Our Free Press embraced the George Washington Bridge Scandal to ignore Robert Gates’ Autobiography
“The price of liberty is eternal vigilance.” A quote attributed to Thomas Jefferson, Patrick Henry and Wendell Phillips. To name a few. John Philpot Curran may have said it first when he said, “The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt.”
This is why the Founding Fathers gave us the First Amendment. And freedom of the press. Which exercises that eternal vigilance. To safeguard democracy. By keeping government transparent. And making it difficult for government to hide things from the American people. Especially when those in power use their positions of power for self interest. Instead of the public’s interest.
So this is the free press as envisioned by the Founding Fathers. Is it still that noble institution? Well, you be the judge. Recently Robert Gates just published a tell-all memoir putting the Obama administration in a very poor light. Saying things like Vice President Joe Biden has been wrong on every important foreign policy issue. That senators Hillary Clinton and Barack Obama voted against the surge in Iraq for political reasons. What was best for them. Not their country. And that as much as Candidate Obama said Iraq was the wrong war while Afghanistan was the right war he never believed in the war in Afghanistan. He didn’t have any interest in winning. Only in getting out. Big news. But now you don’t hear anything about it because someone in Chris Christie’s administration caused gridlock on the roads leading to the George Washington Bridge.
President Obama sacrificed the Americans in Benghazi for the sake of a Campaign Message
The George Washington Bridge scandal has gripped the media. It’s all they can talk about. Unlike those ‘phony scandals’ president Obama complained about that the Republicans were creating out of nothing. Like the ATF Fast and Furious scandal. Gunwalking to put thousands of weapons on the street. So the Obama administration could pick them up after they were used in a crime and say, “See? We need to pass new gun control legislation.” In Fast and Furious that meant new controls for multiple rifle sales or long guns. As explained in Demand Letter 3. One of these guns killed a U.S. border agent. And countless people in Mexico. But that was a phony scandal. Not a real one like the George Washington Bridge scandal.
The Solyndra scandal funneled money to a maker of solar arrays that was bleeding money. To delay the bankruptcy until after the 2010 midterm elections the Obama administration promised the largest private investor—and Obama donor—to restructure the loan. To put him above the taxpayers in any bankruptcy filing. In violation of Section 1702(d)(3) of Energy Policy Act of 2005. The Obama administration did. And the taxpayers’ ate the private investor’s loss. But that was a phony scandal. Not a real one like the George Washington Bridge scandal.
With the death of Osama bin Laden President Obama said al Qaeda was reeling. On the ropes. On the path to being no more. And he was going to ride this foreign policy achievement into the 2012 presidential election. Which is why when Ambassador Stevens requested additional security at the Benghazi mission the Obama administration denied his request. For how would it look if they were beefing up security in the country they just liberated when the threat from al Qaeda was receding? The problem was that al Qaeda was resurgent in Libya. It was so dangerous the British pulled out completely after an attack on their people. But President Obama sacrificed the Americans in Benghazi for the sake of a campaign message. And after four Americans died President Obama, Hillary Clinton and Susan Rice blamed their deaths on a spontaneous protest that turned deadly due to an obscure anti-Muslim video no one had heard of in Benghazi. A spontaneous protest where people had rocket propelled grenades. And mortars that were pre-sighted on their targets. Things few people normally carry on them. The administration lied and they stonewalled Congress over Benghazi. Hiding the truth. Of how politics trumped the lives of four Americans. But that was a phony scandal. Not a real one like the George Washington Bridge scandal.
Our Free Press is NOT exercising that Eternal Vigilance that safeguards Democracy
CBS correspondent Sharyl Attkisson was one of the few in the media to investigate the Obama administration. Breaking stories on Fast and Furious. And Benghazi. Someone hacked into her computer in late 2012. Someone sophisticated who was searching for something on her computer. And knew how to cover their electronic tracks. Well, almost. The Obama Justice Department denied any involvement. But they did spy on reporters at the Associated Press. And Fox News journalist James Rosen. Attorney General Eric Holder even personally signed an affidavit naming him a potential criminal for doing his job. And then lied under oath when asked in Congress. Saying he didn’t get involved with the prosecution of journalists for doing their jobs. Even though he had. But these were phony scandals. Not a real one like the George Washington Bridge scandal.
