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

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

    Quote Originally Posted by teamosil View Post
    It's different because positive externalities don't necessarily align with success in the market. You can measure how wisely a vc firm invested by looking at how well the companies they invest in do on the market, but you can't when you're looking to boost up companies that create positive externalities rather than profit.
    Just because the return on investment is nonmonetary does not mean they are behaving differently from a venture capital firm. Fundamentally, it's the same means to the same end, i.e., investing capital in speculative enterprises with the expectation of a return on investment.

    Honestly, that's just basic economics. It isn't something controversial. What is controversial sometimes is whether a particular externality really exists, whether government should limit itself to the most extreme externalities only, etc. But everybody agrees that it needs to make companies internalize the costs of negative externalities and help them capture the benefits of positive externalities. For example, patent law is a way that the government helps companies capture the benefits of positive externalities.
    If it's "just basic economics", then you shouldn't have a problem producing those quotes.

    Brian

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

    Quote Originally Posted by teamosil View Post
    Green technology has huge positive externalities. Reducing global warming, positioning the US to lead the coming boom in green tech, reducing oil dependency, preparing us for when oil starts to run short, etc. All the benefits created by these companies that they can't capture- that they can't charge for- are positive externalities.
    I don't necessarily disagree with government grants for the development of technology, but investing that money into a company without looking at the marketability of that company is a waste of those funds which would have been better spent as research grants for universities and such. If the company closes shop, there's no benefit at all and the money is totally wasted.

    All too often, the decisions on which companies to support in this manner are not based entirely on logical assessments, but include a certain degree of "You're my pal so I'll help you out."
    Tucker Case - Tard magnet.

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

    Quote Originally Posted by danarhea View Post
    There are a lot of externalities in green technology...
    Such as?

    ...but the problem with Obama is that he is not looking at the negatives as well as the positives, in regard to invividual companies. In the case of Solyndra, they had a process of producing solar technology that was not competitive with other companies in the same market, and thus doomed to failure.

    What Obama is doing is much like throwing crap against a wall. Some of it will stick, but a lot of it will fall to the floor and be lost. Except Obama is not doing this with crap, but with OUR MONEY......... Well, after a few more years, crap might be worth more. LOL.
    I prefer to look at it in terms of net gain or loss. At present, the opportunity cost of investing in an economically and technologically nonviable enterprise like green energy creates a net loss for society in the form of higher energy costs, slower economic growth, and larger deficits.

    Brian

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

    Quote Originally Posted by Free_Radical View Post
    Totally speculative.
    This is why we rely on scientists, not right wing political pundits, to make scientific determinations. The scientists are absolutely clear on it. 97% of climatologists say that AGW has been scientifically proven. The fact that Limbaugh or Boehner or Exxon or whoever claims the jury is still out doesn't carry any weight at all.

    Quote Originally Posted by Free_Radical View Post
    Seems like you already covered that with "reducing oil dependence", and that won't be for a very long time.
    Sorry, I wasn't clear. I mean dependence on foreign oil. Getting dragged into wars over oil, having our hands tied in foreign affairs, ramping up the stakes of international conflicts, etc. are all problems of dependence on foreign oil. Green tech mitigates those.

    Quote Originally Posted by Free_Radical View Post
    in the short to medium term, it has cost us billions and hasn't reduced our dependency one bit
    Completely false. We are already coming up on generating 1/3 of our nation's power with non-fossil fuel sources. Nuclear is already 19%, hydro is already 7%, and both are growing steadily. Solar is still very small, but growing much more rapidly, particularly as people start deploying it on the roofs of their homes and businesses. Wind is 1% and that's growing too.

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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".
    Besides, based on the OP article it's Chapter 13 bankruptcy (restructuring their finances) not Chapter 7 (total liquidation of debt and assets). Frankly, I wish folks would consider the type of bankruptcy filing before flying off the handle everytime the come across a bankruptcy headline concerning one of these "green energy" companies under the Obama Administration. I'd much rather the company go through restructuring than liquidation.

    Besides, wasn't this part of the GM/bank bailout argument? That failing companies should file bankruptcy vice running to the government with their hand out?

    Again, bankruptcy to "restructure debt and present revised business plan/structure" versus "total bankruptcy liquidation WHERE NOBODY WINS" including taxpayers. I'll take Chapter 13 for a couple million in solvency debt, an improved market strategy and reorganization, Alex!

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

    Quote Originally Posted by teamosil View Post
    Hindsight is always 20-20. Certainly there were some people that claimed that before the government invested in them, but there were also lots of people that thought it was a very solid technology . In hindsight Fox and whatnot spam the comments made by people that didn't believe in it of course, but that doesn't mean that would have been clear in advance. Some VC firms in high tech industries aim for a 5% success rate. Meaning that only 1 in 20 companies they invest in makes it. You can't really expect that government will see 100% success. Especially since VC firms' goals are precisely aligned with market success where the government's goals are not.
    I'll have to note that this (bolded above) is an entirely different arguement than Solyndra could succeed. Great, if there are large numbers who think the technology is viable, invest in research that would help further it. Don't put money into something everyone agree's is going to fail.

