Why on Earth Would the Obama Campaign Call Solyndra ‘Successful and Innovative’? Because It Was.

  • Share
  • Read Later
Paul Sakuma / AP

An exterior view of Solyndra Inc. in Fremont, Calif. on May 24, 2010.

In this cauldron of stupidity we call a presidential campaign, the scandal of the minute is Obama campaign spokeswoman Lis Smith’s description of Solyndra as “successful and innovative.” She actually said Solyndra was “widely praised as successful and innovative.” She said this not because she wanted to trend on Twitter, but because Solyndra was, in fact, widely praised as successful and innovative. And if you understand this, you can understand the entire Solyndra pseudo-scandal.

As I write in my upcoming book, The New New Deal, Solyndra was once the toast of Silicon Valley, a hot start-up whose product was not only innovative but revolutionary. It was one of the most successful fund-raisers in the history of clean-tech finance, attracting an astonishing $1 billion from elite investors like British mogul Richard Branson, whose Virgin Green Fund selected Solyndra from a pool of 117 solar companies. When the Bush Administration wanted to complete its first clean-energy loan guarantee before leaving office, it chose Solyndra from 143 applicants. The Energy Department’s civil servants objected to the rush job in January 2009, but suggested the loan had merit; when Obama took over, Solyndra’s application was already at the top of the pile.

Solyndra’s slogan, “The New Shape of Solar,” was more than marketing fluff. Most silicon panels look like tinted windows. Solyndra’s looked like horizontal ladders for lizards. Most panels harvest sunlight with silicon wafers. Solyndra’s relied on a metal mixture called CIGS etched onto elongated glass cylinders. They were more expensive than traditional panels, but they were easy to install, which drove down installation costs; they clicked together like Legos, so they didn’t require elaborate mounting devices, or even tools. The company was burning through cash, and its financials evoked the old joke about losing money on every sale but making it up on volume. But its executives believed a more efficient factory and new economies of scale would slice their production costs, at a time when sky-high silicon prices were brutalizing their competitors.

That’s why the Obama Administration (like the Bush Administration before it) was so eager to finance Solyndra’s state-of-the-art factory in Fremont, California. The company felt like a classic American story of innovation, founded by a Silicon Valley scientist with a background in semiconductors, improving technology originally developed by a national lab, aiming to reinvigorate a U.S.-born manufacturing industry that had fled overseas. Its new factory would create 6,000 construction jobs and 1,800 permanent jobs, while producing enough solar panels to replace a medium-sized coal plant every year. Sure enough, Solyndra’s revenues soared from $6 million in 2008 to $140 million in 2010, and were on track to double again in 2011. Some of us thought the company had a good chance to survive.

Of course, it didn’t, which made some of us look stupid.  Silicon prices plummeted, so Solyndra’s business plan imploded, and the company defaulted on its $585 million loan. It spent too much silly money and made too many arrogant mistakes, but it probably would have been doomed no matter what it did in an era of cheap solar. And remember, cheap solar is a good thing.

There has never been the slightest bit of evidence that political influence had anything to do with Solyndra getting its money. Even Darrell Issa, the top Republican investigator in the House, has admitted that. Every lender makes bad loans, and overall, the federal clean-energy loan portfolio is doing fine. But the idea of the feds giving half a billion dollars to a company that goes bankrupt sounds so shocking that people naturally assume there must be a corrupt explanation. So Republicans have seized on the fact that one major Solyndra investor, George Kaiser, was an Obama fundraiser, ignoring the fact that the Republican donors in the Walton family were also major investors, and that the Bush team was just as gung-ho about the loan. Solyndra has become the centerpiece of Mitt Romney’s “crony capitalism” attacks on the Obama White House.

Skepticism is understandable, in the absence of an alternative explanation. But there is an alternative explanation: Solyndra was a potentially transformative company, “widely praised as successful and innovative.” It was a calculated risk that went sour. That’s a shame, but it’s not a scandal.

