Monday, September 19, 2011

Columbia Journalism Review Writes Silly Critique of Solyndra Reporting

The CJR's The Audit blog has had some good posts.
This isn't one of them.

Besides being biased and superficial in it's critique of Solyndra coverage, the blog fails to credit earth2tech and Greentech as sources used by the media for the last few years.

Do read past the jump. Some of the commenters obviously know the subject better than the blogger and eviscerate the feeble talking points like Canadian guides gutting a fish.
Good fun.
Here goes:
Reporting on Solyndra
Missing basic concepts about the government’s loan-guarantee program.

Much of the press coverage of the Solyndra bankruptcy has been poor on some basic concepts at the heart of the story.

This is what happens when beat reporters meet stories with business, political, and science angles, and why news organizations need to team up their people across beats.*

What happened with Solyndra? Presidents Bush and Obama sought to guarantee half a billion dollars in loans so it could build a big plant to make its unique solar panels. The Obama administration made it official.
There are questions about whether some sort of fraud was committed at Solyndra—the FBI raided the company recently—or whether the Obama administration improperly leaned on the DOE to lend to it. Those will be sorted out in the coming weeks, but in the meantime, the press needs to do a much better job of explaining this program.

Take this New York Times story this morning with the no-kiddin’ headline, “Market Risks Are Seen in Energy Innovations.”
The same market forces that doomed Solyndra, the solar cell manufacturer that received $528 million in government loans and then went bankrupt, could imperil other manufacturing ventures that have received loan guarantees from the Energy Department, energy experts warned this week.
Think about what a loan guarantee is: It’s the government stepping in to help an industry get financing that is otherwise cost-prohibitive. We want more clean energy more quickly than it’s coming, and we want the manufacturing capacity here at home. The market doesn’t care whether its money is used for social good—it wants its money used to make money, with as little risk possible.

So this Department of Energy loan-guarantee program (created by the Bush administration and the Republican Congress back in 2005, by the way) is the DOE leveraging its capital to incentivize the private sector to lend cheaply to promising companies. Startup companies (and startup technologies) need cheap capital to grow quickly, but they’re inherently risky, which is why governments decided they needed this kind of government-as-venture-capitalism-lender corporate welfare.

Venture capitalists give startups capital in the unlikely hope that their companies will turn into the Next Big Thing. For every Google that makes it megabig, there are hundreds of companies that lose their investors’ money or muddle along. More than half of the firms backed by venture capital go bust and investors lose their money....MORE