A Costly Solar Flame-Out (III)

In recent years — where important legislation always seems to be prepared at the eleventh hour, after closed door meetings with only selected congressional leaders — it has been easy to forget that one of Congress’ more important powers is the power to investigate, obtain documents, and take testimony.  Much of the drama in the Watergate story, for example, came during the long, drawn-out congressional hearings into that scandal, as witness after witness drew the ring of scandal closer and closer around President Nixon.

The story of Solyndra — the solar power company that recently went into bankruptcy after receiving more than $500 million in government loan guarantees and then became the subject of an FBI investigation — may reignite interest in congressional hearings.  ABC News is reporting that the House Energy and Commerce Committee, which will hold hearings on the Solyndra story tomorrow, has obtained emails that indicate that the White House was carefully monitoring the Energy Department’s consideration of loan guarantees to Solyndra, at the same time that government analysts were expressing serious concerns about the risks involved.

The Solyndra story is no Watergate, of course, but congressional oversight and investigation powers aren’t reserved only for scandals capable of bringing down a President.  Congress should determine whether federal officials disregarded clear risks and awarded more than half a billion dollars to a private company just to advance a political agenda — or, even worse, to help a political contributor who invested in a struggling business — and, if so, Congress should take steps to ensure that those officials are appropriately punished and such recklessness does not happen again in the future. Such actions would be a good sign that Congress may actually get back to doing its job and exercising its powers, rather than simply, and endlessly, fundraising and grandstanding.

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A Costly Solar Flame-Out (II)

It was bad enough that Solyndra, a solar energy company, abruptly closed its doors recently, after receiving hundreds of millions of dollars in federal loan guarantees as part of a federal government effort to promote “green jobs.” Today, the news got worse.

The media is reporting that the FBI agents, working in conjunction with the Department of Energy Inspector General’s office,  served search warrants on Solyndra and fanned out to scour buildings on the Solyndra campus, looking for . . . something.  In addition, Congress is investigating what happened, and two Democratic Representatives, Henry Waxman and Diane DeGette, have disclosed that less than two months ago they met with Solyndra’s CEO, who assured them the company was in strong financial position and in no danger of failing.  They urge the Republican chairman of the House Energy and Commerce Committee, which is conducting the investigation, to also look into why the CEO did not disclose the perilous condition of Solyndra.

I’m glad that Republicans and Democrats alike are interested in getting to the bottom of the Solyndra story, because investigating the loss of hundreds of millions of dollars in federal funds is not a partisan issue, but rather is a straightforward “good government” issue.  Every Member of Congress should want to know how this happened, and then use that information to assess whether the Department of Energy program, with its risky practice of providing substantial financial support directly to specific companies, should be continued — or should be ended in order to protect against misuse of tax dollars.

A Costly Solar Flame-Out

Federal stimulus efforts to encourage “green energy” businesses took a shot to the chops today when Solyndra, a California solar energy company, declared that it will file for bankruptcy protection.

Solyndra had received $535 million in federal loan guarantees and was one of 40 concerns that was supported by a Department of Energy program designed to encourage green energy projects.  Today, however, the company suspended its manufacturing operations and laid off more than 1,000 workers.

It is not clear how much money the federal government will lose as a result of its support of Solyndra, and some no doubt will argue that such losses, whatever they may be, are simply a necessary cost of trying to develop “green energy” alternatives in the United States.  For others, however, Solyndra’s failure is a sobering lesson that even significant federal support doesn’t mean much if a company cannot hold its own in the rough and tumble world of the global economy.  In this instance, Solyndra apparently couldn’t compete with foreign manufacturers who sold comparable products at cheaper prices.  This story also raises more fundamental questions:  why should the federal government be supporting certain companies and industries at all, and when they do who is deciding whether the investment of our tax dollars has a prayer of earning a meaningful return?

 

Green, But No Green

Yesterday the New York Times published an interesting story about “green jobs.”  It found that, despite being the focus of government subsidies and targeted jobs creation efforts, “green” businesses really haven’t produced much green — in the form of cash payments to new workers and employees.

The article found that “clean technology” jobs account for only a small fraction of jobs nationwide, and that government programs to subsidize and stimulate creation of “green jobs” have largely failed.  Job training efforts also have not borne fruit.  And this story comes on top of other stories that show that much of the employment generated by “green energy” subsidies occurs in other countries, like China, that actually manufacture the wind turbines and solar panel devices that typically are the centerpiece of green jobs initiatives and the photo op backdrop for political speeches about those initiatives.

