Obama's Public Equity Record is the Real Scandal
From Marc Thiessen writing in yesterday's Washington Post:
"Since taking office, Obama has invested billions of taxpayer dollars in private businesses, including as part of his stimulus spending bill. Many of those investments have turned out to be unmitigated disasters — leaving in their wake bankruptcies, layoffs, criminal investigations and taxpayers on the hook for billions. Consider just a few examples of Obama’s public equity failures:
● Raser Technologies. In 2010, the Obama administration gave Raser a
$33 million taxpayer-funded grant to build a power plant in Beaver
Creek, Utah. After burning through our tax dollars, the company filed for bankruptcy
protection in 2012. The plant now has fewer than 10 employees, and
Raser owes $1.5 million in back taxes.
● ECOtality. The Obama
administration gave ECOtality $126.2 million in taxpayer money in 2009
for, among other things, the installation of 14,000 electric car
chargers in five states. Obama even hosted the company’s president, Don
Karner, in the first lady’s box during the 2010 State of the Union address as an example of a stimulus success story. The company has since incurred more than $45 million in losses and has
told the federal government, “We may not achieve or sustain
profitability on a quarterly or annual basis in the future.” Worse, the company is now under investigation for insider trading.
● Nevada Geothermal Power (NGP). The Obama administration gave NGP a $98.5 million taxpayer loan guarantee in 2010. The New York Times reported
last October that the company is in “financial turmoil” and that
“[a]fter a series of technical missteps that are draining Nevada
Geothermal’s cash reserves, its own auditor concluded in a filing
released last week that there was ‘significant doubt about the company’s
ability to continue as a going concern.’ ”
● First Solar. The Obama administration provided First Solar with more than $3 billion in loan guarantees for power plants in Arizona and California. According to a Bloomberg Businessweek report
last week, the company “fell to a record low in Nasdaq Stock Market
trading May 4 after reporting $401 million in restructuring costs tied
to firing 30 percent of its workforce.”
● Abound Solar, Inc. The Obama administration gave Abound Solar a $400 million loan guarantee to build photovoltaic panel factories. In February the company halted production and laid off 180 employees.
● Beacon Power. The Obama administration gave Beacon — a green-energy storage company — a $43 million loan guarantee. At the time of the loan, “Standard and Poor’s had confidentially given
the project a dismal outlook of ‘CCC-plus.’ ” In the fall of 2011,
Beacon received a delisting notice from Nasdaq and filed for bankruptcy.
● This is just the tip of the iceberg. A company called SunPower got a $1.2 billion loan guarantee from the Obama administration, and as of January, the company owed more than it was worth. Brightsource got a $1.6 billion loan guarantee
and posted a string of net losses totaling $177 million.
● And, of
course, let’s not forget Solyndra — the solar panel manufacturer that
received $535 million in taxpayer-funded loan guarantees and went
bankrupt, leaving taxpayers on the hook.
If Obama wants to attack Romney’s alleged private equity failures as
chief executive of Bain, he’d better be ready to defend his own massive
public equity failures as chief executive of the United States."
45 Comments:
Regarding the "stimulus":
According to the CBO, the stimulus has created 3.3 million jobs.
According to Recovery.gov, $755.9 billion dollars have been spent in the stimulus.
If we take these numbers at face value, that works out to about $235,212 per job.
If we just assume the money that was designated for "Contracts, Grants, Loans", then the number is around $70,575 per job (and, to make that assumption, we need to assume that $523.0 billion was essentially wasted).
No private corporation in the world creates jobs at that price tag. In fact, private corporations create jobs at an average cost of $44,389 (median wage, incl. benefits), 81% (or 37.1% with our other assumption) cheaper than the government did.
Even if we believe that the stimulus created this many jobs, can we really call such a price tag a success? Especially when the private sector can do it so much cheaper?
boudreax had some comments on this yesterday:
http://cafehayek.com/2012/05/but-both-are-successful-movies.html
i think he left out a key point:
unlike bain, the treasury lost a fortune on GM. the losses look to be $24 billion, and that's just the losses for the treasury and leaves out those inflicted on senior creditors in direct contravention of BK law.
but, leaving those aside, $24 bn would be 36% of ALL OF BAIN'S CAPITAL. that one trade would have completely destroyed bain. they would have hemorrhaged investors. it would be OVER for them.
they would certainly not be parading it in the media as a great success.
THAT is the difference between public and private in one simple nutshell. private business punishes such stupidity and the firms that do it go out of business. public spending lionizes such underinvestment and claims it as an achievement that it seeks to replicate.
anyone looking for a simple example of why federal spending has a negative multiplier need look no further than this simple example.
I don't know all the details, but the medical device firm my wife works for is actually trying to woo Bain Capital into investing in the company. I guess they haven't heard former captains of industry Obama and Biden's warnings about "vampire capitalism."
Meanwhile, the Obamacare medical device tax kicks in next year...
Forty years ago, corporate America was bloated, sluggish and losing ground to competitors in Japan and beyond. But then something astonishing happened. Financiers, private equity firms and bare-knuckled corporate executives initiated a series of reforms and transformations.
The process was brutal and involved streamlining and layoffs. But, at the end of it, American businesses emerged leaner, quicker and more efficient.
Now we are apparently going to have a presidential election about whether this reform movement was a good thing. Last week, the Obama administration unveiled an attack ad against Mitt Romney’s old private equity firm, Bain Capital, portraying it as a vampire that sucks the blood from American companies. Then Vice President Joe Biden gave one of those cable-TV type speeches, lambasting Wall Street and saying we had to be a country that makes things again.
The Obama attack ad accused Bain Capital of looting a steel company called GST in the 1990s and then throwing its workers out on the street. The ad itself barely survived a minute of scrutiny. As Kimberly Strassel noted in The Wall Street Journal, the depiction is wildly misleading.
The company was in terminal decline before Bain entered the picture, seeing its workforce fall from 4,500 to less than 1,000. It faced closure when Romney and Bain, for some reason, saw hope for it in 1993. Bain acquired it, induced banks to loan it money and poured $100 million into modernization, according to Strassel. Bain held onto the company for eight years, hardly the pattern of a looter. Finally, after all the effort, the company, like many other old-line steel companies, filed for bankruptcy protection, in 2001, two years after Romney had left Bain.
This is the story of a failed rescue, not vampire capitalism.
But the larger argument is about private equity itself, and about the changes private equity firms and other financiers have instigated across society. Over the past several decades these firms have scoured America looking for underperforming companies. Then they acquire them and try to force them to get better.
As Reihan Salam noted in a fair-minded review of the literature in National Review, in any industry there is an astonishing difference in the productivity levels of leading companies and the lagging companies. Private equity firms like Bain acquire bad companies and often replace management, compel executives to own more stock in their own company, and reform company operations.
Most of the time they succeed. Research from around the world clearly confirms that companies that have been acquired by private equity firms are more productive than comparable firms.
more:
http://m.sltrib.com/sltrib/mobile/54178863-82/private-companies-equity-firms.html.csp
Morganovich,
"Bain held onto the company for eight years, hardly the pattern of a looter."
So Bain gave those employees an extra 8 years of paychecks. Wow, what villains! They should all go to community organizer school to atone for their sins.
"Many of those investments have turned out to be unmitigated disasters"...
But! But! But we would've been deprived of the BOOTY BUNDLER!!
It's never been about the economy:
Since taking office, Obama has invested billions of taxpayer dollars in private businesses, including as part of his stimulus spending bill. Many of those investments have turned out to be unmitigated disasters — leaving in their wake bankruptcies, layoffs, criminal investigations and taxpayers on the hook for billions. . . . Amazingly, Obama has declared that all the projects received funding “based solely on their merits.” But as Hoover Institution scholar Peter Schweizer reported in his book, “Throw Them All Out,” fully 71 percent of the Obama Energy Department’s grants and loans went to “individuals who were bundlers, members of Obama’s National Finance Committee, or large donors to the Democratic Party.” -- The Washington Post
"leaving in their wake bankruptcies, layoffs, criminal investigations and taxpayers on the hook for billions."
not to mention crowding out valuable private investment while doing so.
