A solar energy firm touted by the administration in 2010 as a as a "gleaming example of green technology" today announced bankruptcy. 1,100+ employees will be fired.
Please consider Solyndra Filing a Disaster for Obama
President Obama faces political catastrophe in the form of Solyndra -- a San Francisco Bay area solar company that he touted as a gleaming example of green technology. It has announced it will declare Chapter 11 bankruptcy. More than 1,100 people will lose their jobs.Seen and Unseen
During a visit to the Fremont facility in spring of 2010, the President said the factory "is just a testament to American ingenuity and dynamism and the fact that we continue to have the best universities in the world, the best technology in the world, and most importantly the best workers in the world. "
It's not his statements the administration will regret; it's the loan guarantees. The President was celebrating $535 million in federal promises from the Department of Energy to the solar startup. The administration didn't do its due diligence, says the Government Accountability Office. "There's a consequence if you don't follow a rigorous process that's transparent," Franklin Rusco of GAO told the website iWatch News.
The "seen" math is simple enough. $535 million divided by 1,100 is roughly $486,363 per job saved, now job lost.
That is just the "seen" consequence. The "unseen" consequences are not directly calculable but by giving Solyndra money, other companies that the free market would have preferred have been harmed, perhaps permanently harmed.
Although Obama clearly rushed this pathetic company for a nice photo-op, this is not a simple case of the president failing to do his homework as the GAO implies. The government has no business promoting this kind of crap in the first place.
In this case, it is rather amazing how fast Solyndra wasted over half a billion US taxpayer dollars, so fast I suspect fraud.
In general, if companies cannot survive without government subsidies then they should not survive at all.
Solyndra could not survive even with massive government subsidies. The same happened to many ethanol companies as well. Speaking of which, taxpayers pay though the nose for ethanol subsidies and tariffs both at the pump and in the price of corn, in turn, the price of beef as well.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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