Picking winners, saving losers - have governments learned from past failures?

From The Economist - Industrial policy remains controversial. Defined as the attempt by government to promote the growth of particular industrial sectors and companies, there have been successes, but also many expensive failures. Policy may be designed to support or restructure old, struggling sectors, such as steel or textiles, or to try to construct new industries, such as robotics or nanotechnology. Neither tack has met with much success. Governments rarely evaluate the costs and benefits properly. In America the debate has raged fiercely. The government has long helped business, for instance through the Small Business Administration (SBA), set up in 1953, which guarantees loans to small firms. Heavy defence and space spending has created national champions, such as Boeing in aircraft-making. The government bailed out Lockheed in 1971 and Chrysler in 1979, and raised motorbike tariffs in 1983 to save Harley-Davidson. But efforts to support specific industries and firms have remained sporadic despite calls for a coherent policy. Ronald Reagan and George Bush senior tried to eliminate industrial policy wherever they found it, says Michael Boskin, chairman of the Council of Economic Advisers under Mr Bush. Read more

GOP senators list 100 worst stimulus projects

Here is the entire Coburn McCain Report -

Washington (CNN) -- Monkeys on cocaine. New windows for a closed visitor's center. Modern dance as a tool for software development. A report released Tuesday by conservative Sens. Tom Coburn and John McCain cited these and 97 other projects as leading examples of misguided or wasteful spending under the Obama administration's $862 billion economic stimulus bill. Titled "Summertime Blues," the report is the third by the two senators targeting projects that they say fail to meet the job-creation goal of spending under the Recovery Act of 2009. The report highlights the extraordinary "waste and mismanagement" of taxpayer dollars, said McCain, R-Arizona. The stimulus plan "was supposed to create jobs. It does not." The "American people have awakened to the incompetency of Washington," declared Coburn, R-Oklahoma. "The rest of the federal government is filled with stuff just like this." Both senators conceded that the stimulus plan has had some positive effect on the economy, but insisted any benefit was due solely to the sheer size of the package, and that its effectiveness had been blunted due its poor design and spending choices. Coburn complained the measure was full of projects that are "stupid or inappropriate," and fail to meet "the common sense test." Read more

Lacking a trustworthy local leadership

Commentary by Michael Swickard - In the last month I have had a front-row seat to a controversy in which the Las Cruces leadership has acted improperly. At stake are millions of dollars and jobs for our local economy. Also at stake is the reputation of our city, with companies wanting to do business but unsure if the city leadership can be trusted. Several years ago a golf course to replace the Las Cruces County Club course was built on the East Mesa as the centerpiece to a large development. Last year a road was put in by the developer of the project to the golf course but the city council said a second road was necessary for the facility to be used. So the golf course has sat as a stranded asset for a long time using water but not generating tax revenue. Read more