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The Solyndra story has gained so much attention this past month because it illustrates many of the arguments about what’s wrong with Washington these days. Republicans say the California solar panel maker’s bankruptcy reveals the 2009 Obama economic stimulus package as yet another in a long line of wasteful and minimally effective big-government boondoggles. Democrats see the focus on the company’s failure as part of a dangerous GOP crusade to kill off an industry that could help prolong the life of the planet. Government watchdog types see a cautionary tale about how the politically plugged-in can leverage their campaign donations and lobbyists to alter normal bureaucratic procedures and gain inappropriate advantages.
Beyond all that, though, the rise and fall of Solyndra underscores a truism about today’s Washington that transcends ideology and the precepts of good government: The federal government remains the de facto employer of first resort for many of the nation’s businesses. Solyndra’s sullied shot at Silicon Valley stardom — and the 1,100 jobs that came and went with it — were the direct result of a Washington policy decision. The company would have never had a chance to expand without the government loan guarantees that freed up more than half a billion dollars in private sector capital. Similarly, countless mom-and-pop operations and several brand-name conglomerates (defense contractors, for starters) stake their fortunes on winning federal contracts or grants or on providing services paid for with federal dollars. All told, the total number of people who owe their jobs to the federal government is more than triple the 4.5 million who take their paychecks straight from the Treasury.
This phenomenon doesn’t get very much mention around the Beltway’s collective water cooler, in part because it’s such a bedrock part of the way our economy works — and is sure to stay that way for the indefinite future. Nothing the so-called supercommittee might propose in the way of budgetary belt-tightening would change the basic dynamic. And whether the president wins enactment of his job creation package, settles for a pale imitation or gets nothing at all, the fundamentals of the federal employment engine will remain the same.
That’s why an explanation of how it operates — followed by a more detailed exploration of its workings in six economic sectors — is the heart of this year’s fifth CQ Roll Call Outlook.