Nancy Pelosi is facing accusations of cronyism after a solar energy project, which her brother-in-law has a stake in, landed a $737 million loan guarantee from the Department of Energy, despite the growing Solyndra scandal.
The massive loan agreement is raising new concerns about the use of taxpayers’ money as vast sums are invested in technology similar to that of the doomed energy project.
The investment has intensified the debate over the effectiveness of solar energy as a major power source.
The SolarReserve project is backed by an energy investment fund where the Minority Leader’s brother-in-law Ronald Pelosi is second in command.
PCG Clean Energy & Technology Fund (East) LLC is listed as one of the investors in the project that has been given the staggering loan, which even dwarfs that given to failed company Solyndra.
Other investors include one of the major investors in Solyndra, which is run by one of the directors of Solyndra.
Steve Mitchell, who served on the board of directors at the bankrupt energy company, is also managing director of Argonaut Private Equity, which has invested in the latest project.
Since Solyndra has filed for bankruptcy has been asked to testify about the goings on at the firm by two members of the House and ‘asked to provide documents to Congress’.
[…]The project approval came as part of $1 billion in new loans to green energy companies yesterday.
Did they learn anything from Solyndra? No:
‘The administration’s flagship project Solyndra is bankrupt and being investigated by the FBI, the promised jobs never materialised, and now the Department of Energy is preparing to rush out nearly $5 billion in loans in the final 48 hours before stimulus funds expire — that’s nearly $105 million every hour that must be finalised until the deadline,’ said Florida representative Cliff Stearns, who is chairman of the investigations subcommittee of the House Committee on Energy and Commerce.
Since Nancy Pelosi took over federal spending in January 2007, the national debt has increased from $8.5 trillion to about $17.5 trillion. That’s NINE TRILLION dollars in new spending. And much of it just handed off to the people and groups who got the Democrats elected 2008 and 2012.
Have you heard much about President Obama’s $787,000,000,000 economic “stimulus” (now estimated to cost $831,000,000,000) lately? In its last report, published in 2011, the president’s own Council of Economic Advisors released an estimate showing that, for every $317,000 in “stimulus” spending that had by then gone out the door, only one job had been created or saved. Even in Washington, that’s not considered good bang for the buck.
Moreover, that was the fifth consecutive “stimulus” report that showed this number getting progressively worse.
Alas, that was the last report we’ve seen. Never mind that Section 1513 of the “stimulus” legislation, which Obama spearheaded and signed into law, requires the executive branch to submit a new report every three months. It reads:
“In consultation with the Director of the Office of Management and Budget and the Secretary of the Treasury, the Chairperson of the Council of Economic Advisers shall submit quarterly reports to the Committees on Appropriations of the Senate and House of Representatives that detail the impact of programs funded through covered funds on employment, estimated economic growth, and other key economic indicators.”
[…]By now, [the Obama administration] was supposed to have released fourteen such reports. It has released only eight. The last one covered the period ending in June 2011. That’s right — 2011.
With only 58.6 percent of Americans currently employed — down 2.4 percent from the time of Obama’s first inauguration — it’s not surprising that the Obama administration doesn’t really want to fulfill it legal responsibilities and release subsequent reports on its failed “stimulus.” However, it hardly seems fair — to use one of Obama’s favorite words — that the rich and (extremely) powerful think that they can choose whether or not to abide by the laws they spearhead and sign, while the rest of us are forced to obey them.
Recall the original Obama economic team. It consisted of President Obama, Vice President Joe Biden, Treasury Secretary Timothy Geithner, and White House economists Lawrence Summers, Christina Romer, Austan Goolsbee, and Jared Bernstein. It was the Democrats’ Best and Brightest—but not one with a smidgen of executive experience in either the private or public sector. And into their hands was entrusted an $800 billion stimulus spending plan, a package whose details were fleshed out by Harry Reid and Nancy Pelosi. What could go wrong?
Lots, it turns out. And Michael Grabell, a reporter for ProPublica, documents the many failings of the American Recovery and Reinvestment Act in “Money Well Spent? The Truth Behind the Trillion-Dollar Stimulus, the Biggest Economic Recovery Plan in History,” out this week. Rather than focus on questionable Keynesian economics behind the stimulus, Grabell focuses on its execution and management.
In reporting on the stimulus over three years, I traveled to 15 states, interviewed hundreds of people and read through tens of thousands of government documents and project reports. What I found is that the stimulus failed to live up to its promise not because it was too small (as those on the left argue) or because Keynesian economics is obsolete (as those on the right argue), but because it was poorly designed. Even advocates for a bigger stimulus need to acknowledge that their argument is really one about design and presentation.
