Solyndra

[dcarrigg]

Re: Solyndra

Yes, this is of course a very questionable arrangement. I'm still unclear how EJ's proposed PPP differs in concept. Isn't any PPP then subject to political corruption?

Not necessarily. Corruption is always a risk. It can happen even without the public-private partnership.

For instance, it didn't take politicians to pull off Enron or Worldcom or Lehman or Healthsouth or Countrywide or Bear Sterns or Tyco or Conseco or WaMu etc. etc.

We are a nation - perhaps a world - led by kleptomaniacs and liars. (sorry for the cynicism...but it's bound to set in after typing out a list like that).

As for public private partnerships, they span the gamut. It can be as simple as contracting out the building maintenance services to a private company in a public building or as complex as a loan guarantee.

As with anything, if done properly with clear, competitive criteria and due diligence, they are not necessarily a bad thing.

[EJ]

Re: Solyndra

Thanks. I'm still confused as to whether or not this is the type arrangement EJ suggests in his recent book. Hopefully someone can sort it out.

From my book:

To finance these projects, public-private partnerships must compete for infrastructure projects to maximize efficiency and minimize costs. To minimize rents, the resulting infrastructure is owned by the public. To minimize fees, tax-free infrastructure bonds are sold—without investment-banking middlemen—by federal and state Treasury departments directly to private and public investors, much as Treasury bonds are sold today via TreasuryDirect.

Foreign governments can purchase minority interests in these firms and projects, providing a safety valve for foreign investors who may otherwise decide not to reinvest in the United States as their Treasury bond holdings mature. Allow U.S. citizens to defer some portion of their taxes to invest in these projects. Structure the bonds to convert to equity once the projects become profitable, to create an incentive for public-private partnerships to design efficiency into the projects from the start to limit taxpayers’ potential future liability. Require independently audited reporting and review of milestones during project development.

These core projects will create demand for thousands of satellite start-ups, funded by venture capital and other private equity sources, as well as by government start-up financing programs such as the Small Business Administration (SBA).

Using this approach, the United States can avoid wasteful spending and the economically dangerous trend toward socialization of private markets, such as the U.S. housing market today that is 90% supported by fully nationalized Government Sponsored Enterprises (GSE) Fannie Mae and Freddie Mac. The public policy response to the damage caused by sub-par performance of private credit markets following the 2008 credit and banking crisis was socialization of the formerly private housing markets. Prolonged budget deficits that inevitably result from shortfalls in tax revenue during severe recessions followed by slow growth leaves cities and towns without money to pay for infrastructure upkeep and improvements. This will drive a widespread trend toward privatization of public property, such as bridges and roads, over the coming years.

You can judge for yourself whether the PPP you refer to is relevant to the PPP model I describe.

[Slimprofits]

Re: Solyndra

Salandrichard, it's well worth reading:

http://www.amazon.com/Postcatastroph.../dp/1591842638

http://www.worldcat.org/search?q=eri...t=results_page

[LargoWinch]

Re: Solyndra

Below is the only full-digital, energy and operationally super-efficient Hospital in North America. It has been procured under PPP: