There are essentially two approaches to government stimulus programs.
One, you can refuse to participate in these programs on the grounds that subsidies distort the market and lead ultimately to economic inefficiency.
Two, you can take the money with the realization that it pushes you into a murky realm where free market fundamentals, regulation and social policy intermingle.
But there's certainly one thing you can't do. You can't ask and/or obtain stimulus funds AND complain that these programs are futile, expensive and doomed.
Unfortunately, it doesn't stop people from trying. T.J. Rodgers, the CEO of Cypress Semiconductor, helped revive the solar in the U.S. by investing in SunPower. He was also an early investor in Bloom Energy, a fuel cell developer. Both companies rely heavily on subsides.
Nonetheless, Rodgers--a committed libertarian--regularly complains about government regulation, R&D funding and subsides. He wore tri-cornered hats to public rallies years before it became a fashion statement.
He only gets away with it because 1) he's actually a lot of fun and 2) recognizes how subsidies can play a role in jumpstarting an industry.
Others are not so jolly. Mark Mills, a founding partner of Digital Power Capital and a former adviser to Reagan, is the latest example.
Last week in Forbes, Mills penned an article titled "Clean Energy Driven Job Growth is a Return to the Stone Age" that argues that green jobs largely represent a step backward in America's economic development. The problem is that these jobs are centered around construction, not breakthrough industries like manufacturing was in the 1920s or computing in the 1980s, Mills argues.
A significant part of his ire is directed at Brightsource Energy, which is building a 370 megawatt solar thermal plant in the Mojave in part through federal loans.
"Why in the world would anyone want the energy sector, in whatever form it might take, to be the engine of American employment recovery? Sure, at one time in history (and today in subsistence cultures) nearly 100% of employment was anchored in fuel jobs: food for humans and their animals, and fuel for heat and cooking. That, thankfully, isn't the case anymore," he wrote. "There are few seers who can see the next epicenter. I doubt it's in the Mojave Desert."
Fair enough, but here's the quandary: Mills' firm invested in a company called Infinia that wants to build solar power plants. In fact, Infinia has received over $12 million in grants from the Department of Energy. Senator Maria Cantwell visited in late 2008 to extol how federal tax credits allowed the company to expand manufacturing space and create green manufacturing jobs.
There are differences between Brightsource and Infinia. Brightsource's underlying technology shows more commercial promise according to some analysts, which partly explains why it has obtained more money from investors and the government.
Infinia also isn't one of those wacky outfits trying to build an epicenter in California's Mojave. It wants to erect plants in Arizona.
But Mills doesn't stop there. Another one of his companies is International Battery, which hopes to make large-format lithium ion batteries to help balance the output from solar and wind farms.
"We weren't the only ones having the thought that the government was interested in filling the funding gap - it may be that they'll still do it," said chairman Mark Mills in 2009."The DOE has to address whether or not they are concerned that emerging technologies will mature...We hope that the DOE decides that there may be follow-on to help entrepreneurs."
In Forbes, Mills wrote "But for matters of national policy and understanding where America is and must go for economic growth and employment? Please, don't put us back on the (wind, or solar) farm."
Like Rodgers, Mills is actually an intriguing character in person. He once explained to me how advances in computing have been a boon to energy efficiency. If Google had to make do with vacuum tube computers, a single data center would soak up as much power as Manhattan, he told me. He also is putting money into ventures that could one day become self-sustaining, game-changing names in biofuels and green electronics.
But if you're going to ask for taxpayer handouts, we'd all appreciate a little more gratitude.
Follow Michael Kanellos on Twitter: www.twitter.com/mikekanellos
NOAA forecasters estimate a 50% chance of minor geomagnetic storms today and tomorrow. Solar ejections are expected to deliver glancing blows to Earth's magnetic field.
The sun has begun a new 11 year sunspot cycle. Emissions have twice this year missed Earth. Another 500 plus are expected.
NASA forecasts four "extreme" events that could collapse power grids. And an additional 100 "severe" impacts during the next decade.
They warn that the eastern half of the USA might lose electric power for weeks!
Modern civilization depends on power grids. Water supply, food, and much else. Mills and everyone else building grid related systems may want to consider the alternatives.
See: www.aesopiÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂnÂÂÂÂÂsÂÂÂÂÂÂÂtÂÂÂÂÂÂÂÂÂiÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂtÂÂÂÂÂÂÂÂÂÂÂÂÂÂuÂÂÂÂÂÂÂÂÂÂÂtÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂeÂÂ.ÂÂÂÂÂÂÂÂoÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂrÂÂÂÂÂÂÂÂÂÂÂg for a few articles and an outline of how we can turn this threat, which will continue for the next decade, into a practical program of decentralized power.
A program to accelerate development, on a 24/7 basis, can generate cost-competitive green energy based on breakthrough technologies.
That can trigger far more rapid economic recovery and millions of jobs.
Future cars and trucks can become power plants when parked, selling power generated by revolutionary energy conversion systems. These vehicles may very well pay for themselves as investments.
They can also cost-effectively undercut the need for new power plants.
Incentives could encourage on-site distributed generation - a very wise insurance policy .
BULLSHIT, OF COURSE YOU CAN.
This has long been reocnized in economics as the 'tragedy of the commons.'
http://en.wikipedia.org/wiki/Tragedy_of_the_commons
The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently, and solely and rationally consulting their own self-interest, will ultimately deplete a shared limited resource even when it is clear that it is not in anyone's long-term interest for this to happen. This dilemma was first described in an influential article titled "The Tragedy of the Commons," written by Garrett Hardin and first published in the journal Science in 1968.
It's like Social Security. It's not a very good program. For certain classes of people, for instance black males, there is even a negative return on investment. They work long enough and unfortunately die soon enough that they don't get their own deposits (theirs plus their employers share) in their average lifespan after starting benefits.
But that doesn't mean that we who are compelled by the police power of the state to pay for these programs shouldn't at least get back OUR OWN MONEY by signing up for these programs. No reason to let the people who are ignorant enough to believe they are cost-effective get ALL our money.