The President’s Green Initiative would have Worked Better if China didn’t build Better Solar Panels for Less

Posted by PITHOCRATES - October 28th, 2012

Week in Review

President Obama loaned a half billion dollars to Solyndra to create jobs of the future.  Solyndra filed bankruptcy shortly thereafter.  And they are not the only green investment to go belly up.  But the president hasn’t given up on his green energy.  Especially solar power.  Despite China (see Rays of hope for solar firms by Wang Jun and Chen Jia posted 10/26/2012 on China Daily USA).

China’s solar-panel industry has been rocked by recent US duties on its exports to combat alleged dumping and the specter of similar action by European authorities.

At least one company sees the standoff as an opportunity, however…

In the industry’s trade tussle with the United States, Zhou believes, weaker companies will suffer most, and some may fail…

CSG PVTech, a subsidiary of Shenzhen-listed CSG Holding Co, makes panels and modules studded with photovoltaic, or PV, cells that draw on the sun’s rays to produce electricity. Zhou said his confidence in the company is backed by recognition its products have received abroad.

For example, German solar-industry publisher Photon, which tests PV cells and related equipment, since 2010 has ranked CSG-made modules containing monocrystalline-silicon cells among the top three in the world and polycrystalline-silicon modules among the top 10…

Although he oversees both European and US operations for CSG PVTech, it’s clear where Zhou’s focus resides…

“California is a bigger market than Germany,” he said, pointing out that the US state meets the two key requirements – lots of sunshine and a huge demand for electricity.

Jack Pryor, CEO of Access Solar Inc, a Palm Springs installer of panels in homes, said his company is currently outfitting over 110 new townhouses in California with CSG PV panels…

By working with installers like Access Solar, Zhou plans to turn CSG’s focus in the US from business-to-business to business-to-customer, in hopes of making the Chinese company a household name.

He admits, however, that like many Chinese enterprises, a limited understanding of marketing is a hurdle.

“We sell products, but we don’t understand how to sell service,” he said. “As a result, our value chain is too short.”

Zhou aims to sell both.

So not only can the Chinese make solar panels far cheaper than the Americans they make quality stuff.  In fact they make one product that is in the top three in the world.  And another that is in the top 10.  Inexpensive and high quality?  Hard to compete against that.  But it even gets worse for those jobs of the future.  American installers are partnering with China.  And China is working on providing excellent service in addition to low prices and high quality.

So it looks like the president’s green initiative will help create those jobs of the future after all…in China.  But they’re trying to stop that by slapping anti-dumping duties on them.  Of course, that just raises the cost of saving the planet.  Discouraging people from installing solar panels on their houses because of these higher costs.  So the president’s green initiative is basically a lose-lose.  No jobs of the future.  And discouraging people from trying to save the planet.  Oh, and the president’s war on coal is raising the cost of electric power.  So the president’s policies are a triple loser.

Solar power.  It was going to pull America out of the Great Recession by creating jobs of the future.  Instead we get bankruptcies of government subsidized firms.  And higher unemployment than there was four years ago.  Is it me or is solar power not the panacea that the president said it was?

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FT118: ” It’s better to have rich investors risk their wealth than having the government risk our taxes.” -Old Pithy

Posted by PITHOCRATES - May 18th, 2012

Fundamental Truth

It wasn’t the Private Investors who lost Half a Billion Dollars on Solyndra

It takes money to create jobs.  Some conveniently forget this fact when the politicians want to take money away from rich people who got rich by creating jobs.  But the politicians always remember this fact when they want to ‘invest’ our tax money into projects to create jobs.  When they want to spend our taxes they then fully understand the concept that it takes money to create jobs.  Funny how that works.

Also funny is that the projects the politicians want to invest in are not projects the rich investors want to invest in.  Because it’s their wealth they’re risking they are a little choosier in deciding where to invest it.  So they don’t invest in these losers the politicians champion.  For even though these politicians are Ivy League graduates who are smarter than everyone else they only like to risk other people’s money.  Unless they have inside information.  Such as pending legislation that will affect the market.  Then they’ll invest their own money.  But that’s the only time.  For as smart as these Ivy League graduates are they have little understanding of free market capitalism.  Or what it takes to be an entrepreneur.  And have no idea how to evaluate an investment opportunity without having inside information.

