The poster you're responding to is correct. Michael Arrington uses heavy rhetoric, so we should probably translate "handouts" to mean expensive economic intervention which benefits an industry. Silicon Valley's fundamental innovations were driven by government research and intervention, through the military.

http://www.nytimes.com/2005/04/02/technology/02darpa.html?_r...

Arrington actually argues in favor of heavy government intervention: high speed trains, subsidized computers for children, etc. Just not the kind which might conceivably worry Silicon Valley investors.

I agree with some of the article's stances -- like on net neutrality and probably copyright.

No he doesn't, he's saying "if the government wants to spend money on innovation" then do it in leveraging infrastructure. He makes it clear that this is a "first do no harm" sort of thing in the closing "Heck, put a woman on the moon. I don’t know if that last one will do much, but at least they’ll be busy not screwing up Silicon Valley while they’re at it."

Governments like to spend money, he's suggesting what he sees as the least harmful ways to do that, not suggesting, at least in this post, that they do it in the first place.

(While he's not making it here, there's a strong argument to not do "unnecessary" government spending since it crowds out what the market would choose. Every dollar borrowed to build high speed trains is a dollar plus overhead not available to fund a startup.)