American Aid to China?

by Anita on January 30, 2013

In the ongoing saga of “green energy” jobs, the latest chapter involves A123, an American company that makes lithium-ion batteries. Yesterday, the Committee on Foreign Investment (set up under the executive branch in the federal government) approved the sale of A123 to Wanxiang, a Chinese auto-parts firm controlled by billionaire Lu Guanqiu.

Why is this news?  Because American tax-payers have millions invested in A123, as part of President Obama’s green energy job stimulus plan.  By 2012, A123 had already received at least $133 million of potentially $249 million in federal subsidies. But in a pattern similar to the  solar-panel company Solyndra, A123 declared bankruptcy last October after wasting millions of tax-payer dollars.

Even though members of Congress asked that this sale be blocked on grounds of national security, President Obama’s administration went ahead with approval.  A123 makes batteries for cars and for storage on the electronic grid, and China views this market as having huge potential in the future.  So China will get the benefit of technology that was developed as a result of a huge investment by American citizens.

In order to “spin” this story in a favorable light, bureaucrats announced that the sale to the Chinese would benefit Americans by keeping 1000 jobs in Michigan, since A123 would continue to manufacture its products there.  (Michigan’s organized labor has been a strong supporter of President Obama.)

But how many jobs could have been created in Michigan and other states if American citizens weren’t taxed so heavily?  The strategy of using tax funds to prop up companies has a history of dismal failure. American entrepreneurs can lead the way in this new technology if given the chance, but bureaucrats haven’t produced much in the past — except paperwork — and the future doesn’t look promising for their efforts either.

 

 

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