A Company needs Government Help when they can’t Compete in the Market Place
The new green energy sector was going to make America energy independent. And create jobs. Good, high-tech jobs. Building high-tech, expensive things. Things we could charge lots of money for. So we could pay high wages to all those new green energy workers. And the Obama administration helped. Poured federal money into green startups. That are now failing left and right (see What went wrong at Solyndra by Barry Cinnamon posted 8/31/2011 on CNNMoney).
Chinese solar panels are 10-20% less expensive than U.S.-made panels; but by some estimates, Solyndra’s panels were 100% more…
For five years or more, the U.S. government was providing support for solar manufacturing in the U.S. The DOE Loan Guarantee program provided critical funding for Solyndra’s manufacturing growth, supported by over $1b in private capital. Unfortunately, both these private investors and the DOE made a couple of bets on Solyndra that didn’t pan out.
A company needs government help when they can’t compete in the market place. So they can continue to build a more costly and/or a more inferior product. And even when they get that help they still can’t compete. Which just means this was a bad investment from the get-go. Only getting as far as it did because of government help. Which was tax money poorly spent.
So why did they fail? A couple of bad decisions by their CEO.
The first bad bet was that refined silicon, the feedstock for the solar panel industry, would stay expensive. Solyndra invented a solar panel that didn’t use expensive silicon. Unfortunately for Solyndra, and fortunately for all the silicon solar panel manufacturers and customers, silicon has gotten very cheap over the past few years…
The second bad bet was that Solyndra’s flat roof installation technology would make up for their relatively expensive panels. Solyndra did indeed see big savings on flat roof installations, but the rest of the industry did not stand still. Other commercial flat roof products are on the market (full disclosure, Westinghouse Solar has an inexpensive and easy to install flat roof solar panel product) with similar benefits at much lower costs to Solyndra.
Of course, had they never had the government help they never would have gotten off the ground. And anyone who would say otherwise needs to answer the logical follow-up question. If they could have done this without government help, why didn’t they?
The Public Sector doesn’t know Squat about a Good Business Idea
But it’s just not Solyndra. There’s green failure wherever you look in the unfolding saga that is the tragedy of green energy (see Green jobs only produce fiscal black hole posted 8/31/2011 on qcsunonline.com).
Lowlights of the saga include the recent bankruptcy of Evergreen Solar Inc. of Massachusetts, recipient of $58 million in direct subsidies and tax breaks, including federal “stimulus” funding, but which cut 800 jobs and is now $485 million in debt, with more job losses to come with the closure of a Michigan plant. Green Vehicles of Salinas, Calif., received $500,000 in city subsidies, but closed last month without having produced anything of significance, Human Events magazine reported. The company had promised to create 70 jobs and pay back local taxpayers $700,000 a year in taxes.
Seattle got a $20 million federal grant to weatherize 2,000 homes and create 2,000 jobs. After a year, three homes had been retrofitted and 14 new jobs created, many of them administrative. That’s a return on investment of about one job per $1.4 million. In Michigan, Fisher Coachworks is out of business two years after being touted as part of the state’s green future, and despite millions in state subsidies to sell buses bought with federal tax money.
The U.S. Forest Service awarded $490,000 in stimulus funding to Urban Forestry Revitalization Project in Clark County, Nev., to plant trees and other greenery in urban neighborhoods. It created 1.7 jobs, one of them a full-time temporary job, and 11 short-term and temporary.
Overall, estimates the Competitive Enterprise Institute’s Chris Horner, $30 billion in green handouts in the stimulus bill cost taxpayers about $475,000 per job.
These are good examples of why there is a private sector and there is a public sector. The private sector aren’t experts on providing for the common defense or promoting the general welfare. And the public sector doesn’t know squat about a good business idea.
Lobbyists’ Money influences Government Misdirection into Economic Affairs
The government is backing a lot of electric cars and hybrids. They believe this is our future. And, of course, ethanol. So while they are interfering with natural market forces, good ideas may not get a chance. Like, say, this one (see Old newspapers could make gas substitute by Colin Bird posted 8/31/2011 on USA Today).
The researchers have discovered a bacterial microbe that likes the taste of old newspapers — the cellulosic wood pulp that makes the paper, to be more exact. In the process of eating the paper, the microbes excrete a biofuel that can act as a substitute for gasoline, the Detroit News reports.
Such microbes aren’t new; we outlined their potential to make ethanol a few years ago. The difference here is the type of fuel that comes out of the microbes: butanol.
