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Obama with Solyndra workers in 2010.
A couple of weeks ago, as the Obama campaign's criticism of Mitt Romney's controversial private-sector background intensified, the Republican campaign offered an underwhelming comparison. As Team Romney saw it, President Obama's rescue of the American automotive industry was comparable to Bain Capital's private equity practices.
The comparison really didn't make any sense, and soon faded away. This week, however, there's a new comparison: Bain Capital is roughly equivalent to the administration's investment in Solyndra.
I can almost see the underlying point. Obama invested in green energy companies to improve American competitiveness, create jobs, and boost energy innovation, while Romney invested in companies to generate returns for investors. To the extent that both saw opportunities and made investments that carried risks, there's a superficial similarity.
But as Molly Redden explained, any serious analysis shows that the comparison quickly falls apart.
First off, Romney allies typically explain away Bain's failures as just the way capitalism works -- sometimes, bad companies are swallowed by the market. Solyndra, whose solar technology was priced out of the market by cheaper Chinese solar panels, is a pretty classic example of this, and by citing its Adam Smithian demise in response to attacks on Bain, Romney allies have diminished their ability to dismiss Bain's loser companies as just the natural cycle of capitalism.
But the larger risk of this approach is that comparing any of Bain's failures to Solyndra asks voters to examine private equity alongside public stimulus. The former is a game in which a tiny group of stakeholders set out to create as much value as possible for themselves: buying companies, often loading them up with debt they can't bear, and extracting exorbitant fees for themselves before they reintroduce the company to the public and it either fails or succeeds. It's essentially a no-risk racket.... Then there's government stimulus, which is aimed at benefitting the public, and which the Obama administration has distributed with considerable success.
Bain and Solyndra, Redden added, "are really nothing alike."
That's true, but notice that over the course of two days, the argument was nevertheless pushed by Romney, Karl Rove's attack operation, George Will, Michael Barone, and House Budget Committee Chairman Paul Ryan (R-Wis.).
It's almost as if Republicans all receive the same memo at the same time, telling them what to say in public.
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Americans are a simple people, often gullible, and are easily sold most anything that is bright and shiny, if the selling is done in a convincing manner. Mad Men learned this early on (19th C.), and advertising continues to drive the economy.
Politicians saw these same techniques as a way to unload inferior merchandise on that same naive public, and here we are.
I agree. The development of green solutions (i.e. Green Energy, Green products, Green Cars, Green Jobs) sound nice, but the reality is that none of these alone or combined will make even the slightest dent in the environment, jobs creation, or the economy. They only thing they really add to is the growing debt.
"It's almost as if Republicans all receive the same memo at the same time, telling them what to say in public."
It's not "almost" - all GOP get the same talking points memo! Which is exactly why people tend to believe their lies, obfuscations, distortions and total fantasy world going! The propaganda channel FAUX NOISE also heavily contributes to the dumbing down of Amerikuns and spreading fear & hatred! Once again a false equivalence is being used but the sheeple won't can't or don't want to even see that they are being sold back & forth for an agenda that doesn't include them!
I was watching FAUX NOISE the other day. and they ran a string of clips of Liberal politicians and liberal political commentators doing the same thing. It's kinda funny when you see it on both sides. Then I realize that this is the reality of the modern age, and that makes me sad :(
Politics has been reduced down to five second soundbites, and hours of mindless blabber. It is so rare to find an original thought or even clever twist on an old one.
What rank and offensive hypocrisy from Mitt Romney and the Republican Party. Mitt dodges his own record in business, making totally false claims about creating 100,000 or even one million jobs while having the temerity to condemn any discussion of his reputation as a job killer at Bain, then turns around and directly endorses a line of attack that cherry picks President Obama's record and says the president must own the results of a program created and operated by his Republican predecessor. That the GOP is forced to pull such ridiculous stunts shows how worried they are that Romney may actually lose this race. http://www.sunstateactivist.org
Most Americans are too stupid to do nuance. This'll work for Republicans just like climate denial, just like claiming Obama was cutting Medicare, just like claiming it was Obama who caused the credit rating downgrade, just like claiming Obama increased spending, just like claiming the Bush tax cuts are now Obama's tax cuts, just like saying the debt problem is because of overspending and not irresponsible tax cuts, just like saying the country can't afford Social Security when it is ridiculously obvious that we can, just like ...............
What people fail to understand about these ridiculous Republican arguments is that they are intended to confuse. It is intentional obfuscation of an issue that can hurt Republicans confused with a manufactured issue constructed to hurt Democrats. And yes, your fellow Americans are flat-out stupid enough to buy it.
It will work because it is reality! It is common sense. What is not understood is that each government job consumes social resources where private jobs are forced to produce more value than they consume or they die...
The comparisons don't have to make sense to people who have no sense.
Romney and.... now I get it!!!! Satan Claus.
have you moved to DC? If so, you might want to look into some local politics since we a joined at the purse strings with congress. They are in the midst of investigating our elected city council members and the mayor. Meanwhile bits and pieces of the city are being sold off to the highest bidder. Someone wants the land that the 'black' golf course sits on so they are investigating the proprietor (they have already locked up the Ward 5 councilman on trumped up charges and the list goes on and on....(.You know Trump has the right name...fits perfectly for the way he operates....We need to play a hand where there is a no 'trump'. and you need some finesse.) I digress if your moving here welcome to DC District of Congress!
yeah but the comparison does go deeper Obama used taxpayer monies with Solyndra and Romney was using private investor monies. Those investor knew and understood the risk they were taking. The American taxpayer had no say in the investment Obama made. It could be said that since the American population voted for the Congressional representation we did understand the risk but really come on was it really explained.