Lost in the entire story is this: The Obama administration instituted a $31 Billion LOAN program for Green technology. China turned around and put in place a $300 billion GRANT program. Who do you think is going to win in that fight?
fully 71 percent of the Obama Energy Department’s grants and loans went to “individuals who were bundlers, members of Obama’s National Finance Committee, or large donors to the Democratic Party.”
And anybody suprised by this revelation is clueless. Romney will be no different. Politics in the U.S. A.
I'm not making up my mind about this until I hear what Paul Krugman has to say.
"Lost in the entire story is this: The Obama administration instituted a $31 Billion LOAN program for Green technology. China turned around and put in place a $300 billion GRANT program. Who do you think is going to win in that fight?"
we are. we made the (relatively) less stupid mistake. we will have less senseless, non return on capital or demand based investment and crowd out our actual industry less.
china will have destroyed its green industry for a decade.
pork and triumphalism does not create globally competitive technology industries. it creates malinvestment and huge investment losses while devastating the industry it's focused on.
Also keep in mind one of Obama's top bundlers is the criminal Jon Corzine. One of the co-chairs of the Obama Re-election Campaign is Federica Pena.
"Obama raised far more cash from hedge fund and private equity "vampires" than any other candidate in the 2008."
we are. we made the (relatively) less stupid mistake.
At the risk of sounding contradictory, I don't think we are going to win that fight. Both China and the US will be screwed equally here. We've both made monetary commitments that we will never see back. Solar power, at the current level of technology, is pathetically inefficient for anything more than a small neighborhood. There won;t be any widespread adaptation of it until costs go down and/or inefficiencies go up.
And anybody suprised by this revelation is clueless. Romney will be no different. Politics in the U.S. A.
Right you are. As long as we have a government that can arbitrarily regulate and protect businesses, we will have a business interest in government. That's why it's so damn important we let markets be free and government be limited to only its most essential roles.
jon-
if you are talking about return on investment, then yes, we're both screwed. but in terms of our overall green industry, i think we a re the less screwed because, especially weighted for size, we interred with the market mechanisms of innovation and profit less.
we put a pinch of sand in the gears, china dropped a bucket in.
sure, none of the sand is a good thing, but if you have to have some, less seems better.
". That's why it's so damn important we let markets be free and government be limited to only its most essential roles."
amen brother.
protect the rights of the individual, enforce contracts, defend the borders, and stay out of the way.
Given a choice between money wasted on bankrupt companies, or money wasted on "aid to the states", i'll take the former over the latter any day.
arb-
if you are being asked that question in the first place, things are already broken.
"'m not making up my mind about this until I hear what Paul Krugman has to say"...
Now that's some seriously twisted humor pc...
the stimulus was never about "investments".
it was about getting money into the economy and how it got there was not of overriding importance.
remember that the stimulus ALSO included the make-work-pay credit...where the govt just gave each person working ...$400.. the idea was to SPEND IT.
It was the same deal with the 2% payroll reduction.
the idea was not to "invest" it but to "spend" it.
That's what all of the stimulus was really about.
People can disagree about whether the stimulus was correct economic policy or not but characterizing it as supposed to be "investments" is off target.
and.. it had to be approved by Congress ...who could have easily restricted on what it could (or could not) be spent on.
Much of it was spent on teachers, fireman and new roads and bridges.
"the stimulus was never about "investments".
"The American Recovery and Reinvestment plan won't just throw money at our problems.We'll invest in what works."
~Barack Obama January 8th, 2009
"..it was about getting money into the economy and how it got there was not of overriding importance."
Once again: "The American Recovery and Reinvestment plan won't just throw money at our problems.We'll invest in what works."
~Barack Obama January 8th, 2009
I could find you about a million more instances of Obama promising to "invest" tax dollars via the stiumuls, Larry, but that should be enough to put this nonsense to rest.
"and.. it had to be approved by Congress ...who could have easily restricted on what it could (or could not) be spent on."
Yes, agreed. Lets also hold the Democrat Congress responsible for conspiring with Obama to blow a trillion dollars on nonsense.
"The American Recovery and Reinvestment plan won't just throw money at our problems.We'll invest in what works."
~Barack Obama January 8th, 2009
yes.. but the goal was to quickly get money into the economy... you're confusing the word 'invest' here. He was using it in the vernacular of "investing in infrastructure" and "investing in teachers", not "investing" in the stock market sense.
