Tag Archives: Crony Capitalism

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Solar power firm goes bankrupt after receiving millions of taxpayer dollars

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From the Boston Herald, a look at what happens when the government redistributes wealth based on political correctness.

Excerpt:

Evergreen Solar Inc., the Massachusetts clean-energy company that received millions in state subsidies from the Patrick administration for an ill-fated Bay State factory, has filed for bankruptcy, listing $485.6 million in debt.

Evergreen, which closed its taxpayer-supported Devens factory in March and cut 800 jobs, has been trying to rework its debt for months. The cash-strapped company announced today has sought a reorganization in U.S. Bankruptcy Court in Delaware and reached a deal with certain note holders to restructure its debt and auction off assets.

The Massachusetts Republican Party called the Patrick administration’s $58 million financial aid package, which supported Evergreen’s $450 million factory, a “waste” of money.

“The bankruptcy of Evergreen Solar is another sad event for the Massachusetts company and highlights the folly of the Patrick-Murray Administration which has put government subsidies into their pet projects instead of offering broad based relief to all Bay State employers,” said Jennifer Nassour, head of the state GOP.

Here’s a previous story about another solar-power boondoggle, from the Daily Caller.

Excerpt:

Solyndra, Inc. was supposed to have showcased the effectiveness of the Obama administration’s stimulus and green jobs initiatives, but instead it has become the center of congressional attention for waste, fraud and abuse of such programs.

According to a Feb. 17 letter signed by Energy and Commerce Committee Chairman Fred Upton, Michigan Republican, and Oversight Subcommittee Chairman Cliff Stearns, Florida Republican, to Energy Secretary Steven Chu, the Fremont, Calif.-based solar panel manufacturer should never have received a $535 million loan guarantee from the stimulus.*

The company became the first recipient of an Energy Department loan guarantee under the stimulus in March 2009, which was intended to “finance construction of the first phase of the company’s new manufacturing facility” for photovoltaic solar panels.

The Energy Department estimated in a March 20, 2009 press release that the loan guarantee would create 3,000 construction jobs and a further 1,000 jobs after the plant opened.

And President Barack Obama and Vice President Joseph Biden each personally showcased Solyndra as an example of how stimulus dollars were at work creating jobs, during appearances at the company over the course of the following year.

Biden personally announced the closure of Solyndra’s $535 million loan guarantee in a Sept. 9, 2009 speech, delivered via closed-circuit television, on the occasion of the groundbreaking of the plant.

The vice president justified the federal government’s investment in Solyndra in front of employees and other dignitaries, including Secretary Chu and former Calif. Gov. Arnold Schwartzenegger, saying the jobs the company intended to create would “serve as a foundation for a stronger American economy.”

“These jobs are the jobs that are going to define the 21st century that will allow America to compete and to lead like we did in the 20th century,” Biden said.

According to Biden’s speech, the $535 million loan guarantee was a smaller part of the $30 billion of stimulus money the administration planned to spend as part of its Green Jobs Initiative.

Obama made similar claims in a May 26, 2010 speech at the plant, but the 1,000 jobs he and Biden touted in their respective speeches failed to materialize.

Instead, Solyndra announced on Nov. 3 it planned to postpone expanding the plant, which put the taxpayers on the hook to the tune of $390.5 million taxpayers**, or 73 percent of the total loan guarantee, according to the Wall Street Journal.

It also announced that it no longer planned to hire the 1,000 workers that Obama and Biden had touted in their speeches and that it planned to close one of its older factories and planned to lay-off 135 temporary or contract workers and 40 full-time employees.

A closer look at the company shows it has never turned a profit since it was founded in 2005, according to its Securities and Exchange Commission (SEC) filings.

And Solyndra’s auditor declared that “the company has suffered recurring losses, negative cash flows since inception and has a net stockholders’ deficit that, among other factors, [that] raise substantial doubt about its ability to continue as a growing concern” in a March 2010 amendment to its SEC registration statement.

“While we understand the purpose of the Loan Guarantee Program is to help private companies engaging in clean energy products to obtain financing by providing loan guarantees, subsequent events raise questions about Solyndra was the right candidate to receive a loan guarantee in excess of half a billion dollars,” Upton and Stearns wrote.

