In May 2010, President Obama visited California’s solar-panels manufacturer Solyndra, touting it as an “engine of economic growth” and a model of his stimulus spending schemes. Dedicated to government-financed “green energy jobs,” this administration saw the company as encapsulating everything right about the state’s collusion with the environmental-industrial complex. Just last month the business went belly up, having received a $535 million government-backed loan but still proving itself economically unsustainable.
What’s most interesting, however, is the new revelation that Obama was warned by top administration officials and a donor about the folly of Solyndra and the potential bad press from visiting the business. Obama fundraiser Steve Westly presciently warned in a memo:
If it’s too late to change/postpone the meeting, the president should be careful about unrealistic/optimistic forecasts that could haunt him in the next 18 months if Solyndra hits the wall, files for bankruptcy, etc.
In particular, Westly cautioned that he believed “the company’s cost structure will make it difficult for them to survive long term.”
Numerous top officials found the whole project a bad investment. An official at the Office of Management and Budget sounded the alarm as follows: “I am increasingly worried that this visit could prove embarrassing to the Administration in the not too distant future, given 1) what we just heard today from DOE that Solyndra is delaying their IPO at least until the end of the year, and 2) what the auditors said about Solyndra making it through the year absent new financing.”
In the face of these warnings, why did Obama and his handlers proceed unflinchingly to visit the company last year? I can think of two likely explanations. One is hubris: The president thought that these admonitions were insignificant compared to his capacity as a politician and central planner, whether that meant his ability to reshape economic reality despite the financial fundamentals stubbornly asserting themselves, or his political knack to spin away whatever problems might emerge. The other explanation is simply sheer ideological blindness: A near invincible belief in the power of government, and in particular in the program of “green energy” subsidies, to succeed despite the thoughtful warnings of the naysayers.
Many of Obama’s partisans have tried to distract us from the failure of Solyndra by pointing out the failures of private businesses. Yet the whole point is these occur on the market, financed through private capital, with the only people with money on the line being those who have voluntarily agreed to such risk. Solyndra is more scandalous because we taxpayers were forced to foot the bill, with assurances coming from Washington that it is better at choosing economic winners than is the market, and yet even with a leveraged loan, the firm collapsed.
But the further significant thing to keep in mind is Solyndra is a little microcosm of the government in action. It symbolizes everything wrong with this president’s domestic policy and indeed most presidents’ policies: the attempt to shape reality despite economic law and human nature, the drive to improve upon the naturally occurring results of the free market through the forceful, centrally managed hand of government. A few hundred million dollars is less than a drop in the government’s bucket. But the hubris and blindness with which Obama proceeded to champion this program even in the face of his advisers’ warnings should trouble us, and teach us about government in general, even more than the lost money itself.