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Although, I agree that the defense budget can and should be reduced significantly, there are a few points worth considering about DARPA: 1) DARPA is small port

Although, I agree that the defense budget can and should be reduced significantly, there are a few points worth considering about DARPA: 1) DARPA is small portion of the defense budget. (Not quite Big Bird small, but small) 2) As I understand it, DARPA focuses on research and technology, but does not attempt to build commercial products or successful businesses. 3) DARPA has been an exceptionally well-run program for a variety of reasons. (Reasons probably not reproducible by a rapidly assembled stimulus-funded program that at least appears to have rewarded political contributors with grants.) But the most important point is: A123 was attempting to build commercial technology for everyday application in a large, mature, competitive industry with a complex international supply chain. There are already huge market-based incentives for success in this industry. It is difficult to see how a government program could do a better job (at picking winners and losers) than the existing market players. This is an entirely different situation than defense-related technology.

rayiner 14y ago
DARPA is $3.2 billion. Not exactly peanuts. It's well-run, but it's well-run with the understanding that it can throw away $50 million and not get anything and that's okay. There was a logic to the AV123 investment. Battery technology is a major pressure point for all sorts of things, especially in the energy sector. The idea was to guarantee a loan to a private company who might be able to make major advances in the sector, as opposed to putting $50m in a government-run research project (which is much harder to sell politically).
- msgilligan 14y ago
  Well it is peanuts compared to the $700+ billion defense budget. (Which actually takes the wind out of the sails of those who use DARPA as an argument against cutting defense spending.) I don't know the details of A123 or its target market, so I'm not qualified to comment on the ex-ante logic of the investment, but given the WSJ article it doesn't sound like a wise investment to me. The idea that the likely better investment (in terms of net social gain) in a research project is harder to sell politically is perhaps an indication of why the political process may not be the right one for this type of research. I just don't think the Obama administration was capable of rapidly creating something on par with DARPA as part of the stimulus and I think we would have we would have been better off if they had used that money to pay down the debt.

rayiner 14y ago

DARPA is $3.2 billion. Not exactly peanuts. It's well-run, but it's well-run with the understanding that it can throw away $50 million and not get anything and that's okay. There was a logic to the AV123 investment. Battery technology is a major pressure point for all sorts of things, especially in the energy sector. The idea was to guarantee a loan to a private company who might be able to make major advances in the sector, as opposed to putting $50m in a government-run research project (which is much harder to sell politically).

msgilligan 14y ago
Well it is peanuts compared to the $700+ billion defense budget. (Which actually takes the wind out of the sails of those who use DARPA as an argument against cutting defense spending.) I don't know the details of A123 or its target market, so I'm not qualified to comment on the ex-ante logic of the investment, but given the WSJ article it doesn't sound like a wise investment to me. The idea that the likely better investment (in terms of net social gain) in a research project is harder to sell politically is perhaps an indication of why the political process may not be the right one for this type of research. I just don't think the Obama administration was capable of rapidly creating something on par with DARPA as part of the stimulus and I think we would have we would have been better off if they had used that money to pay down the debt.