By on March 17, 2017

Fisker Karms (Image: David Villarreal/Flickr)

Automakers would have to fund a larger share of future green technology projects if the Trump White House’s budget blueprint passes as written.

The administration proposes to do away with a little-used — and sometimes controversial — U.S. Energy Department loan program, as well as a grant program dedicated to spurring advanced fuel-saving technologies.

Contained in the budget blueprint is the elimination of the federal government’s Advanced Research Projects Agency-Energy program, known as ARPA-e. That initiative, created in 2007, doles out $300 million each year for environmentally friendly research initiatives.

While automakers tapped into the program, a number of Silicon Valley startups used the fund as seed money for marketable technologies. Green energy companies also received money from the program.

In light of Trump’s intent to reduce funding to the Environmental Protection Agency, as well the government’s plan to re-open the EPA’s midterm review of 2025 fuel efficiency targets, it’s not surprising the proposal has met fierce criticism. In response, the Trump administration claimed that the “private sector is better positioned to finance disruptive energy research and development and to commercialize innovative technologies.”

ARPA-e isn’t the only federal initiative poised to bite the dust, but it’s arguably the most controversial of the proposed eliminations. Also on the chopping block is the Advanced Technology Vehicle Manufacturing loan program, created in 2008. That program, unused since 2011, became a political lightning rod after low-cost loans were awarded to ill-fated Fisker Automotive and another failed startup. Taxpayers, still recovering from the recession, took a bath.

Three existing automakers received billions of dollars from the program. Ford walked away with a $5.9 billion loan in 2009, while Nissan saw $1.45 billion the following year. Also in 2010, upstart Tesla Motors claimed $465 million from the program’s $25 billion pool.

While it hasn’t been used in years, the program’s existence provides hope and opportunity to companies, argues the National Resources Defense Council. The environmental advocacy non-profit has stated the program “plays a critical role in bringing promising technologies out of the lab and into the real world, bridging a funding gap that entrepreneurs call ‘the valley of death.'”

[Source: Reuters] [Image: David Villarreal/Flickr (CC BY-SA 2.0)]

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100 Comments on “Green Auto Loan and Grant Programs on Trump’s Budget Chopping Block...”


  • avatar
    sirwired

    It should be noted that while Fisker and the other company (Solyndra?) failed, some failures are to be expected with any technology investment program (happens all the time with private VC firms), and the program overall turned a profit.

    • 0 avatar
      28-Cars-Later

      “program overall turned a profit”

      Please expand on this.

      • 0 avatar
        FreedMike

        Hard to quantify in balance sheet terms…but look at it this way. Let’s take Tesla as an example. What’s the taxpayer’s “return”?

        1) How many jobs did the company create, and how much did those workers pay in taxes?
        2) How much did investors make off the stock, and how much in capital gains tax was paid on that?
        3) How much did Tesla’s suppliers pay in corporate taxes, and how much did their workers pay in personal taxes?

        Answer to all three: a very large amount of money. Repeat that by running similar numbers for all the companies who are making the kind of cars that a company like Tesla spurred interest in. Did that “turn a profit” for the government? We’d need to see the balance sheet. But clearly the taxpayers haven’t gotten “no return” or taken it in the shorts.

        Like it or not, the template for new-tech investment in this country has always been that the government either directly or indirectly funds startups. Worked that way with computers. All the initial funding for the technology I am using to write this and transmit it to you came from the government. The tech was later privatized and made profitable. Clearly it would have been developed at some point, yes, but with the big bad gummit priming the pump, it happened very quickly, and generated an IMMENSE amount of wealth.

        The kind of stuff Trump’s talking about is penny wise and pound foolish. That, or he’s bought and sold by Big Oil, which considers things like alternative energy to be an existential threat. I’d like to think it’s the former, but the cynic in me knows it’s the latter.

        Someone’s gonna develop things like alt energy, and whoever does it is going to be sitting on the biggest corporate windfall since John D. Rockefeller. The only question is whether we want that happening here, or somewhere else. If we want it here, then we need to leverage the same model we’ve leveraged with other “new” industries. Or we can “make a stand on conservative principle,” and say it’s none of the government’s business, and watch these industries get developed somewhere else. It’s our call.

        • 0 avatar
          George B

          FreedMike, I’m working at the 4th high-tech startup company in my engineering career. The first 3 were successful companies that produced real products and sold for more money than the VCs invested. Not one of them received government funding. Instead, they’re funded by older men who were successful in some other business who are willing to make high risk high reward investments to see big returns before they’re too old to enjoy it.

          The problem with alternative energy is that it wouldn’t be “alternative” if it was cost competitive without government subsidy. The reasonably practical and cost effective solutions happen when companies are trying to make money from consumers instead of trying to make money from the government. George P Mitchell’s engineers made Shale Gas cost-competitive and mainstream. Toyota made gas-electric hybrids cost-competitive high-volume models.

          • 0 avatar
            FreedMike

            I don’t know what tech company you’re working for, and I don’t know what kind of product it’s turning out, but compare the amount needed to fund your startup(s), versus the amount of money needed to, say, develop a working fusion reactor, or fundamentally change the way every single car and truck on the road works. The amount of funding needed for that kind of new tech is staggering. That’s why we need the government behind it.

