October 16 2012

Oops! We Just Lost Another $249 Million...

Charlotte Hays

One of Mitt Romney’s best lines in the first presidential debate was the one about the Obama administration’s propensity for “picking losers” in its investing in green energy projects.

And that was before this report today from Bloomberg:

A123 Systems Inc. (AONE), the electric car battery maker that received a $249 million federal grant, filed for bankruptcy protection and said it would sell its assets to Johnson Controls Inc. (JCI).

The filing may fuel a debate over government financing of alternative-energy and transportation businesses. Federal grants and loans to companies including A123, Fisker Automotive Inc. and Tesla Motors Inc. (TSLA) have drawn scrutiny from congressional Republicans following the September 2011 bankruptcy filing of solar-panel maker Solyndra LLC two years after it received a $535 million loan guarantee from the U.S. Energy Department.

The problem, as I said in a post earlier today on how our tax money is wasted, is that government is too big and thus has too much money. Department of Energy Secretary Steven Chu, who made the decision to throw nearly half billion dollars at the now-bankrupt Solyndra, simply shouldn’t have this kind of money to pour down a rat hole.

Government officials should not be making these massive investments. In the present administration, there seems to be particularly widespread inability to pick investments (at least on the taxpayer’s nickel—I bet our officials do a better job when they are using their own money). Consider the high hopes President Obama and others had for A123:

Then-Gov. Jennifer Granholm, D-Mich., expected A123 to contribute to the creation of 63,000 jobs in the state.

Energy Secretary Steve Chu attended that Granholm-Obama press conference, and expressed his high hopes for the green company. "Hopefully the first 300 jobs is just the beginning [and] it'll go to another 300 and another 300, to thousands of jobs," he said at the time.

Hat tip: Hot Air

Comments
blog comments powered by Disqus