We just thought we had buried forever with the Carter presidency the notion of “industrial policy”, a kind of Japanese MITI-like concept of government direction of major elements of the economy, with various aspects of “investment” in favored industries and the selection of winners to receive subsidies and targeted tax incentives. Well, guess again. The concept is not only resurrected, it is even more grandiose than could have ever been imagined by Carter’s economic team. Of course, its centerpiece will be ObamaCare in whatever form it is finally adopted, but that’s only the big tipping point, for to follow will be a long list of attempted intrusions into markets and private contract relationships that should keep the Supreme Court busy for many years to come. And in the face of all this, at his recent jobs summit Obama asked a room full of CEOs, “I want to hear from you, what is holding back our business investment?” Can he really be serious? And the answer is that this is what passes for economic development thinking in an administration that has no idea how jobs are created, how capital is formed, and how it is nurtured, because no one in a key policy role has ever done any of these things. How much of this can we stand? Rich Karlgaard makes the insightful point that the salvation of the 1970’s was entrepreneurship and innovation, featuring many startups that are driving job growth to this day. And it’s happening again. The difference is that much of it is happening offshore, and the worry is that with the anti-capital policies now being initiated in Washington, the U. S. will miss the current entrepreneurial boom.
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