And then there was the IRS scandal. Which targeted enemies of the Obama administration. Holding up tax-exempt status for Tea Party groups. Hindering their ability to fund raise and exercise their free speech during the 2012 presidential election. And conservative donors faced punitive IRS audits. Dissuading others from donating. Further hindering fund raising and free speech. The Obama administration said that those responsible were low-office holders in the Cincinnati office. But when the head of the tax exempt division, Lois Lerner, appeared before Congress she pleaded the Fifth Amendment. For the paper trail led to her. And possibly into the White House. For she was an active Democrat supporter. And wasn’t above breaking the law to help her party. Such as violating Section 6103 of the Internal Revenue Code. Forbidding her to disclose income tax return information to anyone. Even another governmental agency. Which she did. And now we learn that the Justice Department lead investigator for the IRS scandal is a Democrat donor. But the IRS scandal was a phony scandal. Not a real one like the George Washington Bridge scandal.
Of all of these scandals which one are you most familiar with? Probably the George Washington Bridge scandal. Because our free press is NOT exercising that eternal vigilance that safeguards democracy. They have become an extension of the Democrat Party. Putting politics above the wellbeing of the people. Helping the Democrats to advance their agenda. While hiding their scandals. To destroy what the Founding Fathers gave us. Liberty. And expand one-party rule. Putting us on the road to servitude. Just as John Philpot Curran warned.
Tags: Al Qaeda, Ambassador Stevens, Associated Press, Barack Obama, Benghazi, democracy, Democrat Party, eternal vigilance, Fast and Furious, Founding Fathers, free press, free speech, George Washington Bridge, Hillary Clinton, IRS, James Rosen, liberty, Obama, Obama administration, President Obama, Robert Gates, safeguard democracy, scandal, servitude, Sharyl Attkisson, Solyndra, The price of liberty is eternal vigilance
Week in Review
While public education teaches kids the fear of global warming, the evils of capitalism and the goodness of government Singapore is having their schools teach business and entrepreneurial skills. The U.S. is suffering through the worst economic recovery since the Great Depression. While Singapore is doing quite well. And should continue to do well because they don’t teach kids the evils of capitalism in school (see Singapore Hunts for New Zuckerberg With Stanford-Style Dorm by Sharon Chen posted 1/25/13 on Bloomberg).
Singapore became Southeast Asia’s only advanced economy by moving up the technology ladder, turning a trading port into the region’s biggest banking center and a manufacturer of electronics, petrochemicals and pharmaceuticals. Now, the nation is looking to gain a bigger share of a software industry that raised $28 billion in initial share sales last year.
N-House, which opened in August 2011, is one strand of a five-year plan by the government that includes offering new technology companies grants of as much as S$500,000, supporting venture capital funds, and encouraging high schools to teach business and entrepreneurial skills, in an effort to groom the next Mark Zuckerberg, co-founder of Facebook Inc…
The island of 5 million people, ranked the easiest place to do business for seven straight years by the World Bank, is the second-easiest place in Asia after Hong Kong for entrepreneurs to gain access to capital, according to a study by the Milken Institute published in 2010.
Singapore is a success story because it’s an easy place to do business in. Businesses like that. So businesses do business in Singapore. This is a lesson the United States could learn. Making it easy for businesses to do business. Detroit, the Motor City, birthplace of the automated assembly line, is a horrible place to do business. Being the home of the Big Three (General Motors, Ford and Chrysler) you’d think they’d have an edge on manufacturing automobiles. Yet not one new auto manufacturer has chosen Detroit. Honda, Toyota, Nissan, Mercedes, BMW, Volkswagen, Hyundai, and Kia all built assembly plants in the United States. But not one of them picked Detroit. Because Detroit, the Motor City, is not an easy city to make automobiles in.
So Singapore knows a thing or two about how to do business. Which, for the most part, is just leaving business the hell alone. For a business is a lot like a dog having puppies. They can do it without any help. In fact, trying to help can actually do more harm to a business than good. For when the government steps in and provides money the private sector won’t supply you can pretty much guarantee that the government is backing a bad investment. Think Solyndra in the U.S. And all those jobs of the future we were supposed to get with all those investments into green energy. President Obama begins his second term with the worst recovery since the Great Depression. Despite all that spending to invest into the jobs of the future. Here’s a lesson Singapore can learn from the U.S. Creating a business-friendly environment is good. But trying to influence things in that environment, well, that rarely ends well. Again, think Solyndra.
