Obama as Venture Capitalist
John Stossel has a great link-filled round up of failed and failing solar and green energy programs funded by the Obama Administration with our money. Check out the extensive list.
Here, for laughs, is Ray Lane of Kleiner Perkins rhapsodizing about Obama as the greatest government venture capitalist ever, and using for his prime example ... Solyndra!
I suppose at one point Kleiner Perkins used to take private risks with private money, but it seems to have found out it can make higher returns leveraging its investments with taxpayer money, and then using political influence to mandate business for the companies in which it invests. Thus the hiring of Al Gore, among other moves, to the KP board. Lane, by the way, is Chairman of serial government trough-feeder Fisker automotive, which make admittedly very cool-looking cars that require a lot of taxpayer subsidies.
Certainly Mr. Lane knows something about marketing, including that age-old tactic the "bait and switch." The taxpayer subsidies of Fisker were made on the theory that electric cars were somehow greener than gasoline cars because they use less energy. But looking at the fuel at the power plant it takes to make the electricity that goes into a Fisker Karma, the car gets worse gas mileage than an SUV (only an EPA equivalent MPG standard that breaks the second law of thermodynamics hides this fact). Congratulations Mr. Lane, green subsidies for sub-SUV gas mileage. All those checks KP partners wrote to Obama in the last election certainly got a good return.
morganovich:
KP has become disgusting.
i saw an interview with them in which they extolled federal command and control of technologies and standards because "it's too hard to pick winners in a free market and we prefer to have the government pick one and tell everyone".
just vile rent seeking.
July 3, 2012, 11:36 amTXJim:
The regulators are captured by the firms regulated. The bad guys own the cops. We need an Un-Touchables unit to clean it up. Dig up Elliot Ness or hire Harry Markoplolis.
Today the actor who portrayed Andy Talyor died and I watched a clip of the ol Mayberry. Barney tickets Gomer for a non-emergency U-turn. Gomer pleads for mercy claiming a law was broken but more importantly their pre-existing friendship should let the infraction slide. Barney explains to Gomer the law is blind and he would loose credibility as a law enforcer by allowing his friendship to taint his enforcement of the law. Barney says it is every citizens' duty to uphold the law, even going as far as issuing a citizen's arrest to uphold it. Barney drives away after giving Gomer a ticket. Barney makes an illegal U-turn and Gomer calls him on it. Gomer makes a citizens arrest on Barney for an illegal U-turn. Barney is not happy. I am struck by the concept of citizens arrest. Must read up.
July 3, 2012, 2:23 pmme:
Venture capitalism (and capitalism in general) is great... as long as the people who put capital at risk will bear the brunt of malinvestment losses as well as the rewards of good choices.
I fail to see how any state organ investing tax moneys would ever satisfy this criterion. (I do go further than most of the readership of this blog in that I'd include defense R&D investment in this category)
July 3, 2012, 3:47 pmbradley13:
"I'd include defense R&D investment in this category)"
Back in the 1980s, Northrop Grumman privately financed the development of the F-20 fighter. By doing so, they failed to follow the gentlemen's agreement of sharing the DoD largesse - by privately financing the devolopment, they thought they could offer a huge cost advantage over the F-16 and take sales away from General Dynamics. "Competition", I think this is called...
You might think the DoD would have been smart enough to see the advantage here, and promote the idea of companies financing their own R&D and competing on the merits of their products. You would be wrong.
By actually attempting some free-market competition, Northrop offended everyone involved in the revolving door of defense contracting. Not only did the US refuse to buy any of the F-20s, they also actively sabatoged Northop's attempts to sell to other countries.
You can read a very tame, boring recital of this in Wikipedia. The reality was much uglier. Many officers and high-level civil servants retire to cushy jobs in industry, working for the same companies they awarded contracts to. Northrop threatened this gravy train by adding competition to the mix. If the winner of a contract wasn't foreordained, how could you properly arrange a cushy retirement job?
Congress makes a bad situation even worse, by insisting on individually approving major military procurements. In order to be approved, the first and foremost requirement for a program is to place subcontracts in as many Congressional districts as possible. Of course, the receiving companies then donate to election campaigns. This wild strewing of contracts hugely increases the cost and complexity of a project; real competition would put an end to this, but also to the campaign donations.
July 4, 2012, 2:28 amCraig Loehle:
The electric car is a second kind of bait and switch. It was originally proposed NOT for climate change but for urban pollution. the theory was that electricity from coal plants was mostly cleaned up at the stack compared to car emissions, so electric cars would help cities like LA with lousy air. This is true, and moreso with nuclear supplying the electricity. It morphed into a cure for global warming, as if the electricity came from unicorns.
July 4, 2012, 6:38 amGoneWithTheWind:
By definition if these "new technologies" were viable they would not need subsidies. It is ironic that the worlds largest photovoltaic solar panel manufacturing plant in the world (in China) has a large coal fired electrical generation facility built right next to it to provide the power. If solar had actually been a viable energy source what a great opportunity to prove it; they could have built the worlds largest PV generation facility to power this factory. But they didn't and that tells you all you need to know about PV solar panels.
July 4, 2012, 9:01 amIGotBupkis, Faecies Evenio Mr. Holder?:
"We're going to see a wind market and a solar market that will be robust and will grow by 70 to 100 percent."
Well, the increase in political hot air has substantially boosted as a result of this, my own estimates would put it up by between 300% and 500%.
And, as Solyndra shows, every American has now gotten burnt by the sun without even going outdoors, so there's a massive new kind of solar market there that no one even considered before.
July 4, 2012, 11:36 amme:
That's on the order of $15B for insane subsidies driven by lobbyism and party politics. I wish they hadn't been disbursed and believe they represent an abuse of tax dollars. Putting things into perspective, though, there's about $4T going to war funding, compared to which this abuse is a pale shadow.
July 4, 2012, 8:15 pmMJ:
Putting things into perspective, though, there’s about $4T going to war funding, compared to which this abuse is a pale shadow.
The war spending was never pitched as "venture capital".
July 5, 2012, 1:49 pmJim:
Much is being accomplished recently regarding the development of space launch rockets and space vehicles in the private sector. I wonder if public sector money will be flowing that way (if not already) and begin to slowly corrupt the private sector side of space travel?
July 5, 2012, 10:38 pmme:
@MJ: Politicians lie. In essence, they are parasites: they milk the populace they control through taxation and then convert it into possession and power by channelling it through transfer vehicles with little to no gain to the host.
What these vehicles are called is pretty irrelevant (just check out a few of the actual names of bills making it through congress for atrociously ironic examples).
The side that matters to me is the one where my earnings are reduced and my property is impacted and my needs are not taken care of in return.
Complaining about a few measly billions while trillions are disappearing in another part of the budget is penny wise and pound foolish. I picked military spending simply because it is an investment with no return. There is plenty more (think bailouts) where the argument that some unspecified nebulous good came from it is harder to make.
July 6, 2012, 6:30 amme:
And yes, sweeping generalization alert, etc. pp.
July 6, 2012, 6:31 amSue me, it's before my first coffee ;)
Patrick:
I am beside myself when I think about my tax dollars being squandered at the same time that they're rising. Hasn't the Government already done enough damage?
July 9, 2012, 7:18 pmWhen the government disregards the laws of physics, economics, human nature, (I could go on and on), the end results are far less than optimal. Mixing politics and abandonment of the laws of science and critical thinking results in far less desireable solutions. The best solutions inevitably arise when human capital is expended in a judicous fashion, and the economics bare witness to the wise paths to take. A government run by lawyers will eventually tie itself in a legal gordion knot. I think that we have arrived at this point.