Political Hay

Green Joblessness

The Obama administration tries and fails to beat the marketplace in creating clean energy jobs.

By 3.5.12

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Last week, General Motors announced that it was suspending production of the Chevy Volt for five weeks. Roughly 1,300 workers will lose their jobs, at least temporarily, during the hiatus. Despite up to $3 billion in taxpayer commitments, the green-friendly hybrid electric car has sold poorly.

Abound Solar, a green start-up competing with Chinese solar panel manufacturers, also disclosed that it would be laying off 180 of its 400 employees. Abound has already burned through about $70 million of a $400 million loan it received from the federal Department of Energy.

A123 Systems, a lithium ion battery maker that has received $249.1 million in grant money from the Deparment of Energy, expects to announce the largest quarterly loss in the company's 11-year history. In recent months, A123 has laid off 125 workers in Livonia, Michigan, where former Gov. Jennifer Granholm touted the company as a stimulus "success story."

All of this comes on the heels of the infamous Solyndra solar company receiving more than $500 million in federal loans and then promptly going bankrupt, ceasing most of its operations, and laying off nearly all of its workers.

These are not isolated casualties of the weak economic recovery. They are not flukes. Call it the Solyndra-fication of the U.S. economy.

In late January, the House Committee on Oversight and Government Reform asked Energy Secretary Steven Chu to explain how Abound Solar had gotten a federal loan in the first place. The ratings company Fitch determined that Abound would be a "highly speculative" investment.

"Fitch describes Abound as lagging in technology relative to its competitors, failing to achieve stated efficiency targets, and expecting that Abound will suffer from increasing commoditization and pricing pressures," wrote Chairman Darrell Issa (R-CA). "DOE's willingness to fund Abound, despite these concerns, calls into question the merits of this loan guarantee."

One thing Abound Solar did have going for it was connections to an Obama campaign bundler, however. Pat Stryker founded the Bohemian Companies, a major Abound Solar investor. Stryker has given $500,000 to Democrats in the past five years. She has written large checks to Barack Obama's 2008 campaign, his inaugural fund, and his 2012 reelection effort.

The administration steadfastly denies any political influence on the Department of Energy loans. Abound Solar received another $9.2 million from the U.S. Export-Import Bank last year.

In fairness, Abound investors are bipartisan in their giving. ABC News reports that at least two of them gave "more than $100,000 to Republicans in the last few years." Indiana Gov. Mitch Daniels supported a $11.85 million tax credit for the firm. The Department of Energy is quick to point to these facts in denying that politics played a role in the decision.

Obama has also been a big booster of the Chevy Volt, vowing to buy the car when he leaves the White House "in five years." The president has made it a national goal to see 1 million electric cars on the road by 2015.

Let's for the moment leave aside the political connections and crony capitalism, taking the administration's denials of hanky-panky at face value.

Even if nothing untoward occured, you still have the government picking winners and losers in an industry rather than the free market -- with predictably disastrous results.

"This isn't the car we wanted to build," says the narrator in a Chevy Volt commercial. "It's the car America had to build."

How about building the car Americans want to buy? That would be a more promising path to market-based success.

Yet the federal government still owns just under 30 percent of General Motors. Perhaps that is one reason GM attempts to make cars consumers don't want to buy, with the exception of those who are very rich and unafraid of the batteries catching fire.

Even without the inevitable cronyism, government-backed green firms that are untested by the market are about as good an investment as subprime mortgages. Anyone care to guess the outcome?

This isn't to say that green companies can't be profitable, just that politicians and bureaucrats are a poor bet for making them so. As long as the government is the biggest investor in the green business, these companies will be in the red more often than the black.

The news is saddest for those who have been led to believe green jobs were high-paying, secure, and unlikely to ever go away. Solyndra-style boondoggles aren't just a bad deal for the taxpayer. Think of the employees working for them when they go belly up.

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About the Author

W. James Antle III, author of the new book Devouring Freedom: Can Big Government Ever Be Stopped?, is editor of the Daily Caller News Foundation and a senior editor of The American Spectator. You can follow him on Twitter @jimantle.