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Opinion: The Solyndra Business Model: Another Lesson in Perils of Liberal Governing

Tuesday, September 20, 2011 - 10:03 AM

A lot can, and has, been said and written about the Solyndra scandal. In case you're not up to date on it, the short version of the story is the Obama administration gave half a billion dollars to a solar panel company in California as part of its Green Jobs Initiative. 

Jon Stewart can sum up the rest of the scandal, but essentially it turned out to be a crony deal for an Obama donor; the White House was told repeatedly that Solyndra was a failing company, and Obama touted Solyndra as the very best example of what his Green Jobs Initiative would do.

That the government invested in a non-viable company because it wanted a "Green" photo-op, and that this investment was part of a sweetheart deal to reward an Obama donor, is disgusting but typical. The fact is, when the government pours money into a business or a program or an initiative, no one cares too much whether it succeeds or fails.

After all, are any of the people who made the decision to fund Solyndra going to see a smaller paycheck as a result? Of course not. That remains the number one argument as to why the government should not have the power to use OUR money to fund their pet projects

It's also the most reasonable argument for why private businesses always do better than public ones. For example, Fed Ex and UPS have to balance their budgets, make cuts when necessary, and care about meeting their bottom line. The US Postal Service? Less.  

After all, when they run out of money, the government just gives them more.  No skin off anyone's nose; it's not like the government employees increasing USPS's funding are using their own money. They're using yours, which is not painful at all.

The major problem with Solyndra is not all the ways that the government failed to prop up a company, or all the bad reasons why the Obama administration chose Solyndra to receive such an obscene amount of money. Pointing out that the Obama administration is inept and using Solyndra as an example is valid, but it only focuses on a part of the bigger problem.  

That bigger problem, of course, is that the government gave out half a billion dollars to a company employing 1100 people, and that this was considered a success (before it wasn't). That's around half a million dollars an employee.

We're at the point where giving away half a million dollars per employee is considered a good use of the tax dollars the government collects—and now the government wants to collect even more.

Why not just give each potential employee $250k, which might actually stimulate the economy while saving a quarter of a billion dollars?

President Obama is playing his class warfare game by insisting "the rich" aren't paying their fair share. He wants to collect more money from those who have been successful in their businesses in a way that he clearly hasn't.

This is a president who has never run anything and never had to succeed in making a profit. Being a community organizer isn't inherently a bad thing, it just doesn't prepare someone for the realities of balancing budgets and making smart investments.

The people that are doing these things successfully are the same people targeted and punished for their success by the president's proposed legislation. It's a backward time for our country when the president's investment in Solyndra is a half a billion dollar failure, and the taxes of those who dare to succeed have to go up to pay for it.

Born in the Soviet Union and raised in Brooklyn, Karol Markowicz is a public relations consultant in NYC and a veteran of Republican campaigns in four states. She blogs about politics at Alarming News and about life in the city with her husband and baby at 212 BabyShe can be followed on Twitter.

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Comments [6]

Marcello from Brooklyn

I do! I'll take private business over public anytime. What I cannot stand is fundamentalism, of any kind: if something is right 90% of the times, it doesn't mean that it is right 100% of times. So while private businesses are more effective in creating opportunities and expand the economy, there are sectors of public life where government has the upper hand because they involve things that, in my opinion, are fundamental human rights that cannot be commodified. Education is one of them. Health care is another where the “american model” of private management leaves 50 million people uninsured and scores more underinsured and no other developed (capitalist) country in the world is crazy enough to emulate.
Here is another case where govt. does a better job. The festering disease of American politics is that while in your old country, the Soviet Union, things went to hell because of complete public control over the economy, here we have the opposite excess: the economy controlling the government. So while this should act in the interests of ALL citizens, it ends up acting in the interests of those who can come up with the biggest political contribution checks (like the Solyndra CEO).
This problem would not exist if every candidate got the same amount of public money for their campaigns without having to go to prostitute themselves. Right?
And what about govt. regulations? It's true that private businesses do a better job at creating opportunities but they are amoral entities, they only go after their bottom line and do whatever they need to fatten it up. So how would you like to live with your child next to a chemical plant that pollutes the water or the air that you drink and breathe? Do yo really think that they would take the initiative to install expensive pollution control systems if it wasn't for the govt. to compel them?
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Sep. 21 2011 06:35 PM
Marcello from Brooklyn

Now about taxes. Why liberals talk about fairness? Because they are stupid! Progressive taxation has a lot to do with fairness but that is a failed argument with Americans who love to call themselves patriotic but have zero sense of solidarity. As I mention in my previous posts, progressive taxation should reflect the use that people do of the “common wealth”. So, if I have a house that is worth 2 million dollars I pay higher property taxes because the value of the public services provided by the police force and by the fire dept. protecting my assets from burglary and fire, are worth more to me than it might be for you who have a $ 500K house.
Finally the rich already pay the majority of the tax burden. Of course they do! That is why they are called the rich! The tax system is progressive so, since taxes constitute a percentage of your income and wealth, to say that I pay more taxes only means that I have more income and wealth. So if you think that the amount paid by the rich is “excessive” (compared to other social groups) that might be because income inequality is excessive.
As for corporations GE, just to name one, last year paid $ 0 in taxes. Zero...

