What’s Wrong with Picking Winners and Losers?

Reuters.com has a piece discussing how former Governor Willard Romney apparently targeted some industries and business for relocation to and success in Massachusetts. See the informative article here.

Mr. Romney and the Republicans have criticized President Obama for picking alternative energy favorites such as Solyndra. Should government target certain companies for success? How about industries? Should broadband receive favored treatment versus agriculture? Should promotion of commerce be defined by providing incentives for favored firms?

Or should government focus on making sure infrastructure is in place to attract and channel commerce. Instead of betting on whether company XYZ will succeed, government can focus on determining what upgrades in education and facilities it will need in order to attract the private sector. Does that sound like a more reasonable bet to make?

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
This entry was posted in broadband, commerce, Economy, Mitt Romney, Political Economy and tagged , , . Bookmark the permalink.

One Response to What’s Wrong with Picking Winners and Losers?

  1. Ken Ciszewski says:

    Our government has in the past helped agriculture with farm subsidies, incentives to manage the land to prevent over planting and thus helping keep prices up, and by buying foods to help keep prices up (when I was in grade school, our cafeteria got surplus food in large cans–canned grapefruit slices were quite a delicacy!!). Government sometimes levies tariffs in selected cases where foreign competition is found to be using predatory pricing.

    The US government had a hand in the early research that led to the development of the Internet (they did research through ARPA and DARPA and funneled money to Bolt Baranek and Newman to also do research). The NASA space program had many spin-off products (the drink Tang is a favorite joke, but it appears to be real) and did research that has wide spread benefits.

    At one time governments (state and local, as well as federal) regulated various utilities (Electric, .Gas, telephone) making them regulated monopolies, allowing them to negotiate a guaranteed profit over operating costs. Later of course, it was decided competition in some of these industries was a better way to go. Or not.

    The point is that our government has supported various industries in various ways over time. However, a consistent national industrial policy is not something we have ever seen, unlike in other countries, like China, where the government has put a lot of money and worker training to create manufacturing of things such as safety pins (according to an NPR radio program aired a couple of years ago) among other things, and the European countries who support Airbus, who then complain that Boeing gets US government subsidies.

    I think we need to decide which jobs are national strategic assets (pick some; computer manufacturing, telecommunications equipment, precision machine tools (which in recent times have been mostly ceded to the Japanese), the creation of computer software, construction machinery, commercial airplanes, and of course, military weapons systems—(witness the recent failed attempt by a US company to partner with a European company related to Airbus to get a US military tanker refueling contract) and target those with help. Domestic energy production should also be a national strategic asset and be helped as well.

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