I get Joe Nocera’s point in his latest column that there is less scandal in the Solyndra loan affair than meets the eye, but I’m still stuck on this paragraph here, which seems key:
But if we could just stop playing gotcha for a second, we might realize that federal loan programs — especially loans for innovative energy technologies — virtually require the government to take risks the private sector won’t take. Indeed, risk-taking is what these programs are all about. Sometimes, the risks pay off. Other times, they don’t.
What does this mean? It seems to imply that federal loan programs exist to take risks that the private sector won’t, which is superficially plausible, but troubling if taken very far down that road. There are, after all, good reasons why the private sector won’t take certain commercialization risks, and it’s not obvious that the Federal government is better equipped to do so. The argument changes in basic research, of course.