Market Failure — Fixing Flats

Friedman rightfully pops a cork over Nardelli’s spin that Detroit is asking for $25 billion to innovate, not as a bailout:

It wasn’t a bailout, he said. It was a way to enable the car companies to retool for innovation. I could not help but shout back at the TV screen: “We have to subsidize Detroit so that it will innovate? What business were you people in other than innovation?” If we give you another $25 billion, will you also do accounting?

The budget of US DOE basic research is $4.7 billion — and that IS for innovation.  Total NSF budget is less than $7 billion.  Total NIH budget is approx. $28 billion.  Who knows how much DOD is spending.  Nonetheless… Why do we need to subsidize the private sector to innovate?

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Filed under Market Failure, Politics, Run like a business

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