In 1971, Indiana-based Bowmar Instruments introduced the first hand-held LED (Light Emitting Diode) calculator. The “Bowmar Brain” was a huge success. Other manufacturers developed cheaper calculators, and when the company could no longer compete, it went bankrupt in 1976.
What if the Government Intervened?
Starting with Chrysler in the 1970’s to GM and Chrysler in 2009 government has intervened to either prevent bankruptcy (Chrysler) or to distort the bankruptcy process (GM and Chrysler). It has justified its intervention by touting the vital importance of these businesses to economic recovery, the need for jobs in severely depressed Midwestern states or national security.
What if the government had intervened in the Bowmar bankruptcy? After all, the first hand-held LED calculator was economically important to both Texas and Indiana. Texas Instruments supplied Bowmar’s calculator chips. Further, the hand-held calculator and LED technologies had important scientific and military importance.
In 2010, it seems absurd to even raise the possibility that government should have “saved” Bowmar. However, we know from our current circumstance that government is whimsical and has indeed prevented private entities from going bankrupt. This prompts us to consider “what if?”
In the 1970’s calculators were expensive: more than $100 for a Bowmar and $500 or more for HP business and scientific models. Government intervention would have kept prices artificially high. Today calculators are included at no extra cost in the basic Windows computer package and banks give away inexpensive calculators as promotional items.
Government intervention would have stunted development of LED technology. Today LED technology is ubiquitous; it is used in signage, energy efficient illumination and in photo optical applications such as remote controls. See Wikipedia LED. Would the government have been able to innovate? I would suggest not.
The Heavy Hand of Government
Today we witness the spectacle of the government intervening in numerous traditionally private activities:
- Banks
- Money Market Funds
- Auto Manufacturers
- Health Care
- Mortgage Lending
Even conceding that the current Administration never intended to socialize broad swaths of private industry, the speed and scope of current federal involvement has put us on exactly that road. Financial media and the White House credit these measures with saving the economy and condition us to accept government solutions to private economic problems. This role is more than that of a regulator. Government has become a major operator in direct competition with other domestic and foreign private enterprises.
What is the Real Cost?
One cost is the recent proposed special tax on large banks who accepted TARP funds. Government largesse is an inappropriate “free lunch,” but even this mistake is not the greatest harm. Government intervention encourages investment based on political rather than economic considerations. Did we really solve the problem of costly union collective bargaining agreements when the government took control of Chrysler and GM? That would have jeopardized union support for Administration policies. See The Greediest Generation – Where Has Shared Sacrifice Gone?
Will these companies produce cars that consumers want to buy, or cars that meet the government’s environmental agenda? The heavy hand of government will ultimately stifle all industries that it touches. In the health care industry, this is of more than academic interest. We may pay with our lives.
If current governmental policy was in force in 1976, we all might be using very expensive and very large hand-held Bowmar Brains. It is a worrisome trend that we should all be concerned about.
loading...
Related posts:
- Truth and the Government
- Are We a Socialist Country?
- The Tragedy of the Commons Part II: Modern Finance and BP
- Who Pays?
- Uncomfortable Questions
Tags: bankruptcy. GM, Bowmar Brain, Chrysler, LEDs
