Filed under: Domestic Policy, Environment, Global Warming, Energy, Democrat Corruption, National Security, Junk Science | Tags: Crony Capitalism, Offshore-Wind Market?, Affordable Energy
The Obama administration Department of the Interior has long busied themselves with preparations for the country’s first-ever federal offshore-wind lease sales, and the administration plans to start with a plot off the Atlantic coast that they hope will prove what a potential offshore-wind market will look like. Will there be any interest? Depends on how much subsidy Interior is promising.
“Trust us,” the wind industry intoned, “the enormous public investment is just seed-funding. It will be well worth it if costs fall in the cause of saving Mother Gaia.”
Energy insiders never bought it. The Victorians replaced windmills with steam driven machinery because they weren’t cost-efficient enough. But it’s easy to understand why Joe Average and populist politicos bought it. After all, aren’t most of us suckers for fictional romantic notions of wafting windmills able to harness the wind and create ‘free energy?’
Except that’s not how it worked out in the real world:
Sally Jewell, the new Secretary of the Interior, and former head of consumer co-op REI, said “If there is good interest in this one, then I think you will have this happening on a consistent basis.” She said Interior considered many factors, including which areas would yield the highest potential for wind power while avoiding bird migration patterns and shipping lanes. Timing for developing a commercial offshore wind industry, she added, is up to the private sector. “The market will dictate, but we certainly don’t want to get in the way.”
The Obama administration is still trying to save the earth from global warming, though even the IPCC is admitting that there hasn’t been any warming in 15 years, even while CO2 continues to increase (and green the world). The president has shown no signs of approving the Keystone XL. The administration ignores the fact that wind farms are killing thousands of eagles, bats and other birds, and in spite of the fact that eagles are a federally protected species and it is a crime to kill one. Most European countries are recognizing that their huge investment in wind energy has been a flop, and are trying to reconsider. In the meantime, they are buying wood to fuel their power stations — that they get from American forests. Go figure.
The Sierra Club has long since changed from an environmental club that wanted to protect the Sierra mountains, into a radical environmental group. They have just decided to go whole “Deep Ecology,” and oppose any form of energy other than wind and solar. Even hydro is a problem for them because they’d prefer to tear down dams. This is all quite precious and sensitive, but would leave Americans freezing to death in a cooling climate. We can adapt to slight rises in heat, but cold kills. Wind and solar just don’t produce enough energy to even begin to power our country. It simply does not and cannot work.
Top Swedish climate scientist Dr. Lennart Bengstrom wrote: Warming is not noticeable —the warming we have had in the last 100 years is so small, if we didn’t have climate scientists to measure it, we would not have noticed. Sea level has risen fairly evenly for 100 years by 2 -3 mm per year. The pitch has not accelerated.
So there you have it. This president will continue to push more money into wind and solar, probably directed to his cronies, and continue to leave fossil fuels out of his “all of the above” energy plan, though he is happy to take credit for the rise in our natural gas and oil production on private lands that he had nothing whatsoever to do with.
Filed under: Capitalism, Democrat Corruption, Economy, Election 2012, Health Care, Law, Politics, Taxes | Tags: Crony Capitalism, Electronic Medical Records, No Cost-Savings Less Accuracy
I had a routine Doctor’s appointment his week. My doctor had left her old group and is now with a new group. Same town, same hospital. I told her that she looked a lot happier. She agreed that she was. She said they were shortly going to digitize all their records as required by ObamaCare. She added that it was just a mess. There is so much opportunity for error. She said that some of the records she receives, she can hardly read. Having accurate records is essential.
Buried in the stimulus law of 2009, was an electronic-medical-records “incentive” program.Michelle Malkin reports that :
Oversight is lax. Cronyism is rife. The job-killing and privacy-undermining consequences have only just begun. The program was originally sold as a cost-saving measure. In theory, modernizing record-collection is a good idea, and many private health-care provides have already made the change. But as with many government “incentive” programs, the EMR bribe is a tax-subsidized, one-size-fits-all mandate. … Penalties kick in for any provider that hasn’t switched over by 2014.
…$4 billion has already gone out to 82,535 professionals and 1,474 hospitals and a total of $6 billion will be doled out by 2016. But the feds’ reckless profligacy, neglect and favoritism have done more harm than good.
