More on Subsidies

Isn’t it ironic that the faux capitalists point with glee to the failure of Solyndra as proof positive that government has no role to play in building industries.  They conveniently neglect to point to First Solar, which is continuing to hold its own against the heavily subsidized Chinese solar industry.  First Solar was born and nurtured with Government support phasing into private industry.  But there have were a number of failed thin film PV companies that have come and gone before First hit the ball out of the park.

Every venture capitalist will tell you that for every base hit they have 5 strike-outs and every grand slam (like Amazon) they have many many failures.  Private industry is not magic, it is just people thinking it through together.  If anything, government has the most risk tolerance and should be in the business of making long shot bets.

What we see now is people pointing to an old model that says fund R&D and let the private sector do the rest.  That does not work in a world economy with China eagerly harvesting our IP and using subsidies to crush our efforts to commercialize it.  No VC is going to go up against that!

No, to be successful in keeping important strategic industries such as Super Conductors, LED lighting, Wind, Solar Photovoltaics, rare earths etc. we need to vertically integrate our programs from cradle to maturity and assure that markets remain.

Government has always been involved in developing infrastructure industries.  We, as a nation, are in denial in service of a flawed purist philosophy that pure capitalism is the key to economic success.  In the face of nationalist, directed economies like China we need to change our game plan to one of strategic development and retention of key industries.

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