"..it was about getting money into the economy and how it got there was not of overriding importance."
Once again: "The American Recovery and Reinvestment plan won't just throw money at our problems.We'll invest in what works."
~Barack Obama January 8th, 2009
but not stock market type "invest"
I could find you about a million more instances of Obama promising to "invest" tax dollars via the stiumuls, Larry, but that should be enough to put this nonsense to rest.
in that context.. it did not mean to "invest" in the sense of investing for a return on investment...
the goal was to get money into the economy quickly.
" "and.. it had to be approved by Congress ...who could have easily restricted on what it could (or could not) be spent on."
Yes, agreed. Lets also hold the Democrat Congress responsible for conspiring with Obama to blow a trillion dollars on nonsense. "
in your view.. yes.
but not the same as 1.5 trillion more a year..year after year.. that you had to borrow....and after 8 years it totaled to 15 trillion.
"yes.. but the goal was to quickly get money into the economy..."
That wasn't the only goal. He clearly states he "won't just throw money at our problems." He eve appointed idiot "sheriff" Joe Biden to oversee the programs to esure money wasn't wasted:
“And with a plan of this scale comes enormous responsibility to get it right. That is why I have asked Vice President Biden to lead a tough, unprecedented oversight effort – because nobody messes with Joe. I have told each member of my Cabinet as well as mayors and governors across the country that they will be held accountable by me and the American people for every dollar they spend.” (President Barack Obama, Remarks, Washington, DC, 2/24/09)
You're full of it, Larry. Once again, lapping away at Obama's boots.
"you're confusing the word 'invest' here."
No, I'm not. You're twisting it in order to whitewash your hero's bankrupt regime.
"but not the same as 1.5 trillion more a year..year after year.. that you had to borrow....and after 8 years it totaled to 15 trillion."
Wtf are you talking about? The deficit never approached $1 trillion until your hero Obama took the helm.
"yes.. but the goal was to quickly get money into the economy..."
That wasn't the only goal. He clearly states he "won't just throw money at our problems." He eve appointed idiot "sheriff" Joe Biden to oversee the programs to esure money wasn't wasted:"
he was trying to get money into the economy so it would get spent.
he said nice words about "invest' but at the end of the day he was helicoptering in money... as per the advice he received..
and you know what? the stimulus - was approved by a bunch of people who could have said "no".
“And with a plan of this scale comes enormous responsibility to get it right. That is why I have asked Vice President Biden to lead a tough, unprecedented oversight effort – because nobody messes with Joe. I have told each member of my Cabinet as well as mayors and governors across the country that they will be held accountable by me and the American people for every dollar they spend.” (President Barack Obama, Remarks, Washington, DC, 2/24/09)"
blah blah blah.. did you ever listen to Bush? McCain...Romney, Pallin?
You're full of it, Larry. Once again, lapping away at Obama's boots.
yeah yeah slurp slurp
"you're confusing the word 'invest' here."
No, I'm not. You're twisting it in order to whitewash your hero's bankrupt regime.
"invest" in stimulus-talk is not the same as "invest" in wall-street talk.
If you want "invest" in that context ...try the auto bailout....
the purpose of the stimulus was to put money in the economy...
they could have handed it out on the street.....but they had to make it look good.
basically they borrowed money from the future in an attempt to jump start an economy that was half dead, on life support and threatening to fall into a full depression.
the political words to describe it...were just that.
Even Bush said those words, guy.
" Wtf are you talking about? The deficit never approached $1 trillion until your hero Obama took the helm. "
read the chart:
http://en.wikipedia.org/wiki/File:CBO_Forecast_Changes_for_2009-2012.png
we got to 1.5 trillion after:
1. - taxes were cut
2. - increased spending on DOD
3. - the economy cratered
#3 happened just as Obama checked-in.
there was not a single thing that Obama did that caused the 1.5 trillion. It was there when he showed up.
"...He said nice words about "invest' but at the end of the day he was helicoptering in money... as per the advice he received.."
Oh, so you admit he lied through his teeth the entire time about spending money responsibly. Instead, he was heeding the advice of idiots.
