Ever since the Solyndra story broke, I’ve been waiting for the other shoe to drop. And … I’m still waiting. The Washington Post unearthed some e-mails suggesting that Obama Administration officials lobbied the Energy Department to expedite approve of a loan for the solar panel company, which eventually went bankrupt. Obviously that was a bad idea. But corruption? Impropriety? No signs of that yet.

More damning information could still emerge. (It can take a while with these kinds of stories.) But, even if it did, it’d be the first serious suggestion of such shenanigans in this administration's initiatives – which is actually pretty remarkable when you think about it. Via the Recovery Act and other efforts at economic stimulus, the federal government under Obama's watch wrote checks for many hundreds of billions of dollars. But the Obama Administration also made a concerted effort to avoid the problems that have sometimes plagued past efforts. In the Recovery Act, for example, it required unprecedented transparency and monitored spending closely for anomalies that might suggest funny business.

The results, as noted here previously, have been impressive. According to an official audit, just 0.2 percent – that’s zero-point-two percent -- of prime and sub-contracts that the Recovery Act awarded led to “consequential investigation.” The inspector general who runs the Recovery Act transparency board told the New York Times that he believes “history will show that there was a lot less fraud in this effort that had been anticipated or that normally would occur with such a large amount of money.” Steve Ellis, who is vice president for the watchdog group Taxpayers for Common Sense, has expressed similar sentiments: "The fraud and waste element has been smaller than I think anybody anticipated.”

For now, then, the real questions Soyndra raises aren’t about ethics. They’re about economics -- specifically, the wisdom of investment in green jobs and, more generally, industrial policy. 

This is an old debate, one I can’t settle here. In a nutshell, the case for programs like the one that funded Solyndra is that the market under-invests in worthy projects of considerable value to the public. Clean energy would seem to be a textbook case, given that the price of carbon-based fuels doesn’t capture the long-term damage they are causing the planet – what the economists call a “negative externality.” Brad Plumer, my former colleague, has made a good case along the lines. So has Mike Grunwald of Time magazine.

The counter-argument is that the government is lousy at picking winners and losers – that investments like Solyndra are more the rule than the exception. Maybe investing in green energy is the right thing to do, this argument goes. But government is bound to do it in the wrong way, not only wasting taxpayer dollars but, potentially, hampering innovation in the long run. Megan McArdle has made this argument, at length, for the Atlantic.

I’m more sympathetic to Grunwald and Plumer (although, to be clear, I don't have the expertise any of these writers do). Among other things, most of the loans in this program seem to have worked out. Investment inevitably involves some risk of failure. (Many of the program's loudest critics know this, by the way; plenty of Republicans have supported such loans in the past.)

I also think that the timing should count for something. At the time of the loan, the Obama Administration was doing its best to pump money into the economy, in order to create jobs. And while there may have been better ways to spend that money, there were probably worse ways, too. In fact, I would gladly have put up with a little more fraud or waste in the Recovery Act and other stimulus programs if it would have generated more jobs.

But the most persuasive argument about Solyndra I’ve seen actually comes from a critic: Andrew Samwick, the (relatively) conservative economist from Dartmouth. He agrees that the price of carbon fails to capture its negative externality, discouraging investment in alternatives. But the proper solution to that, he says, is to raise the price of carbon – i.e., with some kind of tax – rather than invest in the alternatives. (Actually, I think McArdle agrees with this, too.)

He’s probably right. The problem is that raising the price of carbon isn't politically feasible -- not right now and, quite likely, not anytime in the near future. That necessarily reduces our options to policies that are not optimal.

Maybe direct government loans are a second-best solution to the undervaluing of alternative energy. But second-best is still better than nothing.