"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

Wednesday, October 12, 2011

The Solyndra Economy

The key to understanding the deeper import of the Solyndra scandal is to look past the specific facts in this instance to the larger pattern.   Solyndra is not an isolated incident where Obama and Biden and their minions in the Department of Energy pushed through a $500 million plus loan to a failing solar energy company that just happened to be owned and managed by heavy Democratic donors, largely in order to have a photo op for Obama's "green jobs" initiative.    Solyndra is just an example of the crony capitalism that has infected government at every level and, sadly, with every party.    To be sure, the nexus of green energy companies and a Democratic Presidency and a Democratic Senate and (until 2010) Congress and their large donors means that, in this sub-category of government-business corruption, the biggest stains will be on the Democrats.   But, I'm afraid to say, this is just as likely the way business is done in Rick Perry's Texas or Scott Walker's Wisconsin.   When government has the power to direct public funds to specific companies -- to try to choose winners and losers in the economy -- corruption, understood as padding the wallets of your friends, including the lawyers and consultants and lobbyists who set up the deals, is inevitable.

Anyway, here's another story that has to do with a Democratic congressman, his son the lobbyist, and a California green energy company, SunPower.    The loan guaranteed in this case was for $1.2 billion, so it was more than twice the size of the Solyndra debacle.  

How did a failing California solar company, buffeted by short sellers and shareholder lawsuits, receive a $1.2 billion federal loan guarantee for a photovoltaic electricity ranch project—three weeks after it announced it was building new manufacturing plant in Mexicali, Mexico, to build the panels for the project.

The company, SunPower (SPWR-NASDAQ), now carries $820 million in debt, an amount $20 million greater than its market capitalization.  If SunPower was a bank, the feds would shut it down.  Instead, it received a lifeline twice the size of the money sent down the Solyndra drain.

Two men with insight into the process are SunPower rooter Rep. George R. Miller III, (D.-Calif.), the senior Democrat on the House Education and Workforce Committee and the co-chairman of the Democratic Steering and Policy Committee, and his SunPower lobbyist son, George Miller IV.

In other words, Solyndra is just the tip of the iceberg.

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