From last night’s SOTU:
The first step in winning the future is encouraging American innovation. None of us can predict with certainty what the next big industry will be or where the new jobs will come from. Thirty years ago, we couldn’t know that something called the Internet would lead to an economic revolution. What we can do — what America does better than anyone else — is spark the creativity and imagination of our people. We’re the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook. In America, innovation doesn’t just change our lives. It is how we make our living.
Our free enterprise system is what drives innovation. But because it’s not always profitable for companies to invest in basic research, throughout our history, our government has provided cutting-edge scientists and inventors with the support that they need.
Why should government determine in what direction research money is headed? If firms choose not to do research in a certain sector, it’s because they don’t see the payoff down the road, i.e., consumers aren’t willing to spend enough on the new potential research created product to justify the research expenditure. This isn’t a flaw of free markets. It is a part of the foundation of free markets: You don’t spend money on projects that consumers don’t want. Thus, any government spending on research is wasteful. It puts research through a bureaucratic approval system. It takes money from individuals through taxes or deficit spending that would otherwise be directed in a different direction, chosen by the individuals, not the bureaucracy. It opens about a new avenue for cronyism.
Bottom line: This isn’t a recipe for advancement, but for distortion, suffocation, cronyism and coercion.