A June 2010 Wall Street Journal report indicating that Solyndra’s majority owner, Oklahoma billionaire George Kaiser, was a major fundraiser for the 2008 Obama-Biden campaign has stimulus opponents such as Citizens Against Government Waste crying foul.

Even the radically left-wing Huffington Post is getting the picture, in this article entitled “The Party’s Over for Big Wind“.

Excerpt:

Here’s the reality: the backlash against industrial wind is real, it’s global, and it’s growing. The U.S. has about 170 anti-wind groups. AWEA doesn’t want you to know that a number of towns in New York state have prohibited the construction of industrial wind turbines. In April, the town of Falmouth, Massachusetts enacted a year-long moratorium on construction of new wind turbines. And earlier this month, a pair of environmental groups in Massachusetts called for a ban on new turbines in the state until more work is done on the health effects of wind turbine noise.

The wind lobby is desperate to downplay the problem of infrasound from wind turbines. But this month, in a peer-reviewed article in the Bulletin of Science, Technology & Society, Carl V. Phillips, a Harvard-trained PhD, concludes that there is “overwhelming evidence that wind turbines cause serious health problems in nearby residents, usually stress-disorder type diseases, at a nontrivial rate.”

The subsidies for wind energy are in peril. A recent report from the Energy Information Administration shows that in 2010, the wind energy sector got more federal subsidies than any other energy sector other than biofuels. The report found that wind energy got a total of $4.986 billion in subsidies, or nearly twice as much as was given to the oil and gas sector, which got $2.82 billion. The majority of the wind energy money came from the federal stimulus package passed in 2009. But much of that stimulus money has been spent.

Last December, AWEA cheered after Congress approved a tax bill that included a one-year extension of the investment tax credit for renewable energy. But another high-profile renewable energy subsidy, the tax credit for the corn ethanol scam, is due to expire at the end of this year. And given that Republicans in Washington are eager to cut all types of federal spending, the investment tax credit is likely to, once again, be in legislators’ cross hairs.

Bode was right a year ago when she said the wind industry is in distress. Her industry’s still in peril today because it cannot survive without mandates and taxpayer subsidies. And unless or until it can, she cannot expect any sympathy from cash-strapped voters.

Why are we wasting money on unproven technologies? Do we have money to waste on old-time religion?

News

Obama’s job creation advisor ships American business unit to China

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From Jack Cafferty of CNN. (H/T Reason to Stand)

Excerpt:

Here is more evidence of the suicide mission this country is on: General Electric announced it’s moving its 115-year-old X-ray business from Waukesha, Wisconsin to Beijing, China.

The X-ray business is part of General Electric’s GE Healthcare unit, and this move is just part of a broader plan by GE to invest $2 billion in China.

This will become the first GE business to be headquartered there. A handful of the unit’s top executives will be transferred to China but otherwise, the company says, none of the 150 staffers in the Milwaukee-area facility will lose jobs or be transferred. However, GE plans to hire more than 65 engineers and a support staff at a new facility in China.

It’s the kind of news that makes you want to reach for something sharp and jab it in your eye. General Electric’s Chief Executive, Jeffrey Immelt, is one of President Obama’s advisers on… ready? U.S. job creation!

[…]Two months after Immelt was named to the council, The New York Times reported that General Electric paid no income taxes last year… thanks to some fancy accounting footwork, even though the company earned $14.2 billion in profits last year – more than $5 billion in the U.S. alone.

Obama named Immelt as the head of the President’s Council on Jobs and Competitiveness in January. And it’s no surprise that he is shipping jobs overseas – that’s what happens when you elect a tax and spend socialist as President. When Obama attacks businesses with his anti-capitalist rhetoric, they curtail hiring here and hire in China instead. Who would try to expand a business with an anti-business liberal with his finger on the button? You would have to be stupid to risk your capital in a country that runs 1.65 trillion dollar deficits.

It’s important to understand that big businesses like General Electric are not conservative. Big business wants government to insulate them from competition by using regulations to block new entrants. Small businesses are conservative.

News

How health care mandates drive up health care costs

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From Investors Business Daily.

Excerpt:

The ObamaCare legislation gives the administration the authority to compile a list of female preventive services that all new health insurance plans will have to cover without employing deductibles or charging co-payments. A medical advisory panel is recommending that birth control services should be one of these services.

The committee from the National Academy of Sciences’ Institute of Medicine that issued the guidelines also suggests that free breast-pump rentals, counseling for domestic violence, annual wellness exams and HIV tests be part of all health insurance plans.