Still, politicians are so arrogant to believe that they are smarter than the market.  And that if they ‘wisely’ invest our tax money that they can do a better job than those who risk their own money.  People the politicians believe aren’t smart enough to make the best and wisest investments.  Despite their having gotten rich doing just that.  Making wise investments.  For example, it wasn’t the private investors who lost half a billion dollars on Solyndra.  For they saw the only thing keeping the solar industry afloat were government subsidies.  And any industry that requires government subsidies is not likely ever to earn a profit.  So they said ‘no’ to Solyndra and put their money in what they deemed wiser investments.  While the government invested in Solyndra.  Because they saw that as the ‘wiser’ investment.  Only to lose a half a billion of our tax dollars in the process.  Yup.  When it comes to making smart investments the politicians are regular ‘geniuses’.  And by that I mean they are actually the opposite of geniuses.  I was using sarcasm.

Politicians lose Hundreds of Billions of our Tax Dollars in Investment after Investment because they Care 

So the politicians are worse than the worst rank amateur investor.  We know it.  They know it.  At least they should know it what with their perfect record of failure.  So why do they do it?  Why do they continually take money away from the people who know how to better invest that money so they can make some of the worst investments of all time?  That’s a good question.  And we really need to think about it. 

To figure this out think about this one word.  Elections.  That’s the key.  You see, a majority of people wouldn’t vote for these politicians.  Because they want to spend our money.  They want to raise our taxes.  So they can spend it on more Solyndras.  How does that help them?  Here’s how.  People at these companies who receive this federal money are very grateful.  And to show their gratitude they make campaign contributions.  Often with some of the very money they received from the government.  Part of that ‘wise’ investment to create the ‘smart jobs’ of the future.  And why not?  There’ll be a little left over after paying some generous executive salaries and bonuses.  Why not give a little back to the people that made all of that possible?  Make a nice campaign contribution to help the politicians convince the people that they are smart and wise and deserve to win the next election.  So they can spend more of the people’s taxes.  Into other wise investments.  Like Solyndra. 

You just need one thing to make this all possible.  A bad investment.  An investment so bad that no rich people will risk their own money.  Because they know what a loser the investment is.  It has to be that bad.  So someone in the government can say rich people are evil and selfish.  That they only care about turning a profit.  That they are not interested in the jobs of the future.  Or high paying jobs with good benefits for the working man.  Like the politicians do.  They care about the people.  Instead of turning a profit.  And are willing to invest taxpayer money in the poorest of investments.  And lose hundreds of billions of our tax dollars in investment after investment.  Because they care.  More for their own self-interests but they care.  Unlike those evil rich people.  Who refuse to waste valuable investment capital.  And won’t let the people they’ve loaned it to waste it either.  Because they only care about the money.  Unlike our government.  Who has no problem throwing away trillions of our tax dollars.

Investors Invest Responsibly and know how to Pick a Winner that will Create Jobs 

Rich investors take risks when they invest their own money.  So they are very careful in how they invest it.  And when they invest it they are very interested in how that money is used.  They don’t need any oversight committees or legislation.  Because they are no one’s fool.  They are not rank amateurs.  And they appreciate the value of hard-earned money.  They have a vested interest to make sure that money is used in the most efficient manner possible.  Because it’s their money.  And they care.

Politicians invest taxpayer money.  They have no vested interest.  So they don’t care.  When they run out of money from all of their bad investments they don’t suffer any consequences.  All they do is malign rich people again to foster a little class warfare to make raising taxes on the ‘evil rich’ easier.  Then they keep on making bad investments.  Mostly to their political cronies.  Who will return some of that public money back to them in the form of a campaign contribution.

That’s why it’s better to have rich investors risk their wealth than having the government risk our taxes.  Investors will invest responsibly.  The politicians will not.  And the investors know how to pick a winner that will create jobs.  The politicians do not.  The only way they know how to make money is with inside information.  Or skimming a little off the top of the public purse.  Which is the only way to explain investments like Solyndra.  It’s either that or our politicians are just really stupid. 

What a choice.  Corrupt or stupid.  Or is it even worse?  Are they corrupt AND stupid?  If so it sure would help explain a lot.

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The Wind Turbine Industry about to go the Way of Solar Panel Manufacturers like Solyndra

Posted by PITHOCRATES - April 7th, 2012

Week in Review

Solyndra failed because of the Chinese.  Solyndra was working on a tubular technology to avoid using a silicon-based flat panel design.  At the time of product launch silicon was a costly commodity giving Solyndra a cost advantage.  And that cost advantage lasted until the Chinese brought so much silicon to market that the price for silicon imploded.  As did the price of flat-panel solar panels.  Which the Chinese also flooded the market with.  Good for people wanting to install solar panels.  Bad for people wanting to manufacture solar panels.  And now it’s happening with wind turbines (see Wind power market to lose puff this year by Liu Yiyu posted 4/5/2012 on China Daily USA).