            What bank or venture capitalist would lend tens (maybe hundreds) of billions of dollars to a company doing moonshot tech? That brings up two questions, one obvious, one not-so-obvious: 1) isn’t there a huge amount of risk there, and b) what private entity even has that kind of capital to lend? I’m in the banking business, and that’s a good way to go completely broke. That’s why private money doesn’t get behind this until the tech’s developed and marketable. Makes complete sense. And the government has the resources to help the tech be developed. No one else really does, or wants to invest the resources due to risk.

            Maybe the startups you’ve been involve that kind of funding. But I strongly suspect nothing you’ve been involved with really requires the kind of capital it takes to develop workable alt energy. If I’m wrong, let me know.

          • 0 avatar
            JimZ

            “Maybe the startups you’ve been involve that kind of funding. But I strongly suspect nothing you’ve been involved with really requires the kind of capital it takes to develop workable alt energy. If I’m wrong, let me know.”

            you’re not. a big part of being a “startup” is to have your nose rammed so hard up your own a**crack you start to enjoy the smell of your own brand.

            Besides, most startups fail.

        • 0 avatar
          Whittaker

          Of course jobs are created when the Govt throws around money.
          If the Feds gave me $5 Million I would create jobs in the lawn service business, the Vegas Casino business, the liquor industry, the prophylactic industry and the personal lubricant business.
          All those people would pay taxes.
          Anybody can claim any spending program is a net plus. NEA, Foreign Aid, Missions to Mars, Head Start, Ethanol…they will all have their staunch defenders armed with Govt funded studies.
          In fact, I’m going to need $6 Million now. Five to create jobs and one to prepare a report on how many jobs I created. But never fear, the preparation of that report will create more jobs! Oh Joy! Let’s expand the ‘The Whittaker Action Technical Service’!
          We’ll need an office and some Govt cars and a security force and a yearly conference in Miami. I think $9 Million will do…or maybe 12.

          And we will definitely need an acronym:

          The
          Whittaker
          Action
          Technical
          Service

          Fiscal
          Ongoing
          Reinvestment

          Multiplication
          Enterprise

          • 0 avatar
            FreedMike

            LOL for the funny post, but you do realize the computer and Internet industries employ a hell of a lot more people than one guy named “Whittaker,” right?

            And this is the problem with this kind of penny-wise, pound-foolish thinking – it’s done in the context of “me,” not “how could the entire economy benefit.”

      • 0 avatar
        dal20402

        Even before you get into all the stuff FreedMike’s talking about, interest on loans that did get paid back covered the failures.

        • 0 avatar
          FreedMike

          The supreme irony: folks using personal computers and the Internet to complain about the government funneling money to new technologies.

          (And for bonus points, it’s usually the same folks who would love to see huge increases in defense spending…and taxpayers have NEVER taken it in the shorts over a defense program, right?)

          And while we’re at it, let’s cut Pell grants. That way, more kids won’t be able to afford college. MAGA!

          Endless LOL…except it’s not all that comedic.

          • 0 avatar
            28-Cars-Later

            “And while we’re at it, let’s cut Pell grants. That way, more kids won’t be able to afford college.”

            A good deal of institutions need to go bankrupt for the market to balance itself. Financializing student loans has simply exacerbated the problem exponentially.

          • 0 avatar
            Big Al From 'Murica

            Lol. True, but the irony of your ironic post is that the people who typically point out this irony tend to be from the “we spend too much on the military and weapons” camp when the internet in its early days was developed by DoD as a means to ensure continued communications in the event of a nuclear war which is in itself ironic given how exposed the our reliance on the internet makes us to an EMP, which is of course generated by airbursting a nuclear weapon. All this makes me want to listen to Alains Morisette.

      • 0 avatar
        sirwired

        “Please expand on this.”

        Errr… what’s there to explain? On a program-wide basis the interest collected on the loans more than covered the losses. It’s not a complicated concept.

        • 0 avatar
          28-Cars-Later

          1. Your original post did not stipulate as such.
          2. My post stimulated a number of subsequent posts and promoted the exchange of further ideas, which was my goal.

  • avatar
    volcker

    EVERY TIME the government tries to pick winners and losers, it picks the loosers.

    Good riddance to another stupid government subsidy.

    • 0 avatar
      FreedMike

      The entire microcomputer industry (Apple, Dell, etc), created by direct government spending in computer technology: loser.
      The Internet, created by direct government spending: loser.
      Tesla: loser.

      (Hey, if you want to get into tax credits, we can include Exxon here as well…that company’s clearly a loser too, correct?)

      Okey dokey.

      • 0 avatar

        “The entire microcomputer industry”?? You mean Altair and Sol were started with government money? I suppose it’s possible they got some SBA loans. Was it the government that suggested they scavange cash register printers as output devices?

        What direct role did the government have in the development of the x86 and 68000 processors?

        When Wozniak and Jobs were phone phreeking and putting parts together in a garage, what direct government spending was involved?

        Whatever funding the U.S. federal government provided for the develoment of integrated circuits and ARPAnet had to do with the government’s constitutional role in providing for the defense of the country. That’s a far cry from that ATVM loan program, which is about politicians and bureaucrats picking winners and losers, cronies and those out of favor.

        The “you didn’t build that” crowd wants to take credit for others’ success but not the blame for their failures.