“Singapore has done the best job of any government to spawn an entrepreneurial ecosystem,” said Ressi, who travels to the city about three times a year to meet with government officials. “However, I think they’ve gone a little bit too far in making it easy. If they can’t actually raise money from people privately, they probably aren’t worthy of being in existence.”
There are venture capitalists out there with money burning holes in their pocket. They want to invest it. They want to groom the next Mark Zuckerberg. And if these greedy bastards are NOT willing to bet their money on someone there’s a reason for it. These people are in the business of finding entrepreneurs to back and groom. And if they don’t invest in an entrepreneur they must have determined that the entrepreneur just doesn’t have what it takes. So they keep looking for one who does have what it takes. And if that person is out there the free market will find that entrepreneur. While governments pour millions into other Solyndras.
Tags: Asia, Business, capital, capitalism, Detroit, entrepreneurial skills, Hong Kong, Mark Zuckerberg, Motor City, Singapore, software industry, Solyndra, technology companies, venture capital, Zuckerberg
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?
Tags: China, green initiative, green investment, jobs of the future, save the planet, solar panel, solar power, Solyndra
It was Morning in America again because Ronald Reagan reduced the Misery Index by 42.7%
Ronald Reagan was a supply-sider when it came to economics. Of the Austrian school variety. In fact, one of his campaign promises was to bring back the gold standard. A very Austrian thing. The Austrian school predates the Keynesian school. When the focus was on the stages of production. Not on consumer spending. These policies served the nation well. They (and the gold standard) exploded American ingenuity and economic activity in the 19th century. Making the U.S. the number one economy in the world. Surpassing the nation that held the top spot for a century or more. Perhaps the last great empire. Great Britain.
Following the stagflation and misery (misery index = inflation rate + unemployment rate) of the Seventies Reagan promised to cut taxes and governmental regulations. To make it easier for businesses to create economic activity. Easier to create jobs. And he did. Among other things. Such as rebuilding the military that the Carter administration severely weakened during the Seventies (it was so bad that the Soviet Union put together a first-strike nuclear option. Because they thought they could win a nuclear war with Jimmy Carter as president). During the 1980 campaign Reagan asked the people if they were better off after 4 years of Jimmy Carter. The answer was no. Four years later, though, they were. Here’s why. (Note: We used so many sources that we didn’t source them here to save space. The inflation rate and unemployment rates are for August of the respective years. The dollar amounts are annual totals with some estimates added to take them to the end of 2012. The debt and GDP are not adjusted for inflation as they are only 4 years apart. Gas prices and median income are adjusted for inflation. There may be some error in these numbers. But overall we believe the information they provide fairly states the economic results of the presidents’ policies. (This note applies to both tables.))
Reagan entered office with some horrendous numbers. The Carter administration was printing so much money that inflation was at 12.9% in 1980. Added to the unemployment rate that brought the misery index to 20.6%. A huge number. To be fair Carter tapped Paul Volcker to be Fed Chairman and he began the policy of reigning in inflation. But Carter did this far too late. The only way to cure high inflation is with a nasty recession. Which Volcker gave Ronald Reagan. But it worked. By 1984 inflation fell 8.8 points or 66.7%. Even with this nasty recession the unemployment rate fell 0.2 points or 2.6%. Which shaved 8.8 points off of the miserable index. Or reducing it by 42.7%. This is why it was morning in America again. The Left to this day say “yeah, but at what cost?” and point to the record deficits of the Reagan administration. Saying this is the price of tax cuts. But they’re wrong. Yes, the debt went up. But it wasn’t because of the tax cuts. Because those tax cuts stimulated economic activity. GDP rose 12.6% by 1984. And tax receipts even increased with those lower tax rates. Because of the higher GDP. By 1984 Reagan’s policies increased tax revenue by 28.9%. And on a personal level the median income even increased 0.4%. And this following a very bad recession a few years earlier. Finally, gas prices fell 22.2%. And the way Americans feel about rising gas prices this was truly morning in America again.
