Yes, Mr. Kessler, there really is a crony capitalist in the White House
posted at 9:15 am on February 20, 2012 by Ed Morrissey
Glenn Kessler at the Washington Post normally does a pretty good job of fact-checking claims in politics, within the limitations of the fact-checking “science,” which are considerable. Today he takes on claims from Mitt Romney that Barack Obama engages in crony capitalism, focusing on the auto bailout/bankruptcy and the Solyndra scandal. Kessler takes a detailed look at both cases — and misses the point on both, and ends up giving Romney one Pinocchio for the claim:
Obama has his work cut out for him trying to convince voters that his administration didn’t throw good money after bad, especially because internal documents suggest that the White House tried to make Solyndra look like a success despite clear signs of trouble. Still, Romney can’t assert as a matter of fact that the president practiced political favoritism in this case. He is better off saying there is “evidence” or “reason to believe” that crony capitalism occurred.
In terms of the “sweetheart deal” for the UAW, it’s fairly clear that the president gave precedence to the union and its blue collar members, who fared better than they would have been under Chapter 11. Meanwhile, scores of employees from the white-collar ranks are angry about cuts they had to accept. We won’t judge whether Obama’s stance was appropriate, but we can say that he came down on the side of the Democrat-friendly UAW.
Nonetheless, the auto bailouts have proven to be a success so far, and Romney has overstated whether his alternative approach would have been viable during an economic crisis, as we pointed out in a previous column. We’re also hard-pressed to think of a single president who hasn’t pandered to the traditional allies of his party — for Obama, this includes unions and environmentalists.
Overall, the former Massachusetts governor and Michigan native earns one Pinocchio, but mainly for accusing the president of crony capitalism in the matter of Solyndra. He doesn’t have definitive proof of Obama’s intentions, even if the evidence suggests continued grounds for suspicion.
Let’s start with the auto bailout and bankruptcy. While it’s true that Presidents pander to their constituencies, that isn’t the objection in this case. Obama used the leverage he created with the taxpayer bailout that he extended (George Bush initiated it, of course) to ignore the principles of bankruptcy. Obama and his team violated the rights of senior creditors in favor of the unions in an unprecedented, politically-engineered bankruptcy. That’s a lot different than proposing union-friendly legislation or granting new access to federal work forces, both of which Obama has also done.
Despite Kessler’s lengthy explanation on Solyndra, he leaves out a couple of key facts. One, Department of Energy auditors raised red flags about Solyndra when processing the loan request in early 2009, a request that the Bush-era DoE had declined for the same reasons. Energy Secretary Stephen Chu overrode those concerns, and then granted Solyndra an interest rate somewhere between a quarter and a third of the going rate for taxpayer-guaranteed loans. When Solyndra began to fail, the same warnings were issued, but the Obama administration doubled down by restructuring the loan and subordinating taxpayer risk to that of George Kaiser — the Obama bundler who stood to benefit from a Solyndra success story.
In both cases, it might be hard to “prove” Obama’s intentions, but actions speak louder than words.