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Governments Green Energy Boondoggle Continues Growing

Posted by Steve Markowitz on October 19, 2012

Earlier this week green energy company A123 Systems failed costing taxpayers $229 million, as posted in this Blog on October 16.  This $229 million loss was but a drop in the bucket of the green energy companies backed the Obama Administration that have either failed or are failing.

Heritage.org posted an article reviewing the extent of waste involved in Obama’s backing of green energy companies.  Some 36 companies that received taxpayer funds are now either in bankruptcy or laying off workers.  The list of companies is posted below.

According to heritage.org, $80 billion was included in the 2009 Stimulus Package for green energy projects.  It has been estimated that 10% of these funds, $8 billion, have gone to companies that have since gone bankrupt or are in serious financial straits.

Venture capital investments are risky, even for the most skilled investors in the private sector who are held accountable for results. When governments are involved in such investments, the risk of failure increases significantly.  Government officials who make investment decisions have little experience in investing capital or the markets they invest in.  Worse, often the taxpayer funds are given to companies based on political connections rather than the appropriateness of their business plans.

One of the companies on the list below is LG Chem, a “producer” of lithium-ion batteries in Holland, Michigan.  Target 8 posted an article on the failure of this US government backed green energy company that was supposed to make batteries for automobiles including the Chevy Volt.  The Target 8 article points out that:

  • LG Chem employees have reported that they spend hours playing games, reading magazines or watching movies.  This is been ongoing for months due to lack of work with one employee stating: “There would be up to 40 of us that would just sit in there during the day.”
  • Other employees stated: “There’s no work, no work at all. Zero work,” and “what do you do when there’s no work?”.  Yet another stated “”I bailed out of a sinking ship.”
  • The U.S. Department of Energy gave a $151 million grant to this Korea-based company with $133 million spent so far of which 40% went to foreign companies.  Emphasizing the wastes, records indicate that $533,000 was spent on the groundbreaking ceremony, $7 million training workers and $700,000 for workers’ health insurance.
  • According to former LG Chem employee Merryman, the plant “never produced a battery for shipment; still to this day, they’re not”.

During the expensive and taxpayer paid groundbreaking ceremonies for the plant in July, 2010, President Obama used the event as a poster child for his green energy investment plans stating: “This is a symbol of where Michigan is going, this is a symbol of where Holland is going, and this is a symbol of where America’s going.”  Unfortunately, here the President was correct.  The direction that Obama has taken Holland, Michigan is direction he is also taking the Country.

Crony capitalism is a corruption of not only the capitalist system, but of government as well.

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