President Obama has his critics, just like all other presidents before him. As presidents go, Obama has few "scandals" that plague his administration, compared to previous presidents. One particular scandal pinned on Obama is that of Solyndra.
Those on the right regularly put the Solyndra scandal as a prime example of Obama mismanagement, or corruption, or something. But as scandals go, I find the Solyndra incident to be the least effective in positioning the Obama administration as failing or corrupt. Here's why.
First, let's understand what Solyndra is. Solyndra manufactured solar photovoltaic systems. Its supposed technical advantage -- the secret sauce -- was that the cylindrical (Solyndra/cylindrical… get it?) design would allow for solar energy absorption from any direction through direct, indirect and reflected light. Most flat-panel solar panels are most effective during a short span of time when the sun is directly overhead of the panels. Solyndra's design allowed the panels to be effective during the whole span of sun's presence from dawn to dusk.
Now, there's been hucksters offering cheap energy since time immemorial. Was Solyndra a scam? Unlikely. Their energy efficiency claims were not fully backed by technical reports, but they clearly were not making "perpetual motion" machine claims. They were well-vetted by numerous venture capitalists who generally don't invest money in obvious fraud (unless they're part of the fraud). Kaiser Family Foundation, Redpoint Ventures, RockPort Capital Partners… these are serious VCs and they don't throw money at nothing.
What doomed Solyndra wasn't the technology, but the business case they presented. Cheaper, although less efficient, traditional solar panels were still better off than Solyndra technology. The cost to generate electricity via solar panels have dropped drastically over the past 10 years and the minor improvements that Solyndra could offer did not offset the cost of using the technology.
So where's the scandal? The US government is committed to developing green energy. Outside of a few trolls and those whose livelihood depends on the oil and gas industry (or the dying nuclear industry), who can be against renewable, clean, cheap green energy? The US government gave Solyndra a $535 million loan guarantee to construct a commercial-scale manufacturing plant for their solar panels. Of all the different ways to invest in a company, a loan guarantee is one of the least risky. A loan guarantee tells the entity asking for the loan, "Hey, you make the case to get a loan from somewhere: a bank, friends and family, angel investors, whomever. We're on your back to tell these people that, at worst, they'll get back the principal if things go wrong." In other words, the government isn't betting on the technology. Otherwise, it would have been a direct payment for the technology, or a grant. The government is saying to Solyndra, "You still have a job to convince others to give you money."
Ok, that might suggest that the Department of Energy and the US government isn't too keen on the technology. Well, I don't know the inner workings of the DoE, so I can't comment whether this action is standard operating procedure or a special case. But it appears that this route the government took is precisely the right one. It is a nascent, untried technology, so the government can't be cavalier with using the tax payers' money. If the government were fully invested in the business, it would have gone through congress to appropriate the money to fund the technology, like everything else the government commits to such as aircraft carriers and fighter jets.
True, the executive team of Solyndra spent the money profligately with fancy offices and pricey office furniture. But the fact that 100% of the loan wasn't used strictly on the construction of the manufacturing plant wasn't what doomed the company. Again, they did not foresee the precipitous drop in silicon prices that made their technology economically obsolete.
But that's not a bad turn of events. The US government is committed to seeing green energy succeed. It is not committed to seeing each and every or any particular company involved in green energy succeed. The fact that solar panel costs have dropped is a win. That Solyndra lost is collateral damage while winning the war on creating green energy. If Solyndra thrived, we the people win. If Solyndra failed as it did, because there are cheaper alternatives, we the people still win. The only way to lose is to not try.
The government isn't there to bet on the jockey (and really, it shouldn't). The government is there to bet on the choice of the race. And the green energy race is the right bet.
Which is precisely the role of government: providing capital to untried, but promising technology. Failure in a particular technological attempt is still a win in the overall scheme of things, because we all learn from that attempt. The US government, through the National Science Foundation (NSF) funds tens of thousands of small research projects, from obscure math research to huge large Hadron collider type experiments, to studies of supersymmetry in string theory, to field work hunting for dinosaur fossils. Science and technology is never 100% success. It is usually 10% success. Some even claim 1%. Try doing something, like cure brain cancer. 99 out of 100 times, you're doing it wrong, or your conclusions are wrong, or your results show nothing beneficial. That's the nature of science. The graduate chairman, when I received my PhD in math, said, "If your 'theorems' you just proved aren't wrong 99 times out of 100, you haven't been working hard enough." Most attempts in science lead in the wrong direction. The long-running success of science is fundamentally due to the many failures it left in its wake.
So the whole Solyndra incident is a classic case of betting on the horse and having the horse lose, only to be glad that the race now has top-level competitors. Society wins in the end. This is why I find the whole issue so befuddling. If people are going to criticize Obama as a bad president, the Solyndra incident is just not a good example of bad leadership. It is an example of exactly the right leadership.
