From transportation to energy, and everything in between, should the government invest money in as many promising projects as possible? Or would that actually doom many of those ventures to failure? Burt Folsom, historian and professor at Hillsdale College, answers those questions by drawing on the fascinating history of the race to build America's railroads and airplanes.
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In 2011, a solar power company called Solyndra declared bankruptcy. A company going bankrupt is not news. But Solyndra was not just any company. Its biggest “investor” was the federal government which had given it $500 million dollars. That was news.
But, really, it shouldn’t have been. If history is any guide, it was quite predictable. The government is a very poor investor. And always has been. There are countless examples, but two should serve our purpose here.
After the Civil War, American leaders were anxious to bind the country’s North, South, East, and West regions together with transcontinental railroads. Congress therefore gave massive federal aid to build the Union Pacific, the Central Pacific, and later the Northern Pacific Railroads. But all three of these roads had huge financial problems. The Union Pacific, for example, was mired in financial scandal from its inception, went bankrupt several times, and had to rebuild large sections of track thanks to shoddy construction practices.
At that same time, James J. Hill, with no federal aid whatsoever, built a railroad from St. Paul to Seattle -- the Great Northern. How was Hill able to do with private funds what the Union Pacific failed to do with a gift of tens of millions of federal dollars?
The starting point is incentives. The Union Pacific was paid by the government for each mile of road it built. It was in the railroad’s interest not to build the road straight. The more miles it took the UP to cross Nebraska, for example, the more money it made.
Hill, by contrast, used his own capital. To make a profit, he had to build his Great Northern Railroad sturdy and straight. Hill’s company remained in business for almost a hundred years until 1970 when it merged with other railroads. The original Union Pacific, riddled with corruption and numerous other financial misdeeds, including the wholesale bribery of public officials, went broke within ten years.
The story of the airplane is even more stark. By the opening of the twentieth century, the major nations of Europe and America were frantically at work trying to invent a flying machine. The first nation to do so would have a huge military and commercial advantage.
In fact, leading American politicians of the day, such as Teddy Roosevelt, President William McKinley, and others argued that building an airplane was a national emergency. There was no time, they argued, to wait for private industry to get the job done. The government needed to pick the best aeronautics expert and give him the money he needed.
That expert was Samuel Langley, the president of the prestigious Smithsonian Institution and holder of honorary degrees from Harvard, Yale, Oxford, and Cambridge. Langley was already an accomplished inventor and he had written a highly praised book Experiments in Aerodynamics. Federal officials gave Langley funds for two trial flights. He immediately set to work. His theory was that his plane needed to be thrust into the air from a houseboat on the Potomac River. The big engine on the plane would then propel it through air for several minutes.
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I kinda disagree with this video. It's not like Langley, and subsequently every other agency who receives government handouts, spent that money in foreign markets. They invested it in american engineers, technicians, supplies and equipment to complete R&D. Sure they spent our money, but the people who received it ultimately cycled it back into the economy through taxation and private purchases. Also the Wright brothers used Langley's failures as a jump point for their experiments. I think its a gross over-simplification to say that economic growth is spurred from private money over the government's. Another point. Sure the wright brothers invented the first flying aircraft, but the real innovation came from the war machine of WWI and II and the postal system. That's when large combustion engines took our aircraft to new ranges with more cargo. The same goes for space. There was no Elon Musk when the government put man on the moon. As a matter-of-fact, there would be no private space or aviation corporations if it wasn't for the government footing the R&D/innovations bills. You also state that Langley, with the full support of the government couldn't achieve flight. In that same section you just said how both Langley AND the government gave up. Doesn't sound like full government backing to me. Your example of railroads is an example of corruption, not failed government acquisition. Don't get me wrong I'm anti- big government and the government does misstep, quite often. But, your blanket statements are far too chili for my needs.
When I was in the Navy, I got laughed out of the wardroom for suggesting that captains be rewarded for operating their ships efficiently. The others thought our job was to show the flag, and cost was not a factor whatsoever.
Then why has the Republican Party done NOTHING about REDUCING THE SIZE AND SCOPE OF GOVERNMENT for the past 60 YEARS???!!!
