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If you're rich, just say thanks

The Obama administration's debacle with Solyndra was not its brightest moment. The California solar panel maker went belly up after $535 million in government loans were sunk into the venture. The administration allowed aggressive company lobbyists and its desire to push stimulus funds out the door — particularly to jump-start innovations in solar energy — to trump sober judgment about the plant's prospects.

But this idea, currently being jawboned by conservative politicians and commentators, that Solyndra's demise demonstrates that government should not be "picking winners" because the marketplace does a better job, is hokum.

How can anyone suggest that the market is a canny judge of viable businesses after our nation's near financial collapse? Most of Wall Street's titans didn't seem to know or care that their companies' portfolios were crowded with nearly worthless mortgage-backed securities and collateral debt obligations. Or that they were peddling garbage to investors.

The great, omniscient market followed dumbly along, pushing up the stock prices of financial firms that were, in reality, the walking dead.

Picking business ventures that have real rather than ephemeral value is always challenging. But to tell the United States to stand on the sidelines when other countries such as China and Germany use their public treasuries to subsidize emerging technologies, is to unilaterally disarm, ceding the future to our competitors.

Besides, there are no wholly separate spheres for business and government. It's just an attractive myth that F.A. Hayek and Milton Friedman acolytes tell themselves. Federal, state and local governments entwine with business constantly in ways that encourage economic growth. Government subsidies come in a variety of forms such as direct loans, tax credits and government contracts; and taxpayers shoulder attendant costs such as infrastructure or work force training.

As Elizabeth Warren said recently, nobody in this country got rich on his own. "Nobody." The Harvard professor who spent her career advocating for the middle class and who is now a candidate for the U.S. Senate in Massachusetts made quite a splash by telling a group that the rich have government to thank for their success.

Goods are moved to market "on the roads the rest of us paid for," Warren said. "You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for." The social contract, she said, requires America's wealthiest to give enough back in taxes so that future generations can enjoy the same opportunities.

Conservatives deny that the long arm of government can be a helping hand. The debate over the future of the American car industry is a recent example of this clash of ideals. Had it not been for the massive government bailout of General Motors and Chrysler, there wouldn't be much of an industry today.

Critics on the right loudly denounced President Barack Obama in 2009 for dumping tens of billions of tax dollars into the rescue attempt. To them, keeping government out was more important than trying to salvage the estimated 1 million direct and ancillary jobs that would have been lost had GM and Chrysler gone under.

Now the industry has returned to profitability, adding more than 100,000 jobs within the last two years. It is a rare bright spot on an otherwise dismal picture of American manufacturing. The thriving auto sector has helped traditional Rust Belt states recover from the recession faster than the go-go Sun Belt.

But you don't hear too many congressional Republicans or GOP presidential candidates admitting this. They're too busy threatening Fed Chairman Ben Bernanke, telling him to ignore the crushing economic pain and dislocation in America and do nothing, or else.

The current script of the GOP is that government should leave the market alone and forget about partnering with business to spur growth. They are pushing a naively romantic version of economic individualism that ignores the complexity of world markets and the impact of foreign state involvement. And it all comes down to this: America's economic failure is their political gain.

If you're rich, just say thanks 10/01/11 [Last modified: Saturday, October 1, 2011 5:30am]

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