Saturday, September 17, 2011

Scandal! (or how I bankrupted our country with a multiplier)

The current administration has set a relative record for the absence of a scandal, until now, due primarily to the....Republicans!  Usually the opposition party finds something to puff about, but the American people figure it, and it's irrelevance out (White water and Iran Contra come to mind). 

This time, the opposition has focused laser like on the issue of our day, debt and the size and scope of government, and clearly drawn a distinction.  We want reduced government, reduced government spending, self reliance, self responsibility, and low taxes.

They want, and their is no real controversy about our respective differences, government control, central planning, an ever enlarging safety net increased debt and higher taxes, mostly on the higher earners.

We want Capitalism, they want Socialism.

Which brings us to Solyndra, the $500,000,000 boondoggle.  When we arrived at our economic peril, this administration, supported by a "progressive" Congress, decided to spend a vast amount of money to stimulate the economy.  The opposition argued that the money would be better spent on broad based tax cuts, however this was dismissed because of the supposed "multiplier" effect of government spending. 

The theory was that to resolve our economic mess, we needed a huge infusion of money (money we did and do not have) spent at the direction of our central government, which would be done so efficiently, it would (it is hard to write this without giggling) multiply its efficiency.  "Studies" were cited showing its effectiveness.  (funny, "studies" are used as a reason to propose reorganization of our life to prevent global warming...I mean climate change...(it never did warm, darn it).

Well how is that hope and change and multiplier effect working so far?

Our glorious leader decides to revive our country energy jobs and taxes on the high earners.  He/They are just so smart, they know what needs to be done, put money into bridges and clean energy jobs, except...there have been a minuscule number or green jobs created and....we still have "145" dangerous bridges which need to be fixed (according to our President) and if we love him we will pass his jobs bill.

However one might ask, um....Mr. President, why didn't we fix these bridges with the first stimulus bill?  (and why do you so need to be loved?, but that is for another post.)  Could it be, because central planning never works and it always leads to corruption?  Wonder how many bridges we could have fixed for $500,000,000?


The bankruptcy of solar-panel maker Solyndra neatly encapsulates the economic, political and intellectual bankruptcy of Barack Obama’s Big Idea. It was the president’s intention back in 2009 to begin centrally reorganizing the U.S. economy around the supposed climate-change crisis.

To what end? Well, Obama claimed his election would mark “the moment when the rise of the oceans began to slow and our planet began to heal.” But that was just the cover story. At its core, Obamanomics is about the top-down redistribution of wealth and income. Government spending on various “green” subsidies and programs, along with a cap-and-trade system to limit carbon emissions, would enrich key Democrat constituencies: lawyers, public sector unions, academia and non-profits.

No wonder many Democratic strategists predicted their party’s 2008 landslide win would usher in a generation of political dominance. Obamanomics, essentially, would divert taxpayer dollars to the Green Lobby – and then into the campaign coffers of the Democratic Party. This is what crony capitalism is really all about: politicians enriching favored businesses, who then return the favor. Or maybe it’s the other way around, Who cares, really. It’s an endless, profitable loop for both.

And Obama almost pulled it off. The Great Recession conveniently allowed the president to start the spendathon under the guise of economic stimulus.  As it turns out, the $38.6 billion loan program for clean energy firms that Solyndra benefited from has created just 3,545 permanent new jobs after parceling out half its dough. That works out to around $5 million a job.

It’s very difficult to perceive a company with a model that says, well, I can build something for six dollars and sell it for three dollars. Those numbers don’t generally work. You don’t want to lose three dollars for every unit you make.

Unless, of course, American taxpayers make up the difference — though in the case of Solyndra, even government’s thumb on the scale wasn’t enough to save it. And it often isn’t enough when an investment’s goals are a fat political reward rather than a financial one.
“The optics of a Solyndra default will be bad,” the Office of Management and Budget staff member wrote Jan. 31 in an e-mail to a co-worker. “If Solyndra defaults down the road, the optics will be arguably worse later than they would be today. . . . In addition, the timing will likely coincide with the 2012 campaign season heating up.”

That’s not how the private sector makes investment decision. But it’s routine for government where the stakeholders are politicians, bureaucrats, lobbyists and favored constituencies. The takers, not the makers. That’s whose side Obamanomics is on.


Jim G. said...

The Obama administration’s $38.6 billion “clean technology” program was supposed to “create or save” 65,000 jobs. Half the money has been spent – $17.2 billion – and we have 3,545 jobs to show for it. That works out to an impressive $4,851,904.09 per “green job.” A world record! Take that, you loser Spaniards! USA! USA!
So, based on previous form, Obama’s prediction of 1.9 million new jobs will result in the creation of 92,000 new jobs, mostly in the Federal Department of Green Jobs Grant Applications.
Just to put it in perspective, the breezy $447 billion price tag for the Pass My Jobs Bill jobs bill is about 20 times higher than the most recent Greek government deficit currently threatening the stability of the entire Eurozone. Indeed, Greece’s projected 2011 deficit – $24 billion at last count – is little more than half of just one of Obama’s boutique, niche “green jobs” programs. As Churchill almost said, never in the field of human con tricks has so much been owed by so many to so little effect.
Fortunately, there is no “American Jobs Act”. Indeed, the other day, tired of waiting for Obama to turn his telepromptered pseudo-bill into a typewritten actual bill, the Texas Congressman Louie Gohmert waggishly introduced an “American Jobs Act” all of his own. But back on the campaign trail the chanting goes on, last week’s election results in Nevada and New York notwithstanding. America has the lowest employment since the early Eighties, the lowest property ownership since the mid-Sixties, the highest deficit-to-GDP ratio since the Second World War, the worst long-term unemployment since the Great Depression, the highest government dependency rate of all time, and the biggest debt mountain in the history of the planet. And the president has just announced to the world that he’s checked the more-of-the-above box. The Pass My Jobs Bill jobs bill proclaims that this is all he knows and all he wants to know.

Jim G. said...

The estimated cost of the non-bill is just shy of half a trillion dollars. Gosh, it seems like only yesterday that Washington was in the grip of a white-knuckle, clenched-teeth showdown over whether a debt ceiling deal could be reached before the allegedly looming deadline. When the deal was triumphantly unveiled at the eleventh hour, it was revealed that our sober, prudent, fiscally responsible masters had gotten control of the runaway spending and had carved (according to the most optimistic analysis) a whole $7 billion of savings out of the 2012 budget. The president then airily breezes into Congress and in 20 minutes adds another $447 billion to the tab. That’s what meaningful course correction in Washington boils down to: seven billion steps forward, 447 billion steps back.

Baxter said...

Phony "scandal"