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  • Morning Bell: Uncle Sam Is No Venture Capitalist

    It’s yet another inauspicious announcement the Obama Administration didn’t want you to hear. Late on Friday, the White House announced that it ordered an independent review of loans made by the Department of Energy to energy companies after months of weathering criticism for its $528 million loan to the now-bankrupt Solyndra solar panel company.

    The White House’s independent investigation, though, isn’t the only one in town. The FBI raided Solyndra after it declared bankruptcy, and Congress is diving in with an investigation of its own. Energy Secretary Steven Chu, who has been a strong advocate of this federal loan program, is set to testify before a congressional committee in mid-November on his involvement in the scandal. And Heritage’s Lachlan Markay reports that the House Energy and Commerce Committee announced Friday that it will vote to subpoena a host of White House documents related to Solyndra, including messages from the President’s Blackberry. The White House, though, would not comment on whether it will comply with the subpoena.

    Even the mainstream media is picking up on the story. On yesterday’s Meet the Press, host David Gregory asked White House senior adviser David Plouffe whether, in times of dire economic straits, the government should be playing venture capitalist and trying to prop up green energy industries. Plouffe’s answer? In a nutshell, other governments are doing it, so we should, too: “Listen, you see what’s happening in other countries, you know, huge investments in this clean energy sector. We have to do everything we can.”

    But as the motherly advice goes, just because all your friends are jumping off a bridge, that doesn’t mean you should do it, too. Unfortunately, this seems to be the logic the Obama Administration is operating under, despite the weight of common sense that should otherwise be holding it back: If the centrally-controlled economy of China does it, so shall America.

    The latest proposal on the table is the Clean Energy Deployment Administration–a veritable “green bank” that would provide loan guarantees to energy and automotive projects that Washington deems worthy. And what it amounts to is a costly subsidy financed by the taxpayers that invites the government to stick its finger into the private energy marketplace. If the company defaults, the taxpayer is on the hook–just like in the case of Solyndra. The total cost of the program? Ten billion dollars, with projected costs hitting an additional $1.1 billion over the next five years.

    So what about the Administration’s argument that other countries are investing heavily in these industries, so the United States must keep up? In a new paper, Heritage’s Nicolas Loris analyzes the green bank program and points out a harsh reality: When subsidies are removed from these green energy industries, they collapse because they were developed in a bubble and can’t survive on their own.  Loris explains that European countries–which pursued the path the Obama Administration would like to go down–learned that lesson the hard way and are making an exit:

    When faced with a need for drastic budget cuts and job creation, Spain, the United Kingdom, Germany, France, and the Czech Republic decided to reduce subsidies for green energy programs, such as wind and solar energy. As a result, some industries have collapsed and others are either collapsing or face difficult roads ahead.

    Although each European country has taken a different approach to subsidize green technologies, the results have been the same: Artificially propping up industries by reallocating labor and capital toward uncompetitive projects, forcing higher energy prices on ratepayers, and failing projects are costly to the economy and the taxpayer.

    Europe has seen that picking winners and losers in green energy doesn’t work and brings with it a steep cost. The Obama Administration has seen it first hand with Solyndra, the hundreds of millions of taxpayer dollars it wasted, and the 1,100 former employees now out of work. But for some reason, even that first-hand experience can’t convince them to stop playing with taxpayer dollars as if it’s their “Monopoly” money to burn.

    Congress should refuse to expand loan guarantee programs and quit putting taxpayers on the hook for an untold number of projects that could fail. The American people simply can’t afford to have Washington put them in the venture capital business.

    Quick Hits:

    Posted in Energy [slideshow_deploy]

    47 Responses to Morning Bell: Uncle Sam Is No Venture Capitalist

    1. victorbarney says:

      You guys are just going to love it when America has it's marxist manifesto demanded economic collapse, aren't you! And then what? We don't have England to bail u.s. out as we bailed England out of their marxist economic collapse in the 40's you know? Watch!

      • Robert A Hirschmann says:

        It seems that all along Obama Ben Ladens goal was to destroy America. So far he’s done a great job of it. When he accomplishes his task he will declare himself the first dictator of the United States. This will be another Muslim nation with him as our new Mohammed. Won’t that be great?

        The congress should have impeached him a long time ago. Why haven’t they? I wish I had an answer to that. Obama has avoided, bypassed and basically ignored the Constitution and all it stands for. Yet he swore “to uphold and defend the constitution of the United States”. Did he swear it on the Holy Bible or the Koran? If on the Bible, since he is a Muslim, he probably feels that it is not a valid oath. If this is not impeachable I don’t know what is. I call it treason. And that is certainly impeachable.