Those on the right regularly put the Solyndra scandal as a prime example of Obama mismanagement, or corruption, or something. But as scandals go, I find the Solyndra incident to be the least effective in positioning the Obama administration as failing or corrupt. Here's why.
First, let's understand what Solyndra is. Solyndra manufactured solar photovoltaic systems. Its supposed technical advantage -- the secret sauce -- was that the cylindrical (Solyndra/cylindrical… get it?) design would allow for solar energy absorption from any direction through direct, indirect and reflected light. Most flat-panel solar panels are most effective during a short span of time when the sun is directly overhead of the panels. Solyndra's design allowed the panels to be effective during the whole span of sun's presence from dawn to dusk.
Now, there's been hucksters offering cheap energy since time immemorial. Was Solyndra a scam? Unlikely. Their energy efficiency claims were not fully backed by technical reports, but they clearly were not making "perpetual motion" machine claims. They were well-vetted by numerous venture capitalists who generally don't invest money in obvious fraud (unless they're part of the fraud). Kaiser Family Foundation, Redpoint Ventures, RockPort Capital Partners… these are serious VCs and they don't throw money at nothing.
What doomed Solyndra wasn't the technology, but the business case they presented. Cheaper, although less efficient, traditional solar panels were still better off than Solyndra technology. The cost to generate electricity via solar panels have dropped drastically over the past 10 years and the minor improvements that Solyndra could offer did not offset the cost of using the technology.
So where's the scandal? The US government is committed to developing green energy. Outside of a few trolls and those whose livelihood depends on the oil and gas industry (or the dying nuclear industry), who can be against renewable, clean, cheap green energy? The US government gave Solyndra a $535 million loan guarantee to construct a commercial-scale manufacturing plant for their solar panels. Of all the different ways to invest in a company, a loan guarantee is one of the least risky. A loan guarantee tells the entity asking for the loan, "Hey, you make the case to get a loan from somewhere: a bank, friends and family, angel investors, whomever. We're on your back to tell these people that, at worst, they'll get back the principal if things go wrong." In other words, the government isn't betting on the technology. Otherwise, it would have been a direct payment for the technology, or a grant. The government is saying to Solyndra, "You still have a job to convince others to give you money."
Ok, that might suggest that the Department of Energy and the US government isn't too keen on the technology. Well, I don't know the inner workings of the DoE, so I can't comment whether this action is standard operating procedure or a special case. But it appears that this route the government took is precisely the right one. It is a nascent, untried technology, so the government can't be cavalier with using the tax payers' money. If the government were fully invested in the business, it would have gone through congress to appropriate the money to fund the technology, like everything else the government commits to such as aircraft carriers and fighter jets.
True, the executive team of Solyndra spent the money profligately with fancy offices and pricey office furniture. But the fact that 100% of the loan wasn't used strictly on the construction of the manufacturing plant wasn't what doomed the company. Again, they did not foresee the precipitous drop in silicon prices that made their technology economically obsolete.
But that's not a bad turn of events. The US government is committed to seeing green energy succeed. It is not committed to seeing each and every or any particular company involved in green energy succeed. The fact that solar panel costs have dropped is a win. That Solyndra lost is collateral damage while winning the war on creating green energy. If Solyndra thrived, we the people win. If Solyndra failed as it did, because there are cheaper alternatives, we the people still win. The only way to lose is to not try.
The government isn't there to bet on the jockey (and really, it shouldn't). The government is there to bet on the choice of the race. And the green energy race is the right bet.
Which is precisely the role of government: providing capital to untried, but promising technology. Failure in a particular technological attempt is still a win in the overall scheme of things, because we all learn from that attempt. The US government, through the National Science Foundation (NSF) funds tens of thousands of small research projects, from obscure math research to huge large Hadron collider type experiments, to studies of supersymmetry in string theory, to field work hunting for dinosaur fossils. Science and technology is never 100% success. It is usually 10% success. Some even claim 1%. Try doing something, like cure brain cancer. 99 out of 100 times, you're doing it wrong, or your conclusions are wrong, or your results show nothing beneficial. That's the nature of science. The graduate chairman, when I received my PhD in math, said, "If your 'theorems' you just proved aren't wrong 99 times out of 100, you haven't been working hard enough." Most attempts in science lead in the wrong direction. The long-running success of science is fundamentally due to the many failures it left in its wake.
So the whole Solyndra incident is a classic case of betting on the horse and having the horse lose, only to be glad that the race now has top-level competitors. Society wins in the end. This is why I find the whole issue so befuddling. If people are going to criticize Obama as a bad president, the Solyndra incident is just not a good example of bad leadership. It is an example of exactly the right leadership.