A Waste Of Energy?

[babylonsister]

A Waste Of Energy?
by James Surowiecki October 10, 2011


Two years ago, the solar company Solyndra was a darling of the Obama Administration. The company had received more than five hundred million dollars in loan guarantees from the Department of Energy, and was building a factory to manufacture a revolutionary new successor to the solar panel—one that didn’t require expensive silicon and came in a convenient tube format. It seemed like an ideal show horse for the Administration’s green-jobs strategy. Vice-President Joe Biden spoke by video at the plant’s groundbreaking ceremony, saying that the company was creating “the jobs of the future.” The following May, Obama gave a speech at the factory, and declared, “The true engine of economic growth will always be companies like Solyndra.”

Not quite. In fact, Solyndra had a huge problem: the price of silicon panels was plummeting, making its products uncompetitive. The company burned through its pile of cash in a futile attempt to stay afloat; in late August, it declared bankruptcy and fired eleven hundred workers. Solyndra went from show horse to cautionary tale. Its offices were raided by the F.B.I., and congressional Republicans have held hearings, including one at which two of the company’s top executives took the Fifth Amendment. Allegations of corruption are flying; critics of the Administration are arguing that the whole idea of government support for green companies should be abandoned as a pure boondoggle.

Washington being what it is, the backlash against green subsidies is no surprise. But it’s an overreaction every bit as hysterical as the pro-Solyndra hype was. Industrial policy does have a checkered history, and in much of the developing world government intervention in the marketplace has translated mainly into crony capitalism. But in other places the story is more encouraging; many economists argue that government intervention in the market was instrumental in the postwar rise of countries like Japan, South Korea, and Taiwan; more recently, Germany has built a sizable solar industry using subsidies. It’s certainly true that we don’t want government to be in the business of helping decide which big-box retailer or maker of MP3 players has the best chance of succeeding. But it’s also true that there are a few industries where it makes a lot of sense for the government to complement the market by subsidizing research and development. Renewable energy is one of them.

snip//

Of course, some think the Solyndra failure shows that the government isn’t investing smartly. But, while government subsidies have built-in problems—most obviously, some money will go to projects that would have happened anyway—there’s little sign that the Department of Energy has handed out money recklessly: the vetting process, which relied on three thousand outside experts, was unusually rigorous. Solyndra was a wager that went wrong, but failure is integral to the business of investing in new companies; many venture capitalists will tell you that, of the companies they fund, they expect a third, if not more, to fail. By those standards, the government is actually doing pretty well so far: under the stimulus program, the D.O.E. has handed out nearly twenty billion dollars in loan guarantees to renewable-energy companies, and only Solyndra has defaulted, accounting for a small fraction of the money guaranteed. Solyndra’s failure isn’t a reason for the government to give up on alternative energy, any more than the failure of Pets.com during the Internet bubble means that venture capital should steer clear of tech projects.

more...

http://www.newyorker.com/talk/financial/2011/10/10/111010ta_talk_surowiecki

[Indydem]

1. WHY ARE WE LOANING ANYONE IN THE PRIVATE SECTOR MONEY?

We keep hearing that private industry is sitting on trillions of dollars.

Why is the government loaning OUR money to rich assholes so that they can make a shit ton of money? And if the business fails? The rich fucks walk away squeeky clean and have lost nothing.

If the government wants to invest in green energy, develop the GD solar panels and wind turbines at the DOE and leave the fucking profit seeking assholes out.

[SixthSense]

2. why the government is loaning our money to rich assholes

because those rich assholes give a lot of money to politicians... they don't do it as charity, nor because they agree with a politician's ideology

it is bribery plain and simple and the whole government is epidemic with it

this is why Wall St. got bailed out and you and I got stuck with the bill

[wtmusic]

3. Loan guarantees don't cost us anything until something fails

In the current economy risk-aversion is rampant, and loan guarantees are a way to jump-start new tech. They don't always work out, but Solyndra also employed 1,100 people who don't really qualify as "rich fucks":

"I loved my job and it was great to work there," said Chelette, a Pittsburg resident who worked as a training coordinator and production leader at Solyndra. "It was a fantastic company."

Although Solyndra sent 1,100 workers packing without preamble, a number of former employees paint a portrait of a company filled with passionate people who loved working there.

"The employees were very dedicated," said Maria Cruz, a San Ramon resident who put in four years at Solyndra and was also a training coordinator. "They were intelligent. We knew there were struggles. But this was a great group."

http://www.siliconvalley.com/news/ci_18981151

Not to mention, "profit-seeking assholes", like it or not, have it hands down over the government when it comes to innovation.