Shaky Battery Maker Claims a Breakthrough

The reason why governments make very risky bets in new technology companies (and pure research) is that unlike private investors, the government's upside is spread across the whole industry. They tax them all, no matter which company wins.

So even if A123 fails as a business, if the industry grows then the government wins. No matter who buys A123's technology, the government will still get the tax revenue. Even if A123's specific tech is no good, the employees will still go on to other battery companies and help the industry grow that way. The only way the government loses is if the whole idea of improved batteries turns out to be a dud.

To put it another way, imagine if the government invested in an early solid state laser company. Even if that one went belly up, the laser industry paid out so many tax dollars there is no way the government suffered a net loss.

Some industries will grow no matter what the government does. However others can stand to use the boost of government investment, and I think green energy technologies like solar and batteries qualify.

This sounds like a pretty good reason not to believe anything you hear, one way or the other, about this new "breakthrough" battery technology until either (a) you see it parked in your driveway or (b) it's 2022 and you don't.