On Fox, Paul Ryan And Herman Cain Bash Solyndra ‘Crony Capitalism’

Appearing on Fox News Sunday, Rep. Paul Ryan (R-WI), chairman of the House Budget Committee, and GOP presidential candidate Herman Cain agreed that the federal loan to now-bankrupt solar company Solyndra involved corruption. Prompted by Chris Wallace, Cain claimed that President Obama “was trying to help one his political supporters” when the Department of Energy approved the $528 million loan guarantee to Solyndra, because one of the private investors in the company is a foundation started by a top Obama supporter. Ryan accused the administration of “crony capitalism at its worst,” predicting “billions more” in loan defaults:

RYAN: There are billions more of this exact kind of spending that came out of the stimulus that will produce these results we fear. This is industrial policy and crony capitalism at its worst. It’s exhibit A for how this kind of economic policy doesn’t work. We shouldn’t be picking winners or losers in Washington. We should be setting the conditions for economic growth so that the private sector can create jobs. Washington is not good at picking winners and losers, so we shouldn’t try.

Watch it:

Cain repeated Ryan’s assertion that the Solyndra case shows the danger of the government being “in the business of picking winners and losers.”

Ryan and Cain are dangerously wrong. The economic stimulus package — now hitting the end of its two-year time limit — reversed America’s economic tailspin. The clean-energy loan guarantee program, even accounting for the Solyndra bankruptcy, has been an astounding success, fueling billions of dollars of economic activity, and driving a recovery in American manufacturing. The American auto industry, supported by the Advanced Vehicle Technology loan program, has recovered and is now making some of the most efficient and popular cars in the world. The American solar industry had a positive trade flow of $1.9 billion in 2010, was a net exporter to China by more than $240 million, and added or expanded almost 60 factories in Michigan, Ohio, Tennessee, and other rust-belt states.

The track record of the federal government under President Obama — with a selection process by career civil servants — has not been one of doing a bad job of “picking winners and losers” but helping create the conditions that allow private investors and entrepreneurs to create winners.

As ThinkProgress’s Marie Diamond pointed out, the only thing conservatives seem to dislike about “crony capitalism” is when their cronies in the fossil fuel and nuclear industry don’t get all the subsidies. Ryan is treading on thin ice when he accuses others of “crony capitalism” — his family benefits from the oil subsidies he has repeatedly voted to preserve.

At the New Republic, Timothy Noah notes that Republicans — the party of Big Business — don’t actually dislike “crony capitalism“:

But of course, “crony capitalism” was a liberal phrase long before it was a conservative phrase. Paul Krugman, for example, used it to cuff President George W. Bush about his pal Ken Lay in 2002. The term came into vogue during the 1980s. It makes much more sense as a liberal phrase because Republicans cozy up to business far more than Democrats do. (That’s why Perry is vulnerable to the accusation.)

If congressional Republicans really disliked crony capitalism they would back off from their support for Medicare Advantage, the money-losing, government-funded private sector alternative to Medicare, and for-profit colleges, which they want to shield from default limits on student loans. They would also stop trying to interfere with the implementation of the Dodd-Frank financial reform bill.

Transcript:

WALLACE: I want to ask you about Solyndra, the solar making company that got a loan from the government. The company went bankrupt and laid off a thousand workers and leaving taxpayers footing the bill. Less than a minute. What is the lesson of Solyndra?

RYAN: There are billions more of this exact kind of spending that came out of the stimulus that will produce these results we fear. This is industrial policy and crony capitalism at its worst. It’s exhibit A for how this kind of economic policy doesn’t work. We shouldn’t be picking winners or losers in Washington. We should be setting the conditions for economic growth so that the private sector can create jobs. Washington is not good at picking winners and losers, so we shouldn’t try.

…

WALLACE: Solyndra, the solar panel manufacturer, got half billion federal loan guarantee just went bankrupt, laid off a thousand workers and we the taxpayers end up footing the bill. Do you think this was a good faith effort on the president’s part to boost, maybe misguided, but good faith to boost the green industry or do you think he was just trying to help one of his big political supporters?

CAIN: I think it was two things. First, he was trying to help one of his political supporters. And it would have been good faith if halfway through this waste of money, they had stopped. But according to the reports that we’ve seen, they didn’t stop and they knew that the company was going down the tubes. So I don’t think it was not a good faith effort to boost this green energy business in the green energy sector. It was bad decision making and it was an attempt to select one of the losers. And as Representative Ryan said, I know I keep referring to him but he is absolutely right on, the government should not be in the business of picking winners and losers because most of the time they pick the losers. That’s what the whole Solyndra thing is about.