Crony capitalism and job creation

[eisely]

Alternative energy does not look like a great investment, but that does not stop the Obama administration from throwing our money away. There is more to this than meets the eye. The primary owner of this company was a major "bundler" for the Obama campaign in 2008. But this guy walks out the door with minimal to zero losses.

 

New story below:

 

Solyndra, a major manufacturer of solar technology in Fremont, has shut its doors, according to employees at the campus.

 

"I was told by a security guard to get my [stuff] and leave," one employee said. The company employs a little more than 1,000 employees worldwide, according to its website.

 

Shortly after it opened a massive $700 million facility, it canceled plans for a public stock offering earlier this year and warned it would be in significant trouble if federal loan guarantees did not go through.

 

The company has said it will make a statement at 9am California time, though it's not clear what that statement will be. An NBC Bay Area photographer on the scene reports security guards are not letting visitors on campus. He says "people are standing around in disbelief." The employees have been given yellow envelopes with instructions on how to get their last checks.

 

Solyndra was touted by the Obama administration as a prime example of how green technology could deliver jobs. The President visited the facility in May of last year and said "it is just a testament to American ingenuity and dynamism and the fact that we continue to have the best universities in the world, the best technology in the world, and most importantly the best workers in the world. And you guys all represent that. "

 

The federal government offered $535 million in low cost loan guarantees from the Department of Energy. NBC Bay Area has contacted the White House asking for a statement.

 

Some Republicans have been very critical of the loans. "I am concerned that the DOE is providing loans and loan guarantees to firms that aren't capable of competing in the global market, even with government subsidies" Florida Congressman Cliff Stearns told the New York Times

 

[Beavah]

Despite strong growth in the first half of 2011 and traction in North America with a number of orders for very large commercial rooftops, Solyndra could not achieve full-scale operations rapidly enough to compete in the near term with the resources of larger foreign manufacturers. This competitive challenge was exacerbated by a global oversupply of solar panels and a severe compression of prices that in part resulted from uncertainty in governmental incentive programs in Europe and the decline in credit markets that finance solar systems.

 

We are incredibly proud of our employees, and we would like to thank our investors, channel partners, customers and suppliers, for the years of support that allowed us to bring our innovative technology to market. Distributed rooftop solar power makes sense, and our customers clearly recognize the advantages of Solyndra systems, said Solyndras president and CEO, Brian Harrison. Regulatory and policy uncertainties in recent months created significant near-term excess supply and price erosion. Raising incremental capital in this environment was not possible. This was an unexpected outcome and is most unfortunate.

 

Yah, this is often da problem with government tinkering in da markets, eh? The instability it causes makes it hard for firms to make strategic plans or recruit capital. Yeh find good businessmen spendin' all their time either lobbying or fed-watching rather than just lookin' at the market, even if it's well-intentioned.

 

And of course, there are all kinds of ways with government programs where well-intentioned gets overlapped with "self-interest".

 

Da better way to do things when there's truly a national interest at stake, like not allowing the U.S. to fall completely behind da rest of the world on energy development and technology, is for congress to take action to tax things which there is a national interest to discourage. That helps to stabilize markets, because it makes 'em predictable in a way that allows a business to plan strategically and raise capital. And it avoids da risk of the government tryin' to pick winners and losers, or cronies, to award. So yeh tax pollution, or carbon-based/non-renewable energy, or oil, if those are things yeh want to discourage.

 

Da problem is that congress shows no leadership and indeed steadfastly refuses to do its job. So da Executive tries to do what it can through work-arounds like the CAFE standards for cars or low-interest loan guarantees, even though these are terrible approaches.

 

Nothing would be better for national security and for our domestic auto manufacturers than a consistent, hefty, and increasing tax on gasoline. Yeh could abolish over-regulation like CAFE. Yeh could abolish loan guarantees to pet companies like this one. Manufacturers would have a clear picture of da market with which they could plan and raise capital. Da revenues would drastically reduce our debt. Da pressure on oil prices would demolish our enemies. The private research investment would re-establish our technological lead.

 

But that takes action by Congress, eh? And while da pseudo-conservatives in Congress claim to want all those things, what they really are is just anti-tax. So as a result, we get overregulation and market interference and manufacturing paralysis and losin' our technological edge to foreign competitors and well-financed enemies killin' our soldiers and a large debt.

 

Beavah

 

[packsaddle]

I agree, Beavah. Moreover, that would provide a more effective incentive for the MARKET to support development of alternatives, or an increase in the efficiency of energy use, as well as more incentive to restore production of many goods to our shores, not to mention decentralization of some of the production we still have...returning even more wealth to local enterprise. But that idea has been suggested many times over the years. Too bad it can't get traction.

