We've been here before. We have definitely discussed the history of computing (and particularly the internet) and the role of government as developer (through DARPA and CERN) or monopoly customer or through support. Rehashing the discussion is not going to change where people stand. There's a limit to how facts will even change opinions.

rickyp wrote:fate

Go down the list. How many Silicon Valley companies are the result of government investment?

All of them really. The computer, silicon chip, internet, GPS, etc all came about because of some kind of government investment or financial intervention...
Read freemans link and educate yourself.

1. With all the foolish things you post, you should be the last person to engage in condescension.

2. Looking at freeman2's link, it is one thing to say, for example, GPS instruments would not exist without government investment. It is another entirely to suggest the government intended individuals to have GPS units in their cars when they invested in the technology.

Same with the Internet. Did the government envision amazon.com? Did it invest in it?

For the love of Pete, that article that's supposed to "educate" gives government credit for the iPhone. I'm sorry, but that's just dumb. Taking stuff that exists and packaging it in ways no one has previously done is what innovation is all about. Show me the government lab in which the iPhone was developed.

Because land was granted and universities were developed, the Federal government deserves credit?

That article is Pravda-worthy. For every truth, there are 2 (or more) distortions.

The fact that the government invests in technology for military or scientific purposes and then companies find a way to adapt that technology to private use, does not mean the government should get credit for the business itself. In fact, Democrats, left to their own devices, would destroy the Internet by taxing it like there's no tomorrow.

I would say the government does some worthy things. However, government ought not be the primary investor in a producer of speculative product, especially when it is clear that the company (a la Solyndra) cannot compete. Worse, the government should never make loan guarantees which put the investors ahead of the taxpayers--that's why a law was passed to prevent such a thing. Of course, when you're President Obama, laws are more like suggestions than anything else.

danivon wrote:We've been here before. We have definitely discussed the history of computing (and particularly the internet) and the role of government as developer (through DARPA and CERN) or monopoly customer or through support. Rehashing the discussion is not going to change where people stand. There's a limit to how facts will even change opinions.

I agree with that. But I still don't see how Freeman's link and Ricky's repeating of successful DOD and NASA investments proves that loans and loan guarantees to politically well connected companies such as Solyndra is a good investment. In some ways we are all in agreement We've all said (Dr. Fate, Ricky, Freeman, Ray) that there is a place for government investing in scientific research for breakthrough technologies. We've also all agreed (I think) that Ethanol is a waste of government money.

(Cross posted with Dr. Fate whose analysis is excellent, although I would drop the last sentence and change the tone a little.)

Ray Jay wrote:(Cross posted with Dr. Fate whose analysis is excellent, although I would drop the last sentence and change the tone a little.)

Understood, but that is true with Solyndra and with the auto bailouts. The law was set aside and it certainly gives the appearance of being for the purpose of political payback.

Well, the government never innovates anything, the private sector does, but a lot of times the private sector has used government money to develop new technologies. I'm not sure where there are distortions in the article, perhaps some examples would be nice.
You ever wonder why in time of war so many new technologies are created? Part of the answer is that in an existential crisis human beings are driven to perform, but surely part of the answer is that there is a lot of government money to find any advance that has military utility. When would nuclear power have been developed without the Manhattan project?

Maybe it is national hubris but it seems to me that our culture has had a propensity for developing new technologies--therein lies our advantage over China and other Asian economies. Let's not forfeit that advantage by preventing government money from going to brillliant people who will come up with the next technology.

Sure, i don't want the government giving money to politically connected companies, though we might solve the deficit if we took away government funding of companies that are politically well-connected! However, the focus on Solyndra in order to cut-off funding to alternative energy is mis-placed. It is important to know that there is a history of private sector partnership with the government in developing new technologies and usually done with a relatively small price. And of course once an industry has matured there is no reason for the government to pick winners and losers

Hopefully, we are all agreed that the government has a role in providing money for the development of alternative energy and not just for R&D for university research but for funding of companies engaged in the development of nascent technologies (but of course we don't agree on that)

And I think we should fund companies not by giving them a blank check but by having scientific panels evaluating proposals and approving those with the most merit and by government either subsidizing or being a consumer of products that are not competitive in the market at early stages of the new technology

freeman2 wrote:Well, the government never innovates anything, the private sector does, but a lot of times the private sector has used government money to develop new technologies.

|False. There are plenty of examples of government innovation. The world wide web being one of them (no, not the US Federal government, but a government funded and run scientific programme in Europe). A lot of the solutions for tech problems which are innovative in their own ways were developed withing government organisations.

