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.

Too Green to Fail: Crony Capitalism in America

You would have to live in a cave to not know about Solyndra by now. Either that or get your news from MSNBC, were the network has failed to mention the story at all, obviously too busy questioning the sexuality of Michele Bachmann's husband and whether or not the outspoken candidate submits to him. If only MSNBC would submit to facts and cast some sunlight on the Enron-esque collapse of the president's pet energy project.

SolarGate, as some are calling it, revolves around a solar company (no pun intended) that received $535 million from President Obama's Department of Energy as part of the stimulus bill. In this case, the loans were guaranteed, meaning the government has promised to make good on them even if the company can't.

Guess what? The company can't.

Not only that, but Solyndra's loan was fast-tracked for approval by the administration despite red flags about its potential to pay the money back... kind of like those subprime mortgages the government used to guarantee way back in 2007 before the housing sector collapsed and caused the Great Recession. Nevertheless, Solyndra lobbied hard and eventually secured funding for their questionable business plan. According to records, company executives visited the White House at least 20 times before the loan was approved, and newly discovered emails show staffers pleading for the Department of Energy to move quickly so the vice-president could use Solyndra for an upcoming photo-op (NOTE: this could make Biden a potential fall guy for Democrats wishing to revitalize the 2012 ticket).

Since then, the company has been nothing less than a disaster, first canceling its IPO, then closing its factory doors, laying off its employees, and declaring bankruptcy before being raided by the FBI. This, just months after President Obama toured the factory, hailing it as "the true engine of economic growth."

But in case you think this was just another bad decision by an administration famous for bad economic decisions, be aware that Solyndra's private sector investors were offered the loan at a fraction of the interest rate that other companies received from the DOE program. And one of the chief benefactors of this favorable loan was none other than George Kaiser, an Obama donor who raised $50,000 for the president's campaign in 2008. Even worse, the terms of the agreement put the taxpayer on the hook, allowing the Tulsa billionaire's foundation to recoup any of his investment before the government.

All of this would be bad enough if Solyndra was as an isolated incident. It's not. In fact, Solyndra is just the tip of the iceberg, not only an example of failed policy and a waste of a half billion dollars when government debt is discouraging job creation, but part of a bigger pattern of crony capitalism that is emerging with green energy. Incidents of the president's donors receiving loans and grants from the Department of Energy over the past two years are almost too numerous to count. And with the Obama campaign's stated goal of raising $1 billion for 2012, it's no wonder the president is paying back his friends so they can enrich his campaign coffers.

The truth is very little stimulus actually went to help the middle class or small businesses. That's why one trillion dollars later unemployment is still the worst it's been in 20 years. A large chunk of Obama's spending spree is redistributed not among the needy, but among the wealthy and influential, somehow seeming to trickle its way up to the biggest financial backers of the Democrat Party every time.

For the next few weeks, this blog will examine the seedy relationship between the Department of Energy and Obama's biggest donors. Make no mistake. It is a culture of corruption.

Tyranny by Bureaucracy

We are halfway to tyranny by bureaucracy. The Obama administration's recent move allowing the EPA to declare air, that's right AIR, as a pollutant is just the latest demonstration of the danger of allowing government to regulate our lives through an endless array of federal agencies and unelected bureaucrats.

Since every human activity produces carbon dioxide, the EPA has basically been granted unprecedented power by the Obama administration to tax and control every aspect of our lives. The only bigger threat to our democracy is the government takeover of health care, which should it pass, will create 111 new bureaucracies. Together, these two entities will strip away every one of our freedoms until we won't be able to do anything without a bureaucrat's permission. And since these bureaucrats are not elected, it's next to impossible to hold them accountable. Once they become entrenched, it's even harder to remove them.

Democrats and the Left try to sell their intrusive big government programs as beneficial and compassionate, but there is nothing beneficial or compassionate about tyranny by bureaucracy. It replaces individual choice with false promises, promises the government makes in benefits it claims it will hand out, only to snatch them away later by creating a maze of arcane rules and confusion that prevents those most in need from ever receiving them. This is why many people eligible for Medicaid fail to sign up. It's also why it takes an average of 6 months to get an MRI in Canada and twice that to have surgery. Is there anything compassionate about forcing someone to wait a year in pain and agony for treatment? Is there anything compassionate about telling someone to take the pain medicine instead of ever getting treated? Of course not.

Every progressive program sounds harmless at first, but in reality they are a virus feeding on their democratic host. Create an agency that provides health care or an agency to protect the environment. Who can argue against such lofty goals? But they are a ruse. Once granted unlimited power, these agencies hemorrhage dollars through fraud and waste all the while destroying the spirit of the individual. We see this today with the EPA, which can make or break entire industries, killing jobs and putting families out of work simply by how they choose to regulate air.

Of course, If the bureaucratic virus prevails, the host will die, and since the virus can't stand on it's own, the whole system eventually collapses into chaos and anarchy. This was the goal of Karl Marx, the father of progressivism's sister ideology, who wished for "an endless revolution." Again, I note that endless revolutions are neither compassionate nor beneficial.

Perhaps no one understood the tyranny of bureaucracy better than Adam Smith, one of freedoms greatest proponents and a founder of America's free market principles, when he warned:

"As soon as government management begins, it upsets the natural equilibrium of industrial relations, and each interference only requires further bureaucratic control until the end is a the tyranny of the totalitarian state."