To Top off the General Malaise of the Obama Economy Gas Prices Soared while Median Income Fell
Barack Obama is a Keynesian through and through. A believer in pure demand-side economics. To that end his administration focused everything on increasing consumer spending. Tax and spend policies. Income redistribution. Deficit spending. Anything to make America ‘more fair.’ Raising taxes on the rich so the poor can spend more money. With the Keynesian multiplier they believe this is the path to economic prosperity. Just doing everything within their power to put more spending money into the hands of poorer people. Increasing government regulation, fees and fines as well as taxes to bring more money in Washington so they can redistribute it. Or spend it directly on things like roads and bridges. Or solar power companies. Even paying people to dig a hole and fill it back in. Because these people will take their wages and spend them. Creating economic activity.
So President Obama put Keynesian economics to work. Beginning with a $787 billion stimulus bill. Investments into green energy and the jobs of the future. Like a Department of Energy loan of $528 million to the now bankrupt Solyndra. Which was only one of many loans. The bailout of the UAW pension fund (aka the auto bailout). The government poured $528 million into GM. And President Obama touted the Chevy Volt, boasting that GM would sell a million each year bringing his green goals to fruition (GM is struggling to sell 10,000 Volts a year). A lot of malinvestment as the Austrians would say. But a Keynesian sees any government expenditure as a good investment. Because if all the people who receive this government money spends at least 80% of it (while saving only 20%) the Keynesian multiplier will be five. Meaning that the net gain in GDP will be five times whatever the government spends. So how has that worked for the president? Well, here are his numbers:
The government spent so much money that the federal debt increased by $5.4 trillion. Trillion with a ‘T’. That’s over a trillion dollar deficit each of the president’s 4 years in office. And his last year isn’t even a whole year. Unprecedented until President Obama. And what did all of that federal spending get us after about 4 years? An unemployment rate 2.1 points higher. Or 33.9% higher than when he took office. Inflation fell but it did nothing to spur GDP growth which grew at an anemic 3.1%. Which is less than a percentage point a year. Which is why the Great Recession lingers still. Meanwhile the Chinese are having a bad year with a GDP growth of 7.8%. So all of that spending didn’t help at all. In fact, it made things worse. The economic activity is so bad that even tax receipts fell 2.2% after four years of President Obama. Which has many in his party saying that we need to raise tax rates. Contrary to what Ronald Reagan did. And to top off the general malaise of the Obama economy gas prices soared 107.6% under his presidency. While the median income fell 7.3%. One has to look hard to find any positive news from the Obama economy. And there is one. Inflation did fall. But even that really isn’t good. As it may be an indicator of a looming deflationary spiral. Giving America a lost decade. Like Japan’s Lost Decade.
The Flaw in Keynesian Thinking is that it Ignores the Layers of Economic Activity above the Consumer Level
So there you have an Austrian and a Keynesian. Both entered office during bad economic times. Although things were much worse when President Reagan took office than when President Obama took office. The misery index was 20.6% in 1980. It was only 11.6% in 2008. About half as bad for President Obama than it was for President Reagan. It came down 16.4% under Obama. But it came down 42.7% under Reagan. Which is why it isn’t morning in America under President Obama. Reagan increased tax receipts by 28.9 % by the end of his first term. They fell 2.2% under Obama. Adjusted for inflation Reagan averaged annual deficits of $348 billion. That’s billion with a ‘B’. Obama averaged $1.324 trillion. That’s trillion with a ‘T’. Or 280% higher than Ronald Reagan. Gas prices fell 22.2% under Reagan. They rose 107.6% under Obama. Median income barely rose 0.4% under Reagan. But it fell 7.3% under Obama. In short there is nothing in the Obama economic record that is better than the Reagan economic record.
And why is this? Because Obama’s policies are Keynesian. While Reagan’s policies were Austrian. Reagan focused on the stages of production to improve economic activity. Cutting taxes. Reducing regulatory compliance costs. Creating a business-friendly environment. A system that rewarded success. Whereas Obama focused on consumer spending. Tax, borrow and print (i.e., quantitative easing). So the government could spend. Putting more money into the pockets of consumers. Which stimulated only the last stage in the stages of production. So while some consumers had more money it was still a business-unfriendly environment. Where tax, regulatory and environmental policies (as well as the uncertainty of Obamacare) hindered business growth everywhere upstream from retail sales. From raw material extraction to industrial processing to construction to manufactured goods. Where these Obama’s policies punish success. For the bigger you get the more you pay in taxes and regulatory compliance costs.
