DoE Picking winners and losers; here we go again

OmCheeto

I would tell you why I agree with you 100%, but that would be redundant.

I do find these conversations interesting, as the opposing team seems to be totally insane. And yet, they seem to imply that we are insane.

I had a discussion with my boss a while back, trying to determine the origin of our differences, and we discovered that we had totally different thought processes. He thinks in terms of black and white, and I think in terms of infinite shades of gray.

His process of thinking was very efficient I decided, for certain things. But I don't think in the global scenario, that it makes any sense, whatsoever.

chiro

I'm not sure about the relativity of the money with respect to the industry and business itself (including start-up capital requirements and so forth), but one thing is certain: most people waste things they don't value.

Four hundred million dollars seems like a lot and when you give people that much (or even 70 million), it just encourages the situations synonymous with waste and devaluation of initial capital.

Lots of successful businesses are run mostly on thin margins and often to the sacrifice of the owners and operators where they are working below minimum wage since they are working all the time but pulling in just enough for ends to meet.

The thing about the government though is that they don't work like a business where they have to compete for customers: governments always get money no matter what. If it doesn't come from the taxpayer, they will just borrow it.

As a result of the above, it's not in the least bit surprising that they waste money: they don't have an incentive to stop wasting money because they know they can and as a result don't really value the income that they get, wherever it comes from.

Governments should stay out of things like this for at least the above reason, because they are just in a world of their own when it comes to knowing the value of resources and money unlike the new businessperson who is working seven days a week with no "benefits, company car, maternity or paternity leave, sick leave, long-term service leave or gauranteed pension", they don't have a clue what its like to have to effeciently make use of the minimum or near minimum to run their business and survive.

Again though, it's not that surprising.

ParticleGrl

Granting your argument for the time being, you're laying out a case that the government is bad at certain calculations/activities. Although, I would argue that the reason businesses appear to be efficient is that inefficient businesses die- not that business men are magical planners. Its survivor bias.

However- you've failed to point out that there are areas where the government has an edge over private enterprise. The public sector is much better at sustained research investment, and is capable of planning on a much larger scale than any business (consider- central planning IS important- firms are essentially islands of central planning in the other-wise chaotic market). As innovator, the government actually has a pretty decent track record.

Its important to keep in mind that the government funded the research that became the internet, and when they realized what they had, the public sector turned the internet over the private sector. How much income do you think the government would make if instead of turning over public sector research, they insisted on raking in a return?

chiro

I'm not saying that they shouldn't fund research for academia as many people have pointed out (which I wholeheartedly agree with) is that there are areas that are not suitable for private enterprise in the sense that everything is done for a profit.

Such things include not only research in academia, but things like education and health-care. I am behind this kind of thing because even if these kinds of areas have some element of government involvement, it is good for a variety of reasons discussed already at length in these forums and many other places.

But I'm not talking about this: I'm talking about the tendency for government to waste money and resources, and this happens all the time in both defence spending and non-defence spending.

Again, the point I'm trying to make has to do with the tendency of the government to waste resources. This is why I brought up the examples of business owners who scrape through with minimum or near-minimum resources end up being very good at using their resources to the fullest potential.

If the government stopped this practice of throwing money around willy nilly and started to value the resources at its disposal, I would drop my argument.

Also with regards to innovation, I really think you're giving the government more credit than it deserves in innovation.

Most innovation does not come from government: it comes from innovators. Innovators are usually the entrepreneurial types who are not usually motivated by profit, have a lot of persistence, and tend to work around any situation they encounter in order to reach their end goal.

They are absolutely not like governments having near endless amounts of resources to do what they want: they are the complete opposite to this. Governments are really pathetic in any kind of activity involving innovation. If they were any good and genuinely had the ability to fix things they would have done it long ago, but they haven't.

There was a TED talk by a guy who spent the majority of his talk emphasizing that the innovators and creative potential of people declines when money comes into the equation. The thing that makes this flourish has more to do with things that are in contrast to money like helping people for the sake of helping them, not for gain. This is what true innovators are like: they work around problems and this characteristic helps them deal with situations that any government could never deal with.

Finally again with the government funding, the people that created things like the internet where physicists not beaurocrats, and this is one of the key things I am trying to emphasize (along with the wastage).

These beaurocrats don't have a damn clue in many circumstances what its like to have work on a tight-rope because again it's a lot easier to gain access to resource to the point where irresponsible behaviour happens (getting into debt that most ordinary people can't comprehend).

In short, governments waste money, resources, and time and because of this create a dangerous situation when they try and get into these kinds of things. It's not that it doesn't have its place for things like research that is risky (like academia), but moreso that because of its unfortunate privilege with resources, it has a great history of unwise allocation and waste.

ThinkToday

Money is historically cheap. Borrowing is tight. You must not be old enough to remember the Carter years.

Basically, the business sector says no because they think is a bad investment. The government steps in and funds a bad investment with tax dollars. Looking at this example, score one for the business community. There is a reason the US makes almost no TVs, radios, microwaves, clothing, etc. anymore. Other countries do it cheaper. Why would anyone think solar panel production would be any different, unless there was a "new" technological edge to a US maker?

Not "And any investment", any sound investment. Ultimately, who will be the wiser investor, the government that just goes back to well (our tax dollars) when investments go bad, or the venture capital/banking community? I'm betting the people that have their assets at-risk will make the better choice. e.g. I wasn't a Romney supporter, but the more I read about all the companies they saved (not just the ones that went under), they were actually pretty good. At his best Tiger Woods didn't win every tournament.

Dickfore

I am afraid the nouns and adjectives you coined up here don't make much sense for me. And my age has nothing to do with the invalidity of your argument

You are invoking your personal opinions here. I cannot argue with you wether you think renewable energy is a bad investment. I can only criticize your arguments against it, which are null.

