FIAF – Marshmallow and Alae edition

Today’s must read Obama’s Budget Flunks the Marshmallow Test. The marshmallow represents an avoidance of struggle. Instant reward, unearned and un-fought for.

Entrepreneurs know that when they sacrifice, they are learning and improving, exactly what they need to do to earn success through their merits. Every sacrifice and deferred gratification makes them wiser and better, showing them that they’re not getting anything free. When success ultimately comes, they wouldn’t trade away the earlier days for anything, even if they felt wretched at the time.

Government aid, bailouts, and even subsidies represent that marshmallow.

The present administration believes we should be able to get our country fiscally back on track without the vast majority of Americans having to accept less from government. Year after year, no entitlement recipient is asked to give up benefits—even benefits well above a basic safety net.

Bailouts for homeowners, auto companies and financial firms have protected many from the consequences of poor decisions. And even as we run up unprecedented debt, public-sector workers continue to receive pay and benefits that exceed those of their private-sector counterparts.

The expanding welfare state exists, in no small part, to shove marshmallows into our collective mouth. The government expunges sacrifice, smooths the risk out of our economic lives, and protects us from the consequences of our actions. It is aggressively moving us away from the national entrepreneurial ethos, teaching dependency and changing our relationship to the state.

And, in this vein, we’ve got this from Andrew Malcolm on Obama’s speech yesterday.

We’re making new investments,” he said, “in the development of gasoline and diesel and jet fuel that’s actually made from a plant-like substance — algae. You’ve got a bunch of algae out here, right?”

With the knowledge that only he had the stat handy, Obama said, “Believe it or not, we could replace up to 17% of the oil we import for transportation with this fuel that we can grow right here in the United States.”

Grow oil? 17%! Pretty impressive! Wait though! Don’t get too excited over Obama’s green scum energy scheme.

It turns out, the president admitted, no one actually knows how to turn algae (or a million other things) into motor fuel. It simply cannot be done yet by anyone anywhere, although it does sound great, doesn’t it?

Then Obama added, in at least one indisputable presidential observation, “If we can figure out how to make energy out of that, we’ll be doing all right.”

Really? Did he just say that? And if we can figure out how to make energy out of dog poop, packing peanuts, and dirt we’d be doing all right as well. Imagine the possibilities! Yes, I’m thinking unicorns …

The Morning Jolt points us to this piece:

President Obama is a man who feeds others a line of bull that he hopes they’ll accept as some sort of plan, instead of actually dealing in the world of reality. He wishes and hopes that somehow, magically, algae will be used to take the place of oil which is a proven source of energy. Pipe dreams versus reality. For us, something tangible like an actual pipeline that would alleviate our pain at the pump, has been relegated to a pipe dream because of the dreamer we have in the White House.

Of course, who better to direct this dream than the federal government? They’re handing out those marshmallows; right NOW, they’re accepting proposals from small businesses and Universities to fund that research. $14 million for whoever’s got a PLAN!!! Apply TODAY.

Because, of course, where private enterprise fails, the government is there with the answer! Solazyme began as a company with the goal of using the “power of biotechnology to solve environmental problems” – turning algae into fuel. When that didn’t work out so good, they pivoted an started a line of anti-aging skincare products.

Case in point is Solazyme Inc., a South San-Francisco-based biofuel company that made over its product line and is now selling beauty products and nutritional supplements in addition to fuel that can be used in ground and air transportation. But how quickly the new model pays off is to be determined.

On Tuesday, Solazyme posted a wider-than-expected net loss for Q4 2011 of $15.6 million on a GAAP basis, compared with $2.9 million in the same quarter in 2010.

Ooops. What’s a $15.6 million lose FOR ONE QUARTER? The fuel thing isn’t working so well.

Solazyme adjusted its business model out of necessity, suggested Pavel Molchanov, a Houston-based energy analyst at Raymond James. “Solazyme isn’t likely to become in the foreseeable future a fuel-centered business,” he said.

Despite having a partnership with Chevron Oil and selling algae-produced fuel to the Department of Defense, its capacity is limited and its costs are too high to manufacture cheap fuel with fuel priced in the range of $3 a gallon.

Let’s pretend for a moment that there is a future with algae powering our cars. And let’s pretend that you’re a small guy out there, plugging away at this problem. On the VERGE of discovery.

But, because Obama gave the free money, $14 million dollars, to someone else – YOU fail. Go out of business.

Nobody can compete against government favoritism, and the government doesn’t exactly have a track record of picking the creme of the crop.

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4 Comments on “FIAF – Marshmallow and Alae edition”

  1. Jay in Ames Says:

    Yeah, we can grow our oil, but it’s gonna cost ya!

    Algae Biodiesel: It’s $33 a Gallon

  2. Svenster Says:

    Down with Big Algae! What do you get when you burn algae-based biofuels? Carbon emissions, that’s what. It’s probably the dirtiest of the non-existent alternative fuels.

  3. Car in Says:

    From J’ames’s article :

    Solazyme says it will be capable of producing competitively priced fuel from algae in 24 to 36 months. Solazyme actually uses photosynthesis for growing some algae, but only higher value oils for the cosmetic or other industries.

    oops. Guess they didn’t figure that one correctly.

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