The greatest flaw with Keynesian economics is that it looks at aggregate supply and demand. With a focus on consumer spending. And ignores the layers of economic activity that happens before the consumer level. The Austrian school understands this. As did the British when she became one of the greatest empires of all times. As did America during the 19th century. No nation became an economic superpower using Keynesian economics. Japan grew to be a great economic power during the Fifties and Sixties. Then went Keynesian in the Eighties and suffered their Lost Decade in the Nineties. Some Keynesians like to point to China as an example of the success of Keynesian economics. But they still have a fairly restrictive police state. And their economic policies are hauntingly similar to Japan’s. Some have even posited that it is very possible that China could suffer the same fate as Japan. And suffer a deflationary spiral. Resulting in a lost decade for China. Which is very plausible considering the Chinese practice state-capitalism where the state partners closely with businesses. Which is what the Japanese did in the Eighties. And it hasn’t been great for them since. As it hasn’t been great in America economically since the current administration.
Tags: Austrian school, Barack Obama, better off after 4 years, Carter, Chevy Volt, China, consumer spending, debt, deficits, deflationary spiral, economic activity, gas prices, GDP, GM, Great Recession, inflation, Japan, Jimmy Carter, Keynesian, Keynesian economics, Keynesian multiplier, lost decade, malaise, median income, misery index, Morning in America, multiplier, Obama, Reagan, recession, Ronald Reagan, Solyndra, stages of production, stagflation, Tax and spend, tax cuts, tax rates, tax receipts, tax revenue, unemployment, Volcker
Week in Review
Thomas Jefferson did not want the federal government to have money. This is where he parted ways with Alexander Hamilton. Hamilton wanted to give the federal government money to spend to jumpstart American industry. To make it an empire to rival the British Empire. But Jefferson looked at world history and saw nothing but examples of corruption whenever money and government intertwined. This is one reason why Washington D.C. is where it is. Because the big financiers were in New York City. Which in those days was on the other side of the world from Washington D.C. Something he hoped would keep money out of the hands of the federal government. For awhile at least.
Fast forward to today. Where we have a bloated federal government the size of which would have sickened Jefferson. And seeing the amount of money it spent would have killed him. The Department of Energy guaranteeing loans? And a trillion dollar stimulus bill? Had he lived he would have suspected some heinous Hamiltonian plot. For neither would have happened in a Jefferson presidency. For he knew it would only lead to corruption. Like it has (see Solyndra, Cronyism, and Double-Dipping on the Taxpayers’ Dime by Nancy Pfotenhauer posted 7/23/2012 on U.S. News & World Report).
Solyndra became the poster child of spectacularly poor political and policy judgment when it filed for bankruptcy, laid off a thousand employees, and left taxpayers holding the bag on $535 million in loan guarantees. In testimony Thursday before the House Committee on Oversight and Government Reform, the other shoe dropped. Apparently, many of the companies that received loans under the auspices of the same infamous program were well-established entities that essentially double-dipped to grab as many taxpayer dollars as possible…
According to Mercatus scholar Veronique de Rugy’s testimony, approximately 90 percent of the [Department of Energy’s Section] 1705 program loans went to subsidize power plants often backed by big companies with extensive resources…
Now comes the double dip: Companies such as NRG Energy Inc.—closely linked to Senate Majority Leader Harry Reid—not only received $3.8 billion 1705 loans (almost a quarter of the total), but three subentities of the same company received a total of at least 39 grants under the stimulus law…
While happily House Republicans are moving to end the Energy Department’s loan guarantee program, the Export-Import Bank, reauthorized in May in a rush of bipartisan irresponsibility, was part of the double-dipping in a particularly distressing manner. According to de Rugy, First Solar raked in $646 million in 1705 loan guarantees through partner Exelon and landed another $547.7 million of the same from the Ex-IM bank…
…Some of the Ex-Im money went to a Canadian company named St. Clair Solar, which is a wholly owned subsidiary of First Solar. St. Clair Solar received a total of $192.9 million broken into two loans to buy solar panels from First Solar. In other words, the company received a loan to buy solar panels from itself. (emphasis added)
Loaning money to a company so it can buy from itself? That just isn’t right. And $3.8 billion going to a crony of Majority Leader Harry Reid? No wonder the Democrats are all for green energy initiatives and stimulus spending. They get to take care of their friends. Get some of that money in return. And live very well courtesy of the taxpayers who they are stealing from. Of course they will deny this. Saying people (i.e., rich people like them) will eventually spend this money in the economy. That when they and their friends buy expensive cars, private planes, large houses, expensive wines, vacation junkets, etc., they are creating jobs in the economy. Generating economic activity. Which is what a stimulus is supposed to do. And they will say this with righteous indignation. But what they won’t say is how much middle class economic activity their high taxes kill in the private sector. And how much their deficit spending adds to the national debt. Which has already lowered America’s debt rating once. Which is just a sign of the devastation their reckless spending will cause us. And our children.
