Subsidized Solar Factory Failure: A Reflection of Obamanomics Under Cuomo

Solar Factory Failure

The city of Buffalo, New York, is home to a largely state-owned factory, spanning a quarter of a mile. Today, it stands as a symbol of Hope and Change, concepts that were once cornerstone promises of the Democratic Party during the Obama administration. Some may view this dormant structure as a failure attributable to ambitious billionaires like Elon Musk or the downfall of ex-Governor Andrew Cuomo. However, the real narrative lies in its embodiment of the shortcomings of Obamanomics and the Democratic Party’s industrial policy during Obama’s tenure.

A thorough report recently published by The Wall Street Journal highlights the failures of this government-owned Tesla/Solar City plant, laying much of the blame on Cuomo, who, as governor, sanctioned the deal with Elon Musk’s corporations in the early part of the 2010s. Cuomo infamously compared the huge, subsidized factory — leased for $1 per year to Musk’s enterprises — to the Buffalo Bills clinching the Super Bowl title.

This narrative should not overshadow Musk’s critical role in shaping the broader political and economic landscape, particularly in relation to Obama’s industrial policy. During the early Obama era, Musk was viewed as a symbol of the “Hope and Change” Obama pledged to bring to America and represented the aspiration of how Obama would “remake America,” a promise he made during his inaugural address.

Musk personified the essence of the cooperative relationship between industry and the government, which was central to Obama’s economic policy. Both Musk and Obama advocated for increased subsidies, extensive futuristic discourse, and tackling climate change.

Musk was regarded as an industry maverick, and his publicly-funded innovations were expected to make solar panels and electric vehicles more accessible to the masses. His businesses secured federal contracts to launch rockets and subsidies to send satellites into orbit.

In 2008, Musk was a major Obama donor, contributing $35,800 to the Obama Victory Fund, a conglomerate of maximum individual donations ($2,900) for Obama’s primary election, his general election, and the Democratic National Committee. Over the course of time, Musk’s personal contributions to Obama’s electoral efforts surpassed $100,000.

The Obama administration often showcased Musk as the emblem of its industrial policy. In 2014, Musk headlined the annual conference of the U.S. Export-Import Bank, a federal subsidy agency under attack from Congressional conservatives, which Obama strongly supported. Obama implored the business lobby to “join the fight over the U.S. Export-Import Bank,” and Musk heeded the call.

In 2014, Musk used his platform at the annual conference to back Obama’s efforts to reauthorize and expand the Export-Import Bank. Musk argued that his companies required increased subsidies from the U.S. Export-Import Bank to compete with “Coface,” a French entity known for its aggressive low-cost funding provision.

This narrative aligned perfectly with Obama’s 2012 re-election theme of “New Economic Patriotism,” which touted modern, intelligent collaboration between government and industry for everyone’s benefit, including maximum donors like Musk.

Musk and his companies reaped significant benefits from Obama’s landmark economic legislation, the 2009 stimulus bill, which provided massive tax credits for solar panels through Section 1603.

Tesla also gained from Obama’s environmentally-friendly spending policies. “Musk flew to Washington D.C. at least a dozen times since early 2009,” reported AutoBlog, an automotive industry publication, “to advocate for nearly half a billion dollars in low-interest loans from the Department of Energy as part of the Advanced Technology Vehicle Manufacturing program.”

In due course, Obama’s Department of Energy extended that favorable financing to Tesla.

Throughout the Obama administration, Musk maintained strong relationships with key players. Solar City and Tesla both hired the lobbying firm McBee Strategic, a major player on K Street in securing stimulus funds and run by former Democratic congressional staffers and Obama donors. Both companies also enlisted the Podesta Group, a lobbying firm founded by Obama’s chief of staff John Podesta, which maintained deep connections with the Obama administration.

Musk’s companies also maintained close ties with the influential Democrats of that era. Lyndon Rive, Solar City’s CEO (and Musk’s cousin), contributed thousands to Cuomo and Obama’s 2008 election campaign, according to reports from The New York Times and the Center for Responsive Politics, respectively.

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