I, Panel

Solyndra’s story, with apologies to Leonard E. Read

Tim Cavanaugh from the January 2012 issue


I, Panel

Solyndra’s story, with apologies to Leonard E. Read

I am a solar panel—not the ordinary flat solar panel familiar to all boys and girls and adults who hope for greener energy sources. I’m actually much more sophisticated and much less useful than those. I’m a cylindrical-tube panel manufactured by Fremont, California-based Solyndra LLC.

According to my creators, I offer a unique advantage over the traditional solar panel—I don’t need to be repositioned throughout the day to absorb maximum sunlight. Solyndra says that I “capture sunlight across a 360-degree photovoltaic surface capable of converting direct, diffuse and reflected sunlight into electricity.”

After the Department of Energy gave Solyndra a taxpayer guaranteed loan of more than half a billion dollars, the company failed. It turned out my tubular components were just too visionary and ingenious for the rough and tumble of a competitive energy market —even with big support from taxpayers.

In September Solyndra went bankrupt, and the failure sparked a long-suppressed mainstream media discussion about the viability of green energy businesses that have to be supported by taxpayers. But government funding of green energy remains popular. Late in that month, 62 percent of poll respondents told Public Opinion Strategies they agreed that “the failure of one California company should not stop us from continuing to make targeted public investments to help create American clean energy jobs.”

You may wonder why I should write my story. Well, unlike another object—a pencil, say—I am not an example of how the free market creates an elegantly simple product for everybody, whose creation results from the spontaneously organized self-interest of countless people who have never met each other.

Rather, my genealogy demonstrates how a market directed by Washington, D.C., created a needlessly fancy object, whose creation required the politically organized self-interest of a small handful of people; all of whom—from President Barack Obama, to Energy Secretary Steven Chu, to billionaire Obama donor/bundler George Kaiser (whose investment vehicles Argonaut Ventures I L.L.C. and GKFF Investment Company both had large positions in Solyndra and were represented on its board of directors), to company founder Chris Gronet (who visited the White House in 2009 and hosted the president for a photo op at Solyndra headquarters in 2010)—seem to have known each other too well.

The fall of Solyndra, and its cascading subplots, caused a flurry of press attention and an investigation by Republican members of the House Committee on Energy and Commerce. After the story began to take off in the newspapers, the Obama Administration dispatched three Cabinet-level departments—Justice, Energy, and Treasury—to “investigate” Solyndra in a transparent effort to obscure the congressional investigation, but that hasn’t worked.

Among the subplots revealed by the media: It turns out that once it became clear Solyndra was a bum investment, the Department of Energy restructured the company’s loan in order to screw taxpayers and protect Kaiser’s investment vehicles. It also turns out a major Solyndra investor used his seat on the Pentagon’s Defense Venture Catalyst Initiative panel, or DeVenCI, to try and persuade the U.S. Navy to buy me. (The Navy passed.) And emails obtained by House Republicans showed that as late as summer 2011, the Obama administration was trying to put together another bailout for the company that an internal memo described as “just giving the investors more time to extract more value from the firm before bankruptcy.” That’s just the data dump from the few days in early October when I was writing my story. By the time you read this there will undoubtedly be more angles to the Solyndra scandal.

The president has responded by trying to shift the blame to George W. Bush (even though the Bush Energy Department declined to lend money to Solyndra). He has also blamed the vicissitudes of capitalism and the uncertainty of market “risk”—a polite way of saying there just wasn’t as much demand for solar panels generally (and fancy ones like me in particular) as the apparatchiks had hoped. Finally Obama blamed China, which heavily subsidizes solar power in a process the president described as “state-run banks giving money to state-run companies and ignoring losses and ignoring bad management.” Boy, that makes me wish I lived in a country where unelected dictators who think they’re smarter than everybody else can indefinitely waste taxpayer money on useless products like me!

Unfortunately, I live in the United States, there’s this big recession on, and the president’s economic brain trust wasted the administration’s first three years with useless Keynesian stimulus efforts and payoffs to big business and big labor that cost trillions of dollars and created nothing but economic stagnation from coast to coast. So now, as Dan Aykroyd put it, people “expect results.”

And that’s bad news for corporate welfare products like me. But the story has a silver lining. My failure has gotten people talking about the wisdom of having government “pick winners and losers.” Admittedly, even in that conversation I’m of limited value because the government picked me and I’m still a loser. But it’s been very instructive to see how slipshod and arrogant America’s rulers are when they’re using your money to “take bets on these areas where we need to make sure that we’re maintaining our lead,” as Obama put it in October comments that failed to quell the Solyndra storm.

Some legitimate points have also been made by defenders of Solyndra and/or the administration (and since I’m an object built for sunlight, I don’t mind admitting that those folks are well represented in the establishment media). They note that “green” is not the only form of energy that gets generous help from Uncle Sam—though their claims about subsidies for fossil fuels and nuclear power lose some force when you consider that those sources turn out large amounts of energy while renewables generate very small amounts. Others have pointed out the hypocrisy of Republicans who shamelessly sought “green” pork in the past now beating up on Obama over this screw-up.

The real lesson I have to teach is this: Pork barrel spending inhibits creative energies rather than helping them. Sorry I wasted so much of your money to teach that one, but you really should have known better. To calculate that green subsidies are a bad investment, all you really need is a piece of paper. And a pencil.