Obama/Solyndra Reaction: “Should government pick winners/losers? Qualified Yes!”
An L.A. Times editorial boils the scandal over Solyndra – a Fremont, California solar panel maker backed by an important Obama fundraiser that is bankrupt after burning through a taxpayer-guaranteed loan of more than half a billion dollars – down to two questions:
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.
In reverse order, these arguments are: missile gap; global warming; jobz; that the market’s disinterest creates a compelling public concern; and that the nuclear power industry is now a model worth emulating.
I’m especially concerned about this last, as I recall one long midsummer morning in the boardroom in 2007, during which editorialist Dan Turner slowly sucked all the oxygen from the room and left the rest of us to die one by one or agree to his all-out denunciation of nuclear power, a piece that put the verdict right in the title: “No to nukes.” Some of Dan’s arguments, including the one that the industry has never existed without massive public subsidies and shows no glide path away from public subsidies, I even found compelling.
Why the switcheroo now? I would have thought lingering questions about whether Fukushima is in fact under control would at least give pause to proponents of all-or-nothing behemoth energy policies that are constructed in spite of rather than in response to market conditions.
I also can’t imagine any number of qualifications that would square the notion that government should choose private-sector winners and losers with a rudimentary understanding of fair play or individual liberty. Is the logic that because in this case the winner turned out to be a loser anyway, we shouldn’t pay too much attention?
Finally I think the ed board is thinking wishfully when it claims the Solyndra debacle just raises “two important questions.” I can think of a few others: What did Solyndra do with the $527 million (out of a total guarantee of $535 million) it borrowed in the form of taxpayer-subsidized loans? Why did the Energy Department provide so much money for a technology – cylindrical rather than flat solar panels – that has not been proven scalable? What role did Tulsa-based fundraiser George Kaiser, whose George Kaiser Family Foundation held more than a 35 percent equity stake in Solyndra as of an aborted IPO in 2009, play in encouraging this subsidy?
I realize editorial writing is a task more otherworldly than priestly transubstantiation of the host, but it’s just willful blindness to pretend the Solyndra case raises only abstract issues. There’s one journalismism that still holds up: If it looks like shit, smells like shit and tastes like shit, it’s the food at the L.A. Times cafeteria.