        I’m bringing an invention to market. I’m completely dependent on two suppliers who are the only companies in the world making what I need, so I’m well aware of the fact that I didn’t get here on my own. I’m also working with a very talented designer. That being said, Seydel, Lace and Thingsmiths have more to do with whether or not the idea will succeed than Elizabeth Warren and the fact that I drive on public roads do.

        • 0 avatar
          2manycars

          Statists believe that everything good flows from the violent and coercive hand of their favorite criminal gang. They furthermore believe that if said criminal gang had not implemented something they favor, it would not have ever been done. (The internet is a prime example. These guys actually believe that nobody else would have developed and deployed networking protocols to make internetworking possible.)

        • 0 avatar
          OldManPants

          “I’m bringing an invention to market.”

          In a just world, governments would rush to fund the development of a really loud harmonica.

          • 0 avatar
            jpolicke

            You could get it funded if you make it a defense program. Set it up to play through an enormous speaker on the back of a Humvee, back it up to the 38th Parallel, and crank it up. Give it an hour and the Norks will be running south with their hands over their ears. If that doesn’t work threaten to come back next week with an accordion.

          • 0 avatar

            “In a just world, governments would rush to fund the development of a really loud harmonica.”

            I suppose that if big government types can take credit for the entire internet and web, they can take credit for loud harmonicas too. While Little Walter Jacobs was undoubtedly the first harmonica player to be recorded playing through a microphone cupped to his harp and plugged into a guitar amp while in Muddy Waters’ band at Chess Records, Snooky Pryor is said to have earlier entertained fellow troops playing his harmonica through a PA while serving as a bugler in the armed forces during WWII.

            It’s ironic, though, that you bring up government funding of harmonicas. Seydel, the company that is supplying my harmonic reeds and related components, is the oldest harmonica company in the world, 10 years older than Hohner but from 1948 till the reunification of Germany they were something like the 19th Industrial Accordion Werks of the GDR. After reunification the company was restored to the family that originally owned it, they struggled until two things happened. Some music entrepreneurs were looking for a harmonica supplier and decided to become angel investors and the chief engineer of the company developed the first steel reeded harmonicas, carving out a niche in the market for them that has allowed the company to thrive and grow.

            So rather than government funding, good old-fashioned capitalism, with private sector actors investing money in new technologies, is what is making the Harmonicaster possible.

            I’m using a Prusa 3D printer to make parts. The Prusa is an open source design. The open source concept has pretty much proven that you can get a lot accomplished without the hand of government involved.

        • 0 avatar
          mcs

          One of the founders of MITS that created the Altair had his college education paid for by the Air Force and worked in the weapons lab at Kirtland AFB along with the other founder.

          • 0 avatar
            Carrera

            Yes, yes, and he was born in a hospital that probably used some govt funds at some point and drove on roads that were paved on govt money. We get it.
            If the USAF paid for his college, that’s because he gave them 4 years of his youth.

          • 0 avatar
            Big Al From 'Murica

            “had his college education paid for by the Air Force”

            You mean he received a college education as part of his compensation package for agreeing to work for the Air Force for a specified period of time, right.

        • 0 avatar
          Big Al From 'Murica

          i must’ve missed that part in both of the Steve Jobs movies where Steve goes to the government to get funding to build the home brew machines.

      • 0 avatar
        Big Al From 'Murica

        Mike, while I don’t agree with your principle with regards to the microcomputer industry, it would be ridiculous to say the Government had no role. I’d go back further to make that connection. Think ENIAC. Of course here again was something born out of defense spending.

        • 0 avatar
          JimZ

          defense spending against an enemy who no longer exists.

          I don’t understand why people think we need to spend on defense like it’s still the Cold War era and have an enormous military capable of fighting a ground war like WWII all over again, at the expense of everything else.

          • 0 avatar
            Big Al From 'Murica

            I’m not saying we do, but we still need to spend on defense and all of the accomplishments you trumpet as rationale for things like Solyndra were spawned from defense spending. I just think it is rather ironic.

    • 0 avatar
      VW4motion

      It is not just government that picks a loser. Just look at what is happening in the White House right now. Pathological liar at the helm.

      • 0 avatar
        Carrera

        Yes, let’s resort to name calling because your very honest candidate didn’t win.

        • 0 avatar
          VW4motion

          Carrera,
          alternative facts are not facts. I swear, do some research outside of Your alternative facts bubble/silo. It’s mind blowing.

          • 0 avatar
            Big Al From 'Murica

            I thought the mods were going to be cracking down on your sort of a$$hattery. Thanks for contributing nothing

          • 0 avatar
            VW4motion

            Murica,
            Everything I typed is part of this topic. Because the whole premise of the article is biased political clip bait. Stop the whining.

          • 0 avatar
            Big Al From 'Murica

            VW You are as full od $#it as a Christmas turkey. You are trolling. And you would seem to be the one whining with respect to the election.

    • 0 avatar
      sirwired

      “EVERY TIME the government tries to pick winners and losers, it picks the loosers.”

      The program turned a profit, so they actually did a pretty decent job (and better than most VC firms.)

      • 0 avatar
        VW4motion

        Stop thinking and pointing out facts. People don’t like facts no more on the right.

