White House Green Scam?

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White House Green Scam? Part 1

Columnist Charles Krauthammer on implications of Solyndra scandal on Obama administration

This is a rush transcript from "Hannity," September 16, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: There is new evidence that the Obama White House ignored multiple warnings about the financial viability of Solyndra. Now the evidence comes in the form of e-mails handed over to Congressional investigators, and the documents clearly show, White House officials dismissing a report in July of 2010, criticizing Solyndra's finances.

Now Obama aide Greg Nelson responded to the analysis by declaring, quote, "Seems BS."

As usual this administration wasn't interested in protecting your money. They were interested in protecting the president's job. The AP quotes an e-mail from an Obama aide that warned, quote, "The optics of a Solyndra default will be bad. The timing will likely coincide with the 2012 campaign season heating up."

And to be honest, the author of that e-mail is right. That the White House staked its entire green jobs agenda on this company. And it all began way back in 2009 at the groundbreaking of a now vacant solar plan.

(BEGIN VIDEO CLIP FROM SEPT. 4, 2009)

VICE PRESIDENT JOE BIDEN: Part of our plan is to make sure as we create these jobs, we create jobs in the future like the ones you are creating. Jobs you can raise a family on. Green jobs. Jobs that will serve as a foundation for a stronger American economy. Which is why it is so important we invest in Solyndra.

And I'm really happy along with the secretary, to announce today that we've closed a $535 million loan guarantee for Solyndra. More than half a billion dollars.

(END VIDEO CLIP)

HANNITY: Now, that half billion dollars is gone. As are the 1,100 jobs that were at that site. And sadly, we are learning that Solyndra is only the tip of the very big iceberg. Because there are at least four other companies who received millions in stimulus funds that have since filed for bankruptcy.

Joining me now with analysis of this growing firestorm is Fox News contributor, columnist, the one and only, our friend Charles Krauthammer. Charles, welcome back, sir.

CHARLES KRAUTHAMMER, FOX NEWS CONTRIBUTOR: Pleasure to be with you, Sean.

HANNITY: All right. Well, you know, what are we to make of this? They got every warning imaginable not to do this. All the e-mails, they even predicted the date of this company would go bankrupt. But they forced it through any way. What are we to make of this?

KRAUTHAMMER: This is a classic example of this toxic combination of lemon socialism and crony capitalism. The lemon socialism part is the old story of industrial policy. Meaning, smart people in Washington, people who think they are smart. Elected officials, bureaucrats and they bring in experts who think they are even smarter to decide which are the industries of the future. As if they know and the market doesn't. So, you pick industries that you think, companies that you think will do well with none of the knowledge of the market. We have 100 years of experience. That tells us that the impersonal knowledge spread out in the market always appear in the long run to any choice, especially by non-economist politicians.

That's why -- and the most extreme example of course are the social states. So, the union Cuba -- you destroy an economy when you think that a politician in the centralized capital knows where capital ought to be allocated. The other element of this is that the corruption, that is the crony capitalism. It is not randomly thrown around money. It always seems to be money thrown as in the Solyndra case into a company that just happens to be invested in heavily by a George Kaiser who is a big donor to Obama. It is always like this, it's a corruption of the process. In principle it won't work because it is a socialist idea of experts over the markets. But it is made worse when it involves cronyism and favors and corruption.

HANNITY: I think what you are saying, you are not really buying the definition of crony capitalism as much as you are saying, you know, this is cronyism here. This is, you know, we have this friend of Obama's, the week before they get this half a billion dollars, 535 million stimulus taxpayer dollars, that they had access to the White House. Access that for all intent and purposes from my analysis was bought because they bundled this money and gave all this money to the Obama campaign. Is that fair analysis? Is there any other way to interpret that?

KRAUTHAMMER: Well, let's just say that we don't have evidence yet that can hang anybody. But there's a lot of circumstantial evidence. You are right, this is the first loan. It is also an immense loan, half a billion dollars to one company. And it is to somebody who gave a lot of money to the president. The worst part about this is Energy Department officials on the board in the late months, in 2011 when it was headed downhill. And they were aware of the condition of the company and apparently, did nothing. And all that the money -- but there was a change in the loan arrangements. Late in the game, the Energy Department, which was originally supposed to be first in line, to collect in case of a liquidation and a bankruptcy, ended up last in line, and that's why you and I as people who pay taxes are going to be wiped out in this are going to lose the entire half a billion dollars.

HANNITY: Yes, I mean, it's pretty outrageous. They also got a special loan rate which I think has been overlooked by a pretty significant portion of the media. And there are other companies as well. And it is a similar story. So, there's a pattern of behavior here that people that bundled money were able to buy access. And then, as a result of the access, they get, you know, basically taxpayer money and these companies go under.

KRAUTHAMMER: But the larger issue to me is that even if it weren't a corrupt deal. Even if it were above board, what is the government doing throwing $30 billion at an industry that is now a fantasy. We hear Biden say jobs of the future. How does he know? You know, it is like throwing billions of dollars at jet engines in the 1920s. If it comes the market will tell us. The market says, these companies are worthless. This is a company that was making a solar panel at $6. And selling it at $3. I'm not an economist, I'm not sure that that actually works in the long run or the short run.

HANNITY: I don't think you need to be an economist. My 10-year-old daughter, she just turned 10, I think she can figure out the math on that Charles. It's fairly simple.

KRAUTHAMMER: You know, the old Jewish joke of the two tailors, Max and Sam one says, how are you doing? He says, well, I'm making shirts at a dollar each and I'm selling them at 50 cents. And the other asked, well, how do you make a living? He says, I make it up on volume. Well, apparently it didn't work in this case.

HANNITY: Apparently that's the arithmetic there. All right. Let me move on to 2012. I thought you had a very good column this week. And I was glad, you said something, I have used the term as you did, Ponzi scheme as it relates to Social Security. You point out this is a classic Ponzi scheme. But it seems to be now front in center in the Republican GOP presidential debate, and your attitude and your column says, get past the stupid definition of how we're going to debate this, and fix the system. Do you think the country is now ready to take on what has always been the third rail in American politics?

KRAUTHAMMER: No. And you can tell by the president who we learned today is going to make the unveiling of a debt plan next week. And he is going to leave out anything on Social Security. And that as we know, is the easiest of all the entitlements to fix. It requires a tweak on the inflation measure. It requires some means of testing. And it requires most importantly, a raising of the retirement age. Everybody knows that. At the time Social Security was invented, life expectancy was 62. It is now around 80. So, obviously, you've got index it to life expectancy, which is not been done in 60 years, that's an easy fix. And yet, this president won't touch it.

HANNITY: Do you recommend that Rick Perry then emphasize more what he said in the last debate? Contrary to what he said in his book. Do you recommend that Rick Perry perhaps pivot and say no, I want to save Social Security and perhaps keep using that term?

KRAUTHAMMER: Well, look, pivoting is not always a good idea if you have come out so radically on one side. Once you've say it is unconstitutional. And you say it is essentially a scam from beginning to end, it is hard to make a pivot and not look as if you are flip-flopping. Nonetheless, I think unless he reassures people who are now on Social Security or are going to be on in the next 10 years or so, that nothing will change. He's going to have a problem that's going to insoluble and it will make him unelectable, that's a fact of American life.

HANNITY: All right. Charles Krauthammer, good to see you. Thank you so much for being with us.

KRAUTHAMMER: Pleasure.

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