Published September 22, 2011
If you want to understand how liberals view the relationship between individuals and the government, compare their reactions to the Solyndra scandal to their statements on Social Security reform.
Earlier this month, Solyndra, the solar panel maker that received $535 million in federal loan guarantees and was touted as the symbol of President Obama's "green jobs" initiative, declared bankruptcy and had its offices raided by the FBI.
The failure of a company Obama described as "a true engine of economic growth" has raised obvious questions about the advisability of squandering taxpayer money on such endeavors. But Obama's surrogates have countered by arguing that failure is merely a natural byproduct of progress.
"The reason why fledgling, cutting-edge industries need this kind of assistance is because they can be high risk as well as high reward," White House press secretary Jay Carney said. He also observed that "what happened here is an investment did not pan out."
On Sept. 14, administration officials appearing before the House Energy and Commerce Committee, which is investigating the Solyndra loan guarantees, made a similar case.
"Support for innovative technologies comes with inherent risks," testified Jonathan Silver, executive director of the Department of Energy's loan guarantee program.
Jeffrey Zients, deputy director of the White House Office of Management and Budget, also drove this point home. "I think it is the nature of backing innovative technologies that there are technology risks in some situations, market risk," he said.
Yet back in 2005, when Obama was in the U.S. Senate fighting President Bush's efforts to reform Social Security in the Senate, he offered a much different perspective on risk.
"Part of what the president calls an ownership society is really a society in which we do not have social insurance and each of us are on our own, managing risks and returns in the free marketplace," Obama explained at an appearance at the National Press Club. "There's a proud lineage to such thinking. I just happen to think it's wrong."
During the 2008 campaign, Obama said that Bush-style Social Security reform "would gamble the retirement plans of millions of Americans on the stock market."
In reality, the Bush proposal didn't involve government gambling taxpayer money. It gave younger workers the option of investing a portion of their payroll taxes in personal accounts, choosing among investment funds rather than random stocks.
But looking beyond Obama's distortions, his comments have fresh meaning in the wake of the Solyndra scandal and provide insight into what he and his fellow liberals consider appropriate risk.
Obama thinks it's OK for government to risk taxpayer money on business ventures that he deems worthy of investment. But he's outraged at the suggestion that younger Americans be allowed to have more control over the allocation of their own tax dollars.
This derives from the liberal belief that a central authority run by experts will spend money intelligently (in the case of Solyndra, by jump-starting alternative energy), whereas individuals will act irresponsibly if left to their own devices (in the case of Social Security reform, by blowing their retirement on personal accounts).
Experience teaches us differently. Like many failed government ventures before it, Solyndra was a case in which ideologically driven geniuses doled out money to a well-connected company despite repeated red flags that its business model was fatally flawed. And Social Security is insolvent even though government experts have increased the payroll tax rate that finances the program 20 times since its inception.
Beyond acknowledging this reality, a free society should recognize the moral distinction between individuals putting their own money at risk and government bureaucrats playing venture capitalists with taxpayer dollars.
Philip Klein is senior editorial writer for The Washington Examiner. He can be reached at email@example.com. Follow him on Twitter @philipaklein.
This op-ed originally appeared in The Washington Examiner.