The New New Deal (54 page)

Toone says he’s been astonished by the success of the electrofuel projects, and OPX has raised $36 million in follow-up financing. But the energy world is all about scale. A vial can prove a concept, but it’s a long way from refueling our way of life.

“Now we know it works,” Toone says. “We just don’t know if it matters.”

B
ehind the numbers, beyond the shouting, the Recovery Act was about middle-class everymen like Duane Bartley, a bearded Paul Bunyan type from a small mountain town in Colorado, a husband and father and electrical engineer who suddenly found himself unemployed and bankrupt in 2009. Bartley is a hard worker, a gentle giant who likes tinkering with engines with his dad and fixing appliances for neighbors in need. But the Great Recession didn’t just purge rottenness from the system. Bartley’s wife’s veterinary business failed, because her clients couldn’t afford pet care, and then the battery company where Bartley was working failed, because consumers couldn’t afford much of anything. He blasted out hundreds of résumés; not only didn’t he get a job, he didn’t get a single response. He didn’t even send out Christmas cards, because he couldn’t think of anything cheery to say.

But in April 2010, Bartley landed a quality-control job with UQM Technologies, which was tripling its workforce after winning a stimulus grant to build motors for electric vehicles. Three weeks later, Bartley was introducing Biden at a Recovery Act event at UQM’s new factory, wearing one of those crazy-loud ties that guys who never wear ties wear, explaining how happy he was to give his teenage daughter some security.
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“We’ll be putting stamps on our Christmas cards this weekend,” Bartley said.

Bartley, as the newspaper cliché goes, was not alone.

In the spring of 2010, recipients reported that Recovery Act grants directly funded nearly 700,000 jobs. And that reporting only applied to a third of the stimulus; it didn’t capture the impact of tax relief or aid to the vulnerable, much less the indirect impact of new hires like Bartley spending their paychecks. Overall, the White House estimated the Recovery Act had already increased employment by at least 2.5 million jobs, only slightly higher than estimates from independent forecasters.
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But Biden had been around politics awhile, and he didn’t think people responded to numbers. He thought people responded to people, to testimonies like Duane Bartley’s.

“That story can be told time and again, all over the country,” the vice president told the crowd. “Our job is to have Duane’s story repeated and repeated and repeated.”

To Biden, it was a story about resilience, about America getting back in the fight. It was also a story about the Recovery Act’s investments in innovation, about the public sector helping the private sector manufacture the green products that will—“literally!”—drive progress in the twenty-first century. At UQM, Duane Bartley was troubleshooting motors for the all-electric buses that another U.S. company called Proterra was building in another stimulus-funded factory in South Carolina. The Recovery Act was also helping transit agencies in Los Angeles, San Antonio, and Tallahassee buy Proterra’s new buses. Biden thought that if Americans could see this new ecosystem taking shape, the politics of stimulus would improve.

That was the basic idea behind the “Recovery Summer” of 2010, the West Wing’s last-ditch effort to revive the Recovery Act’s reputation.

Obama sometimes humble-bragged about the “perverse pride” his administration took in putting policy first and letting the political chips fall where they may. He wanted his White House to behave more like the Aspen Institute than Tammany Hall, and the Recovery Act reflected that. The two biggest high-speed rail grants went to states with Republican
governors. The biggest stimulus project was a nuclear cleanup in South Carolina, where Governor Sanford was savaging the stimulus. The competitive programs often attracted intense political pressure, but a slew of independent audits of the Recovery Act failed to uncover the administration putting its political thumbs on any policy scales.

The White House, however, was not the Aspen Institute. Politics may not have dominated the conversation, but it was in the room. As the midterm elections approached, Rahm and other political aides often called Biden and his team with political questions: Do we have anything Blanche Lincoln can announce in Arkansas? The White House arranged frequent events in Nevada for Harry Reid, who was fighting for his political life against another Tea Partier. And there was a strong desire to deodorize the general stench around the Recovery Act, which, as Obama half-joked to his cabinet, was “the only thing less popular than I am,” even though its individual items still polled well. That suggested a political failure, and Biden was eager to correct it.