Answer: Because they DO NOT give a rats f*cking ass about it. And it wouldn’t surprise me in the least that they rely on Prager U to continue peddling this kind of bullsh*t to suggest that they do!
A TRUE small government conservative
Not long ago a thriving business that had been around for over 140+ years got taken over by the IRS because they claimed this company owed a lot of back taxes. So the IRS decided they were going to collect those back taxes by running the company themselves! Well, within 6 months, this thriving company was laid to rest! The real sad thing here is that the company the IRS took over was marketing one of the oldest product that carried the oldest profession known to man! Prostitution! And the company was the Mustang Ranch!! If the Government can't even keep the oldest no brainer profession going, why would we trust them to run anything else?
Our "Republic" was created to be a "minimal" government that enforced our law which is the Constitution! Sadly over time, the globalist left and traitorous Rinos have pushed more and more Government on to us and we finally see the end result of what they want! Socialism! Full dependence on Government! Yet in history, it's clear that when you spend other peoples money, it never works out! So far, 1 thousand 100 hundred people who watched this video must like or want Socialism! They just never learn!!!
You can add the F35 & The big dig to the list - massively over budget, huge delays with spurious result. Given the government is inept, incompetent, and absolutely corrupt, it’s no surprise. It’s just not the federal government, when the socialist ran the economy in the USSR, it was a disaster. The only exception is where they directly competed with the West - space race and militarily.
Theoretically the government can pay for these things but they just needed to pay them for how fast,sterdey,safe, and cost effective it was if they put these in place for paying like for the railroad it would be shorter, last longer, safe for all riding it or working on it, and it would cost less money to run them and to diliver goods and services. I am not saying that the government is better than private industry but saying it would be as good as private industry and if you reading this I am only puting this here to show you that is theoretically possible if it is done right,not like have the government has done it in the past. PS I am still a little sceptic if you guys are true but I know you have good intentions and that is all that should mater. Ps.ps. in one of your videos one of you said that global warming is not as bad as we see it but I hate to say it but there is too much evadents that says otherwise so here's some advice even if it looks small it dose not mean it is not gonna do big things and here's some more look for notable study's that have these 3 things: 1 it must show that is no kinds of biased 2 it hast to have a large sapmle size and 3 look for the placebo effect which is not important in this case so ya love your videos
PragerU cherry picking some events from history to fit their shotty agenda. Look at the Manhattan project. What an achievement by American scientists, funded by the government. Just making a point here... I can also cherry pick events from history. Good fight Prager fags
This is the foundation of the Right's LIES-Propaganda-Godless deception!! Also, this is how they maintain Authoritarian Economic dominance... they control the narritive, they use what is supposed to be a Constitutional Democratic government, they force their Globalism on the working-class, and they hold almost all the Wealth-Capital needed to establish businesses.
Need proof?? Why do they LIE ENDLESSLY about an Enlightenment Era THEORY that has (yet) never existed?? Why do they tell us Socialism is evil??
You know _why_ !!
Socialism: an Enlightenment Era THEORY prescribed that SOCIETY fund, own, operate, manage, distribute goods, and profit from local businesses. Existing within the *Free Market/self-regulating market* system, under a Constitutional Democracy, where citizens build a civilized SOCIETY with sustainability, stewardship, and prosperity for the working-class.
Privatization, Statism, Wealth/Ruling Elitism, Authoritarianism, etc etc are not the Economic models that build the type of SOCIETY most in-line with a Christ-like Nation and people... but the human race is unlikely to build a civilization allowing full Liberty. It is nonetheless important to EXPOSE the Right's endless LIES and Godless destruction of Protestantism, and America.
Does anyone remember the Great Depression, Keynesian economics, the greatest failure of free market capitalism. I'm not saying that government is a good investor this video is proof it isn't . But we must keep in mind that if the market is free of government interruption the economy will inevitably be the target of the business cycle and go into recession or depression. So all i want to say is that it's fine criticizing the government investment (after all criticism is the path to transparency and progress) but we shall not forget its importance.
