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Chart of the day: Solyndra loan guarantee vs Pentagon ‘boondoggles’

By Kirsten Korosec | September 16, 2011, 12:51 PM PDT

Solyndra’s business model put the company on track to fail. The changing dynamics of the global solar market accelerated its demise. The Obama Administration’s decision to award a flagship $535 million loan guarantee raises more than a few red flags — which Jon Stewart of The Daily Show put into context this week. Still, it’s worth putting the Solyndra loan guarantee into some perspective.

Christopher Mims, a Smart Planet contributing editor and blogger at Grist among other pubs, put out this request via Twitter earlier today:

Somebody, please: Infographic comparing $500 million spent on Solyndra to multi-billion $ spent on countless failed military projects.

Well, it’s been answered by Philip Bump. Here’s a chart comparing the Solyndra loan guarantee to what the New York Times called the Pentagon’s “biggest boondoogles.” The dollar amounts are in billions. Be warned: This won’t make you feel better.

Chart, Philip Bump; Photo: Solyndra

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About Kirsten Korosec

Kirsten Korosec is a contributing editor for SmartPlanet.

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Lamentation!

Yeah, but the Soylandra product, if it were successful, would not "Crush our enemies - See them driven before us and hear the lamentation of their women"
For that, any price is worth it!

Posted by tech_ed@...

16th Sep 2011

Just
In

Absolutely true.

Big, unaccountable government is destructive no matter who is in charge at the moment.

Posted by JohnMcGrew@...

20th Sep 2011

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Lamentation!

Yeah, but the Soylandra product, if it were successful, would not "Crush our enemies - See them driven before us and hear the lamentation of their women"
For that, any price is worth it!

Posted by tech_ed@...

16th Sep 2011

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Constitutional mandate?

Yes, we have spent hundreds of billions over the years on military boondoggles as determined by the NY Times. Some of those so labeled, such as the ballistic missile defense program or the F-35 fighter are debatable (for example, China just unveiled its latest stealth fighter).

But creation and support of a military is explicitly spelled out in the US Constitution. Funding risky green businesses is not, except perhaps under some very generous interpretation of the Commerce or General Welfare clauses.

And here's another way to compare the two types of funding: A successful CEO of a defense company will make tens of millions in salary, benefits, and retirement. A very few will make over $100 million. But if Solyndra had struck it big like any successful startup its backers such as Obama bundler George Kaiser could easily have made billions.

Let's put that on a chart...

Posted by zackers

18th Sep 2011

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Who cares?

There's no reason to think the writers of the Constitution foresaw either large, standing armed forces, a permanent state of armed conflict, or the impact upon not just national but global security of a single sector of the economy - energy.
The F-35 is likely to be a technically successful project, as of writing, but the delays & the cost over-runs have made it a failure in terms of project management.
Ballistic Missile Defense is finally a reality but the history of the program is that too much was spent to achieve desirable but unattainable goals.

Posted by hoodedswan

19th Sep 2011

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You want cut-rate defense?

You are right, the founders never saw the need for a standing army. They saw themselves a small country protected by oceans, never a global power just 30 minutes away from total destruction.

Yeah, any number of programs have cost overruns. A lot of them just aren't necessary. But despite it all, we still have the best defense systems in the world.

We go to war today for energy. But a few hundred years ago world powers went to war over trade routes and spices (ever tried to eat rotting meat?). There's always something. There always will be, even after we solve the energy problem.

Posted by zackers

19th Sep 2011

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Your last paragraph is absurd

Most defense contractors are old, established, behemoths of corporations. The early investors in those companies (which in most cases included the US government) made so much money it would have made the Solyndra guys, if they had hit it, look like paupers. You can't compare the CEO's of those companies to early investors.

The CEO's of those companies are making tens or hundreds of millions of dollars in salary and bonuses caretaking an organization that has spent billions perfecting how to suck off the federal government's teat. No question the government made a bad bet on Solyndra, but it is for such comparatively small potatoes, the guys at Raytheon and Lockheed are laughing about all the press it is getting.

Posted by GreenCollar

19th Sep 2011

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And the only reason they get to do so...

...is because the government allows them to do so.

That's hardly an excuse, or even an argument.

Posted by JohnMcGrew@...

Updated - 19th Sep 2011

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Wrong

The founders of aerospace companies, such as Northrup, did very well. But even the richest, Howard Hughes, did not approach the wealth of Bill Gates, Steve Ballmer, Steve Jobs, or Larry Ellison even after accounting for inflation. In fact, Silicon Valley has lots of billionaires who did better than the defense pioneers.

And your perception of defense companies is wrong. Many of them have failed, or been forced into mergers (GD, Northrup, etc.). Or look at GE, which has a large defense component. Jeff Immelt has basically wasted every advantage left him by Jack Welch. Look at the relative fortunes of Boeing and Ford after Alan Mulally lost the running for the CEO position at Boeing and left to run Ford. Running a large defense corporation and making products that work is not a caretaker operation. You fail, and even the US government will cut you off.

The guys at Raytheon and Lockheed are far more worried about defense cuts these days. Since the end of the cold war in 1990, the US has cut its forces roughly in half, with more big cuts promised as part of the debt deal. I doubt they are spending their time laughing at anyone.

Posted by zackers

19th Sep 2011

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So that's going to be the defense of their "green" policy?

"Our green policy flushes less money than the military does!"

Yeah, that will go over well as the Obama/Biden 2012 campaign theme.

