Last week, as President Obama delivered his economic speech deriding the so-called "trickle-down" economic policies that created 16 million jobs under President Reagan, his Energy Department was preparing to announce the next stage of a policy that may never create any.
David Frantz, chief of the DOE's clean energy loan program, informed Congress by letter on Thursday that his department will "begin issuing conditional commitments over the next several months" for new loans and loan guarantees to green energy companies. Why Obama is doubling and tripling down on one of his worst and most embarrassing policy mistakes is anybody's guess. Maybe it's change that only he and global warming diehards can believe in.
The DOE promised that it will back these new loans only after "rigorous internal and external review of each application." Sound familiar? Energy Secretary Steven Chu said almost precisely the same thing about the $535 million loan guarantee he approved for the solar panel company Solyndra -- that it was awarded only after "proper, rigorous scrutiny and healthy debate" among the responsible bureaucrats. Solyndra declared bankruptcy in August 2011, leaving taxpayers holding the bag. The price tag was even higher than it had to be thanks to a highly unusual (and possibly illegal) decision by the DOE to restructure the loan so taxpayers took a back seat to the company's other creditors.
Another solar firm, Beacon Power in Massachusetts, still owed $39.1 million in loans when it went under in October 2011. Ener1, the parent company of an electric car battery-maker that received $118 million in DOE grants, declared bankruptcy in January. The DOE also conditionally awarded a $2.1 billion loan guarantee to Solar Trust for America. Luckily, in this case, the company declared bankruptcy last Monday before it could even collect any of the money. But why is Obama's Energy Department dangling treats before so many companies in such bad financial shape?
Not all questionable DOE subsidies end in bankruptcy. Abound Solar, for instance, has merely laid off 280 employees since receiving its $400 million loan guarantee. A123 Systems, an electric car battery company in Michigan that received $249.1 million in DOE grants, has laid off 125 employees and faces a lawsuit for allegedly hiding information about defective batteries. As he did with Solyndra, Obama showered that company with effusive praise before anyone knew whether it would power cars or just produce hot air: "Thanks to the Recovery Act, you guys are the first American factory to start high-volume production of advanced vehicle batteries. I am looking forward to continuing to see the great work that you guys do in the years to come."
Obama now speaks of raising taxes on oil companies -- not to address the nation's debt problem, but to throw even more good money at bad energy companies like these. If at first you don't succeed, pour a few billion dollars more into what isn't working. Whether this is to be taken as Obama's economic plan to create "jobs in the industries of the future" or as an energy strategy -- or, more likely, as greenbacks for his green supporters -- voters are waking up to the fact that it is a boondoggle, both costly and unproductive.