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Come on guys, this should really be a corollary to Myth 8 rather than its own Myth. You even used the phrase “positive externalities!” I do, however, think that I have to abandon the “economists don’t say that” approach here and go with a “actually, I’m on the side of the myth here” tactic. While it’s fine to support markets that produce positive externalities, it’s really hard to do so when the positive externalities aren’t obvious. Therefore, picking “winning” markets is fine in theory but hard in practice sometimes, and picking “winner” companies is way harder…though it does make the case for a Romney presidency, what with his private-equity background and all. (Unfortunately, however, I remember seeing some statistics that showed that the government has a better investment record than Bain Capital.)
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