Saturday, September 10, 2011

Solyndra: Where the Sun Don't Shine

Noman has little to add to Holman Jenkins' gem in this morning's WSJ.  But, he can't let the occasion pass without bringing it to the reader's attention and adding an anecdote about the green economy.  Besides being funny, Jenkins' offering rings truer than the President's actual speech.
I have chosen to pursue this agenda, notwithstanding its untimeliness in the face of matters that have arisen (i.e., the economic crisis), in part because I'm comfortable with it. 
Consider my background. I don't know much about business and, frankly, don't care to. You see, I have a self-reinforcing image of Barack Obama. I am high-minded. Business people are greedy and, somehow, lesser. I stay focused on that...
I am not anti-business. I get a supreme sense of satisfaction when business leaders approach me and, in a deferential manner, ask for subsidies and regulatory favors that will determine whether their companies succeed or fail. Like solar subsidies. This is the kind of job creation I'm interested in. 
My administration has taken flak because of our "investment" of tax dollars in a solar company that last week filed for bankruptcy. Don't be misled. If such companies were profitable and could survive without subsidies, they would not be fit objects of government charity, nor would their leaders approach me with a deferential mien. 
Their dependency is what makes them loyal constituents, generous with a campaign donation, willing to go on CNBC and praise our policies. You can always count on me for job creation when it means taking money from independent businesses, those that are answering the call of the marketplace, and giving it to dependent businesses, those that are answering the call of government.
Jenkins' reference to a problematic solar "investment" is to the now defunct Solyndra Corporation, President Obama's poster child for green jobs and his first stimulus plan.  $500 million dollars of taxpayer investment has gone to seed.  (How's that for a poignant twist on the term "seed capital"?)  But, what else might sober people expect when the federal government appropriates to itself nearly $1 trillion of taxpayer (debtor) money with which to play venture capitalist, while out on a hope-and-change bender?  ("Whee! Let's pretend we're investors and ask our political friends what to do with all this money!")

Naturally the company was backed by one of President Obama's key fundraisers who made several trips to the White House.  The Administration's Energy Department extended the loans despite the House Energy and Commerce Committee's expressed concerns.  The FBI raided company headquarters on Thursday after the company filed for bankruptcy.  Unlike the norm in government-business relations, private creditors (the President's bundler, George Kaiser) will be compensated prior to US taxpayers out of the first $69 million of remaining assets, assuming there are any.

It's a sordid story the hint of which would sink any Republican's ship.  Noman won't be holding his breath, however, waiting for President Obama to go down over this.  At the risk being cynical, he's even willing to bet that the President will sail away scott free.  Democrats always do, a la Bill Clinton and his legions of artful dissemblers.

The staggering fact is that Solyndra's story is just one scrap of the spree--a billion dollar sliver of a trillion dollar slush fund.  So much corruption in a single vignette.

Noman is thrilled, however, for the Democratic Party's friends who were able to reap the benefits of government redistribution, of its spreading the wealth.  Because it's fair.  They're saving the world.  They're entitled to it.

The following is appended for the reader's entertainment.
In March 2010, the company disclosed that its external auditor had questioned whether it could survive. 
In a special note, PricewaterhouseCoopers said the company "has suffered recurring losses from operations, negative cash flows since inception and has a net stockholders' deficit that, among other factors, raise substantial doubt about its ability to continue as a going concern." 
Even so, Mr. Obama visited the company in May 2010, hailing it as a model investment by the government and a "testament to American ingenuity and dynamism." 
House Republicans have questioned whether the White House interfered improperly with the Solyndra deal. One of the family funds of billionaire investor George Kaiser, who was a bundler for the president's 2008 campaign, invested in Solyndra and lent it money to keep it afloat. 
On Sept. 1, two House Republicans investigating the Solyndra deal said they had evidence the White House monitored the loan deal and communicated with the Energy Department as it was being reviewed. The White House has denied any impropriety... 
The company has been searching for a buyer or investor to bail it out since February, when an out-of-court restructuring reshuffled its mounting debt load. Under the restructuring, the DOE agreed that in the event of a default and liquidation, the government would be paid after private creditors providing a new $69 million loan that the company said it needed to stay afloat (emphasis added).
The deal was unusual for the U.S., which is usually the most senior creditor in any type of loan or guarantee (emphasis added). But government officials viewed the arrangement as a way to protect the $460 million in taxpayer funds that were already on the line, people familiar with the matter said. That gamble failed as the company collapsed anyway.
We tax-paying, debt-bearing suckers will clearly have to be protected by the media from knowing too much.  Meanwhile, our political betters and their crony-capitalist friends will be retiring to the back room to deal--on the people's behalf, of course.

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