Editorial board dissent

The recent bankruptcy of California solar energy company Solyndra perfectly illustrates the folly of trying to dictate market outcomes from the West Wing.

In situations like these, instead of putting up their own money and making decisions based on how good a return they expect, bureaucrats put up other people’s (i.e., taxpayers’) money and make decisions based on what seems most politically expedient.

That is exactly how it went with Solyndra. The administration was repeatedly warned of its financial precariousness prior to making the loan.

Examples of such warnings abound, but in my limited space, I’ll cite the most glaring: In May 2010, nine months after the initial loan was approved and nine months before the second loan was approved, an industry analyst noted that Solyndra’s costs were far greater than those of its competitors and added that the type of panels it produced were not economically competitive.

While there is nothing to suggest it would be impossible for private investors to make such a foolish investment, we can be confident of this: if private investors had been dumb enough to make these kinds of investments, American taxpayers would not be paying for the losses.
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— jarlower@indiana.edu