In happier times, the firm had been celebrated as a harbinger of the future. The political connections it enjoyed were the fruit not only of well-placed contributions but of a self-imposed ideological mission: It was going to deliver cheap energy in amazing ways. Top executives had dismissed accounting irregularities. The normal rules, it was said, did not apply.
Then came the reckoning. Bankruptcy. Layoffs. An FBI investigation. Subpoenas. And the guard dogs of the press—always ready to sniff out a good scandal—leaped into action. What you read in the news was “not just the story of a company that failed,” wrote one major columnist. “It is the story of a system that failed. And the system didn’t fail through carelessness or laziness; it was corrupted.” A frenzy of speculation surrounded the company’s demise: “One wonders if it is the tip of an iceberg,” the columnist wrote. “And how many of us have, without knowing it, booked passage on the Titanic?”
The columnist’s then-colleague, who has a flair for the dramatic, wasted no time placing this image of corporate greed “against the stark backdrop of those less well-connected Americans who are fighting our war.” And the editorial board at their paper let its verdict be known throughout the land: “In order to restore confidence in American capitalism and in the integrity of its financial markets,” the editors wrote, “the public needs to understand what brought” the company “down.”
Paul Krugman, Frank Rich, and the New York Times, in other words, were all bent on uncovering the extent of the executives’ crimes and the nature of the White House’s involvement. But that must have been only because the company in question was Enron and the administration under attack was George W. Bush’s. About the spectacular bankruptcy of the (admittedly smaller) solar-panel manufacturer Solyndra, our most fashionable minds are much less curious.
It’s hard to see why. The details of the Solyndra case are a muckraker’s dream: Here’s a company backed by an Obama donor which received a $535 million loan guarantee from the federal government; that used taxpayer money to build a state-of-the-art plant which became a green-energy mecca for Energy Secretary Steven Chu, Vice President Biden (via satellite), and the president himself; that benefited, after it defaulted on the original terms, from an extraordinary loan modification which kept the business alive for another six months and which (illegally) ensured that private investors would be reimbursed before John Q. Public in bankruptcy court; and that may have lied to the government repeatedly throughout its long and sorry quest for favors. Ida Tarbell would have killed for this story.
And, sure enough, the nation’s investigative reporters seem to be diligently following the scandal. Every day brings more sordid details about the favoritism that the Obama administration showered on Solyndra. Every day brings into sharper focus the web of associations through which public largesse is conveyed to patrons of alternative energy. Yet the nation’s premier Democratic politicians and liberal columnists seem not to be reading the news sections of their own papers. Or they’re just being willfully blind.
What does President Obama have to say about Solyndra, for example? Nothing, actually—as of September 30 he hadn’t said a word about the matter. And Solyndra executives Brian Harrison and Bill Stover? They also are silent, having invoked their Fifth Amendment right against self-incrimination more than a dozen times at a congressional hearing in late September. Secretary Chu, through a spokesman, admitted last week that he approved the controversial restructuring of the Solyndra loan. But otherwise he too has been uncharacteristically tight-lipped.
The same cannot be said for the administration’s allies in the media. Never at a loss for words, they have an altogether novel take: Dismiss the story and defend the cause. So a blogger for the famously “contrarian” New Republic writes an item with the headline “The Case for Solyndra.” In a column proclaiming the matter a “phony scandal” and defending Solyndra executives, the New York Times’s Joe Nocera, somehow magically endowed with omniscience, proclaims, “Neither they, nor anyone else connected with Solyndra, have done anything remotely criminal.”
On his blog, Professor Krugman posts the logo for the defunct Internet bubble company Pets.com and sneers, “The private sector never ever puts money into ventures that end up failing.” And the editorialists at the Times caution that Solyndra’s “demise should not spell the end of federal investment in the alternative fuels and energy sources that are critical to reducing greenhouse gas emissions, easing this country’s dependence on fossil fuels and keeping it competitive in the race for clean-energy jobs.”
No, of course it shouldn’t—unless you believe, as we do, that the “clean-energy jobs” canard is more a euphemism for handouts to the green lobby and politically connected business elites than a serious approach to environmental stewardship and economic growth. If private investors risk capital in an enterprise that fails, they are the only ones who lose; if government risks the public’s money in a company that flops, we all lose.
Contrary to the collective wisdom of the Democratic party and many in the GOP, the law of comparative advantage still applies: If China produces solar panels more cheaply than America, all the better; China benefits from our dollars, we benefit from the lower price. That’s how markets work. Talk of international “competition” and soon professional politicians will be using the law to reward friends and punish enemies.
All this cronyism says nothing good about the state of American politics, either. Nor does the fact that, if you went through every paper published in the last month and replaced “Solyndra” with “Enron” and “Obama” with “Bush,” the media would be howling like a pack of rabid wolves. “The truth,” Paul Krugman wrote in January 2002, “is that key institutions that underpin our economic system have been corrupted. The only question that remains is how far and how high the corruption extends.” Right you are, professor. Right you are.