Excerpts from The Wall Street Journal
Editorial
Monday, October 10, 2011
“The more we learn about the Solyndra solar-company debacle, the more the Obama Administration leaps to defend the $535 million loan guarantee. "There were going to be some companies that did not work out; Solyndra was one of them," President Obama told reporters Thursday …
“And there you have America's Solyndra economy, as the White House understands it: Washington allocates capital, and taxpayers pick up the tab if those choices go bust …
“As it happens, we're getting a look at what this world of political investment entails thanks to Administration emails released last week by House Democrats on the Subcommittee on Oversight and Investigations and the White House. Democrats say the emails reveal a ‘vigorous internal debate’ about the Solyndra deal and dispel accusations of crony capitalism.
“The opposite is closer to reality. Solyndra received federal help in 2009 and never turned a profit. In March 2010, PriceWaterhouseCoopers raised questions about the company's solvency …
“Insiders raised alarms, too. Obama donor and venture capitalist Steve Westly wrote to senior White House aide Valerie Jarrett in May and said ‘many of us believe the company's cost structure will make it difficult for them to survive long term’ …
“Here's more ‘reality.’ On August 20, 2009, a DOE staffer asked ‘how can we advance a project . . . that generates a working capital shortfall of $50 [million] when working capital assumptions are entered into the model?,’ adding ‘it also simply won't stand up to review by oversight bodies.’ Solyndra's federal loan guarantee closed the following month.
“Then there are the still-hazy insider dealings, another inevitable feature of government-led investment. An Obama fundraiser, Steven Spinner, took an advisory role at DOE and pushed for the loan to proceed, even as his wife's law firm advised on the same deal …
“The emerging sophisticated defense of Solyndra is Mr. Obama's suggestion that if China subsidizes its industries "of the future," then we must too. But in a free-market economy, which America used to be, private investors decide which industries will succeed in the future, and bet their own money on it. The proper role for government is to support basic research, not commercial ventures that become exercises in taxpayer risk but private reward.
“When government takes $535 million and invests in a loser, it not only wastes taxpayer money but it also denies that capital to some other project in the private economy that might have succeeded. The Solyndra emails show how ill-equipped government is to predict the industries of the present, much less the future.”
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Source: RNC
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