About government industrial policies

In the two years preceding its collapse, Solyndra and its biggest investor aggressively asserted themselves in dealings with the Obama administration, pushing Energy Secretary Steven Chu to visit the company’s headquarters to help it raise private money and later suggesting it would file for bankruptcy if the Energy Department rejected its proposed rescue plan.

Executives associated with the California solar panel company also privately described Energy Department officials as more concerned with appearances than with sound business decisions. (Source: The Washington Post)

Should the government decide which industries and which technologies are in our future?

Politicians have no experience in business decisions and are more likely to fail than succeed. Bureaucracy increases to keep track of the favored companies. Corruption is bound to increase making the decision process very inefficient.

Agencies are then created with regulators to keep track of what happens. Politicians are bribed to force the success of the enterprise. For example Newt Gingrich made between $1.6 million and $1.8 million in consulting fees from two contracts with mortgage company Freddie Mac.

What is happening in Europe is the direct outcome of excessive control of government carefully orchestrated by the industries it has supported and created.

The function of government should be to set the rules of the game and be the umpire. But governemnts should not play the game.

More details in my The Peter Dag Portfolio and my free educational videos on http://www.peterdag.com/.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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