like the military industry congress complex in terms of socialized risk and privatized profit.