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  • Morning Bell: Solyndra Revelations Show It's Time to Close the "Bank of Washington"

    “The Bank of Washington continues to help us!” bragged Solyndra CEO Chris Gronet in emails released last week.

    An investigation by the House Energy and Commerce Committee revealed that Solyndra—the solar company that went under, taking more than $600 million in taxpayer funds with it—wasn’t ever supposed to be an independent business. It was built to rely on the taxpayers.

    “Getting business from Uncle Sam is a principal element of Solyndra’s channel strategy,” wrote Tom Baruch, founder of Solyndra investor CEMA Capital, in an August 10, 2010 email.

    Getting federal money was integral to Solyndra’s business model. But even with government backing, Solyndra failed—just one of a growing list of companies in the Green Graveyard that took taxpayer money and went bankrupt.

    The emails released between Solyndra stakeholders and Obama Administration officials show that Solyndra’s investors knew the company was a bad bet for taxpayers, but the Administration wanted the energy loan guarantee program to be perceived as successful. Meanwhile, the Government Accountability Office was finding that the Department of Energy played favorites with the program, and high-level advisers including Treasury Secretary Tim Geithner were raising red flags.

    When it became clear that the company wasn’t going to make it, White House communications director Dan Pfeiffer wrote to White House insiders Stephanie Cutter and David Plouffe: “This is going to be a real pain, Solyndra is about to go under apparently.”

    Despite 12 such failures—companies taking taxpayer money yet going bankrupt—the Administration hasn’t given up its push for solar. In July, Interior Secretary Ken Salazar characterized the bankruptcies and delays that have plagued the solar manufacturing sector as “just minor (and expected) blips for the industry.”

    “Across the Administration, we’re looking at ways to create jobs and strengthen the economy—and a big part of that is building a sustainable, clean energy future,” Salazar said. But as Heritage’s Michael Sandoval reports:

    Salazar’s touting of job creation is at odds with the Department of Energy’s David Frantz, who oversees the DOE loan guarantee program.…Frantz told House members that these large, utility-scale renewable projects really could not be counted upon for creating jobs. “The predominance of our portfolio—and the objective, really, of the act—is to be creating large infrastructure, utility-scale projects; and, by definition, they are not a multiplier for job creation,” Frantz said.

    Still, lawmakers in both parties have embraced the job creation fallacy. Heritage’s Nicolas Loris has noted that both Democrats and Republicans:

    …like loan guarantees (or tax credits or direct grants) if they support projects for their politically preferred sources of energy, such as clean coal and nuclear, or if they bring jobs to their districts that they can take credit for creating. But these programs do not create jobs. They misallocate labor and capital by shifting taxpayer dollars away from economical projects and toward political ones.

    Energy subsidies, whether in the form of taxpayer-backed loans or outright grants, are a bipartisan boondoggle that simply does not work. Looking back, President George W. Bush’s solar initiative sounds very similar when compared to President Obama’s.

    The aptly named “No More Solyndras” Act, now in the House Energy and Commerce Committee, would stop the government from giving out new taxpayer-backed loan guarantees. For applications that are already under consideration or have received conditional commitment, the bill would require the Secretary of the Treasury to make a recommendation based on the merits of the program. Although not perfect, the legislation moves us in the right direction toward finally ending this program.

    As subcommittee chairman Ed Whitfield (R-KY) said last week, “Instead of handing out billions in loan guarantees to selected companies, we can do much more good by removing billions in unnecessary regulatory compliance costs.”

    There are plenty of job-killing regulations holding back American companies. A lack of taxpayer dollars is not the problem. It’s time to close the “Bank of Washington” and allow truly successful, viable technologies to rise to the top.

