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http://www.latimes.com/news/opinion/la-ed-solyndra-20110902,0,7
Solyndra and the stimulus
The bankruptcy filing of Solyndra, a solar panel firm, calls into question
the Obama administration's clean-energy program.
September 2, 2011
When Solyndra, a Bay Area maker of industrial solar panels, announced plans
to file for bankruptcy protection Wednesday, it wasn't just a blow for the
company's 1,100 laid-off employees or the investors who have pumped millions
into the venture. It called into question the Obama administration's entire
clean-energy stimulus program.
Solyndra was the first company to be awarded a federal loan guarantee under
the stimulus, worth $535 million. Taxpayers are likely to end up on the hook
for much if not all of that amount, a highly embarrassing development for
President Obama because he was among the company's biggest cheerleaders. He
visited its Fremont plant in May 2010 even though PricewaterhouseCoopers had
weeks earlier raised doubts about its plans for an initial public offering
by questioning whether it could continue as a going concern.
That's especially troubling because Solyndra is backed by one of Obama's key
fundraisers, George Kaiser of Tulsa. Congressional Republicans were raising
alarms about Obama's connections to Solyndra well before Wednesday's
announcement, with GOP members of the House Energy and Commerce Committee
voting in July to subpoena documents from the Office of Management and
Budget on the loan-guarantee decision.
Two important questions are raised by Solyndra's failure: Should the
government be in the business of picking winners and losers by providing
loan guarantees to risky energy ventures? And is Obama using stimulus funds
to reward his political contributors?
To the first, the answer is a qualified yes. Solar and wind projects aren't
the first to benefit from loan guarantees; Washington has been offering them
to nuclear power plants for decades. Research and development of
alternative forms of energy are expensive and often need more support than
private investors are willing to provide, but such investment is worthwhile
not only because it stimulates job growth during a downturn, but also
because in an era of climate change and worldwide turmoil over oil and other
fossil fuels, it's in the national interest. Moreover, competing countries,
notably China, are outspending the U.S. on clean-energy subsidies, and
falling behind will only cede the future market to them. But that isn't
meant as an excuse for the Obama administration. If it failed to do due
diligence on Solyndra, it deserves a political black eye.
To the second question, we'd like to see the results of the House energy
committee's investigation. Given that Obama promised to fund clean-energy
ventures during the 2008 presidential campaign, it's no surprise that green-
energy venture capitalists such as Kaiser raised money for him, nor is it
worrisome that many companies backed by those investors benefited from the
stimulus. But if there's evidence that political rather than business
considerations played a role in funding decisions, Obama will have much to
answer for. |
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