China’s wind market bubble will deflate as the industry enters the worst year in its history, said the Spanish wind turbine maker Gamesa.

“The first half of 2012 is the worst time in the last four years, triggering a faster industry consolidation,” said Jorge Calvet, chairman of the company…

China’s wind industry has excessive capacity, going from 10 to 12 manufacturers in 2005 to more than 85 in 2011, according to Calvet.

Jobs of the future?  I think not.  Installing them, perhaps.  But this technology won’t do a thing for our manufacturing base.  What President Obama was going to revitalize with the technology of the future.  Green technology.  Smart technology.  Instead of those high-paying jobs of the past in the oil industry.  Which, incidentally, is something the Chinese can’t take away from us.  Only our president can.  By pursuing his jobs of the future.  Those manufacturing jobs the Chinese are taking away from us left and right.

Perhaps it would be better to pursue those jobs of the past.  There is a demand for fossil fuels.  We have fossil fuels buried within our American borders.  Which means only Americans can bring these fossil fuels to market.  And build and maintain the infrastructure that bring these fossil fuels to market.  All of those good, high-paying, benefit-laden jobs of the past.  In other words, the jobs people want.  The kind that don’t disappear when the Chinese ramp up protection.  The kind that will improve the employment picture.  Bring the cost of gasoline down.  And make America more energy independent.  All good things for the American people.  And things we should do for the American people.  Especially when it’s your job to look out for the American people.

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The NASA Old Guard Supporting Mitt Romney to Reverse Obama’s NASA Disarray

Posted by PITHOCRATES - January 28th, 2012

Week in Review

NASA doesn’t like President Obama.  For it was on his watch that they retired the Space Shuttle program.  And now have to rely on the Russians to ferry American astronauts to the International Space Station.  Pretty sad for it was NASA that put a man on the moon.  No one else has.  And now the American space program has been reduced to hitchhiking rides on old Russian rocket systems that were used during the glory days of NASA (see Last man on the Moon backs Mitt Romney’s race to White House orbit by Jacqui Goddard posted 1/28/2012 on The Telegraph).

In an open letter endorsing Mr Romney’s candidacy, veterans including Apollo 17 moonwalker Gene Cernan, first space shuttle pilot Bob Crippen and former head of Nasa Mike Griffin, feted him as the only contender capable of reversing the “disarray” wreaked on Nasa by President Obama.

Their boost comes after several days of campaigning by the Republican hopefuls on Florida’s Space Coast, a region that thrived during Nasa’s glory days but which is now facing economic gloom following the retirement of the space shuttle last year and confusion over what will succeed it.

On Friday, Mr Romney admitted to a crowd at Cape Canaveral – home to Nasa’s Kennedy Space Centre – that if elected, he would assemble expertise to help chart a new course for the space programme. Mr Gingrich said that he already had one in mind: colonizing the Moon by the end of his second term as president.

Obama is making no friends in the space community.  Despite his quest for jobs of the future.  And if any jobs would qualify as jobs of the future they would have to be space jobs.  But there’s a problem with these jobs.  They’re not unionized enough.  And don’t send a lot of campaign money to Democrat coffers.  Hence Obama’s lack of interest in NASA.

Interestingly, the old guard of NASA is endorsing Mitt Romney.  Who will establish a blue ribbon panel to figure out what to do with NASA.  While Newt Gingrich is proposing Apollo – Phase II, the return to the moon.  This would be a boon to the space community.  Which is what you’d think the old guard would want.  Unless they don’t believe the taxpayers would never support such a bold and expensive program like that.  Or they think it was just expedient politics before the Florida primary.  Or they just don’t believe Newt Gingrich can win in the general election.  And they want someone who appears to be more moderate.  And can reach across the aisle.  Like John McCain.  Who lost in 2008 to Barack Obama.  Which just goes to show you how well moderates fair against Democrat ‘moderates’ (Obama ran as a moderate but gave us Obamacare).

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Obama Favors Protectionism to Save Manufacturing Jobs that Employ Few while Increasing Costs for Consumers Everywhere

Posted by PITHOCRATES - January 28th, 2012

Week in Review

In full campaign mode, Obama seeks the support of unions in the manufacturing industry (see Why Manufacturing Can’t Solve The Jobs Problem by Roya Wolverson posted 1/27/2012 on Time Business).