        • 0 avatar
          Big Al From 'Murica

          Guard that bridge troll….NONE SHALL PASS!!!

          • 0 avatar
            VW4motion

            Murica, just look at all the remarks you made on this page. You go after anyone with a thought outside of your narrow mind. Basically the same crap just repeated over and over again. Try not posting if you just have ignorance and anger to post. I’m sure there are tons of angry white man sites for your bizarro version of a republican.
            Look at this definition of a troll. Then look in the mirror.
            In Internet slang, a troll (/ˈtroʊl/, /ˈtrɒl/) is a person who sows discord on the Internet by starting arguments or upsetting people, by posting inflammatory, extraneous, or off-topic messages in an online community (such as a newsgroup, forum, chat room, or blog) with the intent of provoking readers into an emotional.

          • 0 avatar
            Big Al From 'Murica

            Umm, you came in here name calling and insulting anyone on the right. I have a long history of discussion on this forum with people of different ideologies. I have no tolerance for people such as yourself who simply stir the pot regardless of the topic. Plus I am reasonably sure you are a recently banned poster masquerading under a new name given your comments.

            All of my posts are in response to the article on government intervention in this sector and seek to extol my opinion on that. You came in here calling people liars and attacking those on the right for not liking facts.

            As such I ceased to take your stuff seriously and simply called it out in the hopes the mods will clean it up as your ill (troll, not left leaner) have really cluttered up the site lately. Reread your posts…you have contributed nothing except name calling.

      • 0 avatar
        JimZ

        don’t pester them with facts, they don’t want to hear it.

  • avatar
    slavuta

    “While automakers tapped into the program, a number of Silicon Valley startups used the fund as seed money for marketable technologies.”

    Or just to pocket the money without any return

    • 0 avatar
      FreedMike

      How much wealth and income – which, last I checked, is taxable – did the companies create, even if they failed? Plenty. Take a more nuanced view.

      • 0 avatar
        slavuta

        How much? GE – 0 Tax

        • 0 avatar
          FreedMike

          That’s not even remotely correct.

          How much did GE’s employees pay in taxes?
          How much did GE’s suppliers, and their employees, pay in taxes?
          How much did the companies who buy and sell GE products, and their employees, pay in taxes?
          How much did GE stockholders pay in cap gains taxes for selling their stock at a profit?

          • 0 avatar
            Big Al From 'Murica

            That’s not even remotely correct.

            How much did Trump’s employees pay in taxes?
            How much did Trump’s suppliers, and their employees, pay in taxes?
            How much did the companies who buy and sell Trump’s products, and their employees, pay in taxes?

            I’m just going to leave that there for you Mike. I did take off the last bit since it isn’t publicly traded.

    • 0 avatar
      dal20402

      “Or just to pocket the money without any return”

      Tough to do with a loan.

      • 0 avatar
        ToddAtlasF1

        It wasn’t that tough. They hired friendly contractors to spread the graft around and spent the rest on their own salaries. Then they went bankrupt.

  • avatar
    slavuta

    Electric cars really bother me
    1. Electricity is not magically appears at the outlet
    2. Why are they so expensive? To build one should be tremendously cheaper than to build ICE-driven car. No need for complex engine and transmission.

  • avatar
    indi500fan

    Aaaah the Fisker.
    Did they ever actually sell any of the Bob Lutz version with the LS motor?

  • avatar
    stingray65

    The problem with these programs is that they are structured to always make the US taxpayer the loser. If the government loans money to Fisker or Solyndra and they fail, the government loses the money. If they fund the so-far successful Tesla, they get the loan repaid (with minimal interest) but do not enjoy any of the gains from the high flying stock that venture capitalists get rich on.

    • 0 avatar
      psarhjinian

      So, if I understand things correctly, we should just outright nationalize R&D.

      Hey, I’m fine with that. That’s what we did in the 50s and 60s. And while we’re at it, let’s bring back the fairness doctrine and the 90% marginal tax rate.

      Make America Great Again.

      • 0 avatar
        FreedMike

        Exactly.

        I don’t know why we don’t do a Manhattan Project to develop something like fusion power, and then license the tech out.

        (Actually, I do know why we don’t do it…its’ initials are “GOP”.)

      • 0 avatar

        What you mean “we”? Aren’t you Canadian?

        Actually, the 1950s and 1960s saw a huge increase in corporate R&D spending. In particular, advanced R&D that was more about basic science than applied engineering became a bit of a status symbol with U.S. companies.

        Just how much government funding was involved in Western Electric’s development of the transistor?

        While you’re busy telling broadcasters what they have to broadcast, would you care to apply “fairness” rules that trample on the free speech rights of the New York Times and the Washington Post as well?

        Oh for the days when you could rely on gatekeepers like Walter Cronkite to make sure the public got their daily dose of narrative.

        • 0 avatar
          psarhjinian

          `What you mean “we”? Aren’t you Canadian?`

          Yup, and glad of it, but this particular disease has spread here, too.

          `Actually, the 1950s and 1960s saw a huge increase in corporate R&D spending`

          And a lot of it was done at labs that the governments funded (Bell Labs comes to mind) and working in concert with university labs.

          `Just how much government funding was involved in Western Electric’s development of the transistor?`

          I don’t know—how much government money funded the development of the internet? Would you like to be back in the good old days of CompuServe, GEnie and Prodigy?

