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Obama praised Solar Cell firm goes bust..costs tax payers $500 million

Discussion in 'BBS Hangout: Debate & Discussion' started by Rocketman1981, Sep 15, 2011.

  1. Rocketman1981

    Rocketman1981 Member

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    http://finance.yahoo.com/news/Obama...tml?x=0&sec=topStories&pos=main&asset=&ccode=

    The first company to recieve funding as of the 2009 Renewable Energy Loan Guarantee program. The company defaulted on its loans of $500 million which are guaranteed by the government.

    The federal government does not have the incentive or oversight to be involved in these types of programs in my opinion. I love technology and innovation but efficient capital must find it through venture capital and private equity as opposed to government programs with lack of accountability.
     
  2. Carl Herrera

    Carl Herrera Contributing Member

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    Sometimes your bailout money prevents a banking disaster and gets paid back or saves the American auto industry and the jobs of people working in it. Other times, the solar panel company you support fails.

    You win some, you lose some.

    By the way, it's not like the private sector is always great at picking winners to bet on. Plenty of big banks and private equity guys lent money to or invest money in companies that went bust.
     
  3. DaDakota

    DaDakota If you want to know, just ask!
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    I think the government should be involved in funding companies that benefit the country as a whole.

    Sometimes you win, sometimes you lose...but I think it is a good thing.

    DD
     
  4. Bandwagoner

    Bandwagoner Contributing Member

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    I don't. Instead of loaning a company that money for political reasons, they could have invested in research at universities and put solar cells or batteries ahead a decade.

    Besides there were many people questioning the companies financial health. If the government would have done due diligence, this loan would have never been made.
     
    3 people like this.
  5. SunsRocketsfan

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    agreed.. the govt is not capable of doing due diligence in this case. I dont see how you can trust a politician who has no understanding or expertise in the area to make a educated decision.
     
  6. giddyup

    giddyup Contributing Member

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  7. Rocketman1981

    Rocketman1981 Member

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    To me this is typical of finding an idea and forcing it when its simply not ready. The markets are VERY efficient to new ideas and innovative green energy ideas are worth billions of dollars therefore venture capital investors and PE firms would kill for great ideas. The government is not needed in my mind to do this.

    Apple is an incredible innovative company changing the way we live our lives and the market has reflected that making them one of the largest companies by market cap in the planet. Investors love their ideas and continue to give them more capital to continue their success and people are willing to part with their hard earned money for their products.

    That is different from government mandates and loan guarantee programs. Subsidizing in my opinion doesn't cause much innovation relative to the taxpayer cost.
     
  8. Bandwagoner

    Bandwagoner Contributing Member

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    Well you are wrong, but putting the money in improving technology is much better than just increasing the factories that make current technology.

    As it stand, solar cells are useful in a very limited number of applications. If we increase their efficiency and decrease their cost per watt, then we are doing something.
     
  9. larsv8

    larsv8 Contributing Member

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    Thats all well and good but companies with the largest experteise and capital (energy companies) have zero incentive to push forward with renewable energy. In fact they would do better to see the market hindered for as long as possible.

    Energy is likely the most widespread and most influential problem that society faces. If we get passed that hurdle and there is a infinitely renewable energy source available to all, I think you will see a much much different world.

    Its hard to even imagine what it would be like.
     
  10. DaDakota

    DaDakota If you want to know, just ask!
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    They should set up a venture capital type of arm, where a group of appointed people invest in future technologies that are good for the country.

    BTW - most companies that are venture supported fail, they rely on the big hits to cover up all the losers.

    DD
     
  11. tallanvor

    tallanvor Contributing Member

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    This leads to government corruption. If government is handing out money to whoever they see as 'important to the country' then lobbyists are going to be lining up to beg/barter for that money.

    The problem with Solyndra, isn't just the unethical practice of government picking winners and losers. Apparently the Obama administration also rushed the loan vetting process so the deal would get done before a press event.

    http://www.washingtonpost.com/politics/white-house-pushed-500-million-loan-to-solar-company-now-under-investigation/2011/09/13/gIQAr3WbQK_print.html

    <iframe width="420" height="315" src="http://www.youtube.com/embed/D7wBzuhWj0A" frameborder="0" allowfullscreen></iframe>
     
    #11 tallanvor, Sep 15, 2011
    Last edited: Sep 15, 2011
  12. Rocket River

    Rocket River Member

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    Department of Venture Capitalism?

    Rocket River
     
  13. Carl Herrera

    Carl Herrera Contributing Member

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    Unethical?
     
  14. DaDakota

    DaDakota If you want to know, just ask!
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    The US should be investing in technology that benefits our own agendas.....

    How is it any different than a failed Jet fighter?

    DD
     
  15. brantonli24

    brantonli24 Member

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    Ugh, Toyota, Honda, Samsung, LG, so unethical and poisonous backing of local firms that have completely quashed innovativeness in this world.....what were those governments thinking?

    Obviously not 100% of all government backed industries are going to succeed (Proton in Malaysia, China trying to develop its own software standards) but let's not forget, the rise of the US (and the British Empire before that) was built on government backing industries (or rather, the government preventing foreign competition on those industries, like the British protecting their textile industry in the 16th, 17th century, and high US tariffs).

    Should we criticise the government when its loans fail? Yes, because that's one of the few ways the people can make sure the government is accountable (public embarrassment). But to pretend the whole concept of government backing industries and intervening in the marketplace is, somehow, unethical? That's just silly.
     
  16. Bandwagoner

    Bandwagoner Contributing Member

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    they were not investing in technology. They were investing in a factory with sketchy financials.
     
  17. tallanvor

    tallanvor Contributing Member

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    Are you asking; what is the difference between buying a product from a company and loaning a company money?

    The product after being purchased is used to perform governmental duties (protect my rights). These products are necessary to perform these government duties.
     
  18. DaDakota

    DaDakota If you want to know, just ask!
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    No, I am comparing the goverment investing in new fighter jet technology, that ultimately doesn't work, and costs billions.

    What was that bomber that never quite worked out? The B2?

    This is the same, investing in something that helps the countries future, or has the potential to do that.......

    DD
     
  19. Commodore

    Commodore Contributing Member

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    National defense is a constitutionally mandated federal function, something only the government can provide. Can't compare to investing in some private solar panel company.

    Guaranteed loans to a private company is not the same thing as fee for service. We weren't purchasing $500 million worth of solar panels.

    It's venture socialism. "Hey lets use other people's money to invest in companies we like! We get to be like Warren Buffet!"

    Corrupt, inefficient, immoral.

    When venture capitalists make bad investments, they run out of money. Obama just keeps rolling.
     
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  20. tallanvor

    tallanvor Contributing Member

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    Well first off,the appropriate scenario would be the president instigating a skirting of the inspection of the jet fighter before purchasing because he wanted to do a photo op with the jet fighter just to find out later the jet fighter didn't work so the fighter was thrown away. This would be more equivalent to what happened with Solyndra. A half billion dollars wasted because of a press event.

    Second, having an investment fail isn't unethical in itself. The unethical practice would be a relationship between government and private businesses were the government props up companies it deems as important (aka picking winners). It is not a function of government to force me to invest in products because they like the product. Government should not take the money in the first place and let citizens invest in what they think is important or promising as they see fit. That's freedom baby!

    Finally, as started earlier this leads to obvious corruption in the form of crony capitalism. Both sides of the political spectrum believe in getting lobbyists out of Washington. How do you this? By giving them no reason to lobby, not by handing out money to whoever proves to the government they are 'important'.
     

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