However, as DF and RJ have pointed out, this does not mean that the investments made by government now are a good idea. I think if you want to bolster your argument, you'll need to find better evidence. Perhaps the data behind the 6% failure?

freeman2 wrote:Well, the government never innovates anything, the private sector does, but a lot of times the private sector has used government money to develop new technologies. I'm not sure where there are distortions in the article, perhaps some examples would be nice.

I did give examples of the paper giving government credit for creations they never envisioned: the iPhone, the commercial expansion of the Internet, Apple computers, GPS units, and others.

You ever wonder why in time of war so many new technologies are created? Part of the answer is that in an existential crisis human beings are driven to perform, but surely part of the answer is that there is a lot of government money to find any advance that has military utility. When would nuclear power have been developed without the Manhattan project?

Because in times of existential crises, everything else is on the backburner. A great mind and a pacifist, like Einstein, would not have urged atomic weapon research were it not for war.

Maybe it is national hubris but it seems to me that our culture has had a propensity for developing new technologies--therein lies our advantage over China and other Asian economies. Let's not forfeit that advantage by preventing government money from going to brillliant people who will come up with the next technology.

Oh, like shutting down NASA?

Sure, i don't want the government giving money to politically connected companies, though we might solve the deficit if we took away government funding of companies that are politically well-connected! However, the focus on Solyndra in order to cut-off funding to alternative energy is mis-placed. It is important to know that there is a history of private sector partnership with the government in developing new technologies and usually done with a relatively small price. And of course once an industry has matured there is no reason for the government to pick winners and losers

No, the focus on Solyndra is not misplaced. It was doomed before the government got involved and it basically turned into a financial bailout of Obama donors at the expense of taxpayers. It was not "new technology." It was unique, but it was already getting buried in the market before the government rode to the rescue.

And, there have been many other recent examples of failed energy companies the government "invested" in. Furthermore, it gave money so that companies could create jobs--in Finland and other countries. That is not a wise use of American money.

Hopefully, we are all agreed that the government has a role in providing money for the development of alternative energy and not just for R&D for university research but for funding of companies engaged in the development of nascent technologies

R & D yes.

Production of product? Probably not. Why not? Because it is highly likely that if a company is viable, private investment will flow to it. Investment goes to companies with a chance of winning. Government invests in losers and hopes to make them winners. That is not its business.

Once a company is developing nascent technology, the time horizon would be substantially less than 20 years; I think 3 to 5 years is a good approximation. Ricky correctly indicated that 20 years is too long for most capitalists. But 3 to 5 years is well within the sweet spot of venture capitalists so we don't need the government role.

Danivon

However, as DF and RJ have pointed out, this does not mean that the investments made by government now are a good idea

Since I've argued that the investment can be bad or good, I agree.
The reason I retreaded the discussion of the early stage investments in technological achievements by government was to respond to the repeated nostrum that all government investment is wasteful. And done better by private capital.
The fact is that private capital doesn't often invest until there is a base industry upon which to build. The connection between iphones and the early stage government investment in computers is forty years in the making.... but nevertheless exists.
The continuing example of Solydra as representative of all government investment becomes repetitive too. And is unnecessary. No one has defended that particular investment as a good idea. But its only one of something like 230 made by the DOE. So far 6% have failed..... But have enough of them succeeded that perhaps an industry is being founded in something like bio fuels, or advanced large capacity capcitors? Perhaps. It will take some time to know what evolves.

Most people acknowledge that there wasn't private capital around to invest in refloating General Motors (see debunking of Romney claims to the contrary). Its a striking example of what happens when capital doesn't exist OR the short term return isn't fairly apparent....
But is a striking example of how the absolutist idea of government investing is bad.... is unsupportable.

ray

Once a company is developing nascent technology, the time horizon would be substantially less than 20 years; I think 3 to 5 years is a good approximation. Ricky correctly indicated that 20 years is too long for most capitalists. But 3 to 5 years is well within the sweet spot of venture capitalists so we don't need the government role.

certainly. But the interesting thing is that the crucial investment is often the long term investment. Fate may have trouble linking the past to the future and crediting early stage investment for the establishment of entire industrial sectors. However Bill Gates often reflects on the importance of the early stage government investment to his success.
An industry needs a foundation. Capitalists like to build upon established foundations. Governments sometimes have to create that foundation. And sometimes when they try to do that they fail spectacularly.... Getting all the blame. When they do succeed, then all of a sudden its the entrepreneurs who " did it all by themselves..."
If you don't accurately remember history, and how and why things develop, you tend to repeat mistakes. And its a mistake to think government hasn't played an important role in some fundamental American industrial success stories . And that it can't continue to do so where a national strategy calls for important investment.
Its also a mistake to expect it to be perfect or even as successful as private money investing in safer ventures.Its not a mistake to try and eliminate cronyism and corruption. But to eliminate the government investment categorically because some of it failed or was guided by corruption would weaken the nations ability to respond to foreign competition with the required long term investment.

