THE BLOG
01/04/2007 07:08 pm ET Updated May 25, 2011

Researching Our Way to Prosperity

New York looks to become the next state to jump on the stem cell bandwagon, with newly-installed Gov. Eliot Spitzer (D) promising to put a $2 billion bond issue on the ballot. The investment "will pay for itself many times over in increased jobs, economic activity, and improved health," he said during his inaugural address.

Those of us who raise a cocked eyebrow over out-of-control health care spending need to speak out about this new state arms race (California, Connecticut, New Jersey, Ohio, Florida -- the number of states lavishing direct and indirect taxpayer subsidies on this one area of medical research is growing faster than bacteria on a petri dish).

Stem cell research is promising, and it shouldn't be impeded by a bunch of anti-science right-to-lifers with God and the president on their side. But like any strain of research, the likelihood of a major medical breakthrough coming from stem cells is probably not that much greater than gene therapy, the human genome project, the war on cancer or any of the multi-billion-dollar medical research programs that came before it. A lot of knowledge and a few good things will come out of stem cell research, but will it make those with severed spines stand up and walk? Call me irreligious, but I'm skeptical.

How about jobs and economic development? Well, the venture capital cycle in biotech is about as boom and bust as they come. Not for nothing is biotech called the rich man's lottery. The angels and funds pour in lots of money to lots of start-ups, hoping one of them will pay off. Today, we're at the top of a business cycle when there is plenty of money to pour into fruitless ventures. But how much will there be when unemployment is higher and the dreamers behind a few stem cell business plans come up empty?

Of course, there will be some new jobs created for university researchers, their underpaid foreign graduate students, and the white coat crowd in the biotech industrial parks subsidized by the taxpayers. But is this really the best use of government subsidies, especially at a time when the health care sector -- 16 percent of GDP and still growing -- is sapping the vitality of the rest of the economy? Has anyone given any thought to how much some of these breakthrough stem cell technologies might cost, and how the rest of the economy might pay for them?

Progressive thinkers like former Labor Secretary Robert Reich and Robert Kuttner of the American Prospect magazine have long provided the intellectual rationale for strategic government investments to spur economic development. But as Democrats once again get their hands on a few levers of power, we should probably have a public debate about what would best serve the overall economy NOW.

Can you say alternative energy and mass transit? That also would create high tech jobs, and it would help the rest of the economy, not tax it. Just because the religious right is against it doesn't mean we should write the stem cell researchers a blank check.

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