From that story are a number of cited warning signs: mediocre bond ratings, higher manufacturing costs than its competitors, bad reports from their auditor (who cited problems going back well before the Solyndra loan was finalized), and canceling their IPO.
As for the conspiracy theories: no. Wasn't a handout. Wasn't a payoff. Those are long debunked myths.
It was just awfully convenient funding for all the parties involved - except the public. Coincidences happen all the time.
The rest of us are counting on physics to still work today like it did yesterday.
And if you had a clue what the physics was, you'd have a point. Earth is not a toy one-dimensional model, the atmospheric radiative model of Arrhenius.
Because I live here, and if it's true, it's another interesting data point.
No, he asked why was it so important that this "data point" (and many other such things) be blamed on human-caused climate change? I think I'll answer that question.
It's because it fits the myth that humans are bad. The mechanics of the rationalizations and what is actually considered good and evil change from generation to generation, but the myth never does. I think people have psychological needs for such myths, perhaps to cope with the unpleasant aspects of reality.
Look I realize you are a clueless idiot. So this reply isn't for you. It's for everyone else who looks at this thread and thinks, well isn't 3% better than 70%?
First, there's what should be the nail in this coffin. People like dywolf define as a success, nay an unequivocal success, a business that just happens not to go bankrupt in five years after receiving one of these very ample loan guarantees (this part, "section 1705" started in 2009 due to passage of the American Recovery and Reinvestment Act in that year). It's "one of the most successful loan programs the government has ever run" to use dywolf's words.
Imagine if a sports team defined as an "unequivocal success" and "one of the most successful seasons we've ever had" merely because 97% of their team showed up for preseason practice with maybe one or two games actually played by the point they start to brag. And as long as 89% of the team sticks around through the end of the season, whether or not they ever win any games, then they'll meet expectations too.
The expectations are absurdly low.
Second, he conflates different loan guarantee programs. Solyndra and Tesla weren't in the same program and Tesla's loan wasn't a loan guarantee, but rather a low interest loan. This point is a bit pedantic, but I just want to point out yet another symptom of dywolf's ignorance in this matter.
Third, the cited, biggest success of this "program", Tesla is massively subsidized by both the federal government and the state of California. I believe the subsidies are large enough to make the difference between a successful company and also-ran.
There was an earlier discussion of a major "bond manager" of Tesla stating that the company should drop auto manufacture altogether and go full bore into car batteries. At the time, it didn't make sense why someone would suggest that. That now strikes me as further evidence that Tesla doesn't actually make cars that would be profitable on their own.
I don't think Tesla is unusual in being heavily subsidized, but rather that is a typical feature of the businesses which picked up these sorts of loans.
Moving on, dywolf and several others have conflated the loan guarantee program with a variety of risky business activities such as venture capital, leveraged buyouts, or growth equity, spinning some bullshit about how "conservative" the investments were (from the link "an actual 5% loss rate is exceptionally conservative").
Note what they don't compare this program to - actual private lending. An actual 3% loss over five years is bad. While those levels were being hit by banks during the real estate crisis and subsequent recession, that resulted in banks collapsing, not bankers high-fiving each other over the unequivocal success of their lending programs.
Why should we consider VC-level risk appropriate for what should be mundane industrial project lending? Venture capitalists have more or less the same universal strategy. They put small amounts of money (and often technical or business expertise lacking by the founders of the startup) into a startup. The startup proves itself by meeting whatever goals have been set. Then those that survive to that point may get funded further by the VC or by other investors. Every such investment is graduated. They don't dump half a billion dollars in and hope the business works out.
This strategy of dumping huge sums in and building huge projects is completely alien to how the private world does investments in new, untried things.
As an aside, I'm not surprised that someone so profoundly ignorant of what "investment" means, would link to a gratuitously ignorant site like governmentisgood.com.
Please provide concrete evidence, you know, actual facts with numbers
My previous post is more than adequate. Let me repeat myself in case you just didn't read it:
For example, the US government could have indefinitely extended loan guarantees to Solyndra which would have kept the business from defaulting ever, but only by creating a perpetual money sink. The failure rate on that scheme would by your reckoning be 0% (making it an "unequivocal success" to use your term for it) even though substantial wealth of the public is being destroyed.
