The “Barack Bounce”: Obama the President of Endorsement Fails

COMMENTARY - While many criticize his performance record presiding over the largest economy in the world, President Barack Obama seems to have a horrible performance record on a micro-economic level. The latest example of the President’s inability to pick “winners” comes two days after his 2012 State of the Union Speech, during which he praised Ener1 as an example of successful energy investments.

“In three years, our partnership with the private sector has already positioned America to be the world’s leading manufacturer of high-tech batteries,” Obama said in his speech. Sadly, if this were true, then the high-tech battery sector is doomed.

Despite the Federal Government’s good intentions, the aid that it gave to Ener1 was not enough to stave off bankruptcy. Ener1 received $118 million in U.S. Energy Department grant money to make electric-car batteries, and while the major automotive manufacturers are starting to get closer to making hybrid and electric cars more mainstream, the company couldn’t stay afloat even with the injection.

To be fair, the money was directed to Ener1’s subsidiary EnerDel, of which only $55 million had been paid to date. But the lesson that needs to be learned is that, even though the government has enough incentive to invest in the green sector, given energy independence worries and a growing concern for the environment, the fact of the matter is that government intervention in business is not going to breed the kind of corporate responsibility needed for a truly sustainable business in the future.

If these companies are to make us believe that they can persist without massive government aid, the track record is going to have to improve. Case in point, Solyndra, a California business that received a $535 million loan guarantee from the government before going bankrupt last September. Besides receiving funds before bankruptcy and subsequently going bankrupt, what else does Solyndra have in common with Ener1? Obama mentioned Solyndra in his State of the Union Speech last year.

Now, Obama’s predecessor wasn’t too slick with his green shoutouts either. During his 2006 State of the Union Speech, George W. Bush was touting switchgrass as the fuel of the future. To be honest, I haven’t heard much about switchgrass at all in the six years since that speech. At least with switchgrass, Bush wasn’t throwing money at it and watching it go down the drain. In the case of Ener1, at least the grant received bi-partisan support, but that doesn’t change the fact that Obama was so out of touch with his government’s “portfolio” that he failed to notice how close to death’s door Ener1 actually was before he praised them. How much proof do we need that politicians have no clue how to fix this sector?

Cherry-picking these two companies is not fair to the green energy sector. There are plenty of good stories to follow, and investment in green companies is necessary for society, especially when it comes to batteries and energy storage. But going forward, it’s probably good advice to back away from or short any company Obama throws his support behind, because a bankruptcy could be right around the corner.

G. Joel Chury
Editor in Chief
VantageWire.com