Two high profile companies have gone bankrupt in the United States -- government-backed Solyndra and Evergreen -- and analysts anticipate more failures ahead."Solyndra was just the beginning," said Jessie Pichel, head of clean energy research at the investment bank Jefferies & Co. "We're going to see a lot of companies go bankrupt."
Just how many? Of the few hundred or so solar panel makers worldwide, just 20 to 40 are expected to remain standing in a few years time, said Mark Bachman, a renewables analyst at Avian Securities.
None of this should have been a surprise to anyone with even the most rudimentary understanding of how markets work. Any product -- and I mean any product, good or service -- that can be made and sold profitably, will be made and sold profitably. This is the work of the "invisible hand" that Adam Smith understood, oh, about 235 years ago. Any product -- and I mean any product, good or service -- that requires a subsidy in order to be made and sold profitably is, by definition, not something that can be made and sold profitably absent the subsidy. To put it simply for our liberal friends, if it's a good product, it's already being developed and sold without government subsidies. If it needs subsidies, it's a bad product to begin with. Solar panels are self-evidently a bad product.
The problem with crony capitalism and the steering of subsidies to favored industries is that it's all crony and no capitalism. It's not a question of the government being unable to consistently pick winners; it's really an axiom that government can only pick losers, because the winners would already be winning without the subsidy.
Unless by "winning" you mean getting rich by stealing money from taxpayers.
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