Barack Obama is a Terrible Fund Manager, and a Rotten Tech VC

Obama is a terrible tech investor.  If the USA was a hedge fund, he’d be looking at a total collapse.  

First, he lost $500 million on a failed, foolish, and almost corrupt investment in Solyndra, the high-flying and high-overhead solar panel maker, run by some of his financial backers.  Talk about crony capitalism.

Now, he’s lost another $100 million on something called Ener1.  From Heritage’s excellent blog, The Foundry, a post by Lachlan Markay — and if you’re not bookmarking him, you should be:

After months of financial turmoil, an Energy Department-backed lithium ion battery company has filed for Chapter 11 bankruptcy protection.

The company, Ener1, received a $118 million grant from DOE in 2010 as part of the president’s stimulus package. The money, which went to Ener1 subsidiary EnerDel, aimed to promote renewable energy storage battery technology for electrical grid use.

But despite generous federal support for the company, Ener1 was racked by problems last year. In October, NASDAQ delisted the company due to non-compliance with Securities and Exchange Commission filing requirements. A month later, the company’s president, chief executive, and top financial officer were fired.

And wait!  There’s more:

Ener1 is not the first energy storage technology company to file for Chapter 11 after receiving significant stimulus support. Beacon Power, which manufactures flywheel energy storage technology, received a $43 million loan guarantee from the same stimulus program that funded Solyndra. Despite having used $3 million marked for loan repayment to continue funding its daily operations, Beacon filed for Chapter 11 in November.

It’s one thing to lose money that investors gave you voluntarily.  Anyone who would voluntarily bet that a community organizer from Chicago with zero private-sector experience knows how to invest billions of dollars in the tech sector deserves to lose it all.

But it’s your money he lost.  And not today’s money, either.  He’s lost money that you haven’t even earned yet.  He’s losing money you haven’t even seen yet.  And he promises to lose more.  From Politico:

President Barack Obama isn’t letting Solyndra scare him away from pushing a green energy agenda.

Pivoting off a State of the Union address in which he vowed not to “walk away from the promise of clean energy,” Obama doubled down Thursday by highlighting incentives for windmills, solar panels and natural gas vehicles during visits to key battleground states Nevada and Colorado.

Obama’s got the easiest job in high finance.  I’ll bet fund managers and venture capitalists everywhere are green with envy.  He can invest in whatever he wants.  He can lose as much as he wants.  And his investors — you and me — just have to sit and watch him do it.

  1. tabula rasa

    When the market demands this stuff and when it is economically viable, it will be built by private capital.  Until then, it’s just game-playing with our money.

    Forgive me for saying this yet again.  How can our smartest president ever not see this?  Of if he sees it, not care?  

    It makes me sick.

  2. Aaron Miller

    Millions? Pfft.

    I got some interesting chain mail today:

    Why the U.S. was downgraded:

    * U.S. Tax revenue: $2,170,000,000,000 * Fed budget: $3,820,000,000,000 * New debt: $ 1,650,000,000,000 * National debt: $14,271,000,000,000 * Recent budget cuts: $ 38,500,000,000

    Let’s now remove 8 zeros and pretend it’s a household budget:

    * Annual family income: $21,700 * Money the family spent: $38,200 * New debt on the credit card: $16,500 * Outstanding balance on the credit card: $142,710 * Total budget cuts: $385

    Got it?

    OK, now Lesson # 2: Here’s another way to look at the Debt Ceiling:

    Let’s say, You come home from work and find there has been a sewer backup in your neighborhood. Your home has sewage all the way up to the ceiling.

    What do you think you should do? Raise the ceiling, or pump out the crap?

    Stuff like this zooms around the internet every day, yet it apparently never crosses the minds of Republican politicians to speak with similar clarity.

  3. Stuart Creque

    And did he do much better on his “investments” through ARRA and TARP? It’s pretty clear USA LLC is in a state of total financial collapse.

  4. Percival
    Aaron Miller: Millions? Pfft.

    Here’s another way to look at the Debt Ceiling:

    Let’s say, You come home from work and find there has been a sewer backup in your neighborhood. Your home has sewage all the way up to the ceiling.

    What do you think you should do? Raise the ceiling, or pump out the crap?

    First of all, I’d get someone else to open the door.

  5. DocJay
    Percival

    Aaron Miller: Millions? Pfft.

    Here’s another way to look at the Debt Ceiling:

    Let’s say, You come home from work and find there has been a sewer backup in your neighborhood. Your home has sewage all the way up to the ceiling.

    What do you think you should do? Raise the ceiling, or pump out the crap?

    First of all, I’d get someone else to open the door. · 0 minutes ago

    Obama has and it’s our kids/grandkids.  He’s voted present.  Of course what should we expect from a man who has always had someone else paying the bills.

  6. Snow Bird
    tabula rasa:

    When the market demands this stuff and when it is economically viable, it will be built by private capital.

    This is beyond the comprehension of leftist socialist economic policy makers.

    Equally incomprehensible is the concept of creation of wealth. In their minds, there is a fixed amount of wealth and the only way to increase the wealth of one sector is to take it away from another.

    Little else is needed to explain European and, increasing, American governing policy.