        Here he is telling the world that he is a Muslim. So, who was responsible for 9/11? What religion preaches that America is the Devil and should be killed at all costs? Look at the facts and decide if Obama is good for America!
        http://www.youtube.com/watch_popup?v=tCAffMSWSzY#

        • Jeanne Stotler says:

          A good book to read, explains this whole administration, "Mobster Goverment" also Michele Malkin's book.

    2. Capt. Jerry Hulick says:

      Here's my take. the White House jumped in to prevent congress from effectively vetting the situation to its fullest. their excuse will be that they have an active investigation going on, therefore cannot release any documents for Congress to review. the same goes for the FBI and the Dept. of Energy. Ergo Congress gets boxed out again. And the white House has effectively stopped any further investigation of the fraud. Tell me if I'm wrong.

    3. Wes Evans says:

      The Green industry has become the new patronage a way to reward your political friends and backers that is not yet against the law.

    4. ThomNJ says:

      One cannot reasons with diehard ideologues like obama and his ilk.

    5. Lawrence Burnham says:

      It would seem that the Obama administration, and Obama himself, are determined to pursue continued spending on "green energy" and "green energy companies' even after they have seen what has happened to European investments. I can only conclude from this continued spending that it is a ways and means to furthur reduce the US economy. Or that these millions of dollars being handed out are designed to return monies to the Democratic party.

    6. Tom Davie says:

      It is apparent that everyone is tiptoeing around the elephant in the room…namely that this administration is driven to push forward its (his) agenda by any extra-legal means possible, whether it is green energy or gun control. The President thinks that there is always one more way to skin the cat. Solyndra was the tip of the iceberg. In it, he thought he could also money launder donations to his re-election campaign, using our money, and no one would be the wiser. Fast and Furious was a thinly veiled scheme to create a backlash about Mexican Gangs receiving American guns, and then have a platform for National Gun control.
      He thinks he's slick. He thinks were ignorant. The only legal means to stop this onslaught of serial injustices is Congress. Our LAW MAKING body needs to do what they are paid to do. Make law, and investigate, prosecute and remove anyone who is breaking it, whether it is the Attorney General, Secretaries, or the President. NO ONE is above the LAW. It is past time for political correctness and polite innuendo. Our system is not just broken. It is unraveling in front of our eyes.

    7. Steve Czonstka says:

      Senator Jim DeMint had it correctly named Venture Socialism.

    8. Robert Pohl says:

      WE, the Government, should, in my opinion, support basic reseacrh in promising technologiess assuming the privet sector seeks such support. Turning the results into a viable endevor should be the private sectors job. Should the Government get repaid for any finacial support for basic research you bet. Don't know just how this would work.

    9. Jim Stine says:

      gees, nobody has mentioned the fact that Toyota is a partner in GM either.

    10. albaby says:

      Obama administration comply with the subpoena? The papers requested may be too "delicate" for the adminstration to release and the Holder Justice Dept. may deny they exist. Holder's justice Dept wants to pass a law to allow them to do that with FOIA requests.

    11. JSNYC says:

      RE; OBAMACRATS GREEN ENERGY SUBSIDE LOAN PROGRAMS.
      Q. What are the specific names of the subsidized green industries that have collapsed world wide?
      Q. What companies have been on the lists of collapsed companies?
      Q. By what tax dollar amounts have taxes been raised to cover the subsidies?
      Q. What has been the bill so far for taxpayers having to pay for the subsidy loans in various countries, US?
      Q. What has been the income of taxpayers having to pay for the subsidies?

    12. John says:

      There would be no Internet for Heritage to publish their spin on if the US government wasn't a venture capitalist.

      • steve says:

        WRONG!!! the internet was NOT venture capitalism. It was a military project for military purposes (look up DARPA NET) but once the project was well developed, someone realized it could be expanded to non-military (ie private sector) uses.

