I’m always on the lookout for that news story that comes out of left field that could, in some way, hit the markets. Yesterday, I believe I came across one.
Around 1pm CT, it came out that a group of U.S. solar-equipment companies were filing a complaint with the government saying that Chinese solar-panel companies were dumping their panels on the cheap, essentially undercutting the market and preventing them from competing.
Before you hit the comments section, I realize that around 1pm CT was the same time the Philly Fed came out, and that was the more likely cause for the market break. And I also realize that, once again, there’s rioting in Greece and that the European situation in general can turn things in a second.
So how exactly am I piecing this together?
Because what they’re asking for is more protectionism, and that can have long-term consequences in the marketplace.
Thanks to the solar industry’s close ties to the Obama administration, it wouldn’t surprise me one bit if the Department of Commerce actually pursued this. That scares me. Can our economy really afford to have Obama’s henchmen out there putting up even more regulatory hurdles? Is this really the time to repeatedly slap the face of China, our second largest trading partner and fastest-growing customer base?
And let’s not forget that these solar companies like Solyndra and Evergreen aren’t going bankrupt because they can’t compete with Chinese prices. They’re going bankrupt because they’re manufacturing inferior products. It’s not a question of cost, it’s a question of quality. And yet, they want to wag their finger at the Chinese because they can’t compete in the open market. Ridiculous.
(The fact that they’re making these inferior products using massive amounts of taxpayer money is another equally enraging part of this equation—but my pal John Ransom can bring you up to speed on that.)