Twelve More Solyndras
Crony capitalism and coercive ideology march blindly onward.
by John Hayward
01/13/2012
You loved that half-billion-dollar Solyndra disaster, didn’t you? Sure, who didn’t? Over $500 million of taxpayer loot recklessly stuffed into the pockets of top Obama contributor George Kaiser, to bankroll a failed company that currently rots in bankruptcy… but is still trying to ladle out huge bonuses to its six-figure employees.
Well, great news! CBS News found a dozen more Solyndras – “green energy” companies pumped full of your money in defiance of all business sense:
Take Beacon Power -- a green energy storage company. We were surprised to learn exactly what the Energy Department? knew before committing $43 million of your tax dollars.
Documents obtained by CBS News show Standard and Poor's had confidentially given the project a dismal outlook of "CCC-plus."
Asked whether he'd put his personal money into Beacon, economist Peter Morici replied, "Not on purpose."
"It's, it is a junk bond," Morici said. "But it's not even a good junk bond. It's well below investment grade."
Was the Energy Department investing tax dollars in something that's not even a good junk bond? Morici says yes.
"This level of bond has about a 70 percent chance of failing in the long term," he said.
You read that right, folks: Beacon Power had a CCC-plus toxic rating from S&P before investment genius Barack Obama poured $43 million of your money into it. They did indeed go bankrupt, two months ago. No, you probably aren’t getting your money back.
But wait, there’s more!
CBS News counted 12 clean energy companies that are having trouble after collectively being approved for more than $6.5 billion in federal assistance. Five have filed for bankruptcy: The junk bond-rated Beacon, Evergreen Solar, SpectraWatt, AES' subsidiary Eastern Energy and Solyndra.
Others are also struggling with potential problems. Nevada Geothermal -- a home state project personally endorsed by Senate Majority Leader Harry Reid -- warns of multiple potential defaults in new SEC filings reviewed by CBS News. It was already having trouble paying the bills when it received $98.5 million in Energy Department loan guarantees.
Well, at least all this is stimulating American business, right?
SunPower landed a deal linked to a $1.2 billion loan guarantee last fall, after a French oil company took it over. On its last financial statement, SunPower owed more than it was worth. On its last financial statement, SunPower owed more than it was worth. SunPower's role is to design, build and initially operate and maintain the California Valley Solar Ranch Project that's the subject of the loan guarantee.
(Emphasis mine.) Oh. Well, at least the French will be grateful that Barack Obama forced American taxpayers to subsidize one of their American corporate acquisitions.
These disasters couldn’t have been corrupt examples of politicians raiding the federal refrigerator for bacon they could drag back to their home states, could they? Naaaaaah….
Others are also struggling with potential problems. Nevada Geothermal -- a home state project personally endorsed by Senate Majority Leader Harry Reid -- warns of multiple potential defaults in new SEC filings reviewed by CBS News. It was already having trouble paying the bills when it received $98.5 million in Energy Department loan guarantees.
Oh, but that’s not all. On top of those loan guarantees, Nevada Geothermal also received “at least $66 million in grants,” as the New York Times reported back in October. At the time, company executives were “expressing confidence that they can recover,” and assuring everyone in earshot that “the government investment is not at risk.” The poisonous reasoning behind these “green energy” debacles was made abundantly clear by a Reid spokesman:
Mr. Reid has received some support from the industry, in the form of at least $43,000 worth of campaign contributions from the geothermal industry since 2009, according to an analysis of federal campaign finance records.
Adam Jentleson, a spokesman for Mr. Reid, said that the senator was proud of his work as an advocate for geothermal power and a broad array of other clean energy projects in his state. But Mr. Jentleson, and the Energy Department spokesman, said Nevada Geothermal company had not received, nor been offered, any special treatment.
“If projects like this did not contain a certain level of risk, alongside their enormous potential for creating jobs and generating clean energy, there would be no need for the bipartisan loan guarantee program,” Mr. Jentleson said.
Precisely. These projects don’t make any economic sense, so they can’t attract enough willing investors. Therefore, high-powered politicians and lobbyists force the rest of us to “invest” in them, so we can Win The Future. Meanwhile, these phony politically-invented “opportunities” attract investors who like the idea of government using compulsive force to make taxpayers cover any losses that might be incurred. Capital is thus diverted away from truly viable and useful opportunities. If you’re still wondering how deranged levels of government spending actually kill jobs, instead of merely failing to create enough of them, this is part of the answer: polluting the market with false data.
As the Times pointed out, plenty of Republicans and the Bush Administration supported this type of thinking too, which is why it’s important to dismantle the whole diseased system, rather than simply installing new management. Or we could just re-elect Barack Obama, keep Harry Reid in charge of the system, and get ready for the next dozen Solyndras.
John Hayward is a staff writer for HUMAN EVENTS, |