74 comments
Sort: Newest | Oldest
Lee Weisenberg
Lee Weisenberg

Michael,

I believe your point misses the larger mark in my opinion.  And I speak with some knowledge regarding Solyndra having been involved in the closure of the facility.  Solyndra never had a chance to make it...and this simply the truth.  Their technology, while pretty neat, was cost prohibitive compared to other CIGS or ITO solar technologies that exist.  What gave everyone, and I would include you in this, the false hope that they could succeed was that almost 100% of their revenue was subsidy driven in Europe.  Once the subsidies dried up, the revenues did the same.  I think the larger lesson we can learn from Soylndra, and the other clean energy companies that are falling by the wayside on a weekly basis, is that the government is horrible at picking winners and losers.  The market will ultimately decide whom the fittest are...no matter how much cheerleading and money the government provides.  That is of course until they mandate that we have it.

Joe Murtaugh
Joe Murtaugh

I think the money lost was like 2 and half percent of the DOE's investment money. The Fossil Fuel Industry trumped up a war and cost us thousands of lives. Not to mention the Big Gomits financial subsidies to the likes of Exon, the first or second most profitable company in the world...unless you really count.

3xfire3
3xfire3

Michael,

You are like the little boy who is in a barn frantically digging through the Horse Sht.

When asked what he was doing the little boy said "With all this Horse Sht there must be a pony in here somewhere.

Michael there is no pony.

It is amazing the lengths you are willing to go through to try and help your Hero.

Crissa
Crissa

Where's your facts?  I don't see 'em.

ChowT
ChowT

neither did I.

Cmdr_Casey_Ryback
Cmdr_Casey_Ryback

RED is a good way to describe OWE-bama (D) the Chicago MOB FAILURE

Firozali A.Mulla
Firozali A.Mulla

Hillary Clinton travels places to tell all “Please do help Syria,

our troops need cheering. Now will she pay this or not is the huge question.

And we talk of corruption in many small states. I thank you Firozali A.Mulla

DBA

Firozali A.Mulla
Firozali A.Mulla

Hillary Clinton, who has steadily chipped away at

the more than $25 million in debt her campaign amassed

during her run for president, owes only $100,000, according to Federal Election Commission disclosures for the second quarter of 2012.

Running for president is

expensive, and although the subject of campaign

debt has usually

been synonymous with Newt Gingrich in the past several months,

Clinton is among the many former presidential candidates who've departed the trail in debt. She suspended

her campaign in June 2008 owing the $25 million but had paid off enough by the

end of that year to owe $5.9 million. Almost four years later, the campaign

owes $100,000 to one entity, the firm of Penn,

Schoen amp; Berland for

consulting and polling fees. Penn, Schoen amp; Berland is a market

 

research firm headed up by a

trio of long-time advisers to both Bill and Hillary Clinton: Mark Penn, Doug

Schoen and Michael Berland. She travels places to tell all “Please do

help Syria, our troops need cheering. Now will she pay this or not is the huge

question. And we talk of corruption in many small states. I thank you Firozali

A.Mulla DBA

 

 

 

 

 

 

ahandout
ahandout

More business pearls for the uneducated left:

 “When you don’t have the demand, you can’t go into

something with the attitude, ‘Build it and they will come,’”

Misra said. “You have to make sure the customers are already

there when you build it.”

http://www.bloomberg.com/news/...

I wonder were the whistling robots ended up? 

Cmdr_Casey_Ryback
Cmdr_Casey_Ryback

STUPID doesn't begin to cover this story or President FAILURE.

Crissa
Crissa

Look who's uneducated... You're saying they shouldn't have competed for the best engineering talent at the top of the second tech bubble?  You're saying that investing in workers doesn't guarantee a return?

'Cause you're providing cover for politicians who are saying small businesses will hire more people if only they're getting a tiny bit more of a tax break, don't worry about demand, it'll come.

Do you ever worry about contradicting yourself?

ChowT
ChowT

He doesnt know.

Cmdr_Casey_Ryback
Cmdr_Casey_Ryback

RED is a good way to describe OWE-bama (D) the Chicago MOB FAILURE