Editorial
Government as a Venture Capitalist
In January 2009, the administration claimed that if Congress passed a rush stimulus bill, the United States would be saved from economic catastrophe that was threatening to send unemployment figures above 8 percent. Government stimulus was the answer and if we cared about our country, we would set aside our reservations and do what needed to be done to pass the bill. Congress passed the bill. Unemployment continued to go up and has been well over 8 percent ever since. (In fact, economist John Williams of ShadowStats finds unemployment to be closer to 23 percent using traditional methodology.) Yet some are claiming the first stimulus worked and all we need to bring back prosperity is more government stimulus.
Stimulus might appear to work for some people for a short time. It worked for a short time for Solyndra. For a time, they could pretend to be engaging in productive activities that would help the economy. For a time, unemployment was 1,100 people fewer. But the recent bankruptcy of Solyndra shows that the government is a terrible venture capitalist. This charade cost the American people over half a billion dollars they could not afford, yet there is no mea culpa. The administration is not questioning its calculations, or how they could have been so wrong on their unemployment predictions in the wake of the last stimulus.
Instead, they want more money. Once again we are hearing the cry that if we care about our country, we will approve more spending and more taxes and that will create more jobs. They promise.
Yes, you could have gone to the Solyndra factory and you would have seen jobs. What you could not have seen were the productive jobs that were never created. Real venture capitalists make decisions based not on politics and photo opportunities, but on complex economic estimations of risk and reward. They don't simply throw piles of other people's money at a factory and expect magic to happen. The uncreated jobs you can't see might still be around. Instead, we have more government debt which will lead to more inflation and more taxes. These, in addition to an already hostile regulatory environment, only add to the burden and risk of job creation in the private economy.
It has been said that when all you have is a hammer, everything is a nail. Our government is full of people who sincerely believe big government and more spending is the answer to every problem. They automatically look to government for every solution. Government is their hammer, and all they know to do is to keep hammering. When government "solutions" still don't solve the problems, they are unfazed. They keep calling for more government, more laws, and more programs. Americans are tired of being treated like nails.
This government-centric mindset is the root of the problem. People who think this way are naturally drawn to politics and government. To them, the US Constitution is an annoying road block, something to get around, or ignore.
We must become interested in real, lasting, productive jobs - careers that allow families to build up a solid foundation of prosperity and economic security - not pretend make-work government jobs that waste resources and vanish overnight. We have to choose one or the other.
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Posted by acudoc on 09/22/11 01:55 AM
Quite interesting. Never thought of using that source of energy before.
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Posted by acudoc on 09/22/11 01:39 AM
Quite interesting. Never thought of using that source of energy before.
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Posted by RF on 09/21/11 08:41 AM
agreed but if the stock and tax swindle managed to create a few thousand jobs it would be acceptable-- this dog and pony show is the old Mel Brooks comedy The Producers" on steriods, more money in a flop than in a hit--
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Posted by John Danforth on 09/20/11 09:22 PM
Whether or not any panels get made is entirely irrelevant to the players. It's a stock and tax swindle, just like all the others, and this has been going on for a long time, probably even way before I noticed it with the 'hydrogen as fuel' scams.
The only difference with this one is that they fell short on getting their IPO launched.
I challenge anyone to go a website like ECD (who got their start as a tax and stock swindle with 'the hydrogen economy') and try to find something you can actually buy and install.
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Posted by Avatar on 09/20/11 12:27 PM
Given that WWI & WWII & Korean & Vietnam & Iraqi & Afghanistan wars along with Mass USA deficit spending has propped up the economy to the benefit of the Military-Congressional-Industrial Complex, it is going to take a huge economic paradigm shift for the US economy to adjust to a more peace time economy. Given that the elite forces behind this complex have much to lose, it will take more than a Ron Paul presidency to accomplish this change.
