COMMENTARY | When Sarah Palin was inveighing against crony capitalism, one of the instances she had in mind was the Solyndra disaster. Solyndra, a recipient of government largess, was touted by President Barack Obama as a company of the future.
The reason Obama said this was Solyndra was a manufacturer of solar panels, something the president has a fascination with. Obama even toured a Solyndra plant in Fremont, Calif., in the company of then-Gov. Arnold Schwarzenegger, touting “green jobs” as the wave of the future.
However, despite nearly a half a billion dollars in government backed loans, Solyndra went bankrupt and closed its doors, laying off the thousand or so workers who now do not have any jobs, green or otherwise.
Crony capitalism, which is based not so much on what one can do but who one knows, is a central feature of Obama’s economic philosophy. He believes the government, through well placed “investments” can cause companies and industries to come into being that the marketplace finds dubious at best.
Unfortunately there is only so much that political rhetoric and government money can do absent a market for a product like Solyndra’s solar panels. The company was unable to produce a product that was competitive in the market place, even against other solar panel manufacturers. The technology is not yet mature and cheap enough for a mass market without government subsidies.
“Green jobs” are not the only area where the Obama administration’s fixation on crony capitalism has found itself. High speed rail, for example, is an obsession with the White House, even though it is a solution in search of a problem and is proving to be so expensive that even some state governors are rejecting federal dollars to build rail lines in their states.
Even the space program is not insulated from Obama style crony capitalism. In order to develop space craft to take American astronauts to and from low Earth orbit, the Obama administration has greatly expanded a Bush era program to funnel billions of dollars in subsidies and guaranteed contracts to companies such as SpaceX and Boeing.
So far none of the companies involved in the space commercial crew program has been able to develop private markets for commercial space ships, apart from vague space tourism plans and the possibility of serving a private space station under development by Bigelow Aerospace.
Palin has hit upon a good line of attack, which speaks not only to free market capitalism but Americans’ sense of fair play. What is the government doing picking winners and losers in business, apparently based on political whimsy? That is a question the Obama administration will have difficulty answering in the upcoming election campaign.
Sources: Sarah Palin Triangulates in Iowa, Mark R. Whittington, Associated Content, Sept. 3, 2011
Solyndra Debacle Spotlights Obama’s Folly, Debra Saunders, Real Clear Politics, Sept 4, 2011
Why Obama’s Commercial Space Initiative is Not Commercial, Mark R. Whittington, Associated Content, Sept. 6, 2010