This is how you get 1% growth and 0% job growth: use other people’s money to invest according to politics.
Solyndra was not profitable and did not have a viable business model. So venture capitalists (using their own money) wouldn’t back it. But since it’s a popular cause (the green religion) and connected (run by a big BHO fundraiser), it received taxpayer money in the form of loan guarantees.
In other words we’ve taxed functioning businesses to fund a popular mirage. If those viable businesses (and their shareholders) didn’t fear their taxes going up tomorrow to pay for this nonsense, and Obamacare, and a flurry of new stifling regulations… maybe they’d go back to hiring and capital purchases to grow their businesses and our economy.
Sadly it’s just the latest example of gross capital misallocation driven by political considerations instead of economic/investment criteria. This is America – when an idea has merit, it gets funded by private capital. This is especially true in green tech. There is a bubble of venture capital chasing the dream – including some who followed on the loan guarantees at Solyndra – and it too will someday pop. But at least they’re using their own money.
These efforts at “industrial planning” (or whatever name it’s called each time around) only distort the process – and result in 1% growth and 0% job growth.
from NR’s Sunburned
Solyndra was an irrestibly juicy piece of bait for stimulus-happy progressives. President Obama, like all Democrats, labors under a special challenge when it comes to economic affairs: His economically illiterate base spends its time decrying “corporations,” but urban-gardening cooperatives don’t create a lot of jobs, and community-based nonprofits by definition don’t create any profit, and therefore no investment capital, and therefore no economic growth. You want to see some real, sustainable, long-term jobs created, your best bet is to look to a “corporation”—“corporation” simply being the word for a business that has grown large enough or profitable enough to require the legal organization of its affairs.