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    The Week

    What the FBI's Solyndra raid means: 3 theories

    The saga of the bankrupt company that once played a starring role in President Obama's green jobs push takes an unexpected turn

    FBI agents raided the California headquarters of solar-panel maker Solyndra on Thursday, magnifying the Obama administration's embarrassment over $535 million in loan guarantees the now-bankrupt company received as part of Obama's push to create green jobs. Also plaguing the president: News that one of Solyndra's main investors, billionaire Obama fundraiser George Kaiser, had visited White House aides 16 times since 2004, suggesting that Kaiser may have tried to leverage his influence with Team Obama to win favors for his company. How damaging will this saga be to Obama — and to the alternative energy industry? Here, three theories:

    1. The raid further discredits Obama and his green-jobs push
    "This raid couldn't have come at a worse moment for the administration," says Ed Morrissey at Hot Air. A federal bust on Obama's "pet green-tech company" on the very day when Obama was pitching his jobs plan to Congress? Ouch. And the Kaiser connection stinks of cronyism. But remember, "if this raid turns up any official corruption... this moment will look like a Sunday afternoon on a Martha's Vineyard golf course" compared to what's coming next. 

    2. And exposes the danger of playing favorites with tax dollars
    "While the government has always played a big role in fostering new industries from the railroads to alternative power," says Steve Gelsi at MarketWatch, "the saga around Solyndra exposes the risks [in] awarding loan guarantees to specific companies." It's possible that the FBI and Energy Department, who've teamed up on the probe, are fishing for evidence of wrongdoing to take "political heat" off the Obama administration.  

    3. But Solyndra's problems shouldn't be generalized to an entire industry
    The FBI's involvement only proves Solyndra is a special, possibly criminal, case, says Eric Wesoff at Greentech Media. It doesn't reflect on the work of other green companies, such as SolarCity and First Solar, that continue "leading the charge to get solar power on the United States grid at a competitive price." Short of a letter from Obama to Kaiser thanking him for his campaign contributions and promising loans in return, Solyndra is no reflection on Obama, either. It's just a meaningless "distraction."

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    199 comments

    • WilliamC  •  8 mths ago
      "Until that time the gov can do nothing to create wealth as jobs or in any other form. "

      Huh. See, the Chinese Solar firms are doing well because the Chinese government gave them free land and really, really low interest loans. The American firms were better at technology but couldn't outspend China. So the idea that the government can't create jobs is a FAIL.

      If we'd backed Solyndra as hard as the Chinese back their companies it would have been an even fight.

      "a mass conversion to solar energy will result in higher electric bills for everyone. there is no energy saving device that saves consumers money. the less energy we use the more we pay per unit. we can't afford to save energy. "

      Dude, your math is weak. LED's save energy and money. Solar Panels pay back in a few years and so does geothermal.

      The Federal fuel tax is 19 cents per gallon, more or less. Cutting use and improving gas mileage to save 50% would save $1.85 per gallon. The road tax could be adjusted easily and still leave savings.
      • charmonium5 8 mths ago
        William I doubt that my math is "weak", at least relative to a non-scientist,
        but in any case here is a little non-math food for thought:
        [1] Whatever you cite as a "reason" for the uncompetitiveness that brought Solyndra [and as it turns out two other US terrestrial solar companies] down, it remains the fact that they were a bad investment for a US based company and every Venture Capitalist in the world new it. Subsidy just displaces that uncompetitiveness and subsidized businesses will fail in a marginal economy.
        [2] Mass conversion to terrestrial solar will never happen. Terr solar is way too low entropy source and is suitable only in conjunction [grids] with other high entropy sources in regions of unusually high insolation. That same low entropy argument applies to geothermal which are even lower entropy sources. The massive panels farms that are envisioned will produce so much toxic waste as the panels are replaced after a degradation to 80% every few years that the cost/kwatt will be astronomical compared to nuclear by far the highest entropy source yet available.
        Solar has promised a "payback" in its many different forms for 40 years and has yet to deliver except in niche applications. There are more abandoned solar panels still on rooftops, tat were subsidized by "tax credits" that there are working ones in Southern Calif. Worse in Massachussetts. This failure ought to obviate any "math" that you may bring to bear on the general utility of terrestrial solar energy.
        Move it to space...maybe a different outcome.
        [3] What the Fed Fuel Tax has to do with Solar Energy?
        You can cut your actual mileage by 50% today. Buy a 100cc motorbike.
    • William  •  8 mths ago
      a mass conversion to solar energy will result in higher electric bills for everyone. there is no energy saving device that saves consumers money. the less energy we use the more we pay per unit. we can't afford to save energy. for example: the federal mandate to increase the nation's mpg to 35.5 from current 23 [ approx. ] will not save moterests money. why ? because the states and feds maintain our highway system by taxing fuel by the gallon purchased. if we cut our use by 50%, tax revenues will decrease by 50%. you simply cannot maintain the roads on that reduced amount. therefore, the road tax will increase by 50%. net savings to the consumer O . SO IT GOES FOR NATURAL GAS, ELECTRIC, WATER. WE SAVE EVERYTHING BUT MONEY AND THAT'S IN SHORT SUPPLY FOR MOST AMERICANS.
    • D C  •  8 mths ago
      With Eric Holder running the show, I can all but guarantee no prosecutions, no ties to Kaiser, more of OUR money spent "investigating" that'll result in zero results.

