It seems that Nobel Prize-winning economist and reliable regime apologist Paul Krugman thinks he can wave away the Solyndra scandal with a reference to an iconic business failure from the dot-com era:
But it is indeed a terrible scandal, because the private sector never ever puts money into ventures that end up failing:
He then punctuates his point (oh so pithy!) by posting an image of Pets.com and its sock puppet. I’m not sure if the sock puppet is equivalent to President Obama or Solyndra backer George Kaiser, who raised significant funds for Obama’s campaign, in this context.
What I’m also unsure about is if Krugman is an idiot, or just disingenuous, if he believes he can refute the criticism leveled at the Solyndra fiasco – not just from media, but from House investigators wondering how the company secured half a billion dollars in loan guarantees and made it all go up in smoke – merely by pointing out that private investors screw up, too. He cannot possibly be oblivious to the huge difference in moral hazard presented when government throws taxpayers’ money at private business versus when private investors use their own money.
It isn’t that private equity is never lost in business ventures. It’s that there’s a level of accountability when it happens. And there is little doubt that venture capital investors learned a lot from the dot-com bubble. Government will never learn the same lessons, because it throws stolen wealth at the ventures which are best connected politically, not those which it thinks will succeed.
Coyote Blog has a few more salient points in a response to Krugman.