Feds should not pick winners
By Jeffrey Gonzalez, Inland Valley Daily Bulletin
On Aug. 31 Solyndra, a solar panel company in Fremont, Calif., financially collapsed and closed its doors forever. Within days, the FBI was executing surprise search warrants on both the bankrupt company's headquarters and the home of the company's chief executive, Brian Harrison. On Sept. 23, Mr. Harrison, along with another Solyndra executive, invoked his Fifth Amendment right to avoid self-incrimination when questioned about Solyndra's bankruptcy by the House Subcommittee on Oversight and Investigations.
In addition to raising troubling questions about the competitiveness of American manufacturers in industries that are quickly being dominated by Chinese companies, the Solyndra bankruptcy raises important questions about whether the federal government should be in the business of picking winners and losers in the American economy.
Before Solyndra's collapse and before the execution of search warrants by the FBI, the Department of Energy (DOE) rushed a taxpayer-funded loan of $535 million for Solyndra through the agency's normal application process and before government accountants and market experts could properly evaluate the company and the risks associated with the loan. The loan was both the first and largest loan the DOE issued through its loan guarantee program, and President Obama, in May 2010, visited Solyndra's facilities and called the company, "an engine of economic growth."
In defense of the half-billion dollar check the DOE provided Solyndra, the Obama administration and congressional Democrats have argued that the loan program, which is aimed at supporting start-up clean energy manufacturers, cannot be expected to have a 100 percent success rate. As President Obama told George Stephanopoulos when he was asked whether he had any regrets about the Solyndra loan, "hindsight is always 20/20."
Yet what the President and congressional Democrats are intentionally ignoring, and hope to sweep under the rug, are the political forces that influenced the DOE's decision to make the ill- advised half-billion dollar loan to Solyndra: Solynrda's largest investor is a multi-billionaire Obama campaign bundler who met with many of the president's advisers before the loan was approved; bureaucrats at the DOE and staffers at the Office of Management and Budget expressed doubts about Solyndra's financial health, but were ultimately ignored; and Solyndra spent $1.8 million lobbying the federal government for the loan.
For a president who ran his 2008 campaign on the message of "change," a promise to do away with sleazy politics and the influence of political interests in government, the Solyndra affair is quite damaging. But even more serious questions remain: How should the Solyndra affair inform us about what strategies our government should implement to jump-start our economy? Can we trust politicians to make capital investment decisions with taxpayer dollars? Should the federal government even have the power to pick winners and losers from the broad range of emerging American businesses?
The answer to these last two questions is no. Washington is a town controlled by lobbying, political payoffs and ceaseless campaigning. Sadly, it is the system we have created, and until the system is changed, the last thing we should do is trust politicians to make capital investment decisions with billions of dollars in taxpayer money.
The proper role for the federal government in promoting economic growth and job creation in emerging industries should be restricted to implementing policies that will lay the foundation for free enterprise and capital investment. More specifically, the federal government should focus on supporting research and development projects and providing incentives for capital investment through our nation's tax system.
The president needs to be held accountable for his administration's actions in losing millions of dollars by betting on a failing company with strong ties to his campaign. Yet I hope most of us can focus on the bigger-picture - what policies our government should pursue to jump-start job creation. 10/11/2011