President Obama faces political catastrophe in the form of Solyndra -- a San Francisco Bay area solar company that he touted as a gleaming example of green technology. It has announced it will declare Chapter 11 bankruptcy. More than 1,100 people will lose their jobs.
During a visit to the Fremont facility in spring of 2010, the President said the factory "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. "
It's not his statements the administration will regret; it's the loan guarantees. The President was celebrating $535 million in federal promises from the Department of Energy to the solar startup. The administration didn't do its due diligence, says the Government Accountability Office. "There's a consequence if you don't follow a rigorous process that's transparent," Franklin Rusco of GAO told the website iWatch News.
The President touted the federally back money as a way to create jobs. The President's opponents immediately jumped on the deal as Solyndra made its first layoffs.
Republican Congressman Cliff Stearns of Florida warned, "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."
Sheesh! The fundamental premise of free market, Austrian economics from Ludwig von Mises and Friedrich von Hayek forward is that the the market, through the collective actions of individuals in the marketplace making decisions about what they want and need (and not what governments tell them what they ought to want or need) actually creates knowledge about what does and doesn't work, what is and isn't useful, what is and isn't productive. Central planners, without this knowledge that only the collective action of individuals in the marketplace can create, who simply choose based on ideology this or that industry to support, inevitably fail. You can't just by fiat demand that people by Chevy Volts, and you can't just by fiat demand that people use "green technology."Another critic, Fred Upton of Michigan: "The unfortunate reality is that loan guarantee highlights many of the systemic flaws associated with the stimulus in the mad dash to spend hundreds of billions of dollars."
This is not a matter of opinion, this is simply a scientific fact. Central planning has and will everywhere fail, not because of bad intentions, but because of ontological truth -- that the central planners simply cannot know what the market has not as yet revealed.
Putting aside economics, for a moment, however, consider this: $535 million in federal loan guarantees for the stated purpose of "creating jobs." Hmmmmm.... this plant had apparently a total of 1,100 jobs. Maybe I'm just a silly right wing nut job, but $535 million divided by 1,100 is just shy of $500,000 per job! The government would have done better giving $100,000 grants to 5,000 people who can show that they can match that investment with personal funds to start small businesses, and then gotten out of the way and let them go ahead and try. If 1% make it, you've got 50 small businesses who might actually hire new employees. But that common sense, "small ball" approach wouldn't allow Obama to line the pockets of his rich donors.
What? What's that you say? Oh, the article, from the NBC San Francisco affiliate, failes to tell you this information:
One of Solyndra's biggest stakeholders is Argonaut Ventures I. Its majority owner is Oklahoma oil billionaire George Kaiser, who was a "bundler"of campaign funds for the Obama-Biden campaign. This means he collected contributions and sent them en masse to the candidates....Well, isn't that cozy.
Obamanomics... socialism mixed with corruption. November 2012 can't come fast enough.