We should follow Jefferson’s advice. And limit the amount of money government can spend. Defense spending? Yes. Intervening into the private economy? No. Because loan guarantees and stimulus spending don’t help anyone but those spending the money. Our politicians. And their cronies. For Jefferson was right. Nothing but corruption comes from intertwining money and government.
Tags: 1705 loans, 1705 program loans, corruption, Democrat, economic activity, Energy Department, federal government, green energy, Hamilton, Harry Reid, Jefferson, jobs, loan guarantees, money and government, Senate Majority Leader Harry Reid, Solyndra, stimulus spending, taxpayers, Thomas Jefferson, Washington D.C.
Week in Review
If the Energy Department was a private corporation it would be the ideal bailout target for a company like Bain Capital. Inept management, poor investments and bad strategic policy. It has everything. So much so that it would be easier for the bailout team to ask them at Energy what actually worked. It would keep the initial meeting much shorter (see Difference Engine: To and from the grid posted 6/1/2012 on The Economist).
Since then, interest rates have fallen, while the price of solar panels has tumbled even more so—thanks to Chinese overcapacity. Meanwhile, electricity rates (at least those in southern California) have risen noticeably. Your correspondent reckons photovoltaic solar systems now cost half as much as they did four years ago.
Two things could make or break America’s affair with solar power. One concerns the ushered in by the economic stimulus bill of 2009. Many of those temporary tax credits are now coming to an end. If nothing is done to extend them, the incentives will fall from a peak of over $44 billion in 2009 to $16 billion this year and $11 billion by 2014. That could bring the solar-installation business to a screeching halt and wipe out tens of thousands of green jobs. The industry’s future depends largely on the outcome of the November election….
The irony is that those who invest their own money to generate clean electricity from solar panels on their rooftops are likely to be the last to benefit from it environmentally. Nowadays, most people work outside the home during the day and consume the bulk of their residential electricity in the evening and during the night. In California, that is when the state—which meets only 70% of its electricity requirement from its own resources—relies heavily on cheap electricity imported from dirty coal-fired power stations elsewhere in the country. This situation will only be exacerbated if, as expected, plug-in battery vehicles, needing to be recharged overnight, account for an increasing share of the Californian fleet.
That aside, all your correspondent now has to worry about is whether the 31% anti-dumping tariff recently imposed on Chinese solar-panel makers really does deter them. Having seen such trade spats play out many times before, he suspects the tariffs will only spur Chinese firms to acquire the few remaining American solar-panel makers so that they can carry on manufacturing in low-cost Wuxi or Shanghai and do their final assembly in middle America (presumably with local subsidies to boot).
So solar panels have never been cheaper thanks to the Chinese. Which is good. These lower prices will encourage people to save the planet by installing solar panels onto their roofs. Unless the government raises these low prices with a 31% anti-dumping tariff. Hmm. Looks like you have to choose between saving the planet. And providing green jobs. For as this anti-dumping tariff clearly shows you can’t have both.
And because jobs are more important than the environment the government is subsidizing the clean energy industry. Let’s crunch some numbers. They say we could lose “tens of thousands of green jobs.” So let’s assume there were 80,000 jobs created in the first year. And they declined by 10,000 every year to reflect with the growing number of bankruptcies in the green energy sector. Dividing the incentive by the cost in the first year you get a cost of about $550,000 for each job created. If do the same for the last year you also get a cost of about $550,000 for each job created. That’s a lot of money to pay someone. And I’m guessing that the Chinese aren’t paying their employees a half million each in wages and benefits. Not when they’re making these solar panels so cheap that the U.S. has to slap an anti-dumping tariff on them.
