Citizenship for Peter Thiel made a lot of sense. I laid out the case over at the Spinoff.
Corporate welfare is different.
Matt Nippert asked me last week for comment on the government's venture capital fund, which wound up partnering with Thiel in some of his New Zealand investment. The government's fund effectively lets government share in downside risk but not upside.
Eric Crampton, economist and head of research for pro-market think-tank NZI, had previously defended the government's granting of citizenship to Thiel who gained approval after appealing to then-Internal Affairs Minister Nathan Guy to waive requirements he live or intend to live here due to "exceptional circumstances".The government just shouldn't be in this kind of business.
Crampton said that decision was a "bet worth making at the time, and one that should not be regretted in retrospect".
However, following revelations Thiel exercised a buyout option in his partnership with the publicly-funded New Zealand Venture Investment Fund - a move that netted the Paypal founder $24m in profits while leaving NZVIF barely breaking even despite both parties bearing equal risk of loss - Crampton said going into business with Thiel was a gamble the Government should not have taken.
"The Government should not be involved in investment pump-priming activities," he said.
"Government economic diversification schemes, in which the government shares in the downside risk if the investment turns sour but only benefits on the upside through increased tax revenues from a successful business, are adventures best avoided," Crampton said.
It's also been written up at the Straits Times. I talked with Radio NZ's Panel about it.
Meanwhile, Canada throws money at airplanes....