    13. Paul Mullan says:

      I will never understand why the left always messes up the Internet stuff, did you learn your lesson with Gore debacle? http://www.leftwatch.com/articles/1999/happy-birt

    14. B. Eric says:

      The Gov't should not be in the business of picking winners and loosers. All Gov't subsidies should be stopped, and the free market will determine the winners. Lobbiests from all sides of the political spectrum are in business to extract money from the federal buracracy. The entire system is basically corrupt On second thought maybe I will start a green energy company. I will make green energy by harvesting one of the primal forces Gravity. I will call the the company Free Fall Energy Systems. I will drop large quantitiesof Horse Manure from high altitude and capture the energy based on the formula F=MA.(force equals mass times acceleration), in conjunction with the equation S=1/2 gt squared. This will calculate the energy recovered based on the speed of the dropped manure relative to itsmass as it impacts the White House. This makes about as muc h sense as allthe other green energy projects.

    15. Wayne Grievo says:

      Once a Chicago gangster, always a Chicago gangster. Everyone in Washington; GO HOME. We will take care of the enegry and the planet. Stop pretending that you know better…..

    16. Redfray says:

      I for one do not want my tax money going for these "Green jobs or technology" by government monies. I'm not getting my money back for the investment being made. All these taxations and expenditures should be voted on by the people. NO government branch should have the power to spend tax money on any private industry. NO product should be approved by grvernment taxes for any group of ,people in America. This type of business of giving tax money to certian people by our government is pure larceny, and should carry a harsh penalty.

    17. Boy talk about the fox guarding the hen house. I hope the Republicans don't allow this strategy to interfere with their investigations.

    18. Jeanne Stotler says:

      If you haven't read Michelle Malkins book about the coruption in this administration, you should, also read "Mobster Goverment" the author is a Washington Times reporter, after reading these books plus books by Hannity, Mark Levin and others I know this man; first should not be sitting in the oval office and : second if he is reelected we most likely will go the way of Cuba, Chili and Venezulea, he will appoint himself President for life, we already know he has no regard for the Constitution or our way of law.

    19. Curt Krehbiel says:

      Obama's providing our tax dollars as venture capital is outside the venue of a capitalist system. His doing so is designed to bankrupt the United States and destroy capitalism as an economic system. This is but a small part of his creation of a totally socialist, if not communist, order.

    20. Robert says:

      What's black and white and red all over? The president of the United States. Face it, our politicians and bureaucrats have made a total mess out of this fine nation. The financial "melt down" was a fraud in the genre with the burning of the Reichstad. If government had stayed away, we'd be back to prosperous now. But with the moves this president and congress are making, this nation is going to hit a wall and never recover. Why on Earth would we ever allow this pack of fools to be making investments?

    21. toledofan says:

      If the history of this administration is written properly, then, this will be the most corrupt administraion in America up until this writing. It's just amazing to me how aloof the mainstream media has become; I mean Sollyndra on it's own would have been enough, in years past, to impeach a president or at the very least the firings of many within the administration. Throw in fast and furious, the other green companies going under, the foriegn policy debacles, the trips, sidetrips and deals within the Congress relating to Obamacare and it's easy to see how corrupt the administration really is. We can only hope the Historians are honest and tell it like it was.

    22. Barry Schmidt says:

      "The White House, though, would not comment on whether it will comply with the subpoena." But, gee, President Obama, didn't you promise "transparency" while you were in the White House?

      Maybe I need to see my physician to get my ears cleaned out and my eyes checked. Frankly, I don't count on any information from the White House that would implicate Obama's complicity in any way with Solyndra. How can we forget the recent refusal of Obama to provide any information that might implicate his knowledge about the BAETF's gun's to Mexico fiasco? If Obama were a Republican, the liberal press would have had a field day with the story. King Obama continues to get away with murder (figuratively), yet no criticism is leveled by a mainstream media that is obviously in his pocket.

    23. David Ferguson says:

      Why are we not putting these people in prison.

    24. Bob Davidson says:

      Congress controls the purse strings of this nation but what happens once the purse is open is an entirely different thing. It is not as if they control end use of our tax dollars. They may put rules & regulations on the use of tax dollars to no avail. That is why we have government pork, every politician knows that. We will continue to have 1,000 Soylndra's until the faulty system of waste and fraud is changed. Change it, Loved it or live with it , it is our system of government.

    25. Kevin Browne says:

      The Administration says we must invest because China is subsidizing Chinese companies. This is a laugher! *Of course* China is getting behind solar cell and wind turbine manufacturers – Americans and Europeans are buying the stuff! China is opening 2 coal-fired power plants a week, while we waste money on "green energy"! If we stopped forcing those technologies onto the market before they're as cost-effective as coal, natural gas, and nuclear, the Chinese would stop subsidizing their "green" manufacturers tomorrow…

    26. surfcitysocal says:

      Government has never done anything efficiently or thriftily. Government needs to shut up, get out of the way…and preferably, go part-time.