A recent report by the HHS Inspector General said essentially that no one is actually checking to see if the transition from paper to electronic is improving patient outcomes or health services. The claim that the EMR conversion would reduce paperwork was based on hope rather than evidence, and many doctors say that it is actually doubling the amount of paperwork in their practices. Malkin again:
Billionaire Judith Faulkner, Obama’s medical information czar and a major Democratic contributor, just happens to be the founder and CEO of Epic Systems — a medical-software company that stores nearly 40 percent of the U.S. population’s health data. Another billion-dollar patient-record database grant program has doled out money to the University of Chicago Medical Center (where first lady Michelle Obama and senior adviser Valerie Jarrett both served in high-paid positions).
It seems the cost-savings predictions were grossly overstated. Epic Systems, Faulkner’s company is famed for its lack of interoperability. antiquated, hard-drive dependent software firms that refuse to share data with doctors or hospitals using alternate platforms. And what is a company like Faulkner’s doing with this enhance power to consolidate and control American’s private health information. Epic and other large firms spent hundreds of thousands lobbying for the Obama EMR giveaway. It seems not to be a coincidence that Epic’s sales have been skyrocketing in recent years, double what they were four years ago. Obama named billionaire Democratic donor Faulkner as the only industry representative on the federal panel overseeing the EMR $19 billion “incentives” program from which her company benefits. Crony-capitalism indeed.
Now the person who supervised the IRS political pursuit of anyone who might potentially donate to the election campaign of the President’s opponent has been moved from that section to being in charge of the IRS grab for every American citizen’s medical records. This is unprecedented and disturbing. If the IRS is an agency that cannot be trusted with our private financial information, uses their power to force you to reveal information to which they have no legal or ethical right, then we are all expected to hand over all our private medical history and current treatment for whatever they want to use it for. Are you going to go for that?
Filed under: Capitalism, Democrat Corruption, Domestic Policy, Economy, Health Care, Law, Politics | Tags: Crony Capitalism, Freelancers Insurance Company, Sara Horowitz
This is an odd story. A health insurance company headed by an old friend from the days when President Obama was an Illinois state senator got a $340 million federal loan to establish Obamacare co-ops in New York, New Jersey and Oregon is spite of having a chronic record of consumer and regulatory complaints.
The New York-based Freelancers Insurance Company has been rated as the “worst” insurer for two straight years by state regulators, according to Richard Pollock, of the Washington Examiner’s Watchdog Team. Data compiled by a national insurance association show an unusually high rate of consumer complaints.
The firm was founded by Sara Horowitz in 2009, who worked with Obama when he was in the Illinois state senate to launch Demos, a left-wing New York think tank funded in part by George Soros. The website of Demos described Horowitz and Obama as members of the founding group in 1999. Sometime between that date and November 6, 2011, reference to Obama was deleted.
Before incorporating FIC, Horowitz had established the Freelancers Union, a nonprofit organization that describes itself as offering “health insurance and other benefits, plus advocacy, solidarity, and resources for freelancers and independent workers.”
In 2012, Horowitz’s FIC won the largest single award under an obscure Obamacare provision that allocates $2 billion to establish 24 co-ops to compete against private insurers and state health insurance exchanges. Co-ops are collectively owned organizations that produce goods or services for the benefit of members instead of for profit.
The funds are awarded as tax-free loans by the U.S. Department of Health and Human Services’ Center for Consumer Insurance Information and Oversight.
The House Oversight and Government Reform Committee has opened an inquiry regarding FIC’s eligibility for the loans. The New York State Insurance Dept. ranked FIC last among commercial insurers with the most complaints , and 49th out of 50 among all of the stat’s insurance providers.
The department ruled that the insurer did not comply with statutory or contractual obligations in half the cases filed against the company. The National Association of Insurance Commissioners which represents 50 state insurance commissioners reported FIC’s complaint rate to be more than seven times the national average in the two most recent years for which information is available.
Horowitz was chosen in December to serve a three-year term as a director of the Federal Reserve Bank of New York. It apparently pays to be a friend of the president. Just gives you all sorts of confidence in ObamaCare, doesn’t it.