Sep. 21 2011 06:33 PM
Karol from NYC

Oh Marcello. I enjoy your comments, I really do. I don't always reply only because you and I could go back and forth for days and days. Clearly we are wired differently and our disagreements aren't minor ones. I will just address a few points: "Taxes are not a punishment. They are the price to pay for civilization." If that's true then why is the liberal argument for raising them always about "fairness"? Any anyway, "the rich" already pay the majority of the taxes. You know this. You're right that not all private businesses succeed but I would always bet on a private business to do better than a publicly one. Wouldn't you?

Sep. 21 2011 02:22 PM
Marcello from Brooklyn

If that is what happened, the Obama administration screwed up royally and deserves all the blame that will certainly get.
I could point out that is truly remarkable that Karol Marcowitz finds this situation scandalous considering the un-bending enthusiasm and certitude conservatives reserved for other previous govt.-sponsored exploits such as the invasion of Iraq that costed the american people slightly more than half a billion dollars (not to mention the thousands of lives lost).
I could also point out that, while this might have been a fiasco, other govt. intervention in the economy in the past were successful. The Obama administration's stake in the Detroit automakers saved them from bankruptcy, spared the need for laying off thousands of people and got out of the way as soon as the companies had the opportunity to restructure.
I also found it amazing that, in this day and age, after we have just witnessed the most monumentally catastrophic recession in almost a century triggered by private business gone wild, somebody could actually claim that “private businesses always do better than public ones”. Private business which had to be bailed out with public money to avoid a larger systemic failure.
KM then proceed to compare FedEx and UPS with the United States Postal Service perpetuating the conservative, idiotic myth that running a govt. is, is principle and in executions, the same thing as running a business. Because right-wingers' main purpose is to cater to the interests of the rich and corporations, they believe that that is also the only acceptable existential standard and that humanity, as a whole, should conform to it. But to believe that in a society everybody has the talent, the skills, the inclination and the interest to be a business person, it's absolutely idiotic as it is to believe that a society could actually function with such a “monochromatic” trait. In a society you have millions of people who are completely different from one another and a government, unlike a business , has to tend to everybody's welfare. A president is the president of all Americans not only its business class so, unlike a business, a govt. has to pursue a different kind of growth and objectives that don't end only at the bottom line .
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Sep. 21 2011 12:29 PM
Marcello from Brooklyn

Then we get to the cherry on the cake: the fact that “Obama's class warfare” is punishing people who are successful (the “job creators” who, with the lowest tax rate in 50 years, are not crating any jobs) by demanding more taxes of them.
Here is the other classic conservative myth: that successful businesses-people live in a bubble where they are completely cut off form the rest of society and therefore, their success is the result only and exclusively of their talent. Americans love the myth of the Superman. But these successful people created their wealth by utilizing public assets such as roads, the police force, the court system, schools and universities that provided them with the educated work force they used to create their business. So they pay more in taxes because their use of the “Common Wealth” is larger than yours and mine.
Taxes are not a punishment. They are the price to pay for civilization.

Sep. 21 2011 12:26 PM
Hiro Hara from Connecticut

First, a grant cannot be that high amount to begin with. A grant is by nature, high risk no return investment that government spends on technology or development that otherwise no investor would, but is promising. Those cannot be that big amount. If a company need that much of capital infusion, it should procure through capital market, not by government. If it is government that decides to invest, it should take a lot closer look at how the company is spending that much amount of money.
Loan and loan guarantee is another thing.
Just because a President wants the industry to grow, throwing money at it would not make them grow any faster than it can. US loves to throw money at problem, Ah, such a rich country! Excuse me! We are no longer rich! Stop throwing money at a problem without analyzing and just hoping it to be solved. It is the lack of responsibility, accountability, lack of effort to really understand how the money should be spent.

DOE has spent so much stupid money, because they had budget and they had to spend quickly to affect the economy. Yet they could not spend on small money on innovation technology that small company invented and pursuing. They spent the money on themselves to the National Lab. Small money creates jobs. Big money create corruption. Dem should really sober up and realize this.

Sep. 20 2011 10:41 AM

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