This is one of the most ludicrous channels on youtube.... I feel sorry for that people actually believing this is education and not funded propaganda. The videos on this channels make abhorrent nonesensical claims and get away with it.... So sad
Propaganda channel funded by the billionaire class who buy off the politicians! Definition of fascism? ... collusion of corporate and Govt sector
Internet, texting iPhones computers etc all came about by massive govt R and D in the military sector ;
The difference between College knowledge and hands on practical knowledge. you maybe able to use big words but you have no idea how to make solid objects work. that's why engineers have ideas , that the working man bring to life.
It’s like the water company in the Philippines. Before privatization, the pilferage rate was 50%. The government agency didn’t care cause they charge the pilferage lost to customers as surcharge. After privatizing the water services in 1997, guess what? A miracle.... pilferage rate becomes almost 0%.
Privatization of train did not work for UK
I have been convinced by this video gov investment is shit. Only after I see this video with actual result of UK train privatization found out privatization might be worse.
It is nice to see different opinions.
I think the moral is: In some cases, privatization works, in some cases, gov investment works.
There are no straight answers. Think and research after watching a youtube video...
That solyndra messed up so badly, 9% efficiency CIGS solar cells? Now we have over 18% efficiency on those solar cells and panels ready for a manufacturer to be built for them, but we are adding another top layer and planning for a much better 2 active layer thin film solar cell.
We really need to rely on private funding for research at this rate.
You didn't even try to explain why you think the government is bad at investments; i.e. what drives their decisions to be bad, you simply gave two examples and then concluded from there. This is an improper use of data and we both know it, these could be outliers; Ben Shapiro would be furious.
Two failed attempts as example to make your point is not representative. The failure in these two examples isn't due to state spending but due to failure of the experts and wrong policy. There are lots of succesful examples. Very one-sided youtube explanation
This v8deo is straight B.S. it's someone being a puppet saying what people want also if it's a really risky field with little to no knowledge available then private finding want come also when the investments will benefit the masses equally then it will not happen also if you had to go all the way back to the Wright brothers to show your point how many did you over look the proved you wrong
If you look at space travel today you'll see the terrible investments that the us made in rockets, they never thought to reuse the rockets like SpaceX is, the government is bad at doing things and there's examples showing this happening all around us right now
This is clear as blue sky that government are going right direction cause no other private investor going to risk. Only government pave them way so other can have idea or make the same mistake simple as that.
The premise of your argument is that because some private projects worked out better than some government projects then private projects must always work out better than government projects. That is not so. A real analysis would involve more than a couple anecdotal examples.
@7EiamJ7 private industry has gotten to the moon thanks to Elon Musk. He did however rely on a hefty gov loan so that doesn't prove anything. I wasn't really arguing for or against privatization. I was arguing against this particular videos argument. It's clearly a logical fallacy.
I dunno, when your doing it privately you watch the pennies and need to succeed.
But when your using collected taxes there's no personal responsibility, project leaders still get paid and the losers are the working class.
Of course the state will have success stories they need those to sell the idea they can take on big projects, like going to the moon, get the funding and delay for more funding.
Surprised private industry haven't gotten to the moon yet, that is odd.
Democrats want more money to pay for free healthcare and green new deal and they will solve all the problems with your money. Good luck! We should head to venezuela to enjoy the maduro diet to lose some weight.
The problem is not that Facebook and Google are the only advertising platforms. The problem is that they are considered mainstream media and without these two, the trend of cryptocurrencies gaining legitimacy is delayed. That is right, I said delayed not blocked or prevented.
The World Has Changed.
Five years ago, when bitcoin was unknown to most people, this might have been a fatal move. Today is a different story. I recently traveled to a remote mountain town in the interior of Mexico. Everyone I met had heard about Bitcoin and eyes lit up with excitement when I ask if I could pay for lunch with bitcoin.
Today are dozens of websites dedicated to cryptocurrencies, either holding them, exchanging them or just writing about them. Probably the most effective advertising remains on Google, it is called Google Search and it is free.
If someone wants to learn about owning bitcoin or any other currency, there is a ton of educational information.
The Flipside Is Being Ignored.
Not All Regulation Is Inherently Bad.
If we examine the full spectrum of regulation to this point on a global scale there is one common target most everywhere. That is the practice of exchanges. So far there has been little or not regulation, threatened or enacted, to protect investors from loss of funds due to security breaches.
Capitulation Is A Good Sign.