Now that I satisfied your question, will you address the problem I describe?
Let's take the example of Tesla Motors, mentioned above. The received $465 million in government guaranteed loans which they've since paid off. In January of 2014 they employed about 6,000 people (up from nearly 3,000 in December 2012), most of them well paid. They're also have supply chains for the parts they don't make in-house. They had over $2 billion in revenue in 2013. That's a nice chunk of economic activity they're driving. I'd say that's a pretty good return on investment.
And the government(s) could have just done nothing at all with similar results.
Perhaps you could provide us some concrete examples of some projects that have a negative ROI but aren't contributing to the failure rate of the program.
Anything with a cost over $4 per watt. They could have instead done nothing and let the businesses figure out on their own how to provide solar thermal and other renewable power systems for far less than that amount.
The loss rate for venture capital is 33-50%. Typical loss rate for "safe" conventional commercial investment strategies are 15% for leveraged buy-outs, and 13% for growth equity. A 10-15% loss rate for government is similar, or better than, commercial investment strategies. The stated 10-11% target indicates a very conservative approach, and an actual 5% loss rate is exceptionally conservative.
You are comparing pigeons and bowling balls. Government isn't investing here. It's giving a bunch of money indirectly via loan guarantees to cronies to squander. It's just another siphon for sinking public funds in useless projects and activities.
Here's the scam as I see it. The business sets up a shell company which receives the loan and the loan guarantee. The project gets built with the shell company contracting the original business for all services and construction. Then when the loan money runs out, the shell company declares bankruptcy (or the loss gets hidden with another infusion of public funds) and the original business walks away with a significant profit from all that contract work even after losing the modest initial stake they had to put in for the appearance of propriety. Rinse, lather, repeat.
The 3% of loan amounts that immediately went south are merely an indication of the complete lack of due diligence on the part of the feds and the incompetence of some of the pigs at the trough.
I think that's a reason thing to ask of the public. Keep in mind that the public is part of the reason that the US has aging reactors subject to such fault modes, doesn't have long term storage of nuclear waste or nuclear fuel recycling, and levies ridiculous levels of liability against industry and commerce for which the Price-Anderson act is necessary protection.
But they do care enough to put up Other Peoples' Money. That's the fundamental problem with public funding. It gets used on projects and purposes that nobody would touch. if they could only fund it themselves.
Please be an idiot somewhere else. It doesn't even remotely make sense to compare private sector failure rates for attempts to create profitable businesses from scratch to loan defaults on government loan guarantees.
For example, the US government could have indefinitely extended loan guarantees to Solyndra which would have kept the business from defaulting ever, but only by creating a perpetual money sink. The failure rate on that scheme would by your reckoning be 0% (making it an "unequivocal success" to use your term for it) even though substantial wealth of the public is being destroyed.
Minimal? They set a goal of no more than 10/11% failure.
That's already higher than private sector by 3:1.
First, failure means merely that the business didn't go bankrupt and default on the loan. It doesn't even mean that the business ever does anything productive with debt that's being backed. Meanwhile, a VC's failure is a business that fails to generate a sustainable profit. Do you really think that not defaulting on a loan is the same as successfully taking a business from nothing to long term profitable?
It's ridiculous to compare these loan guarantees to business creation. The expectations are vastly lower.
What part of "the government's loan strategy is OUTPERFORMING the public sector in its ROI" dont you get?
LOL. The public sector doesn't do ROI.
The public sector accepts 70% failure as a cost of doing business.
VC's accept a 70% failure rate because the successes more than pay for the failures. The government program doesn't have that going for it. It's a substantial and hidden loss of wealth that generates a bunch of one-off renewable energy projects that are vastly oversized for the purpose of prototyping new technologies.
The DOE only has a 3% failure rate.
Over a period of about two to three years. And these are the worst sorts of failures - default on the majority of the loan. They are deliberately hiding the other sorts of failures, such as building something that has negative ROI.
Anyone who can claim that this loan guarantee program has a 3% failure rate has no clue what failure means.
Because most people (including I suspect a number of the proponents of the theory, particularly on the political side) think the threat of AGW is exaggerated.
