October 24, 2011

ON THE OTHER HAND, GOVERNMENT IS EXCEPTIONALLY DEFT AT PICKING LOSERS...:

Why Politicians Lose So Much Money Trying To Pick Winners (Jim Powell, 10/24/11, Forbes)

The Solyndra scandal offers us a reminder that government isn't very good at picking winners and shouldn't try to do it.  Thanks to Obama administration connections, this California‑based solar panel maker had a $535 million spending blowout at the taxpayers' expense, then fired everybody - some 1,100 jobs.  But there continues to be relentless lobbying for government to back other ventures touted as essential for our future.

Perhaps we need to reflect a little on why government hasn't been able to pick winners.  For starters, nobody has a crystal ball.  Media reports of official government news releases regularly describe as "unexpected" the latest numbers on unemployment, housing starts, the gross domestic product and other economic indicators.  Financial bubbles, stock crashes, bond defaults, terrorist attacks, world wars, natural disasters, rising prices, falling prices and so much else have taken politicians by surprise.

It can be just as difficult to predict all sorts of things in our lives, like which new car models will be successful.  Every year for decades, automakers have introduced new models.  There have been hundreds and hundreds, but most weren't in production very long.


...so rather than trying to wager on a winner it should simply raise taxes on gas/oil and let the market pick out winning alternatives.

Posted by at October 24, 2011 9:11 PM
  

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