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Investor’s.com editors react to the suggestion we have become “lazy.”
We’re starting to grasp how hard a job the president has. It can’t be easy to rule a country filled with so many soft, lazy, greedy fat cats who can’t make good stuff anymore.
At a business forum Saturday, President Obama complained that “we’ve been a little bit lazy over the last couple of decades.” He apparently meant we’ve let foreign investment go slack, since “we aren’t out there hungry, selling America and trying to attract new business into America.”
But this is just the latest slur against the United States uttered by its leader.
In October, Obama complained that “we have lost our ambition, our imagination and our willingness to do the things that built the Golden Gate Bridge.” Earlier that month he groused that the U.S. “used to have the best stuff” but doesn’t anymore. In September he described America as having “gotten a little soft.”
And that’s when he hasn’t been complaining about greedy Wall Street executives who think they deserve to make a profit.
But calling America lazy is going too far.
First of all, foreign direct investment has more than tripled over the past two decades. So it’s hardly like businesses abroad haven’t noticed that the U.S. is a good place to invest.
And while the president might have been too busy writing autobiographies to notice, the past two decades have shown an America that is anything but soft or lazy. Since our president doesn’t seem to know about this, here’s a quick review: …
Craig Pirrong calls our attention to articles in WaPo and NYT about the dismal record of government investments in alternative energy projects. The Professor says if you’re surprised by the poor results then you might be an idiot.
… These failures were predictable–and in fact predicted. But the predictions have been ignored. For decades, as the WaPo article points out in excruciating detail. Good money has been thrown after bad which had been thrown after worse. These decisions have been driven by political economy rather than economic calculation. If something needs a subsidy, that means it costs too much for the value it produces. Yes, there can be circumstances in which there is some value that is not internalized by the producer, in which a subsidy may theoretically be justified. But as the historical record makes abundantly clear, that’s not what drives how subsidies are allocated: they come out of the political sausage grinder, and it is politics and political connections that turn the crank.
Whatever you think about ExxonMobil, they deserve credit for not buying into the “beyond petroleum” moonshinery of BP and some other supermajors in the last decade. During the Bush years, XOM CEOs Lee Raymond and Rex Tillerson steadfastly refused to commit capital into renewables and alternative energy, and resisted playing the subsidy game: they were unabashedly an oil company, and didn’t pretend otherwise. They had seen the boondoggles of the 1970s–remember Synfuels?–and didn’t want to squander valuable capital on similar boondoggles in the new millennium. Unfortunately, Congress and two administrations–particularly the current one–haven’t been quite so perceptive. As a result tens of billions of dollars have been wasted, and wasted predictably.
Here’s the Washington Post article. No surprise it is much better than the Times’.
Solyndra, the solar-panel maker that received more than half a billion dollars in federal loans from the Obama administration only to go bankrupt this fall, isn’t the first dud for U.S. government officials trying to play venture capitalist in the energy industry.
The Clinch River Breeder Reactor. The Synthetic Fuels Corporation. The hydrogen car. Clean coal. These are but a few examples spanning several decades — a graveyard of costly and failed projects.
Not a single one of these much-ballyhooed initiatives is producing or saving a drop or a watt or a whiff of energy, but they have managed to burn through far more taxpayer money than the ill-fated Solyndra. An Energy Department report in 2008 estimated that the federal government had spent $172 billion since 1961 on basic research and the development of advanced energy technologies.
What does Washington have to show for these investments? And should the government even be in the business of promoting particular energy technologies?
Some economists, executives and financiers — as well as Energy Secretary Steven Chu — argue that the government must play a role because certain technologies have non-financial benefits, such as producing fewer greenhouse gas emissions or easing U.S. reliance on foreign oil. The semiconductor industry is often held up as a model of how government money can help build a new type of economy.
But others argue that the history of government attempts to reach for the holy grail of new energy technology — a history that features both political parties — is not inspiring. “We’re making very large bets, and the decisions seem to be more grounded in politics and geography than in engineering and science,” said Michael Graetz, a professor at Columbia Law School and the author of “The End of Energy.”
Consider the saga of the Clinch River Breeder Reactor.
In 1971, President Richard Nixon set a goal of building an experimental nuclear power plant. The Clinch River reactor was supposed to be a sort of perpetual motion machine, producing power as well as plutonium that could be used in other plants.
Private utilities agreed to kick in $175 million, less than half of the $400 million that the Atomic Energy Commission estimated it would cost to build. As expenses ballooned, the government covered all the overruns. The project was criticized by activists and scientists worried about the risk of nuclear weapons proliferation. Cheap uranium undercut it.
After President Ronald Reagan was elected, Clinch River survived the first round of his spending cuts, in part out of deference to Senate Majority Leader Howard Baker (R-Tenn.), a strong supporter of the reactor, which was in his home state. But finally, in 1983, with the Congressional Budget Office saying the cost might exceed $4 billion, Congress terminated the program. Blueprints had been drawn up, modeling done, components ordered and some ground cleared, but the reactor was never built. The price tag for the federal government: $1.7 billion ($3.9 billion in today’s dollars).