It's called representative government. You know what other government decisions you don't get to have "really explained" and decide for yourself all of the risks before they're enacted? ALL OF THEM.
The purpose of government investing in areas like renewable energy is to advance an industry that will benefit us all, not to make a profit. The entire point is to take risks that private investors are unwilling to take on. By definition, such investments are riskier, and some of them are going to fail. If the programs only invested in companies that had low risk, they would completely fail in their essential purpose or nurturing the industry.
I agree that this comparison has some major flaws. The private capital invested by Bain is the property of the individuals who explicitly choose to invest it in this manner. I myself do not believe that investing in green energy has helped anyone but the people who get the money. When it is the government investing I have no real choice in the matter.
In many cases, including this one, it involves people who are close to government officials. If some of the companies do succeed its better than them failing, but I'm still tired of elected officials giving my money and special treatment to their friends and financiers.
It would require a technological breakthrough or a miracle to make green energy a viable solution or even make the slightest dent in America's energy needs.
Dear Fossils, GERMANY'S GRID WAS 50% SOLAR LAST WEEK! This is serious business regardless of bumps in the road, there is no going back. Welcome to the future! Coming to an outlet near you sooner than you think!
http://www.reuters.com/article...
http://spectrum.ieee.org/energ...
http://www.treehugger.com/ener...
Germany choice is to develop their renewable sector, vuild more nuke plants ala France or buy natural gas from Russia which, correct me if I'm wrong, provides the other 50% of their energy needs right now, when they're not stuck at the end of a dry pipe as the Ruskies turn off the valve in the middle of winter to coerce the odd former Soviet republic or satellite in between to pay their gas bill.
So yeah, the Germans really do not want to be dependent on an undependable hardass like Putin for their basic fuel needs. Our problem isn't quite the same as there's.
The problem is there are billions out there in failed and failing renewable energy projects financed by Bush and Obama. Of course Republicans will hammer Obama for them and claim they misread the energy business and poured money into losing ventures. There is such a natural gas glut in this country that no other energy source but oil can compete. Gas is at about $2.50 /MMBtu and dropping. T. Boone Pickens has sold all his holdings in it because it's so cheap there's too little profit in it or makes all others except oil uncompetitive. One big truckstop retailer is building 100 nat gas fueling stations for big rigs because n-gas price translates to about $1.50 gallon cheaper than diesel. Oil is still holding up because the cost of fueling infrastructure and engineering new cars is too costly to change over cars and planes. For now anyway. .
Because of "use it or lose it" producer lease laws gas producers have to keep drilling, pumping and selling, they can't buy leases and sit on them or cap the wells to keep prices up. So rather than lose their sunk costs they keep flooding the market with nat gas they make little to no profit on. Ain't capitalism grand?
Solyndra is only the tip of the iceberg. It appears all those renewable projects funded by Bush and Obama are going under along with the rest of the solar, coal, nuclear and wind industries. They can't compete according to Pickens unless gas is at $6.00 /MMBtu.
Alternative energy industries are still infant industries in the US and should be protected with high tariffs against cheap foreign imports, subsidized for Research and Development and provided for with a national investment in start-up monies.
Visit Portland,OR and you will see you will see solar panels an almost every building. It is so very important that these energy saving panels be of the highest quality and erected by a qualified work force in order to guarantee efficiency. There is no way to cut corners on this enterprise. Consequently, this industry is of no value to vulture capitalists like Romney and his cronies. I am confident that with the rise of GM, America will regain its reputation for producing quality goods over profit. Our future as a nation depends on it.
I would hope that America could be both innovative and profitable.
Successful companies aren't usually profitable because they make inferior products and sell them at higher prices. If that were the case then no one would buy the products and the company would fail as it should.
Unless of course it were protected by tariffs and/or financed by the government. Then we'd have no choice.
OK, I am pretty ignorant about money related stuff, but is that really the way a "private equity" company works? It buys up another company, loads it with debt, takes out fees and walks away? That sounds like a bait and switch scam! I am figuring the company that was taken over was kind of polished up to make its books look good using borrowed money, offloading workers, selling valuable assets and patents, etc., so it could be sold to someone else at a profit based on an inflated "value".
That sounds like buying a car, taking out any good-quality machinery and replacing it with junk, and selling it based on its new paint-and-wax job.
In other types of commerce, isn't this kind of thing illegal?
Money moves around faster than the speed of light these days. Capital markets have an inherent bias toward short-term gains and do not like risky, large scale projects with long gestation periods. If the capital market is too cautious to finance a viable project the govt may step in to invest for the betterment of the public good. Hence, hybrid private /public investment. Capital market failures are more likely in the early stages of development when the capital market is underdeveloped and more conservative. There is nothing illegal about it. Comparing Solyndra to Bain Capital is like comparing apples to orangutangs.
I'm with you. Is that what really happened? If so any misrepresentation of a company's financial situation to potential buyers would constitute fraud.
I've been having trouble finding good info on this issue. Does anyone know if there have been any investigations on Bain Capital? I haven't found anything.
It seems counter intuitive to believe that Mitt would want Bain to be compared with Solyndra. Can anyone tell me where or when this started.
Also, I can understand how a company can become more profitable by laying off workers and I can understand that sometimes it is better to sell off a failing company's assets and disolve it if it is going to fail, but does anyone have any specific data on this topic. I keep on finding opinions about it, but very few facts or useable info.
Any help would be appreciated. thanks.
Please read Matt Tiabbi's article in Rolling Stone on Romney and Bain Capital. It is eye-opening and informative.