Solyndra, Inc., a California-based “green” energy company has filed for bankruptcy — despite a $535 million loan guarantee from the U.S. government. That means, first, that the government made that loan without checking the viability of the business plan and business model. So you and I must pay for that $535 million loan. This is outrageous, but it is continuing with other firms, and in equally outrageous and expensive subsidies.
Ironically, the CEO of Solyndra, Brian Harrison, said that “regulatory and policy uncertainties in recent months created significant near-term excess supply and price erosion.” Of course, the regulatory and policy uncertainties are the sole responsibility of the federal government. Thus it was at least partly responsible for this expensive failure.
But “the near-term excess supply and price erosion” is due to Chinese manufacturers, who are turning out solar panels and panel components at growing rates, thereby creating the excess supply and the price erosion. The Chinese government subsidizes those factories heavily, and is pressing for more and more solar manufacturing. But the U.S. government should know about those Chinese policies and practices. If our leaders do not know those things, they are not doing their job; if they did know, they were not doing their job when they committed taxpayer funds to back (pay for) a huge loan that was likely to go bad.
There’s another dimension of this multiple government error. Many investors in Solyndra will less likely invest again in such a venture — and many of those investors are Silicon Valley billionaires who were huge backers of Senator Obama in his campaign and election in 2008. Of course they did not expect the government to sink their investments, but it did.
Solyndra may have been over-optimistic, but every start-up and every entrepreneur has to be optimistic, or no one will ever take a chance. Many fail, but those that succeed are vital to America’s continuing economic and intellectual leadership. Still, we should be able to count on some responsibility and insight from the government. Sadly, while backing these types of failed ventures, the administration continues its short-sighted attacks (calls for new taxes) on America’s successful conventional energy producers.
So once again, our government has tried to force progress by picking winners, and it has failed, repeatedly in this case, to do so. To recall an old anti-war lyric, “When will they ever learn? When will they ever learn?”