  7. James Of England
    Craig M: Rob, thanks for posting this. I was thinking along these same lines when I heard about Obama’s latest “bad investment.” I really hope Romney’s people have made the same connection and use this to counter the inevitable Bain Capital criticism we’ll hear if/when Romney makes it to the general election. · 5 hours ago

    It’s a big part of the stump speech, a standard example used to outline what is meant by “[Obama] has no experience in the real world/ private sector/ real economy”.

  8. wilber forge

     There is a huge technological gap with moving to anything close to affordable Green energy. We have been at this for decades and are no closer. The act of just throwing money at the problem is very bad management.

    For all those who cringe at nasty oil, I encourage you to put open mason jars on the porch and capture the magic. When arriving home, cap the jars, take them inside and bask in the warmth and light it provides.

  9. Alcina

     I’m always amazed at the way people ignore the machine-politics aspects of Obama’s policies.  He’s handing out taxpayer cash to his political supporters and favored constituencies. For him, whether these are good “investments” by any VC standard is just beside the point.

  10. Chris Johnson

    “How can our smartest president ever not see this?”

    Of course he sees this.  Of course he cares, which is why all of his “economic” advisors are gone.

    He’s Shooting the Moon, folks, a reference that people that have played Hearts will get.  He is trying to win the “tricks” you are suppposed to avoid, in a spectacular fashion, to win the hand that he is playing, that is counter to every other strategy for winning.  Nobody would ever Shoot the Moon with something as critical as the American economy, except for someone that never cared about the actual economy in the first place.

    This isn’t a game where the other players can toss their cards and cuss at the Shooter for taking a brazen approach, before everybody gets a fresh beer.  This is a Moon Shot to take this country down by spending as rapidly as possible, as long as possible.  There is intent.

  11. DocJay

    There is absolutely intent.  Summer of 2008 I had lunch with one of the top investors in our country.  This billionaire was going on about Obama being ready to spend spend and then spend.  I countered that Bush was horrible with spending so how bad could it be and his answer still haunts me.  ”Jay, you ain’t seen nothing yet”. From a BTO quote comes our BHO disaster.  Never in the history of mankind has one man been so utterly irresponsible with our money.

  12. Covert Conservative

    Rob, thanks for posting this. I was thinking along these same lines when I heard about Obama’s latest “bad investment.” I really hope Romney’s people have made the same connection and use this to counter the inevitable Bain Capital criticism we’ll hear if/when Romney makes it to the general election.

  13. Covert Conservative
    James Of England

     Craig M: I really hope Romney’s people have made the same connection and use this to counter the inevitable Bain Capital criticism we’ll hear if/when Romney makes it to the general election. · 5 hours ago 

     It’s a big part of the stump speech, a standard example used to outline what is meant by “[Obama] has no experience in the real world/ private sector/ real economy”. · 36 minutes ago

    If the way you phrase it — “a standard example” — is indicative of the treatment it gets in the speech, that’s part of the problem. This administration’s insistence on the prerogative of government to “pick winners and losers,” and it’s reality of picking mainly losers, is an argument that has grown from a theoretical one to one with real-world evidence that keeps growing. How this can make a dull speech is beyond me.

    From the criticism I’ve read, it seems like this argument is being subordinated to a larger, boilerplate (and unconvincing) “Vision for America.” It’s time to just let Romney be Romney, the brilliantly dull manager America needs.

  14. Steve MacDonald

    I agree with some above that this simply has to be intended. What amazes me is the Republican side of the debate. By the end of his term, Govt. debt will have increased far more than 50%. We have put in place new entitlement programs that will accelerate the debt accumulation pace.We have regulatory programs that throttle small business initiative (our job growth engine). We have steadfastly worked against affordable and abundant energy to facilitate growth.  We have blown by the 90% to GDP debt threshold that is proven to reduce GDP by at least 1%.

    Yet the only potential candidate, Gov. Daniels, who tried to focus the debate on this was lambasted out of the race. None of the remaining candidates speaks seriously to the situation….besides Ron Paul who is considered unelectable.  

    The functional difference between Obama and the Democrats and their political opponents appears to be the speed at which we arrive at our final collapse, not the end destination. 

  15. Timothy Patton
    CJRun: “How can our smartest president ever not see this?”

    Of course he sees this.  Of course he cares, which is why all of his “economic” advisors are gone.

    He’s Shooting the Moon, folks, a reference that people that have played Hearts will get.  He is trying to win the “tricks” you are suppposed to avoid, in a spectacular fashion, to win the hand that he is playing, that is counter to every other strategy for winning.  Nobody would ever Shoot the Moon with something as critical as the American economy, except for someone that never cared about the actual economy in the first place.

    This isn’t a game where the other players can toss their cards and cuss at the Shooter for taking a brazen approach, before everybody gets a fresh beer.  This is a Moon Shot to take this country down by spending as rapidly as possible, as long as possible.  There is intent. · Jan. 27 at 4:29pm

    Edited on Jan. 27 at 4:32pm

    Wonderful analogy.  I think I will use it with my friends of the left, especially the ones who still think Obama plans well.  At best, he’s reckless.