"he said nice words about "invest'"
I guess that's your admission I'm actually not confused about what the word means. Oh wait...
"invest" in stimulus-talk is not the same as "invest" in wall-street talk."
Oh, it's not? Why use the term then? He repeatedly used the word "invest" rather than more accurate vernacular such as, "piss money out the window."
I'm confused. Was he saying "nice words" about investment, or did he really mean something else? Does your brand of logic require any consistency?
Solyndra funding came from the stimulus. Are you telling me his "green initiatives" were not "investing" as in "Wall Street talk?" If so, you're simply a brazen liar.
"..and you know what? the stimulus - was approved by a bunch of people who could have said "no"."
Every Republican, with the exception of 3 RINO's, did say "no."
"Even Bush said those words, guy."
What words?
You and your stupid chart.
"1. - taxes were cut
2. - increased spending on DOD
3. - the economy cratered
#3 happened just as Obama checked-in."
It's been explained to you multiple times how fy2009 cannot be lumped all into Bush's column. You can't blame Bush for Obama's stimulus, the 2nd half of TARP, the $410 billion omnibus spending package Obama signed, and other initiatives he wasted money on. Since 2009, spending has only gone up. That means all that "one time" spending was locked into the baseline. Obama is largely to blame for all of that. To deny that is to be a moronic Obama boot-licker, aka "Larry."
"...He said nice words about "invest' but at the end of the day he was helicoptering in money... as per the advice he received.."
Oh, so you admit he lied through his teeth the entire time about spending money responsibly. Instead, he was heeding the advice of idiots.
no.. he used the word "invest" in a way different than you perceived.
"he said nice words about "invest'"
I guess that's your admission I'm actually not confused about what the word means. Oh wait...
it's like "trust fund".. eh?
"invest" in stimulus-talk is not the same as "invest" in wall-street talk."
Oh, it's not? Why use the term then? He repeatedly used the word "invest" rather than more accurate vernacular such as, "piss money out the window."
because it's like someone saying they are going to "invest" in a new LCD TV. they're not really "investing".
I'm confused. Was he saying "nice words" about investment, or did he really mean something else? Does your brand of logic require any consistency?
he meant spend money on thing that would benefit the economy - he was "investing" in the economy.
"Solyndra funding came from the stimulus. Are you telling me his "green initiatives" were not "investing" as in "Wall Street talk?" If so, you're simply a brazen liar."
no more or less than Bush hiring Blackwater to fight wars...
"..and you know what? the stimulus - was approved by a bunch of people who could have said "no"."
Every Republican, with the exception of 3 RINO's, did say "no."
"Even Bush said those words, guy."
What words?
"invest".. in a "coalition of the willing" and other political blather that all politicians engage in.
>>> Lost in the entire story is this: The Obama administration instituted a $31 Billion LOAN program for Green technology. China turned around and put in place a $300 billion GRANT program. Who do you think is going to win in that fight?
The nation that didn't put a single dime into BS "technologies" that don't work?
What do I win?
>>> Does your brand of logic require any consistency?
Larry, "GIGO".
Logic manipulates fallacies just as effectively and reliably as it manipulates truths.
"it was about getting money into the economy and how it got there was not of overriding importance.
remember that the stimulus ALSO included the make-work-pay credit...where the govt just gave each person working ...$400.. the idea was to SPEND IT"...
Wow! larry g you'll believe just about anything your boyfriend.and his fellow travelers throw at you...
"Oh, so you admit he lied through his teeth the entire time about spending money responsibly. Instead, he was heeding the advice of idiots"...
No, an idiot made the comment of which I'm lifting part of it for entertainment purposes...
More Obama Bundlers Cash In With Massive Air Force Contract
"because it's like someone saying they are going to "invest" in a new LCD TV. they're not really "investing"."
"he meant spend money on thing that would benefit the economy - he was "investing" in the economy."
So he was misusing the word "invest"? He really meant something else? Why wouldn't he clearly say what he meant so as not to confuse English speakers?
"So he was misusing the word "invest"? He really meant something else? Why wouldn't he clearly say what he meant so as not to confuse English speakers"...
The RICO Act maybe ron h?