Filed under: Capitalism, Democrat Corruption, Economy, Politics, Progressivism, Statism | Tags: Andrew Klavan, Compulsive Spending, Crony Capitalism
President Obama has been trying for four years to promote the claim that the financial crisis was caused by the hated Bush tax cuts for “the rich.” Democrats always hate tax cuts, because they believe in BIG government, and you can’t have BIG government without lots of tax revenue.
Democrats also believe in “fairness” which means that income should be redistributed from those who earned income to those who didn’t earn any or enough. It just isn’t fair that some people should work harder or have more expertise or be luckier than others who don’t work hard or have any expertise and just aren’t lucky. Although “luck” isn’t always as lucky as people think. Statistically, the people who win lotteries usually turn out to be less lucky than they were in the first place.
Bill Clinton left a recession for George W. Bush. The “booming” Clinton economy was booming largely because of the “dot-com bubble” when everybody with a computer thought they were going to make their fortunes online. President Obama wants to go back to the Clinton tax rates because the rich paid more then, but he wants to pretend that Bill Clinton’s much lower spending didn’t exist, didn’t happen, spending is good, don’t even suggest that I should cut back on spending. Did you know we have 54 Christmas trees in the White House? Although we’ll be in Hawaii for most of the Christmas season. Out of touch.
Filed under: Election 2012, Law, News the Media Doesn't Want You to Hear, Politics, The United States | Tags: Crony Capitalism, Rule Breaking, Tax Cheating
The House of Representatives passed a bill last Tuesday that would fire federal employees who’ve been seriously delinquent in paying their taxes. They did this because almost 100,000 federal workers are behind on their taxes, including 700 congressional employees. These workers owed more than $1 billion in unpaid taxes 2010, up from just under $600 million in 2004, according to the Internal Revenue Service. We could charitably call these folks “rule breakers.”
Wow! We could save a billion dollars if the tax cheats just paid up? And they are rule breakers as well?
Of course, we’ve also learned recently that there’s been significant rule breaking in the General Services Administration (lavish conferences and now word of excessive bonuses) and the Secret Service (the prostitution scandal in Colombia). Combined, the problems of tax evasion and rule breaking generally point to deep ethical issues in the federal workplace.
The federal government really needs to know what Gallup knows: Rule breaking is very predictable. The more disengaged the workplace, the more employees will break rules. And according to Gallup’s 12-question employee engagement survey (Q12), U.S. government workers are mostly not engaged (52%) or are actively disengaged (18%).
Now, it may surprise many government leaders to learn that generous pay and benefits don’t predict a great workplace. Federal workers are generally well compensated and receive more vacation days and better healthcare and retirement packages than many private sector employees — yet they remain disengaged and work within a growing culture of rule breaking.
The Chairman doesn’t mention it, but an attitude at the top that rule breaking will not be tolerated would be a start. But that would be sheer hypocrisy wouldn’t it. The President of the United States has been quite explicit in saying that he will not prosecute the laws with which he disagrees. Reports of the Attorney General’s failure to prosecute the law have been constant. The Secretary of the Treasury was publicly labeled a tax cheat because he had not paid his taxes. Administration members accused of illegal actions EPA director Lisa Jackson, Interior’s Ken Salazar, HHS’s Kathleen Sebelius, some have been taken to court and told to knock it off.
The administration clearly has no respect for the separation of powers, and does not feel obliged to yield to the laws passed by Congress, nor the decisions that emanate from the courts. Thus we have a government functioning by “Executive Orders,” and a Congress left fuming. With that attitude, it is hardly surprising that you have some “trickle down fairy dust,” to borrow a phrase; a feeling that if they can get away with it, why can’t I?
Rudy Giuliani cleaned up New York with a belief that petty crime, broken windows and graffiti led to a general climate of disrespect for the law. You could call that “trickle up.” He was right, of course. And as long as the federal government has an attitude that crony capitalism, rule breaking, tax cheating are fine for members of the federal workforce and their executives, we will continue to have a lot of the aforementioned.
Filed under: Capitalism, Democrat Corruption, Economy, Election 2012, Statism, Taxes | Tags: "Most Transparent Administration", American Capitalism, Crony Capitalism
Bwa-ha-ha-haha! CNN headline:”Obama calls for greater transparency from Romney snort! giggle. President Transparency, who won’t disclose his Harvard grades, or his grades from Columbia University, or his grades from Occidental, or Punahou grades, or even grade school or kindergarten. His life is an open book — the autobiography with all those invented characters and dubious stories.
