As the old song goes, “Ain’t nothing like the real thing, baby!” My children agree with this axiom wholeheartedly. Since they were born, they have ingested relatively few things that were made from artificial ingredients. My son seemed to throw up every time he had anything that contained red dye, so we became acutely aware of the list of ingredients on everything. It was surprising to realize that almost every juice, popsicle, cereal, and yogurt, even exorbitantly priced “organic” ones, contained the pervasive red dye. My daughter began to dislike the bitter taste of the dye and, with her sensitive sense of taste, can still detect its unexpected presence. Our family is not a crunchy, granola one and I don’t own even a single pair of Birkenstocks, but we do prefer real, wholesome ingredients in our food and treats, instead of the cloying taste of dyes and artificial preservatives.
Likewise, our economy has struggled along with stops and starts and fits and coughs as a result of a steady diet of artificial stimulus. The idea that throwing money into the economy in any haphazard manner cannot help but produce economic growth is producing an undeniable result. Tossing money at a weak idea that cannot endure the normal rigors of due diligence probes, like the infamous Solyndra stimulus funding of $535 million, produces nothing other than layoffs of workers and bankruptcy that has left the taxpayers twisting in the wind. However, the temptation of misleading American citizens into subsidizing even more bankrupt business plans has proved too great for the
“venture socialists” in the current administration.
The economic stimulus package of 2009 doled out taxpayer dollars in the millions and billions to pet interests and pork programs of members of Congress. While much of the funding went to states to meet budget shortfalls, shore up pension funds, and extend unemployment benefits, the rest was rushed out without reasonable investigation or oversight. Solyndra is the embodiment of Conservatives’ worst fears about hurriedly spending almost one trillion dollars in the name of government stimulus or a massive experiment in Keynesian economics. Sadly, though, Solyndra is just the flavor of the moment and has plenty of company.
The list of failing companies that greedily disposed of millions in government stimulus funds, only to collapse after such gluttony, is growing.
Evergreen Solar, Inc. received $5.3 million in stimulus funds from the 2009 economic stimulus package. The company has declared bankruptcy now. They are joined by SpectraWatt which obtained a $500,000 Stimulus grant from the National Renewable Energy Laboratory.
Another winner of stimulus who ultimately lost is Mountain Plaza Inc. Despite declaring bankruptcy in 2003, the company received $424,000 from the Tennessee Department of Transportation as part of a grant aimed at installing “truck stop electrification” systems that allow idling truckers to plug-in during extended stops and turn off their exhaust-belching, environment polluting diesel engines.
The company filed for bankruptcy again in 2010.
Elsewhere, Olsen’s Crop Service and Olsen’s Mills Acquisition Co. also failed despite Olsen’s Mills receiving $10 million to increase employment, add equipment and machinery, refinance existing debts and work capital for operations and acquire land. The payout — part of a $64 million package to nine rural businesses in Wisconsin for economic development loan assistance — was delivered in January 2010, after Olsen’s Mills filed for bankruptcy protection for defaulting on a $60 million bank loan.
While President Obama travels the country touting the success of the 2009 Stimulus and begs Americans to show their “love” for him by passing his second round of stimulus now, the jobs supposedly created by the government are vanishing faster than a Slush Puppie in the summertime.
The Obama administration promised that its $38.6 billion loan guarantee program to promote green jobs would create or save 65,000 jobs. Instead, only 3,545 have been created after investing about half of that total, according to the Energy Department.
Rep. Marsha Blackburn of Tennessee surmised:
My goodness. We should be reviewing every one of these loan guarantee projects.
Perhaps the loan guarantee business should not be undertaken by the Federal government at all. Perhaps capital investments should be provided by private investors who are experienced at risking their own capital in a cautious, calculated way after performing due diligence. Perhaps free markets should be free to operate without government interference and incompetence.
Peter Kohlstadt is a former Solyndra employee. His comments in an interview with Greta Van Susteren reveal some misconceptions about how businesses become successful and prosperous that are apparently commonplace.
VAN SUSTEREN: Were you there when President Obama visited?KOHLSTADT: I wasn’t in the building. I was — at the time, I was in another building. But I saw the live video feed of it. So it was — it was — it was a proud moment, you know, to have the president, you know, visit your company. And you know, at that point, we thought, Wow, we’re — you know, I think we’re really going to make it, you know? You know, the president, you know, is kind of backing us, in a sense. And you know, you figure that, OK, you know, there may be some bumpy times, but, you know, ultimately, there was never a thought that they’d close their doors.
You know what? Whether or not your President, who received millions in campaign fundraising dollars from the green energy producers and promoters, endorses and infuses your company with taxpayer-backed loans, your economic success still depends on the conventional constraints of supply and demand. If China produces a greater supply of solar panels at a ridiculously low price at the same time that demand diminishes, your company will, you know, require a force greater than the frivolous endorsement of a, you know, Harvard Law professor to keep its doors open.
The falling price of traditional solar panels is likely the main cause of Solyndra’s bankruptcy.
The simple fact is that artificial stimulus packages or temporary government spending does not create jobs. The market conditions must be right for a business or service to be in demand. Only when the demands of the marketplace and the authentic market conditions indicate support for a new business enterprise can there be real success and prosperity.
The free market system cannot be artificially manipulated by the intervening hand of a meddling government. At best, such inorganic approaches produce temporary results that yield bitter fruits of failure in the long run. The last 3 1/2 years have produced a phony, government-engineered harvest infested with crony capitalism, bankruptcies, and layoffs.