Hmmm...The smaller state of Mass. spends less money than the larger country they are a part of...who'd a thunk it.
For your consideration:
Solyndra, schmolyndra: The Obama administration’s hit rate is better than the private market’s
By Jess Zimmerman
Making loans is a tricky business — sometimes you bet on the wrong horse. For example, there's the Obama administration, which doled out 1.4 percent of its Recovery Act cleantech investments to failed solar company Solyndra, in a move that everyone and their uncle is now calling a giant embarrassment. And then there's private venture capital, which invests in green energy companies that fail at least 30 percent of the time.
According to Susan Kraemer at CleanTechnica, the Obama admin's hit rate far outperforms venture capitalists:
The US government guarantee of a private loan to Solyndra, at $535 million, represented a minuscule 1.4% of the Department of Energy investment in all renewable technologies. By contrast — VCs (who were out $1 billion to Solyndra, for example) expect much higher failure rates. Richard Stuebi, who advises VCs on expected green energy failure rates, says that just 3 in 10 successes represents a successful VC investment strategy. That is 70% losers — not 1.4%.
It's not an apples-to-apples comparison, because the 1.4 percent is based on how much money went to Solyndra, whereas Stuebi's figures are about number of ventures. DOE lists 38 guaranteed loans; one failure out of 38 investments would be closer to 2.6 percent. And while Stuebi shows only 30 percent of investments being successful, there's another 40 percent that just drag along, not failing but not providing sufficient return on investment. Still, it looks like private investments go belly-up at a much higher rate than the government's.
So, are we still calling this a "scandal"?
Here is the really big difference between obama giving money to Solyndra and Romney trying to help a local green energy firm, here is the apple vs the orange.
Top Obama bundler George Kaiser made multiple visits to the White House in the months before the company was granted a $535 million loan from the government. And top Solyndra officials also made numerous visits — 20 — to the White House, according to logs and reporting by The Daily Caller. Solyndra officials in the logs included chairman and founder Christian Gronet and board members Thomas Baruch and David Prend. The company secured the $535 million loan despite the fact that it was widely known Solyndra was in deep economic trouble and had negative cash flows since its inception.
My understanding of economics is fine.
The federal government can't spend ANY money unless it borrows almost half of it first. That's because they DON'T have the money...but they lend it anyway...and the Obama administration did it just because THEY wanted to. Not because Congress...or the citizens...told them to.
You blame Obama for investing in Solyndra (along with venture capitalists)...because it failed as a venture. You ignore the other successful 30 some odd companies that did not fail, so I assume you wish to focus on this failure. I then point out the risk involved in venture capital as well as the ratio of success, to which you respond that it has no bearing on your focus. Likely due to the fact that the VC failure rate is far above the Gov't failure rate....thus making it hard to defend your stance. The only comparison that actually DOES work here it indeed Venture Capital, as that is exactly what the Government was doing with the recovery act.