Frequently Searched

Government: A lousy venture capitalist

November 4, 2014

When state legislatures reconvene in January, a priority for many will be passing some kind of “jobs” bill. What form that might take is open to debate, but there are already lessons to be learned on what not to do.

In 2009 the Arizona legislature, like many other states, passed a bill providing “tax incentives” (AKA subsidies) for renewable-energy industries. The legislature partly responded to pressure from those who thought they’d found the next big thing in “green jobs.” It also followed on the heels of a new solar panel factory in Tucson, Arizona.

Now that solar panel factory is closing only three years into its tenure. And it’s not alone. Another plant in Massachusetts has closed. Especially notable, a company called Solyndra, with a half billion dollars in federal loan guarantees, has declared bankruptcy.

That’s not a great track record, and it proves a point: Government makes a lousy venture capitalist.

Venture capitalists lose their money sometimes, but that’s the point: it’s their money. Government has no business risking taxpayer resources or disrupting tax systems to favor some businesses over others in an effort to directly create jobs.

Unfortunately, the Arizona legislature did it again in creating the Arizona Commerce Authority, with its ability to directly subsidize companies. The legislature would have doubled down on this bad bet with SB 1041 last session but for Governor Brewer’s veto.

Our legislature needs to rein in local regulation, create a more rational tax system, and free up the state’s natural resources. For example, cities require too many permits and take too long to issue them, we tax businesses too heavily, and public ownership of land ties up resources in too much red tape.

While not as sexy as attending ribbon-cuttings at solar panel plants, addressing such issues would have a more lasting, positive impact on the economy.

Dr. Byron Schlomach is the director of the Goldwater Institute’s Center for Economic Prosperity.

Learn More:

Institute for Energy Research: Solar Manufacturers Slowly Closing Up Shop In U.S.

Arizona Republic: Solar-panel plant to open in Tucson

Bloomberg: Obama Team Backed $535 Million Solyndra Aid as Auditor Warned on Finances

 

 

More on this issue

Donate Now

Help all Americans live freer, happier lives. Join the Goldwater Institute as we defend and strengthen freedom in all 50 states.

Donate Now

Since 1988, the Goldwater Institute has been in the liberty business — defending and promoting freedom, and achieving more than 400 victories in all 50 states. Donate today to help support our mission.

We Protect Your Rights

Our attorneys defend individual rights and protect those who cannot protect themselves.

Need Help? Submit a case.

Get Connected to Goldwater

Sign up for the latest news, event updates, and more.

Wait! Don’t close this yet!

We are grateful for your support of the Goldwater Institute’s efforts to advance and defend liberty throughout the United States. For over 36 years, we’ve been defending the rights of Americans to live their lives free from government interference.

And Goldwater is unique in that we direct our efforts to the 50 states where we introduce and advance innovative ideas that expand freedom. And we fight in courtrooms and capitals nationwide to defend individual liberty.

In 2024 alone, we scored over 50 policy and litigation victories defending liberty!

And that’s just the beginning.

Our plans for 2025 include:

  • Stopping pernicious DEI and other woke programs in America’s universities.
  • Ensuring that patients suffering from rare and terminal diseases have access to cutting-edge, lifesaving medical treatments, without having to first seek permission from the government.
  • Defending parental rights across the United States so that parents can send their kids to the school that best fits their needs, free from leftist indoctrination.
  • Eliminating government interference in the fundamental right of individuals to own property and use it as they see fit.
  • And much, much more

We seek to restore the presumption of liberty; that people are free to act without first asking permission from the government.

But we cannot do this without you. Will you join us as we fight to preserve and advance liberty throughout the country? As we seek new and innovative ways to defend freedom in all 50 states?

And there’s great news: Thanks to a generous Goldwater supporter, your donation today will be doubled!

So please, join us in fighting to advance liberty and score real wins for freedom from coast to coast!