By the Recovery Summer, more than half the stimulus had been spent, and it seemed to be winding down. But as Ron Klain told Democrats on the Hill, only the under-the-radar elements—tax cuts, state aid, food stamps—were winding down. The visible, marketable stuff was ramping up. That summer, there would be six times as many highway projects under construction as the last summer, eight times as many park projects, twenty times as many water projects.

Finally, the shovels were ready. It would be nice to get some credit for them.

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ongressional Democrats were less eager for their constituents to see the Recovery Act in action.

They thought Obama had done a horrible job selling the stimulus early on, letting Republicans dictate the narrative, getting bogged down in health care instead of pounding a jobs message. But by 2010, most Democrats had stopped clamoring for presidential backup on the stimulus. They no longer wanted to discuss the stimulus. The narrative of failure was set, and an election year when the major issues were
sky-high unemployment and sky-high deficits seemed like a strange time to try to rewrite it. They were more concerned with salvaging their own jobs than the Recovery Act’s reputation. “It got to be so toxic,” says one House leadership aide. “It didn’t make any sense to talk about its benefits.”

Hill Democrats were already frosted at Obama on multiple fronts—his scuttling of the transportation bill; his handling of the health bill, cap-and-trade, and the seemingly endless war in Afghanistan; his failure to ask them for advice, invite them to events, and otherwise make them feel special; and his habit of denouncing “Congress” rather than “Republicans.” Anyway, the stimulus debate felt like a ball game that had been out of reach since the first quarter. One poll found only 6 percent of Americans believed it had created any jobs. That was less than the percentage of Americans who believed Elvis was alive or the moon landing was faked.

Some Democrats, not content to ignore the Recovery Act, began attacking it. Chuck Schumer, the camera-loving New Yorker in charge of messaging for Senate Democrats, began howling that 80 percent of the stimulus grants for wind projects had gone to foreign manufacturers. “The point of the stimulus was to create jobs in the United States, not in China,” Schumer said. In fact, those foreign manufacturers were creating jobs in the United States, no matter whose name was on the corporate polo shirts. The Recovery Act not only saved the U.S. wind industry, it nearly tripled the domestic content of U.S. wind farms, and only three of America’s 33,000 turbines were made in China.
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But for Republicans, the jingoism from Schumer—who usually knew which way the political winds were blowing—was pass-the-popcorn proof that the debate was over.

“It’s one thing if Republicans say the stimulus is wasteful,” gloats one senior GOP Senate aide. “It’s another thing if Chuck Schumer says it.”

For the White House, the political calculus of the Recovery Summer was simple: The stimulus was creating jobs, so people ought to hear about it. Duane Bartley was as real as the moon landing. The Recovery Act would probably remain unpopular as long as times remained tough,
but if Obama showed what he was doing to turn things around, voters would remember once things turned around. It reminded Biden of the crime bill from the 1990s; crime wasn’t going to drop right away, but you had to be there every time a new cop was sworn in, so that when crime did drop people would give you credit.

“We’ve got a story to tell. Let’s tell it!” Biden argued.

At the end of May, Obama visited a factory under construction in Silicon Valley to tell one of those stories, a tale of the Recovery Act unleashing the next generation of California ingenuity.
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In retrospect, he should’ve left that particular story untold.

“It was here where weary but hopeful travelers came with pickaxes in search of a fortune,” Obama said that day. “It was here that tinkerers and engineers turned a sleepy valley into a center of innovation and industry. And it’s here that companies like Solyndra are leading the way toward a brighter and more prosperous future …”

T
he White House went to amusing lengths to stage-manage Obama’s visit to Solyndra. “Can you confirm that his greeters will be wearing their normal everyday work clothes and safety gear?” the advance team emailed. “We want to make sure we have the construction worker feel.” Yes, confirmed, along with the twenty-foot-by-thirty-foot American flag, coffee and donuts for the press, and a robotic arm that would display a solar panel onstage during the president’s speech. Also, the team wanted a solid backdrop behind Obama: “Preferably not white. Something darker and matte (not glossy).”

