quotable

"Once abolish God and the government becomes the God." -G.K. Chesterton

Sunday, October 2, 2011

Too Green to Fail: Crony Capitalism in America II

Since President Obama came into office, the Department of Energy has become a piggy bank for some of the wealthiest venture capitalists in the world, a money-pumping machine that rewards the richest of the rich with multi-million dollar grants and loans under the guise of green energy. So far the DOE has awarded $20 billion in government handouts, far exceeding what the private sector spent on green energy according to the DOE's own website, and plans to hand out as much as $38 billion.

While most people recognize the potential benefits of green energy, dispersing billions to billionaires to create "green jobs" has failed to live up to any measurable standard. In fact, when government intervenes in a crowded industry of for-profit startups and strips away risks for some investors at the expense of others, that's the very definition of crony capitalism.  Even more troubling, it suggests corruption by an administration that is willfully using taxpayer money to only prop up businesses with ties to the president.

Everyone is familiar with the case of Solyndra, which we already covered in detail, but Solyndra isn't an isolated incident. As government auditors pointed out last summer, The Energy Department's loan guarantee program "has treated applicants inconsistently, favoring some and disadvantaging others." At what point do we start to recognize a pattern of corruption and call out the president for these continued conflicts of interest?

Take the Sunshot Awards. On September 1, the DOE announced $145 million dollars in government grants awarded to companies with investments in solar energy. Being grants, this money that does not have to be paid back. It is, in essence, corporate welfare. Winners of the Sunshot Award this year include GE, Solexel, and Dow Chemical. All three have strong ties to the Obama administration. GE, in particular, has been under the spotlight recently, given a NY Times article reporting that the multi-billion corporation paid no federal taxes last year despite earning billions in profits.

GE is led by Jeffrey Immelt, who also heads President Obama's Jobs Council and has a cozy enough relationship with the commander-in-chief to indulge in international travel on Air Force One. So it was no surprise to see Immelt sitting in the House Chamber as a special guest of the president when he touted his second stimulus, or $447 billion jobs bill, which promises to send more grants and corporate welfare Mr. Immelt's way.

President Obama, of course, has spent the better half of the year criticizing those who make hefty profits for not paying their "fair share", but apparently GE gets a waiver from this administration, just like all those waivers being handed out by the HHS to exempt companies from complying with the egregious costs of Obamacare. If the president is upset GE didn't pay more taxes given their profit margin, the least he could do is stop handing them free money. And yet the DOE awarded millions in corporate welfare to the under-taxed GE, collected, ironically, from American companies and individuals who did meet their tax obligations and pay their "fair share."

Dow Chemical is another Sunshot grant winner with deep ties to the Obama administration. Their CEO, Andrew N. Liversis, has been labeled "Obama's Aussie" and sat on the president's Export Council before being appointed co-chair of the president's Advanced Manufacturing Partnership (which brings with it another $500 million of U.S. government investment). He has visited the White House at least 18 times. As a token of his appreciation, Andrew Liversis has already endorsed Obama's $447 billion Baby Stimulus (or Porkulus II), one of the few CEOs to do so, and just weeks after receiving his company's grant.

Cynics may shrug their shoulders at these instances of cronyism and insider deals, but it's important to recall President Obama ran as a different kind of candidate who was going to "lead the most transparent administration in our nation's history." Even now, the president continues to blast special interests and lobbyists who demand special deals, but as Solyndra, GE, and Dow Chemical have proven, the president is encouraging these very deals behind closed doors. This administration is bought and paid for by Big Business, and vice versa.

All of which leads to Solexel, another California solar company like Solyndra. Solexel received $13 million from President Obama's DOE, which is fine and dandy except that surprise! the investors behind this company include two of President Obama's biggest fundraiser, John Doerr of Kleiner Perkins Caufield & Byers (which also has ties to Al Gore), and Steve Westly of The Westly Group, who bundled half a million dollars for the president's campaign and sat on the Secretary of Energy's Advisory Panel.

Steve Westly wrote about the underlying spoils of his privileged position on his website in 2010, bragging, "We believe that with the Obama administration, and other governments … committing hundreds of billions of dollars to clean tech, there has never been a better time to launch clean tech companies. The Westly Group is uniquely positioned to take advantage of this surge of interest and growth."

Uniquely positioned indeed. Like Mr. Liversis, Mr. Westly has also vocally supported the president's $447 billion "jobs plan", no doubt expecting billions of the second stimulus to land squarely where the first stimulus did - in his wallet. Mr. Westly has already pocketed $500 million from the Department of Energy for his investment in Tesla, which manufactures and sells high-end electric cars to millionaires.

If you want to see what greasing the wheels of crony capitalism will do for a president's re-election efforts, just watch the clip below as venture capitalist Steve Westly gushes over everything Obama has done for him. This is a man who won't give an on-camera interview to ABC News to answer questions about how so much taxpayer money just happens to find its way to his pockets, but he certainly isn't camera shy when it comes to praising his sugar daddy in the White House. Heck, he can probably even afford to throw some of that free government money back at the president's re-election campaign. What? You say he already has? No kidding.

None of this is by accident. It's a pattern. And not surprisingly, it's terrible for the economy, as those with rich connections get richer while an increased regulatory climate squeezes small businesses and entrepreneurs from hiring and investing. Meanwhile, private sector dollars follow the path of least resistance, investing where government protects them from risk - i.e. inefficient government projects.

We are now on the brink of a double dip recession. Unfortunately, the mainstream media is asleep at the wheel while President Obama and his cronies take the rest of us to the cleaners.





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