Skip to comments.Inquiring minds want to know: Why did green-jobs bust Solyndra get a gigantic federal loan?
Posted on 09/03/2011 2:21:27 PM PDT by Ernest_at_the_Beach
Rich Lowry calls it Obamas Enron. Over to you, House Republicans:
House investigators said they have uncovered evidence that White House officials became personally involved in an Energy Department review of a hot-button $535 million loan guarantee to the now-failed California solar company Solyndra
We have learned from our investigation that White House officials monitored Solyndras application and communicated with [Department of Energy] and Office of Management and Budget officials during the course of their review, the letter says
Heres the bottom line, [solar industry analyst Peter] Lynch said. It costs them $6 to make a unit. Theyre selling it for $3. In order to be competitive today, they have to sell it for between $1.5 and $2. That is not a viable business plan.
Other flags have been raised about how the Energy Department pushed the deal forward. The Center for Public Integritys iWatch News and ABC disclosed that Energy Department officials announced the support for Solyndra even before final marketing and legal reviews were in. To government auditors, that move raised questions about just how fully the department vetted the deal and assessed its risk to taxpayers before signing off.
The White House insists it didnt intervene with DOE on Solyndras behalf, but go figure the companys key investor was a foundation headed by George Kaiser, a billionaire known for raising boatloads of money for Barack Obama. The Kaiser Foundation insists that its going to take a loss from Solyndras failure just like all the other investors, which doesnt quite explain why Solyndra got a half-billion-dollar loan to keep on chugging towards unprofitability in the first place. And this may be just the beginning:
Solyndras closing has raised concerns about other renewable energy investments by the Obama administration.
Frank Rusco, a Government Accountability Office director who helped lead a review of the Solyndra loan and the Energy Departments loan guarantee program, said the GAO remains greatly concerned by its 2010 finding that the agency agreed to back five companies with loans without properly assessing their failure risk. The companies were not identified in the report, but the GAO has since acknowledged that Solyndra was among them. Three of the companies were working together on one massive nuclear project, and the Energy Department said Thursday those funds are not at risk because the money has not yet been released to the companies.
The DOE thinks/hopes that other loans to clean-energy companies will offset the losses from Solyndra, but Rusco says hes not sure about that for the simple reason that those firms havent produced much yet. My own suspicion is that the Solyndra loan is probably more a case of classic Hopenchange incompetence than corruption. Obamas spent tons of political capital promoting his green jobs pipe dream, with Republicans challenging him on it at every turn. The very last thing he needs under those circumstances is to blow $500 million on a money pit funded by one of his big donors. Its such a huge loss and looks so shady that the GOP will make hay of it for months; his whole green jobs plan will be hugely damaged by it. (It doesnt help either that hes now happily admitting that environmental regulations are a drag on the economy to be discarded when needed in the interests of growth.) What likely happened here is that the White House and DOE, in their excitement to kickstart the age of clean energy, skipped some of the due diligence on Solyndra on the assumption that the Kaiser Foundation and other investors surely wouldnt toss their own money into a sinkhole. Oops. Exit quotation from Lowry: Inevitably, the U.S. solar industry will seek to score the trifecta of government support already achieved by the boondoggle fuel ethanol subsidizing its production, mandating its use, and barring its foreign competitors.
As far as I am concerned, this should be a death penalty offense for the DoE. Kill it, burn it to the ground. The very definition of addition by subtraction.
And that the Technology was OLD!!!
He could see the Closing coming before it actually happened!
This is exactly the sort of thing the Republicans can make an issue of but won’t.
Pure Stalinism, part of the five year plan to giganticize everything:
“Miller also noted that the $535 million loan guarantee that Solyndra received from the Energy Department under the Recovery Act to build this new factory has created 3,000 construction jobs, and the project has been running at least two shifts a day, six days a week since the groundbreaking last September, paying out more than $90 million in union wages.”
The times, they are a-changin’ Jeff. Since Boenher let ‘em drop this week over the joint address to Congress, maybe some others will follow his example and look very closely at this.
The only problem is that the money is long gone. If there is anything to retrieve it will take years and the taxpayers will end up eating most if not all of that loan.
Bet me a burger Solyndra shafted a bunch of their vendors too.
Green Jobs = Crony Capilalism
Divide each by 1,000, and you come to $535,000 for every 4 jobs.
4 goes into $535,000 to make it $133,750 per job.
For our government, that only leaves one pretinent question:
Does this go into the "jobs created" or "jobs saved" column?
Maybe that explains it a bit.
There could be a scandal here. However, Issa is really busy, what with Fast and Furious and all the other scandals, it will take a while before they get to this.
Upton is on this as well, I think.
The money may be long gone but we don’t have to keep throwing good money after bad. The House controls the power of the purse. They can dramatically reduce funding for the Department of Energy and eliminate funding for the specific loan program that backed Solyndra. Use the waste as justification. If Boehner can company hang tough they can leave Obama and the Senate two choices — sign the reduced spending bill or don’t have the department funded at all. The productive American people will applaud.
The summary of Ohanian’s research on FDR prolonging the depression has been posted so often, it’s boring , but the more things unfold, not to mention unravel, the more you see that Bernanke as a student of the depression, followed the wrong trail.(the article is from 2006, BTW, no hindsight needed.)
“Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump,” said Ohanian, vice chair of UCLA’s Department of Economics. “We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.”
In an article in the August issue of the Journal of Political Economy, Ohanian and Cole blame specific anti-competition and pro-labor measures that Roosevelt promoted and signed into law June 16, 1933.
“President Roosevelt believed that excessive competition was responsible for the Depression by reducing prices and wages, and by extension reducing employment and demand for goods and services,” said Cole, also a UCLA professor of economics. “So he came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies.”......
The policies were contained in the National Industrial Recovery Act (NIRA), which exempted industries from antitrust prosecution if they agreed to enter into collective bargaining agreements that significantly raised wages. Because protection from antitrust prosecution all but ensured higher prices for goods and services, a wide range of industries took the bait, Cole and Ohanian found. By 1934 more than 500 industries, which accounted for nearly 80 percent of private, non-agricultural employment, had entered into the collective bargaining agreements called for under NIRA.
I don’t know where Ohanian is, he should be shouting from the rooftops to confront the likes of Krugman and Roubini.
Because with tards it is only the intentions that count - never the results.
It has to be that way since their ideas never work or only make things worse.
Obama faces resignation, impeachment, or a landslide defeat in November 2012. Those are his choices. Being the narcissist that he is, he will choose door number 3.
Hopefully, the electorate will remember to look beyond the pretty packaging and their own feelings of guilt in subsequent elections.
“And that the Technology was OLD!!!”
The Cypress CEO also noted that although serious Silicon Valley entrepeneurs normally start-out in dumpy buildings, the first thing Solyndra did was build a “palace”. And their major private backer was a big Obama contributor. Looks like our presidential hustler got flim - flammed. Lets see if he can blame this on the Republicans.
Does this go into the "jobs created" or "jobs saved" column?
Both because, the jobs were created and saved!
I don't know why the Republicans don't say that Obama wasted a trillion dollars and know he wants more? Obama and the Democrats wasted a trillion dollars and know they want to pay for it through higher taxes? Can't the Republicans ever get together with simple messages?
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