But if you spend any time actually looking into how the Department of Energy doles out the loan guarantees, you quickly realize that it’s not acting like a venture capitalist. Rather, it is funding projects that have already attracted private capital — lots of it. The private sector, in other words, is still the one picking winners and losers.

What the program is essentially doing is moving alternative energy innovations to full-scale development. Why is the government doing this? Because this is precisely where the private sector fails. As Rothwell puts it, “The program is supposed to overcome the commercialization valley of death.”

In this country, it is relatively easy to get venture capital for a good idea — and alternative energy has attracted billions in the past few years. What is hard to come by is money to fund the far more expensive process of commercializing the innovation. Andy Grove, the former chief executive of Intel (and still one of the great business minds in America), has been sounding the alarm about this, pointing out that one reason so many American innovations wind up being manufactured in China is that the Chinese are more than happy to finance the commercialization process.