Solyndra Green

By now, most of you know the story about the huge loan guarantee secured by Solyndra for expanding its solar system manufacturing.  Crony capitalism at its worst as we discover the level of involvement that the Obama Administration had in the whole process, just so they could tout a green energy success and justify their stimulus spending.

Yep, its going bankrupt a year after the loan was made, and We The People will lose over a half billion on the deal. Great ‘investment’ Mr. President; maybe economics was not required to obtain a degree from Harvard, but it should be required to run a country.

My purpose today is not to beat up this decision, especially since everyone else is already at it.  I want to take a look instead at the rationale behind taxpayers backing commercial ventures that lack viability.

I know the argument that will be made: ‘renewable energy and energy independence is so important that the federal government must jump-start the industry using taxpayer dollars until such time as it can be economically viable and stand on its own…blah, blah, blah.’

For those too young to remember, or too ignorant to care, this is the third time since the 80’s that we have tried to jumpstart the industry using taxpayer dollars to fund rebates and incentives.  It’s like a bad fruitcake; keep bringing it out of the closet hoping that this will be the holiday season that someone actually eats it.

Here is a fact of life that must be accepted by the people spending our money: when the technology is at the point of economic viability, private investors will flood the industry with money and it will flourish.  Hoping for change prior to this point is just politics, and any taxpayer money invested will be wasted.  If politicians want to pick winners and losers, let them vote on American Idol, but stay away from our wallets.

Besides the wasted taxpayer dollars, decisions like investing in Solyndra limit technological breakthroughs as financing flows only to companies deemed worthy by politicians.  How many amazing solutions have been ignored and failed because the company did not lobby the correct group of politicians?  Expecting solutions within this environment is crazy.

I know, it’s easy for me to criticize and not offer solutions.  So, here is my solution for politicians who want to stimulate an industry and create green jobs, show leadership in energy independence, and most importantly, not use a single taxpayer dollar.  The solution is simple if you have the courage to lead; so here goes my 3 step plan:

1. Remove all tax incentives, stimulus, loan guarantees, rebates, and all other taxpayer funded plans at the Federal level.
2. Introduce and pass legislation that eliminates all capital gains taxes, and more importantly, eliminates all taxes on profits generated from privately financed energy production developments that meet defined alternate energy goals.  Make it simple legislation that defines the goals to be achieved, and leave out all of the political favors BS that usually accompanies new bills.  Tax revenue can be generated on sale or licensing of the technology to other countries.
3. Get out of the way and let American ingenuity and capitalism solve the problem.

In my entrepreneurial mind, this appears to be a huge win-win solution.  Private investors will flood the market with capital directed towards solutions that show promise.  If the technology fails, only the ‘greedy capitalists’ will lose money and not the taxpayers.  Since there are no rebates and incentives, industry will be forced to produce alternative power at costs that make sense to the consumer.

Real ‘green jobs’ will be created, and not just short term jobs that disappear when stimulus money is removed.  We have no idea the direction that this unrestricted technological treasure hunt will take us, but the economy will feel the positive impact as industries vie for solutions and market share.  Jobs may shift as the industry sorts itself out, but the long term impact to employment will be staggering.

Long term energy solutions that make sense for the country will take hold, and our industries will have products and technologies for export that will benefit the world. Give an incentive to Americans to solve this problem, and then have a little patience as entrepreneurs find real answers.

And please, don’t demonize those who succeed in solving the problem this time.  Let’s agree up front that private industry and investors deserve every penny they earn for providing a true alternative for the country.  In the end, the loss of tax revenue will pale in comparison to the tax dollars being wasted now.

Here is an idea looking for a leader; any politician out there with the courage to try something new that has not been polled and tested in focus groups?  Probably not, but I hold out hope.

~Jack Woodward

Tags: 2012 Election, corruption, crony capitalism, fraud, green energy, Obama