He DID say clearly. When you say "invest" in infrastructure - it's not the same as 'investing" in stocks/bonds or a business venture.
Govt does not "invest" that way to start with.
In fact it's excluded by law from "investing" things like trust funds.
the links that showed that Obama was "responsible" for the deficit in 2013-2016 was hilarious.
I mean you don't even know if he gets a second term and on top of that you don't even know what actions might be taken with regard to the budget like sequestration or extending all or piecemeal the Bush Tax cuts.
So how could you attribute future deficits to ANY President?
UNLESS you are assuming that the deficits were already in place, and continuing year after year unless cuts made.
this whole narrative is not really serious in dealing with the issues.
It just more partisan anti-Obama blather much like the birther issue.
deficits created by changes to the budget will carry forward to the next elected President unless Congress cuts that budget.
Deficits created by the Congresses under George Bush - such as the doubling of the DOD budget - continue to be a cause of the deficit because the DOD budget was increased without companion cuts in other spending or increases in taxes to pay for it.
That was done under Bush. The deficit that it caused - continues under Obama but Obama had nothing to do with it even though it is a significant part of the structural deficit in his administration.
The only way to reduce that deficit would be to increase taxes or cut DOD spending.
The GOP will not do either.
so that leaves us with a permanent deficit - no matter who is President.
and that's why the CBOl projects deficits for 2013-2016 even though there's no guarantee who will be President - CBO is essentially saying that "without changes" - the deficit will continue.....
Now.. when you take the above situation and you turn it into yet another "Its' Obama's fault" it totally misrepresents the realities and basically is just flat lying about it.
"Deficits created by the Congresses under George Bush - such as the doubling of the DOD budget - continue to be a cause of the deficit because the DOD budget was increased without companion cuts in other spending or increases in taxes to pay for it"...
Well larry g still attempting to morph a lie into reality if he repeats it often enough...
Gotta give the lad kudos for effort though...
read it and weep Juandos:
http://en.wikipedia.org/wiki/File:U.S._Defense_Spending_Trends.png
notice how the DOD budget started ramping up in 2000 until it more than doubled by 2010 and these numbers do not include other National Defense spending...like:
FBI counter-terrorism $2.7 billion At least one-third FBI budget.
International Affairs $5.6–$63.0 billion At minimum, foreign arms sales.
Energy Department, defense-related $21.8 billion
Veterans Affairs $70.0 billion
Homeland Security $46.9 billion
NASA, satellites $3.5–$8.7 billion
Veterans pensions $54.6 billion
Interest on debt incurred in past wars $109.1–$431.5 billion Between 23% and 91% of total interest
Total Spending $1.030–$1.415 trillion
Once this spending is put into the budget, it stays there until/unless it is removed or cut - something our self-avowed fiscally-conservative Republicans - refuse to do.
so then they blame this massive budget increase on Obama - who had almost nothing to do with it... it was there when he took office.
that's the unvarnished truth guy...
larry g showing an incredible ability to NOT learn from his previous embarrassing mistakes says: "http://en.wikipedia.org/wiki/File:U.S._Defense_Spending_Trends.png"...
ROFLMAO!
Wikipedia?!?!
LMAO!
What's next? Aliens landing in your backyard with the latest issue of the New York Times chock full of those dastardly military-industrial complex conspiracies?
you missed the referenced SOURCE Juandos..
OMB .....
yeah.. I know. you don't like them either but your sources make up data our of whole cloth and/or just lie outright...
"you missed the referenced SOURCE Juandos..
OMB"...
Good one fool!
Then why didn't you just go to the OMB site larry g?
You just automatically accepted what was tossed out by the wiki clowns regarding both the substance and the source...
Ha! Ha! Ha! Ha!
actually no... if the narrative or chart is not credibly sourced, I do not trust it.
there is no real dispute over the doubling of the DOD budget and it's role in the 1.5 trillion - continuing deficit.
You cannot double the DOD budget, cut taxes, and expect the budget to balance....
Entitlements grew during that period also -but they did not double.
except for Medicare Part D which became a brand new entitlement - and that is yet another permanent part of the budget ...adding to the deficit and debt that Obama had nothing to do with.
Post a Comment
<< Home