ICYMI: Losing Propositions

From The Columbus Dispatch

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Editorial
February 23, 2012

The U.S. Department of Energy has made some woefully bad bets with public funds in recent years, losing hundreds of millions of dollars on ‘green’ companies as part of its clean-energy investment program.

In several cases – notably with Solyndra, the California solar-panel maker that received more than half a billion dollars from the Feds, then went bankrupt – there have been ties between companies that received government millions and big donors to President Barack Obama’s political campaigns. Energy department executives have denied political influence. But wouldn’t it just be better to erase all doubt and pull the plug on these often ill-conceived giveaways? …

And the losses likely aren’t over. Both the Energy Department itself and an independent study commissioned by the White House in the wake of the Solyndra failure estimated that the government stands to lose up to $3 billion on its loans and guarantees to clean-energy companies. …

Not unrelated to the federal government trying to create an artificial market, government officials and company executives have shown that they live in a bubble removed from market realities. …

Many problems arise from government being in the business of picking winners and losers in the marketplace. From the government’s side, politics often drives the allocation of money – notably in the case of Solyndra.

And once a company has millions in federal money, the money often isn’t prudently used. Faced with virtually insurmountable competitive challenges that objective business analysts could have foreseen, Solyndra burned through a billion dollars in two years. …

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