Why is it ALWAYS with the fear mongering about the privacy you already don't have, and no one ever talks about the better decisions we could be making if everyone knew what the elite already know?
Experience and reason. As the other replier noted, why would the elite share this with us?
LOL. It's remarkable how minimal expectations are for government work and "investment". A few years in and there was already a 3% default rate on the loans.
And they're comparing this to a "successful VC strategy"? VC don't guarantee a half billion in loans to businesses that will clearly go bankrupt. They start small.
Nor do VC guarantee loans for crap, over-priced projects. For example, several of these projects are run by career public works businesses like Abengoa SA. They specialize in turning public funds into green elephants. I notice also that the price on these projects tends to hang around $4-8 per watt of generating power. That's not good enough to be competitive.
My view is that in twenty years not a single one of these projects will be relevant to the renewable energy technologies of that future. They'll be a historical footnote about the US blowing a bunch of money on projects that didn't go anywhere and completely ignored by the people who think this approach works.
The countries that actually matter (China and India) use the inaction of rich countries as an excuse for their own inaction.
Unless, of course, they'll use the "action" of rich countries to take advantage of and ruthlessly surpass them. I think "setting an example" here is economic suicide for whoever does it. Anthropogenic global warming simply has not been shown to be urgent or dire enough to where this sort of demonstration is necessary.
And in the absence of that urgency, China and India have no reason to go along with the game aside from getting economic opponents to commit to crippling positions.
That's why we need a "social contract." The exact terms are up for debate, but most people who have thought about the issue agree that, in fairness to all, we need protections for everyone. And sometimes we need to build in protections for those who need it most.
What does the "social contract" actually have to do with that? It's a vague concept that means whatever the needs of the moment require. It's useless for the above purpose. Law on the other hand is quite useful for this purpose. For example, Hammurabi's code of law, one of the earliest known systems of law, stated protection of the weak as a core purpose of the law.
And what "protections" actually do protect those who are disadvantaged in the above way? I note that much of the modern world's "social safety net", which generally is considered a manifestation of the social contract, does more to benefit those who could (but can't be bothered to) provide for themselves than it does the disadvantaged. Meanwhile the society in question is being harmed by the cost of those social safety nets.
Every developed world society has a problem with public pensions, for example. The demographics of these societies all have their societies aging. More older people need more support, while there are less younger people to provide the wealth for that support. The "social contract" people ignore the costs of providing their version of the social contract.
I'm reminded of a previous conversation I had on the subject. An AlecC wrote this:
I think the "Social Contract" exists, but I agree that it is a problem, but also an advantage, that it is not written down. There is an implicit contract between all of us on how society works: that we give up some freedoms, as do our fellow citizens, in order to make society work. The fact that it is not written down means that we can actually have different views of what is actually in the contract - and privacy is a golden example of that. On the other hand, being unwritten allows it to evolve. Writing things down fixes them, while society changes. A prime example here is the Second Amendment: while not saying it is right or wrong, I am certain those who wrote and passed it did not foresee current firearms technology.
In other words, it's a lot easier to demand stuff out of others when you can point to an amorphous concept which can mean whatever you want it to mean as your justification than if you have to point to a hard copy of actual law.
If you weren't cooperating to promote moral bullshit, there's no need to form an organization, you could have just formed a trading relationship as free independent individuals.
A "trading relationship" is also an organization. For example, a common current form is the limited liability corporation common throughout the world.
And your use of the term, "promoting bullshit" glosses over the other things that are done. For example, the belief system of Christianity pacified the barbarians. Norwegians and the Danish are a lot nicer now than they used to be. I think reality is a lot more generous to me than you claim.
Slashdot Mirror
Actually solyndra looked solid to both public and private investors.
We can actually look at the evidence.
From that story are a number of cited warning signs: mediocre bond ratings, higher manufacturing costs than its competitors, bad reports from their auditor (who cited problems going back well before the Solyndra loan was finalized), and canceling their IPO.
As for the conspiracy theories: no. Wasn't a handout. Wasn't a payoff. Those are long debunked myths.
It was just awfully convenient funding for all the parties involved - except the public. Coincidences happen all the time.
You don't get it. Climate change is so powerful now, it can move emperor penguins great distances!
The rest of us are counting on physics to still work today like it did yesterday.
