Free Markets, Free People

loan guarantees


More green energy “winning”

It just gets better and better:

President Obama will tout investments in “renewable” energy Wednesday at the local Copper Mountain Solar 1 plant, although the plant has only five full-time employees.

The plant, owned by San Diego-based energy company Sempra, was built in late 2010 at a cost of $141 million. Funding included $42 million in federal-government tax credits and $12 million in tax-rebate commitments from the state of Nevada.

Construction of the plant involved over 300 part-time jobs, but currently only five full-time employees operate the plant, a Sempra spokeswoman confirmed. That comes out to $10.8 million in tax-dollar subsidies per employee.

Result?

Nationally, solar energy is unlikely to help the president achieve his goal of lower energy costs. Geoffrey Lawrence, deputy policy director at the Nevada Policy Research Institute, the free-market think tank that publishes Nevada Journal, noted in his Solutions 2013 report that, even according to the U.S. Department of Energy, solar-PV energy will cost three and a half times more than energy from traditional sources such as coal.

“President Obama’s visit to the Solar 1 Facility in Boulder City is the perfect illustration of why the president’s economic policies are such a failure," said Andy Matthews, president of NPRI. “The government has spent over $50 million to ‘create’ five permanent jobs and build a plant producing a product — expensive solar energy — that no one would purchase without a government mandate.

“That’s not a path to a vibrant economy; it’s the road to serfdom. This mindset — of government attempting to pick winners and losers in the economy through subsidies and regulation — is a major reason why the national unemployment rate is at 8.3 percent, Nevada’s unemployment rate is 12.7 percent and the national debt is over $15.5 trillion.”

But hey, here we are “winning” the Charlie Sheen way.

Again, does anyone wonder anymore why, despite their rhetoric, Obama and Secretary Chu are just fine with gas prices going up?

~McQ

Twitter: @McQandO


Obama finally creates jobs. In Finland. With your money.

This is just the theater of the absurd masquerading as government:

With the approval of the Obama administration, an electric car company that received a $529 million federal government loan guarantee is assembling its first line of cars in Finland, saying it could not find a facility in the United States capable of doing the work.

Vice President Joseph Biden heralded the Energy Department’s $529 million loan to the start-up electric car company called Fisker as a bright new path to thousands of American manufacturing jobs. But two years after the loan was announced, the job of assembling the flashy electric Fisker Karma sports car has been outsourced to Finland.

"There was no contract manufacturer in the U.S. that could actually produce our vehicle," the car company’s founder and namesake told ABC News. "They don’t exist here."

That’s just absurd.   Half a billion dollars of taxpayer guaranteed money to a company in Finland with no guarantee that the coal powered cars they’re building would be built here and create jobs here.

Nope, according to the company’s founder, “no contract manufacturer in the US could actually produce the vehicle”.

We’re finding out about that now?  They didn’t know that before they approved the loan guarantees?

Yet another example of government picking winners and losers with your money.  And, as usual, doing a dismal job.  They’d like you to think they do due diligence on these sorts of deals, but example after example point to utter incompetence, not to mention the fact that government shouldn’t be doing this in the first place.

Dumb and dumber at work with your tax dollars.

Don’t you feel all warm and fuzzy inside?

Oh … and it will be the “Volkswagon” of electric cars made for the little people:

Fisker is more than a year behind rolling out its $97,000 luxury vehicle bankrolled in part with DOE money.

Amazing.

~McQ

Twitter: @McQandO


Green jobs? At $23 million a pop?

How many times have we said the government shouldn’t be involved economically in picking winners and losers?  And how many times have we seen examples of the government doing precisely that and the program ending up a disaster.

Solyndra, for instance.   But political agendas rarely yield to the laws of economics so it is fairly easy to predict how they’ll end.   The Obama administration’s “green jobs” agenda – again see Solyndra for the latest prime example – is a consummate failure.  And a look at where that agenda is headed serves as an example of why what has been said right here (and many other places) continues to be true.

But in case you’ve missed it or are inclined to wave off what we might say here, here’s a guy from CATO:

Jerry Taylor, senior policy analyst for the free-market Cato Institute, says the whole program shows that the federal government should not be picking private-sector winners and losers.

"It’s a lot of money for very few jobs if you do the math," Taylor said. "If nobody in the private sector is willing to invest their capital, that’s a pretty good signal."

What is he talking about?  Take a look at the chart.

Yes, those are Department of Energy numbers for the number of jobs that will be created for $6.5 billion in loan guarantees for the 9 companies in question.  That’s right, $6.5 billion in guarantees will create 283 permanent jobs.   That’s $23 million of your dollars (or borrowed money) per job.

Where’s the private investment?  Why are these companies having to seek federal loan guarantees so they can get loans?  If they’re viable, as Jerry Taylor points out, the private sector should be willing to invest in them.

Why aren’t they?

In fact, why, given that it appears the private sector is not willing to do so, is the DoE even considering these loans?

Because there’s an agenda at stake here.   This isn’t about market viability or sound economics, it’s about trying to save an agenda that promised 5 million green jobs, remember. 

And this is what you get.   A failed Solyndra and 9 companies the private sector won’t invest in which may create 283 jobs.  May.  Government estimates about programs it supports have never been known to be overly optimistic, have they?

$23 million a pop for 283 jobs that may or may not materialize. 

The fact that they’re even considering these loan guarantees tells you all you really need to know about how clueless they are. 

And there are people that still wonder why there is a growing body of us out here wanting smaller, less costly and less intrusive government that binds itself to the limits of the Constitution?

Really?

~McQ

Twitter: @McQandO


Obama touted solar technology company files for bankruptcy

But not before sucking down over half a billion dollars in federal loan guarantees that will now be exercised.

Solyndra was touted by the Obama administration as a prime example of how green technology could deliver jobs. The President visited the facility in May of last year and said  "it is just a testament to American ingenuity and dynamism and the fact that we continue to have the best universities in the world, the best technology in the world, and most importantly the best workers in the world. And you guys all represent that. "

The federal government offered $535 million in low cost loan guarantees from the Department of Energy. NBC Bay Area has contacted the White House asking for a statement.

This is what happens when government tries to pick winners and losers economically with absolutely no understanding of the market in which they intrude.  What this clearly points out, unless there was true malfeasance by the company, is there is no market, at this time, for what they were selling.  Either that, or they were truly incompetent.

This was a “if we build it they will buy” project that apparently either misrepresented the market or misunderstood it. Either way, it failed.   And the Feds were apparently no more informed about the market potential of the product than the company.  Result – over half a billion in loans guaranteed by the Federal government are now being called in.  The taxpayer, as usual, is on the hook to pay off the mistake the government made.

One of the constant themes here is the government is way outside its charter when it engages in activities like this.  It is an example of what those Tea Party lunatics mean when they talk about government intrusion and call for smaller government.  Note, it has nothing to do with welfare reform or any other of the usual nonsense their opponents try to tag them with.   It has to do with out-of-control government and out-of-control spending in areas where none of the founders ever even hinted at envisioning a Federal presence.

It’s a pity this has to be constantly pointed out to Tea Party critics bent on stereotyping members of that group as racists.  But as usual, reality provides the perfect context and example to counter their baseless charges.

This is not what our government should be involved in, period.  And certainly not with tax payers money, exclamation point!

~McQ

Twitter: @McQandO

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