These mandates won’t come without significant costs. The additional benefits won’t be free, despite the left’s loose usage of that word in association with health care. The mandates will force insurance premiums higher and someone will pay.

The Congressional Budget Office said years ago that existing mandates at the state level — there are more than 2,000 of them, according to the Council for Affordable Health Insurance — raise premiums by 15%.

That’s just a starting point. CAHI, which has done heavy work on this issue, believes that state mandates push premiums up by 20%. In some states, the increase can be as high as 50%. The result is a cost curve that bends upward, not down.

Mandates at the state level run from the expected to the bizarre. They require insurers to provide such unorthodox coverage as wigs (hair prostheses), Oriental medicine, port-wine stain elimination, smoking cessation, acupuncture, midwives, counseling, and marriage, occupational and massage therapists.

As we’ve noted before on these pages, the state mandates are an insult to common sense. Why would a single man need an insurance package that covers in vitro fertilization, maternity leave, midwives, breast reduction or mammograms?

Does it make sense for a childless, unmarried woman to be forced into a plan that includes care for a newborn and screening for prostate cancer? And is there any reason a teetotaler’s policy should cover alcohol abuse?

These regulations are not only asinine, they wreck the health insurance marketplace. The longer the list of mandates, the less competition there is. When insurers have to carry these gold-plated packages, they can’t compete with lower-priced plans that have fewer benefits. This can price some customers entirely out of the private market.

Here’s a post from Ruth Blog that makes the financial aspects clearer, using “free” contraception as an example.

Excerpt:

First of all, preventive medicine implies the prevention of a pathological condition. Pregnancy is anything but pathological. Artificial contraception is an elective medical therapy for those desiring to block a totally normal and healthy physical condition. Not only is contraception elective, but the decision to have sex should be elective as well.

Secondly… If an unmarried woman makes the conscious decision to be sexually active, it seems she should also bear the consequences of such a decision. Her partner should be willing to share any burdens of the relationship, including the financial cost of sexual relations. If a woman is not in a stable relationship, it seems unreasonable to demand someone else has to pay for her sexual dalliances.

[…]Sexual activity is elective. Preventing the normal consequence of sexual activity, pregnancy, is elective. The use of artificial contraception to prevent pregnancy is a personal lifestyle choice, not a medically recommended therapy. Therefore, artificial contraception should not be considered mandated preventive medical care. In these tight fiscal times, we cannot afford to be too inclusive with what constitutes preventive medicine.

Note that the artificial conception would be free for women who want to have children without fathers. And we know how that works out.

The Heritage Foundation points out that mandates actually reduce the freedom and prosperity of women who don’t use these services.

Excerpt:

Many Americans find the use of birth control morally objectionable, and some women may simply have no need for a health plan that covers these services, based on any number of personal choices and other factors. Those that fall into this category would have no choice but to pay for unnecessary coverage if the recommendations are made law.

[…]If HHS takes an overly prescriptive approach regarding these particular measures, women who would prefer not to pay the higher premiums to carry health benefits they don’t need or to which they object won’t have that option.

In a truly market-based insurance exchange, women would be able to choose a health plan that met their needs and was consistent with their values, and those who wished to forgo certain benefits would have the freedom to do so. If any attempt at health reform is to succeed at reducing costs and tailoring coverage to the specific needs of each individual, it must ensure that consumers are able to choose the plan and benefits that work best for them, rather than submitting to the decisions of a bureaucratic board.

There is no opt out for moral women when these things are mandated as minimum coverages in every policy. There is no escape. My fear is that women would be forced to pay for these services and then feel obligated to use them since that is the only way to get any value for the money that is being forcibly extracted from them.

What health care mandates really achieve is 1) to buy votes from the providers of the mandated services, and 2) to transfer wealth from people who don’t want or need these elective services (e.g. – single chaste Christian men) to people who need it because of their own elective lifestyle choices. And the more I have to pay to subsidize other people’s breast implants, contraceptives, STI  treatments, abortions and in vitro fertilizations, the less I can afford to do the things that I want to do, which isn’t fair. My money is my money, and their money is their money. I should be allowed to keep what I earn and buy only the health care that I need. I have other uses for that money. Let the government do-gooders find some other way to boost their self-esteem instead of playing Robin Hood with health care.