          Wait, I know the answer: thanks to the new GOP chair of the FCC, we’re probably going back to the CompuServe/GEnie era.

          `While you’re busy telling broadcasters what they have to broadcast, would you care to apply “fairness” rules that trample on the free speech rights of the New York Times and the Washington Post as well?`

          Sure. They’re already quite fair. You had the fairness doctrine since 1949; it’s only after Reagan removed it that the right-wing media was able to dispense with little things like “truth”.

          • 0 avatar

            “`Just how much government funding was involved in Western Electric’s development of the transistor?`

            I don’t know—how much government money funded the development of the internet? Would you like to be back in the good old days of CompuServe, GEnie and Prodigy?”

            All of the improvements in the internet since the days of CompuServe have been due to the private sector.

            Arpanet does not equal the invention of the internet as we know it.

            Tell me, just which of my ideas do I get credit for, or does the government get to take credit because my dad was in the Army when he met my mother?

          • 0 avatar
            Big Al From 'Murica

            “And a lot of it was done at labs that the governments funded”

            So you are for increased defense spending then, right? I mean the vast majority of those labs were receiving funding to ensure we would defeat the Soviets when WWIII eventually started and beat them to the moon. Nuclear weapons did come before nuclear power.

          • 0 avatar
            DaveBeNimble

            You mention Bell Labs…every wonder where they went? And places like Xerox PARC?

            Back in the 50’s and 60’s, corporations had much higher tax rates, so it made more sense for them to invest in R&D than claim profit.. But the Argument at the time was that there was all this cash getting “trapped” in the companies, and it would be better to disgorge the cash back to the shareholders. So they changed the tax rates to let the companies decide with more freedom what to do with their Money. Strangely, the People running the companies decided that they and their shareholders should have it, and corporate R&D labs dried up.

          • 0 avatar
            ect

            “All of the improvements in the internet since the days of CompuServe have been due to the private sector.

            Arpanet does not equal the invention of the internet as we know it.”

            Really, Ronnie, this is absolutely not true.

            Virtually everything to do with the internet was originally developed with government funding, from the networks like Arpanet, NSFNET, CERNNET and others that came together to create the internet, to the TCP/IP protocol, to the world wide web (invented at CERN), to the first web browser (Mosaic).

            Once all the pieces were in place, the private sector rushed to take advantage of it, of course.

            CompuServe and Prodigy were not internet-based services, but data services accessed over conventional telephone lines, at painfully slow speeds. They tried to migrate to the internet when it became feasible to do so, but the growth of the world wide web overwhelmed them.

        • 0 avatar
          JimZ

          Man, Ronnie, you are quite a rigid “either/or” kind of person.

    • 0 avatar
      dal20402

      Or give the government an equity interest as part of the terms of the loan. (Which they may do already — I haven’t seen the agreements.)

    • 0 avatar
      FreedMike

      Stingray, this is the same model the government used to stimulate investment in microcomputers. All the technology for the machine you’re using to write your opinion was funded directly by the government back in the ’50s and ’60s (same for the Internet, in the ’70s and ’80s). When the PC came about in the 1980’s, the government did a huge tax credit for businesses that bought them (my dad among them).

      As a result, IBM was able to amortize the costs of their initial PC’s far more quickly and efficiently than “the market” would have been able to. Net result? That PC that cost my dad in the neighborhood of ten grand back in the early ’80s is now many orders of magnitude faster, and costs well under $500.

      Now, how much wealth, (and tax revenue) has that created? How many jobs have been created? It’s incalculable. The economic payoff for this country has to be many trillions of dollars by now.

      Yes, sometimes the taxpayers lose. But when they win, they win big.

      • 0 avatar

        In the ’50s and ’60s, the vast majority of government funding for computers, either through research grants or by purchasing power went into mainframes, not microcomputers. Much of that government spending, was related to defense. The space effort contributed to the development of ICs and small processors, but that too was essentially part of defense.

        Not all government spending is the same. The federal government has a constitutional obligation to provide for military defense. It doesn’t have a constitutional obligation to support this or that technology or industry.

        If your father paid $10,000 for a PC in the early 1980s, he got ripped off. The MSRP on the IBM 5150, introduced in 1981, was ~$1,600-$3,000, depending on how it was configured.

        I bet you think the labor movement, not Henry Ford, invented the weekend.

        Just wondering, how would you feel about a presidential Executive Order that said that all electronic components used in U.S. military equipment has to be sourced in the United States?

        • 0 avatar
          psarhjinian

          “It doesn’t have a constitutional obligation to support this or that technology or industry.”

          It doesn’t have a constitutional obligation to do a lot of things, but a) that doesn’t seem to be a problem when it’s stretching “defense” to mean “secure assets in other sovereign nations, against said nations’ will”, b) nor does it seem to matter when it’s about enforcing morality laws, or c) there’s the whole concept of “general welfare”.

          If you want to be a strict constitutionalist, sure, we can play that game. No more expeditionary forces, no more “regime change”, no more blue laws, no more public/private partnerships. No fire departments, while we’re at it. No central reserve banking (lets go back to play-money and regular depressions! Wheee!)