Take the tax cut piece of the plan. Inspired by new research in behavioral economics, Team Obama constructed the $116 billion tax credit so it was “dribbled” out in paychecks at about $10 a week. Grabell:
Perhaps that would have worked if the tax cut had been substantial. But spread out in tiny increments, it did little to overcome the prevailing fear of losing a job, a home and years of retirement savings. Not only did Obama lose the political credit but also the consumer excitement that a large check would have provided.
Or how about the infrastructure spending. Grabell says it was beset by regulatory obstruction and union pandering:
The timing of the stimulus was poor to bring about the flood of construction projects everyone expected in the first year. States had to advertise the project to allow contractors to submit bids. They needed to review those bids and sign the contracts. Then, they had to go back to the U.S. Department of Transportation for the final OK. ..
Some projects in public housing, waterworks and home insulation remained paralyzed for six months to a year as short-staffed agencies reviewed Buy American waiver requests and calculated prevailing wages for weatherization work in every county in America.
In Michigan, human services officials estimated that 90% of the homes in line for weatherization work would need a historic preservation review. But as of late fall 2009, the office responsible had only two employees.
Public transit advocates expected a windfall for bus companies like New Flyer in St. Cloud, Minn. But the transit money took longer to get out the door because every grant had to be reviewed by the Labor Department to ensure that it wouldn’t have a negative impact on transit unions.
In short, Big Government screwed up the Big Spend. Biden said the stimulus would “literally drop kick us out of the recession.” But Grabell concludes that “the stimulus ultimately failed to do what America expected it to do — bring about a strong, sustainable recovery. The drop kick was shanked.”
As they filed out of the Capitol Thursday evening, a few Republican House members told the WEEKLY STANDARD what they thought of President Obama’s address to Congress on jobs:
Ben Quayle (R-Ariz.): “For somebody who keeps saying we should get beyond politics, that was a pure political speech tonight. It was unfortunate.”
Paul Ryan (R-Wisc.): “It was, um, I didn’t hear any new ideas. The only new idea from him that I was encouraged by is corporate tax reform. Broad based, lower rates. That’s something we called for in our budget, we’ve always wanted to do. So perhaps some room for common ground there…I lost count of all the straw men up there. I mean, I was losing count at about 14 or 15. But we’re used to hearing that. I think the last third of it was pretty much straw men…All the ideas in the front that he ticked off were the same things that he put in the stimulus that he proposed earlier, which are more Keynesian-style ideas that have already sort of proven to fail. I would rather we pass ideas that have proven to work rather than double down on ones that have proven to fail.”
Tom Price (R-Ga.): “I felt it was desperate. I felt he was desperate and I though the speech was desperate…He mocked many of the proposals that we’ve put forward, and none of it was productive or constructive to the political discourse. Somehow, he’s incapable of appreciating that many of the things that he says actually thwart positive political discourse.”
Diane Black (R-Tenn.): “There was something new. The president was saying we should look at Medicare, Medicaid. First time I ever heard that…What he does in there is like what my kids do. They take my credit card, they spend, and then they want me to pay for it.”
Renee Ellmers (R-N.C.): “At one point, he said, some of you believe if we cut regulation and cut spending, that’s going to be enough. I couldn’t have applauded harder. I believe that very much…His approach is not very pro-business. When he talks about Warren Buffett, that’s a little far-removed from the average businessperson. If any of those guys want to send in more tax dollars to the treasury, they can. They can just write the check.”
Michael Grimm (R-N.Y.): “I thought it was a little bit of a campaign speech…Part of it was a little bit demeaning. The president sometimes can be a bit arrogant.”
Patrick McHenry (R-N.C.): “It’s a rehash. I think this is the stimulus part deux or, I guess when you’re talking about multiple stimuluses, stimuli. You could call it the stimuli speech.”
Obama is just a petulant child. One minute, he is in his ranting mood and has a tantrum against the responsible grown-ups. The next minute he wants to borrow the car keys. We elected a 14-year old to be President. One who has no experience as a job creator in the private sector. He is out of his league.
In his remarks tonight, President Obama argued that his jobs proposal would create more jobs for teachers. He went as far as to say laying off teachers…”has to stop”.
But since 1970, student enrollment in public elementary and secondary schools has increased just 7 percent, while public elementary and secondary staff hires have increased 83 percent. Moreover, in the 1950′s, there were approximately 2.36 teachers for every non-teacher in a school district. Today, in our nation’s school systems, that ratio is closer to 1 to 1. So every teacher in the classroom has an administrative counterpart in your local public school district. That is a tremendous strain on state budgets. But it is also a huge boon the education unions.
President Obama’s call to spend more precious taxpayer dollars to “prevent teacher layoffs” may do more to inflate schools’ non-teaching rosters than to retain teachers.
