Obama's Solyndra Talking Cure Fails
Little scandal, big story
This is the Obama I voted for. The caretaker. The hamstrung wunderkind. The graying, toothless, scandal-ridden executive, vainly proposing high-minded laws and stimuli that die in the legislature. My favorite kind of president: the kind who can't get anything done.
The scandal over Solyndra, a Fremont, California-based maker of tube-shaped solar panels, has only gotten worse since President Barack Obama tried to defend his command-economy principles to a polite press corps last week. Shortly after Obama's lackluster press conference on Thursday, Jonathan Silver, administrator of the Department of Energy's loan guarantee program, announced he was leaving his powerful and prestigious federal government job for the opportunity to become a "distinguished visiting fellow" at the Third Way think tank.
On Tuesday, Solyndra itself coughed up CEO Brian Harrison, announcing in bankruptcy court that Harrison, who was in charge as Solyndra obtained a $527 million taxpayer-guaranteed loan and subsequently went bankrupt, had left the company "as scheduled."
Solyndra dead-enders have tried to downplay Silver's departure from the Energy Department. So has the Obama Administration.
"Because of my absolute confidence in Jonathan and the outstanding work he has done, I would welcome his continued service at the Department, but I completely understand the decision he has made," Energy Secretary Steven Chu said in a statement about a job change that could most charitably be described as awkwardly timed. "Under his leadership, the loan program has demonstrated considerable success, with a broad portfolio of investments that will help American companies compete in the global clean energy market." Chu claims that Silver made his decision prior to the Solyndra bankruptcy and Silver's disastrous testimony to the House Committee on Energy and Commerce.
Human sacrifice is the food of politics, so career crashes like these are to be expected. Note that Silver has now been sacrificed twice—first in having to testify over a loan that was made two months before he took office, and now as the preliminary to Chu's highly probable departure.
But Solyndra has been remarkably lethal for a hubbub that only surfaced because House Republicans made an issue of it. Whether you believe Americans are not interested in Solyndra, have not heard enough about it from the establishment media, or are too smart to be fooled by a "faux scandal," one thing stands out: Like the originally marginal Occupy Wall Street movement, Solyndra keeps getting bigger the more it is belittled.
It also continues to generate side troubles. Human Events' Neil W. McCabe reported Wednesday on another green energy company with close ties to Golden State Democrats that has lately come into a big federal loan. You may not share McCabe's judgment that San Jose-based SunPower will be "twice as bad" as Solyndra or his confidence that the company is doomed. But the drumbeat of publicly funded green-job disappointments is turning what had been the president's signature industrial policy into a grinding, extended walk of shame:
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…
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….
The congressman hosted an Oct. 14, 2010, tour of the plant with company CEO Thomas H. Werner and Interior Secretary Kenneth L. Salazar to promote the company's fortunes.
"The path to a clean energy economy starts here, in places like SunPower's research and development facility," said Salazar during the tour.
As the bad news continues to pile up, Obama is consistent in his notion that it's possible to make the problem go away with sugary words. At his press conference last week, the president gave his most complete response on Solyndra to date, but the responses were nothing new:
Solyndra—this is a loan guarantee program that predates me, that historically has had support from Democrats and Republicans as well…
China and Europe, other countries are putting enormous subsidies into these companies, and giving them incentives to move offshore. Even if the technology was developed here in the United States, these companies are going to China…
Now we knew from the start that the loan guarantee program was going to entail some risk, by definition. If it was a risk-free proposition, then we wouldn't have to worry about it. But the overall portfolio has been successful…
But I have confidence that decisions were made based on what would be good for the American economy and the American people and putting people back to work…
And by the way, let me make one last point about this: I heard there was a Republican member of Congress who is engaging in oversight on this. And despite the fact that all of them in the past have been supportive of this loan guarantee program, he concluded, "You know what? We can't compete against China when it comes to solar energy." Well you know what? I don't buy that. I'm not going to surrender to other countries technological leads that could end up determining whether or not we're building a strong middle class in this country…
What's also a problem, as I said, is that other countries are subsidizing these industries much more aggressively than we do. Hundreds of billions of dollars the Chinese government is pouring into the clean energy sector, partly because they're projecting what's gonna happen ten or twenty years from now…
And all I can say is the Department of Energy made these decisions based on their best judgment about what would make sense…
Obama's Solyndra skylarking failed to address the central issue—why your money is being gambled on pig-in-a-poke new market development in the first place—and also created new doubts. While the president at least provided an "I have confidence in" sop to Attorney General Eric Holder (who is on the run from the much more serious "Fast and Furious" incident), he didn't even pronounce Steven Chu's name. The assurance that the Department of Energy used "their best judgment" was not a ringing endorsement either.
