Solyndra’s Collapse a Lesson in What Government Ought and Ought Not to Do
I attribute the collapse of Solyndra last week to several factors: cheap solar panel imports from China, a company’s executive team and board that were more interested in selling stock instead of selling solar, and a jittery marketplace in which no one, from huge multinationals to corner stores, in keen to invest their hard earned cash. At a fundamental level, however, Solyndra’s demise also shows the perils of the government offering subsidies, loans, or tax credits to favored companies. True, the U.S. government should not be giving any subsidies to oil and gas companies. But the federal government should not be handing out freebies to any companies, for that matter. Two years ago during the summer of stimulus mania, I went to several workshops and conferences that included panels on how to score Department of Energy of Department of Transportation monies. While it was hardly easy to scam the government, some of these panels smacked of standardized test prep exam courses that instruct their students on how to “game” the system. Hence opponents of the stimulus will have a field day with the Solyndra fiasco if they dig and do their research on the company’s quick path towards bankruptcy. Despite this half a billion dollar throwaway, the argument can be made that clean energy offers a path for the American economy to dig itself out of its hold. The left and right can scream all they want about tax cuts vs. infrastructure spending. But while we should be fixing our bridges, roads, and levees, the economy needs a bold new technology that can keep jobs here and spike innovation. After all, remember that Bill Clinton was lucky: the Internet launched the economic boom of the 1990s. And despite all the claims that the government cannot do anything right, massive sums of investment are what built our infrastructure, developed technologies thanks to the space program, and yes, built the Internet. What the federal government should be doing, while partnering with companies large and small, is launching a fund that lasers in on clean energy technologies. A paper published last year by the American Enterprise Institute and the Brookings Institute, while criticized by some, makes a valid point: we ought to inject cash into science education, energy technologies research, and we cannot slam the door shut on nuclear energy. Solar, nor wind power, nor biofuels, nor methanol, nor all of them together, will lead us towards energy independence. Sadly, our polarized political climate means that such a fund will not start anytime soon. An old Republican tactic, cap-and-trade, which helped reduce acid rain and air pollution under George H. W. Bush two decades ago, would help spark clean technology innovation, too.