Another Of Obama’s “Green Jobs” Investments Going Belly-Up
The Obama/Democrat economic model of picking winners and losers in the market would work a lot better if they didn’t pick so many losers.
A geothermal energy company with a $98.5 million loan guarantee from the Obama administration for an alternative energy project in Nevada — which received hearty endorsements from Energy Secretary Steven Chu and Senate Majority Leader Harry Reid — faces financial problems, and the company’s auditors have questioned whether it can stay in business. …
Nevada Geothermal Power (NGP) has incurred $98 million in net losses over the past several years, has substantial debts and does not generate enough cash from its current operations after debt-service costs, an internal audit said. …
But Rep. Jim Jordan, Ohio Republican and chairman of the House Oversight and Government Reform subcommittee on regulatory affairs, stimulus oversight and government spending, is concerned about NGP’s finances and the timing of the loan guarantee.
“The company was in danger of defaulting on its financial obligation, and the [Department of Energy‘s] assistance served as a de facto bailout,” Mr. Jordan said. “After receiving a taxpayer-backed $98.5 million loan guarantee, the company is still struggling.”
This illustrates, once again, the fundamental problem with government “investment.” Companies with sound business models, that provide goods/services that are competitive in the market place and in demand, have no problem attracting private investment. It’s only companies with unsound business models, offering goods/services that are uncompetitive and/or have only marginal appeal, that require government assistance.
And, of course, pumping millions of dollars into companies like that doesn’t make them any more likely to succeed.
Giving government money to companies that would succeed without it is corporate welfare. Giving government money to companies that can’t exist without it is a waste of money.Tags: Economy, green jobs