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

    Quote Originally Posted by Free_Radical View Post
    Just because the return on investment is nonmonetary does not mean they are behaving differently from a venture capital firm. Fundamentally, it's the same means to the same end, i.e., investing capital in speculative enterprises with the expectation of a return on investment.
    Just to be clear, it isn't that the return is non-monetary, it is that the benefit isn't captured by the producer. It could be either monetary or non-monetary.

    The difference is exactly that- the company they're investing in doesn't capture the benefit- they can't charge for it. So that means they're more likely to go out of business.

    Quote Originally Posted by Free_Radical View Post
    If it's "just basic economics", then you shouldn't have a problem producing those quotes.
    Just google "positive externality" if you want to learn more about them. Here are some links to get you started:

    Market Failures and Externalities - positive & negative externalities, solutions, Coase theorem
    Positive Externality - Economics
    Tutor2u - what are positive externalities?
    Positive Externalities - Economics Help
    Externalities: The Concise Encyclopedia of Economics | Library of Economics and Liberty

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

    Quote Originally Posted by teamosil View Post
    This is why we rely on scientists, not right wing political pundits, to make scientific determinations.
    I can cite dozens of eminent scientists who do not support the prevailing hypothesis concerning man's role in global warming. And please refrain from silly partisan comments. I do not listen to "right wing political pundits".

    The scientists are absolutely clear on it. 97% of climatologists say that AGW has been scientifically proven.
    First of all, the study to which you are referring is not meant to be a comprehensive representation of the climate science community. They only sampled about 1,400 (if memory serves) "climate scientists".

    Secondly, "climatologists" are only a small subsection of the scientific community. Basically, they are nothing more than glorified physicists, and among physicists, chemists, biologists, engineers, etc., there is no such overwhelming consensus, and much of the physics underlying atmospheric dynamics is unsettled at this point.

    The fact that Limbaugh or Boehner or Exxon or whoever claims the jury is still out doesn't carry any weight at all.
    I would put my science education up against yours any day.

    Sorry, I wasn't clear. I mean dependence on foreign oil. Getting dragged into wars over oil, having our hands tied in foreign affairs, ramping up the stakes of international conflicts, etc. are all problems of dependence on foreign oil. Green tech mitigates those.
    So does exploiting domestic hydrocarbons.

    Completely false. We are already coming up on generating 1/3 of our nation's power with non-fossil fuel sources. Nuclear is already 19%, hydro is already 7%, and both are growing steadily. Solar is still very small, but growing much more rapidly, particularly as people start deploying it on the roofs of their homes and businesses. Wind is 1% and that's growing too.
    If you consider nuclear "green energy"...

    As for the rest, I agree that is a positive development, but you cannot attribute that entirely to government "investments" in green technology.

    Brian
    Last edited by Free_Radical; 01-26-12 at 04:03 PM.

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

    Quote Originally Posted by teamosil View Post
    Just to be clear, it isn't that the return is non-monetary, it is that the benefit isn't captured by the producer. It could be either monetary or non-monetary.

    The difference is exactly that- the company they're investing in doesn't capture the benefit- they can't charge for it. So that means they're more likely to go out of business.
    I don't see how this addresses my point. The government is investing capital (tax dollars) in speculative enterprises (green technology) with the expectation of producing a return (positive externalities). How is this fundamentally any different from venture capitalism?

    I've taken dozens of economics courses. I don't need Google to educate me.

    What I'm asking for is a quote which would substantiate your earlier claim concerning Adam Smith and every other capitalist economist. Since you cannot produce such a quote - especially from Smith - I will assume you were just making things up.

    Brian

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

    Quote Originally Posted by Free_Radical View Post
    First of all, the study to which you are referring is not meant to be a comprehensive representation of the climate science community. They only sampled about 1,400 (if memory serves) "climate scientists".
    No, they sent it to 10,000 scientists. Every single scientist on record with a university or government institution as being any kind of earth scientists. It is, by far, the biggest survey every completed of scientists on the topic. If we don't go with the results from that, what is the alternative? Just making things up willy nilly?

    http://tigger.uic.edu/~pdoran/012009_Doran_final.pdf

    Quote Originally Posted by Free_Radical View Post
    Secondly, "climatologists" are only a small subsection of the scientific community. Basically, they are nothing more than glorified physicists, and among physicists, chemists, biologists, engineers, etc., there is no such overwhelming consensus, and much of the physics underlying atmospheric dynamics is unsettled at this point.
    Yeah, they're the subsection that studies the climate.

    Quote Originally Posted by Free_Radical View Post
    If you consider nuclear "green energy"...
    I do. As does the Obama administration. Dr. Chu- the secretary of energy- is focused on a plan to convert over to primarily nuclear over the course of the next 50 years. The problem is that it isn't really totally ready for primetime yet safetywise and it takes forever to deploy plants and they're really expensive. So, he wants to fill in the gap with alternative energy. I think that's about right.

    Quote Originally Posted by Free_Radical View Post
    As for the rest, I agree that is a positive development, but you cannot attribute that entirely to government "investments" in green technology.
    No doubt.

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