Then there was the Synthetic Fuels Corporation. …
More on DC corruption from Marc Thiessen’s OpEd book review also in the Post.
… Perhaps the most disturbing revelations come from Schweizer’s investigation into the Obama Energy Department and its infamous “green energy” loan guarantee and grant programs, a program Schweizer calls “the greatest — and most expensive — example of crony capitalism in American history.” The scandal surrounding Solyndra — the now-bankrupt, Obama-connected solar power company that received a federally guaranteed loan of $573 million — is well known. But Solyndra, Schweizer says, is only the tip of the iceberg.
According to his research, at least 10 members of President Obama’s campaign finance committee and more than a dozen of his campaign bundlers were big winners in getting tax dollars from these programs. One chart in the book details how the 10 finance committee members collectively raised $457,834, and were in turn approved for grants or loans of nearly $11.4 billion — quite a return on their investment.
In the loan-guarantee program alone, Schweizer writes, “$16.4 billion of the $20.5 billion in loans granted went to companies either run by or primarily owned by Obama financial backers — individuals who were bundlers, members of Obama’s National Finance Committee, or large donors to the Democratic Party.” That is a staggering 71 percent of the loan money.
Schweizer cites example after example of companies that received grants or loans and documents their financial connections to the Obama campaign and the Democratic Party. And he shows how “the [Energy] department’s loan and grant programs are run by partisans who were responsible for raising money during the Obama campaign from the same people who later came to seek government loans and grants.”
There is much, much more, which means that when Schweizer’s book hits stores Tuesday, heads in Washington are going to explode.
William McGurn notes how special crony capitalism is in Chicago.
New York gave us banks too big to fail. Washington bequeathed us Fannie Mae and Freddie Mac. Still, when it comes to crony capitalism, no one quite matches Chicago.
Soon the Illinois state legislature will meet in special session to consider the Chicago machine’s latest favor: legislation designed to deliver tax relief to three of the state’s largest companies. These tax breaks for the lucky few come just 10 months after the Illinois legislature approved what has been described as the largest tax increase in the state’s history. It’s no coincidence that both have been supported by Gov. Pat Quinn and other top leaders of the state’s Democratic Party.
In so doing, Chicago is giving America a window into the logic of crony capitalism: Raise taxes on everyone—and then cut side deals with those big enough to lobby for special relief.
The legislature is considering this limited tax relief because three corporate mainstays of greater Chicago have threatened to leave without it. One is the CME Group, operator of the Chicago Mercantile Exchange, the world’s largest futures exchange by volume. Another is the Chicago Board Options Exchange (CBOE), the world’s largest options exchange. The last is Sears, one of America’s oldest and most famous retailing giants. …
David Harsanyi says, “Constitutional or not, ObamaCare has to go!!”
Is not doing something the same as doing it, and should government be allowed to force you not to do the thing you’re already not doing by making you do it so you don’t not do it anymore?
That is just one of the perplexing legal questions the Supreme Court will likely find a way to say “yes” to in July after it wrestles with the constitutionality of Obamacare.
Once the court upholds the individual mandate — a provision that allows politicians to coerce citizens to purchase products in private markets (or, in this case, state-backed monopolies) — we will have precedent that puts few limits on the reach of Washington and crony capitalism. And beyond policy, Obamacare demonstrated why we should be cynical about government.
I suppose it starts with process. Obamacare was shoved through the sludge of parliamentary trickery, lies, horse trading, cooked-up numbers and false promises. Even after waiting to see what was in the bill, as Nancy Pelosi suggested, there was a historic electoral backlash. (Some people just don’t know what’s good for them.)
As for the court’s decision, it probably won’t imbue many people with any more confidence in process. Supreme Court Justice Elena Kagan — only recently charged with defending the administration’s positions in federal courts as solicitor general, working there while the health care law was being written and picking the legal team to defend it — will be rendering her entirely untainted decision on the matter.
Nor, as we learned this week, is it reassuring to find out that while the House was debating passage of Obamacare, Kagan and well-known legal scholar Laurence Tribe, then in the Justice Department, did a little dialoguing regarding the health care vote, and according to documents obtained by Media Research Center, Kagan wrote: “I hear they have the votes, Larry!! Simply amazing.”
Nothing says impartiality like double exclamation points!! …
Andrew Malcolm has late-night humor.
Fallon: The Miami Dolphins won their first NFL game this year! My grandma was so happy, mostly because she’s the Dolphins starting quarterback.
Fallon: The AFLAC duck balloon debuts in Macy’s Thanksgiving Parade this year. You think that’s weird. Wait til you see the balloon for that old guy from the Cialis ad.
Letterman: Kim Kardashian had a quiet intimate meeting with her new husband in Minnesota last week. It was just him, Kim, the cameraman, the sound guy, the makeup artist, a publicist, the cue card holder, the grip and, of course, the teamster driver.