American Elephants

Creativity is Easy, You Just Order it Up! And Supply Lots and Lots of Money. by The Elephant's Child
May 4, 2009, 10:47 pm
Filed under: Capitalism, Economy, Freedom | Tags: , ,

A week ago, President Obama told the National Academy of Sciences in Washington about his vision of a new era of research and inquiry in which “discovery” is a national priority.

Obama cited the space race as an example of what can be accomplished with large infusions of money. If we can go to the moon, the theory goes, then we can do anything.  But this is a flawed vision of creativity.  Apollo was a pretty difficult, but straightforward engineering problem.

Creativity is often portrayed as a lightbulb going off over the head, or a bolt of lightening striking. It isn’t  like that.  All leaps forward are built on the shoulders of others.  Insight consists of bits and pieces of other people’s work that come together with a connective  idea in the creative  person’s mind.  Or not.  And there is much more “not” than breakthrough.  You can’t just order it up.

A National Priority of Investing 3% of GDP

Obama pledged to push public and private investment in research and development in the United States beyond it’s high point in 1964.  It would take $420 billion a year to reach this level.

A paper by Austan Goolsbee, the President’s economic adviser, points out that the majority of R&D spending is actually just salary payments for R&D workers.

[G]overnment R&D spending raises wages significantly, particularly for scientists related to defense such as physicists and aeronautical engineers. Because of the higher wages conventional estimates of the effectiveness of R&D policy may be 30 to 50 percent too high.

Energy Secretary Chu is giving $30 million over five years to two professors at the University of California, Berkeley, for research on cleaning up power plant pollution. Professors Berend Smit and Donald De Paolo will get $2 million and $4 million a year to seek better ways to clean carbon out of the emissions from power plants and natural gas wells and put it underground.

A Naïve Belief In the Power of Government

Liberal faith in the efficacy of government is amazing to behold.  They believe for scientific breakthroughs,  they have only to supply the money and choose the correct scientist.  They believe in bureaucracy and committees, and look with suspicion on the work of a lone individual.

The pharmaceutical industry used to be one of the country’s most innovative and successful, but excessive and erratic government regulation has pushed development costs into the stratosphere, according to the Hoover Institution’s Dr. Henry I. MIller.  It has made outcomes uncertain and slowed approvals to a trickle.

The chemical industry is another favorite target of government regulators. The EPA has designated pheromones — natural chemicals which in small amounts, prevent male insects from locating the females, thus reducing the number of offspring — as pesticides, and requires expensive testing in order to use them commercially.

Carol Browner, environmental czar; Lisa Jackson, EPA administrator; Kathleen Merrigan, deputy secretary of agriculture and  Joshua Sharfstein deputy FDA commissioner are hostile to modern technology and the industries that use it. None of them, according to Dr. Miller, has shown any understanding or appreciation of science.

A Complete Lack of Confidence in the Private Sector

President Obama and Treasury Secretary Geithner recently announced a need to regulate venture capital firms, on the grounds that they pose a risk to the economy.  Huh? Venture capital is focused on new technology in small startup companies.  By giving these firms the startup money to develop their ideas they are providing the engine for innovation, job creation and growth.  More than any other aspect of our economy, venture capital makes us the envy of the world.

Some have suggested that the Obama administration simply lacks understanding of the free market, that venture capital firms seek economic returns that are not aligned with the political objectives of the administration.  Others suggest  that venture capital can create huge fortunes outside of taxable income, which would also be unacceptable to the administration.

If the administration attempts to control decision-making in every industry in which it gets involved, we are in deep trouble.  There are very few individuals capable of running large business enterprises successfully.   It is a rare talent.  Businesses simply want to keep government off their backs, so they can provide jobs and products  and growth for the economy.

Most of the current crisis was caused by government, by too much regulation, by misguided regulation, by ill-conceived regulation.  It will not be improved by more government control.

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