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Thread: Obama-backed electric car battery-maker files for bankruptcy

  1. #11
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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by Caine View Post
    If the government has to invest in it because the private investors won't..... That tells me all I need to know about the viability of the business and how much of a waste of taxpayers dollars it is.
    Are you familiar with the concept of positive externalities? A company might not be "viable" if you don't consider the positive externalities, but still produces a lot of value very efficiently when you take the positive externalities into account. That's the idea here.

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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by teamosil View Post
    It's weird we have to keep explaining to you guys that not every investment is going to be a winner. That's how the market works. If a company were a sure thing to be wildly profitable, there wouldn't be any point in the government investing in it, private investors would already be doing that. The whole goal with this thing is to try to push innovation along faster than the market would on its own. So if none of the companies we were investing in were going bankrupt you would know we were not really hitting the right mark. We need to aim right at the bleeding edge to try to tip companies from the "won't make it" category over into the "will make it category".
    The Federal government is not a venture capital firm. They lack the requisite incentives and structure needed to successfully engage in speculative financial enterprises. What's more, they are prone to political bias and corruption.

    Brian

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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by Pointy View Post
    No they are not, but Government (Taxpayers cash) injected into non proven viable firms simply because some noodle-head has the idea that this is the way to go, is a stupid waste of valuable Taxpayer resourses.
    I agree. Here's the deal. If the government can help a business get "back into business", and put people to work, I am all for it. But before lending money to those businesses, the government should do what banks do, and assess those businesses. If they are not worth saving, then the government should let them fail. Obama did great with the automakers, but failed with Solyndra, and now this. This is because he is just throwing money at the problems. That might have worked for the automakers, but it didn't work here. If the government is going to spend money, it should do so wisely. The government should also not treat the money as a givaway, but as a loan, WITH INTEREST.

    I believe that Mitt Romney, with his experience in business, would have done it the same way as I outlined above.
    Last edited by danarhea; 01-26-12 at 03:19 PM.
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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by Free_Radical View Post
    The Federal government is not a venture capital firm.
    That's right. That's my point. You guys are evaluating them the way you would a venture capital firm. That's not what they're trying to do at all. They're trying to boost up companies that generate positive externalities.

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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by Deuce View Post
    No, that isn't what the government is doing.
    LOL, well, that convinces me.

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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by teamosil View Post
    That's right. That's my point. You guys are evaluating them the way you would a venture capital firm. That's not what they're trying to do at all. They're trying to boost up companies that generate positive externalities.
    Read my post, the one right above yours.
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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by teamosil View Post
    That's right. That's my point. You guys are evaluating them the way you would a venture capital firm.
    That's because they're taking capital and investing it in speculative enterprises with the expectation that there will be some return on the investment. If they don't want to be evaluated like a venture capital firm, then they should stop behaving like one.

    That's not what they're trying to do at all. They're trying to boost up companies that generate positive externalities.
    In other words, they're investing capital in speculative enterprises with the expectation that it'll generate a return of some sort. Sounds like they think they're a venture capital firm.

    Brian

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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by teamosil View Post
    You don't understand. The government isn't just trying to pick winners. They aren't trying to make money by investing in the stock market or something. They're trying to increase and speed up the development of green technology.
    They are trying to make money by investing in the stock markets but that is a different topic.

    Are you familiar with the concept of a positive externality? When an economic endeavor would create positive externalities, then the role of government is to help companies capture some of those externalities. That's what they're doing here, not day trading.
    Sorry, I have no specific information here but I imagine that this was much like Solyndra. Their model was gone over up and down and left and right and it was determined that they could not succeed at what they were doing. It mattered none to the government.

    You want to fund research into technology to create long lasting batteries? O.K., I'll listen and consider that. Not as a profit center that can go bankrupt though.

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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by danarhea View Post
    Read my post, the one right above yours.
    The thing you're missing IMO is the positive externalities. A company which is producing value when you take the positive externalities into account is "worth saving" even if it will never be profitable in the market, which doesn't take those externalities into account.

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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by teamosil View Post
    The thing you're missing IMO is the positive externalities. A company which is producing value when you take the positive externalities into account is "worth saving" even if it will never be profitable in the market, which doesn't take those externalities into account.
    What "positive externalities" are you referring to?

    Brian

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