    See the 10 Most Revealing Solyndra Emails

    Quick Hits:

    • “Saudi King Abdullah invited Iranian President Mahmoud Ahmadinejad for an extraordinary summit of Muslim leaders to be held this month in the holy city of Mecca,” reports AFP.
    • Iran is test-firing short-range missiles, which its defense minister said “will only be used against those who have bad intentions towards the Islamic Republic of Iran.”
    • A gunman killed six people and critically wounded three others before being killed by police at a Sikh temple in Wisconsin yesterday.
    • The NASA rover Curiosity successfully landed on Mars early this morning.
    • When voters in four states go to the polls in November, they will face ballot questions about the future of marriage in their states.
    Posted in Ongoing Priorities [slideshow_deploy]

    33 Responses to Morning Bell: Solyndra Revelations Show It's Time to Close the "Bank of Washington"

    1. Tony T says:

      It's time for conservatives, young and old, to read or re-read Ayn Rand's "Atlas Shrugged." The idea of government picking winners and lossers and crafting policies for wealth redistribution (her Equalization of Opportunity Act) are presciently described in this book.

    2. toledofan says:

      I guess, it boils down to, Obama needs to be fired, period. This entire loan issue to Solyndra was about politics and it's clear the politcs failed, the company continues to bleed red ink and our tax dollars are being wasted. I think that's the whole point, the waste and the arrogance of this administration that they can just continue to throw our money away over and over.

      • Carol, AZ says:

        Yes your correct but by now most of us realize these are the raving of a madman.
        Mad Max is unstable, and his leadership delirium. No press is willing to report it accurately.
        From day one Bo has sucked from every system he's been admitted to and is a destroyer of our American system. All evidence has been covered up .
        D.C. knows it and is still protecting him . Our highly controlled American press is still protecting him.
        America is very unstable fiscally and this coming crisis hasn't been accurately reported either. The bottom line ; he doesn't care and never has, about our country, or Democracy becasue he's been set-up to destroy it.

    3. Len Lawrence says:

      Just remember November it's time to get even with this nonsense and eliminate the leakage of our tax dollars to people who don't deserve it by people that don't deserve to be in office.

    4. Jeff says:

      How much did Gronet take with him and how much did he send back to Obama?

    5. jay says:

      Salazzar and the rest of the minions in this administration, including the guy in the white house, continue to show us how really incompetent and crooked they truly are.
      Time to clean house in November, to save this great nation from the destructive tendencies of the left and their cohorts.

    6. boberic says:

      The most pertinant quote comes from the Nobel Prize winning Phd economist Milton Friedman. " If the federal government were to be put in charge of the Sahara desert in five years they would run out of sand".

    7. Lloyd Scallan says:

      Don't we yet understant this is not about "green or solar energy". It' about Obama using our tax dollars as a slush-fund to repay his fiancial supporters. Expecting Obama to close the "bank of Washington" is a pie in the sky dream. The author, along with many others, had better come to the relalization that Obama is
      determined to collapse this nation economical system. He will not stop.

      • Palrak says:

        Two things: First, where I live (near Palm Springs, CA), there are wind farms as far as the eye can see. On a good day, about 1/3 of them are operational, and I fail to see how they have helped lower my energy bills. Second, one of my neighbors recently installed solar panels (ugly) to the tune of $55,000. He told me it would pay for itself in 5 years. How much electricity for a 2500 sq. ft., 2-person home could they possibly use, that they'd save $55K?!? I guess there's a sucker born every minute…unless I'm missing something.

    8. bentonmarder says:

      We can argue all we want about the intentions of the Obama administration and its relationships with the 'green energy' companies. What is never discussed is the fact that, due to the nature of things, solar and wind power are not suited to production of base-line electric power. They are much more suited to small-scale uses like charging batteries, working heat sinks, operating equipment on short-term basis that takes into account their intermittent nature. Now, since the '30s, there has been thought of harnessing tidal power—the Bay of Fundy, for example. This is a much more promising area for larger scale production of base-line power, but for some reason, doesn't receive the interest, research, funding.

