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FIGHT! Semiconductor heavyweights debate government's role, gloves come off

Gadfly T.J. Rogers: 'Government sucks.' Investment honcho: 'It's good for society'

'Bad boy' and self-proclaimed 'rich guy' T.J. weighs in

T.J. Rogers, however, wasn't buying Banatao's argument. "So you've heard two opinions," he said. "The last opinion is that government is good and does things that are helpful to the industry. The opinion before that was that government is a brake on the economy and slows us down, causes us to stumble. Let me do a tie-breaker: the government sucks."

Rogers took specific umbrage at Banatao's reference to Kennedy. "I don't give John Kennedy credit for my goddam industry," he said. "We invented it right here, not some goddam bureaucrat in government."

He also tore into the idea that governmental influence on the development of the internet was a good thing. "I keep hearing that the internet got invented by the government," he said. "I actually did research on this. There were three competing standards for the internet, all of which were technically capable, and it is not at all clear that the internet that we have today – the protocol for it – was the best of the three. Basically, it was a government expenditure, government laboratories, and they just prevailed by edict."

From Rogers' point of view, the government – by definition – is always in the way, and that you can't believe in innovation and entrepreneurship while also believing that the government can be an aid to industry.

"You can't sit here and say, 'Startups, smart people inventing things is what really matters,' and then right after that say Senator Blowhard has a better idea of what to do than I do," he said. "You can't believe in those two things."

Rogers was also particularly incensed by what he characterized as the inefficiencies of having the government use tax money for job-creation programs when the private sector is much more efficient than government in doing so.

"How does the government fund things?" he asked rhetorically. "They tax us, right? And then they take money from us, and then they decide by a political process – which usually involves not just the technical merit, which they don't know, but they depend on 'experts' who work for the companies that are trying to get pork, and also which states is it going to go into."

He cited figures he found on the US Department of Commerce website which he claimed that say it costs $30,000 in capital investment by the private sector to create a job as opposed what he said was between five-hundred thousand and four-million dollars per job created in the president Obama's stimulus package.

The Reg, by the way, couldn't find the stats he was citing on the DoC site – unless he was referring to the $30,000 that the Minority Business Development Agency says is the average cost of starting a business.

"So every time you take a chunk of money away from guys like me – and you could say I'm a rich guy and I don't need the money, and I am a rich guy and I don't need the money," he said. "But what do I do with it? I invest it. And I will create more jobs by investing my own money than by sending it to the pork-barrel process for them to figure out what to do with that money."

Banatao argued that Doerr and Rogers were too narrowly focused in their outlook. "There are many ways of looking at this, guys," he said. "Be practical about where the needs are coming from."

Those needs, he said, include basic research that neither companies nor venture capitalists are willing to fund. In addition, "Let's not forget that a lot of us benefited from grants when we were all in the university system."

Banatao also cited an article in The Wall Street Journal that describes studies that came to the conclusion that not only does government funding promote technological innovation, but also that the government has funded research too risky for venture capitalists, research that has led to groundbreaking, industry-creating breakthroughs.

"Guess who the biggest VC is?" Banatao asked. "It is the government."

"We just wish they got a better return on their investment," interjected Doerr.

"It doesn't matter," Banatao shot back. "Look at all the jobs that it created. That is the return to society."

At that point, the argument began to devolve into a slap fight. Government was "the biggest funder of basic technologies that went into a lot of things that big companies, later on, benefited from," Banatao reiterated.

Banatao: "It is all there in the numbers."

Rogers: "I don't believe it."

Banatao: "It is there. Read it."

Rogers: "No it's not." ®

Bootnote

Perhaps one reason for Rogers' pugnaciousness could be explained by his opening remarks on the panel. "First of all I'd like to start out with a disclaimer," he said. "They served us some nice wine at dinner tonight of which I partook amply. So I will apologize in advance in case I lapse at any time in my talk into telling the truth."

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