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Politics : Politics for Pros- moderated
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From: LindyBill3/22/2005 3:56:59 AM
   of 793883
 
"Picking winners" doesn't work
adamsmith.org
By Eamonn on Industry & Employment

The death of John De Lorean reminds us of when governments spent taxpayers' money on "picking winners" that they hoped could regenerate depressed areas. In strife-torn Northern Ireland, they picked the DMC, the impractical stainless-steel gull-winged car featured for humorous effect in the movie Back to the Future.

De Lorean was a Detroit executive who dreamt of creating a sports car. In the mid-1970s Britain's Labour government gave him £55m to set up a factory in Belfast. It was never a valid scheme. Even Mrs Thatcher threw in another £30m trying to save it. Two years later, the receivers were sent in.

This £85m wreck was just one in a series of disasters caused by governments thinking that they were somehow better at identifying successful future businesses than the professional investors who do it every day.

De Lorean was the last romantic failure Mrs Thatcher would finance. And subsequent governments have inherited her skepticism. They still use public money to boost places and sectors (small business, say). But the memory of De Lorean prevents them from throwing cash at particular businesses. Perhaps at last, our politicians have learnt something?
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