When Government Picks “Winners,” They Sometimes Turn Out to Be Losers
Alex Adrianson /
The government isn’t very good at picking technologies to invest in. Undeterred by this track record, however, some members of Congress now want to create a new subsidy program for cars powered by natural gas. Time to remember two great moments in government technology policy.
In the early 1960s, an adviser told President Kennedy that failure to enter the supersonic transport market would cost the United States 50,000 jobs, $4 billion in income, and $3 billion in capital. In 1968, the federal government began subsidizing the development of the Boeing 2707—an aircraft that was expected to compete with the French Concorde. Supersonic travel uses a lot more fuel, and spikes in the price of fuel made the project uneconomical. Concorde flights were also so loud that they provoked a backlash against supersonic flight. After spending nearly $1 billion without completing a prototype, the Boeing project was canceled in 1971. (more…)