President Transparency— who has two cabinet members under threat of contempt of Congress because they won’t reveal the papers that Congress has subpoenaed, and President Transparency has asserted “executive privilege” so they won’t have to.
Obama can’t talk about the economy because his record with the economy is truly horrible. All his claims of hope and change, promises of jobs, promises of a reviving economy are all for naught. The economy sinks deeper, the job situation gets worse, largely because of the policies that Obama has pursued.
Mr. Obama doesn’t understand how jobs are created. He doesn’t seem to understand that public sector jobs are paid for with money taken from taxpayers. Every time you add another high-paying administration job, and they are very high-paying, everybody’s taxes go up a little more. He announced today that he wants to tax the rich more because they paid higher taxes during the Clinton administration and the economy did fine.
So the economy and unemployment are off the table, that leaves only attacks on Romney. At Axlerod’s direction, armies of lefties are digging through Romney’s financial dealings trying desperately to find something, anything, crooked. Romney is wealthy, that makes him a real target of the left. Former press secretary Robert Gibbs argued on Sunday that Romney’s financial picture is out of touch with that of most Americans.
“I pick a bank because there’s an ATM near my home,” he said on CNN’s State of the Union. “Romney had a bank account in Switzerland.”
Romney had a stellar education, very bright, with a talent for numbers and data and business. Over the years that talent and his skill managed to turn many companies around, and some of them became spectacular successes. What people in private equity do is invest their own money, along with that of shareholders (including retirement funds and individuals) so they have a stake in how their efforts turn out, both on the upside and on the downside. The Obama campaign has already tried to portray Bain Capital as a “corporate raider” which is just silly, and demonstrates how very little these people understand about business.
When Obama was first inaugurated, Rham Emmanuel set up daily economic meetings, since the economy was in such dire shape. He was waiting for the multiplier effect to multiply, and he got bored and quit them.
Mr.Obama’s understanding remains at the same level as when he started. You jump-start an economy by creating demand; when there isn’t enough demand, you pump some money into the economy , which the people will spend, and the money will circulate through the economy creating a magical “multiplier effect,” creating more demand in every hand it touches. Trouble is, a number of our top economists have determined that the “multiplier effect” is approximately zero. And when people are frightened, they don’t spend the extra, they save it. He can’t even explain how his policies were supposed to work or why they haven’t, he can only make specious claims that it will all start to work pretty soon — one of these days.
People who regard the path to wealth as something obtained through crony capitalism, and government jobs as “public service” in which you buy votes and do favors are not going to understand American capitalism. From Elizabeth K. Spahn
Crony Capitalism.” Isn’t that what American capitalism is? We were into our third glass of very fine red wine at the banquet following the training session. He was absolutely sincere. I was horrified. . . .
Cronyism is not capitalism, I replied. Cronyism is the opposite of capitalism. American capitalism is about markets, competition. “Rational” markets in which sellers compete; purchasers decide based on price, quality, service, brand. Cronyism, nepotism, elites reserving the goods for themselves — This is the opposite, the antithesis of American capitalism. This is why we revolted in the first place.
He looked at me. I looked at him. Ah, he said.
Filed under: Capitalism, Democrat Corruption, Domestic Policy, Economy, Law, Politics | Tags: Auto Bailouts, Bankruptcy Laws, Crony Capitalism
In his round of campaign fundraisers (150 to date) President Obama celebrates the bailout of General Motors and Chrysler as one of his administration’s outstanding successes. The $23 billion the taxpayers lost was worth paying to avoid more massive job losses. But if the administration had treated the United Auto Workers in the manner required by bankruptcy law, he would have saved taxpayers $26.5 billion.
The Treasury Department estimates that taxpayers will lose $23 billion on the auto bailout. Researchers James Sherk and Todd Zywicki found that the preferential treatment given to United Auto Workers accounts for the American taxpayers’ entire losses from the bailout. Had the UAW received standard treatment in a normal bankruptcy proceeding, the Treasury would have recouped its entire investment. Benefits allowed UAW members to retire in their mid-50s with minimal out-of-pocket expenses for the remainder of their lives. None of the taxpayers’ losses came from “saving jobs” but instead from propping up the compensation of some of the most highly paid workers in America.
