The recent bankruptcy of Solyndra poses a real problem for President Obama. It has exposed the President’s achilles heel, that is, no business experience.
In early 2009, the solar panel maker Solyndra was awarded a $535 million loan guarantee by the Department of Energy. At that time, President Obama made a special appearance at Solyndra’s new factory in Fremont, CA.
But let’s be clear about this, this was not some guarantee to the banks loaning the money to Solyndra. This was a $535 million dollar payment of taxpayer money directly to Solyndra.
To make matters worse, at the time of the loan, Solyndra was losing money AND their technology was not competitive with existing solar panels.
The Obama administration is trying to blame this on low cost panels from China ruining our competitiveness, but the reality is that Solyndra’s technology was more expensive and was ALWAYS projected to be.
This was crystal clear to anyone with minimal business training at the time of the loan. This company would never make money. The cost for Solyndra’s technology to make one watt of electricity had always cost more than conventional solar panels, and always would.
Would you pay more for electricity generation just to use Solyndra technology? Of course not. That is why Solyndra went bankrupt. This simple fact would have been evident to the Obama administration at the time of the loan if any of them had ever worked in industry or had bothered to check the company out.
Instead President Obama jumped on the “Green jobs” bandwagon and wasted $500 million dollars of your money to get a photo opportunity.
What could he have done?
How about using that $500M to seed 10,000 start up companies with a $50,000 seed grant instead?
That’s 10,000 new companies which could be doing everything from technology to manufacturing to services.
After 1 year and a half on this program, some startups would surely fail, but you would still have thousands of new companies and millions of more jobs. Instead they have a company in bankruptcy and all the money gone.
The Future
The Obama administration is now planning to spend billions more of your money to reduce the interest rate on outstanding mortgages in an attempt to stimulate the housing market and the economy.
This will fail as well. Why? Because it SPENDS money without creating anything. It lowers costs, and gives people a bit more to SPEND, but no one is CREATING anything. That is why it is a SPENDING program, not an INVESTMENT.
What Obama needs to do
Create a $1 billion startup INVESTMENT fund and let me administer it with no red tape or bureaucracy or debate. A iind of startup INVESTMENT Czar.
What the Obama administration needs is someone who has worked in industry and knows how to grow businesses quickly.
In one year, we’ll have thousands of new companies and millions of new jobs. That will do more to help the housing market and economy than anything the Obama administration has on the drawing board.
Time for a change.
