Forget Adam Smith, Whatever Works or Industrial Policy Revisited

Was reading an old BusinessWeek yesterday evening and after the lines "As America struggles to recover from the deep recession that likely lies ahead, a new economic model could take shape that would involve a great deal more than direct government involvement in the world of Wall Street. It could mean greater support of such industries as autos, nanotech, and renewable energies, which face fierce global competition. And it certainly spells a return of heavier regulation. It is far too early to predict that the U.S. is headed down the road of Asia-style industrial policy or the kinds of interventions imposed during the Great Depression, when bureaucrats seized and micromanaged entire industries." got me thinking that the protection of new industries let alone the old critical ones (Chrysler, GM etc) will probably become even more acute in the days to come. Shall we see a new even more stronger competition for/protection of the so called knowledge based enterprises? But then again, ironically, what caused the mess in the fist place were knowledge intensive financial services.