Overpaid workers with overgenerous benefits were a significant factor in the automakers’ decline. Detroit’s labor costs were 50% to 80% higher than other automakers like Toyota and Nissan. General Motors paid its unionized workers $70.51 an hour in wages and benefits, Chrysler paid $75.86 an hour. There were management mistakes, but these labor costs were a big reason why the automakers went bankrupt. Throughout the bailout, the Obama insulated the UAW from the sacrifices that unions usually make in a bankruptcy — at taxpayer expense. The UAW accepted huge pay cuts for new hires, but the administration kept the pay of existing UAW members at GM intact.
Section 1113 of the Bankruptcy Code enables reorganizing companies to improve their post-bankruptcy competitiveness by renegotiating union contracts to improve competitive rates. Thus GM still has higher labor costs than any of its competitors. UAW Employees at Delphi, a subsidiary of GM, got $1 billion of bailout funds to support their pensions. Delphi non-union retirees got nothing.
The $26 billion President Obama gave to the UAW is more money than the U.S. spent on foreign aid last year and 50% more than NASA’s budget. None of the money kept factories running. It went, in true crony-capitalist fashion to Obama’s union supporters.
There’s a reason why we have bankruptcy laws. They’re designed to see that everyone gets a fair shot, everybody is doing their fair share, and everybody is playing by the same rules — oh wait…
Filed under: Capitalism, Democrat Corruption, Economy, Environment, Health Care, Politics, Statism | Tags: Barack Obama, Crony Capitalism, Wealth Redistribution
It was a very bad week for the administration. The Left sunk everything they had into an effort to recall Governor Scott Walker, and it didn’t work. The governor did exactly what he promised when elected, did battle with the unions over pension and healthcare benefits that the state could not afford, yet still left union workers with better benefits and lower cost for them than the average. Many pundits noted that the vastly public service union employees were still vastly overpaid.
The previous week was also a very bad, horrible, no good week. The monthly job report was a disaster, and the economy was close to a second phase of recession. And the president between demanding that the rich pay their “fair share” spent his time in campaign events with the very rich celebrities that he was disparaging. Well, they know he didn’t really mean it, and their accountants will cope with any tax increase.
So what did the President do? He held a press conference to say that the private sector was just fine, and we needed more stimulus to help states and local governments to hire more cops and teachers and firefighters. We thought it was a bad move, but he was just being honest.
Later the same day, of course, he tried to take the remark back and said the private sector wasn’t really fine, people were out of work. But the funny thing is, Harry Reid said exactly the same thing last October. And they both meant exactly what they said.
“The massive layoffs we’ve had in America today—of course they’re rooted in the last administration—and it’s very clear that private sector jobs are doing just fine. It’s the public sector jobs where we’ve lost huge numbers, and that’s what this legislation’s all about. And it’s unfortunate my friend the Republican Leader is complaining about that.”
We need to listen more carefully to the second part of Obama’s statement about the private sector. He said:
If Republicans want to be helpful, if they really want to move forward, and put people back to work, what they should be thinking about is, ‘How do we help state and local governments and how do we help the construction industry?’” Obama said. “Because the recipes that they’re promoting are basically the kinds of policies that would add weakness to the economy, would result in further layoffs, would not provide relief in the housing market, and would result – I think most economists would estimate – in lower growth.
See, his heart is in the right place. He wants to put people back to work in government jobs, where the pay is high and the benefits large. And for ordinary working people, nice union construction jobs with lots of rules to protect their “rights.”
Well, we know that Democrats favor big government and Republicans believe in small government that is lean and does not do what is better done by state or local government, or by the people themselves. But this is ridiculous. They consider public sector jobs as high-paying middle class jobs, and more desirable jobs than anything in the private sector. Obama has continually referred to private sector jobs as “service jobs” and as admirable — because they are doing important things for other people.
I admire cops and firemen as much as anyone, and I admire teachers who do a good job., but the idea that all public sector jobs are something special and better than private sector jobs is baffling. Obama meant what he said the first time. Public sector jobs are the important ones, and you reward your friends in the public sector.