Amazingly — to me, at least — some green energy advocates say federal and state governments haven’t done enough to encourage green energy.  They bemoan the fact that Congress did not enact “cap and trade” legislation that would have made use of fossil fuels more expensive and therefore made green energy alternatives more competitive.  For now, however, people are paying attention to their pocketbooks when they are making energy choices, and green energy is losing out.

The article is a good illustration of how government forecasts and promises frequently end up for naught.  It also demonstrates that government efforts to redirect consumer sentiments are doomed to fail — at least when they ask consumers to spend more for unfamiliar technology that doesn’t seem to work as well as what they were using before.

Calling To Report On That GM Investment

“Mr. Webner, this is one of your securities analysts over at the Treasury Department calling to discuss the status of your investments.”

I beg your pardon?

“Yes, this is one of your analysts over at Treasury.  You’ll recall that we decided to invest $50 billion in tax dollars from you and other taxpayers in General Motors.”

Who is this, really?

“It’s the Treasury Department, Mr. Webner.  Don’t make me read your Social Security number over the phone.  I’m calling you today to report on the GM investment.  You see, we’ve decided to sell our holdings of GM stock this summer.”

Okay . . . so, how did the investment do?

“Mr. Webner, I’m very pleased to report that, if we sell at current prices, we’re likely to lose only about $11 billion.”

Wait a minute — did you say we are going to lose 11 billion dollars?!?

“Yes, that’s right.  It means we’ve only lost a bit over 20 percent of the investment!  Of course, prudence compels me to point out that the loss could be greater if the share prices fall.”

How is the stock doing, then?

“I’m sorry to say the current stock price has fallen to below the initial public offering price.”

Why?

“Well, Mr. Webner, have you been to the gas station lately?  With gas prices increasing every day, consumers surprisingly aren’t motivated to buy those huge GM pickup trucks.  And during the first part of this year, GM had to offer big sales incentives and rebates to get people to buy those quality cars that your tax dollars helped to manufacture.  Oh, and there’s been some management turnover, too.  Of course, gas prices could go down before summer, Mr. Webner.  And those Chevy Volts could start flying off the showroom floors.”

So, you are telling me that we are likely to lose even more than $11 billion unless gas prices go down and the Chevy Volt takes the country by storm?

“That’s about it, Mr. Webner.  Now, can I talk to you about our planned investments in green technology companies?”

Click.


The Horrors Of Recycled Paper Napkins

Our office has long tried to be “green.”  We recycle paper products and aluminum cans.  We don’t use styrofoam coffee cups.  And, recently, we started using recycled paper napkins at our coffee stations.  The napkins are brown and are proudly stamped with the green recycle stamp and the messages “Made with 100% recycled material” and “Save the environment, one napkin at a time.”

The napkins are in a dispenser right next to the sink and the coffee brewer.  Their intended use is plain:  they are supposed to help you as you rinse out your coffee cup in the morning and scrub out the remaining coffee film.  At this simple chore, however, the recycled paper napkins are a complete, abject failure.  A single napkin is so flimsy that it dissolves and falls to pieces at the slightest touch of liquid.  So, you use three napkins together — thereby saving the environment, three napkins at a time — but as you clean out the cup you realize that you are leaving behind moist, rice-sized paper pellets adhered to the bottom and sides of the cup.  The brown paper residue then needs to be swept from the cup, by hand.

We used to have sturdy, presumably non-recycled, napkins for this purpose.  One napkin filled the bill admirably and left you with a spotless, shining cup, ready to accept the morning’s first touch of black magic.  Now, what used to be a simple, mindless part of the morning routine has become a source of grim frustration, all because the environment-saving recycled napkins suck at their job.  The first rule of napkin technology should be, “no residue left behind.”  Our gossamer recycled paper napkins not only are incapable of removing existing residue, they compound the problem by leaving their own trail of brown crud.

I’m all in favor of recycling — really I am — but we shouldn’t be guilt-tripped into buying inferior recycled products that fail to perform their intended function.  No amount of “green office” awards can make up for the horrors of trying to use recycled paper napkins.