Solyndra – a perfect example of “Crony Capitalism”
Posted by Al Raden on September 11, 2011 · Leave a Comment
The events surrounding the bankruptcy of Solyndra, Barack Obama’s favorite solar energy company, should remind us again why the federal government should not play venture capitalist with our money. You’ll recall that Soylyndra was given a loan guarantee of $535 Billion dollars by the administration. It appears to me that this waste of our money was prompted by 2 goals – 1) payback for generous campaign donations, and 2) an obsession with destroying the existing energy industry.
This ‘investment’ would not have been made by anyone with a basic understanding of economics. As recently as early 2010, an audit by Price Waterhouse concluded that Solyndra, which lost over $500M in its first 5 years of operation, “has suffered recurring losses from operations, negative cash flows since inception and has a net stockholders’ deficit that, among other factors, raise substantial doubt about its ability to continue as a going concern.” Despite this, Solyndra’s loan guarantees were fast-tracked, while an established solar company, Evergreen Solar in Massachusetts, was struggling, and in that same year moved to China (along with 800 jobs). Interestingly, Solyndra spent a half million dollars in 2010 lobbying Washington. And, curiously, as part of the deal the taxpayers interests were subordinated to those of George Kaiser, a wealthy billionaire and large contributer to Obama’s campaign. Guess he had his vision of “Hope and Change” fulfilled.
An FBI investigation has begun, but I don’t expect it to go anywhere with the current Justice Department. This is a prime example of the “crony capitalism” that Sarah Palin is always railing about.
