Ezra Klein Defends Failed Solyndra Investment

Why is Ezra Klein considered one of the Left’s smartest bloggers / pundits? What criteria are they using? Does the ability to take the latest Center for American Progress’ talking point memo and rewording it make you “smart” among the Left? Or is it his ability to use some other Soros-funded think tank’s analysis in order to argue that up is down? It’s baffling. Naturally, MSNBC seems to be grooming him for TV — he guest hosts a few of their shows — but why?

This IQ-sapping post about the recent bankruptcy of solar-power technology developer, Solyndra, is a perfect example of Klein’s “smart” – read “not really very smart” – analysis. (via Washington Post)

I don’t know all the specifics behind Solyndra, the solar-power company that the White House touted as a successful renewable-energy investment but which went belly-up this week.

He should have stopped right there, but the failure is a very high profile one for progressives, the “green” agenda, and Obama, so Klein had to comment — and this is his problem. He takes it upon himself to be the guy who tries to explain to the peons out there why progressivism’s failures aren’t failures. For some inexplicable reason, editors and program managers out there keep paying him to do it, too. And then there are all the people who read his “analysis” and agree with it! It’s unreal.

To his credit, Klein did at least point to an article (also on Washington Post) which does a good job reporting how the $535 Million government-backed loan Solyndra received was sketchy. Chances regular Klein readers actually read the other article? Slim. They’re not there to read about the deal or if it was a wise investment. They’re on Klein’s blog to be told that a massive failure was okay. They want to hear that Obama made the right call and that Klein is going to give them a warm fuzzy feeling if it’s the last thing he does.

But as a general point, it’s entirely possible for the initial investment to have made sense and for the company to have eventually failed. If we’re going to try to support young companies doing risky things in sectors that we’re hoping to dominate, we’re going to have to be prepared for some of them to fail. In fact, we should be hoping some of them fail. If our success rate is too high, it means government is making bad investments.

There’s so much wrong-disguised-as-common-sense in this paragraph one could probably write a book about it. Klein seems incapable of asking himself if the Federal Government should be doing this at all. Should it be supporting young companies doing risky things? The question has probably never crossed his mind.

If “we” as a society are hoping to dominate the solar power sector, wouldn’t the private sector be all over it? The failure to ask these questions leads to the two ridiculous sentences at the end of the paragraph. No one hopes some of their investments fail. No one. And the government, particularly, shouldn’t hope their investments fail because they’re not investing their own money. They’re investing taxpayer money that is not being voluntarily given. They’d better have a really high success rate! If not, they shouldn’t be doing it!

Klein continues:

Technologies and companies that are sure things can raise money on their own. They don’t need government support. It’s companies making big, risky bets with a huge upside but a high chance of failure that have a case for public support.

No, Ezra. That’s not how it works. He tries to pretty up the situation by saying there’s a “huge upside” but if there were a “huge upside” to Solyndra, they wouldn’t have just gone belly up. Solar power isn’t some new idea. It’s been around for a long time. Solyndra had an interesting variation on the concept of a solar panel, but obviously the market didn’t want it. Klein is defying logic and the laws of markets putting lipstick on a very expensive pig. The only companies who can make a case for public support are ones that are providing a technology that is vital to a government function; and, specifically, a technology that provides a solution that is not available from another source / technology. That’s the only time you can really make a case for public support. Otherwise, well, you get companies like Solyndra wasting $535 Million in taxpayer money for something – solar-power arrays – we can get from various other sources.

The funniest part is that Klein even provides examples of technologies that could make a case for public support – money – but he takes a huge leap of logic that doesn’t pass the smell test.

What we’re looking for in those investments isn’t a perfect success rate, but the occasional big success. When we look back at past government investments, we talk about the ones that paid off, like microchips and the Internet and radiotelephony and nuclear power.

Yes, those technologies advanced because of government investment. But the investment was made because there was no viable alternative. Back during the Space Race, we needed computing power on a small format. The internet was developed because the government needed a way to transfer large amounts of data over multiple locations. “Radiotelephony” – Klein’s thesaurus suggested word for “wireless communications” – because we needed wireless communications. Nuclear power resulted from the development of the nuclear bomb because… Getting the picture? There was no alternative so the government invested. Those situations don’t even come close to Solyndra and its technologies. Not even in the same ballpark. Solar-power technology is a mature market.

Another devious tactic in his post: Klein is acting like developers of microchips, etc. received the same kind of financial support Solyndra did. In the case of those other technologies, the government contracted with the developers (and spent direct Research & Development dollars with government employees / scientists) to produce these technologies for the federal government. Solyndra received a government-backed loan in order to continue it’s commercial business. Massive difference. If Klein can’t see that difference, it’s just another example of the “smart” blogger not being very smart. Of course, he could just be omitting all that to push his ideological belief that the government should be involved in the investment business.

Either way, the Left’s wunderkind isn’t as bright as everyone claims he is. When you actually think about what he says and writes, there’s really nothing there. What’s that say about the people who hang on his every word?

Also, it is going to be interesting to see how the media treats this Solyndra loan. It stinks of cronyism.


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