President Obama's "Sputnik Year"

When President Obama gave his State of the Union address over 11 months ago, he referred to America's "Sputnik Moment"--our need to invest massive amounts of money in innovations, particularly green innovations, to keep pace with a changing world (emphasis added):

Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik, we had no idea how we would beat them to the moon. The science wasn’t even there yet. NASA didn’t exist. But after investing in better research and education, we didn’t just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs. 

This is our generation’s Sputnik moment. Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race. And in a few weeks, I will be sending a budget to Congress that helps us meet that goal. We’ll invest in biomedical research, information technology, and especially clean energy technology -– (applause) -- an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.

Following that speech, Governor Palin criticized President Obama's reference to Sputnik, noting how spending so much money on things like Sputnik lead to the eventual demise of the Soviet Union:

That was another one of those "WTF" moments, when he so often repeated this Sputnik moment that he would aspire Americans to celebrate. And he needs to remember that what happened back then with the former communist USSR and their victory in that race to space, yes, they won, but they also incurred so much debt at the time that it resulted in the inevitable collapse of the Soviet Union. So I listened to that Sputnik moment talk over and over again, and I think, No, we don’t need one of those. You know what we need is a “spudnut” moment. And here’s where I’m going with this, Greta. And you’re a good one because you’re one of those reporters who actually gets out there in the communities, find these hard-working people and find solutions to the problems that Americans face.

Governor Palin was lambasted by the media for making what they saw as a huge historical gaffe. In reality, it turned out to be a history lesson for the biased media. Peter Schweizer (prior to being hired as an adviser to Governor Palin) wrote at Big Peace following the media mocking that Governor Palin that she was indeed correct:

Palin is right: Sputnik was the typical government solution; symbolism over substance. The Soviets did not really create a satellite, and Washington really wasn’t threatened by it. They “welcomed it.” 

Palin’s other point is that Sputnik was the sort of government bureaucratic program that got the Soviet Union in trouble; it’s an example of what eventually did them in. Citing Wikipedia (what journalistic ingenuity!), Stromberg [Washington Post author] argues that actually the Soviet Union didn’t have a debt problem until some “thirty years after” Sputnik. Perhaps instead of relying on Wikipedia, Stromberg might have consulted Robert Gates’ book From the Shadowswhich chronicles, in part, his career as a Soviet analyst at the CIA. (Just in case they are unaware at the Post, this is the same Robert Gates who is now the Secretary of Defense.) On page 173, he accurately points out that the CIA knew early on of the “Soviet economic crisis. From the late 1950s, CIA had clearly described the chronic weaknesses as well as the formidable military power of the Soviet Union.” Hmmm. Do you think this “chronic weaknesses might have had something to do with excessive bureaucracies and the size of government? Note to Stromberg: you will have to close Wikipedia and actually crack a book for this one.

In a post today, the Heritage Foundation points out that President Obama's pie in the sky promises have done just the opposite of what he promised. Solyndra has become the notorious posterchild for the green cronyism--driven by politics, not policy-- that is so pervasive in this administration:

Of course, central to the story is solar energy company Solyndra, which received a $535 million taxpayer-funded loan guarantee. President Obama spoke at the company’s newly unveiled factory in May of last year, bragging that “[W]e can see the positive impacts [of the stimulus] right here at Solyndra.” Despite the President’s boosterism, Solyndra went bankrupt last summer, leaving 1,100 people out of work. The jobs the President promised didn’t stick around long, and they came at a heavy price.

That's just the tip of the iceberg when it comes to the "Sputnik" investments President Obama made with taxpayer dollars. Four other solar companies that received stimulus money also went bankrupt this year. There is also Brightsource,a failing solar energy company connected to Obama donor Robert Kennedy Jr, who received more than a billion dollars in taxpayer guaranteed loans. In late September, President Obama's Department of Energy extended more green energy loans to companies like Exelon and General Electric whose leadership and employees were also big donors to his campaign.Most recently, President Obama has invested hundreds of millions of dollars in the company Solazyme to fuel a Navy ship with algae based biofuels. Solazyme's strategic adviser is non other than T.J.Glauthier who was part of President Obama's transition team and who worked on the energy part of the 2009 stimulus bill. Solazyme is receiving $16 a gallon for this fuel-- 4 times the average price for such a fuel.  Pretty good payback from a friend, huh?

 President Obama's promised to invest in more than just clean energy, though, and that he did investing in both information technology and medicine. Take for example the companies Lightsquared and Siga Technologies.  Lightsquared, which received hundreds of millions of taxpayer dollars for a broadband project and has ties to both the infamous George Soros and Phillip Falcone (another Obama donor) is another company which has been part of President Obama's "Sputnik Year". President Obama indeed also invested in "information technology" as he promised in his State of the Union address, but such an investment did not help " strengthen our security". In fact, testing showed that Lightsquared internet signals interfered with military GPS signals. In essence, President Obama is willing to compromise the military's technological abilities in order to fill the wallets of his cronies.  President Obama also has extended a hundreds of millions of dollars no bid contract to Siga technologies  a company who manufacture small pox treatments. This company had ties to former SEIU leader and Obama friend, Andy Stern, and to mainly Democratic donor Ronald Perleman.

