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I consider it almost a patriotic duty to ensure that the Solyndra scandal gets lots of coverage. It is a classic case of what can happen when politicians (of any stripe) and politically-correct enthusiasts (e.g., the green lobby) figure out ways to tap the public purse to fund their favorite initiatives. Industrial policy (of all kinds) is about the only sure way to ensure that taxpayer's money is wasted, often at the expense of more promising but less PC ventures. Be sure to see the four related cartoons here. HT: Glenn Reynolds
I believe strongly that any good idea worth its salt will have no trouble locating funding. As the late Jude Wanniski often argued, the supply of capital in the world is virtually unlimited if you have a good and profitable idea. Governments should never play the role of venture capitalist.
UPDATE (Sep. 14): This is taking on the proportions of a major scandal. See today's ABC News report here. Crony capitalism at its finest.
12 comments:
Please stay on top of this. When someone Googles "Quid Pro Quo" this story should be the first thing the search finds!
Barton Hinkle has a good article in the Sept 9 issue of the Richmond Times-Dispatch re this.
So John, you live near Richmond, VA. So do I.
William,
I live in Miramar Beach, Florida (NW coast). I have been through the Richmond area several times. Virginia is a beautiful state.
"I believe strongly that any good idea worth its salt will have no trouble locating funding."
Agreed.
Selling arms, the property of the U.S. taxpayers, to Iran, a sworn enemy of the U.S., to fund the Contra rebels was a bad idea.
Please define "good". If this merely means "profitable" then many good ideas will go without funding unless a government agency or some truly visionary benefactor(s) can dispose of profit to further an idea that will only appear on the radar of the markets and market-aligned players after some outside event or condition forces into their pedestrian imaginations. Although it is not a popular idea among the acolytes of the "Free Market" there are many technological advances that have come to us through government agency(ies) and spending, a lot of it military or aerospace (not far apart) or though government contracts in major universities. Medicine, computing, electronics, etc., etc., government funding has frequently been the source and springboard of "private sector" advancements in the 20th and 21st centuries, either dierctly or through a variety of subsideies supporting various industries, particularly in energy and weapons. Many important ideas, like problems posed by resource depletion and climate change have been rejected by the Wisdom of The Market and will eventually find acceptance only when forced by crisis. Same as it ever was.
The cartoons are interesting but the reality pales when considering the Trillions of dollars shoveled into the Financial Sector, as if Solyndra were responsible for our current troubles.
Hey! how about this: "Soylyndra Green is people...aaahhhh!!"
Douglas: I recognize that there are many great things that have come as a result of direct government sponsorship and/or development. But I also know that there are countless ways that well-intentioned officials and politicians can waste huge sums of money on things like solar power or high-speed rail. The potential for human error, for greed, for corruption, for crony capitalism, and downright theft whenever government gets into bed with private interests is huge and ever-present. We cannot simply approve everything that sounds good on the surface, and figure that the money wasted on many projects will be offset by the good of a few that succeed. The bar for agreeing to a public-private partnership must be set extraordinarily high, much higher than it is now.
The energy sector is rife with venture capital, private equity, and big players with money such as exxon. No need for federal jump-starting.
That said, this $500 million is teeny next to the $3-4 trillion we have wasted in Iraqistan.
Like Cash for Clunkers--a one-time $2 billion boondoggle, but then every year we spend $8 billion on subsidized rural telephone services. Every year.
Unfortunately, most people (left- or right-wing) only point at the politically correct instances of federal waste.
"The potential for human error, for greed, for corruption, for crony capitalism, and downright theft whenever government gets into bed with private interests is huge and ever-present."
Scott, I can't get over how much you sound like a progressive sometimes. Keep it up!
Are you ready to endorse public campaign financing and overturning the Supreme Court's Citizens United decision?
Benjamin, you must live in an urban area otherwise why would you display such animus for the rural... maybe you grew up in a small town, or maybe farm animals freaked you out on a trip to the country. I guess I can understand this, but I am interested in knowing how you came up with the figure for the rural phone subsidies. What is the form of the subsidies? Aren't there any "wasteful" subsidies for urban areas? I suspect there are. Are ALL subsidies "wasteful"?
Douglas, Yes much new technology has been created through gov't funding i..e defense, space exploration, etc., but it generally falls int the catagory of killing a fly with a sledge hammer. Yes, the fly is dead, but the cost of the hammer is 20 times the cost of a fly swatter and the table the fly landed on is smashed. :)
Seriously, there is an area for gov't spending that will enhance the private sector. But, IMO, it should be kept at the R&D levels at all times, as the government has no controls for expenditures. Solyndra and the government loan are a beautiful example of crony capitalism, something the Obama administration is all about.
Solyndra ought to be a much bigger story.
I think Bruce Krasting has it right in the following analysis. Argonaut is about to walk away with $850 million of assets for $100 million - and taxpayers are going to get zip.
http://www.zerohedge.com/contributed/more-solyndra-%E2%80%93-next-move
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