Reason Foundation Study Details Depths of Green Energy Crony Capitalism

Not an investment in the future but in people who know the right politicians

Credit: OregonDOT / Foter.com / CC BY

The Reason Foundation (the non-profit that publishes both this site and Reason magazine) has released a new report today that really explores the terrible decisions made by the Department of Energy in its green energy loan programs and subsidies. This is the program that brought America Solyndra (and several other similar cases that have gotten less attention.) They summarize:

A new Reason Foundation study finds 22 out of 26 projects were rated as "junk" grade investments before they were awarded taxpayer-backed loans as part of the Department of Energy's Section 1705 loan program, which was part of the 2009 stimulus bill that focused on renewable energy, electric power transmission, and biofuels projects.

The report also highlights taxpayer-backed loans given to companies with ties to Senate Majority Leader Harry Reid, former Vice President Al Gore, former New Mexico Gov. Bill Richardson, and a company founded by former Maine Gov. Angus King, who is now a U.S. Senator. According to the Reason Foundation study, the companies that spent the most on lobbying received the biggest Section 1705 loans.

"These projects were rated by credit rating agencies as junk investments with a high likelihood of failure, but the Department of Energy didn't seem to care because it was giving loans to the firms that were well connected or were spending the most on lobbying," said Julian Morris, vice president of Reason Foundation and co-author of the report.

Far from offering loans for all different types of energy innovation, the lion's share of the money went entirely to solar projects. The study takes note of the relationship between the amount of lobbying the companies reported and the size of the loan guarantees they received:

Reason Foundation

 

Also of note: The completed projects so have far produced less than 100 permanent jobs. They (and the uncompleted and troubled products) produce thousands of temporary construction jobs (usually handed out to connected unions via labor agreements), but they don't have to care whether the projects are financially viable once their work is done.

Read the Reason Foundation's summary here and the whole report is accessible here (pdf).

Comments

[Episiarch]

You don't understand, Scott. It's not cronyism when the stated intentions of the technology are green (and therefore good). Remember, only words matter, not actions or consequences.

[Austrian Anarchy]

If you think this is good, just watch what they've been doing with schools.

[Dweebston]

But... but green! And solar! Carbon-neutral! Renewable!

These aren't merely words, they're invocations that dispel physical and economic limitations!

[The Rt. Hon. Serious Man, Visc]

Progressives: Complain about Corporatism in Government, Embrace Corporatism for Healthcare, Energy, and Manufacturing

[Bo Cara Esq.]

I think the Democrat Party does not even hide the fact that their one tenant above all others is tax and spending. They have many causes, some of which I might even agree with, but they almost immediately think to address every one with taking other people's money and spending it.

[Restoras]

The Arbiter Hath Spoken! So let it be written in the Libertarian Purity Manifesto.

[darius404]

Don't be ridiculous. Everyone knows Palin's Buttplug is the Arbiter of Libertarian Purity.

[NotAnotherSkippy]

When they're not advocating for subsidized housing they have other tenets too.

[Austrian Anarchy]

What would Woody Guthrie's guitar do?

[Johnimo]

Hammer out freedom? Hammer out justice? All over this land? I'm just sayin'

[MP]

The problem here is that this can quickly devolve into BOOSH! or THEY DID IT TOO! In other words, eco-cronyism is justified to counter carbon-cronyism.

And that's ultimately the real problem with this report. It overly focuses on the utilitarian aspects of the cronyism. It's bad because it was "Junk". Bah! It's bad because it is morally flawed.

[SusanM]

The utility argument adds to the schadenfreude.

[Sevo]

"A new Reason Foundation study finds 22 out of 26 projects were rated as "junk" grade investments before they were awarded taxpayer-backed loans"

And the management was so f'ing bad that even huge amounts of 'free' capital couldn't make them good.
Pathetic.

[Bo Cara Esq.]

That was my take too. Even with the 'filthy lucre' taken from taxpayers they still failed. Wow.

[Restoras]

When you are looking for venture capital, and can't get any, you always go to the government. The government is far easier to hoodwink than venture capitalists.

[Gozer the Gozerian]

Hoodwink or bribe?

I know, I know... "Yes."

[The Heresiarch]

What was the end ROI?

[Sevo]

"What was the end ROI?"
Well, Obo got re-elected.

[Christine Lakatos]

Yeah, this is amazing. I wrote about this exact topic in April 2012 called Green Corruption: Department of Energy "Junk Loans" and Cronyism http://greencorruption.blogspo.....ergy.html.

Since that time Marita Noon (cited in this report) and I have exposed more cronyism and corruption inside the DOE as well as tracking the $80 to $100 billion of taxpayer money from the stimulus package that was earmarked for green energy (over 50 stories).

Recently, I researched the billions that went to biofuels, noting their connection and status. Plus the failures list that I plan on getting back to in early 2014, which includes these junk loans (in your report) as well as additional stimulus and green energy funds. http://dailycaller.com/2012/10.....-troubled/

My latest is Senator Harry Reid's connection to 5 stimulus "junk" loans worth over $3B ?? just to name a few that stuck out after I read Reason Foundation's report.

So much to say... [e-mail]. Thanks.

[Christine Lakatos]

oops link not working http://greencorruption.blogspo.....p98Lo0Zwk8

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