Quote of the day, investment practices edition

Generalizing on the subject of the Solyndra bankruptcy to the differences between federal and private investment, Megan McArdle writes:

Venture capitalists, at least in theory, lend money to firms like Solyndra because they think that doing so will make them more money.  Government programs lend money to firms like Solyndra because they want to lend money to “green” firms.  They don’t lend until the returns drop below some threshold; they lend until they run out of the money that Congress has authorized them to lend.

When banks engage in this sort of behavior, we call it a bubble, and try to figure out how to fix things so they won’t do it again.  When government agencies do this, we call it a weekday.

(Emphasis added.)

Kinda makes you look at those mortgage income tax deductions a bit differently, doesn’t it?


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anarchocapitalist agitprop

Be advised

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