And if you had a clue what the physics was, you'd have a point. Earth is not a toy one-dimensional model, the atmospheric radiative model of Arrhenius.
Because I live here, and if it's true, it's another interesting data point.
No, he asked why was it so important that this "data point" (and many other such things) be blamed on human-caused climate change? I think I'll answer that question.
It's because it fits the myth that humans are bad. The mechanics of the rationalizations and what is actually considered good and evil change from generation to generation, but the myth never does. I think people have psychological needs for such myths, perhaps to cope with the unpleasant aspects of reality.
Actually modern coal burning plants can do load following. For example, your 4 hours to reach full power from a warm start is an example.
What evidence would convince you that it is urgent or dire?
Substantial warming, for example, over a few decades. Huge methane releases. Greenland's ice sheet sliding into the ocean.
Look I realize you are a clueless idiot. So this reply isn't for you. It's for everyone else who looks at this thread and thinks, well isn't 3% better than 70%?
First, there's what should be the nail in this coffin. People like dywolf define as a success, nay an unequivocal success, a business that just happens not to go bankrupt in five years after receiving one of these very ample loan guarantees (this part, "section 1705" started in 2009 due to passage of the American Recovery and Reinvestment Act in that year). It's "one of the most successful loan programs the government has ever run" to use dywolf's words.
Imagine if a sports team defined as an "unequivocal success" and "one of the most successful seasons we've ever had" merely because 97% of their team showed up for preseason practice with maybe one or two games actually played by the point they start to brag. And as long as 89% of the team sticks around through the end of the season, whether or not they ever win any games, then they'll meet expectations too.
The expectations are absurdly low.
Second, he conflates different loan guarantee programs. Solyndra and Tesla weren't in the same program and Tesla's loan wasn't a loan guarantee, but rather a low interest loan. This point is a bit pedantic, but I just want to point out yet another symptom of dywolf's ignorance in this matter.
Third, the cited, biggest success of this "program", Tesla is massively subsidized by both the federal government and the state of California. I believe the subsidies are large enough to make the difference between a successful company and also-ran.
There was an earlier discussion of a major "bond manager" of Tesla stating that the company should drop auto manufacture altogether and go full bore into car batteries. At the time, it didn't make sense why someone would suggest that. That now strikes me as further evidence that Tesla doesn't actually make cars that would be profitable on their own.
I don't think Tesla is unusual in being heavily subsidized, but rather that is a typical feature of the businesses which picked up these sorts of loans.
Moving on, dywolf and several others have conflated the loan guarantee program with a variety of risky business activities such as venture capital, leveraged buyouts, or growth equity, spinning some bullshit about how "conservative" the investments were (from the link "an actual 5% loss rate is exceptionally conservative").
Note what they don't compare this program to - actual private lending. An actual 3% loss over five years is bad. While those levels were being hit by banks during the real estate crisis and subsequent recession, that resulted in banks collapsing, not bankers high-fiving each other over the unequivocal success of their lending programs.
Why should we consider VC-level risk appropriate for what should be mundane industrial project lending? Venture capitalists have more or less the same universal strategy. They put small amounts of money (and often technical or business expertise lacking by the founders of the startup) into a startup. The startup proves itself by meeting whatever goals have been set. Then those that survive to that point may get funded further by the VC or by other investors. Every such investment is graduated. They don't dump half a billion dollars in and hope the business works out.
This strategy of dumping huge sums in and building huge projects is completely alien to how the private world does investments in new, untried things.
Then there's my fifth point, there's absolutely
So where are these "real space corporations"?
As an aside, I'm not surprised that someone so profoundly ignorant of what "investment" means, would link to a gratuitously ignorant site like governmentisgood.com.
Please provide concrete evidence, you know, actual facts with numbers
My previous post is more than adequate. Let me repeat myself in case you just didn't read it:
For example, the US government could have indefinitely extended loan guarantees to Solyndra which would have kept the business from defaulting ever, but only by creating a perpetual money sink. The failure rate on that scheme would by your reckoning be 0% (making it an "unequivocal success" to use your term for it) even though substantial wealth of the public is being destroyed.
Now that I satisfied your question, will you address the problem I describe?
