Is It Fair for Government To Pick Winners?

by Laura DeMaria on January 26, 2012

in Blog

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In January 2010, Ener1, a manufacturer of lithium-ion batteries for use in plug-in electric cars, received a $118.5 million Stimulus grant from the US Department of Energy. Today, it filed for bankruptcy. Their Chapter 11 filing lists around $100 million each in assets and debts and proposes a restructuring plan to reduce its debt and provide up to $81 million to recapitalize the company.

The bankruptcy follows in the footsteps of Solyndra ($535 million from the DOE), Beacon Power ($43 million from the DOE) and SpectraWatt ($500,000 from the American Recovery and Reinvestment Act), all government-subsidized green energy companies which collapsed within the last year.

Ener1 cites heavy competition from Asia, a rough economy, bad investments and the slowly developing electric car market for its failure.  Even though Asia may have a cheaper workforce and more relaxed labor laws, the repeated failures of federally-backed green industry corporations—which according to CBS, will perhaps total 11 bankruptcies in the near future—is due to the Obama administration’s unrealistic insistence on creating a green energy industry out of subsidies, particularly when the demand for “green” products is virtually non-existent in the real marketplace.

This latest bankruptcy brings the total to about $1 billion in wasted, taxpayer-generated stimulus money. Ultimately, the President’s resolve to invest taxpayer money on highly risky green investments borders on the immoral. Where is the sense of fairness in an administration choosing which industries get a chance to succeed and which to fail?

Carl Johnson January 26, 2012 at 8:19 pm

It’s worse than that. There is a connection between the loans and grants given to the failed companies and campain contributions recieved by Obama

Paula Fields January 26, 2012 at 9:41 pm

Thank You. SO true. Good work.

Marlo Lewis January 27, 2012 at 6:52 pm

Good post, Sara. Indeed, the Dead keep truckin’ year in, year out, [1] despite Jerry’s passing. [2] They didn’t want tax credits for concert tickets, mandates for air time, or loan guarantees for album production. What they wanted from government was non-interference. [3]

[1] “And the band keeps playin’ on.”
[2] “Such a long, long time to be gone, such a short time to be there.”
[3] “They just won’t let you be.”

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