Last week another publicly subsidized “green business” company filed for bankruptcy in Portland. ReVolt Technology had received $6.8 million in state and local subsidies, plus another $5 million from the Obama administration, for its electric car battery technology, but could not get the product to market.
One would hope that the repeated failures of subsidized companies would induce a modicum of humility among the political class, but this does not appear to be happening. The director of the Portland Development Commission, which approved a $1.3 million loan to ReVolt, told The Oregonian, “It’s obviously disappointing, but we certainly know we’re going to have a few of these.”
Taxpayers should be outraged by this attitude. The Oregon Constitution prohibits public investment in private companies, so none of the companies being propped up with taxpayer money should have ever received a penny in the first place. Yet, the Portland Development Commission is fully expecting to have more public money lost in private sector bankruptcies.
There is an important role for government to play in technological innovation, but it’s not to serve as a venture capital fund. In the daily competition among market participants, government should simply call the balls and strikes and enforce the rules of the game. Players should come from the private sector; and the best products should be determined by consumers in the market process, not by government cronyism.
John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.