Thursday, April 13, 2006

Hillary's Latest Brainstorm

Thirteen years ago Americans were saved from HillaryCare. Now the wannabe president-of-us-all wants to undermine one of the pillars of economic growth, which is capital investment. Larry Kudlow has the story; here's his opening:

In a speech delivered in Chicago earlier this week, the New York Senator went on ad nauseam about all these alleged problems plaguing our booming American economy and how to fix them. She said “we cannot go on letting our basic infrastructure decay and failing to invest in new technologies if we expect America to maintain its economic leadership.”

Mrs. Clinton’s idea? She wants to see us put into place a “national investment authority.” This brilliant idea is based on a recent report by Felix Rohatyn and Senator Warren Rudman that would create some newfangled government institution to help “finance accelerated commitment to rebuilding our national infrastructure.” Read between the lines and all this means is just more intrusive meddling and spending from Washington. We know where that gets us.

Kudlow goes on to explain why Hillary's latest brainstorm is yet another dangerous Clintonian fantasy. And yet, Ms. Rodham Clinton's proposal will resonate with the intelligentsia, who like to believe that they are smarter than markets, and who certainly would like to tell us what to eat for breakfast (for starters).

One of the intelligentsia who probably applauds HillaryInvest is Nobel laureate Joe Stiglitz, who thinks he has proved the superiority of government over the private sector in the realm of R&D. I popped that thought balloon a while back, in this post, where I concluded that

[t]he true private rate of return to R&D is about 4 to 6 times that of the government rate of return. What else would one expect, knowing that the private sector responds to the signals sent by consumers while government just makes it up as it goes along?

But logic and facts will not daunt committed statists like Hillary Clinton and Joe Stiglitz.