Now that President Obama has begun a discussion about the role of business vs. the government in making decisions that move assets to higher (or lower) valued uses, the Washington Post has jumped into the middle of it:
UPDATE: A reader correctly points out that you cannot judge a policy by looking at only its failures, you must also look at the benefits. I have blogged before about the record of the industrial policy of picking winners and losers.
Since taking office, Obama has invested billions of taxpayer dollars in private businesses, including as part of his stimulus spending bill. Many of those investments have turned out to be unmitigated disasters — leaving in their wake bankruptcies, layoffs, criminal investigations and taxpayers on the hook for billions.Some examples:
- Raser Technologies, $33 million in 2010. Bankrupt in 2012 and owes $1.5 million in back taxes.
- ECOtality. $126.2 million in 2009. Has since incurred more than $45 million in losses and “under investigation for insider trading,”
- Nevada Geothermal Power, $98.5 million in 2010. Now "significant doubt about the company’s ability to continue”
- First Solar. $3 billion. Recently “fell to a record low in Nasdaq Stock Market trading and fired 30 percent of its workforce.”
- Abound Solar, Inc. $400 million. Recently the company halted production and laid off 180 employees.
- Beacon Power. $43 million. Now bankrupt.
So if I can cite a select number of failed investments from an investment fund, that fund is a failure? Based on that standard, nearly every VC fund is a failure.
ReplyDeleteThis is weak.
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