    9. ARNOLD TAPP says:

      >>> ANY COMPANY WHICH MAKES SOLAR PANELS OR OTHER DEVICES TO GENERATE ELECTRICAL POWER SHOULD BE THRIVING , SINCE AMERICANS AND PEOPLE ALL OVER THE PLANET ARE CONSCIOUS OF REDUCING COSTS . ANY SUCH COMPANY WHICH GETS INTO FINANCIAL TROUBLE
      DOES SO BECAUSE OF BAD MANAGEMENT , WASTED MONEY , EMBEZZLEMENT , MIS-USE OF FUNDS OR SOME OTHER RELATED REASON . " WE THE PEOPLE " MUST NOT BE ASKED TO ' BAIL THEM OUT '
      WITH OUR TAX DOLLARS . THE COMPANIES WHICH FAIL FOR SUCH REASONS SHOULD BE LEFT TO BAIL THEMSELVES OUT OR DECLARE BANKRUPTCY .

    10. Florida Jim says:

      Salazar is just another left-wing hack milking the taxpayers with a government job requiring no accountability and few skills other than being an Obamaphile. Salazar was futile in the Obama/BP oil debacle and is instrumental in blocking the Keystone Pipeline which will free America from Mid-east oil imams, which neither Obama nor Salazar want since their goal is the destruction of America through our lack of an energy policy.
      My suggestionn is to open the oil and gas spigots as 100 other countries have done and America will have wealth and jobs and Obama/Salazar will haveneitherr.

    11. Jumpmaster82 says:

      Does this include cutting off tax payer subsidies to oil companies?

      • AD-RtR/OS! says:

        Name one "subsidy" that is extended to oil companies, and write-offs for business expenses don't count as they are available to all companies. The last time I checked, the majors (Chevron/Mobil/Shell/BP) made about 7-cents profit for every gallon of gas they sell, while government received 50-cents in taxes from that gallon – so who is making a killing on gasoline? It certainly isn't the party who has taken all the risk.

    12. Jim says:

      Just beautiful – Do a little research and see what Navistar pulled with Facility Bonds from Illinois Counties.

    13. Sgt. York says:

      O'Vomit won again America-0 O'Vomit – 100. Come on boys it time to stand up for our America not O'Vomit's Socialist America. Its jobs over handouts we want work first handouts last just for the people who actually need help. Then its work part time,drug test and no stamps for junk.

    14. Jim says:

      Just beautiful – Do a little research and see what Navistar did with "Facility Bond" bailout in several counties in Illinois. """Is Obama from Illinois?"""""The bigger the election contribution, the bigger the grant.

    15. Bobbie says:

      when did the government of official people get the right to commence businesses off the tax payers dollars BEFORE asking the tax payers? referring to this line: "wasn’t ever supposed to be an independent business. It was built to rely on the taxpayers." Was that during Bush who stopped it under the logical reasoning there was nothing indicating productivity who obviously wasn't under that standing of tax dollar reliance when he stopped the funding? Whose money did it start out with and under what future plans besides government controlled socialism, crisis and bankruptcy? Tax payers don't want tax dollars going to government personal finance investments! People are much wiser to control their own finances and take the loss of their own consequences and take matters to a court of law if necessary! The government of official people dump their poor decision making consequences in their control, on us!!! No accountability no court of law!! Stop this 3rd world leadership mentality! No bailouts! Jail time and monetary pay back to the people!

      The Obama government feels it necessary to tie our shoes! Please get back to the constitution, the peoples' only protection.

    16. Robert says:

      Everyone in the photocell business knew "back when" that Solyndra was going to fail as the base of their product was inefficient and overly costly; much more costly than better materials. In short, the business could not succeed in the real world unless their political buddies could assure them that the government would buy their products in spite of being an inferior product. I wonder if Obama has a Swiss account being fed a stream of your money.

    17. Beemergranny says:

      "Investors knew the company was a bad bet for taxpayers, but the Administration wanted the energy loan guarantee program to be perceived as successful…."?? Is this legal?? Of course, anything this administration does is full of shady dealings. NOW is the time for Tea Party/Conservatives all over this country to stand get off their tush and get out the vote to rid Washington of these politicians. I am amazed everyday at the new ways our government is manipulating all Americans and not many are standing up and shouting STOP IT! Least of all, any lawmakers.

