Solyndra’s All-Too-Predictable Collapse
On Tuesday evening, ABC News reported that in his upcoming “jobs speech,” President Obama will call for more “green jobs stimulus” — though this is now being called, in advance, “targeted infrastructure investment for clean energy projects.” It appears that he and his team have run out of ideas.
The next day, Wednesday, Obama’s “green jobs stimulus” baby, Solyndra, declared bankruptcy after taxpayers had spent $527 million propping up the company (or $479,000 per temporary job created).
I suppose it would be déclassé to note that I told you so.
Today, The Washington Post weighed in with a story on page A2: “Obama-backed green firm shuts down.” Although it was actually the taxpayer who bore the financial risk of Solyndra, The Post notes that it is Obama who bears the political exposure for this absurd boondoggle.
The best line in the story is this quote from Solyndra chief executive Brian Harrison: “This was an unexpected outcome and is most unfortunate.”
Unexpected? Really? Not only did I predict that this would happen in a book that was published in April 2010, red flags abounded soon thereafter about Solyndra, specifically, key among them that the company had to pull the plug on a comparatively modest $300 million equity IPO.
It seemed that, despite the enormous bag of other people’s money that our political class had handed it, the company’s prospects were dismal. This is, of course, common among companies that depend on politically arranged wealth transfers.
Around the same time, Solyndra’s auditor, PricewaterhouseCoopers, revealed how Solyndra “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.”
As Peter Lynch, a solar industry analyst, told The Post, Solyndra had “an insane business model. The numbers just don’t work, and they never did.”
Prior to its collapse, Solyndra had lost $558 million in its five-year existence.
So how, precisely, is this “unexpected”?
Then there’s Energy Department spokesman Dan Leistikow’s statement downplaying the cost of Solyndra’s bankruptcy: “Congress recognized the risks inherent in [subsidizing companies like Solyndra] and wisely set aside funding to offset any potential defaults or losses.”
Don’t worry, the Department of Energy will be made whole. Congress has more money.
Those Taxed Enough Already people sure are nuts.
Then there’s the fishy odor emanating from this:
House Republicans and government auditors had questioned the wisdom of the administration’s loan guarantees to the company, backed by capital from billionaire Democratic fundraiser George Kaiser …
Some of the biggest investors in Solyndra … were venture capital funds associated with Kaiser, a key Obama fundraiser. The company, its connections to the administration and the imperiled federal loan guarantee were detailed in a Washington Post report in June.
On July 13, the Republican subcommittee majority voted to subpoena White House documents related to the loan guarantee, as it probed how Solyndra received the administration’s first loan guarantee under the federal stimulus plan. Material sought by the committee included e-mails and other documents that the lawmakers said officials at the Office of Management and Budget had failed to produce voluntarily …
Administration officials have said the loan guarantee was issued on its merits alone. Democrats said the White House had done its best to comply with congressional investigators, whose requests were what Rep. Henry A. Waxman (D-CA) in July called a “fishing expedition.”
Well, I’d say the fish just jumped in the boat. And it’s likely that, given other recent taxpayer-funded “green jobs” collapses, critics of Obamanomics are going to need a bigger one.
All this makes Obama’s jobs speech gambit all the more bewildering. The Post continues:
Solyndra had repeatedly been highlighted as a model by the Obama administration … Obama visited Solyndra’s factory in May 2010. “The future is here,” Obama said in his appearance, praising plans “to hire a thousand workers.”
Yes, the future is here, on your dime, and it isn’t going away anytime soon as long as Obama keeps calling for more “green jobs stimulus.”
Sorry, that’s “targeted infrastructure investment in clean energy projects.” We can’t have people thinking Obama is out of ideas.