I don’t think that Obama grasps the idea that the rest of us are scandalized by his crony capitalism. That’s just how things are done in his mind in the public sector. At least that’s how things are done in Chicago. His entire career is based on people doing favors for him and knowing that he will return the favor when the opportunity presents. Bill Ayers got him the job running the Annenberg Challenge, the big failed Chicago school reform effort. That became his big resume enhancement. He got help in his elections when the sealed divorce records of his opponents magically were opened for the press. The Speaker of the Illinois legislature decided, reportedly, that he was going to “make himself a Senator,” and Obama won a magically almost uncontested race for the U.S. Senate.
He has had a lot of payback to do. That’s just the way things are done in the Chicago tradition. My next-door neighbors grew up in Illinois and had many tales about the longstanding political corruption there. Read again how Mayor Richard Daley enhanced his pension, all quite legally, of course.
Obama’s redistribution of wealth is meant to redistribute more wealth from the private sector to the public. The entire pursuit of climate change and energy legislation is meant to redistribute wealth. Has nothing to do with global warming, it is and always has been a power grab. The energy sector must become a publicly owned and controlled piggy bank. ObamaCare is in actuality another redistribution of wealth scheme. When the government owns the entire medical establishment, they have all of us suckers locked in.
The proper form of government is that with a special class of wise people in public service, advising, regulating, controlling and making life better for all us little people. They need large cadres of worker bees to fill the bureaucracy required to do all the good works that they will do. And if they enrich themselves and their friends in the process— well that’s just what they deserve, isn’t it?
Think how they enrich the private sector portions of the economy who support and depend on them, like their sycophants in the mainstream media. They support the left, the left supports them — with special information not accessible to others. We call them “leaks” but it’s just another kind of crony capitalism. Or ask yourself how it is that Katie Couric deserves a $4 million salary. I rest my case.
ADDENDUM: According to the Bureau of Labor statistics, the employment rate for government workers last month was just 4.2 percent, up slightlyl from 3.9 percent a year ago. Compare to the construction industry( 14.2 percent unemployment), Leisure and hospitality services( 9.2 percent), agriculture (9,5 percent), professional and business services (8.5 percent) and wholesale and retail trade (8.1 percent)
Filed under: Capitalism, Economy, Energy, Environment, Junk Science, National Security | Tags: Crony Capitalism, Green Loan Program, Subsidizing Friends and Supporters
One of the biggest scandals in American politics is about to erupt. It is a story of the inside game in Washington in which the political class enriches itself at the expense of ordinary taxpayers. Peter Schweizer’s new book details how 80 percent of the Department of Energy’s “Green Loan” program went to companies run or primarily owned by Obama’s financial backers. Out of $20 billion of government loans, $16 billion went to Obama bundlers, friends, and supporters. In other times, they used an old-fashioned word:
graft: The unscrupulous use of one’s position to derive profit or advantage.
Is this an inevitable result of government intervening in the private market, picking winners and losers? These are companies that rely on government support for their existence. In most cases, if the government support is withdrawn they cease to exist. Doug Ross quoted the relevant excerpt from Schweizer’s book:
When President-elect Obama came to Washington in late 2008, he was outspoken about the need for an economic stimulus to revive a struggling economy… After he was sworn in as president, he proclaimed that taxpayer money would assuredly not be doled out to political friends…
…But an examination of grants and guaranteed loans offered by just one stimulus program run by the Department of Energy, for alternative-energy projects, is stunning. The so-called 1705 Loan Guarantee Program and the 1603 Grant Program channeled billions of dollars to all sorts of energy companies…
…In the 1705 government-backed-loan program [alone], for example, $16.4 billion of the $20.5 billion in loans granted as of Sept. 15 went to companies either run by or primarily owned by Obama financial backers—individuals who were bundlers, members of Obama’s National Finance Committee, or large donors to the Democratic Party. The grant and guaranteed-loan recipients were early backers of Obama before he ran for president, people who continued to give to his campaigns and exclusively to the Democratic Party in the years leading up to 2008. Their political largesse is probably the best investment they ever made in alternative energy. It brought them returns many times over.
…The Government Accountability Office has been highly critical of the way guaranteed loans and grants were doled out by the Department of Energy, complaining that the process appears “arbitrary” and lacks transparency. In March 2011, for example, the GAO examined the first 18 loans that were approved and found that none were properly documented. It also noted that officials “did not always record the results of analysis” of these applications. A loan program for electric cars, for example, “lacks performance measures.” No notes were kept during the review process, so it is difficult to determine how loan decisions were made. The GAO further declared that the Department of Energy “had treated applicants inconsistently in the application review process, favoring some applicants and disadvantaging others.” The Department of Energy’s inspector general, Gregory Friedman, … has testified that contracts have been steered to “friends and family.”
