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That's right Mr. President, keep loaning the money, everything is going GREAT!  (Source: Getty Images)
President says high-risk loan was "felt like... a good bet"

(This article contains editorial commentary, which is the opinion of the author.)

President Barack Obama has endured scathing criticism in recent weeks for loaning $535M USD to failed solar startup Solyndra.  The loan came as part of a $40B USD "green" technology stimulus effort.  But on September 1, 2011 Solyndra filed Chapter 11 bankruptcy, leaving its 1,000+ employees looking for work and leaving the government staring at an un-recoupable loss.

I. Interview: Obama says "No" regrets on wasting $500M USD

In recent weeks Republicans have lashed out at President Obama for the lost money.  They argue it's indicative of the President's overall budget incompetence.  They've launched a probe into the loan and the Department of Energy's overall loan infrastructure.  States Rep. Michael Burgess (R-Texas), a member of the House Energy panel’s investigative subcommittee, "We need to hear from Secretary Chu and [White House Office of Management and Budget Director Jack] Lew to fill in some of the blanks.  The buck has to stop someplace, and presumably it stops with the heads of those agencies."

But the POTUS is holding his ground.  In an interview on ABC News' "Good Morning America", also broadcast online on Yahoo! News Monday, anchor George Stephanopoulos asked President Obama if he regretted the 2009 loan guarantees .  He replies, "No I don't.  Because if you look at the overall portfolio of loan guarantees that had been provided, overall it’s doing well. And what we always understood is that not every single business is going to succeed in clean energy."

President Obama's administration is accused of rushing the loan guarantee in order to allow it to be announced at the September 2009 groundbreaking of the company's new factory.  By February the loan was already under investigation.  Still, the President stood firmly behind Solyndra, visiting their California headquarters in early 2010 and touting them as a green energy "leader".

Some emails that have been released indicate some administration members had expressed concerns about the company's financial health -- concerns that were ultimately overruled.

Obama implied America has to get more China-like when it comes to loans, in order to compete with the Asian rival.  He states. "If we want to compete with China, which is pouring hundreds of billions of dollars in this space, if we want to compete with other countries that are heavily subsidizing industries of the future, we have got to make sure that our guys, here in the United States of America, at least have a shot."

II. Editorial: Business as Usual in Washington, D.C.

To be fair, as bad as the Solyndra loss looks, the previous Bush administration spent many times that essentially paying off the losses of the American International Group (AIG), which it built up from taking on risky investments pre-recession.  AIG received over $127B USD [source] and sent over $100B USD overseas to banks it owed money to.

Thus perhaps the Solyndra debacle is more of a testament to how things are run in Washington no matter which party is in charge, rather than a sign that President Obama is somehow exceptional or different, for better or worse.  Both parties talk about balancing the budget, but it's a matter of public record that in recent years both parties have overspent, committing to risky investments and troubled assets.

That's not to say what the Obama administration did here was right by conservative fiscal standards.  As the old saying goes, two wrongs don't make a right.  But if there's someone who offers an alternative to this kind of spending they're likely not in Washington, D.C. -- or at least likely not very popular there among either party.

These kinds of wastes are particularly sad, as they come at a time when proud American science projects are being shuttered due of lack of funds.  America recently closed the world's second largest particle accelerator, because the government claimed it couldn't find $100M USD out of the $3.4T USD budget to pay for the accelerator's annual operating costs.  The AIG funding could have paid for over 1,000 years of operation.  The Solyndra funds could have extended the life of the accelerator 5 years.

One thing's for sure when it comes to Solyndra, though -- President Obama isn't going to say sorry for what happened.

Source: ABC News



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At least he's honest for once...
By quiksilvr on 10/4/2011 8:24:40 AM , Rating: 1
He easily could have pointed blame at others and could have thrown in some business mumbo jumbo stating things like bounce back predictions or decreased solar costs with more production.

But instead, he pretty much stated the truth. That the government took a $500M gamble and lost. It isn't good, but at least he didn't bullsh|t.