      Holder will make sure any seized document with any of Obama's boys names on them will get blacked out, "classified" and/or shredded. Rose Law firm anyone?

      Same thing happened with Evergreen Solar - Massachusetts gave them $56 million dollars right before they moved to China.

      We'd get better ROI if we burned the money for heat.
    • Marcuf  •  8 mths ago
      why investigate? a business becoming insolvent after receiving soooooo much money and doing so in such a short period of time? loan guaranteed by us? if were paying for anything, I want to pay to recover all the 500,000,000 back
    • RonS  •  8 mths ago
      The FBI raided Solyndra for one reason and one reason only: they seized documents that are needed to proceed with bankruptcy proceedings to ensure that the US Government is first in line as a creditor. No one will be prosecuted, no one will be arrested and the $500 million that Solyndra got from Obama- minus his commission of course- is gone! How's that "change" grabbing you now? Does it make you feel better to know that the corruption is green-oriented? I didn't think so.
    • Rusty57  •  8 mths ago
      "FBI Agent" is now classified as a 'green job'.
    • william  •  8 mths ago
      the week still hauling obama's water for him.if this was bush the story would have blood dripping from their fangs as they scream its all his fault.
    • charmonium5  •  8 mths ago
      The difference between China in the terrestrial solar business [based as it is in thin film microelectronic technology] and the US which has not been competitive or a decade in that realm, is obviously not a matter of demand but market competitiveness. The Solyndra debacle [as with two other US terrestrial solar companies that went belly up this years] shows us the importance of providing appropriate products in competitive markets as the real job generators. When they are economically feasible, no one will need gov to define them or make them real. Until that time the gov can do nothing to create wealth as jobs or in any other form. The time will come when the Global Economy has squeezed all the US govs funny-money and the worthless equity left over as a result of the "real Estate Bubble" out of its stores. When currency and credit in circulation measures the actual wealth existent, then the economy will expand. Not until then.
    • elzeeky  •  8 mths ago
      four more years Obama the hell with the nay sayers word up
    • charmonium5  •  8 mths ago
      Write Congress. Demand separation of business and gov.
    • VoteNixonshead2012  •  8 mths ago
      Owebama and Solar Kickbacks = Impeachment.
    • charmonium5  •  8 mths ago
      Investigation is being expanded to execs homes and computers. Is the FBI investigating for wrong-doing or is it acting to exponge the record of any of Mr. Obama's dealings? Naturally no one can talk and it'll be that way for an indeterminant time, say till after the next election.
    • Orlando Olivera  •  8 mths ago
      Nothing ever changes in Washington, bussiness as usual.
    • paraprosdokian  •  8 mths ago
      Eric Holder friend of the politicians and the corrupt!!!!!The FIX IS in!!
    • Capt  •  8 mths ago
      If nothing is done, no investigation, no questions, nothing then we know that our country in in the wrong hands of the wrong people, including Obama!
    • charmonium5  •  8 mths ago
      Zeax thinks that theft has occurred in the Solynfra deal. I am certain that all the legal docs allow Solyndra their loan guarantee even though any real and sensible business man or venture capitalist would never have invested in that scheme. Mr Obama granted a 1/2 trillion loan guarantee backed up with your money on poor business facts and ethics. Reason enough to divorce business constitutionally from government. There was theft indeed, it occurred when the gov took your money by force and gave it to someone else.
      • Old Geezer 8 mths ago
        This is but bad , but YOU are so freeking Republican! Get you story straight! It was NOT a half trillion $ loan it was a half Billion $ loan. Huge difference! Always trying to make things worse than they are. Join the Tea Party - you'll fit right in!
      • Bookemdanno 8 mths ago
        half trill, half bill, whats the difference geezer? barry seatero (pres real name) is destroying this country.
      • charmonium5 8 mths ago
        Mr Obama has promised 1/2 trillion in "new jobs" presumably Solyndra was one. 999 more like it will fill his promise. 6 billion to GM... and not one of these "investments" will have a net + ROI of that you can be sure. Any potential business that could thrive in this business environment needs no gov assistance. BTW Geezer when building and maintaining a nannystate, it makes no difference D or R...you just believe that it does because you were taken in by the propaganda to the effect.
    • charmonium5  •  8 mths ago
      Apologist for radical corp socialism and the current administration yelp about early Iraq procurements in comparison to the Solyndra caper. That corp welfare exists and has been alive and well or decades is admitted by nearly everyone. What we need is separation o Business and State. It might happen eventually.
      The point being argued on this thread is the way in which it is contracted. In the Halliburton case, what was contracted or was in fact delivered [more or less]. In the Solyndra case it wasn't and is increasingly looking as if it could not have been. The former is questionable expenditure of gov't funds at a time when competitive bidding wasn't feasible AND likely their were no secure competitors ready to act immediately. In the latter case it was business malfeasance supported with gov [TAX] money. Very significant difference ethically and probably legally.
    • Chris-Delon  •  8 mths ago
      Cant have Obama Blackmailed if he is connected. Multinational corporation Welfare system at it best. Both Parties get suckered by these Guys. Hope people look at the Multinational Corporation shell games in Tax ,Trade and regulation laws. That where the truth hidden.
    • dave  •  8 mths ago
      I dont believe that this was an intentional scam or corruption, but I do believe its a great case study as to why the Gov needs to stay out of business, and let the free market function.

