What will Obama's legacy actually be?
Early on the Obama administration, conservatives took umbrage at the government loaning money to Solyndra, the ill-fated solar company. In case you missed it, Solyndra came up with a cockamamie design for solar panels using glass tubes which were sputtered like semiconductors. It offered no real advantage over traditional solar and in fact cost a lot more. Then, cheap solar panels from China flooded the market and the entire thing went bankrupt. No one is selling tubular solar anymore.
Those on the Left argued that the government should subsidize energy alternatives. At the time of the market crash, or more precisely just beforehand, we had a mini-energy-crises in the US, with gas shooting up to $5 a gallon briefly in 2008 and just as dramatically crashing in 2009. The Energy loan program has, since then, managed to turn a profit. But not before a few high-profile losses.
Nevertheless, many on the right argued that these kind of programs favored one business over another, which is something those on the right have no trouble with when the business being favored is theirs. But it raises the question, how much should the government intervene in markets and try to influence technology?
Back in the 1960's, cars ran on carburetors and leaded gas. Smog choked our cities and a "powerful" car might get 350 horsepower out of a 350 cubic inch engine - on a good day - and get gas mileage in the teens, if the owner was lucky. Pollution controls and safety standards implemented in the 1970's caused cars to get horrible gas mileage and put out pitiful amounts of power - and run like crap. But a funny thing happened. By the 1980's horsepower was up, emissions were down, and gas mileage got better and better. Today, you can buy a car that cranks out 300 horsepower out of 3 liters and gets 30 miles per gallon, and pollutes so little that you would be hard pressed to die of CO poisoning if you locked yourself in the garage.
Now, granted, much of this change was due to competition in the marketplace - particularly foreign competition. When Japanese and European cars started putting out more power on less engine, the US automakers took note. But our foreign counterparts didn't have the strict emissions rules we had here in the States - rules that today they have only relatively recently adopted themselves. And the air today is cleaner as a result of these regulations - and cars get better mileage because of CAFE requirements as well.
So, it is possible that sometimes, government regulations can push an industry in the right direction. But there is a huge difference between mandating that all players in the market behave a certain way and to loaning or giving money to selected players or selected industries, and the latter is what upsets conservatives.
Another legacy of the Obama administration was the JOBS act which created something called Regulation A - allowing startup companies to raise money through crowdfunding and issuing stock in a more informal manner. In other words, with few regulations - the opposite of what Democrats are supposed to believe in. While many hailed this as an advancement, allowing small-time entrepreneurs to get into the game, the record of crowd-funding has been spotty, to say the least. As it turns out, a lot of money has changed hands and not a lot of product has been shipped. And perhaps the poster boy for this has been Elio motors - a Regulation A company that is set to unwind the entire concept.
The Elio thing sticks in my mind because as an Engineer I cannot see how this concept could work - where so, so many others have failed. The cost and mileage targets are insane, and well, we are seeing the whole thing melt down in slow motion, with thousands of people losing money, in terms of non-refundable deposits (60,000 people @ $1000 apiece is $60 Million!) or folks who bought the OTC stock that has now sunk tosix bucks $4.50 a share. The folks snookered into this deal are not sophisticated, but rather are being manipulated by a lot of hype and hoopla.
But hey, don't worry about Elio. It's not too late to make a deposit on your air-powered car!
Sadly, both hyped vehicles will never see the light of day. And the people plunking down money for imaginary cars are Externalizers - people who won't take action in their own lives until the world changes to suit their tastes. When it was mentioned to one Elio believer that for the price of an Elio they could buy a nice late-model second-hand car with four wheels, doors, and seats, and drive it home today, their response was, "well, then you'd have to deal with an unreliable secondhand car!" - as if a three-year-old Corolla was some clapped out piece of trash.
Who are these people? Not professional investors. Not engineering types. From what I can divine online, the typical Elio deposit holder or investor (other than the insiders, for the latter) is young, male, left-leaning, and harbors mild conspiracy theories about the oil companies, the "big three" and "evil corporations" in general. They didn't so much invest in Elio as try to make a political statement. This is a dangerous thing, I think, when people blend politics with investing. Yea, sure, it would be nice to fund politically-correct industries, but if they end up losing money or are outright frauds, are we really saving the planet?
And moreover, doesn't this Regulation A filing thing seem like a really bad idea in terms of consumer protection? We are not protecting the small investor, who is most likely to be harmed by sketchy or even outright fraudulent stock offerings - which are targeted at the small investor. The whole crowdfunding thing is no different - asking people for non-refundable deposits on things that don't exist yet. There is a reason that these types of "investments" were illegal at one time.
