You can now read 5 articles in a month for free on Read as much as you want anywhere and anytime for just 99¢.

Opinion | Josh Barro

R.I. should default on 38 Studios

‘The shakiness of this company is a tragedy for Rhode Island,” Governor Lincoln Chafee said Wednesday about 38 Studios. “Shakiness” was an understatement. The next day, Curt Schilling’s troubled video game studio, which the state lured from Massachusetts with a $75 million loan guarantee, abruptly laid off its entire staff.

Yet the problem isn’t just that Schilling’s company has apparently run out of cash. It’s that Rhode Island put itself in a position where the failure of one specific mid-size firm would be a tragedy for the state. Whenever any state gets into the “economic development” business — that is, handing out favors to individually selected firms — it is playing venture capitalist with taxpayer dollars. But while real venture capitalists know that many investments fail, Rhode Island doesn’t appear to have planned for anything other than success.

Your comment is subject to the rules of our Posting Policy

This comment may appear on your public profile. Public Profile FAQ

Wake up with today's top stories.

Want each day's news headlines delivered fresh to your
inbox every morning? Just connect with us
in one of the following ways:
Please enter a valid email will never post anything without asking.
Privacy Policy
Subscriber Log In

You have reached the limit of 5 free articles in a month

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of
Marketing image of