Some public officials in Arizona have pinned the state's economic future on the hope of a big biotech payoff. Just last month, Governor Napolitano signed a bill creating a tax credit to subsidize investment in certain bioscience companies. But the industry's track record does little to inspire confidence.
In 2004 alone, the 330 publicly traded biotech firms posted a collective loss of $4.3 billion. Cumulative net losses since the first biotech company went public are more than $40 billion.
The Wall Street Journal likens the biotech craze to "a casino that sends capital to otherwise neglected high-risk corners of research-and rewards a very few with huge paydays."
Despite its massive losses, biotechnology may hold great promise. But private investors are best suited to weather these losses and manage the risks, not "visionary" officials using public money to jumpstart their entree into the high-tech economy via industrial planning.
As Nobel Prize-winning economist Gary Becker wrote, "Silicon Valley could never be reproduced through bureaucratic hothouse support." The numerous localities and states-including Phoenix and Arizona-trying to woo this fickle and unprofitable sector should leave the risky business to private investors, not taxpayers.
- Seattle Post-Intelligencer: "Biotech profits still seen as years away"
- Business Week: "Global Silicon Valleys? First, Kill All the Subsidies"
- Fedgazette (Federal Reserve Bank of Minneapolis), "Focus: Biotech"
- Wall Street Journal: "Biotech's Dismal Bottom Line" (paid subscription)
- Arizona Republic: "Arizona's Tech Game Plan" (paid subscription)
The Arizona Registrar of Contractors (ROC) is charged with protecting vulnerable consumers in Arizona from construction scams: the elderly, new home owners, the City of Tempe. The City of Tempe?
When Tempe decided to install a city-wide wireless internet (wi-fi) network, the ROC stepped in to protect the city from itself. The city had hired an experienced technology firm to install the system, but the ROC threatened to shut down the project because the firm was not licensed to perform construction in Arizona. Setting aside the merits or demerits of Tempe's project, the ROC has overstepped its consumer protection mission.
Instead of focusing on helping consumers resolve claims against contractors who walk off a job or do shoddy work, the ROC is increasingly becoming a pseudo law-enforcement agency, complete with most-wanted lists and sting operations.
Fundamentally, this raises the question of whether ROC functions are necessary and appropriate to government. Private organizations like the Better Business Bureau, the Underwriters Laboratories, and numerous self-regulating industry agencies protect consumers from fraud. Oversight from such private organizations is effective for consumers, less costly to taxpayers, and importantly, keeps government within its appropriate purview.
The Florida Supreme Court hears oral arguments tomorrow on a lawsuit brought against the Florida school voucher program. Florida's program, the only one of its kind in the country, helped some 700 students this year, most of whom were poor and trapped in failing public schools.
Although the U.S. Supreme Court ruled in 2002 that vouchers are constitutional, teachers' unions are taking the legal fight to the states, many of which including Arizona still have 19th century anti-Catholic Blaine Amendments that forbid public funding of religious institutions.
As Goldwater Institute senior fellow Clint Bolick wrote in a policy brief last year, "the Arizona Supreme Court has repudiated a broad interpretation of [Arizona's anti-Catholic Blaine Amendment] that would foreclose educational options to children who need them. In Kotterman v. Killian, the court upheld scholarship tax credits against challenges under both the First Amendment and the state constitution."
That ruling has not stopped school choice opponents from heading to federal court to challenge Arizona's tuition scholarship tax credit program, which allows individuals to receive tax credits for contributions of up to $500 to private school scholarship programs. In March, the federal district court judge dismissed the challenge as frivolous.
With any luck, the Florida Supreme Court will soon join the Arizona Supreme Court and the U.S. Supreme Court in upholding the constitutionality of school choice, and help put parents in charge of their children's educations.
We've all spent long hours in doctors' waiting rooms after waiting weeks just to get an appointment. It's no secret that Arizona has a doctor shortage. A 2001 Goldwater Institute study revealed that Arizona has 172 physicians per 100,000 residents; the recommended ratio is 195 physicians per 100,000 residents.
Some assume the shortage stems from a lack of medical schools in Arizona. That's the rationale for Governor Napolitano's approval of $7 million in first-year funding for a downtown medical school.
But as study authors Jeffrey Singer, M.D., and Craig Cantoni found, the shortage is instead due to high malpractice insurance premiums, a high rate of uninsured patients, and regulations that make it difficult and expensive for doctors to practice here. Building a new medical school at public expense does not address any of those problems.
And now comes word that a private medical school going up in Mesa will welcome 100 students to its campus, far more than the 24 students the state medical school plans to enroll.
Given the large private medical school and the state's misunderstanding of the cause of the doctor shortage, it appears the publicly-funded downtown medical school is no cure for the waiting room blues.
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