Of course these numbers don’t include the $500 billion the government blew on Solyndra. Or the other Solyndras out there. Which when you factor all of these in these green jobs are costing the taxpayer probably in excess of a million dollars each. For what? To pay someone a $50,000 wage on an assembly line so he or she can take these earnings and stimulate the economy? Talk about a negative return on investment. And the president is attacking Mitt Romney’s Bain Capital past? If Bain Capital took over the United States government to turn it around to get a sensible return on tax dollar investments guess who would be the first fired from his job? The incompetent chief executive that spent a million dollars plus to get $50,000 worth of stimulus.
And the kicker is that none of this matters. When solar power is available people are at work. When people are home cranking up their air conditioners and plugging in their electric cars for the night the sun is down and coal-fired power plants are meeting this peak demand. So we get nothing. No jobs. And we don’t even save the planet. We just get higher taxes and more debt. A pretty crappy deal if you ask me. We have coal. We should just use coal. And not demonize it. We’d arrive at the same outcome. Only with fewer taxes and less debt. And cheaper electricity. Because we’d be bringing more coal-fired plants on line. Now that is a smart turnaround plan. The kind of turnaround that could end up in the win column at Bain Capital.
Tags: anti-dumping tariff, Bain Capital, California, cheap electricity, Chinese, clean energy, Coal, coal-fired power stations, electricity, Energy Department, environment, green jobs, incentives, jobs, save the planet, solar panels, Solyndra, tariff, tax credit
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.
Tags: Campaign contributions, create jobs, election, evil rich, evil rich people, government subsidies, inside information, invest, investor, Ivy League graduates, jobs, jobs of the future, market, money, politicians, private investors, profit, rich, rich investors, rich people, risk, smart jobs, Solyndra, subsidies, tax money, taxes, taxpayer money, vested interest, wealth, wise investments
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.
Tags: American People, Chinese, fossil fuels, jobs, jobs of the future, jobs of the past, manufacturing, silicon, solar panels, Solyndra, wind turbines
Week in Review
Big Government has failed. So to fix Big Government those in government say the solution is to make government bigger (see Energy Loan Oversight Is Needed, Audit Finds by JOHN M. BRODER posted 2/10/2012 on The New York Times).
The Department of Energy’s loan guarantee program for alternative energy projects, which produced the ill-fated loan to the solar panel maker Solyndra, needs more rigorous financial oversight and stricter performance standards for recipients to reduce the chance of future defaults, according to an audit conducted by the White House and released Friday.
So the way to fix this bureaucratic mess is to add more bureaucracy. Grow the size of government. Spend more taxpayer money to provide more oversight on worthless taxpayer-financed investments. Interesting. Only in government. Where they fix failures by doing even more of the same.
But it doesn’t end with Solyndra.
Solyndra and Beacon are not the only loan recipients to find themselves in trouble. Fisker Automotive, an electric car maker in Irvine, Calif., has missed some milestones that were written into its loan agreement, so the Energy Department has cut off credit. As a result, Fisker has stopped work on the conversion of an old General Motors factory in Wilmington, Del., that is supposed to produce an electric sedan, and laid off more than 60 employees and contractors.
Spokesmen for Fisker and the Energy Department both said that the terms of the loan were confidential and they would not say precisely what milestones were missed, but Roger Ormisher, a spokesman for the company, said, “We admitted very openly we were late to market with the Karma,” the company’s $102,000 sporty sedan. Fifteen hundred have been built and “a few hundred” sold, he said. Progress was slowed by a safety recall.
It wasn’t just an electric sedan. But a sporty sedan. And a fairly luxurious one at that coming in at $102,000. But will people buy it? Probably not. You see, the biggest problem electric cars have that prevents the masses from buying them is range. They just don’t go far on a single charge. Especially if you use the headlights or heater. And you can’t recharge them quickly. Which means if you run out of charge you can’t have a friend drive out a gas can full of charge to pour into the tank. You run out of charge on the road and you’re paying for a tow home.
And making any car ‘sporty’ just compounds the problem. Because if you’re accelerating quickly you drain the battery faster. And this is the car the government is subsidizing. Of course this is going to be another Solyndra. No one’s going to buy this car. Unless the government subsidizes the bejesus out of it to bring that $102,000 down to something closer to $15,000. Where people may put up with the inconvenience of driving nothing but one short trip a day. At least, until they get their electric bill. Because electricity isn’t free. And if you’re charging up a battery than can make are car zoom sportily along, it’s going to have some big batteries. And long charge times. Making big electric bills.
