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Imagine taking all of the taxpayer capital devoted to the bailouts and - more crucially - to the extraordinarily creative liquidity facilities opened by the Fed to the finance industry and instead devoting that to the tech industry. That is, instead of (or perhaps in addition to) finance firms being allowed to borrow at the Fed discount window, allow tech firms to do the same. Similarly, allow tech firms access to term loans at below-market rates. Instead of providing emergency equity capital injections to banks, provide equity capital for tech firms. And if any of that seems politically controversial to you, then fair enough, the most politically neutral solution would be to greatly increase R&D funding for basic academic science/engineering research grants through the NSF, NIH, and other scientific bodies.
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<p>Some Silicon Valley executives argued this very point. They gave, as an example, that instead of bailing out the auto companies, the money should have been provided as seed funding for hybrid vehicles, solar-powered vehicles, etc.</p>