    18. The best known definition of "stupidity" is the "repetition on an action with the expectation of a different outcome."
      I wish it was possible to create a govt agency that could counter this federal malady, but alas, it would cost as much as the rest of the govt combined.

      • Palrak says:

        Actually, it was "insanity," not "stupidity," but in this case, I guess they're rather synonymous.

    19. victorbarney says:

      Good luck with that thought! Just saying…

    20. F.D. O'Toole says:

      I like a guy who can lose big in a card game and then, push back from the table and say, "Just a bump in the road." What a sport! On the other hand, that's a pretty big bump. And of course, it's not his money that was lost.

    21. Bobbie says:

      Unfortunately for Obama, America is a strong lady that isn't going down fast enough for him so he has to go to the level of total ignorance unleashed. Look at the activists using their no level of tolerance, trying to take down small businesses just to show the fool! They're working together these unAmerican types, to shut down small businesses to keep open only, the President's tax payers' pay without consent, subsidized businesses where corruption will be spread further until the only rule Obama's centralized government will come to abide by. NO THANKS! People prove themselves better than treated with conductive indecencies imposed by the controls of government authority using corruption we have no defense against. Get rid of all government subsidized businesses and bring back the market of accountability!

    22. Larry K White says:

      In 1982, SPV operations were given "tax shelter" status. All the PV plants were built by private capital from LP's ( Limited Partnerships) They didn't work then and all those rich guys lost their money! __ Now it is Tax payers who loose?__ps What is the KW/H cost now? Not mentioned!_

    23. Blair Franconia, NH says:

      OMG! OBAMA ISN'T WORKING.

    24. AD-RtR/OS! says:

      The SecTreas has to "…make a recommendation based on the merits of the program…".
      Better yet would be to require the SecTreas to be a personal co-signer and have some skin in the game.

    25. Wes Evans says:

      Large scale efficient utilities by definition can not be large scale jobs creators for they would not be efficient if they needed many employees to operate. An oxymoron.

    26. Jack W Estes says:

      Just more solid proof of obama's true beliefs and personal mantra – if at first you don't succeed, fail, fail, again. Heck, it's not my money anyway…

    27. Patty says:

      Anytime a business has no personal financial fallout from a venture the result is reckless operations. Bottom line profitability is not the desired end, but only the lining of their pockets and payoff to those who have guaranteed a bailout.
      What is guaranteed with that model is failure–and we, the taxpayers are picking up the tab. It need to STOP NOW. We must vote out of office those with this model as their MO.

    28. Nicolai Alatzas says:

      American ingenuity is all we really have, when we stop investing in the future we create a depression.

    29. Matt S says:

      I'm glad that people in general are savvy enough to seperate the "solar" green industry from other green industries that are quickly evolving.

      At my company we have had our proprietary, and financially viable production process equipment for algae based biofuels and co-products sitting in a warehouse for 3 years, not creating jobs. During this time we have repeatedly petitioned, applied for and even begged for the smallest amount of their attention. Not just for the grant of less than $500k we have needed for independent test data certifying what we already know to be facts regardng productivity, but to make the entire alphabet soup of departments and agencies like, DOD, DOE, EPA etc. aware of the undeniable fact that the verbiage used in their funding opportunities (w/o exception) gave the unmistakable impression that the agencies involved had no idea what specifically they should be asking for. This is crucially important as each told me they do not accept unsolicited proposals, which in each case was another "misstatement".

      We have the key to the biofuels universe, the government claims to want it and has even mandated biofuel use yet still has no producer. If any algae company could do what we know we can, there would already be an algae trading board at the CBOT.

      We have a decade in R&D (self-funded) invested in the creation of a system capable of making algae keep its promise, and at the critical time the entire federal government turned their backs to us. Why? Because we have ethics, integrity and credibility. Our Dictator has these three qualities in the crosshairs and there is no acceptable excuse for it.

      We just want to get on with making decent jobs. We are Scipio Biofuels.

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