Economist Bill Shughart (a former GMU colleague, by the way) has this excellent op-ed in today's Washington Times ; it's on the folly of even small-scale government 'industrial policy.' Here are Bill's concluding paragraphs:
people to work is easy, as demonstrated by Franklin D. Roosevelt's
Depression-era Works Progress Administration (WPA), more accurately
known as "WPA: We Piddle Around." The bigger challenge is to create
wealth. Toyota failed to foresee the economic events that caused its
expansion plans to unravel.
Keep this in mind when Congress and the White House are selecting economic stimulus projects to fund this year.
If highly successful private firms like Toyota – with their
extraordinary market research and years of savvy and experience –
sometimes embark on projects that turn sour, how can we expect
politicians, most of whom have no such business know-how, to pick
There is a difference, however. Companies usually risk their own money. In Washington, the politicians will be risking ours.