Let me put this another way: If the government (and the military is the government) cannot develop and deploy a "low cost" fighter jet program for less than 1/3rd of a trillion dollars, what makes any sentient being believe that the same government can effectively develop and deploy the infrastructure of the next generation of energy, run health care, or anything else that is the least bit complex? They can barely pave roads!

Posted by JohnMcGrew@...

Updated - 19th Sep 2011

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Past History

During the 60's, the federal government was doing a lot. The majority of the new interstate highway system was put into place, we fought a police action/war in Viet Nam, we were building new missles and more powerful nuclear devices, going gung ho on space exploration and developing new technologies for military and eventually civilian use. The government also started the war on poverty and added medicare and medicaid for retirees.

The current state of the art government is too bitterly and politically divided to do a tenth of what was done 50 to 60 years ago. We also have the problem with taxes, as in no one wants to pay excessive taxes for things they can't or don't need.

Our idea of government has changed over those years. The best example although a poor one is the movie "The Absent Minded Professor"; the main character invents a way to make vehicles fly and wants to turn this over to the military. The current attitude would be to produce this invention overseas and commercialize it and skip the government.

The point is, there is no political will to overcome the obstacles that keep the government from moving out of a stagnant status quo. It is possible an event can break the log jam, but if the events of 9/11 did not do this then I don't want to be around for an event that does break the log jam.

Posted by sboverie

19th Sep 2011

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Probably the only true successes you listed...

...were the national highway system and the space program. The national highway program was about bridges and laying pavement; hardly "high tech". The Apollo program was certainly a success, but was hardly sustainable. NASA was never the same again after 1972.

The "War on Poverty" was certainly a failure; Trillions of dollars spent subsidizing poverty over 45 years has only bought us broken people and more poverty. Including Vietnam was an interesting choice; a poorly conceived war we were on the cusp of winning until the new Progressive resurgence snatched defeat from the jaws of victory. Medicare and Medicaid are about to bankrupt us.

The irony of your post is that most of our problems today are due to the unfunded bills from the programs you speak of finally coming due on the horizon. You are right about one thing, though. It will take a truly substantial event to break the logjam; bankruptcy, when the dependents of the status quo will no longer be able to leech off of the non-dependent. Watch what is currently happening in Greece for a preview.

Posted by JohnMcGrew@...

19th Sep 2011

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That is correct

I threw in the Viet Nam war as an example of a political trade off. Pres. Johnson wanted to expand the war on poverty but was forced to escallate the Viet Nam war as the price for his domestic plans. The war on poverty was as successful as the war on drugs and the war on terrorism. Johnson was warned that escallating the Viet Nam war would lead to economic problems.

Still, with all those programs happening at once was a thing most Americans supported. The tax rates were huge to pay for those programs.

I am watching Greece, Portugal, Spain and Ireland. That is a scary situation for the global economy. Should Greece default then there is not much that the Eurozone can do on the level of the US Fed Reserve; for good or for ill it is really hard to tell if the Fed over reached or if they still have tricks left to play.

The Apollo program as well as the previous space programs were very successful and the spin off effects had excellent returns. Nasa is back to where it was at the end of the Apollo program, unfortunately.

I am a veteran and I do respect what the government is capable of doing, I also have gratitude towards the government. I am dissatisfied with both parties and view both as playing russian roulette with all of us. Government can do things that the private industry is unwilling to do as well as spread the burdon of financing expensive tasks like space exploration. The problem with government is keeping it in balance with the aspirations of the people and the burdon it places on the people.

Posted by sboverie

19th Sep 2011

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Despair isn't a viable option

There are needs that the private sector can not meet for reasons of scale and/or the absence of profit in the short term. Far better to examine the process than to give up & pretend the needs don't exist. Especially, in the case of health care, when there is there are a variety of successful models to choose from & there is no desire to "run" it to begin with.

Posted by hoodedswan

19th Sep 2011

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Well Said

We do need both private and government for all of us to deal with our common problems.

Posted by sboverie

19th Sep 2011

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Who said it was?

All I've said is that relying upon politicians to open up our checkbook to achieve these things is folly. The only "despair" I feel is for the wealth that is sucked from me to pay for it. I have no doubt that at some future date, my house will be covered with solar panels paid for by me, bought from some efficiently-run company not beholden to Washington. What I don't expect is that it will be done by a company run by political cronies.

Posted by JohnMcGrew@...

19th Sep 2011

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It's not about dispair

You are right, some problems are a scale issue requiring aid from the government. The transcontinental railroad and land grant colleges come to mind in the 19th century, and as we have discussed defense companies in the 20th century. But almost always, these "investments" have been with hints of corruption (look at railroads and defense, though I've argued that defense funding is a necessary evil of the US government).

The $500 million load to Solyndra was not about R&D. It was to fund a manufacturing plant for a solar cell design that even auditors in the government knew was not competitive. Once the government crosses the line this way in picking winners and losers, it's all too easy to become corrupted. There was nothing absolutely necessary about Solyndra, except to its investors. Why should the taxpayers fund that?

Posted by zackers

Updated - 19th Sep 2011

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kinda reminds me of what the Kansas governor is doing right now....

...which is taking monies allocated for weatherizing homes by using local auditors and weatherization/energy contractors to improve housing stock, and instead using that money to develop an ethanol production plant and distribution network--at the same time as many ethanol plants are closing all across the midwest. Goes to show that croneyism and trying to make winners out of losers has a long and illustrious tradition regardless of what political party you belong to.

Posted by klassman6

20th Sep 2011

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Absolutely true.

Big, unaccountable government is destructive no matter who is in charge at the moment.

Posted by JohnMcGrew@...

20th Sep 2011

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