Corporate welfare: Solyndra the poster childEDITORIAL
September 22. 2011 8:05PM
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.