The argument has been made that government investments in clean energy are essential for the United States to maintain its position as a leader of technology and innovation. The DOE’s fear was that China’s large internal investments in clean energy were putting the US at-risk of falling too-far behind. On that I can not fully disagree. I am however shocked by what seems like incredibly poor choices in using our tax dollars.
Solyndra was a spectacular failure, and now it looks like A123 Systems will be following them to oblivion. These do not demonstrate a well-planned, fully-public vetting of investment dollars, but it shows the power of government insiders to reward their campaign donors. The fact that the A123′s possible path to salvation was that a Chinese car company would acquire them for half a billion dollars really put a huge hole in the DOE theory.
Separately from the government’s bad idea to give a quarter billion dollars to a company named after a yellow-pages plumber (A123), it might have been worse for investors to help them raise an additional $380MM based on the stock ticker being named after a steak sauce (AONE).
I would propose an alternate direction. Own the brains and technology, not the hammers. Allocate a portion of those dollars to increase the amount of government grants for primary scientific research at US universities with two additional requirements. 1) Fifty percent of the grants are slated to fund PhD and Postdoc research for US Citizens. 2) All foreign-citizen’ed PhD and Postdocs are immediately offered US Citizenship at graduation. It’s a great incentive to keep the best and brightest US students working on these problems, and it helps us recruit the smartest foreign minds to the US and lets them stay to create new industries and join emerging new companies.
Control of the technology is better than maintaining the means of production. I just came out from Walgreens, and for $3.25 I bought some Q-tips. On special at the front was a 4-pack of CCFL lightbulbs selling for $1.25. Yeah, not $1.25 each, $1.25 for all 4, a 3-year lifespan of bulbs times four being sold for cheaper than little balls of cotton stuck on sticks. I still remember when each CCFL bulb would sell for $20, so yes, China has already won the production war. The only factories I would want to control now might be hydroelectric power plants and the factory that makes Q-tips.