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Posted by rossbcan on 09/20/11 12:02 PM
RP: "We have to choose"
YES and, we have to CHOOSE correctly, else, perish, individually and collectively:
Click to view link
which requires sorting fact from manipulation of collective choice for short term private benefit, but long term doom, even for the predators:
Click to view link
Really admire RP's persistence, patience and, above all, self control in pulling his punches to avoid any plausible basis of the ongoing and inevitable "radical anarchist" demon / fear mongering false allegations.
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Posted by que sera sera sera on 09/20/11 11:01 AM
found an intriguing potential new source of energy which would require new technology but strikes me as a way better place to invest than other "green" technologies.(very high energy density and continuous supply):
Click to view link
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Posted by george.von.uri on 09/20/11 10:21 AM
My wife coined a new term today, "regulation constipation".
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Posted by gmallast on 09/20/11 10:14 AM
Here is a link for Frederic Bastiat's article to which I alluded in my previous post:
Click to view link
I should have double checked the spelling of his first name. In a hurry. Sorry.
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Posted by gmallast on 09/20/11 10:11 AM
Eloquently put. This will save me the trouble of composing an answer to my Congressman Sander Levin's e-mail supporting the President's jobs proposal. I live in Mr. Levin's district (Michigan 12th) which has been hit hard by the current crisis.
Frederec Bastiat's classic 'What is Seen and What is Not Seen,' (1850) to which Dr. Paul alludes, should be required reading in all economics classes and for all members of the government.
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Posted by Frank on 09/20/11 09:33 AM
"This government-centric mindset is the root of the problem." Yes, both for the electorate & for the politicians who get elected. I suppose it will take repeated failed big government "solutions" to our current set of problems before the electorate wake up and start to demand less government plans, less spending, less regulations & lower taxes. Not until this mindset changes will we turn this nation around. Even then, I believe it's already too late to avoid the coming economic armageddon.
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Posted by RF on 09/20/11 09:16 AM
In order to create productive employment, you'll need to change the way our society is evolving... The Techno-crats have become obsessed with eletronic gadgets, wall sized TV in thier bedrooms,and constant overdevelopment of the cell phone, a s a newer product to sell.. What was really wrong with Solyndra isn't the politics, I believe all the parties and poolititions, connect network and schmoozze thier way thru life, g;lad handing favors in some form or another-- those whom live in glass houses should not cast stones..
I certainly think Ron Paul is an honest man, and a decent politition, his intentions are in thebest interest of this country, but he has been in Congress for many years and has seen both parties behave in similar manners... whether its a military contract, road contract pork projects are nothing but.the S-O-S.. Why Solyndra was allowed to squander 523 million dollars on a " state of the art ,turn key ,robotic factory" is a better question- wouldn't providing a few thousand jobs , utilizing skilled and semi skilled labor, partial robotic uses,instead of thinking they would be able to run it from thier cell phone, have made more sense??... Common sense is dissapearing at a rapid rate in this country,, our inability to compete with the Chinese in manufacturing ,is what the Government should be looking at,and seeking direction to "change"..
How did this Factory cost 523 million dollars?? has anybody wondered ?? What kind of fees are we paying the consultants, the designers, the suppliers,of all this high tech nonsense-- did the factory ever produce any panels?? Yes It was built with prevailing wages ,Union Labor- the lucky bastards that earned a real paycheck for a year or so I can't fault, , they all grabbed a piece of the government pie this time, some took some hefty slices, it's that thinking we have to "change" before we can move foward to creating a better employment,,. I agree with Ron Paul about the government-centric mind set is the root of the problem,it allows this to happen, it doesn't regulate where it should, and wastes a lot of time and money where it shouldn't.. We remember when everything was Made in USA- untill we return to that mindset- full employment will never return.
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Posted by chessmaster on 09/20/11 08:36 AM
If government is the answer you are asking the wrong question.
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Posted by Reader on 09/20/11 06:41 AM
Government as Vulture Capitalist!!
