Failed Industries: the Opportunity Costs of Bail-Outs

We've heard a lot about saving jobs by providing financial CPR to the Big 3 auto manufacturers recently. I won't discuss American auto industries' management incompetence or even whether consumers' car purchases represent a national investment or merely a gigantic wasteful prepaid expense. But I do want to ask: what are the opportunity costs of sinking money into an old-technology industry which cannot manage itself?

I spent this past weekend in San Francisco at the 50th Annual meeting of the American Society of Hematology (ASH), immersed in basic science, current life-science research and development, and the ultimate application of exquisite scientific discipline and research to patient care. The atmosphere was vibrant; the weekend extraordinary. When I joined ASH in 1978 (I am now "emeritus"), it was an organization of about 1400 physicians, basic scientists and researchers. Now, it has a membership of 16,000 with more than 20,000 persons from around the world attending the annual meeting. The discoveries described at these meeting, and the cross-fertilization as experienced scientific researchers, trainees, physicians and other persons concerned with hematology learned from each other and interacted, will revolutionize medical care in coming decades. Hematology has moved from the "black box" era (when we gave drugs without really knowing how they worked), to understanding many of the basic mechanisms of cellular function and disease not just at the chromosomal or genetic level, but at the molecular level.

The money we use to prop up our moribund American auto industry's "yesterday's technology", will not be available to fund scientific medical research which will pay significant dividends, not only through prolongation of life, health and alleviation of suffering, but through financial return on investment. Those missing dollars will not help to keep America scientifically pre-eminent. Failure to fund life sciences research will inhibit new systems of effective patient care.

America should consider its opportunity costs when it commits resources to bail out failed industries. Let's support scientific research and medical technologies which give us a return on our investment, provide significant high-paying employment and opportunity, and harness the brain-power of our country, rather than boost horsepower under the hood.