Call it whatever you like; as you say, it's still infringing copyright
Not according to a ruling by david_thornley. I think I'll side with him. I want my free stuff.
Let's take the example of Tesla Motors, mentioned above. The received $465 million in government guaranteed loans which they've since paid off. In January of 2014 they employed about 6,000 people (up from nearly 3,000 in December 2012), most of them well paid. They're also have supply chains for the parts they don't make in-house. They had over $2 billion in revenue in 2013. That's a nice chunk of economic activity they're driving. I'd say that's a pretty good return on investment.
And the government(s) could have just done nothing at all with similar results.
Perhaps you could provide us some concrete examples of some projects that have a negative ROI but aren't contributing to the failure rate of the program.
Anything with a cost over $4 per watt. They could have instead done nothing and let the businesses figure out on their own how to provide solar thermal and other renewable power systems for far less than that amount.
China is investing far more in renewable and clean energy than most western countries.
Because a) it makes a lot of money for them, b) employs people, and c) is a great sink for rare earths which they're withholding from the market.
and part of it is because the EU demands they clean up if they want to sell us stuff.
Another way to put that is that Chinese businesses have figured out how to beat the ISO 14001 protectionist scheme.
The loss rate for venture capital is 33-50%. Typical loss rate for "safe" conventional commercial investment strategies are 15% for leveraged buy-outs, and 13% for growth equity. A 10-15% loss rate for government is similar, or better than, commercial investment strategies. The stated 10-11% target indicates a very conservative approach, and an actual 5% loss rate is exceptionally conservative.
You are comparing pigeons and bowling balls. Government isn't investing here. It's giving a bunch of money indirectly via loan guarantees to cronies to squander. It's just another siphon for sinking public funds in useless projects and activities.
Here's the scam as I see it. The business sets up a shell company which receives the loan and the loan guarantee. The project gets built with the shell company contracting the original business for all services and construction. Then when the loan money runs out, the shell company declares bankruptcy (or the loss gets hidden with another infusion of public funds) and the original business walks away with a significant profit from all that contract work even after losing the modest initial stake they had to put in for the appearance of propriety. Rinse, lather, repeat.
The 3% of loan amounts that immediately went south are merely an indication of the complete lack of due diligence on the part of the feds and the incompetence of some of the pigs at the trough.
The "collective will" favors the elite.
I think that's a reason thing to ask of the public. Keep in mind that the public is part of the reason that the US has aging reactors subject to such fault modes, doesn't have long term storage of nuclear waste or nuclear fuel recycling, and levies ridiculous levels of liability against industry and commerce for which the Price-Anderson act is necessary protection.
But they do care enough to put up Other Peoples' Money. That's the fundamental problem with public funding. It gets used on projects and purposes that nobody would touch. if they could only fund it themselves.
DOE: 11% is the goal. They achieved only 3%.
Please be an idiot somewhere else. It doesn't even remotely make sense to compare private sector failure rates for attempts to create profitable businesses from scratch to loan defaults on government loan guarantees.
For example, the US government could have indefinitely extended loan guarantees to Solyndra which would have kept the business from defaulting ever, but only by creating a perpetual money sink. The failure rate on that scheme would by your reckoning be 0% (making it an "unequivocal success" to use your term for it) even though substantial wealth of the public is being destroyed.
Minimal? They set a goal of no more than 10/11% failure. That's already higher than private sector by 3:1.
First, failure means merely that the business didn't go bankrupt and default on the loan. It doesn't even mean that the business ever does anything productive with debt that's being backed. Meanwhile, a VC's failure is a business that fails to generate a sustainable profit. Do you really think that not defaulting on a loan is the same as successfully taking a business from nothing to long term profitable?
It's ridiculous to compare these loan guarantees to business creation. The expectations are vastly lower.
What part of "the government's loan strategy is OUTPERFORMING the public sector in its ROI" dont you get?
LOL. The public sector doesn't do ROI.
The public sector accepts 70% failure as a cost of doing business.
VC's accept a 70% failure rate because the successes more than pay for the failures. The government program doesn't have that going for it. It's a substantial and hidden loss of wealth that generates a bunch of one-off renewable energy projects that are vastly oversized for the purpose of prototyping new technologies.
The DOE only has a 3% failure rate.
