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If you can't do the simple stuff correctly how can we be confident that government can do the hard stuff (health care, balancing environment and economy, balancing security and freedom) correctly
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That's a good question. Government in places like Singapore can be very efficient and effective at delivering things like this....It delivers by decree and makes it happen. China has a similar ability to "make things happen". Trampling on individual rights in order to achieve the end goal...
Democracies, especially messy democracies like the US and India have a much harder time delivering things efficiently. And yet, in the US even the horrible mistakes like Ethanol and employer supplied health care haven't stopped the US from dominating the last 100 years.
The US hasn't been below 22% of the entire planets GDP since 1880, when it took leadership in the world. And has been as high as 50% (after WWII) . Even horrible mistakes like the Iraq war (which cost 1% of US GDP annually ) don't knock the track completely off the rails. (The Post American World- fareed Zakkaria). This vast strength allows mistakes to be carried along.
But one of the mistakes is the kind of blanket ideological condemnation that you and Fate make about things like government investment. And blanket assertions that left unfettered, private capital and private industry would deliver a healthier economy and clearer economic development. The crashes of 1929 and 2008 are prime example of how this is a sure fired failure.
The world, even in the US, wasn't a very pleasant place for the majority of the population during the industrialization . And the gilded age in the US saw wealth owned by a small elite. It was largely interventions by government that built the large thriving middle class. Part of that were investments by the US government in dozens of enterprises in the early stages and even beyond. (TVA is still government owned).
You can't ignore the lessons that history has taught about the successes of government involvement and rail on just about its failures.
And, especially in the US, private enterprise lobbies the government to the extent that it is the large corporations that have more control over government economic policy than the electorate at large. Who keeps Congress supporting ethanol? Who kept the health insurance and health care industries from major reformation over the last 40 years?
If you think Fisker and Solyndra were a case of corporations bleeding tax payers money for bad investments ....what about the rules that keep much of Medicare and Medicaid from negotiating better prices for services and pharmaceuticals? Or the rules that kept health insurance companies profits high whilst chivvying away at the standard of living of the average citizen by taking a slightly larger share of income year after year....?
That's corporate America at work too. And it didn't really provide positive effect for most working class and middle class people.
The answer is, that in a complex economy and a messy democratic system nothing is going to come easily. And that ideological statements that "government should never be involved" can't be sustained when one looks at all the evidence of successes and failures over time.
For instance when Fate says
However, the government is not (as I said a few posts back) a typical VC.
he's right. But not the way he thinks. The governments involvement is often more fundamental to the establishment of entire industrial sectors. And, its generally been more successful than the average VC. Mostly because, it isn't at the mercy of the market forces entirely. So it doesn't have to record a pay back in 5 years.... In fact when it invests in things like Frakking and the Internet and the development of the computer .... it doesn't often see a direct return.
And yet the investment becomes foundational.
You can be right in saying Solyndra was crap. But that doesn't make the entire program at the DOE wrong. Nor does it make the idea of government intervention wrong when it has proven to be wildly successful in enough cases to make the alternative worth considering when an economic sector isn't likely to develop without help...
Alternative energy is an area in which governments around the world are involved because almost everyone sees the development of these industries as key elements of economic development. And because the private capital markets are making the required investments in the competing geographies. Corporations have proven that they don't really care about the development of a national economy, only their own success. Someone has to look at for the people who make up the nation, and act on their behalf to ensure that economic development includes their nation.
The US is lucky that the US government has the where with all to involve itself, and a pretty decent track record of success when it does get involved..
In a global economy, corporations aren't looking out for the citizens of any particular geography - only their shareholders and executives. If governments don't work to ensure that their national interests are advanced through economic policy and, perhaps, investment at times - then no one will.
29 Apr 2013, 3:14 pm 