          • 0 avatar

            I’ve opposed blue laws since I’ve known about them. I’m Jewish and I might like to buy some kosher wine on a Sunday morning.

            As for fire departments, those are local and if a community wants to use their tax dollars to provide for fire protection, that’s their business to do so as long as it’s done legally. For the matter, though, a large percentage of Americans are protected by volunteer fire departments with very little tax support. Perhaps, however, that shouldn’t be allowed because it might hinder the opportunity for graft by public employees.

            No, fire protection is not the purview of the federal government. The fact that you think that fire departments might be a constitutional issue shows how little you know about the way our system of goverment works. We have a federal system here that was intended to keep most of the political power at the local and state levels. Fire departments, and schools as well, are not really the business of the feds.

          • 0 avatar
            Big Al From 'Murica

            “when it’s stretching “defense” to mean “secure asseTs…”

            Why do you think the government was so vested in computers? Was it so you could post stuff in a car forum? Or was it so they could do things like perform incredibly complex simulations to do things like develop nuclear weapons. These were not simply venture capital schemes as the modern examples are but determined efforts to do one thing…ensure the US would win a war with the Soviet Union.

            This doesn’t mean we don’t share some common ground. I’m not fond of the latest wars and there is a whole ton of waste in defense spending. But nearly everything you cite as grounds for investments like Solyndra was born out of military priorities.

          • 0 avatar
            Big Al From 'Murica

            “If you want to be a strict constitutionalist, sure, we can play that game. No more expeditionary forces, no more “regime change”, no more blue laws, no more public/private partnerships.”

            I’d give you all of that in exchange for a similarly right interpretation of the phrase “promote the general welfare”, the interstate commerce clause, and the 14th amendment.

            I believe that would make us both Libertarians.

          • 0 avatar
            JimZ

            “It doesn’t have a constitutional obligation to do a lot of things, but a) that doesn’t seem to be a problem when it’s stretching “defense” to mean “secure assets in other sovereign nations, against said nations’ will”, b) nor does it seem to matter when it’s about enforcing morality laws, or c) there’s the whole concept of “general welfare”.”

            Or blowing $1.5 trillion on a fighter jet that doesn’t work and nobody wants.

          • 0 avatar
            Big Al From 'Murica

            Ah the F35. Yes, it is everything wrong with military procurement. A significant chunk of the issue was congressmen attempting to be sure that their districts got a piece of the pie. The whole second engine that the military didn’t want fiasco for example.

            When it became a jobs program and not a fighter jet program this was bound to happen. But still, a couple of things:

            First, I can think of a single elected official that has told big defense “hey, no more…bring the costs down or we will go another direction”. Love him or hate him, the current guy has so far been better on this than any President in my lifetime. Furthermore most of his increased spending is going to personnel IIRC. We have a hard time retaining tech talent now because why stay in when you can get the same benefits and not have to go to crapholes on the outside. That has decimated morale far more than outdated weapons and I am happy I am at retirement time.

            Next, yes, I agree with you. Our procurement processes suck. I was part of developing a small, deployable IT platform. What we came up with and what we got as a project of record from General Dynamics were so far apart it was staggering. The whole point was a set up that could fly commercial. What they eventually got was in fact too heavy for this purpose. our elegant solution which was basically ruggedized laptops turned into 4 transit cases worth of crap we really couldn’t use. But GD greased the generals and folks in contracting to sell them something way more costly. Then they came back saying they could shrink it in the next revision, but it would cost. It is maddening because we could have done it internally for a fraction but the rules are stacked to ensure the contractors get theirs.

            It has happened in every system we buy from Ships (look at the LCS), to Planes (F35) to ground equipment (they made a movie about how crazy the Bradley program was).

            But again, Presidents of both parties keep the gravy train rolling. Look, we need a replacement for the F18 and F16. They are both 4th gen fighters. The aircraft Russia and China are deploying in that role have 5th gen capabilities. The F18 first flew in the 70’s. We do have to keep up with other countries. I think you would agree with that. But yes, the waste is staggering and it is probably worse than even you imagine. Even if you hate the Donald you should welcome him taking these contractors to task. It is about time.

            Having said all that, I find it difficult to imagine that Government forays into other industries are much more efficient. This is why I typically oppose things like Solyndra and the successful ones as well. Government needs a big goal for this sort of thing to work (let’s say no BS energy independence by a set date). Just saying we want to support green energy is IMHO a license to flush money.

          • 0 avatar
            JimZ

            I don’t necessarily disagree that the F-16/18 need updating or replacing. The problem is that the Air Force (who loves the fact that they get all of the cool toys they ask for) insists on replacing the A-10 Thunderbolt with the F-35 as well, which is pants-on-head silly. Even Congress (esp. Sen. McCain) agrees.

            “Having said all that, I find it difficult to imagine that Government forays into other industries are much more efficient. This is why I typically oppose things like Solyndra and the successful ones as well. ”

            can’t agree. SpaceX has paid at least part of their bills by launching government missions; mostly ISS resupply. If you count the two COTS demo launches, just under half of their commercial flights have been paid for by NASA or the Air Force.

          • 0 avatar
            ToddAtlasF1

            Isn’t Space X an example of the government doing less? Remember when NASA’s primary task wasn’t Muslim outreach?