Among other things, Obama’s State of the Union speech Tuesday drove home the idea that U.S. industries need more protection. “Over a thousand Americans are working today because we stopped a surge in Chinese tires,” he said in his speech. That’s all fine and good if your goal is to hold on to U.S. manufacturing jobs. But it’s not going to solve the country’s overall unemployment problem. And in the end, it may cost the American consumer more than those jobs are worth.

For one thing, raising trade barriers on imported goods like tires makes tire-buying more expensive for American consumers, which, as Matthew Yglesias points out, only undermines those consumers’ ability to spend elsewhere. It also provokes countries like China to raise trade barriers on U.S. goods, which makes the job of increasing U.S. exports and export-related jobs even harder. Even if protections did save some manufacturing jobs, they wouldn’t be enough to move the needle on unemployment. It’s worth remembering that only 11% of U.S. jobs come from manufacturing, thanks to globalization, which has taken jobs abroad to lower-wage countries, and technological advances that have increased worker productivity. And that percentage has been declining steadily for several decades.

…And since we can’t reverse that process, the biggest gains in the job market can’t come from greater protections, but instead from gains in technology. Standard Chartered’s Gerald Lyons made the point today that, despite the enduring public perception that technology kills jobs, for every one job technology destroys, it creates 2.1 other jobs. Thus, instead of clinging to our past by supporting unproductive industries and erecting trade barriers, the U.S. has to find “the types of jobs that are fit for this country’s future,” argues Diamond.

Once upon a time the whale oil business was booming.  And a lot of people where employed in the whaling industry.  Until John D. Rockefeller came along.  Who created Standard Oil.  Introduced Americans to kerosene.  And put the whale oil business out of business.  Creating far more jobs in the petroleum exploration and refining business than the whale oil business ever did.  Now if President Obama were in office during this time he would have placed a tax on kerosene to protect those whale oil business jobs.  Because although he may talk about the jobs of the future, he wants to protect the jobs of the past.  Especially if they are protected by a strong union.

When only 11% of U.S. jobs are  in manufacturing, this protection of the jobs of the past is also very costly.  Because to save 11% of jobs in the economy he will raise prices on everything in the economy.  Meaning 100% will pay a surtax so the 11% can keep these jobs of the past.  So to sustain a little economic activity he will kill a lot of economic activity.  Which doesn’t make sense.  But it will protect union jobs.  And sustain contributions to Democrat coffers.  Which is the whole point of saving these jobs of the past.

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Are Solar Jobs the Jobs of the Future?

Posted by PITHOCRATES - November 13th, 2011

Week in Review

Yet another example that solar jobs are not the jobs of the future (see CBI criticises solar subsidy cut posted 11/11/2011 on the BBC).

The UK’s biggest business group has criticised the government’s decision to halve the subsidies for household solar electricity by next month…

The CBI said the decision to halve “feed-in tariffs” earlier than planned would force companies to cancel planned work, destroying projects and jobs…

In a speech to the CBI East Midlands annual dinner he said: “Moving the goal posts doesn’t just destroy projects and jobs, it creates a mood of uncertainty that puts off investors and they wonder what’s coming next.

You know what kind of jobs need subsidies?  Jobs where people make things nobody wants.  Unless the government makes it worth their while.  With a nice bribe.  Which is the only way to get investors interested.  Because investors know these are losing investments.  Unless taxpayer money is factored in somehow.

“And it worries me that in just a year, we have gone from third place to 13th place behind Brazil and India in terms of investment in renewables and this is an industry – the solar industry – which has been hugely successful: 25,000 jobs, 39,000 if you add in the ones in the supply chain, that is being put at risk,” [Labour’s shadow environment secretary Caroline Flint] said.

If you have to subsidize these jobs they’re not good jobs.  Because there are jobs you don’t have to subsidize.  And there are a lot of them.  In the private sector.  And these are good jobs.  Because you don’t have to subsidize them.

Subsidizing jobs has one great drawback.  If the fiscal conditions aren’t conducive to maintain these subsidies these subsidies are often cut.  Case in point see above.

If you have to drag people kicking and screaming (i.e., with subsidies)  into the jobs of the future, then perhaps we should rethink what the jobs of the future should be.

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Destroying the Economy, Destroying Health Care – Obama Trying to Surpass Jimmy Carter in Destruction

Posted by PITHOCRATES - October 16th, 2011

We Need 14 million Jobs to Break Even Now and a 6.8% Growth Rate on 100,237 Green Jobs just ain’t Going to Do It

According to President Obama, this is our future.  Clean energy.  Renewable energy.  Green energy.  These are the high-tech, high-paying jobs of the future.  And look how they are growing (see California has 1 in 4 U.S. solar energy jobs, study says by Marc Lifsher posted 10/17/2011 on the Los Angeles Times).

