Obama's Crony Capitalism - What the Solyndra debacle reveals about Obama's economic strategy

Reason ^ | September 9, 2011 | A. Barton Hinkle

[neverdem]

The president's address on jobs last night included some soaring phrases, but it left out one crucial word that epitomizes his approach to economics: Solyndra.

Fourteen months ago, the president was using his sonorous baritone to deliver soaring rhetoric about how his policies helped launch that now-broke company, which made cylindrical solar panels. The administration fast-tracked Solyndra's loan guarantee through the American Recovery and Reinvestment Act—i.e. the stimulus—perhaps because Solyndra's principal backers just happened to have donated huge sums to the Obama election campaign. Washington guaranteed more than a half-billion in loans to Solyndra on the promise of 4,000 jobs.

"This new factory is the result of those loans," the president said at the Fremont, Calif., facility—a facility The Washington Post termed a "signature project of President Obama's initiative to help create clean-energy jobs." The result of those loans now? Solyndra has shut its doors, its 1,100 former employees are jobless, and the taxpayers are on the hook for perhaps hundreds of millions of dollars.

Viewed in isolation, the Solyndra story is mildly troubling. But it is nothing Washington has not seen before. The late, great columnist Molly Ivins wrote some crackerjack pieces about the return on investment that corporate sharpies used to get from their campaign donations to Republican politicians. The Solyndra story sounds like the same old, same old.

Except it isn't. The Solyndra story encapsulates a much bigger issue than mere crony capitalism, bad as that is. Because Solyndra is not alone. The Obama administration has sunk billions into loan guarantees for dozens of other renewable-energy companies as well.

This is known as the political allocation of economic resources, and it entails all kinds of problems. The first and most basic: It's wrong. Government should not be picking winners and losers in the marketplace...

[Liz]

Nice take. I guess Michelle gave him the Marxist pep telk before he took to the podium......

“It’s not your fault. It’s the people’s fault. We told ‘em on the campaign trail to forget about them comfortable life styles, that we were gonna redistribute the wealth. And now they have the nerve to complain?”