The Solyndra scandal threatens to blow up into the first truly major scandal of the Obama administration. This is, as Via Meadia readers know, bad news for the administration on several levels; besides the obvious ethical issues, the Solyndra scandal makes the President appear incompetent or worse when it comes to job creation. The scandal supports some key Republican attack narratives and as long as it is in the news the Democrats will suffer.
The spectacle of company chiefs taking the Fifth Amendment before Congress means that the scandal has real legs. At this point the White House must brace itself for a steady drip, drip, drip of Solyndra coverage for some time, creating a public sense that cronyism, green naivete and incompetence cause the federal government to waste stimulus money without creating jobs.
Meanwhile, the damage spreads as a combination of bad economic news, falling energy prices and the ripples from the Solyndra bankruptcy push the alternative energy sector into trouble. Take the case of First Solar Inc., a major solar-panel maker and solar-farm developer and until very recently the likely recipient of a $1.9 billion loan guarantee from the DOE. The WSJ reports:
The DOE’s disqualification of First Solar’s Topaz project loan guarantee comes as the department faces intense scrutiny following the bankruptcy of solar-panel start-up Solyndra Inc., which obtained a $535 million loan guarantee and a $527 million government loan to build a factory in Fremont, Calif. Solyndra is the subject of a federal criminal probe into whether the company misled the government in connection with the 2009 loan guarantee. It filed for bankruptcy protection earlier this month.The loss of the loan guarantee for the Topaz project sent First Solar shares tumbling to their lowest point in more than four years…
First Solar still has $2.5 billion in DOE guarantees pending. Without these federal loan guarantees that the industry has relied on to keep itself solvent, investors are panicking. Meanwhile, as the NYT noted,
The bankruptcy’s timing could hardly be worse for the solar industry; about $9 billion in additional loan guarantee money is available, but by law, projects must break ground by Sept. 30. On Thursday, the sponsor of three major projects that had received tentative approval said that at least one of them would certainly not meet the deadline and that the two others might not either. About 1,000 megawatts of power is at risk, according to the industry’s trade association.But the Republicans, with evidence in hand that the Solyndra loan was moved through quickly in the late stages, has publicly cautioned the Department of Energy and the White House not to act in haste in the last days of the program, which was paid for as part of the stimulus bill.
Everything the environmental movement has pushed the President to do has turned into a political mess. The green jobs agenda lies in ruins; so does cap and trade — and so does the push for a global carbon treaty. Yet environmentalists, rather than being ashamed and embarrassed that their agenda flops disastrously when put to the test, are bitter and resentful toward the White House and Democrats generally.The green movement as it is now led is a politician’s nightmare. It pushes its political allies toward unpopular and unworkable ideas, but its members are stringent and demanding. Sooner or later movements like this go under the bus; look for many Democrats to quietly distance themselves from a movement and an agenda that demand a great deal but don’t offer much in return.