Friday, October 21, 2011

A New Scandal Every Week

Even lamestream media organizations like ABC are covering the scandals now.  The Obama Administration has lent more than a billion dollars to two electric car companies buildings cars that even I can't even consider buying because they are for people much richer than me.  Fisker has decided, in spite of the hype when the loan to Fisker was announced in a closed Delaware car manufacturing plant, to build the $97,000 sedan in Finland:
With the approval of the Obama administration, an electric car company that received a $529 million federal government loan guarantee is assembling its first line of cars in Finland, saying it could not find a facility in the United States capable of doing the work.
Vice President Joseph Biden heralded the Energy Department's $529 million loan to the start-up electric car company called Fisker as a bright new path to thousands of American manufacturing jobs. But two years after the loan was announced, the job of assembling the flashy electric Fisker Karma sports car has been outsourced to Finland.
 Tesla is at considerable risk; because it is a public firm, we can see how much trouble.  Fisker is privately held, so the risks are hidden behind a cloud.
An investigation by ABC News and the Center for Public Integrity's iWatch News that will air on "Good Morning America" found that the DOE's bet carries risks for taxpayers, has raised concern among industry observers and government auditors, and adds to questions about the way billions of dollars in loans for smart cars and green energy companies have been awarded.
But in both cases, the people with financial stakes are politically connected:
"Their major venture investor is Kleiner Perkins, who has Al Gore as a partner and is certainly politically connected in general," said industry observer Sexton. "Whether that played a role or not is up to the DOE to explain."
Tesla brings political pull, as well. A former Tesla board member, Steve Westly, is an Obama bundler who raised hundreds of thousands of dollars for the president in 2008 and for his 2012 re-election campaign.

1 comment:

  1. You rightly report that we are subsidizing foreign jobs. And then there is the obvious moral slippery slope of choosing winners and losers with taxpayer dollars.

    But in the electric car examples we have another issue that only government can have when it invests. First, its pockets are large and not necessarily driven by profit, but by politics and jobs and PR.

    So the car companies may be funded long past ROI jurisprudence. And then it will quickly become another Concorde fiasco, where the taxpayer is directly subsidizing the rich given the price of the car.

    Regardless of one's political bent, there exists customs and behaviors in politics which are accepted and legal. DOE investments are one of them. So is building a mosque yards from Ground Zero.

    But the insensitivity, presumptuousness and arrogance necessary to do them easily destroys the goodwill and trust that is otherwise needed in a society that depends on cooperative actions in order to optimize performance and innovate.