President Obama indeed chose to invest in those areas that he sees will pave the way for what he sees as America's Sputnik moment, but he has done so at the expense of the American taxpayer and at the cost of our financial future. There's nothing like repaying your campaign donors and cronies with taxpayer money to truly "win the future". Yet again, Governor Palin was right. It was just another "WTF" moment turned into a "WTF" year for our President.

Crossposted here and here.

Shining Sunlight on the Crony Capitalism of President Obama and Solar Energy Companies

On a recent appearance on Judge Napolitano’s show , Governor Palin stated that the failed solar panel company, Solyndra, was just the beginning of what she calls “crony capitalism on steroids”. She noted:

We’re going to see much revelation of other companies too that are receiving our tax dollars that we don’t have, that we’re borrowing from China and we’re printing out of thin air in order to fund some of these entities that have friends in the White House and on Wall Street. And we’re the ones in the end, the middle class, who are made to suffer. People are going to understand more and more the dangers of crony capitalism, and that is why so many of us are saying, “whatever it takes to retire this permanent political class that has embraced it. We’re going to do to it!”

As usual, Governor Palin was correct in predicting pervasive crony capitalism in Washington DC. On Friday, the Obama administration doled out $5 billion more dollars in energy loan guarantees. One of those loans went to the company, Exelon (emphasis added):

The deals announced Friday include a $1.5 billion loan guarantee to Florida-based NextEra Energy and other investors that bought a planned 550-megawatt solar farm on federal land in Southern California from First Solar, as well as $646 million to Illinois-based Exelon Corp. for a 230-megawatt solar plant near Los Angeles. Next Era Energy Resources and GE Energy Financial Services bought the Desert Sunlight project from First Solar, while Exelon bought the Antelope Valley project. First Solar will continue to build and operate both projects.

Interesting to note is that Exelon was President Obama’s fourth largest donor in 2008, and this was not the only time he was involved in crony capitalism tainted political maneuvers with this company. He did so while he was in the Senate as well:

The New York Times reported earlier this year that Obama accepted more than$225,000 in contributions from Exelon executives while watering down an antinuclear bill he had introduced in the Senate. Exelon is the nation's largest provider of nuclear power.

Next Era Energy, who partnered with GE, received $1.5 billion dollars in loan guarantees, but that’s not the only time Next Era Energy and GE have teamed up. President Obama’s Council on Jobs and Competitiveness is headed by GE CEO, Jeff Imelt, while Next Era CEO, Lew Hay III, also served on this council. This becomes crony capitalism defined, as President Obama stated when he established this council, “[i]t's critical for us to have input from folks who are actually hiring, putting people to work, making payroll, making the products and services that make our economy so powerful”. Isn’t it funny that these companies’ input potentially played a role in steering loan guarantees to their companies? Governor Palin has recently highlighted the crony capitalism of GE, including the loans (emphasis mine):

This icon of American industry is a company full of good employees who make some good products (and is the parent company of a huge media outlet), but GE is also a large American corporation that pays virtually no corporate income taxes despite earning worldwide profits of $14.2 billion last year, $5.1 billion of it in the United States. In fact, they claimed a tax benefit of $3.2 billion, meaning they received more of our hard earned tax dollars than they contributed. How is that possible? It’s because not only do they shelter their money from taxes, but they also get many tax credits, loans, government grants, and other benefits from the federal government that our smaller businesses couldn’t even imagine being able to profit from.

It should also be noted that GE-affiliated donors were among his larger contributors in 2008 to the tune of more than half a million dollars. It's amazing what you can discover when you shine a little sunlight on solar energy companies!

Governor Palin’s career has been marked by fighting cronyism and corruption. As a member of the city council, she called out a fellow councilmember for trying to modify Wasilla’s garbage regulations in order to steer business to his garbage collection company. She blew the whistle on the head of the Alaska GOP, Randy Ruedrich, who was working with her as a commissioner with the Alaska Oil and Gas Conservation Commission, when he was doing party business on state time. This resulted in the largest ethics fine in state history. As Governor, she continued this consistent fight against crony capitalism and corruption. Her three major legislative victories focused on this fight. She signed into all major ethics reform that disallowed trading votes for campaign funds. Her major energy reforms were passed in a transparent manner that did not allow oil companies to write the legislation to disproportionately benefit them. This includes restructuring Alaska’s oil tax system after the previous administration had developed a plan that was good for Governor Murkowski’s cronies, but not for the people of Alaska. Her natural gas pipeline project allowed companies to submit proposals for public consumption before state government officials made decisions, preventing backroom dealing. In her interview with Judge Napolitano, she noted that Americans want to do “whatever it takes to retire the permanent political class that has embraced [crony capitalism]”. An easy way to do this is to elect the woman who already done this every step of the way.

