Even as President Barack Obama criss-crosses the country (only in battleground states, natch, come the ’12 election) to sell his latest jobs plan, his administration’s abject failure to pick business winners stands on full display in Fremont, CA. There, solar-panel maker Solyndra LLC — recipient of $535 million in taxpayer-backed loans — is shutting its doors, slumping into bankruptcy and now crawling with federal agents and GOP-led congressional investigators.
Meaning this administration doesn’t just lean anti-business (notwithstanding its penchant for playing footsie with mega-investor Warren Buffett, General Electric Co. Chairman Jeff Immelt and the Wall Street moguls who make campaign contribution). Team Obama also doesn’t seem to have a clue when it comes to discerning the difference between reasonable bets on a company’s future and politically correct fliers on losers unprepared for stiff competition. And Solyndra is proving to be just that.
“Solyndra isn’t the only American solar company in financial trouble these days,” Al Lewis writes today on Marketwatch.com. “Evergreen Solar of Massachusetts and SpectraWatt of New York also filed recent bankruptcies. And BP Solar stopped manufacturing in Frederick, Md., last spring.”
He continues: “Before [the president] publicly hyped this unproven start-up company as a shining example of America’s future, perhaps Obama should have read Solyndra’s IPO registration statement, particularly the part about the competition. Or maybe he should have taken note of the independent auditors who said the company was piling up losses and blowing through cash so fast it just might not make it. It also doesn’t help the president that one of Solyndra’s big investors was the foundation of Tulsa, Okla., billionaire George Kaiser, who is also one of his leading fund raisers.”
The Solyndra fiasco is, at the same time, evidence of the Obama administration’s inept business judgment and the politicization of its taxpayer-funded business agenda. Or, put another way, could the president’s people be in the business of throwing federal loan guarantees your way if you write a check? Probably. Yes, there may be an argument to make that there’s a role for government to back promising new technologies deemed risky by private investors, but the fact that private capital is saying no says something, too. The case of Solyndra clearly is a textbook example of how not to do it.
“The fact that federal loan guarantees were even necessary for Solyndra tells us that few, if any, lenders thought that giving the firm money was a very good idea,” Jerry Taylor and Peter Van Doren write in Forbes. “Given the fact that lenders who bet ‘right’ on companies with strong prospects but insufficient capital are lenders who will make money, we can rest assured that hundreds if not thousands of bank loan officers took a long, hard look at Solyndra and said … no thanks.”
But not the smart people inside the Obama administration. They knew better. Except they didn’t, and the Solyndra debacle is one more piece of data that proves the point.