By BZDTemp on 10/4/2011 8:34:50 AM , Rating: 1
Exactly. I'm thinking he could have added something about the relationship between omelets and eggs.


RE: At least he's honest for once...
By therealnickdanger on 10/4/2011 8:48:31 AM , Rating: 3
The simple truth is that he doesn't regret it because it wasn't HIS money that got wasted. He's wasting the money of the taxpayers while he and his cronies exploit every tax loophole possible to avoid paying in their "fair share" - to quote the Messiah himself. I'm glad he has such a clear conscious about it. Makes it a lot easier to vote him out of office in 2012.


RE: At least he's honest for once...
By Targon on 10/4/11, Rating: 0
RE: At least he's honest for once...
By Reclaimer77 on 10/4/11, Rating: 0
By lelias2k on 10/5/2011 5:26:52 AM , Rating: 2
It is also the government's duty to provide education and health services, but look where we are.

quote:
securing our borders and protecting our citizens


Yeah, that's the kool aid they all tell you to drink so they can keep pouring trillions into "defense."

As for the investment, my opinion is that the government should invest in technologies of the future, especially when the rest of the world is kicking our asses when it comes to those technologies.


RE: At least he's honest for once...
By Natch on 10/5/2011 1:43:09 PM , Rating: 2
I was wondering if you could please tell me where this occurs?

quote:
Does a basic file clerk really deserve $80,000/year plus a pension?


I just checked the Office of Personnel Management's (OPM's) page on the present-day GS pay scales, and a GS-04 (which would be your "basic file clerk" is NOT making $80,000 a year.
http://www.opm.gov/oca/11tables/indexGS.asp

In fact, in most places, they start out at $30,000 a year, and after ~20 years of service , have skyrocketed all the way up to (are you ready for this?) $40,000 a year!! The highest GS scale I saw was for the San Francisco Bay area (Nancy Pelosi country), where they go from $33K to $43K in range.

Yeah...believe it or not, but the whole "government employees make too much money" is nothing more than a BS political talking point. OPM has set the value of a government employee's benefits as ~29% of their salary, so even multiplying that GS-04's salary by 1.293, they're only coming in at $42,669 to $55,599 in value. So unless you can somehow tell us where the other $25,000 to $35,000 in imaginary wages are coming from, I'd have to say your point was a bit of an exageration.


By lelias2k on 10/5/2011 5:21:15 AM , Rating: 4
Take a look at the US income tax history and let's see if Obama is really the one who created the problem...

http://en.wikipedia.org/wiki/Income_tax_in_the_Uni...

Don't get me wrong, I'm pissed with a lot of thing this government has done, but the tax problem is not one of them.


By cruisin3style on 10/5/2011 3:40:04 PM , Rating: 2
the simple truth is if he had apologized and said he regretted it, people like you would say America needs a leader that doesn't compromise or apologize.

Just make sure you make a conscience decision to vote Republican


RE: At least he's honest for once...
By web2dot0 on 10/6/2011 10:15:17 PM , Rating: 2
You gotta look at the big picture. Not every gov't investment is going to work out. Obviously, this didn't work out. But $500M is not $1T. That's the scope of the problem. Don't make it bigger than it is.

The gov't spends many Billions investing in these types of things. Let's evaluate based on the overall performance, not a single point of failure. You are bound to lose battles in a war, we just need to make sure we win the war.

If you are such a fiscal hawk, where were you when the gov't bailed out WallStreet? Shouldn't you be against the Republican Party that got us into this mess? The Trillion Dollar mess ....

You need to bring it from a 10 to a 2. Breath now ...


By therealnickdanger on 10/7/2011 11:12:40 AM , Rating: 1
Congress was controlled solidly by democrats when the Wallstreet bailout of 2008 occurred... and the much larger 2009 bailouts... and 2010... You can't paint Republicans into a mess that they didn't cause.


