Friday, October 19, 2012

President Obama's green energy "failure"

I've seen a lot of people refer to the numbers in this study as a means of attacking President Obama's green energy stimulus.

Here's my take on those numbers and what they actually mean in context:

I will gladly admit that Obama's plan for stimulating the green energy industry has fallen short, but look at what these companies are up against! The oil industry has ruled the nation for decades, and the only way get their foot off of the neck of projects like the electric car is to invest in new and better green technologies, which is what Obama did. Even if these companies are going bankrupt, they are being BOUGHT by other companies that are working to achieve the same worthwhile goal, and many of the jobs created by the stimulus are safe in the new companies.

Was Obama's way the best way? No.
Did it work the way it was supposed to? No.

But at least he did SOMETHING, and the industry continues to grow. Of the $80 billion in clean energy loans, grants and tax cuts, ONLY 10% have gone to companies that are currently bankrupt or are "circling the drain."

I will tell you right up front that I am not an economist, but I can tell you about one industry that I do know intimately: Restaurants.

86% of restaurants fail within the first 6 months, even with multi-million dollar investments. So why is it a surprise that fledgling companies in an emerging market that hasn't quite caught hold nationwide yet can fail? When a restaurant closes, it files for bankruptcy and turns the whole operation (equipment and often employees included) over to a new owner who opens under a new name and tries something different. This process repeats itself until someone gets it right and the restaurant brings in enough business to support itself.

I understand that food service and the energy industry are not perfect analogies, but I maintain that investing in these companies, even if they go bankrupt and are bought by other companies, was an effective way to grow jobs and make headway in the fight for American energy independence.

I would also like to point out that the Heritage foundation is notoriously biased; to be perfectly honest I don't trust them to give statistics that aren't, at best, specious, and are often, at worst, grossly misleading.

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