Doctor Fate wrote:Some fancy footwork, but basically, we paid ourselves back and you credit Tesla.

Okay.

No, I'm confused. Do you think it's bad that Tesla paid back their loan? I wouldn't think that would be true, but you're leading me to that conclusion. However they did it, it's better than Chapter 11, isn't it?

geojanes wrote:

Doctor Fate wrote:Some fancy footwork, but basically, we paid ourselves back and you credit Tesla.

Okay.

No, I'm confused. Do you think it's bad that Tesla paid back their loan? I wouldn't think that would be true, but you're leading me to that conclusion. However they did it, it's better than Chapter 11, isn't it?

But, basically, they did it with government money (and government regulation that forced other businesses to buy credits from them). So, it's not like the cars are succeeding.

Is it better than Ch. 11?

Undetermined. Talk to me in 2-3 years.

This energy department loan program totals 34 billion. The ideal is to help American companies compete in the use of alternative energy. DF does not think Tesla paying back almost a half billion dollar loan represents a success. So what does the anti-government loan crowd think about the massive loans given by the federal reserve to large corporations (348 billion) and 3.3 trillion in total given to banks, businesses, bond companies, etc? Conservatives complain incessantly about 34 billion given to develop alternative fuel (a laudable goal) but 3.3 trillion, well no big deal. I suppose the government is not picking winners and losers when it gives all that money to prop up big business?http://mobile.bloomberg.com/news/2010-12-03/fed-created-conflicts-in-improvising-3-3-trillion-financial-system-rescue.html

Here is another example of government intervention working: the tariffs passed by Reagan that saved Harley Davidson. http://www.nytimes.com/1987/03/18/busin ... f-aid.html

freeman3 wrote:This energy department loan program totals 34 billion. The ideal is to help American companies compete in the use of alternative energy. DF does not think Tesla paying back almost a half billion dollar loan represents a success. So what does the anti-government loan crowd think about the massive loans given by the federal reserve to large corporations (348 billion) and 3.3 trillion in total given to banks, businesses, bond companies, etc? Conservatives complain incessantly about 34 billion given to develop alternative fuel (a laudable goal) but 3.3 trillion, well no big deal. I suppose the government is not picking winners and losers when it gives all that money to prop up big business?http://mobile.bloomberg.com/news/2010-12-03/fed-created-conflicts-in-improvising-3-3-trillion-financial-system-rescue.html

Here is another example of government intervention working: the tariffs passed by Reagan that saved Harley Davidson. http://www.nytimes.com/1987/03/18/busin ... f-aid.html

Most conservatives are against the myriad examples of government waste. I'm not sure why you think they are not. Re the $3.3 trillion, I do think you have to distinguish between spending to get out of the financial meltdown vs. spending to get out of the recession. In principle I think we had to do the former, but not the latter. I'm also not sure that the $3.3 trillion was actually spent, but that's a different topic.

ray

Most conservatives are against the myriad examples of government waste

Most elected conservatives tend to change their tune when it gets down to specifics. (Well, elected officials of any kind.)

Then there's the question of whether or not something is "wasteful".
For many conservatives, and most elected conservatives serving in Congress, there is no amount that could be spent on defence that might be reaching a level deemed excessive. You've never seen a conservative candidate running for office on cutting defence spending have you?

To the extent that everyone can agree that there is waste in spending in any organization, when you talk about one as big as the US government, there are always going to be examples of dreadful waste through mismanagement or errors in judgement.
But, I submit to you Ray that the nature of the system of governance has lead to more mismanagement. In more centralized systems (parliamentary systems) the budget process is also centrally controlled. Where a government has committed to a plan they have the control, if they have the discipline, to effect significant change.
With the system in the US, the House, the Senate and the Executive all have varying degrees of control and impact. and when you get a situation where the two sides are confrontational and ready to make every issue win/lose its hard to do more than muddle through.
I think corporate lobby groups probably have more control over the direction of budget allocations and policies on specific areas than ever before.... making it hard to make sweeping changes.
Who keeps the ethanol subsidy alive? And isn't that egregious waste?