RE: At least he's honest for once...
By phantom505 on 10/4/2011 8:49:34 AM , Rating: 2
That's what happens when you have public-private investment. You're going to lose sometimes. It's not really a big deal. My guess is that they have finance guys that calculated the risk and most of the risk is probably going to get soaked into the interest of the successful companies.

We do this with student loans all the time. No story here.


RE: At least he's honest for once...
By VahnTitrio on 10/4/2011 10:18:29 AM , Rating: 2
Correct. Private banks don't hit homeruns with every loan they issue. Although whether the risk is absorbed in interest remains to be seen. Wasn't that part of the housing market collapse, interest too low on high risk mortgages?


RE: At least he's honest for once...
By Iaiken on 10/4/2011 11:18:22 AM , Rating: 2
No, the problem with the mortgage crisis was the sheer volume of mortgages that had little equity and no insurance was greater than the reserves held in the banks.

The government absorbed the risk and propped up the banks long enough to allow them to undertake in the single largest transfer of real world assets into the hands of financial institutions ever. The money is mostly all still there, it's just tied up in physical assets for the time being.

That's the thing about banking, if the government is on your side, you can't lose. The government could have just as easily stopped the first domino from falling (Lehman Brothers), but deliberately chose not to as it was a powerful signal to the remaining banks that they had no choice but to co-operate.


By Master Kenobi (blog) on 10/4/2011 11:18:38 AM , Rating: 2
Interest was artificially low, when the rates started to rise nobody could pay them. But that is purely a case for poor loan criteria. It generally isn't a good idea to loan someone the money for a 400k dollar house when they only make a measley 35k. The general premise was a "get rich quick" scheme. If you bought the house and made just 1-2 payments and then proceeded to flip it (sell it to someone else for 10-15% more than you paid) then overall you could make a tidy profit. The problem is the people who did this for 2-3 years and go out while it was still good made out like bandits. All the idiots who jumped on that band wagon later on and kept at it like crack addicts still held homes they couldn't pay for when everything imploded. General rule of thumb, if "everyone is starting to do it" then the jig is up and it is time to run like hell in the opposite direction. I remember my co-workers getting their realtor licenses in droves just to speed the process up and cut out middlemen so they could flip more homes quicker. To my amusement they all got burned when shit hit the fan.


RE: At least he's honest for once...
By Reclaimer77 on 10/4/11, Rating: -1
RE: At least he's honest for once...
By phantom505 on 10/4/2011 2:25:12 PM , Rating: 2
If there is a failing of the US in modern times it is the fact we don't take risk and we don't let risky ventures fail. Why? Because "We the People" back the lion's share of every loan created through a bank via FDIC. If a bank fails who gets the tab? We do.

We set up systems to privatize profit, and publicize debt. That is one of the many dangers of getting rid of something like social security and turning it over to Wall St. Then Wall St won't be able to fail because everyone's retirements are tied to it.

What is asinine is that fact you look everything on a micro scale and fail to see the bigger picture then whine about it. Then you talk about how great something else would be that would lead to even bigger necessary bailouts. Let's just tell everyone that invests in anything that they'll certainly make money... like a real Ponzi scheme.


RE: At least he's honest for once...
By mkrech on 10/4/2011 4:43:15 PM , Rating: 4
$15,000,000,000,000
quote:
privatize profit, and publicize debt

The government is publicizing the debt. In this case, a little over $500,000,000 of debt. Then the government privatizes the profits, but only to those that are chosen by the political tyrants.

It is indeed a terrible system that MUST be stopped for our country to survive this tyranny.

Laissez Faire capitalism supported by a return to federalism will cure this system. But the longer we wait to take action the more difficult it will be to kick the bad habits.


By Ringold on 10/4/2011 1:44:27 PM , Rating: 2
quote:
My guess is that they have finance guys that calculated the risk and most of the risk is probably going to get soaked into the interest of the successful companies. We do this with student loans all the time. No story here.


Sorry, what?

You're right, they did have finance guys that calculated the risk, and they wanted more time for review, smelling a bad investment. They were ignored.

