Saturday, October 22, 2011

Stupid people do stupid things

Daily Bell
Adrian Krieg

Really stupid people repeat the same failed process over and over ad infinitum. Please pay attention, Dr. Chu! Einstein said it was the proof of insanity.

Case in point is the Obama administration's solar power loan guarantee program. Not one of the loans made since 2009 have proven successful. The most costly failure, as of now, is Solyndra at $535 million. After Solyndra received its loan it laid off 1100 workers and filed for bankruptcy, in which it had the government (Department of Energy) restructure the loan to put the taxpayers behind the bus, losing US taxpayers $535 million.

Before that, Spectrawatt went belly up and we lost $500,000. Spectrawatt was one of 13 companies given grants. How many are still in business is anyone's guess. We can't even find a list on the Internet.
All this has not satisfied the Obama energy department headed up by Dr. Chu. On the last days of availability he doled out another $4 billion. The question now is, is it even possible to run printing presses fast enough to keep up with Obama's insane spending? More astutely, how did Solyndra wind up with all that money? Seems that a review of the George Kaiser Family Foundation shows it was the grantor of $10,000 to the Urban Health Initiative at the University of Chicago Medical Center, the very place where Michelle Obama was employed, at a salary of almost a quarter-million dollars per year, after her husband became a federal senator and had siphoned a massive federal grant to the same institution.

Kaiser was a frequent White House visitor and the principal in an investment vehicle called GKFF Investment Company that is involved in Solyndra. While the payola by investors in Solyndra is not large, there is a pattern within this administration where donors become winners and taxpayers become the losers. Just so we don't upset anyone by leaving them out, we should mention that Valerie Jarrett and David Axelrod were both also employed at the University of Chicago Medical Center and employee Michelle's hubby, Barack, was a lecturer at the University of Chicago. Oh, and I almost forgot good old George Kaiser, who in the weeks before Solyndra got its loan guarantee, visited the White House and gave the president's 2008 campaign a little gift of $53,500.

Newly released information indicates that the California Democratic Party was a major stockholder in Solyndra and is one of the creditors that will be bailed out while the taxpayers are left holding the bag. Now, we can all understand why the loan guarantee was renegotiated in favor of the stockholders over the government (taxpayers) at the last moment before filing for bankruptcy. And just by the way, Solyndra donated $7,500 to the Democratic Party of California, before the stock purchase or the loan guarantee, in October 2010.

Sadly, many lobbyists will now be looking for new jobs, which is not good for the president's jobs initiative. Seems that Solyndra had scores of DC-insider lobbyists and contractors working on their behalf, including, among others, McAllister & Quinn, McBee Strategic, Sen. Alfonse D'Amato (R-NY ret.), Senator Maria Cantwell (R-NY), Nancy Pelosi and Rice Hadley Group, whose principal is Condoleezza Rice.

New loans include $737 million to Tonopah Solar Energy on September 28 and then $646 million to AV Solar Ranch on the 30th. Total loans now outstanding to solar energy projects are $6.5 billion; projected cost per job created is $23 million. How much of the entire $1.383 billion in new loans will be used to manufacture the products in Mexico is unreported. But at least one of the companies built a plant in Mexico. One can only be amazed that no one in the administration has looked at Spain!
One can only guess that when these go belly up, this administration will find some more campaign donors looking for a handout. This administration has become the sleaziest, most corrupt and least transparent in my memory. Consider now: Operation Gunrunner, Fast and Furious, Solyndra, LightSquared, Chrysler – the list gets longer every day. There is so much dirt just on Operation Fast and Furious and Solyndra that the others don't even make the news. The fact of the matter is companies who are unable to secure loans in the private sector either have bad technology or a poor business plan. I have looked over the plan for Tonopah as well as Solar Power and know exactly why the private sector is not investing in these boondoggles.

This all brings us to Sun Power (SPWR-NASDAQ), to which Dr. Chu just gave a massive loan guarantee. Sun Power is the company that just built a solar power panel plant in Mexicali, Mexico. This will certainly help the Jobs Bill ... Pass it Now! A perfunctory investigation into the finances of Sun Power indicates a net capitalization of $800 million with a debt load of $820 million. In other words, on the day that Mr. Chu gave Sun Power a $646 million loan guarantee the company was bankrupt and $20 million underwater. One wonders how they pick these losers. Have no fear – I'm about to tell you.

George Miller IV is the son of Congressman George Miller III (D-CA). (These people appear not to be very inventive – George Miller the 10th will be here soon.) The representative is senior Democrat on the House Education and Workforce Committee and co-chair of the Democrat Steering and Policy Committtee. George the IV (the son) is a paid lobbyist. How much he has succeeded in bringing to the White House I am not at liberty to say. Papa Miller is a strong supporter of solar energy because when Ford shut down its Richmond, CA assembly plant in his district (a benefit of free trade, for which he voted) the old building was converted for the production of solar panels. But the production is in Mexicali; the facility in Richmond appears to be a warehouse.

Don't for a moment think that I have forgotten wind power, i.e., bird swatters. Aside from the fact that they have produced even larger losses in England, Spain, Holland, Hawaii and California than solar power, we continue to see expansion in this industry. GE, the largest American producer of wind generation equipment, may have something to do with that. Remember, it is GE that off-shored 29 plants since Obama was elected, has $16 billion held off-shore to avoid US corporate taxes, is a huge donor to Obama and saw their CEO made the Jobs Czar – all of which has absolutely nothing to do with this, I'm sure.

The fact that neither system, solar nor wind, has demonstrated the ability to produce a marketable product at reasonable cost that is industrially speaking competitive with oil, coal, nuclear or gas is a known fact. The exact same is true of ethanol. The taxpayers from cradle to grave heavily subsidize these pipe dream energy-producing systems. They subsidize the farmers and manufacturers of the products, they finance the producing plants, distilleries for ethanol and manufacturing plants of the core producers, and then in the end because the equation is untenable they subsidize the selling price.

We all lose because we could be using unsubsidized products at costs 40% lower. We could save billions upon billions in taxes. We could have gasoline at 85 cents per gallon with a 50-cent per gallon profit. We could have electric costs that are 40% lower than your present monthly bill. But then, who would pay all the graft for the chosen to run for re-election? How would Obama develop a billion dollars in campaign reserve funds? Where would the banksters put all that surplus money? It would reduce the national debt and cut billions of dollars off the profit of the Federal Reserve System who's earning about one-third of our taxes for interest repayment of loaned debt funds. The FRS, when set up in 1913, put $144 million into the pot. There are about 100 stockholders – let's pay them off and give them their original money back and redline the $14 trillion national debt off the books. I would sure feel better!

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