Last week, the Obama administration’s Department of Energy announced it is extending an $852 million loan guarantee to something called the Genesis Solar Project in California.
Genesis, according to Energy Secretary Steven Chu, will be built on federal land and ultimately employ perhaps 800 people during its construction and 47 people once it is up and running. This would seem to be a lot of money to generate very few jobs at a time when the nation is on the verge of bankruptcy, but the project really isn’t about jobs.
It’s the latest in the administration’s attempt to turn us away from dependence on fossil fuels regardless of cost and reality. This project, according to Mr. Chu, “will enable the deployment of clean, renewable sources at scale, which will help bring down the cost of solar power in the years to come.”
Maybe, but one has to remember that this man is part of an administration with neither a learning curve nor much regard for the intelligence of the people who elected the president.
You see, Mr. Chu and his boss have been there and done that already in California, using tax money to guarantee a massive investment in a company that was going to help usher in a brave, new and a very green world.
That company, Solyndra, declared bankruptcy not 48 hours after Mr. Chu announced his faith in Genesis. Solyndra’s founders managed to procure and eat up roughly half a billion dollars in federally guaranteed loans without making a penny in profit before declaring bankruptcy.
The company got its guarantee as part Mr. Obama’s American Recovery and Reinvestment Act after its founders and board members made extensive contributions to the Obama campaign and the Democratic Party and mounted a mighty lobbying effort before Congress. Its grant was the first in a series of massive subsidies to similar enterprises and was made just weeks after Mr. Obama took office.
Solyndra is history today, but when the guarantees were announced as part of the Obama stimulus program, the fanfare and hullabaloo exceeded even those of last week’s announcement. Mr. Chu, like the man who appointed him, is rarely right about anything, but he continues to exude confidence in schemes that have already proved unworkable.
Solyndra was going to build solar panels and provide thousands of Californians with high-paying jobs in the new, green economy Mr. Obama and his friends seem totally dedicated to conjuring up in the face of opposition from the laws of economics.
When the stimulus act passed and Mr. Obama wanted to shovel some of the cash to his political friends on the West Coast, he and his minions were warned by the Government Accountability Office that they might want to look for a more suitable recipient than Solyndra, but they went ahead anyway.
Actually, they did more than just go ahead. They waved Solyndra’s corporate flag and assured those of us being asked to throw our tax money into the venture that it was the smartest thing we had ever done.
Vice President Joseph R. Biden, no doubt basing his projections on an intimate familiarity with American business gained during a lifetime as a politician, predicted confidently that Solyndra would “allow America to compete and to lead like we did in the 20th century.”
Not to be outdone, the president himself scurried out to California to stand in front of the new factory you and I helped build and called the company “a testament to American ingenuity and dynamism.”
When the loan guarantee was extended to Solyndra back in 2010, Mr. Obama, Mr. Biden, Mr. Chu and those of their contributors who made up the company’s board promised a new era and 4,000 jobs.
Some testimony. The 4,000 jobs never materialized, and Solyndra never turned a profit. It is going to be some time before the bankruptcy courts figure out just how much of the half-billion dollars the Obama team gave the company will be lost forever, but this didn’t stop Mr. Chu’s spokesman from declaring even as the Solyndra bankruptcy papers were being filed that the investment had been a great success.
Mr. Chu’s spokesman argued that “the project that we supported succeeded. The facility was producing the product it said it would produce, and consumers were buying the product.”
He failed to note that the solar panels Solyndra designed and manufactured were too complicated and expensive to compete in the marketplace. Those that were sold were sold at a significant loss, and the company would have closed its doors even earlier but for the federal loan guarantee.
It wasn’t Mr. Obama’s fault, though. Mr. Chu’s spokesman said the ultimate failure of Solyndra was traceable to those pesky market forces that continue to plague private-sector entities. In other words, it was the capitalist system rather than the administration’s flawed judgment that led to Solyndra’s downfall.
Moreover, the evidence suggests that the aspiring crony capitalists in the Obama White House monitored and no doubt encouraged Solyndra’s application for the loan guarantee, ignored warnings that there had been little or no due diligence and rushed the process at the request of the company. Because most of the major corporate players involved were huge Obama financial backers, it doesn’t take a total cynic to wonder if there wasn’t a bit of favoritism involved.
Many members of Congress, including House Energy and Commerce Committee Chairman Fred Upton, are seeking evidence as to whether Solyndra paid to play in Mr. Obama’s new, green economy, but such evidence is going to be hard to find because the administration somehow managed to destroy the records of emails, correspondence and other contacts with the folks at Solyndra regarding the granting of the guarantee.
What a shock.
David A. Keene, former chairman of the American Conservative Union, is a member of the board for the ACU, the National Rifle Association, the Constitution Project and the Center for the National Interest.
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