            The best defense against the F35s of the world is term limits. It isn’t about Hawks and Pansies. It’s about lifetime incumbents buying their security with pork. Even the biggest watermelon Democrats took a choice cut of the F35 pig, just as a ‘conservative christian’ near-billionaire I know has a taxpayer-raping solar farm on his fallow soil. The only solution is to eliminate lifetime politicians and lifetime political benefits. A congressman who doesn’t need reelection and won’t have perpetual financial or physical security provided by the taxpayers will be focused on doing the right thing for his constituents instead of his backers.

          • 0 avatar
            Big Al From 'Murica

            The A10 has also prompted inter service squabbling. I agree. For the role of close air support the only thing better is rotary wing which isn’t always practical depending on where you are and how fast you need the support. The Army loves it. The Air Force wants to ditch it. I could argue about why the Air Force is wrong but as a Soldier and former groundpounder who has been on the receiving end of CAS from a warthog I obviously have my biases.

            If they just have to ditch the A10 the FA/18 Super Hornet would seem a better choice as all those 5th gen capabilities are sort of wasted on this sort of mission. Make no mistake though…Soldiers love the A10.

            I think some of the desire stems from needing to spread the massive cost overruns of the F35 around. I guess this is the military equivalent of “we’ll make it up on volume”. It works as well here as it did for GM though.

            With respect to Space X I don’t see this in the same boat. Government needs provisions launched to the ISS and eventually crews. They ask for bids and SpaceX came up with the best deal. This is Government buying a service and different than the AVTM stuff as they weren’t getting anything at the end of those deals outside of hopefully payback of the loans.

            I’m not a fool though and realize there was probably some sweetheart provisions in the contract to spur them on so your point isn’t totally off though, but I still see that as a significant difference.

          • 0 avatar
            Big Al From 'Murica

            Also, the whole premise of the F35 was that we needed something more affordable than the F22 for other roles and NATO nations. When it became more expensive than the F22 I’m not sure why we continued on with it.

  • avatar
    xtoyota

    The Government is giving out this money from money obtained from China :=(
    One day China will want their money back ….
    What a stupid program we got ourselves in :=(

    • 0 avatar
      dal20402

      “When you owe the bank a million dollars, you have a problem. When you owe the bank a billion dollars, the bank has a problem.”

      And in any case most of our government debt is held by American individuals and companies. China is just one of a lot of foreign holders.

    • 0 avatar
      DeadWeight

      This whole “China is on the verge of greatness” meme is ill-constructed.

      China has some of the deepest, systemic, structurally hazardous economic problems of any emerging/semi-developed nation at present, and will for decades to come, partly as a result of demographics, partly as a result of culture, and partly as a result of massively inefficient state-planning, and in fact, there’s a very good chance that China may never reach the status as the largest economy in the world (even while jockeying for position as having the highest population with India), nor military superpower.

      • 0 avatar
        FreedMike

        This…China better hope their economy continues to develop, or they’ll find themselves in the same boat the old Soviet Union was, just with *TEN TIMES* the number of p*ssed off citizens.

        • 0 avatar
          DeadWeight

          Also, while there is disagreement on the issue of what intermediate and long-term affects automation will have on various nations, industries and national and private economic actors, I submit that automation as a human labor/jobs-replacing machine (manual labor and even intellectual labor), will turn out to be a more significant threat to labor-intensive and export-dependent nations with an economic structure such as China (and India, Indonesia, Malaysia, et al) more so than other nations, and in fact, may be *literally* devastating to China’s future economic blueprints.

          • 0 avatar
            FreedMike

            …might be devastating to me too, if they develop AI that can underwrite mortgages. Sorry Dave, I’m afraid you’re out of a job.

            Then again, it might not affect the more senior folks like me.

            (AI is already becoming a job-killing concern for attorneys.)

          • 0 avatar
            dal20402

            “(AI is already becoming a job-killing concern for attorneys.)”

            Confirmed. And, of course, just as in other areas, it’s hitting those at the bottom of the food chain the hardest.

            My job, which pretty much exclusively involves applying judgment refined by experience, is safe for the foreseeable future. But the poor schlubs drafting routine contracts, estate documents, and even litigation filings are having to compete with computers that can do more of the drafting every day.

            Only go to law school if you can get into a T14 school. I’m serious.

          • 0 avatar
            28-Cars-Later

            For those who wondered what T14 was:

            The schools that are currently ranked in the top 14 of the U.S. News & World Report Law School rankings are:[8]

            University of California, Berkeley, Boalt Hall School of Law in Berkeley, California
            Columbia Law School in New York, New York
            Cornell Law School in Ithaca, New York
            Duke University School of Law in Durham, North Carolina
            Harvard Law School in Cambridge, Massachusetts
            New York University School of Law in New York, New York
            Northwestern University School of Law in Chicago, Illinois
            Stanford Law School in Palo Alto, California
            University of Chicago Law School in Chicago, Illinois
            University of Michigan Law School in Ann Arbor, Michigan
            University of Pennsylvania Law School in Philadelphia, Pennsylvania
            University of Texas School of Law in Austin, Texas
            University of Virginia School of Law in Charlottesville, Virginia
            Yale Law School in New Haven, Connecticut

            https://en.wikipedia.org/wiki/Law_school_rankings_in_the_United_States

          • 0 avatar

            The place where AI can achieve some of the greatest savings are in government bureaucracies. A study in the UK showed that only 20% of government workers performed tasks that required human intelligence.