On a per-pupil basis, federal spending on education has nearly tripled since the 1970′s. And those who have benefited the most from this profligacy aren’t the children sitting in the nation’s classrooms. No, the increase in federal education spending (and commensurate increase in Washington’s involvement in local schools) hasn’t led to improvements in academic achievement, to increased graduation rates, or even to a narrowing of the achievement gap. It hasn’t served to improve outcomes for children, but it has propped-up the public education jobs program that too often aims to meet the needs of the adults in the system, not the children it was designed to educate.
As expected, tonight President Obama called on taxpayers to send their hard-earned money to the federal government so that Washington can pour that money into public school construction. In an attempt to boost job growth, the president suggested spending billions on school infrastructure projects to “modernize 35,000 public schools.”
Since President Obama came into office, spending on public education has skyrocketed:
Education budget in 2008: $59.2 billion
Education budget in 2011: $69.9 billion
Department of Education “stimulus” award (Spring 2009): $98 billion
“Edujobs” public education bailout (Summer 2010): $10 billion
And state and local school construction spending has also seen significant increases.
By some estimates, inflation-adjusted school construction spending has increased 150 percent in the last two decades. And unfortunately, profligacy and waste are the norm. Remember the $500 million RFK high school in Los Angeles, built last year after a California bond referendum was enacted? There are certainly schools in ill-repair, but this maintenance should be a local concern. Washington should not be in the business of school window repair, updating facilities, or repainting buildings. Schools don’t need increased federal funding for school repairs; they need more flexibility with funding to be able to use dollars for needs they consider pressing.
The president’s proposal to funnel more taxpayer dollars into school construction has both constitutional and pragmatic problems. School construction has historically been – and should remain – the job of states and localities. Federal forays into school construction have been rare and indirect. Federally-funded school construction is also a terribly expensive way to build schools: Washington-funded jobs must pay prevailing wages, increasing costs on average by 22 percent.
In calling for federally-funded school construction, President Obama is once again supporting Washington overreach in education. But he’s also behind the game in terms of the direction school policy is trending. As states and localities begin embracing online learning – and as education shifts to a world outside of the walls of physical school buildings – President Obama is pushing to subsidize the old model. The administration might think “school construction” polls better than other government “jobs” projects, but it’s just as destined to be a waste of taxpayer money, and a public policy failure.
Robert Stacy McCain is a Herman Cain supporter. Wouldn’t it have been great to see Herman Cain debating Obama? The job creator against the community organizer?
Barack Obama is seeking legislative backing for economic stimulus worth $450-billion (U.S.), making the U.S. President a lonely advocate for spending at a moment dominated by calls for austerity.
Mr. Obama told a joint session of Congress Thursday evening that the United States must get a grip on its rising debt, but not at the expense of condemning millions of people to the unemployment rolls and welfare because traumatized companies refuse to hire.
[…]The President’s proposals Thursday were the same as those telegraphed in the U.S. media over the previous 48 hours. He’s responding to an economy that is quickly losing momentum, expanding at an annual rate of only 0.7 per cent in the first half of the year. The unemployment rate is 9.1 per cent, compared with 8.8 per cent in March, and 14 million Americans are unemployed more than two years into the recovery.
[…]Like the roughly $800-billion stimulus program Mr. Obama shepherded through Congress in early 2009, his new proposal would ease the tax burden on the middle class; send money to states, which have cut almost 500,000 jobs since 2010; and seek to create jobs for millions of unemployed construction workers by plowing millions into refurbishing roads and schools.
[…]The U.S.’s publicly held debt is on track to reach 82 per cent of gross domestic product by the end of the decade, higher than in any year since 1948, according to the Congressional Budget Office.
[…]The U.S. economy is faltering in part because previous stimulus programs are dwindling, while private demand has yet to return in robust way.
[…]Mr. Obama also proposes direct transfers worth $140-billion. Some $35-billion will go to states to help them retain teachers, police officers and fire fighters, while $30-billion would be used to refurbish schools, an initiative the White House likes because the work involved tends to be labour intensive and the contracts can be signed quickly.
A look at some of Obama’s claims and how they compare with the facts:
OBAMA: “Everything in this bill will be paid for. Everything.”
THE FACTS: Obama did not spell out exactly how he would pay for the measures contained in his nearly $450 billion American Jobs Act but said he would send his proposed specifics in a week to the new congressional supercommittee charged with finding budget savings. White House aides suggested that new deficit spending in the near-term to try to promote job creation would be paid for in the future – the “out years,” in legislative jargon – but they did not specify what would be cut or what revenues they would use.
