What else can you conclude about a program in which Solyndra was one of the more promising loans?
In follow-up to yesterday’s grilling of Energy Secretary Steven Chu, the Washington Post editorializes in “No Fun in the sun”,
So what is the scandal here? Well, the review process behind the Solyndra loan was not quite as diligent as Mr. Chu insists. The secretary claimed Thursday that the solar panel maker failed due to an unforeseen, and unforeseeable, “tsunami” of subsidized Chinese competition and low prices for its competitors’ raw materials. In fact, the administration knew, or should have known, of these threats to Solyndra’s business model before the loan closed in September 2009. The Office of Management and Budget warned about them in an Aug. 31, 2009, e-mail to President Obama’s staff.
But the real scandal is the loan guarantee program itself. The United States needs alternatives to oil, for reasons ranging from climate change to national security. Shoveling taxpayer dollars into profit-seeking manufacturing companies is not the way to develop them.
You can call it crony capitalism or venture socialism — but by whatever name, the Energy Department’s loan guarantee program privatizes profits and socializes losses. It’s an especially risky approach in the alternative-energy space, where solar energy is many years from being cost-competitive with fossil fuels for most uses — and history is littered with failed government attempts to back the next big thing. [Emphasis added]
Keep in mind that the only reasons there are any profits to privatize is because the overhead — not just the losses — has been socialized.