Obama's speech misfired in other ways. His jingoistic jabs at Rep. Cliff Stearns (R-Florida), who heads up oversight for the Energy Committee, set Stearns up for an obvious rejoinder.
"If President Obama believes that we should borrow billions of dollars from China to subsidize American businesses trying to compete with China then he doesn't understand this country's economic system," Stearns said in a statement. "We should not be picking winners and losers, which is a fundamental flaw in his stimulus scheme."
Obama also tried to create distance between himself and the company by saying the loan guarantee program "predates" him. This is unlikely to stick given Obama's famous photo opp at Solyndra's swanky headquarters and the Bush Administration's decision to pass on the company's loan application.
This was the special weakness of Obama's explanation. In nearly 1,300 words [pdf] he barely went beyond the widely ridiculed couple of sentences he muttered in an earlier Good Morning America appearance. The content merely reiterated a month's worth of unsuccessful efforts to blame Bush, China, and capitalism. If he thinks creatively enough, Obama might find some new targets: The recent revelation of how much money California green energy companies have managed to grab from the loan program at least holds out the possibility of claiming it was all Prop 13's fault. But the stubborn fact remains that the Nobel-winning president's Nobel-winning energy secretary chose to throw $528 million at a company closely tied to one of his billionaire campaign donors.
If that were the sum of the troubles—or if Obama had launched this charm offensive a month ago—the cloud might have passed with only a loss of a few kW in output. But the president has been relentlessly evasive. He has deployed his police in a manner that obstructs the Congress in its own investigation. He ignored his own staffers who doubted both the viability of the company and the public relations "optics" of an abundantly photographed presidential visit to Solyndra last year. Prior to the company's implosion, the president's Energy Department was on track to lend it another $469 million, and his minions showed an outrageously cavalier attitude toward the stewardship of your tax money.
After this slovenly history, Obama is under pressure to show executive-style accountability, but because he is an entirely political character he can't conceive of his situation in anything other than campaign terms. Sure, the Republicans are using this scandal for their own gain, escalating an argument over what is in D.C. terms a small sum of money, and chipping away at his green-spending regime for reasons that are opportunistic rather than principled. (Note that Stearns couldn't bring himself to attack Obama's cockamamie central premise that "we" are in some kind of market competition with "the Chinese.") But so what? Who could blame Republicans for joining a turkey shoot like this one?
In a perverse way, Obama might be better off if the second loan of $469 million had gone through. At a billion dollars the Solyndra loss might have become just another unfathomable statistic to a nation already dazed by the many trillions that have been wasted in the past few years. But when it's half a billion, you can almost get your mind around it. Solyndra continues to grow as a scandal not because the stakes are high but because they are revealing.
It will also continue to radiate political obstructions to whatever Obama's agenda is these days. Which is why I'm encouraged by one detail in Michael Goodwin's recent scuttlebutt-laden report on Obama's growing disengagement. The president, Goodwin claims, often knocks off work around 4 o'clock to have dinner with his wife and children. This is good news first because the president has a lovely young family; second because leisurely dinners leave less time for the legacy-building we all end up paying for; and third because history has shown that the more time a president spends with his family, the less time the rest of us have to spend with them.
Tim Cavanaugh is a senior editor at Reason magazine.