      Obviously this company didnt have a solid, marketable product and efforts by the Gov to reach in and artificially stimulate markets (like Green Energy or Auto or Housing industry) are unrealistic. If there isnt real demand for a product, its doomed to fail.
      • Gman 8 mths ago
        China is forging along just fine. They've spent over double the amount toward alternative energy compared to the U.S. This country needs to ween itself off of oil. Market conditions won't do that. The government is the only entity that can steer progress in this area. The Solyndra episode is unfortunate. But ironically, it's foreign governments who've outspent us to reach their goals. Business and government need to work together. Hopefully we'll learn lessons of what went wrong with Solyndra and do better. We can't afford not to.
      • West, by God, Virginia 8 mths ago
        Dave...there wasn't much demand for electricity when it was first introduced. It was considered impractical and dangerous.
      • charmonium5 8 mths ago
        Gman the difference between China in the terrestrial solar business [based as it is in wafer scale microelectronic technology] and te US which has not been competitive or a decade in that realm, is obviously not a matter of demand but market competitiveness. The Solyndra debacle [as with two other US terrestrial solar companies that went belly up this years] shows us the importance of providing appropriate products in competitive markets as the real job generators. When they are economically feasible, no one will need gov to define them or make them real. Until that time the gov can do nothing to create wealth as jobs or in any other form. The time will come when the Global Economy has squeezed all the US govs funny-money and the worthless equity left over as a result of the "real Estate Bubble" out of its stores. When currency and credit in circulation measures the actual wealth existent, then the economy will expand. Not until then.
    • Sunshine Connie  •  8 mths ago
      What it says is simply that Crony Capitalism is a failure at taxpayer expense. Just like children can not buy friends the POTUS can not buy success.
      • charmonium5 8 mths ago
        Yes, so let's divorce gov from business as the constitution does for religion for example. Crony Capitalism is not capitalism at all. It is social engineering produced by gov and socialist businessmen. [ie Non Competitive businessmen, not real businessmen]