Solyndra has become the poster child, particularly after the top executives took the Fifth Amendment to avoid testifying, and congressional investigations are ongoing, but there are many others. The latest is an electric transmission project that received stimulus-law financing under a program operated by the Western Area Power Administration.
NRG Energy is building a compound of nearly a million solar panels halfway between Los Angeles and San Francisco. Taxpayers and ratepayers are subsidising the project by almost as much as the entire $1.6 billion cost of the endeavor. This involves loan guarantees, cash grants, contracts that require power customers to pay higher rates, state laws that require utilities to buy increasingly large amounts of solar energy. Beneficiaries include firms like Goldman Sachs, Morgan Stanley, General Electric, Exelon, NRG and Google. The Dept. of Energy loan guaranteed a $1.2 billion construction loan, with a low loan rate of 3.5%. When construction is done, they get a $430 million check from Treasury. NRG doesn’t have to pay property taxes, saving it $14 million a year. And ordinary rate payers get to pay about 50 percent more than the expected cost of electricity.
The expected rate of return for equity investors is 25 percent.
States have passed legislation that requires utilities to buy a significant share of their power from renewable sources such as solar or wind. Kevin Smith, CEO of Solar Reserve, a Nevada solar project, said “It is like building a hotel, where you know in advance you are ging to have 100 percent room occupancy for 25 years.”
This is essentially what has happened in England, where a combination of EU regulations and governmental ignorance and fear of global warming has led them to a position where the high cost of energy is resulting in what they call “energy poverty” where people cannot afford the basic energy they need to stay warm — in a period when the globe has been cooling for over ten years.
Solar panels, they say, are ‘expected’ to last for 20 or 25 years, except they are quite fragile and subject to all sorts of damage. Then there are the backup power plants required for the times that the sun isn’t shining — like night, and cloudy weather. They don’t have any way of storing electricity yet, but they are thinking of large banks of used electric car batteries — used because the batteries are so costly.
The whole thing goes far beyond the Department of Energy’s foolish green loans. The federal government has paid out nearly $40 billion to subsidize corn-based ethanol. That is judged a success because it has displaced more than half a million barrels a day of petroleum. But ethanol has driven up food prices, contains less energy than gasoline, destroys small engines, is more polluting than gasoline, and if we were using our own energy resources properly would be unnecessary. And that’s just the ethanol.
Wind farms are proving to be neither cost/effective nor practical. There is the lightbulb ban, done so that GE, Sylvania and Phillips can make more money by having their bulbs made in China. There’s Beacon Power who made flywheels for electricity storage — bankrupt, Ener1, who made lithium-ion batteries, delisted by Nasdaq, and many more. There are the green job training programs, and I haven’t even touched upon the costly regulations emanating from the EPA. We may never know the total cost of all this nonsense, nor grasp the immediate costs to our country, our own pocketbooks and our own welfare and freedom.
Filed under: Capitalism, Democrat Corruption, Economy, Law | Tags: Crony Capitalism, Just a Coincidence?, Political Payoff
The Environmental Protection Agency says that new greenhouse gas regulations, as proposed, may be “absurd” in application, and “impossible to administer” by its self-imposed 2016 deadline, according to The Daily Caller. The agency is asking taxpayers for around $21 billion so they can hire up to 230,000 new bureaucrats to attempt to implement the rules.
Although the Clean Air Act does not give the EPA authority to regulate greenhouse gas emissions, they plan to do it anyway. The agency’s plan is being challenged in court by petitioners who argue that such a decision should be left for Congress to make. However, Obama feels free to waive rules made by Congress, so nothing is for certain anymore.
If the EPA wins its court battle, the number of businesses forced to file for an EPA permit and complete extra paperwork in order to continue operating would grow to as many as 6.1 million from the 14,000 now required to file.
The EPA would be forced, forced, to hire another 230,000 employees to deal with all the permits. The $21 billion does not cover the economic impact of the regulations, which would be much bigger.