            Of course public employee unions and the politicians they buy will make sure those jobs are protected.

          • 0 avatar
            dal20402

            The presence of Texas on the list is new this year. Historically (for decades) that spot belonged to Georgetown. Outside of Texas, the Georgetown degree will still have more currency. Texas is an excellent school, but there’s a LOT of ignorant anti-Texas sentiment in the markets where the highest numbers of lawyers are employed.

          • 0 avatar
            ToddAtlasF1

            The difference is that Texas has excellent prospects while the places where the highest numbers of lawyers are employed are in a state of autosarcophagy.

            UVA law is a good law school, but they employ their unemployable graduates to keep their placement numbers up. It’s amazing that you can do with unlimited access to public debt.

          • 0 avatar
            dal20402

            “The difference is that Texas has excellent prospects while the places where the highest numbers of lawyers are employed are in a state of autosarcophagy.”

            You need to get out more if you think that the economy of oil-bust Texas is doing better than the economies of New York, DC, LA, and the exploding Bay Area.

    • 0 avatar
      Big Al From 'Murica

      In order for your theory to be sound, China would have to come collect which would ultimately mean engaging in a war With the United States outside of china. For all those numbers, their ability to project force is not that great.

      They could fight us via trade and seizing assets and all that but that hurts them as much as us. Nope, if someone won’t pay up you have to send the repo man and while their repo man would be a raging bada$$ in their own yard, he’d get beat up pretty good anywhere else.

  • avatar
    Big Al from Oz

    I do believe in assistance for R&D, but not manufacture.

    Manufacture should be the risk all private investors accept. You will also see wiser investment if someone has put all at risk.

    Subsidising and protecting manufacturing reduces competitiveness and progress.

    Investment in the past with new technologies was geared more towards R&D.

    If investment in new technology is required to market the new tech then more R&D is needed.

    You can’t half ass business and expect the tax payer to pick up the losses.

    • 0 avatar
      stingray65

      Government funding of R&D makes some sense, but 85% of government “venture capital” goes goes to commercialization which doesn’t make any sense. If the technology is viable (i.e. it can be manufactured and there is a real non-subsidized market for it) there should be plenty of private money to start producing and selling it. The problem comes when the technology is not viable (i.e. Solyndra) and private money is therefore not available, and only then does the government typically come in the “save” the commercialization that is likely doomed to fail.

    • 0 avatar

      I’d rather that much of the funding for the EPA and DOT instead went into goverment labs like Livermore.

  • avatar
    993cc

    Well, this is pretty much the end of Elio Motors.
    I’m agnostic as to whether this is a good or bad thing, but it would have been interesting to at least see them make it to production.

  • avatar
    SCE to AUX

    “Also in 2010, upstart Tesla Motors claimed $465 million from the program’s $25 billion pool.”

    You just can’t bring yourself to mention that this *loan* was repaid early, with interest, can you?

  • avatar
    TW5

    When liberals complain bitterly about the ills of poorly executed supply-side economics, they are talking about programs like this. Naturally, these programs are the harbinger of government-lovers everywhere.

    Anyway, these programs are pointless. Supply-side is how you stimulate production of mature industries. Demand-side is how you build a market for certain types of technologies. This giveaway of taxpayer funds to American companies, under false pretense that it would somehow serve a national interest (though the companies could easily be bought be foreign interests), is unacceptable.

    • 0 avatar
      Big Al From 'Murica

      If this was all packaged as part of a larger plan to achieve total energy independence with specific goals and milestones to make us less exposed to highly unstable regions of the world I think you could sell it as serving the national interest. As it is nobody on either side has put forth that sort of vision and these sorts of “investments” typically simply funnel money to the pet industries of either side of the political spectrum.

  • avatar
    Whittaker

    True of False?
    If the Manhattan Project had never been funded, Nuclear bombs and nuclear power would not exist.

    False, of course.

    Then why do people think we wouldn’t have the internet if the Govt had not had a hand in it’s origins?
    Tech marches on.
    The best environment for progress in all things…tech, art, health, education, medicine, industry, etc…is a prosperous and free society.
    That…a prosperous & free society…is what Govt needs to focus on. It is a seedbed for progress.

    • 0 avatar
      Big Al From 'Murica

      Government came up with what would become IP based communications intended for use in a nuclear attack. People should go back and read up on these early efforts. There was a ton of work done to get from there to the modern internet. That work was done by in large by private industry in the name of selling you stuff and targeting ads at you.

      It is the same with battery tech. That research is by in large being driven by people’s desire to not have to plug in their phone as often, not Government wanting more electric cars. The cars will be a byproduct when battery tech gets there. The governments approach has brought us the situation in California where manufacturers are unloading compliance cars at a loss.

  • avatar

    The purpose of the ATVM program was ultimately environmental. Meanwhile, fracking is making America’s air cleaner because utilities are switching from coal to natural gas

  • avatar
    Big Al From 'Murica

    Agreed. Coal will go away in the US, not because of regulation killing the industry, but because economics. if our elected officials were smart we’d be preparing that workforce for that eventuality rather than pandering to them though.


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