By Jennifer Granholm, POLITICO
Never mind our worry that China will again outshine the U.S. in gold medals at the Olympics. The Chinese are more focused on besting us in another competition — the global race for energy investment and jobs. With an assist from Manchurian-candidate Republicans, they just might do it.
The lead in The New York Times business section on Tuesday, “China is making its biggest and boldest grab for overseas energy resources yet,” is about China’s $15 billion bid for a Canadian oil producer. And that’s only about half of what China invests in solar technology.
Meanwhile, back at the ranch, congressional Republicans, debating ways to gut the Department of Energy’s investment in clean tech, are now doing their level best to put a stake through the heart of the U.S. ability to out-innovate and out-compete the Chinese.
The Republican challenger for the White House isn’t doing any better. Despite former Massachusetts Gov. Mitt Romney’s tough talk on competing with China, his campaign is trying to win by proposing to eviscerate the U.S. government’s role in investing, too. Though Romney invested in clean energy all the time as governor.
It’s well known that Romney, when in Massachusetts, championed alternative energy investment and bragged about the jobs it created. Despite facing a large state budget deficit, Romney took $15 million from the economic development fund, invested it in the Massachusetts Green Energy Fund and gave that money to independent, private investors to manage.
Fast-forward to today. Out of the 14 investments that Romney made through private-sector investors, three are bankrupt — more than a 21 percent failure rate. Granted, it’s a small sample. Romney’s private-sector Bain Capital record doesn’t look much better. Of the 77 businesses the firm invested in while Romney was in charge, 22 percent filed for bankruptcy or went out of business by the eighth year. In 8 percent of those companies, Bain’s entire investment was lost.
This rate of failure is understandable, you may say, given this is new technology — there’s bigger risk involved.
Well, someone forgot to tell the Department of Energy about the high failure rate in early-stage technology investments. Because they didn’t experience it.
In recent testimony before House Republican Darrell Issa’s We-Have-Nothing-Better-to-Do-Than-Form-a-Clean-Energy-Witch-Hunt Committee — otherwise known as the House Committee on Oversight and Government Reform — former Department of Energy loan director Jonathan Silver provided a “wow” moment.
“While not every investment will succeed,” Silver testified, “the portfolio is in good shape. The funds represented by investments that have failed represent less than 3 percent of the total portfolio. This is a record the private sector would consider remarkable but is particularly impressive for a portfolio of technologically innovative projects being built at a commercial scale for the first time anywhere.”
A 3 percent investment failure rate born of government decisions? Maybe the private sector could take investment tips from the U.S. government. Seems the taxpayers would be much better off.
In addition to that low failure rate, Silver made a crucial point: The DOE fund was created because the U.S. needs to advance alternative energy sources to replace foreign oil — and risk-averse private investors won’t provide the capital needed to bring unproven technology to scale. If we are to move forward and compete with other nations — like China — the government must step in where the private sector fears to tread.
But the tea party patriots prefer to watch the competition from the stands rather than get into the arena.
Psst, dear Republicans, I’ve got a news flash: Americans like these investments! Despite your rush to trash clean energy investments and Solyndra, Americans still want our government to invest in clean energy. A recent National Journal poll showed that 64 percent of respondents wanted to see the government extend tax credits for clean energy and create a clean energy standard for the country.
Meanwhile, Gallup shows that 69 percent support “spending more government money” on developing solar and wind power.
Of course, in everything there are failures. For every failed Solyndra under DOE auspices there is a failed Konarka solar panel maker under Romney in Massachusetts. Konarka got significant assistance from state government but failed despite the help. Does that make the policy wrong?
No. It makes the politics of slamming any failure wrong. If Republicans in Congress are demanding perfection from government and aren’t willing to accept even a 3 percent failure rate, they have chosen a strategy of forfeiting the race. We aren’t even in the starting blocks. It’s cowardly politics and feckless policy.
I visited China last year to see the mind-blowing investments being made in clean energy. At one stop, a member of the Chinese delegation approached me and asked, “So, when do you think the U.S. will adopt national energy policy?” I rolled my eyes and shrugged my shoulders. “With the tea party and Republicans in Congress,” I sighed, “it won’t happen anytime soon.”
The official smiled with delight. “Take your time,” he said. “Just take your time.”
So, Republicans, go ahead and take your sweet time on investing in our future. Just know that, as we sleep, China is grateful for your inaction, moving into position to win the gold. And smiling all the way.