If they are going to add oversight they need to add it at the level where they decide to back these losers. Before the money goes out. Or, better yet, they should just stop investing in these losers. If a company can’t get investment capital there’s a reason. They don’t have a good idea. At least, not one anyone will risk their own money on.
Tags: battery, Beacon, Big Government, bureaucracy, charge, electric cars, electric sedan, Energy Department, Fisker, oversight, range, Solyndra, taxpayer
Week in Review
The cheaper solar power equipment is the more people will buy it and hire people to install it. Because labor is labor. There’s nothing you can do about that. But manufacturing can reach economies of scale that can reduce manufacturing costs. And selling prices. Much like everything else in the world. The first televisions were expensive. Now they’re cheap. The first VCRs were expensive. Then they got cheap. The first personal computers were expensive. Then they got cheap.
So all that we need is for someone to make solar power equipment cheap by employing economies of scale and we can ‘save the planet’ by replacing fossil-fueled generated power with clean solar-generated power. And that’s the whole point of clean solar power, isn’t it? Saving the planet? Well, as it turns out, no (see The Coming U.S.-China Solar War by Bryan Walsh posted 1/31/2012 on Time).
Demand for solar power rose eightfold between 2006 and 2011 — from 200 MW to 1,600 MW…
Despite those rosy numbers, many U.S. solar companies — especially those that manufacture solar panels and modules — are struggling to survive. Most notably, the solar start-up Solyndra went under in 2011, taking with it over $500 million in government loan guarantees. The Bloomberg Large Solar Energy Index of 17 top solar companies lost more than two-thirds of its value in 2011.
That’s because solar power is getting much cheaper — prices for modules have dropped 40% over the past five years. According to some U.S. solar-panel manufacturers, that drop in price is due largely to low-cost imports from Chinese panelmakers. It’s not that their manufacturing methods are necessarily better than ours. It’s that government support from Beijing and low-cost labor make it easy for China to undercut its U.S. competitors. The result is more and cheaper solar power for Americans — but perhaps less market share for U.S. manufacturers.
You’re never going to compete against Chinese manufacturing and win. And it’s not because of government support. (Or their currency manipulation.) Because the U.S. is providing government support, too. Case in point, Solyndra. It’s the cheap labor. In a country that builds dormitories in factories. Where workers work, eat and sleep. And like it. Because these are the good jobs. Unlike being a starving peasant farmer. Also, China doesn’t allow unions. Or complaining or disobedience in the workplace. Only when U.S. workers flood factories under similar conditions will the U.S. manufacturing ever hope to compete against the Chinese.
Of course, the U.S. could make this cheap solar equipment (that can save the planet) less cheap by slapping tariffs on it. Making people spend more to buy this solar equipment. So much more that the expensive American manufactured equipment is no longer more costly than the once cheaper Chinese imports. Which, of course, would greatly discourage people from buying it and hiring people to install it. Unless they receive massive government subsidies to offset the added tax of the tariffs.
Higher solar equipment costs for installers? Higher costs for solar power installations for people who want to ‘save the planet’? Higher taxes for everyone to pay for ever more government subsidies and incentives to save a few manufacturing jobs? All while discouraging people from ‘saving the planet’? Seems like some real silly policy. And one that no one really thought through before getting us on this silly road.
If it’s not about saving the planet then the heck with solar power I say. Let’s just keep using fossil fuels. From American sources. Let’s create good coal jobs. Good oil jobs. And good natural gas jobs. For if we mine it or pump it up in America, all of the jobs will be American jobs. It doesn’t require massive government subsidies or incentives. And there will be no more Solyndras. And the Chinese will be left with a surplus of solar panels that they will have to discount to unload. Which we could then add to the electrical grid to offset peak demand on those hot summer days. When the sun is scorching the land beneath it. Now that would be a practical use. It would help conserve our precious fossil fuels. And it will also help to reduce emissions during peak demand. Which was the whole point of solar power in the first place. Only this way it wouldn’t require massive government subsidies and incentives. Or the massive job-killing taxes to pay for those subsidies and incentives.
Tags: cheap labor, China, Chinese, Chinese manufacturing, economies of scale, fossil fuels, government subsidies, government support, incentives, jobs, manufacturing, save the planet, solar panel, solar panel manufacturing, solar power, solar power equipment, Solyndra, subsidies, tariffs, taxes, U.S. manufacturing
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