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Posted by on Jun 2, 2012 in Business, Politics | 3 comments

Solyndra Backfires; Robme Injured

The US government poured money into a failed solar energy business and Mitt Romney hoped he could raise the issue from the dead and blame Obama for the failure. Of course, the US government invests seed money — or guarantees loans — for business start-ups whose success would solve a problem and benefit all of us, not least with job opportunities. The government does this often, but not with the belief that every single penny of seed money will put out roots. Ultimately, Solyndra failed. Obama was blamed for spending half a billion’s worth of government money on a failed company.

Solyndra declared bankruptcy in August 2011 after having received $528 million in federal loan guarantees, and its fate has been seized on by Republicans as symptomatic of big government waste in the stimulus program and the futility of clean energy subsidies.

Mr. Romney accused the president of steering taxpayer dollars to his friends and “cronies,” and of stifling free market competition by picking economic winners and losers. …Caucus, NYT

Romney staged a campaign event in front of the Solyndra factory yesterday even as most cameras were clicking on George W. Bush at the White House. By the end of the day, the Romney campaign’s effort to pin Solyndra on President Obama had kind of backfired. It gave the Obama campaign the opportunity, once again, to put the spotlight on Romney’s poor economic record as governor of Massachusetts.

Oops.

“The reality is that Solyndra received funding through a Department of Energy program created under the Bush administration – a program that has supported tens of thousands of jobs across the country and is moving forward with investments in innovative projects like the first nuclear plant built in the U.S. in decades and the world’s largest wind farm,” said Lis Smith, a spokeswoman for the Obama campaign, in a statement. “In fact, both Republican and Democratic administrations advanced Solyndra’s application, and the company was widely praised as successful and innovative both before and after receiving the Department of Energy loan guarantee.

Ms. Smith added, “As governor, Mitt Romney’s record was one of dismal job creation, outsourcing, increased spending and the highest per capita debt in the nation. Now, he’d cede the clean energy industry and the hundreds of thousands of jobs that come with it to China in order to please his Big Oil campaign donors, including keeping massive tax cuts for the oil industry on the middle class’s dime. Massachusetts couldn’t afford Romney Economics, and America can’t either.” …Caucus, NYT

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NPR added up Governor Romney’s week in the headlines. Or weak in the headlines, maybe…

“Trump, Romney’s surrogate, goes on ‘birther’ offensive” — The Hill

“Trump overshadows Romney with ‘birther’ talk” — Bloomberg Businessweek

“Romney appears with ‘birther’ Trump” — UPI.com

“Obama campaign goes after Romney for Trump connection; should Romney speak out against birther issue?” — Fox

There was this, “Romney Campaigns at Failed Solyndra Factory,” in the New York Times politics blog, and similar headlines elsewhere Thursday.

But there was also this: “Romney’s Solyndra Show=Poor Political Theater” on Bay Area’s NBC station’s website, which detailed the secrecy surrounding the Solyndra events, and its timing — starting at the moment former President George W. Bush began to speak at the portrait unveiling.

“Opinion,” it read: “A campaign trump card may have been misplayed.” …NPR

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Andrew Sullivan finishes Romney off with this quote from the Boston Herald (a right-leaning, not to say servile Boston paper):

When Romney was governor, the state handed out $4.5 million in loans to two firms run by his campaign donors that have since defaulted, leaving taxpayers holding the bag.

The two companies — Acusphere and Spherics Inc. — stiffed the state on nearly $2.1 million in loans provided through the state’s Emerging Technology Fund, a $25 million investment program created while Romney was governor in 2003 that benefitted 13 local firms.

Acusphere, a biotechnology firm headed by a Romney campaign donor, got $2 million in 2004 that it was supposed to put toward a $20 million manufacturing facility in Tewksbury, which never became fully operational…

The loans were approved by a seven-person advisory board that included two Romney appointees and three Romney campaign contributors, a Herald review found.

Is Romney deliberately, for some unfathomable reason, deliberately setting himself up? Either that or he’s really, really stupid.

Cross-posted from Prairie Weather

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Copyright 2012 The Moderate Voice
  • RP

    No matter what your political views, looking at the “green incentives” by the Obama administration does have to be questioned. Who really did their homework before awarding this money.

    Solydra’s cost for panels were already much more expensive than the chinese counterpart. Did they know this and if not, why not?

    Fisker, a private auto manufacturer received incentives for electic car production. They have not produced one yet and now it appears they won’t even sell one in America. Who did the research on this company?

    Would it not be more reasonable to provide infrastructure for companies like wind energy farms where the wind turbines are bought and paid for by the energy company and the government pays for the transmission lines to the existing power stations? That would seem to put some responsibility on the part of the company and not just a handout to companies that may or may not produce a product.

  • rudi

    @RP
    Did you read the post and links?

    “The reality is that Solyndra received funding through a Department of Energy program created under the Bush administration

    Romney’s record in Mass is just as bad.

    When Romney was governor, the state handed out $4.5 million in loans to two firms run by his campaign donors that have since defaulted, leaving taxpayers holding the bag.

    The two companies — Acusphere and Spherics Inc. — stiffed the state on nearly $2.1 million in loans provided through the state’s Emerging Technology Fund, a $25 million investment program created while Romney was governor in 2003 that benefitted 13 local firms.

  • merkin

    The underwriting on the Solyndra loans was poor and it was rushed to satisfy the need for the stimulus to quickly pump money into the economy. The problem was with the perceived need to spend the stimulus money on worthy, shovel ready projects. It would have been better for the economy to put the money out as tax cuts or even checks mailed out, Ben Bernanke’s helicopter drop. The Solyndra money did make it into the economy, but in a less than ideal, poorly targeted way.

    The Great Financial Crisis and Recession, the reason that we needed a stimulus in the first place, occurred because of really bad underwriting, the need by a very few to invent new ways to gamble huge amounts of money and the stupidity of a government to let them do it with federally insured bank funds in the name of an idea that has failed repeatedly before, deregulation.

    The stimulus was 800 billion dollars spread over two years, to boost an economy that lost over four trillion dollars in demand. Every penny of the 800 billion was added to the government’s debt load. During the same time period the Federal Reserve put nearly 15 trillion dollars into the banks to shore them up, to replace the liquidity lost when the house of cards private shadow banking system collapsed and to take over the toxic loans. The Fed made a total of 29 trillion dollars in loans over the three years to banks here and abroad at interest rates from zero to 35 basis points, 0.35%. Please note the decimal point, the maximum interest rate was 35/100 of one percent.

    Not a single penny of this trillions of dollars appears in the national debt. Where did this money come from? Is it magic money?

    We were told by the people whose policies and regulatory inattention bought us the GFC&R that all of this magic money would mean two things, hyperinflation and high interest rates. We don’t have hyperinflation, far from it, and the Treasury set a record Friday for the lowest interest rate in the hundred year history of the 10 year Treasury note, 1.47%.

    And they recommended and have forced a policy of anti-stimulus, austerity, that has failed everywhere it has been tried, resulting in more recession and more unemployment and even higher deficits.

    How often do these people have to be proven wrong before we stop listening to them?

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