Government as VCs is Bad M’kay

The government is not a business and it shouldn’t be run like one.
Say this about 1000 times until you understand it.

Done? Good

This morning I read Scott Woolley’s post on Slate Tesla Is Worse Than Solyndra that laments the US gov investment didn’t look the like the investments of the venture capitalists and that the US gov should now own a stake in Tesla as a result. While on a very superficial level I could see why one would think so, but if you dig deeper it is a horrible idea for the gov to play VC.

VCs use their connections and influence in an attempt to ensure the success of their investments. Imagine the world of conflicts of interest that would arise were the gov to do the same? Oh we want to give Tesla a chance let’s raise gasoline taxes and offer tax credits for buying an electric car. Let’s make all new fed vehicle purchases Teslas. Let’s legislate a ban on non-electric cars… You see where I’m going with this the gov acting as a VC is rife with problems.

The way the gov approached Tesla is the same way the gov approaches its investment in college education, they back loans that wouldn’t be granted by conventional institutions with knowledge that many will fail and some will succeed, but the overall goal is to have a more educated population. What they did with Tesla and Solyndra is the same, they backed loans on favorable terms in order to achieve a goal that makes the country better as a whole. Having a cutting edge electric car company is good for the US just as having an educated population is good for the US. You’d never suggest that the gov claim an ownership stake in students with the expectation of a cut of future earnings, so why should it be the same for Tesla. The US gov will receive its payback when Tesla creates jobs and pays taxes. If there were any terms the gov should have stipulated it should have been to ensure that Tesla stay in the US for 20 years and isn’t allowed offshore tax shelters or outsourced labor.

Eastern Motors

Where your job is your credit. Fellow C-List DC Blogger DCKatastrophe gifted me my very own car this weekend, she got a bunch of Eastern Motors schwag after mentioning them in her blog. I wonder if this is subliminally related to a not forgotten promise that if I’m ever in the the position where I can easily piss away $30k I’m going to buy her a pink Miata with the vanity plates “SNDYVAG”
Thanks!

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