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Krauthammer: Solyndra Deal Was Lemon Socialism And Crony Capitalism

Charles Krauthammer: "This is a classic example of this toxic combination of lemon socialism and crony capitalism. The lemon socialism part is an old story of industrial policy. Meaning, smart people in Washington, or people who think they're smart. Elected officials, bureaucrats and they bring in experts who think they're even smarter 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 the impersonal knowledge spread out in the market always appear this long run to any choice, especially by non-economist politicians. And the most extreme example of course are the socialist states. So the union, Cuba, North Korea. You destroy an economy when you think a politician in the centralized capital knows where capital ought to be allocated.

"The other element of this is the corruption, that is the crony capitalism. It's 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."

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