Wednesday, October 05, 2011

Signs of the times

My Sep 18 post includes my two cents on Solyndra.  Many others have discussed it in much greater depth (see especially various posts by Megan McArdle).  But we have reason to worry that industrial policy is coming back.  The Economist recently cited support from serious academic economists. The New Yorker's James Surowieki chimes in with his Oct 10 column.  His "pro" case is easily rebutted.  (i) Politicians make politicized choices; and (ii) they cannot assemble the detailed and dispersed knowledge that markets gather when ideas and projects are vetted.  He seemingly accepts the first as a possibility, and barely touches the second.

The downside of accelerating change is the way it leaves some people in the dust.  Add hard economic times and you may have a problem.  The confused claims and slogans of the Wall Street protestors and their allies are a depressing sight.  But what about all the others who have come think that industrial policy deserves a new look?  That may be the more dismal development.