Besides, there are instances where the market does not find an optimal solution. This is when externalities are present, such as is the case.

Even if the market finds an optimal solution at the current level, this is only a local optimum. There may as well be a different global optimum (and I'm not talking about local and global as geographic terms) that cannot be reached.

Let me give you an example. When Columbus wanted to discover an alternate route to India, he had to go for financing to the Spanish Crown (Queen Isabela) to fund his enterprise. His original goal failed, but don't you think Spain benefitted from his discovery?

I was using a division in public and private. It is not the case that public cannot be sound, as is not the case that private is necessarily so.

And, finally, you show why you started this thread. It's simple Republican propaganda.

Good luck to you, Good Sir.

OmCheeto

Don't have time for infinity today.

Capitalism in a mixed economy world.
Chinese: Let's see, if we we put the Americans out of business, then we will make all the pie, and they will have to buy it. We will be rich.
Americans: If American companies can't compete without government help, then so be it.
Chinese: Cha-Ching!
Om: Shakes head.

Trade deficit.
Germans: Ver are allen our marks goings? hmmm... [skratches zee heades]
Americans: Let the world economy be free!
Germans: Zee veld ekonomees ist nicht fry, und it's nicht fair, und it's not nice eezer. Let's do zumzing

Om: skratchez hiz kopf

Om: skratchez hiz kopf ein zekund time

$439,342,000,000.00 <-- Cost of US imported petroleum products last year(page -->bea.gov xls zip file)
$____641,000,000.00 <-- Cost to US taxpayers for the 3 bankrupt solar companies(fox news)

OPEC: Cha-Ching!

439.342/0.641 = 685

So we export 685 times as much money for oil than we spend on defunct solar companies.
Seems like that could be a bit "taxing" on our economy if that keeps up.
Oh wait, it has been.

[Expletives directed at ***** ******* ******** deleted]

OmCheeto

Me too!

Fun with numbers:

Lockheed Martin
2011 U.S. government contracts: $39,980,000,000.00
employees: 123,000
$/employee: $325,040.65
times 30 years: $9,751,219.51

that's $9.75 Million per job.....

ps. I have nothing against Lockheed Martin and its employees. They just happen to be the #1 government funded contractor. I'm sure they do lots of wonderful things with that $9.75 million per each employee's career.

JonDE

Not that I'm completely disagreeing with you, but I am disagreeing with your argument.

You can't compare oil vs solar panels. Most cars don't run on electricity. They run on gas. Most electricity in the US is not produced from oil. Further oil has other uses such as in making rubber, plastics and fertilizers that can't be replaced by adding electricity via solar panels.

IMO oil should be counted on its own with very little comparable to other sources of energy.

OmCheeto

Pfft! They are both sources of energy. They are easily compared.
They will be when I'm finished.
So old school.
Have you ever seen this image?:

Do you know what I found out about the above graph?
25% is about the best a car can do.
In everyday urban driving, the efficiency drops to around 5%.


Once again, see Germany.

pfft! One of at least 10 reasons why I bought a Ford:

And last, but not least, this is P&WA. We shouldn't be discussing science, we should be bashing politicians!

ThinkToday

That’s your response to “Money is historically cheap. Borrowing is tight. You must not be old enough to remember the Carter years.”?

Seriously? At the end of the Carter presidency the Federal funds effective rate was 13.35% and the current rate is 0.1% http://www.federalreserve.gov/releases/H15/data.htm It is hard to image money any cheaper than it is now. On the other hand, a business getting credit isn't as easy http://www.slate.com/articles/busine...it_crunch.html So, my position is entirely valid, supported by the facts, and I see no merit in your use of the term "coined up", for that matter I'm not even sure what it's supposed to mean, as you used it.
As for referencing your age, it has to do with what might be your point of reference. I think $4/gal gas is nuts, but I recall buying gas for less than 25 cents/gal. So for you, $4/gal may be high and $2.50/gal may be acceptable. My grandfather swore he'd part his truck if gas hit $0.25/gal. So, point of reference (age, in this case) matters. I don’t know. What I do know is “By this, I mean that the current interest rate for borrowing is sufficiently high, …..” isn’t supported by reference (e.g. the one I gave above) or experience.

It has nothing to do with "Republican propaganda". You would be surprised at just how deep in Democrat party politics my family has been. Both parties have done the same things. In fact, the Republicans look to be the bigger “bailout party”, http://www.propublica.org/special/government-bailouts So let’s just step back from the party accusations, as they are just false unsubstantiated arguments that are irrelevant to the discussion. It's about the role of government and mucking around in economy on a microscopic scale by making individual loans, credit lines, etc. to companies. Clearly, one can argue the government has a role with assuring a level playing field; e.g. fair credit rules, non-discrimination, fair trade policy, safety standards, etc., but those are macroscopic things. As I said before, I can see the case for the government involvement in developing cutting edge technology that isn't within the risk/reward window that would yield private investment, such as fusion power.

Was there ever any doubt China or a similar country would provide cheaper solar panels than could be made in the US? So why would the government ever sink our tax dollars in this plant?

In looking up sources, this was surprising to me - "[We're] one of the last makers of nails in this country," company president Roelif Loveland said. About 90 percent of nails come from China and, Loveland said, if he could double sales, he could add 25 more jobs." "A box of nails is $5 more than those made in China and steel is $146 more a bundle." We can’t even make nails cheaper, and we don’t have to pay to ship them across the pacific ocean.
http://abcnews.go.com/Business/Econo...ry?id=14719487

Hopefully, the government won't get into the nail business too.

Astronuc

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