Economic Illiteracy, Thou Art Obama’s Defense of Solyndra

Written by Editor on . Posted in Current Events

Is it time to start using the term Dumb@ss?
Dissembling about the capital destruction debacle that was his Administration’s loan guarantee to bankrupt green-energy firm Solyndra, President Obama told ABC News last week that “if we want to compete with China, which is pouring hundreds of billions of dollars into this space…we’ve got to make sure that our guys here in the United States of America at least have a shot.”Of course if the president were better schooled in basic economics, he would well understand that “our guys” do have a shot to compete in this space thanks to U.S. capital markets being the deepest in the world. Thanks to angel financing, venture capital, PIPEs, convertible bonds, bonds themselves, and stock issuance, those with a good idea have myriad options when it comes to marrying their innovation with capital.…Indeed, what’s continuously forgotten by our federal minders is that they have no resources. For the Obama administration to guarantee a $500 million dollar loan is for it to ultimately extract $500 million from the private economy where it might have actually funded a real, economy enhancing concept. Unseen is what Microsofts, Intels and Facebooks (the latter’s initial funding $500,000 – Facebook supposedly now worth $75 billion) will never see the light of day thanks to the political class’s hubristic belief that it knows better than private markets disciplined by success and failure about where capital should be allocated.
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