The Department of Energy is not a business
by Conn Carroll
The Washington Examiner
September 1, 2011
http://campaign2012.washingtonexaminer.com/blogs/beltway-confidential/department-energy-not-business
Asked at today's White House press briefing, "What does it say about the President's so far as he gets ready for this new plan, that this company he promoted and gave government money too has gone bankrupt and is laying off 1100 people." Carney answered:
The whole purpose of this program, which has a broad portfolio of many companies that are doing well was to invest in cutting edge technology. ... There are no guarantees in the business world about success and failure. That is just the way business works. And everyone recognizes that. And that is why there are over 40 companies, as I understand it, 40 guarantees involved in this program that merit looking at. You can not measure the success based on one company or the other.
This would actually be a decent answer if Carney worked for a venture capital firm and not the federal government.
Of course not every investment works out. As Milton Friedman liked to say, "Capitalism is a profit and loss system. The loss part is just as important as the profit part." Profits and losses send signals to entrepreneurs and investors informing them where best to place their resources.
But when the government is the investor, those signals never get transmitted. Just look at what Energy Department spokesman Damien LaVera told The New York Times about Solyndra: "The project that we supported succeeded. The facility was producing the product it said it would produce, and consumers were buying the product. The company struggled because the market has changed dramatically.ā€¯
Only someone investing other people's money, in this case the taxpayer's, could look at a half-a-billion dollar loss and call it a "success." Since the Energy Department is driven by ideology, not profit and loss signals, the American taxpayer is going to continue to lose money on failures like Solyndra. And as more stimulus "investments" in unsustainable companies dry up, more Americans will become unemployed. As Carney might say, "That's the way business works."
The essential American soul is hard, isolate, stoic, and a killer. It has never yet melted. ~ D.H. Lawrence
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