Alex: I believe our country gets long-term benefits from, as you've described it here, funding of research, science, technology, engineering and mathematics. I get worried, though, when our government officials start picking winners in private industry. As Jon Titus points out, their track record with Solyndra and Ener1 would suggest that they're not particularly well-qualified to be doing that.
Bill, a very cogent explanation of the process in play here. Games theory offers a great way to analyze these things. As you indicate, the predators are roaming free. The thing of which I dispair is that, regardless of your opinions on regulation, the "prey," as represented by our legislators, are unlikely to ever to anything to address the intrinsics of the problem. At times they will pass laws and regulations, but they'll be disconnected from other laws -- i.e., no coherent overall strategy -- and they'll often be introduced/passed more for show than for any effect.
Alex, I am really enjoying the free course in Game Theory currently being offered by Stanford. Their initial overview describes the optimization of behavior of both Predator and Prey in the standard Predator/Prey model. In all cases, both Predator and Prey benefit from being active -- moving around, looking for opportunities and avoiding pitfalls. In all cases being inactive and staying put gets a low score. Recall the advice given to wilderness trekkers in the event they get lost -- stay put and the rescuers will find you. When the search party is a Predator, that is precisely the wrong advice.
Government involvement in technology can benefit Exploration in the form of No-Strings-Attached Grants: Gifts to enable innovators to move around Steven Johnson's "adjacent possible" and explore. All other forms of Government involvement, such as loans, tax-credits, and especially regulations, have the effect of controlling behavior and restricting "movement" within the arena of ideas. Regulations are particularly onerous, as they force both Predator and Prey to stay put. In the model of free-market capitalism, that simply means both Predator and Prey are now susceptible to attack from more agile Predators -- a role presently filled by overseas competition.
Looks like most of the Linkedin discussion tended against government support for manufacturing. The rush to overseas manufacturing seems to have slowed in recent years for a number of reasons -- rising labor and shipping costs as well as production and supply difficulties. There's also a recent trend toward keeping manufacturing closer to the end consumer. High volume, low mix products, however, will probably continue to go to the cheap-labor markets. Not much would stop that.
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