Obama is simply ignoring the Solyndra scandal which keeps growing, as he hits the campaign trail trying to fire up his base. The Chicago Way— rewarding donors with taxpayer money, is becoming a pattern. Solyndra favored a major Democratic donor, George Kaiser.
LightSquared’s wireless broadband project jeopardizes the nation’s GPS system, on which the military and aviation depend, as well as others. That support involves not only supporting a big donor, Philip Falcone, by approving the project, but there is the possible subborning of perjury by asking four-star General William Shelton , head of the U.S. Space Command to alter his testimony to Congress.
A member of Missouri’s most prominent political family, Tom Carnahan is the host of the St. Louis fundraising effort, but his energy development firm, Wind Capital Group, is the recipient of a $107 million federal tax credit to develop a wind power facility in his state. The BlueGrass Ridge Wind Farm consists of 27 turbines, 252 feet tall. Each of the blades is 140 feet long. But after all the hype and investment, all the subsidies, wind accounts for only 1% of our electricity, backed up 24–7 by natural gas or coal-fired power plants. But tomorrow, sometime, it will surely produce all the electricity we need to power our economy.
There is a worrying disregard of basic economics, and the national interest in the blind pursuit of leftist environmentalist ideology. The appearance of corruption may just be an appearance, but the administration is busily picking winners and losers, and the winners just happen, coincidentally, to be big Democratic donors.
So Obama continues his strategy of forcing the cost of energy up so the public will be forced to support his clean green economy. None of it will work. The DOE’s Energy Information Administration reported that in 2007, the average subsidy per megawatt hour for all energy sources was $1.65. The subsidy for wind and solar was about $24 per megawatt hour. But then Solyndra seemed to think it was fine to sell solar panels for $3 that cost $6 to make.
Administrator Lisa Jackson seems to think that in a time of recession it’s fine to ask for $21 billion to hire another 230.000 people to process permits. Does she think that she is creating jobs? The government has no money of its own, where does the money come from? And is the $21 billion funding for permanent salaries and benefits, or just for the next year?
Filed under: Capitalism, Democrat Corruption, Domestic Policy, Economy | Tags: Cheap Vulgarity, Crony Capitalism, In the Pocket of the Unions
Michael Ramirez, master of the visual metaphor, captures the moment. See all his work at Investors.com. “In the pocket” is unfortunately all too accurate. I have been dismayed and startled at the cheap vulgarity of union signs. They are making a major mistake. They can bully politicians who want their money, but they cannot bully the American public.
Filed under: Capitalism, Economy, Freedom, Statism | Tags: American Entrepreneurs, Chairman Austan Goolsbee, Crony Capitalism
Sigh. It would really help if someone in the White House had ever worked in the private sector. Austan Goolsbee is the Chairman of the president’s Council of Economic Advisors. (He replaces Christina Romer who has returned to the University of California at Berkeley). He’s been doing these White Board thingys from the White House for a while, and he always yells.
He gets this partly right. American entrepreneurs have created huge businesses. Successful startups are an engine of business, and hire a lot of people as they grow. But governments are notoriously bad at deciding which businesses should be supported and choosing which should become successful.
Obama has already been a shining example of this. His passionate belief in his green clean energy economy has no basis in science, engineering or energy expertise. Neither wind nor solar will ever make a significant contribution to our energy supplies.Yet he has “invested” billions in subsidies for those favored businesses. Wind farms and solar panel makers and electric battery factories could not exist without government subsidy, because they are not economically viable.
Obama champions a kind of crony capitalism. He subsidizes business, business supports his plans, he does favors for business, business supports his campaign, he gives business special perks, business does what he wants because they are obligated. Business becomes a creature of government. It is practiced in many countries. We usually refer to them as corrupt governments.
There is a long struggle between the guy with an idea in a garage and the huge business. And if that’s the way Obama is planning to solve his unemployment problem, we’re in bigger trouble than I thought. Venture capitalists are picky about the way they hand out their own money— in direct contrast to the Obama administration which shovels it out the door by the trillions. Because VCs don’ t like to waste their own money, they do a lot of due diligence.
I am deeply suspicious of the “comprehensive review of regulations.” What entrepreneurs need is freedom from regulation. Obama wants to control. Government assigned mentors?
What entrepreneurs need is for government to get out of the way.