A Philosopher's Blog

Solyndra

Posted in Business, Philosophy, Politics by Michael LaBossiere on September 17, 2011

When I first heard “Solyndra” my initial thought was that it was some sort of sci-fi thing, like Soylent Green or Solaris. However, it turns out that it (or rather was) a solar energy company.

Solyandra failed, which is not all that unusual for businesses involved in “new” technology. However, what makes this case somewhat special is that Obama and Biden made the company a show pony for their green energy and jobs plans. Obama even visited the company to praise them in person. However, as with Soylent Green and Solaris, things were not as they seemed.

Even before Obama visited the company it was known that it had lost $558 million in its five years of operation. An audit of the company had, in fact, indicated that it was likely to fail. As such, Obama was essentially saying that a shambling zombie of a company was full of life and vigor. Obviously, the Obama administration failed to do its basic homework before he went to praise this company. This, is, of course, a significant failure and damages his reputation.

If Solyndra had merely been praised, then this situation could have been dismissed as a minor embarrassment for Obama. However, the government loaned the now bankrupt company $535 million and might have to write that off as a loss. The FBI is apparently investigating the company and it remains to be seen if any misdeeds (other than incompetence) were committed.

There are other companies that are receiving similar loans and this situation raises serious and legitimate doubts about the process by which loans are determined. After all, if Solyndra was given millions and touted as a poster child while it was, in fact, already dead, then it is natural to wonder how many more Solyndra like scenarios are out there.

While loans to businesses can be a good idea and can pay off, it is clear that the assessment process needs to be carefully considered. While there is always risk in business, especially in “new” technology, there is a very important distinction between legitimate risk and handing money to a company that is driving off a cliff.

This situation could have easily been avoided and it does raise questions about the possibility of corruption within the administration. After all, Obama backer George Kaiser was a major investor ($75 million) who was able to get a special deal in regards to being given priority over all the other creditors-including the government.

It is unfortunate that this will provide ammunition to those who oppose alternative energy and government support for new business. We need both, but we need the process to be handled properly and the Obama administration has let us down.

 

7 Responses

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  1. WTP said, on September 17, 2011 at 12:25 pm

    Congrats, Mike. I was hoping I would get through this post without a “Blame Bush” point, and I’m happy you didn’t disappoint. However, I must ask about this point:

    “It is unfortunate that this will provide ammunition to those who oppose alternative energy and government support for new business. We need both…”

    I don’t know of people who “oppose alternative energy”. Government support for businesses pursuing alternative energy, yes. But much of the opposition to such is because of situations exactly like this one. Government entities are not qualified to make these kinds of decisions. Peggy Noonan had a column today in which she pointed out:

    “The president would have been helped by wise old aides with wise old heads, people who somewhere along the line had had to meet a payroll. Instead he was surrounded by bright, committed, energetic naïfs who didn’t know what they didn’t know. They knew Democratic Party politics. They did not know national politics.”

    Now this quote was in reference to politics, which is something they should know considerably more about than business. Yet this point is doubly applicable to this Solyndra mess, as they know even less about business than politics.

    • Michael LaBossiere said, on September 19, 2011 at 7:54 pm

      Well, there seem to be some folks who are opposed to nuclear power, which is typically cast as an alternative power. Plus, there are some people who are opposed to wind farms (such as the folks who contend they are bird slaughtering machines).

      • WTP said, on September 21, 2011 at 9:14 am

        So are you saying, in this context of a discussion involving a company that built solar panels, that there is some cross section of people who oppose nuclear and wind power who will use this Solydra debacle as ammunition to justify their opposition to those alternatives? And that such people would be taken seriously by anyone serious? Or are you just being a smart ass again?

        • dhammett said, on September 21, 2011 at 9:35 am

          Just offhand, and outside this discussion, does one have to be a smart ass to say that there are two or more “serious” people who , for reasons even they may not understand, believe some very foolish things?

  2. dhammett said, on September 18, 2011 at 11:23 pm

    Dr. LaB: Sometimes Stewart says it all before you even write the blog post.. .🙂

    First 8:35 here:

    • Michael LaBossiere said, on September 19, 2011 at 7:58 pm

      I steal from him shamelessly. But, I do fill in the arguments while he does the much more entertaining approach.

  3. Mark Davis said, on November 4, 2011 at 11:00 am

    there is a connection btween solaris and solyndra ….even if its just the fraud part…….. I have been doing my research and it is now obvious to me that most of the higher end of the system is corrupt and anyone can be in danger if in fact they get to close to the truth. Check outh the NJ connections from Corozine to bernanke to fishman to Lautenberg to menendez (defacto exoneration) to alito……………… chertoff….. holder…. then throw in these names—– Kean 911 citigroup united health…… gorelick911 fishman…… consider these ………Fannie Mae, Fre MAc BP…… the list goes on and on ….. we need to stop them now……


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