By J.F. McKenna
There were going to be some companies that did not work out; Solyndra was one of them. — President Obama
I think it is not wise for an emperor, or a king, or a president, to come down into the boxing ring, so to speak, and lower the dignity of his office by meddling in the small affairs of private citizens. — Mark Twain
To recast a classic aphorism by America’s most beloved author… Suppose you were a government official. Now suppose you were a hapless business investor with no personal stake in the investments you make. But I repeat myself.
Old Mark, himself an entrepreneur as well as a writer, would surely forgive the appropriation. He’d likely be less forgiving about today’s U.S. treasury-funded excursions into the marketplace. As Huckleberry Finn’s father told the New York Herald in 1876, “History has tried hard to teach us that we can’t have good government under politicians.”
Or smart business investments.
The Solyndra story is public swindling writ large: questionable technology and an unvetted business plan aided and abetted with government dollars. As The Wall Street Journal recounted earlier this week, “Solyndra received federal help in 2009 and never turned a profit. In March 2010, PriceWaterhouseCoopers raised questions about the company’s solvency. The next month, a White House Office of Management and Budget staffer worried that the Department of Energy ‘has one loan to monitor and they seem completely oblivious.’ Another said it was ‘terrifying’ to consider that some of DOE’s next projects would make Solyndra look ‘better.’”
Solyndra’s public cost — the public cost to date, that is — is more than a half-billion dollars, give or take a few million. Still unknown is the cost to the genius public-servants behind the investment to the now-failed company. (According to long-standing federal regulations, public shame cannot be effectively measured and is therefore not reported.)
Before you rationalize that such idiocy is a federal level away, consider Greater Cleveland’s own white elephant in the making — the medical mart. The Sunday Plain Dealer’s Henry Gomez presented a less than cheery update on the $465 million project: “Forget what you know about the medical mart. Very quietly, the project is turning into something very different than what Cuyahoga County commissioners promised years ago when they imposed a higher sales tax to pay for it. No longer is the mart envisioned exclusively as a first-class superstore for doctors and other health care professionals eager to buy the latest in medical equipment, furniture and supplies. Instead, private developer MMPI has in recent weeks shown a shift toward tenants who would provide educational services rather than sell expensive products. The Chicago company has done so without fully explaining its thinking to the taxpayers footing the bill.”
Here I was finally coming to terms with the 28,000-good-jobs pitch that the Gateway promoters had handed to Clevelanders years ago. Now this. Radio-show host Tom Kelly summed up my tax-funded sense of déjà vu when he said of the medical mart project: “They presented it as an easy home run, when everyone knows it was a hoax.”
A hoax it may be, but that hoax comes with a monthly payment of $683,000 right now.
Whether the bad investment is engineered downtown or in D.C., the result is the same. It represents drunken-gambler behavior done in the public’s name and exercised with limited consequences for the dice rollers. The editorialist at the WSJ got it right: ““In a free-market economy, which America used to be, private investors decide which industries will succeed in the future, and bet their own money on it. The proper role for government is to support basic research, not commercial ventures that become exercises in taxpayer risk but private reward. When government…invests in a loser, it not only wastes taxpayer money but it also denies that capital to some other project in the private economy that might have succeeded. [Current] Solyndra emails show how ill-equipped government is to predict the industries of the present, much less the future. ”
Mr. Twain would agree with that assessment. With the help of adviser Henry Rogers and much hard work on his own part, the author pulled himself out of bankruptcy, the result of poor business investments. No excuses, no tears, no bailouts. Such an experience, of course, toughened Twain’s view of those who take business risks with the citizens’ money.
“The government of my country,” Twain once quipped, “snubs honest simplicity but fondles artistic villainy, and I think I might have developed into a very capable pickpocket if I had remained in the public service a year or two.”
J.F. McKenna is a veteran business journalist and communications specialist. Reach him at firstname.lastname@example.org .