When asked about high gasoline prices President Obama cooed about the future cars that will get 75 miles an hour on his hot air effusions….. Here is another big flop ….. rsk
Mitt Romney quipped in the first Presidential debate that the problem with the Obama Administration’s green energy investing isn’t that it tried to pick winners and losers, but that “you pick the losers.” He was being generous. Another big green Administration favorite went belly-up on Tuesday with the Chapter 11 filing by battery-maker A123 Systems Inc.
Massachusetts-based A123 is—or was—part of President Obama’s grand design to build a U.S. electric-car industry more or less from scratch. The company was founded by entrepreneurs in 2001 to make lithium ion phosphate batteries and attracted private investment from the likes of Sequoia Capital and GE. Then Washington picked up the green energy fad.
As Mr. Obama put it in August 2009, the government would create an “infrastructure of innovation” by doling out “$2.4 billion in highly competitive grants to develop the next generation of fuel-efficient cars and trucks, powered by the next generation of battery technologies, all made right here in the U.S. of A.”
In a September 2010 congratulatory phone call to A123’s Livonia, Michigan plant, Mr. Obama called it “the birth of an entire new industry in America.”
Democrats were explicit that this was an attempt to rehabilitate the idea that government could nurture new industries. As Michigan Senator Carl Levin said in a 2011 speech, A123’s factories “are a forceful rebuttal to those who argue against public investment in this field, people who label this ‘industrial policy.’ In the not too distant past, that label—’industrial policy’—was the kiss of death for any proposal. That’s an ideological hang-up that we’ve now overcome.”
One not-so-ideological hang-up: The technology and market for such an industry didn’t and still doesn’t exist for commercially profitable levels of production. Electric-battery storage in particular has bedeviled technologists for decades. But rather than fund basic research—arguably a role for government—Mr. Obama and his green friends decided to play venture capitalist and industrial planner. With your money.