Student loans are also pretty much risk-free, as they're damn near impossible to ever get away from. They're the only loans I'm aware of, off hand, that one can't shake in bankruptcy. That puts them in a radically different category.

Pure denial to ignore all the failures, extending all the way to the top of the government, that occurred here. My only sympathies are for those 'finance guys' who were doing their job apparently and got rode hard and put up wet.


RE: At least he's honest for once...
By bug77 on 10/4/2011 8:56:40 AM , Rating: 4
It wasn't even a gamble, when the writing on the wall were already pointing out that the company would go under by September 2011.
So yes, he did bullsh|t.


RE: At least he's honest for once...
By FITCamaro on 10/4/2011 9:08:52 AM , Rating: 2
Exactly. From the evidence everyone knew the company was going to fail. But they rushed the loan anyway. Some think as a payoff to Democrats in California which wouldn't surprise me at all. From what I've heard/read, several high ranking Democrats were invested heavily in Solyndra. So they probably made a killing off it pulling out before it failed.

That's the whole reason for much of the green movement. Democrats padding their portfolios with tax payer money to artificially inflate stock prices so their investments make money.


RE: At least he's honest for once...
By Spuke on 10/4/2011 9:57:02 AM , Rating: 1
quote:
From what I've heard/read, several high ranking Democrats were invested heavily in Solyndra. So they probably made a killing off it pulling out before it failed.
Doubt it. The company never made any money. Well, at least someone will get a manufacturing facility on the cheap.


RE: At least he's honest for once...
By Iaiken on 10/4/2011 11:21:51 AM , Rating: 2
quote:
At least someone will get a manufacturing facility on the cheap.


This is actually a really good point, any facilities and equipment are not simply lost, they can wind up in the hands of other (more successful) companies for bargain pricing.


By theapparition on 10/4/2011 11:54:49 AM , Rating: 2
Or they sit unattended, with no property tax revenue, and become delapidated, causing property values in the area to plumet.

Take a look at all the manufacturing facilities in Michigan for sale.


RE: At least he's honest for once...
By Ringold on 10/4/2011 1:46:58 PM , Rating: 2
From what I've read, the facilities aren't worth a ton and the equipment is heavily specialized to the type of solar panel technology they were making -- which just wasn't profitable, even with government subsidies. Govt might recoup some money, but lenders will take a heavy hit.


RE: At least he's honest for once...
By Cerin218 on 10/4/2011 11:50:07 PM , Rating: 2
We are talking about Ethanol right?...


RE: At least he's honest for once...
By ekv on 10/5/2011 4:25:39 AM , Rating: 2
and not Kool-Aid.


By MrBlastman on 10/4/2011 12:23:11 PM , Rating: 2
Doubt it you might but it happens all the time.

You see, Solyndra never had to make any money for their initial liberal investors (so the theory holds) to make out with profits. Instead, what happens often is a business starts up and they look for seed money.

This money often comes from people that like the cause the business is behind or are promised to make out from their investment. Oftentimes, the individuals running the company aren't exactly ethical in their handling of the books and manytimes do not value the company properly, thus, their private stock price.

So what happens is those running the show keep telling everyone things are going great. They especially tell their seed money providers this lie. They then reach out for additional loans and investors--in this case, the United States Government and in return, to keep their private shareholders happy, pay out part of this invested money to these initial holders through redemptions--yes, they let them redeem their shares (some of them are probably getting tired of not receiving a dividend check) at a higher price than they paid them for.

But wait, how is this possible? It is possible due to the shady accounting practices. See, publicly traded stock is regulated by the SEC who routinely requires filings to be made disclosing certain bits of information. The SEC can randomly audit any of these businesses at any times to see whether they are true or not. Private businesses do not have this requirement at all. They can essentially value their shares for whatever they like and those investing in the company, have to accept it as word.