The progressive movement, and Democrats in particular, have spent the last 100 years chipping away at the Constitution for "the greater good", adding one bureaucracy on top of another. Unfortunately, there is no "greater good." If the liberties of one man or woman can be trampled upon, then by definition no rights are absolute, and the government can run over anybody they choose. Nothing good can come of this.

How about a "Listen to the People Forum", Mr. President?

Last week, President Obama announced a "Jobs Forum" to solicit ideas to help put unemployed Americans back to work. This would be fine and dandy if we were talking about a student council proposal. Meet and have cookies, discuss possible themes for the prom, and maybe sign everybody up for a leadership conference or two. But when the President of the United States of America starts suggesting brainstorming sessions and team-building exercises to jump-start the economy, you know he is completely in over his head.

Not that we should be surprised. If you've spent your entire political career running for office and never been held accountable for actually running an office, holding a "Jobs Forum" probably seems like the perfect solution to pretending to do something about a problem you have no desire or idea how to fix. When unemployment is expected to reach almost 11% and one in six Americans is said to be looking for more hours of work, you have to at least act like you're concerned. Such antics might work in an election, but it's a terrible way to lead a nation.

Not only can't the government create jobs without stealing resources from the private sector (thus killing private sector growth), but every policy the president has pushed so far can accurately be described as a "Jobs-Killing Forum." From the stimulus boondoggle to handing control of car companies over to the unions, from cap-and-trade energy schemes to state-run health care, from protectionism to higher taxes, President Obama has all but declared war on free enterprise.

Rather than let the invisible hand of the free market correct the economy, the Obama administration has cut it off and inserted their own heavy hand in its place, picking winners and losers and threatening regulations at every turn. Private companies now change their behavior to meet the federal government's whimsical desires, often at the expense of innovation and job creation. What good is a forum when the best ideas to come out of it will be ignored if they don't support a larger, more intrusive bureaucracy?

Of course, the purpose of the "Jobs Forum" isn't to turn the economy around. It's to protect and insulate the Obama brand from the political fallout from his statist policies. To turn the economy around, Obama would have to abandon his Far Left agenda, shrink government, lower taxes, and listen to the will of the people. That's not going to happen. Meanwhile, so long as we're aimlessly brainstorming, why not hold a "Peace Forum" to solve Iraq and Afghanistan.

The only forum that Obama doesn't seem willing to hold is a "Listen to the People Forum." He has all but ignored the results of this year's elections in Virginia, Pennsylvania, and New Jersey in which Republicans, left for dead nine months ago, won handily. He has ignored the polls, demonized the Tea Party protesters, and vilified news organizations that oppose his policies.

Only the most callous person would continue to push an unpopular ideology at the expense of everyday Americans, but it's become clear that Obama holds in contempt those who wish to succeed without relying on the state.

Murdering Economic Recovery in the Womb

New figures show unemployment has hit 10.2%, but that could be far from the bottom. This from today's Washington Examiner:

As Examiner columnist and practicing economist Irwin M. Stelzer notes in today's edition, some of the traditional signs of recovery look positive. But businesses aren't investing in new jobs, they are instead hoarding cash, waiting for the next shoe to drop in Washington on such issues as health care reform, cap-and-trade, and federal taxes, spending and deficits. "There is a nagging fear among those who closely watch not only the economy but government policy that these nascent economic forces might be murdered in their crib by the current administration," Stelzer notes.

It's time for Obama and Democratic congressional leaders Harry Reid and Nancy Pelosi to step back from their radical plans to vastly expand federal power, spending, deficits and taxes, and instead reach out to conservatives in both parties who understand how to make the economy grow with tax cuts, reduced bureaucracy, and lower government spending. In other words, stop playing ideological games and get serious about restoring economic growth before millions more jobs are lost.

Democrats will argue that reforming health care is part of the economic recovery, but nothing could be further from the truth. The economy didn't tank because of the costs of an MRI. I don't know of one economist making this nonsensical argument, unless Keith Olbermann counts as an economist. Of course, I'm surprised he even counts as a TV personality. Leave it to progressive kool-aid drinkers to blame the economy on tax cuts (instead of out-of-control government spending) and a health care system that 8 out of 10 Americans are satisfied with.

If PelosiCare or ObamaCare passes, health insurance will get more expensive, making the economy worse, thanks to the thousands of tax hikes and fees proposed on everything from the uninsured to the overinsured, from doctors who order too many tests to medical device manufacturers, all passed down in the form of higher premiums. Not to mention the draconian regulations and price controls on private insurers.

Add in the crap-and-trade boondoggle to create green jobs (i.e. government jobs producing inefficient energy subsidized on the backs of cheap, profitable, and efficient energy), the unavoidable inflation on the horizon, the possibility of a Copenhagen treaty on climate change that punishes US industrial growth, and the expiration of the Bush tax cuts, and you are looking at a deadly cocktail that will destroy jobs and increase the odds for a great depression.

I wouldn't argue that Dems are killing the recovery in the crib, however. That would suggest the recovery is further along than it actually is. The recovery is still in the womb, and Obama and company are in the process of aborting it in the name of bashing capitalism. No surprise given the Left's fanatical devotion to the procedure. If the sanctity of life isn't worth protecting, what would make free enterprise worth saving?