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Obama Tries to Deflect Blame on Solyndra, Keystone

March 23, 2012

Published March 22, 2012 |

“Obviously we wish Solyndra hadn’t gone bankrupt. Part of the reason they did was the Chinese were subsidizing their solar industry and flooding the market in ways Solyndra couldn’t compete. But understand, this was not our program per se.”

— President Obama talking to National Public Radio’s “Marketplace.”

President Obama is on a swing-state campaign blitz this week, looking to stifle voter anger over high energy prices. While the White House is casting the trip as an effort to lay out Obama’s vision for future energy abundance, much of the message is aimed at reducing the supply of blame.

Today, for example, Obama will speak in Cushing, Okla., the pipeline capital of the planet, to point out that while he has blocked a pipeline to bring Canadian oil to the Gulf of Mexico, he is allowing other domestic pipelines to be built.

The pipeline to Canada, the Keystone XL, is a political winner. Polls consistently show Americans favor its construction and Republicans have been hammering the president for months for his obstruction of the project.

Obama seems to be in the midst of a creeping climb-down on the subject, but he has to move slowly.

Remember, many liberals dislike the project because it would provide so much oil to gasoline refineries. The cheaper gas is for American drivers, the more gasoline they will use. Environmentalists believe all this driving is causing the earth’s atmosphere to become dangerously warm.

Obama, who is a long-time crusader against global warming, has suffered politically for his opposition to the pipeline. Global warming has faded as a concern for voters amid a lengthy economic disruption and with new doubts about the most alarming claims made by carbon hawks. With gasoline prices more than twice as high as they were when Obama took office, consumers are far less indulgent of Obama’s environmental policies.

The president’s point in Cushing is that while he won’t allow the top of the pipeline to go where the oil is, he has chosen not to block pipeline expansions at the southern end. This, of course, makes folks in the energy business furious. To have the president demanding credit for not blocking domestic pipeline upgrades is galling to them. They need executive blessing to cross the international border with Canada, but for domestic jobs they mostly just need Obama not to interfere and allow the permitting process to work as in the past.

The Obama campaign and White House have both made clear that the part of the pipeline that goes to the oil may yet be approved. The problem, they say, is that Republicans hurried the process. Again, Obama is seeking bipartisan blame.

When builders apply again with a new proposal, says Team Obama, the State Department may find new wisdom in their proposal and allow it to proceed.

This is how general elections change things. For the past seven months, Obama has been looking to pacify his sometimes-crabby political base. For the next seven months, Obama will be looking for ways to convince moderates that he really isn’t as liberal as they think. This is the way in which Keystone can go from bad to good.

This week’s campaign swing is Obama’s effort to show moderates that he isn’t really so radical on energy. Some of Obama’s biggest political missteps surround energy policy, particularly his effort to impose global warming fees and the massive outlays given to Democratic allies for dubious green energy projects.

Obama’s first stop was in must-win Nevada, where he defended subsidies for solar energy, a tricky subject given the high-profile debacle at Solyndra, a pet project of big Obama donors that got a presidential visit and lots of public help.

While making his push for solar, Obama explained to a reporter for National Public Radio that the blame for Solyndra was bipartisan and not the fault of the Obama Democrats “per se.”

“Congress, Democrats and Republicans, put together a loan guarantee program because they understood historically that when you get new industries, it’s easy to get money for new startups,” Obama said. “But if you want to take them to scale, often there is a lot of risk involved and what the loan guarantee program was designed to do was to help start-up companies get to scale.”

The 2009 stimulus package that provided the funding for a loan of $527 million for Solyndra, which subsequently defaulted, got zero Republican votes in the House and three Republican votes in the Senate — Maine Sens. Olympia Snowe and Susan Collins and former Pennsylvania Sen. Arlen Specter, who switched parties two months after the vote. There was no Republican input on the structuring of the energy loan program and the specific loan to Solyndra was a Democratic job from start to finish.

It’s true that there has been bipartisan support for the Federal Financing Bank since before its founding in 1973. Republicans have increasingly come to dislike the idea of giving the government power to loan money to private enterprises — “picking winners and losers” — because of a growing opposition to crony capitalism and how it perverts politics and the marketplace. But crony capitalism was once very, very popular among moderate Republicans who cherished “public-private partnerships” and other hidey-holes for public funds.

But to suggest that Solyndra, the pet project of a major Obama backer, George Kaiser, was somehow a bipartisan failure because Rockefeller Republicans like the idea of using other people’s money to start businesses is a little far-fetched. That would be like the driver at fault in a car crash arguing that roads enjoy widespread public support and crashes are inevitable: “While my car may have collided with yours, surely we can all agree that infrastructure is vital to America.”

Solyndra was a debacle even if you like the idea of government giving money to preferred businesses: donor influence, ignored warnings, poor judgment, bad timing.

Solyndra made the opponents of “picking winners and losers” jobs too easy. Here, in one case, is everything the small-government conservatives have argued. Borrowing money from China to try to match Chinese subsidies for that country’s solar sector is a tough enough sell. Doing so in a way that might enrich political benefactors is far worse.

Friday is the second birthday of the president’s largest lingering liability from his term: a health law that most voters think will be expensive, disruptive and ineffective. The Supreme Court begins several days of arguments on the law, thought to be unconstitutional by most Americans, on Monday.

The process will remind moderate voters of their frustrations with Obama and his policies in a big way. It’s unfortunate for the president that the health law revival comes amid voter anger with his energy policies, and this campaign trip is an effort to reduce his liabilities on energy before Americans spend several days talking about the law they dislike that also happens to be Obama’s most significant accomplishment.

If Obama can’t knock down the perception that he is too liberal, events will compound quickly and leave him unable to pull of a new, more centrist posture.

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