One in every four solar energy jobs in America is held by a Californian, and growth in the clean-tech industry is burgeoning nationwide, a new study said.

In August, California had an estimated 25,575 solar-related jobs out of 100,237 for all 50 states, according to the National Solar Jobs Census 2011…

Nationally, employment in all parts of the solar industry, including manufacturing, installation, residential, commercial and large-scale power generation, grew 6.8% in the 12 month period ended in August.

Wow.  Imagine that.  There’s a total of 100,237 solar energy jobs in the country.  Of course, that number is not so impressive when you consider there are approximately 14 million people unemployed right now.

So these solar energy jobs represent jobs for approximately 0.716% of the unemployed.  For these clean energy jobs to be in fact our future they are going to have to do better than 6.8% growth.  Just to put these 14 million unemployed back to work they’re going to have to grow that 100,237 by 13,866.7%.  That’s a lot of growth.  And it’s never going to happen.

It’s funny how President Obama is all for a mix when it comes to deficit reduction.  Spending cuts AND tax increases.  Has to be a mix.  Because he says you just can’t cut the deficit by spending cuts alone.  Which is preposterous.  When you’re spending too much spending less ALWAYS works.  But that’s another story for another time.

Clean energy.  Renewable energy.  Green energy.  These aren’t our future.  They may be part of our future.  But they aren’t going to be THE future.  Unless you don’t care to have jobs in that future.  Which, of course, we need.  Desperately need.  So, at best, these clean jobs can only be a small part of the mix.  A very small part.  Because we need 14 million jobs to break even now.  And we’ll need more to handle normal population growth.  And a 6.8% growth on 100,237 just ain’t going to do it.

Nothing ever Good Happens to those Being Enticed by Bait (Entangling Federal Grants)

It would be hard for the Obama economic policies to be any more wrong.  But they can be.  Thanks to Obamacare.  Whose regulatory costs have frozen business growth.  And it gets worse (see Mackinac Center: No rush for legislators to create health insurance exchange by Jack McHugh posted 10/16/2011 on the Detroit Free Press).

Gov. Rick Snyder is urging lawmakers to create a state health insurance exchange, which some supporters soft-pedal as a Travelocity or Orbitz for health care. Simultaneously, the Snyder administration is pursuing strings-attached federal grants that increasingly commit the state to something very different — a full-blown exchange compliant with regulations mandated by the new federal health care law. That means the resulting entity won’t be an exchange at all, but rather the agency through which the federal Patient Protection and Affordable Care Act’s mandates, subsidies and regulations will be administered by the state…

But Heritage itself has exploded claims of kinship with Affordable Care Act exchanges. Heritage scholar Ed Haislmaier wrote recently, “Rather than serving as a mechanism for expanding health insurance choice, variety and competition … Congress has perverted the exchange concept into a bureaucratic tool for federal subsidization, standardization and micromanagement.” Haislmaier recommends that states refuse the entangling federal grants that the Snyder administration is pursuing.

Sigh.  The siren song of federal money.  Can no one resist it?

There’s another word for ‘entangling federal grants’.  Bait.  Ever have a problem with raccoons?  Cute little things.  But not in your backyard.  Because they can do quite the damage.  So you call your friendly trap and release animal control specialist.  To trap these cute little critters and release them in the country where they belong.  And do you know how they get these clever little things into these traps?  Bait.  That’s right, you trick them with something that seems really good to them.  Once they enter the trap the door closes.  And they are then at the mercy of the animal control specialist.  Much like any state that takes these federal grants that come with all those federal strings.

Nothing ever good happens to those being enticed by bait.  Some animals learn to avoid traps.  Being human, it should be easier for us to avoid these traps.  Because we can think.  And should know better.

So it’s Bad on the Jobs Front and it’s no Better on the Health Care Front

The only jobs policies we have are bad policies.  Pouring money into industries that can’t grow fast enough to reduce unemployment.  Meanwhile, we hinder job creation by throwing Obamacare at our job creators.  They have no idea what that thousand-plus-page law will cost.  So they’re doing the only thing they can.  Don’t hire.  Don’t grow.  And sit on cash.  Until the uncertainty goes away.  Or Obamacare is repealed.

So it’s bad on the jobs front.  And it’s no better on the health care front.  Obama is working stealthily to entrench this most unpopular legislation as best as he can.  Whether we want it or not.

Destroying the economy.  Destroying health care.  Looks like he really wants to replace Jimmy Carter in the history books as the worst president of all time.

 

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