US govt creates/picks a lot more WINNERS than LOSERS

[boutons_deux]

Repugs and Fox and their fabricated Solyndra scandal (still getting prime time on Fox) can suck my <govt-mid-wifed invention>

Government As Venture Capitalist: The Amazing True History

public funding for technology innovation is now more important than ever. In his 2010 book, "State of Innovation," UC Davis sociologist Fred Block examined R&D Magazine's list of the top 100 annual innovations over four decades, going back to 1970, and found that the percentage of those technologies to which public investment could be traced had grown dramatically. In 2006, 77 out of 88 domestic winners had been at least partially funded by government. And yet, ironically, public investment in technology innovation has been declining, as a percentage of GDP, for 30 years, in no small part because, while we often celebrate failure in the private sector as an essential part of the innovation process, we have increasingly little tolerance for it in the public sector.

Ideological opponents of government investment - aided and abetted by an economics profession that dresses up theories borne of 18th century, preindustrial capitalism with fancy mathematical models and calls them authoritative - serve up exaggerated tales of government investments gone terribly wrong while downplaying the remarkable history of government investment in technologies that have transformed our economy.

The truth is that government investment in general purpose technologies has not been the exception over the last two centuries, it has been the rule — and an important part of the story of America's extraordinary rise as an economic power. We forget that history at our peril.


http://www.alternet.org/module/printversion/154649

[boutons_deux]

Major Analysis: Federal Loans And Loan Guarantees Have A Huge Benefit But A Low And Predicatable Cost


http://www.americanprogress.org/issues/2012/05/img/credit_graphic1.jpg

the private sector will simply not lend to certain borrowers or will lend only under unaffordable or unmanageable conditions. That’s why we rely on federal credit programs: The U.S. government can bear certain risks that the private sector cannot to achieve certain public goals such as increasing the global competitiveness of our workforce, returning stability to the U.S. housing market, and adding jobs through business expansion.

These programs typically run at very low cost to taxpayers. On average, every $1 allocated to loan and guarantee programs generates more than $99 of economic activity from individuals, businesses, nonprofits, and state and local governments


Based on initial estimates over the past 20 years, the government expected its credit programs to cost taxpayers 79 cents for every $100 loaned or guaranteed. Based on recently updated data, those cost predictions were reasonably accurate but slightly underestimated. The current budgetary impact of these programs is about 94 cents per $100 loaned or guaranteed.

There’s little evidence that credit programs are biased toward underpricing risk. In fact, a little more than half of all nonemergency federal credit programs will cost the government less than what they are expected to over the life of the program.

The remainder is accounted for by the losses suffered by the Federal Housing Administration on loans made in 2008 during the peak of the housing crisis. Excluding that book of loans, all nonemergency federal credit programs cost slightly less than expected.

http://thinkprogress.org/climate/2012/05/03/475978/major-analysis-federal-loans-and-loan-guarantees-have-a-huge-benefit-but-a-low-and-predicatable-cost/

[Wild Cobra]

What is your point here?

1992 to 2011 average....

What would it look like year by year? Probably no cost up to 2007 or 2008. probably massive costs afterward, probably less guaranteed and more paid out per loan average.

Government doesn't need to subsidize R&D. private industry does just fine at it. Think about the failures like Solindra. Because it was a bad investment is why the private investors stayed away from it. Private investors should never have a guarantee when they gamble, and that's what capital investment it. A gamble. If you have to guarantee a capital gains investment, then it is simply not worth investing in, and win or lose at their gamble, you are just making sure the rich people get richer.

Did the investors for Solindra lose all their money put in like they should have, or did they get richer?

Ever go to any casino, and have an insurance table where you could buy insurance to pay you back for your losses?

[RandomGuy]

What is your point here?



When goverments spend on human capital, the returns on the investment are very large.

This strongly implies that more goverment spending on human capital, such as higher education, that would equal a larger economy.

It is also true that, if you increase goverment spending, holding everything else equal, you automatically increase GDP, if you recall.

[Wild Cobra]

When goverments spend on human capital, the returns on the investment are very large.

This strongly implies that more goverment spending on human capital, such as higher education, that would equal a larger economy.

It is also true that, if you increase goverment spending, holding everything else equal, you automatically increase GDP, if you recall.
I'm not going to take the time to point out the fallacies. You would disagree anyway never considering my points. Besides, it's fun watching PopTech take you down. I'll let you keep your mental resources there since you're at a huge disadvantage with him

[TeyshaBlue]

When goverments spend on human capital, the returns on the investment are very large.

This strongly implies that more goverment spending on human capital, such as higher education, that would equal a larger economy.

It is also true that, if you increase goverment spending, holding everything else equal, you automatically increase GDP, if you recall.

I would differ on the higher education point. It's a fair trend already that links tuition costs to availability of loans/grants...tuitition increases trending at 2.5x the inlfation rate since 1985 (Hello, Stafford Loans).

