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Corporate welfare: Solyndra the poster child

Almost all you need to know about corporate welfare can be summed up in the following quote from a former employee of bankrupt solar-panel maker Solyndra, which received more than half a billion dollars in federal loan guarantees from the Obama administration.

&#';After we got the loan guarantee, they were just spending money left and right,&#'; former Solyndra engineer Lindsey Eastburn told The Washington Post. &#';Because we were doing well, nobody cared. Because of that infusion of money, it made people sloppy.&#';

That&#';s what corporate welfare does. It changes the behavior of business executives, just as no-strings-attached welfare can change the behavior of the poor. Instead of focusing on profit-making, executives tend to spend more freely, let the business slide and focus on rent-seeking. That was exactly what happened at Solyndra.

&#';Lobbying expenditures of $160,000 a year in 2008 and 2009 accelerated as Solyndra&#';s financial and political troubles mounted,&#'; The Post reported. &#';By 2010, such spending had grown to $550,000.&#';

Solyndra was bankrolled by the stimulus bill. As its inventory of unsold solar panels piled up, it built a new taxpayer-funded factory and sought more taxpayer funds. What was &#';once touted by President Obama as the flagship of his administration&#';s effort to spur the clean-energy industry,&#'; wrote The Post, became instead the poster child of corporate welfare gone wrong. It is a cautionary tale for politicians of all persuasions who find themselves tempted to spur their favorite industries with jolts of taxpayer cash.

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