The left wing media loves a good scandal, particularly one that
somehow points out how allegedly greedy capitalists rip off taxpayers.
If these capitalists are in any way connected to the Republican Party,
like defense contractor Halliburton, it's feeding-frenzy time.
But if the scandal involves one of the liberal media's pet causes
like "affordable housing" to the poor, scandals such as the widespread
accounting fraud at the government mortgage lender Fannie Mae and the
massive pay packages handed out to the agency's top executives are
just not such a big deal. That is until Fannie imploded and taxpayers
were stuck paying the bailout bills.
All of which brings us to the sad story of Solyndra, and how wasting
more than $500 million of taxpayer money on a dubious technology
isn't really much of a scandal, at least according to some of my
colleagues in the financial press.
Solyndra is a company that was supposed to develop solar panels, and
help the US compete with those financed and controlled by the Chinese
government, which have cornered the market in these products. The
reason it needed the government money was not just to better compete
with the Chinese, but also to produce "green" energy and jobs for a
Liberal's wet dream.
But the dream was deferred because the Chinese are better than we are
at this business (which may not be much of a business in the first
place), and Solyndra's business model made no sense -- it was trying to
sell solar panels at prices well above the market rate.
American taxpayer money was wasted just about the moment the Obama
Administration signed over the checks.
Joe Nocera of the New York Times points out
that the Republicans are now blowing the entire Solyndra mess way out
of proportion with Congressional hearings and probes just to embarrass
the president as the 2012 election approaches. More importantly, he
believes it's absurd to call any of this a scandal because new
technologies like solar power are by nature risky, and it is the
government (ie, the American taxpayer) who must shoulder this risk for
the sake of a better future because private money for such necessary
projects is hard to come by.
"But if we could just stop playing gotcha for a second, we might
realize that federal loan programs -- especially loans for innovative
energy technologies -- virtually require the government to take risks
the private sector won't take. Indeed, risk-taking is what these
programs are all about," Nocera writes.
He doesn't know it, but Nocera has just identified why Solyndra is a
very big scandal.
First put aside his lame arguments about the necessity of the
government funding stuff for the public good that the private sector
doesn't. The government wasn't supposed to be taking "risks" with the
money that Solyndra was given in the first place. This was "stimulus"
money. It was supposed to be spent on "shovel ready" jobs, according
to President Obama, then-House speaker Nancy Pelosi and just about
every left-of-center economist when they began humping passage of the
$800 billion stimulus package back in 2009.
The package -- sold as a jobs bill to both repair our crumbling
infrastructure of roads and bridges and put people back to work -- was
supposed to keep unemployment initially at around 8%, bringing it down
to around 7% or lower by now.
At the time, President Obama pointed out that the risk was not
spending the money fast enough to boost an economy heading for the
deepest recession since the 1930s. This money, he assured us, wasn't
to be spent on risky, albeit, noble ventures that may or may not work,
but on projects that produced immediate, and much needed jobs.
The same Republicans who Nocera and the left-wing media attack as
partisan on the Solyndra matter, doubted the efficacy of such
programs, accurately pointing out some notable government-sponsored
stimulus failures like FDR's WPA effort in the 1930s, which failed to
make much of a dent in the Great Depression, and George Bush's own
half-hearted stimulus that did nothing to forestall the 2008 financial
crisis and Great Recession that followed.
Put aside the obvious hype that accompanies partisan warfare in
Washington (Does Joe really think the Democrats are any less partisan
when they get their hands on something like this?) In attacking
Solyndra, Republicans are accurately pointing out the wishful thinking
Lefties are pinning on green technologies in either creating jobs or
products that actually work. After all, when was the last time you saw
an electric car power up outside in the Whole Foods' parking lot?
They're also pointing out a very real scandal: Why the $800 billion
stimulus package failed to work in any measurable way as unemployment
remains above 9 percent and economic growth appears to have stalled.
Some liberals like my friend Arianna Huffington have accurately
pointed out that the problem with the president's stimulus is just how
poorly it was administered. "The stimulus package failed because it
was all over the map. It was not a targeted, clear jobs creation
program," she told me during our appearance on ABC's "This Week."
And here in lies the Solyndra scandal. I'm sure some people were put
to work building the Solyndra factory that was supposed to make all
those solar panels that were supposed to just fly off the assembly
line before the company went bankrupt and wasted $500 million of
taxpayer funded loan guarantees, but was this the best use of money
designed to create lasting jobs and lasting stimulus?
The answer is pretty clear: Not even close.
If you look at what we know about Solyndra's failure, Arianna has it
pretty much right: The administration rushed the loan through, didn't
give much thought about the company's ability to create jobs, much
less the sustainability of its business model before it became
unsustainable and declared bankruptcy.
I can't tell you whether Solyndra will ever live up to the legal
definition of a scandal similar to accounting frauds of Enron and
WorldCom where senior executives went to jail. The FBI is
investigating the matter and the company's chief executive officer and
chief financial officer recently asserted their Fifth Amendment rights
in front of a House investigative committee.
Keep in mind that innocent people take the Fifth all the time and FBI
will often investigate issues for the US Justice Department that
receive massive press attention without charges being ever filed. But
"scandals" don't have to lead to high crimes and jail terms. They
often lead to public disgust and retribution at the ballot box.
And President Obama has shown the scandalous proclivity to put
ideology over the general welfare of the American people. Why else did
he waste so much political capital on passing an unpopular health care
law when Americans were losing their homes due to high unemployment?
Why else would he divert money that was supposed to employ
construction workers to finance a company that builds products no one
wants?
I suspect there will be many more Solyndras out there, so this scandal
will keep getting bigger and bigger, whether the media likes it or
not.