Tuesday, February 19, 2013

The Cato Institute's, Scott Lincicome, On Solyndra

 "This cursory review makes clear that the Obama administration, and especially the 2009 Stimulus Bill, gave hundreds of millions of dollars in direct subsidies to domestic polysilicon producers.  These subsidies inevitably - and totally unsurprising - helped cause polysilicon prices to drop (and led to a Chinese investigation of U.S. exports which targets the aforementioned tax subsidies and several other state-level programs).  Moreover, all the state and federal subsidies to downstream solar manufacturers like Solyndra and to US solar energy consumers further stoked US polysilicon investment and production and further reduced prices.  
  And down goes Solyndra
 So to recap: the Obama administration gave a $500 million dollar loan guarantee to a company that was dependent on sky-high polysilicon prices, but simultaneously threw hundreds of millions of dollars at domestic polysilicon producers. The latter subsidies - when combined with billions in indirect subsidies to solar producers and consumers - inevitably helped stoke overcapacity in the domestic and global polysilicon markets and a resulting collapse in polysilicon prices that - wait for it - eviscerated Solyndra's business plan and ultimately killed the company.  And when Solyndra declared bankruptcy, the Obama administration immediately blamed China. You cannot make this stuff up.".........................................................................................So, there it is, people. Subsidies in fact DID kill Solyndra. But they weren't so much Chinese subsidies as U.S. subsidies. Youza, huh? Talk about the left hand not knowing what the other hand is doing.


Roberto Severino said...

Too bad anti-libertarians who believe in the Koch Brothers conspiracy theories wouldn't even bother to read anything that Cato publishes, even when it's something important like this. That's a pretty dumb way of discrediting a source, rather the ideas presented. Don't you hate it when that happens?

Will "take no prisoners" Hart said...

I'm a huge Cato fan, Roberto. I consider them kind of a small l libertarian bunch that really looks at developing positive solutions (as opposed to the Mises Institute which I consider interesting but a little more doctrinaire) and hardly a partisan enterprise (Timothy Carney brags that he's never voted Republican).

dmarks said...

Koch Brothers conspiracy theories?