The Solyndra Scandal: What Was Secretary Chu Thinking?

Energy Secretary Chu testifies before Congress today on the Solyndra mess.  Naturally, I'll be watching, and reporting if he says anything interesting.

But first, the pre-game.  

There's a very popular narrative in books and magazine articles about the super-smart outsider CEO who comes into a dysfunctional organization and sweeps away all the ludicrous inefficiency through the sheer power of his genius, common sense, and wide-eyed incredulity at the behavior of the morons who have been running things.

I suspect that was part of the reason that people got so excited about having Secretary Chu--an actual Nobel prizewinner!--in office.  I am second to none in respect for his smarts, but I think people expected rather too much from it.  I remember learning, in one of the few West Wing episodes I watched, that Aaron Sorkin had awarded President Bartlett the Nobel Prize in economics.  No doubt this sounded super-awesome to Sorkin, but if you've ever met a Nobel prizewinner, it's ludicrous. The talents required to win the Nobel prize in economics include things like incredibly single-minded focus on one idea at a time, a willingness to ignore the opinions of others, and a positive enjoyment of the vast amounts of time you will spend alone in your office, thinking.

I understand why Sorkin thinks that these would be very admirable qualities for a president to have . . . but I doubt he'd actually hire this person as, say, a producer on one of his shows.  The type of person who is good at the one is not good at the other--and being president probably looks slightly more like producing a television show than winning the Nobel Prize.

The smart outsider who simply refuses to tolerate the old inefficient ways does sometimes succeed.  On the other hand, often they turn out to be arrogant and intolerant wrecking balls who fail spectacularly because they refuse to hear that there are real constraints on their vision.  They dismiss those who raise potential problems as naysayers and fools, rather than respecting them as valuable sources of local knowledge.

(One story I've heard over and over:  new CEO/CFO takes over.  New honcho notices that some of the sales guys are making fantastic sums of money--more than occasionally, more than said CEO.  Over the protests of the sales and marketing organization, big man fires said salespeople, or changes their compensation so that they aren't making so much.  Sales plummet.  El jefe has to go groveling to the old sales people, or hire new, even more expensive people to replace them.)

What we're still trying to find out is whether in the matter of industrial policy Secretary Chu--and by extension, the administration--is the genius of popular fable, doggedly implementing a bold vision over the protests of entrenched insiders . . . or the arrogant idiot who drives his company into the ground because he just knows that he's discovered the wave of the future.

In other words, we need to know the answer to the question that still bothers me: what were you thinking?  Unfortunately, these sorts of hearings are rarely good venues for answering those concerns.
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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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