In 1995 in went to Best Buy and plunked down $195 for four MEGAbytes of sram memory for my 486. This morning a quick check online revealed I could buy four GIGAbytes of DDR memory for $54.98. Trivia buffs can do the math to derive the per byte cost but the point I want to make is development not production pays the rent. Being first with new technology pays unbelievable rewards but they don't pay off for place or show. We have seen this show before with LCD watches, with ink jet printers, and microwave ovens. You can't make money betting on solar panels to show. Yet this is exactly what brought us the Solyndra scandal. Once the manufacturing technique is perfected the exciting new innovation becomes just another commodity. Imagine if you will, Barack Hussein Obama addressing a joint session of Congress and promising to make the US the leading manufacturer of ink jet printers. Solar panels, ink jet printers, dram memory, LCD watches, monitors, and televisions all had their day in the sun but they are also yesterday's news.
When we ask ourselves why the Obama administration would want to pour money down the Solyndra rat hole the answers are not so clear but the kindest thing that can be said about the actors is they were stupid beyond even Georgia public school standards. A less charitable assessment would be they are guilty of personal malfeasance on a scale the government hasn't seen since the Teapot Dome scandal. While Obama and company maybe be stupid the outside investors are not, yet if maximizing profit and minimizing risk were a concern they went about the pursuit of those aims in a strange way. First, upon securing the loan guarantees they splurged on a new plant. Everybody and his brother can point to an abandoned factory in his hometown that could be had for thousands-not hundreds of millions of dollars. Now if one wanted to come out of bankruptcy with a nice asset one might want to build a new plant. Solyndra has filed for chapter 11 bankruptcy meaning the principals don't want to liquidate the assets of the company but rather "re-organize" the company. Here things get tricky because being a privately held company Solyndra doesn't have to make public as much information as we would like to see. Also bankruptcy law is arcane with frequent disagreements among bankruptcy lawyers. Second, it seems the Solyndra plant was running its operation flat out up until it was shut down. Anyone who has been around a failing company knows that usually working hours are reduced and some workers are furloughed. Here the company acted like it wanted to burn through its cash as fast as it could.
The third red flag is George Kaiser. He is, of course, a big Democratic donor and an Oklahoma oil man. As best as I can figure, when the Department of Energy allowed him to subordinate federal loan guarantees with his $69 million bridge loan he put the taxpayers in the same position as the Chrysler bond holders. Something is very wrong with this deal but did the Obama administration think it could do this on the sly? Kaiser and his group, Argonaut Solar stand to take hundreds of millions of taxpayer dollars simply because the Department of Energy and the Obama administration says they can. Watch for fireworks and calls for a special prosecutor after the principals of Solyndra testify before Congress next week and don't expect to hear how smart the Nobel Prize winning Secretary of Energy Steven Chu is.
We areTHE RESISTANCE.
Excellent!
ReplyDelete