Republicans claimed that the reams of Solyndra-related documents the administration later turned over to investigators exposed the true nature of the Obama White House, a Tammany Hall masquerading as an Aspen Institute. And it’s true that the email trail revealed White House aides obsessing about the political appearances of his visit to Solyndra. Not only did they choreograph that “construction worker
feel,” they fretted the president might be embracing a corporate loser. With hindsight, the internal debates make for painful reading.

Solyndra had bled over $400 million in two years, and its auditor had just cited “substantial doubt about its ability to continue as a going concern.” So when it was announced that Obama would stop by Solyndra in a week, one OMB official sniped: “Hope doesn’t default before then.” The clean-tech venture capitalist Steve Westly, a California politician and Obama fund-raiser, warned White House senior adviser Valerie Jarrett that Silicon Valley had grave doubts about Solyndra.

“I just want to help protect the president from anything that could result in negative or unfair press,” Westly wrote. “If it’s too late to change/postpone the meeting, the president should be careful about unrealistic/optimistic forecasts that could haunt him in the next 18 months if Solyndra hits the wall, files for bankruptcy, etc.”

Westly’s email was immediately forwarded to Matt Rogers, who said the “going concern” language was standard for a fast-growing company preparing an IPO. Still, he saw three real problems for Solyndra. Silicon prices were plunging, which meant its high costs could be a crippling disadvantage. Europe was on the brink of another crisis, which was weakening demand in its top export market. And the company was “counting on an energy bill to pass” to build U.S. demand, which was like counting on
Zookeeper
to win an Academy Award. On the other hand, Solyndra’s sales were rising, and the stimulus-funded factory that would help it cut costs was on schedule to open that fall.

“Sounds like there are some risk factors here—but that’s true of any innovative company that POTUS would visit,” Klain told Jarrett. “It looks OK to me, but if you feel otherwise, let me know.” Jarrett said she was comfortable if Klain was comfortable. He assured her that Solyndra’s situation was common for high-tech start-ups.

“The reality is that if POTUS visited 10 such places over the next 10 months, probably a few will be belly-up by election day 2012—but that to me is the reality of saying that we want to help promote cutting-edge, new-economy industries,” Klain wrote.

“I agree,” Jarrett replied. “There is an inherent risk in highlighting a single company before they have a track record.”

Klain responded: “Or even after they have one : - )”

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epublicans have exploited this paper trail to accuse the White House of “playing politics.” Newt Gingrich called Solyndra “a half-billion-dollar photo op.”

It’s true. Politics were played. Photos were taken. Is it news that presidential events are political? Perhaps Obama’s advance team went overboard micromanaging the Solyndra CEO’s sartorial choices—“I know he might think about wearing a suit, but I advise against it if at all possible”—and it was a sad day for the Republic when White House officials began using emoticons in their emails. But there’s nothing scandalous about trying to present policies in a positive light. Actual scandals involve actual policies. If anything, the White House didn’t think enough about the politics of Obama’s visit. “Going concern” letters are common, but Solyndra was burning cash like MC Hammer; there was no need to send the president to the riskiest stimulus project in California.

Sure enough, a month into Recovery Summer, Solyndra had to cancel its IPO, triggering another round of bad-news stories. It also replaced CEO Chris Gronet, the scientist who founded the firm and invented its technology, with veteran Intel executive Brian Harrison, a burly, buzz-cut former minor-league power pitcher who had manufacturing experience and an imposing presence. As Harrison described it to me later, Solyndra was the corporate equivalent of a science geek who hadn’t grown up. It was still obsessed with perfecting its technology long after it should have shifted into making and selling mode. Its research team was still far bigger than its marketing team, as if revenue was an afterthought. And its strategy was ludicrous. It was trying to appeal to the entire solar market, as if its technology were so incredibly cool that everyone would pay more for it, instead of focusing on the flat commercial rooftops where it had a genuine advantage.