Ricky:

Fate may have trouble linking the past to the future and crediting early stage investment for the establishment of entire industrial sectors.

Ricky:

But to eliminate the government investment categorically because some of it failed

Fate:

R & D yes.

Ray Jay wrote:Ricky:

Fate may have trouble linking the past to the future and crediting early stage investment for the establishment of entire industrial sectors.

Ricky:

But to eliminate the government investment categorically because some of it failed

Fate:

R & D yes.

Are you trying to confuse rickyp with facts?

It won't work!

rickyp wrote:So far 6% have failed..... But have enough of them succeeded that perhaps an industry is being founded in something like bio fuels, or advanced large capacity capcitors? Perhaps. It will take some time to know what evolves.

6%? Of what? It was a $90B program begun in 2009. Frankly, I don't think we yet know how much of it will be wasted as some of it has yet to be "invested." Still, scroll down this page and you have a list from 7/19/12 backward.

Most people acknowledge that there wasn't private capital around to invest in refloating General Motors (see debunking of Romney claims to the contrary).

See debunking of your debunking.

The problem is Romney said, in that infamously politically incorrectly titled piece (the headline he didn't write), that government guarantees were the only way investors would jump in. Get your facts straight and leave poor Mittens alone. Go kick someone else for a while; let the man catch his breath.

Its a striking example of what happens when capital doesn't exist OR the short term return isn't fairly apparent....
But is a striking example of how the absolutist idea of government investing is bad.... is unsupportable.

What does the GM bailout have to do with investing in Solyndra et al?

Nothing. But, thanks for playing!

Doctor Fate wrote: Furthermore, it gave money so that companies could create jobs--in Finland and other countries.

Fate: you damage your credibility by raising the Fisker red-herring. Fisker Automotive is a U.S. company that received DOE money to support R&D work for the Karma in the U.S. The fact that the Karma is manufactured in Finland is irrelevant; the money went for upstream development work in the U.S. The DOE grant was also to support Fisker's project to produce the Atlantic in Delaware.

Karma design & engineering -> U.S. jobs
Atlantic production -> U.S. jobs

Yes, Danivon, people in government (scientists, engineers, etc.) can innovate too. A sloppy post on my part. As for proving my case, see your post that we have been over this terrain before and no one is going to change sides.

Rudewalrus wrote:

Doctor Fate wrote: Furthermore, it gave money so that companies could create jobs--in Finland and other countries.

Fate: you damage your credibility by raising the Fisker red-herring. Fisker Automotive is a U.S. company that received DOE money to support R&D work for the Karma in the U.S. The fact that the Karma is manufactured in Finland is irrelevant; the money went for upstream development work in the U.S. The DOE grant was also to support Fisker's project to produce the Atlantic in Delaware.

Karma design & engineering -> U.S. jobs
Atlantic production -> U.S. jobs

Do tell: how many American jobs have been created by Fisker?

$529M for how many jobs?

The Delaware plant . . . is it open? Can you guarantee it will open? Of course, the CEO of Fisker says it will, but can you believe him?

Fisker Automotive Inc.'s new chief executive officer said the plug-in hybrid carmaker still plans to build rechargeable autos at a Delaware plant that stalled when the Energy Department blocked a loan for the project.
The closely held company, which last week said it raised more than $100 million from private investors, continues to work out plans to produce its second model, the Atlantic, at the Wilmington facility, Tony Posawatz said Monday. Posawatz joined Anaheim's Fisker in August after retiring from General Motors Co., where he led development of the rechargeable Chevrolet Volt sedan.
Issues that led regulators to suspend access to a loan to refurbish and equip the Delaware factory have been resolved, and "at an appropriate time, we will revisit the discussion with them of the possibility of accessing the remainder of the loan," he said.
Fisker's goal of becoming profitable from its $103,000 Karma sedan, which goes about 40 miles on battery power before a gasoline engine kicks in, has been challenged by initial delivery delays, tight funds and technical failures that led to recalls of flawed lithium-ion battery packs and cooling fans.
Consumer Reports last month criticized the luxury car, declining to recommend it because of its cabin noise, interior design and reliability concerns.

I'm not opposed to faith, but don't confuse your hope with facts. From wiki:

The Atlantic is scheduled to become Fisker Automotive's second production car, after plans to produce the Fisker Surf and Sunset variants of its full-size Karma were shelved earlier in 2012. Production was initially scheduled to begin by the end of 2012 at former GM plant in Wilmington, Delaware. By October 2012 the carmaker decided to postpone production for late 2014 or 2015 due to financial constraints.

So, at best, the jury's still out.