Of course, a private investor can ask to see the books--but, the books are only as truthful as those who prepare them. Oftentimes these businesses will keep two sets of books. The "real" books that they show investors and then the REAL books that only those internally can see (which really show the poor health of the company). These "real" (fake) books show growth or other appealing things that would make people want to invest in the firm and also justify an appreciating share price. Sometimes they'll even show a profit, othertimes not.

So through additional equity being invested (or loaned) in the company, they then capitalize these redemptions to the initial holders to keep them happy--and thus they pass the word on to others that the company made them money, thus perpetuating the whole scheme for a time. Eventually these things fold, just ask Charles Ponzi all about it... or Worldcom's ex leaders... or Enron's...

*PS: Just because the SEC regulates public entities doesn't mean they are completely truthful either. As we've seen in the last few years, the SEC has been asleep at the wheel and let a lot of things slip by.*


By Cerin218 on 10/4/2011 11:46:21 PM , Rating: 2
It's already been proven that politicians profit more than normal investors for their stocks. When you have inside information and it isn't illegal, not tough to make a profit.


RE: At least he's honest for once...
By theapparition on 10/4/2011 12:09:31 PM , Rating: 4
quote:
Politicians padding their portfolios with tax payer money to artificially inflate stock prices so their investments make money.

Fixed that for you.

I've no love for liberals, but plenty of conservatives play the same games.


By FITCamaro on 10/4/2011 2:30:32 PM , Rating: 2
Fair enough.


RE: At least he's honest for once...
By bubbastrangelove on 10/4/2011 12:03:19 PM , Rating: 3
I'm sure he'll get a good laugh about it like he did when he threw away billions on the shovel ready jobs that weren't shovel ready.

The best and saddest part is he's confused why no one (well anyone with common sense) doesn't want to give him more money for the jobs bill. He's clueless.

Our president isn't fit to run a lemonade stand let alone a country.


RE: At least he's honest for once...
By cooperaaaron on 10/5/2011 11:37:02 AM , Rating: 2
And I guess Bush was... spending MANY TRILLIONS on two unjust wars... yea... The current President has been spending the last 3 years preventing the country from going over the edge..... Guess you forgot about that.....lol


By bubbastrangelove on 10/5/2011 5:00:19 PM , Rating: 2
Please point out where I said Bush was any more or less competent and I'll gladly answer your question. You guys are getting desperate huh!

The only thing I've ever said comparing Bush to Obama is the following: "remember we thought it couldn't get any worse?".

Settle down Francis.


RE: At least he's honest for once...
By tigz1218 on 10/4/11, Rating: 0
RE: At least he's honest for once...
By vapore0n on 10/4/2011 9:28:24 AM , Rating: 2
Yes. Lets equate wasting 500M dollars to killing millions of people.


By monitorjbl on 10/4/2011 11:32:55 AM , Rating: 2
Well, accounting for inflation, it's only equivalent to killing about 60,000 people. Which would make Hitler a slightly better person had he only wasted 500 million dollars.

http://www.time.com/time/health/article/0,8599,180...

Also, Godwin's law.


RE: At least he's honest for once...
By Master Kenobi (blog) on 10/4/2011 11:33:47 AM , Rating: 2
Depending on the number of people and their theoretical worth we might have a fair argument. I believe the current value of a person is listed at roughly 5 Million USD. This number changes between the government agencies with the EPA generally the high roller at about 9 Million. Likewise the low roller is the DoD which values a life at no more than 600 Thousand.

So 500 million would equal roughly 100 dead people.
I'll take a conservative estimate and say 11 Million dead by Hitlers orders. 11 Million * 5 Million = 55 Trillion. But that is with todays estimates, back then the value of a life might have been in the Thousands rather than Millions which would substantially reduce the total dollar figure into the low-mid Billions.


RE: At least he's honest for once...
By Steve1981 on 10/4/2011 12:34:16 PM , Rating: 2
quote:
I believe the current value of a person is listed at roughly 5 Million USD.


Is that MSRP? Do I get a discount for a Somali model?