Essentially, the jobs plan is an IOU from a president and lawmakers who may not even be in office down the road when the bills come due. Today’s Congress cannot bind a later one for future spending. A future Congress could simply reverse it.
Currently, roughly all federal taxes and other revenues are consumed in spending on various federal benefit programs, including Social Security, Medicare, Medicaid, veterans’ benefits, food stamps, farm subsidies and other social-assistance programs and payments on the national debt. Pretty much everything else is done on credit with borrowed money.
So there is no guarantee that programs that clearly will increase annual deficits in the near term will be paid for in the long term.
—OBAMA: “It will not add to the deficit.”
THE FACTS: It’s hard to see how the program would not raise the deficit over the next year or two because most of the envisioned spending cuts and tax increases are designed to come later rather than now, when they could jeopardize the fragile recovery. Deficits are calculated for individual years. The accumulation of years of deficit spending has produced a national debt headed toward $15 trillion. Perhaps Obama meant to say that, in the long run, his hoped-for programs would not further increase the national debt, not annual deficits.
Let’s now look at some of the specific proposals.
But will it work?
Hans Bader explains the plan in this excellent post at the Competitive Enterprise Institute. (He has lots of links, so I removed them, but you can find them in his post on the CEI web site)
It contains more money for the long-term unemployed, more infrastructure spending, and funds for hiring laid-off teachers. It also would extend a cut in the portion of payroll taxes paid by employees. The measures would be financed mostly by deficit spending, but partly by raising taxes on the so-called “rich” — a category that includes most of the small business owners who actually hire people — and by eliminating what the administration refers to as “tax loopholes” — which are not really tax loopholes at all, but rather provisions that allow industries disfavored by the administration to benefit from the same tax code provisions as other industries.
[…]Even the least-bad of Obama’s proposals will not grow the economy. Aid for the long-term unemployed will reduce the size of the economy by encouraging some people to not accept jobs that pay far less than they were accustomed to, even when those are the only jobs available to them. Obama’s proposed infrastructure spending will not grow the economy either, as Veronique de Rugy and others note, since it will be accompanied by costly Davis-Bacon mandates designed to favor unions (which raise the cost of transportation projects and exclude many small non-union contractors), and some of it will be wasted on rail boondoggles and pork rather than roads and bridges, or on Obama Administration pet projects, like energy efficiency, that require specialized skills that most unemployed construction workers lack. (Ironically, Obama removed most transportation spending from the original $800 billion stimulus package for political reasons, replacing it with more harmful welfare and social spending.)
How about Obama’s previous stimulus plan?
Meanwhile, by sucking money out of the private-sector economy, the stimulus wiped out a million private-sector jobs, even as other stimulus provisions outsourced American energy jobs to foreign countries, and wiped out jobs in America’s export sector, resulting in a net loss to the economy of 550,000 jobs, according to two economists. The Obama administration’s use of taxpayer money to subsidize above-market wages for government employees is at odds with what economists like Lord Keynes (the father of the Keynesian school of economics) counseled in past recessions, and what Franklin Roosevelt did in the Great Depression, when he hired people to do construction and transportation projects in the WPA but paid them only very modest wages, providing opportunities to the unemployed without siphoning off useful talent from private-sector businesses.
But isn’t it a good idea to help the unemployed and public school teachers?
As the Heritage Foundation notes, “The consequences of extended unemployment benefits are some of the most conclusively established results in labor economic research. Extending either the amount or the duration of UI benefits increases the length of time that workers remain unemployed. UI benefits subsidize unemployment. They reduce the incentive unemployed workers have to search for new work and to make difficult choices–such as moving or switching industries–to begin a new job.”
The President’s proposed subsidies for laid-off teachers discriminate in favor of one occupation, without any legitimate reason for doing so: the unemployment rate among teachers is vastly lower than for many occupations, and lower than for most. It is best understood as the Administration pandering to the teachers’ unions.
This man only has one thing in his mind and it’s spending your children’s money and giving speeches about how great that makes him. He likes to hear the crowds applaud him for spending your children’s money. I do not think well of people who, in tough economic times, come into my house, take my credit card, and spend a bunch of my money on public sector union workers who have job security, benefits and pensions that I can only dream about. Where does he think that the money he is spending comes from in the first place?
We need an exit strategy from this Keynesian deficit spending quagmire. This man has spent over a trillion dollars on the job-killing Obamacare program, and over a trillion more on stimulus spending. He is running 1.65 trillion dollar annual deficits and he wants to spend even more. And what have we got to show for it? The worst economic recovery in the history of the country – after a recession caused by his own party– and an unemployment rate that is more than double what Bush’s unemployment rate was when he had a Republican House and Senate in 2006.