Abbott Power Plant, Champaign, Illinois
He distinguishes between the “Endless Frontier” investments in basic science (a libertarian who gets it) and government investment in technology development:
My position is not that government investment in technology has zero returns. My position is that on average it does worse than returns to private investement. This should not be controversial. It is the consensus view of economists who study innovation and growth. If you think average returns to government-directed investment are higher than average returns to private investment, then you really do believe that the state has special generative powers. And you should formalize your findings, collect your Nobel Prize, and forever change the world. Or you should chill out about how awesome the Internet is.
His conclusion has important implications for Obama policy — energy, infrastructure, science — going forward:
If advocates of a centralized push toward a green economy (which you have to admit is a pretty radical and romantic thing to even think plausible) aren’t counting on big technological leaps borne of subsidies, then they should be more open about the fact that their plan is really just to make energy incredibly expensive until incrementally developing green energy sources finally become competitive with carbon-based sources. Ten years? Twenty years? Thirty? And they need to explain why they think government winner-picking in green technology is likely to have a better record than government winner-picking generally.