October 3 2011
Energy Secretary Steven Chu and the Obama administration ignored warning signals and guaranteed a loan for the failed green operation Solyndra. As a result, the taxpayers lost more than half billion dollars.
A revealing piece in Politico today lays much of the blame for the Solyndra scandal at the feet of Secretary Chu. But the piece ("Physicist Chu Out of His Element as Energy Head?") provides an amazing rationale for the secretary's colossal blunder:
Energy Secretary Steven Chu faces questions over whether his laboratory smarts and Silicon Valley background have undercut his ability to operate inside the Beltway....
"Impressive credentials, but sadly miscast for the rough and tumble, oft unforgiving world of oil and energy markets and its cast of malign actors," Raymond Learsy, author of "Oil and Finance: the Epic Corruption," wrote in a blog post published Monday on the Huffington Post.
An environmentalist with close ties to the Obama administration said Chu didn't help his cause with his own staffing decisions, picking people with science and technical backgrounds over people with solid political and policy chops.
"The great irony, the big critique [with Solyndra] is the suggestion of too much politics and political influence, when in fact the realities on this might be exactly the opposite, that there was too much science and too little intuition," the person added.
Got it? Mr. Chu threw our money down a rat hole because he is so smart. Oh, and Mr. Chu hired other smart people who therefore didn't know better than to let him waste our money. Maybe if these wizards had been less fabulously credentialed (Mr. Chu is a Nobel laureate) we'd still have our half bill?
Let's face it-it's not smarts that caused these people to waste our money. They lost our money for us because they know nothing about how the markets work. They have a philosophy that ignores private enterprise sees government as the prodder and creator of innovation. The piece implies that Mr. Chu, dwelling as he does in an ivory tower, lacks political savvy. That's not the problem, though: he lacks an understanding of how innovation happens.
What if Secretary Chu had had more political skills? I shudder to think what it might have meant. He might have been able to finagle more money to waste on green projects that are doomed to fail. To repeat myself: No, it's not political skills he needed. He needed an appreciation of the market.
If Solyndra had been a good project--by which I mean possibly lucrative--it would not have needed so much money from the taxpayer. Entrepreneurs would have been falling all over themselves to get in on the deal. There are some large projects that require the government. Space exploration comes to mind. There are few direct profits in space exploration. But, believe me, if there had been oil or diamonds on the moon, entrepreneurs would have beat the next space ship up there. Green energy, which must produce real results to be viable, should be left mostly in the capable hands of entrepreneurs.
But what's a half billion here, a half billion there? Some folks are okay with Chu's performance, however. Roger Ballentine, president of the consulting firm Green Strategies, told Politico:
"I think he's exceeded expectations, frankly. I've never seen a period of 2½ years where the DOE has been more central to a broader political dialogue. That's not always because of good things. But this is a secretary who's been thrust into the limelight from circumstances in a way that few ever have."
That's one way to look at it.
There's nothing wrong with trying to get off fossil fuels-but it's not going to happen if entrepreneurs don't see the possibilities, no matter how much of our money geniuses like Mr. Chu waste.