By Ringold on 10/4/2011 1:50:54 PM , Rating: 2
If NewEgg has free shipping, I might bite.


RE: At least he's honest for once...
By DougF on 10/4/2011 3:55:00 PM , Rating: 2
Actually, yes. "Blood" money in the Middle East/Africa region is still around $100K for a life.


RE: At least he's honest for once...
By ekv on 10/5/2011 4:32:29 AM , Rating: 2
Iran is only coughing up $25k.


RE: At least he's honest for once...
By Reclaimer77 on 10/4/11, Rating: -1
RE: At least he's honest for once...
By phantom505 on 10/4/2011 9:13:42 AM , Rating: 3
Loosen the tin hat a bit, you might tear a hole in it.


RE: At least he's honest for once...
By Reclaimer77 on 10/4/2011 1:00:59 PM , Rating: 3
Your joking right? This is far from a conspiracy theory, just follow the money trail on this deal. Now, maybe I'm just cynical, but when I see the money ending up in the hands of George Kaiser, despite the man claiming he "had no knowledge" of it, I put 2 and 2 together. Oh and if you don't know who Kaiser is, you shouldn't even be discussing this issue and accusing others of being tin foil hat wearing lunes when you don't even know any facts.

Really? We had people who claimed Bush "started" wars to pay off Halliburton, but I'm crazy for pointing out that this was obviously a money laundering scheme from the start?

Between 2009 and 2011 Solyndra officials and investors were invited to the White House over 20 times. 20! And the government just so happens to choose them to "invest" in. Including 4 trips the very week before the "loan" was announced. Crony capitalism at it's finest.

If I'm so crazy then tell me something, why did the FBI raid the offices of Solyndra after they went belly up? Does the FBI always raid businesses when they go bankrupt? Is that standard practice now lol? Maybe they were looking for ohhh, I don't know, where $500 million went and why?

http://www.theblaze.com/stories/solyndra-scandal-f...


RE: At least he's honest for once...
By FITCamaro on 10/4/11, Rating: 0
RE: At least he's honest for once...
By mkrech on 10/4/2011 4:56:34 PM , Rating: 2
Don't be an a$$ FIT. There are constructive ways of offering criticism. Shooting into your own ranks is not productive. Unless your just trying to troll both sides for a rise. Which i doubt and sincerely hope is not the case.


RE: At least he's honest for once...
By mkrech on 10/4/2011 4:50:41 PM , Rating: 2
Sorry, I have not read the link yet, but I don't think the FBI was trying to find out where the money went. That's pretty obvious. However, controlling the evidence of how it got there was probably an objective.


RE: At least he's honest for once...
By xti on 10/4/2011 10:21:51 AM , Rating: 2
omg...we must pad our basement and fill the closet with can food! stat!


RE: At least he's honest for once...
By MonkeyPaw on 10/4/2011 9:48:07 AM , Rating: 2
If losing half a billion dollars is a good bet, I hate to think where lots of the risky bet money went...


By lightfoot on 10/4/2011 1:02:01 PM , Rating: 2
The UAW and teacher's unions mostly.


RE: At least he's honest for once...
By Jaybus on 10/4/2011 3:25:40 PM , Rating: 2
You surely don't think this was the only deal he thought was "good".


By cooperaaaron on 10/5/2011 11:38:43 AM , Rating: 2
Ask Bush where all of those trillions went for two wars ....... right !


By Jeffk464 on 10/4/2011 3:34:39 PM , Rating: 2
Of course not, is a blast to blow other people's money.


By Cerin218 on 10/4/2011 11:42:31 PM , Rating: 2
Is this the kind of thing that the Democrats don't believe that we are taxing the people of this country enough to do? Maybe Warren Buffet can put his money where his mouth is and write a 500 Million dollar check to cover this so that the rest of us poor slobs that have to work 60-80 hrs a week won't lose money for. But keep whining liberals, about how the government doesn't tax enough and we can't pay our bills. The pres gives his friend 500 million and they walk away laughing, just lie his union buddies.


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