Adjust the cost structure, then administer funds.

[ChumpDumper]

I'm not going to take the timeOne has to wonder why you ever take any time at all.

[CosmicCowboy]

Most of those technology breakthroughs were probably compliments of the MIC which Boutons loves to hate.

[clambake]

Besides, it's fun watching PopTech take you down.

whoa, hold your horses. u gonna blow your chance.

[boutons_deux]

"the MIC"

yep, TAXPAYERS/GOVT funds MIC heavily (not private funders). The GOVT you love to hate.

But the MIC starting wars to enrich itself offsets any tech spinoffs.

[boutons_deux]

Clean Energy Scores Highest Documented Rate of Return of Any Federal Program


Energy Research at DOE: Was It Worth It? Energy Efficiency and Fossil Energy Research 1978 to 2000 (http://www.nap.edu/catalog.php?record_id=10165) was a stunning vindication:


… the report examines 17 R&D programs in energy efficiency and 22 programs in fossil energy funded by the U.S. Department of Energy (DOE). These programs yielded economic returns of an estimated $40 billion from an investment of $13 billion.

(http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=10165)Three energy-efficiency programs, costing approximately $11 million, produced nearly three-quarters of this benefit. (http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=10165) Most significant were advances made in compressors for refrigerators and freezers (http://cleantechnica.com/2012/10/16/clean-energy-scores-highest-documented-rate-of-return-of-any-federal-program/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IM-cleantechnica+%28CleanTechnica%29#), energy-efficient fluorescent-lighting components called electronic ballasts, and low-emission, or heat-resistant, window glass. Standards and regulations incorporating efficiencies attainable by these new technologies ensured that the technologies would be adopted nationwide, thus dramatically compounding their impact.

The handful of energy technologies cited above, developed through funding (http://cleantechnica.com/2012/10/16/clean-energy-scores-highest-documented-rate-of-return-of-any-federal-program/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IM-cleantechnica+%28CleanTechnica%29#) by my old office, the Office of Energy Efficiency and Renewable Energy, have returned some $30 billion on an R&D investment of about $400 million. I defy anybody to identify an independent report from a body as credible as the National Academy showing such a staggering return on investment for US taxpayer dollars.

the energy technologies in the report avoided “more than $60 billion in damage and mitigation.”


Economics Stunner: “Coal-Fired Power Plants Have Air Pollution Damages Larger Than Their Value Added” (http://thinkprogress.org/romm/2011/10/13/332882/economics-coal-fired-power-plants-air-pollution-damages/); Natural Gas Damage Larger Than Its Value Added For Even Low CO2 Prices — and Life-cycle study (http://thinkprogress.org/romm/2011/02/16/207534/life-cycle-study-coal-harvard-epstein-health/): Accounting for total harm from coal would add “close to 17.8¢/kWh of electricity generated”


“the return for this portion of the government investment would be on the order of 40 to 1–a cost to the government of about $5 per ton of carbon (http://belfercenter.ksg.harvard.edu/files/pcast97_ch3.pdf)” with annual fuel cost savings of $75 to $95 billion in 2020, and reductions in oil consumption of 4 to 10 million barrels of oil a day by 2030.

http://cleantechnica.com/2012/10/16/clean-energy-scores-highest-documented-rate-of-return-of-any-federal-program/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IM-cleantechnica+%28CleanTechnica%29

[boutons_deux]

The Venture Capital Secret: 3 Out of 4 Start-Ups Fail

But now there is evidence that venture-backed start-ups fail at far higher numbers than the rate the industry usually cites.

About three-quarters of venture-backed firms in the U.S. don't return investors' capital, according to recent research by Shikhar Ghosh, a senior lecturer at Harvard Business School.

Compare that with the figures that venture capitalists toss around. The common rule of thumb is that of 10 start-ups, only three or four fail completely. Another three or four return the original investment, and one or two produce substantial returns. The National Venture Capital Association estimates that 25% to 30% of venture-backed businesses fail.

Mr. Ghosh chalks up the discrepancy in part to a dearth of in-depth research into failures. "We're just getting more light on the entrepreneurial process," he says.

His findings are based on data from more than 2,000 companies that received venture funding, generally at least $1 million, from 2004 through 2010. He also combed the portfolios of VC firms and talked to people at start-ups, he says. The results were similar when he examined data for companies funded from 2000 to 2010, he says.

Venture capitalists "bury their dead very quietly," Mr. Ghosh says. "They emphasize the successes but they don't talk about the failures at all."

There are also different definitions of failure. If failure means liquidating all assets, with investors losing all their money, an estimated 30% to 40% of high potential U.S. start-ups fail, he says.

If failure is defined as failing to see the projected return on investment—say, a specific revenue growth rate or date to break even on cash flow—then more than 95% of start-ups fail, based on Mr. Ghosh's research.

http://online.wsj.com/article/SB10000872396390443720204578004980476429190.html