    27. Nancy Jones says:

      Okay so Obama places part of the blame for our struggling economy on Europe's debt crisis, while at the same time pushing and shoving America into a European model. Can you say idiotic? I knew you could!

    28. Bruce Kolinski says:

      These foolish subsidies dis-incentivize the green start-ups from ever becoming financially viable and competitive. Subsidy guarantees sloppy, lazy failure. These are not actually subsidies at all; just a slush fund that captures dollars from left and right, then pays the dollars to leftist friends, who then make donations to the Democrat Party. This stinks and folks should be going to prison.

    29. Carol M Kite says:

      There has been little about the fed gov't, especially during the Obama administration, exhibiting common sense. Is this the time to push 'green energy'? Obama warned, even during his campaign, "such would necessarily cause the cost of utilities to skyrocket". It's common knowledge, wind & solar energy don't do the work, besides we sit on US ground rich with oil, coal & gas! With a nation of millions struggling under a mantle of unemployment, already wondering how they'll keep their families from freezing this winter, it's rediculous to be throwing more good money, taxpayers money, I might add, after bad. Every other necessity to sustain life is extraordinarily expensive today, due to Obama's economy, please let common sense prevail!

    30. The Farmer says:

      Capt. Jerry Hulick, you sir very likely have it right!!!! The Whitehouse starts up an investigation there-by tieing down all information, keeping it from the light of day!!!!!

      ONE TERM THEM ALL 6 or 8 years but only one term…..

    31. Tom says:

      Yes, Yes — Congress needs to stop the profligate Executive Branch from speculating in the Green Energy sector with our Tax Dollars.

    32. ChuckL says:

      The only valid method of providing subsidies to any company by the United States Government is to provide a limited term tax reduction or exemption. constitutionally the government may not provide money to any company.

      By providing the subsidy with a temporary tax exemption, the government increases tax receipts as the taxes from income will rise with the added employment. Nothing will be taken from the taxpayers so taxpayers will not lose money in a bad investment. The likelihood of the venture being a success will be greatly increased as the only money will come from venture capitalists who are experienced in assessing the likelihood of a startup succeeding.

    33. Dwana Townsend says:

      I bet you no one making thes "Loan" decisions knows how to read a personal financial statement, business financial statement, Profit and Loss statement, Balance Sheet, tax returns, or a credit bureau. Don't you think that if these investments would have shown real promise in being profitable that the Donald Trumps of the world (Private Investors) would have been happily throwing their own money into these companies? Solyndra is only the tip of the iceburg that sunk the titanic.

    34. Casey Carlton says:

      In addition to the progressive's typical myopic view of things, we also have a case of cronyism, where big campaign contributors, among others, are being rewarded for their financial contributions.

    35. Herschel says:

      Former President Nixon looked at America through a Television camera and brazenly said, "I am not a crook." I doubt if President Obama could repeat that same lie. From the beginning, his plan has always been the total destruction of America.

    36. N.Y. Nick says:

      I know of a venture capitalist who's invested in two solar energy companies much to his regret. This country is years (20+) from coming close to making solar cells economically feasible and the Chinese, even with their cheap labor advantage, are not much closer toward the same goal. This Ivy League frat house of an administration is well aware of this fact, thereby financially supporting these turkeys clearly suggests something more serious than simple incompetence and we taxpayers are providing the funding unwittingly.

    37. DanBritt says:

      Let:'s look at history. Row boats and sail boats, then someone discovered the combustion engine.
      Wagons and oxen or the horse, then someone discovered the combustion engine.
      Does our current liberal administration want to set us back in time ?
      For all you have, thank coal, oil, gas and the men that figured how to produce and use them.
      All are welcome to go green if they wish.
      My opinion, GREEN is for people that want something for nothing !

    38. Walt. Hannan says:

      The time has arrived to impose term limits on the ineffective Congress – 12-years seems like a proper number of years for any Senator or Representative. They can do enough damage in a dozen years to last a lifetime but any less term isn't the answer either. We might also consider a single term for a president such as Obama or Carter or Clinton.

    39. Blair Franconia, NH says:

      No, Uncle Sap isn't a venture capitalist and he never was.

    40. Morris says:

      The federal government should not use taxpayers funds to subsidize favored industries, but only to provide basic reasearch efforts that are made available nationally to all interested parties, no picking winners and losers.

    41. Jim says:

      How is this an different then the government guaranteed SBA program, which works just fine?

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