It seems odd to me that an administration that was obsessed with regulating Wall Street more, created a huge loophole in the securities field, that allows small shady companies to offer stocks to unsophisticated investors with little or no oversight. The same administration that wanted to crack down on "the big banks" for financial sloppiness, was willing to allow crowdfunding and Regulation A stock issues, with little or no oversight. And the latter was far more likely to rip-off the small investor than the former.
But then again, the administration got snookered the same way with Solyndra. They wanted to believe it would work, without doing the requisite math. They loaned money to a company that Wall Street and the Banks would not touch. And maybe they should have listened to the professional investors before committing government money to the project.
What will Obama be remembered for? Obamacare? Solyndra? The JOBS act and stock fraud? It is hard to say. But I think overall, his legacy will not be as spit-shined as some on the left want it to be. Granted, Republicans never really gave him a chance at all. But then again, he never really tried very hard to woo the few votes he needed to get some of his agenda passed.
I think even die-hard Democrats see the Obama years as a series of missed opportunities, and not just because the intransigence of the GOP. And today, we lurch forward with a national healthcare plan that is a patchwork of Medicare, Medicaid, VA, private insurance, company insurance, and Obamacare "market" plans, all of which have flaws and need fixing - but no one wants to do the hard job of fixing, just destroying.
And sadly, a small minority of Americans (like me) are buying our own policies in the Obamacare "marketplace". So the government feels it can shit all over the 10-20 million of us, because they can get re-elected, even if we vote.
No, I am not sure that Obama's legacy will be all wine and roses.
The Elio thing sticks in my mind because as an Engineer I cannot see how this concept could work - where so, so many others have failed. The cost and mileage targets are insane, and well, we are seeing the whole thing melt down in slow motion, with thousands of people losing money, in terms of non-refundable deposits (60,000 people @ $1000 apiece is $60 Million!) or folks who bought the OTC stock that has now sunk to
But hey, don't worry about Elio. It's not too late to make a deposit on your air-powered car!
Sadly, both hyped vehicles will never see the light of day. And the people plunking down money for imaginary cars are Externalizers - people who won't take action in their own lives until the world changes to suit their tastes. When it was mentioned to one Elio believer that for the price of an Elio they could buy a nice late-model second-hand car with four wheels, doors, and seats, and drive it home today, their response was, "well, then you'd have to deal with an unreliable secondhand car!" - as if a three-year-old Corolla was some clapped out piece of trash.
Who are these people? Not professional investors. Not engineering types. From what I can divine online, the typical Elio deposit holder or investor (other than the insiders, for the latter) is young, male, left-leaning, and harbors mild conspiracy theories about the oil companies, the "big three" and "evil corporations" in general. They didn't so much invest in Elio as try to make a political statement. This is a dangerous thing, I think, when people blend politics with investing. Yea, sure, it would be nice to fund politically-correct industries, but if they end up losing money or are outright frauds, are we really saving the planet?
And moreover, doesn't this Regulation A filing thing seem like a really bad idea in terms of consumer protection? We are not protecting the small investor, who is most likely to be harmed by sketchy or even outright fraudulent stock offerings - which are targeted at the small investor. The whole crowdfunding thing is no different - asking people for non-refundable deposits on things that don't exist yet. There is a reason that these types of "investments" were illegal at one time.
It seems odd to me that an administration that was obsessed with regulating Wall Street more, created a huge loophole in the securities field, that allows small shady companies to offer stocks to unsophisticated investors with little or no oversight. The same administration that wanted to crack down on "the big banks" for financial sloppiness, was willing to allow crowdfunding and Regulation A stock issues, with little or no oversight. And the latter was far more likely to rip-off the small investor than the former.
But then again, the administration got snookered the same way with Solyndra. They wanted to believe it would work, without doing the requisite math. They loaned money to a company that Wall Street and the Banks would not touch. And maybe they should have listened to the professional investors before committing government money to the project.
What will Obama be remembered for? Obamacare? Solyndra? The JOBS act and stock fraud? It is hard to say. But I think overall, his legacy will not be as spit-shined as some on the left want it to be. Granted, Republicans never really gave him a chance at all. But then again, he never really tried very hard to woo the few votes he needed to get some of his agenda passed.
I think even die-hard Democrats see the Obama years as a series of missed opportunities, and not just because the intransigence of the GOP. And today, we lurch forward with a national healthcare plan that is a patchwork of Medicare, Medicaid, VA, private insurance, company insurance, and Obamacare "market" plans, all of which have flaws and need fixing - but no one wants to do the hard job of fixing, just destroying.
And sadly, a small minority of Americans (like me) are buying our own policies in the Obamacare "marketplace". So the government feels it can shit all over the 10-20 million of us, because they can get re-elected, even if we vote.
No, I am not sure that Obama's legacy will be all wine and roses.