Over a period of about two to three years. And these are the worst sorts of failures - default on the majority of the loan. They are deliberately hiding the other sorts of failures, such as building something that has negative ROI.
Anyone who can claim that this loan guarantee program has a 3% failure rate has no clue what failure means.
Ever wonder why AGW gets nothing but lip service?
Because most people (including I suspect a number of the proponents of the theory, particularly on the political side) think the threat of AGW is exaggerated.
Why is it ALWAYS with the fear mongering about the privacy you already don't have, and no one ever talks about the better decisions we could be making if everyone knew what the elite already know?
Experience and reason. As the other replier noted, why would the elite share this with us?
In fact the boost to the economy for the ones that do succeed probably far outweigh any losses in the programs.
What boost? Perhaps we could discuss some of these examples and see if they really live up to your claims.
LOL. It's remarkable how minimal expectations are for government work and "investment". A few years in and there was already a 3% default rate on the loans.
And they're comparing this to a "successful VC strategy"? VC don't guarantee a half billion in loans to businesses that will clearly go bankrupt. They start small.
Nor do VC guarantee loans for crap, over-priced projects. For example, several of these projects are run by career public works businesses like Abengoa SA. They specialize in turning public funds into green elephants. I notice also that the price on these projects tends to hang around $4-8 per watt of generating power. That's not good enough to be competitive.
My view is that in twenty years not a single one of these projects will be relevant to the renewable energy technologies of that future. They'll be a historical footnote about the US blowing a bunch of money on projects that didn't go anywhere and completely ignored by the people who think this approach works.
The countries that actually matter (China and India) use the inaction of rich countries as an excuse for their own inaction.
Unless, of course, they'll use the "action" of rich countries to take advantage of and ruthlessly surpass them. I think "setting an example" here is economic suicide for whoever does it. Anthropogenic global warming simply has not been shown to be urgent or dire enough to where this sort of demonstration is necessary.
And in the absence of that urgency, China and India have no reason to go along with the game aside from getting economic opponents to commit to crippling positions.
That's why we need a "social contract." The exact terms are up for debate, but most people who have thought about the issue agree that, in fairness to all, we need protections for everyone. And sometimes we need to build in protections for those who need it most.
What does the "social contract" actually have to do with that? It's a vague concept that means whatever the needs of the moment require. It's useless for the above purpose. Law on the other hand is quite useful for this purpose. For example, Hammurabi's code of law, one of the earliest known systems of law, stated protection of the weak as a core purpose of the law.
And what "protections" actually do protect those who are disadvantaged in the above way? I note that much of the modern world's "social safety net", which generally is considered a manifestation of the social contract, does more to benefit those who could (but can't be bothered to) provide for themselves than it does the disadvantaged. Meanwhile the society in question is being harmed by the cost of those social safety nets.
Every developed world society has a problem with public pensions, for example. The demographics of these societies all have their societies aging. More older people need more support, while there are less younger people to provide the wealth for that support. The "social contract" people ignore the costs of providing their version of the social contract.
I'm reminded of a previous conversation I had on the subject. An AlecC wrote this:
I think the "Social Contract" exists, but I agree that it is a problem, but also an advantage, that it is not written down. There is an implicit contract between all of us on how society works: that we give up some freedoms, as do our fellow citizens, in order to make society work. The fact that it is not written down means that we can actually have different views of what is actually in the contract - and privacy is a golden example of that. On the other hand, being unwritten allows it to evolve. Writing things down fixes them, while society changes. A prime example here is the Second Amendment: while not saying it is right or wrong, I am certain those who wrote and passed it did not foresee current firearms technology.
In other words, it's a lot easier to demand stuff out of others when you can point to an amorphous concept which can mean whatever you want it to mean as your justification than if you have to point to a hard copy of actual law.
If you weren't cooperating to promote moral bullshit, there's no need to form an organization, you could have just formed a trading relationship as free independent individuals.
A "trading relationship" is also an organization. For example, a common current form is the limited liability corporation common throughout the world.
And your use of the term, "promoting bullshit" glosses over the other things that are done. For example, the belief system of Christianity pacified the barbarians. Norwegians and the Danish are a lot nicer now than they used to be. I think reality is a lot more generous to me than you claim.