The collapse of solar firm Solyndra is the beginning of the end for Obamanomics. After more than 32 months on the job, President Obama and his economic (on)crack team have managed to increase the chronic unemployment rate to record highs, increase the national debt to record highs, decrease economic growth to near-record lows, and decrease the President’s approval rating to record lows. Not exactly great results, but now the solar scandal is exposing why Obamanomics is such a failure.
I say the Solyndra scandal is the beginning of the end because it’s finally shedding light on what’s really behind the administration’s economic policies: lemon socialism and crony capitalism. These failed ideas are a “toxic combination,” according to Charles Krauthammer, and have been exposed as the backbone of Obamanomics.
Lemon socialism is government support for industries that would fail otherwise. The bank bailouts qualify as lemon socialism, as does the government support of Solyndra. Without lots of subsidies, low interest rate loans, and tax credits, the solar industry would basically collapse. The government supports the industry, believing that it’s smarter than the market and therefore capable of correcting for its perceived imperfections.
Of course, this is utter nonsense. The government’s decisions are not made by omniscient philosophers, but by politicians, political appointees, and life-long bureaucrats. These people have no skin in the game and no incentive to make the right choices.
Politicians and political appointees serve the special interests that helped them reach their positions of power. They end up helping their friends and hurting everyone else.
Bureaucrats, typically not beholden to special interests, are instead weakened by the insulation that protects them from bad decisions. In the private sector, wasting money is a firing offense. In the public sector, it’s seemingly the objective.
Clearly, in this instance, lemon socialism was proven a failure. The government was warned that Solyndra would collapse and was beyond saving, yet it still gave the company a loan for half a billion dollars. Now we taxpayers are left with the bill.
This lemon socialism, by itself, is bad enough. Unfortunately it often leads to crony capitalism, and the Solyndra scandal has that written all over it. The White House fast-tracked the loan:
At a Wednesday hearing of the committee’s oversight group, House Republicans pointed to emails obtained from the Department of Energy and the White House Office of Management and Budget, which they said showed the Solyndra loan was fast-tracked to fit the White House’s scheduled announcement of the move as part of President Obama’s green jobs initiative.
“The political pressure to approve the Solyndra deal appears to have caused DOE and OMB to miss or disregard numerous shortcomings regarding Solyndra’s financial viability,” read a memorandum from the committee released at the meeting.
Why help out this firm? It must have been the best in the industry, right? Nope, but Solyndra shareholders and execs gave a lot of money to Obama:
Shareholders and executives of Solyndra, a green energy company producing solar panels, fundraised for and donated to the Obama administration to the tune of hundreds of thousands of dollars.
Tulsa billionaire George Kaiser, a key Obama backer who raised between $50,000 and $100,000 for the president’s election campaign, is one of Solyndra’s primary investors. Kaiser himself donated $53,500 to Obama’s 2008 election campaign, split between the DSCC and Obama For America. Kaiser also made several visits to the White House and appeared at some White House events next to Obama officials.
Campaign finance records show Kaiser and Solyndra executives and board members donated $87,050 total to Obama’s election campaign.
And Solyndra visited the White House a lot:
According to White House visitor logs, between March 12, 2009, and April 14, 2011, Solyndra officials and investors made no fewer than 20 trips to the West Wing. In the week before the administration awarded Solyndra with the first-ever alternative energy loan guarantee on March 20, four separate visits were logged.
George Kaiser, who has in the past been labeled a major Solyndra investor as well as a Obama donor, made three visits to the White House on March 12, 2009, and one on March 13. Kaiser has denied any direct involvement in the Solyndra deal and through a statement from his foundation said he “did not participate in any discussions with the U.S. government regarding the loan.”
But the countless meetings at the White House seem hardly coincidental. Kaiser, in fact, is responsible for 16 of the 20 meetings that showed up on the White House logs.
That sounds like crony capitalism to me, which combined with lemon socialism, has led to the failure of Obamanomics.