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Politics : Formerly About Advanced Micro Devices
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To: combjelly who wrote (736334)8/31/2013 7:51:40 PM
From: i-node1 Recommendation

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FJB

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It sure as hell doesn't.

Some companies will make bad decisions either way, and perhaps Solyndra did. But when you're spending government dollars, it is far worse.

Someone mentioned USDA subsidies. One of my former clients was all over the national news a while back, angered about black farmers in Arkansas not getting their fair share of USDA payoffs. This particular individual, who I worked with in the 90s, ran a sizable farming operation. When I was doing his work, a large portion of my time on his account was spent doing financial analysis & projections to satisfy bankers and various quasi-government organizations so they could continue to advance him money in a losing situation. Not once did I ever meet with this person when he didn't bring up the USDA lawsuit -- "when that money comes in we're going to be in good shape!" They had so many different loans and they were in such disarray someone in my office would have to spend a full day tying out the liabilities every single month.

But the reality is that his debt was far beyond any reasonable level, not because of lousy crops but because of lousy management. There was nothing you could do for this family; they were determined to lose it all -- knowing that the lawsuit would eventually bail them out. The money flowed in -- all government guaranteed, of course -- and it flowed out on everything except making the farming operation work.

Meanwhile, I had another client who owned a small fraction of the land and wouldn't have taken a government-guaranteed dollar if you'd begged him -- who consistently turned a profit of hundreds of thousands a year. Liabilities? ZERO.

Neither was stupid. It is the difference between government dollars and hard-earned dollars. When you're handing out free money, the accountability goes out the window.
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