Beware of a company that claims it can make widgets for $10 each, sell them for $8 apiece, and then "make up the losses on volume." No banker or venture capitalist would invest in such a foolhardy scheme. But substitute "solar panels" for widgets and that is exactly what Washington's professional politicians and career bureaucrats did with $535 million in loan guarantees for Solyndra LLC, the now-bankrupt California company that was the centerpiece of President Obama's "clean energy future." The funding came from Obama's $859 billion economic stimulus program. Ultimately, Solyndra may prove to be the only Energy Department loan guarantee that explodes into a scandal rivaling Teapot Dome or Credit Mobilier for venality and abuse of the public trust. However, there are at least 16 more such loan guarantees worth in excess of $10 billion, all approved by the same cast of characters at the White House and the U.S. Department of Energy responsible for the current mess. And many other federal departments and agencies have provided billions of dollars' worth of loan guarantees, so nobody should be surprised if Solyndra is only the first of many similar outrages under the Obama economic stimulus regime.
What is clear from emails made public last week by the House Energy and Commerce Subcommittee on Oversight and Investigations, headed by Rep. Cliff Stearns, R-Fla., is that key Solyndra loan decisions were guided primarily by political considerations. Obama was not in the White House when the proposal to back the company initially appeared in Washington, but two weeks before President George W. Bush left office an Energy Department review panel unanimously recommended against making the loan. Even after Obama opted to champion the proposal, career employees at the Office of Management and Budget cautioned against doing so before a final decision was made. One even predicted Solyndra would run out of money and head for bankruptcy court by September 2011. And a Government Accountability Office report said the Energy Department had circumvented its own rules in order to make loan guarantees to at least five firms, including Solyndra.
The problem is that government is inherently political, so it is all but impossible, even for the most dedicated and impartial career employees, to make investment decisions using tax dollars strictly on the basis of economic considerations. That is why politicians should never be allowed to pick winners and losers in the market. The result almost always will be -- as Energy and Commerce Committee Chairman Rep. Fred Upton, R-Mich., said of the Solyndra mess last week -- "not right. This is not good. It makes you sick to your stomach. This is taxpayer money."
