Solyndra Goes Bankrupt
Debra Saunders has written an interesting article highlighting the Solyndra energy debacle. Essentially, this was one of Obama’s examples of “investing in the future” in order to create “green jobs”. I’m sure it all looked good on paper, and solar panels are a sexy technology that politicians love. The only problem is that the firm, which was given a $535 million dollar federal loan, is now bankrupt. The article nicely points on the weaknesses inherit in governments making these kinds of investments. The main one being that these decisions are made for political (solar panels are sexy, investing in a new broom factory isn’t) purposes, not economic ones. What it misses, though, I think, is the real harm to the economy that these kind of decisions cause.
When investments are made like this it uses up resources that might have been used profitably elsewhere. If the $535 million dollars (that amount the feds invested in Solyndra) had been left in the private sector, what new products or services might have been bought or created? If Solyndra had been allowed to go bankrupt sooner, how would its human capital been used? Is it possible that some of its talented engineers etc might have started new companies on their own? Or perhaps help existing companies grow and prosper? We’ll never know, as that money is now gone and that time has been wasted. And people wonder why the US economy is limping along?
November 13th, 2011 at 6:32 am
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