[scoutingagain]

I have to agree also. The DOE needs to get out of the business of trying to prop up specific technologies through these subsidies, loans and loan garuantees be it solar panels, wind turbines, ethanol technologies, clean coal or tax breaks for oil companies. These technologies need to be able to compete in a free market and stand on their own.

 

The DOE should limit it's involvment to supporting basic research that then can be privatized and developed by the private sector.

 

Ending the tax breaks for oil companies would be a back door tax increase on oil and was at one point supported by that raving liberal Rand Paul.

 

SA

[SeattlePioneer]

McGovern lost the Presidency in 1972 in part because of his $.50/gallon gasoline tax proposal.

 

 

Personally, I hope Obama goes with a $2/gallon gasoline tax in 2012. We Republicans need all the help we can get to win back the Presidency.

 

My liberal friends always seem able to come up with bright ideas for a dozen new taxes if they sit down together over a six pack of beer.

[CalicoPenn]

This is a shame - looks like the next generation of solar panels - panels that can be mounted flat on a rooftop at a lower installation cost than standard panels.

 

But when you have governments that have subsidized installations moving away from that proven model leading to a glut of supplies in the market coupled with the intransigence of certain politicians at the state and national level in one of the biggest markets in the world who believe that alternative energy is a codeword for socialism and communism, it's not surprising that forward momentum stalls.

 

At one time in our country, we rallied to meet new challenges - and all prospered as a result. We took big risks, and reaped big rewards - and changed the way we live our lives. Do you have a microwave oven? Thank the US Government for funding the research that led to them. Do you enjoy the freedom of cruising the internet? Thank the US Government for funding the research and development that led to it. Boldly stating that we would put a man on the moon in less than a decade led not only to a brilliant success but to products we no longer can seem to live without. All because our politicians said "Yes, we can do this" and not "Ummm, no because my big oil supporters will get mad at me".

 

This is exactly the kind of research and development our government should be taking a risk on - and we need politicians willing to help it succeed by providing incentives and subsidies and tax credits and protective tarriffs to help create the market. Panels like these, put on roofs all over the US, would give us a tremendous boost in our energy production - what are people so afraid of?

 

(This message has been edited by calicopenn)

[Tampa Turtle]

I was reading something the other day that most of the super-duper poly, wicking hiking clothes were a spin-off of Department of Agriculture research.

 

I think it is only crony capitalism if you don't like the project and investing in the future of american jobs and industry if you do.

[scoutingagain]

"Personally, I hope Obama goes with a $2/gallon gasoline tax in 2012. We Republicans need all the help we can get to win back the Presidency. "

 

Others are hoping Michele Bachman wins the nomination and continues to enthusiastically support drilling in places like Everglades National park and off the coast of Florida.

 

On the other hand if Huntsman wins the nomination I could be turned. I highly doubt it though because he's too sensible and the GOP has been anything but lately.

 

SA

 

 

[SR540Beaver]

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: "from bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage."

 

Attributed to Alexander Fraser Tytler, published in 1776. Regardless of whether he actually said it or not, it is wise counsel. We are increasingly dependent. Unless we recognize where we are headed, we are doomed to repeat history.

[packsaddle]

"Microwave ovens were inwented in Russia"

just a little Chekov humor there, apologies to Startrek.

[Tampa Turtle]

SR540 Beaver,

 

I am highly suspicious of the veracity of that quote.

[SR540Beaver]

Tampa,

 

There are questions as to who may have actually created the quote, this my disclaimer. Regardless of where it originated, there is much historical truth evident in the words.

[NJCubScouter]

SR540Beaver, I would be curious to know, which are those democracies that collapsed "over loose fiscal policy," as opposed to some other cause such as military conquest (external or internal.) I realize it isn't your quote, but Mr. Tytler is presumably no longer around to ask, and you did say there is "much historical truth evident in the words," so I am wondering what evidence there is for the historical truth of those particular words.

[NJCubScouter]

I just did some reading about this quotation on the Internet, and the consensus seems to be that while nobody can agree on who said these words, almost everybody who has looked into agrees that they are NOT ALL ONE QUOTE. The part at the end about the sequence from bondage to spiritual faith, etc., was a completely separate quote, by a different person (whoever that may have been), than the part at the beginning about "loose fiscal policy." Apparently the two quotes were put together in the 1970's, and of course with the invention of the Internet, is one of those things that has been spread all over the place. I think it does change the significance of the whole quote to know that it is not a whole quote at all. In other words, the "sequence" in the second part does not necessarily have much to do with the "public treasury" or "loose fiscal policy" -- at least not based on this quote.

[Papadaddy]

A significant, increasing tax on gasoline would never fly. Because it would be a "fair tax" meaning everyone would have to pay it equally...if they wanted gasoline. It would also drive up the cost of small, economical cars beyond the means of the average joe. My nephew just started community college and is looking for cheap, economical transportation. Not to be had. All the "clunkers" are gone, thanks to Government meddling.