My point would be that 34 billion dollars is not a lot of money and has at least a chance of promoting American competitiveness in alternative fuels. I was reading a great book called the Wealth and Poverty of Nations. In 1998 the author wrote : "The present tendency to global industrial infusion will entail, for the richer countries, a leveling down of wages, increased inequality of incomes, and/or high levels of (transitional?) unemployment. No one has abrogated the law of supply and demand". Well, all of that has come true. David Landes, the author, also noted "To be sure, the rich, industrial countries can defend themselves (ease but not eliminate the pain) by remaining on the cutting edge of research, by moving into new and growing branches (creating new jobs), by learning from others, by funding the right niches, by cultivating and using ability and knowledge. They can go a long way on cruise control and safety nets, helping the losers to learn skills, get new jobs, or just retire."
To the extent that private industry can go it alone into new research into new and growing branches, great. If not then our government should
help private industry to get into those new fields. The stresses of globalization require that we have an active policy towards promoting American dominance in new technologies because otherwise there will be enormous stress on our society due to many people being unemployed or working in low -skill, low wage jobs. Conservatives can rail about the safety net all they want--how about figuring out how to get those people jobs.

Ricky:

Who keeps the ethanol subsidy alive? And isn't that egregious waste?

Democrats and Republicans; yes.

The only major ticket Presidential candidate over the last many years who has had the courage to run against ethanol subsidies is McCain.

Freeman:

My point would be that 34 billion dollars is not a lot of money and has at least a chance of promoting American competitiveness in alternative fuels.

The general view that $34 billion is not a lot of money is a huge problem on both sides of the aisle.. Pretending that these subsidies have a chance of promoting American competitiveness in alternative fuels is delusional. These subsidies are helping specific companies but have nothing to do with American competitiveness. Research on alternative fuels would be fine, but pretending that these loans have been for research is a rationalization as a result of cognitive dissonance.

Mr. Landes also wrote about the 1998 Asian Crisis:
"The problem, in a way, was too much success. These economies had grown too fast, had become the focus of a gold rush yielding inebriating rates of profit and spectacular capitals gains--the kind of returns that gild a balance sheet in London or New York and promise fast advancement for investment prodigies. But high returns imply/entail high risk, and good businessmen should be as suspicious of spectacular profits as they are alarmed by big losses. The basic rule of business, as of physics, is the law of conservation of mass and energy: nothing for nothing. And another law: every action gives rise to reaction, in other words, no bulls without bears. Failure lurks in the shadow of success, in the evitable, all too-human excess of greed."
Conservatives trying to blame the Financial Crisis on the government should read that paragraph.
As for your implicit conclusion RJ that these loans are a waste of money I guess we'll see. I am a firm believer in trial and error. If it doesn't work, then fine then we'll know not to do similar ventures in the future. Your certainty that it won't help American competitiveness seems to be more ideologically than evidentially driven (since it is too early to judge the results)

Freeman:

The basic rule of business, as of physics, is the law of conservation of mass and energy: nothing for nothing.

Whereas I agree there is no such thing as a free lunch, the fundamental reason for the success of capitalism is that both parties to a voluntary exchange benefit. It isn't nothing for nothing. Yours is a mistaken perspective. The basic rule of business is that you are providing something to your customers that they want. It is win/win. Laws of conservation of mass and energy are not a good analogy.

I think what Landes was saying with that analogy is that you don't get high returns for low-risk (a lesson that was lost on Wall Street in the years leading up to the Financial Crisis). Mr. Landes is pro-capitalism so if you are reading something anti-capitalistic in that analogy I suspect you are mistaken. It would if course be even more problematic to infer my views from that analogy.

freeman3 wrote:This energy department loan program totals 34 billion. The ideal is to help American companies compete in the use of alternative energy. DF does not think Tesla paying back almost a half billion dollar loan represents a success.

That's a mischaracterization.

What I said was, since it was paid back with subsidies from the government, in essence "we" paid off the loan "we" made, I can't give Tesla much credit.

And, the "ideal" is for the technologies themselves to compete. So far, whether it's solar, wind, or electric cars, they're not competitive.

So it is a success then--just not a big one?

freeman3 wrote:So it is a success then--just not a big one?

If you loan me a million dollars and I pay you back with your own money, is that a "success?"

freeman3 wrote:So it is a success then--just not a big one?

It is not Solyndra, that is for sure. At least that is something!