Butanol is better than ethanol because it doesn’t require any modifications to today’s gasoline-powered engines. (Many older cars can’t accept E15, let alone E85.) Also, butanol would generate similar gas mileage performance as gasoline. Ethanol has 27% less energy per gallon compared with gas.
It’s not yet known if this discovery is marketable or scalable, especially since alternative fuels are a bit out of vogue, with more attention focused on electrics, plug-ins and hybrids.
Anyone who has ever tried E85 that actually had a real commute to work saw what a bust E85 was. There was no cost savings because you had to pump 27% more of it into your tank than gasoline. Worse, the first time you found out about this you may have been driving home from work. Late at night. Going through an area not known for its bright lights and safety. And have to stop. To buy gas. Not a lot of fun. Especially if you’re a woman.
But the government is committed to E85. Because, of course, of the powerful corn lobby. Who is chopping in high cotton these days. The price of corn has never been higher. What with it being both a staple food and now a fuel. So while the money will influence more government misdirection into economic affairs, butanol may die a quiet death. For it has no lobby.
Global Warming may not be Man-Made, but the Myth of Man-Made Global Warming Is
All of this government malinvestment in products is one thing. And a complete waste of taxpayer’s money. But it’s ‘the why’ that they are doing this that really rubs the salt into the open wound. To save the planet. From man-made global warming. Which, as it continues to be shown, is a myth (see Watching A Green Fiction Unravel posted 8/30/2011 on IBD’s Investors).
Experiments performed by a European nuclear research group indicate that the sun, not man, determines Earth’s temperature…
The results from an experiment to mimic Earth’s atmosphere by CERN, the European Organization for Nuclear Research, tell researchers that the sun has a significant effect on our planet’s temperature. Its magnetic field acts as a gateway for cosmic rays, which play a large role in cloud formation.
Consequently, when the sun’s magnetic field allows cosmic rays to seed cloud cover, temperatures are cooler. When it restricts cloud formation by deflecting cosmic rays away from Earth, temperatures go up.
Or, as the London Telegraph’s James Delingpole delicately put it:
“It’s the sun, stupid.”
Why, this seems to disprove much of what the global warming alarmist have been alarming us about for lo these many years. And being scientists, of course you know what they will do. Do everything within their power to hush things up.
This new finding of 63 scientists from 17 European and U.S. institutes from an experiment that’s been ongoing since 2009 is, if we may paraphrase Vice President Joe Biden, a big deal. Which is exactly why the mainstream media, with so much invested in global warming hysteria, is letting last week’s announcement from CERN pass like a brief summer shower, ignoring it.
Even CERN’s own director general, Rolf-Dieter Heuer, is trying to avoid the meaning of the findings.
He told Germany’s Die Welt Online that he’s “asked the colleagues to present the results clearly, but not to interpret them. That would go immediately into the highly political arena of the climate change debate.”
But, as British science writer Nigel Calder points out, Heuer would have no reservations about entering “‘the highly political arena of the climate change debate’ provided” his results endorsed man-made warming.
Of course, without global warming, the globe isn’t warming. Even at the poles. Where the icebergs are. Which can mean only one thing. Those icebergs aren’t melting. And the sea levels aren’t rising.
And it’s not just the CERN research creating a problem for them. They also need to explain why sea levels, like presidential approval numbers and consumer confidence, have fallen. According to NASA, the oceans are down a quarter of an inch this year compared to 2010.
Under the rules of climate change, sea levels, due to melting ice and water that expands as it warms, should be increasing in a way that we’re all supposed to believe is a threat. But NASA scientists say that El Nino and La Nina, weather cycles in the Pacific Ocean, have caused sea levels to fall.
So, yes, global warming is man-made. The myth of global warming, that is. Just like the billions of dollars the government has been throwing at these bad green investments. The idea that these ‘investments’ will create jobs is another man-made myth.
Money and Power – the Driving Force of all Mankind and Governments
The green energy sector is based on man-made global warming. Which real science continually disproves. Man isn’t warming the planet. The sun is. As it always has. And always will.
And the scientists know this. The real ones. And the fake ones that have been pushing global warming. Why do they do this? Just look at what they have accomplished. Costly new regulations. And all that government spending on green energy. Paid with our taxes. Stifling real economic output. And transferring a lot of wealth from the private sector to the public sector.
And there it is. Like it always is. Money and power. The driving force of all mankind. And governments.
Tags: Big Government, butanol, create jobs, E85, electric cars, energy independent, Global Warming, government help, green energy, high-tech jobs, hybrids, man-made global warming, market forces, money and power, myth of man-made global warming, private sector, public sector, save the planet, sea levels, Solyndra, tax money, warming the planet