"It profits me but little that a vigilant authority always protects the tranquillity of my pleasures and constantly averts all dangers from my path, without my care or concern, if this same authority is the absolute master of my liberty and my life."

--Alexis de Tocqueville, Democracy in America

Monday, September 19, 2011

Three Notes on Solyndra

Congressman Brian Bilbray (R - Cal.) made the following key points during the Solyndra hearings last week, as related by Andrew Stiles in NRO.   All of the points go, not to the potential corruption of the deal, but to the sheer stupidity of it:
  • "Why did the government choose to invest in Solyndra’s 'thin-film' solar-panel technology in the first place, when it has historically proven to be one of the most complex, and therefore riskiest, forms of solar technology?"   By contrast, China is subsidizing its solar industry, but betting heavily on the polycrystalline variety, which is not as efficient as thin-film but is less risky and vastly cheaper to produce.
Answer:  because the White House "deciders" are political animals, not businessmen.   Risk doesn't enter into their thinking, nor does profitability; the only thing that matters is the "optics" of the deal.   For Obama and his ilk, "thin-film" solar sounds cool, so let's invest in it.   Using other people's money, of course.
  • Why build a new plant in California?  "Electricity costs in California are twice as high as in Midwestern states like Ohio, and nearly four times as expensive as in China.  On top of that, California has some of the strictest state and local regulatory regimes in the country in regard to air quality, water quality, storm runoff, occupational safety, hazardous-waste generation, and so on.   Yet Solyndra proposed to build on 30 acres of virgin farmland in Fremont, Calif. (in the Bay area), on a site that was classified by the EPA as a 'non-attainment zone,' meaning that air quality did not meet certain federal standards."
Answer:  Here's where the corruption comes in.   California is a "blue" state, and the Bay Area is the bluest of the blue.   California is also a key source of campaign funds.   That's why you build a plant in California, regardless of the costs or bureaucratic impediments, if you're Obama.   After all, again, it's other people's money. 

  • Why build a plant at all when you could lease space or buy a vacant building?    "Bilbray is astonished that no one appears to have second-guessed the decision to build a new facility in the first place, which he calls 'absurd.' With the number of Bay-Area start-ups constantly in flux, and with businesses 'fleeing the state' in search of more favorable economic conditions, there is no shortage of facilities available to be rented or retrofitted to accommodate even high-tech companies like Solyndra."
Answer:  because making that kind of rational business decision doesn't give you a chance to subsidize the local construction industry, a two-fer that would have been attractive to the union-dependent Obama administration.

Bilbray is doing good work getting to the bottom of this.  But what I fear is that Solyndra is not an isolated scandal, but simply an example of how business gets done in Washington, and how far we would have to go to get back to a truly free market.

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