Crossposted here and here.

Green Energy Jobs vs. An Energy Jobs Plan that Makes Opponents Green with Envy

Governor Palin recently highlighted the crony capitalism surrounding the Solyndra solar panel company. This solar panel company with ties to Obama fundraisers has received more than half a billion dollars in stimulus money devoted to green energy projects. In spite of this, the company declared bankruptcy in August and laid off more than a thousand employees. As Governor Palin noted on Hannity on Tuesday, Solyndra received more stimulus money than 35 states received for infrastructure and roads. Governor Palin has been at the forefront of the discussion of crony capitalism, such as that of Solyndra’s, on both sides of the aisle, especially in recent weeks. However, considering Solyndra went bankrupt despite receiving hundreds of millions of taxpayer dollars and despite spending more than a million dollars on lobbying since 2008, it is important also to remember Governor Palin’s words of warning on the economic futility of green energy projects.

In her speech at the India Today Conclave in March, Governor Palin warned of the economic woes of countries who emphasized green energy, noting the effects such policies had on the United Kingdom and Spain, and also referred to such policies as “social engineering” :

This push for 'green' at the expense of 'conventional, reliable' sources is not a credible energy policy or economic policy. It's "Social Engineering" by Central Government Planners. And it leads to nothing but more debt & more job loss. And taxpayers will be stuck subsidizing the failure and paying more for energy.

Later, in her speech at the Madison Tea Party in April, Governor Palin noted solar panels specifically (emphasis added):

Less than 90 days after the election, in his State of the Union address, President Obama told us, nah, the era of big government is here to stay, and we’re going to pay for it whether we want to or not. Instead of reducing spending, they’re going to “Win The Future” by “investing” more of your hard-earned money in some cockamamie harebrained ideas like more solar shingles, more really fast trains – some things that venture capitalists will tell you are non-starters. We’re flat broke, but he thinks these solar shingles and really fast trains will magically save us. So now he’s shouting “all aboard” his bullet train to bankruptcy. “Win The Future”? W.T.F. is about right.

In both speeches, Governor Palin was right. Taxpayers have been stuck subsidizing failure, and companies like Solyndra have indeed been non-starters. That is part of the reason Governor Palin emphasized energy development as part of the plan she laid out in Iowa earlier this month:

Fourth, it is time for America to become the energy superpower. The real stimulus that we’ve been waiting for is robust and responsible domestic energy production. We have the resources. Affordable and secure energy is the key to any thriving economy, and it must be our foundation. So, I would do the opposite of Obama’s manipulation of U.S. supplies of energy. Drill here, drill now. Let the refineries and the pipelines be built. Stop kowtowing to foreign countries and dictators asking them to ramp up production and industry for us, promising them that we’ll be their greatest customer. No, not when we have the resources here. We need to move on tapping our own God-given natural resources. I promise you that this will bring real job growth, not the politicians’ phony “green jobs” fairy dust sprinkled with wishes and glitter… No, a hardcore all-of-the-above energy policy that builds this indestructible link between made-in-America energy and our prosperity and our security. You know, there are enough large conventional natural resource development projects waiting for government approval that could potentially create more than a million high-paying jobs all across the country. And this is true stimulus. It wouldn’t cost government a dime to allow the private sector to do these. In fact, these projects will generate billions of dollars in revenue. Can you imagine that: a stimulus project that actually helps dig us out of debt instead of digging us further into it! And these are good-paying jobs, and I know that from experience. For years my own family was supported (as Todd worked up on the North Slope) by a good energy sector job. America’s economic revival starts with America’s energy revival.

Rather than emphasizing green energy projects funded by taxpayer “stimulus” dollars, Governor Palin noted that America needs to become the energy power by developing God given resources. To be sure, energy has been one of Governor Palin’s signature issues for years, so this is not a new statement. However, Governor Palin’s record of fighting against crony capitalism and for domestic energy development uniquely positions her above other potential presidential rivals. A report released last week by the Department of Energy’s National Petroleum Council notes that America has more oil and gas resources than previously thought and has the potential to be the world’s largest producer of oil by 2017 if regulations were appropriately lifted. Also, as Governor Palin noted in her speech, more than a million jobs could be created if government got out of the way.

While Governor Romney and Governor Perry are quibbling over whose administration has a better job creation record, Governor Palin is noting that government cannot create jobs, but they can certainly do a lot to destroy them through overregulation. That isn’t to say that there isn’t job growth or destruction on a politician’s watch, but that Governor Palin’s small government rhetoric matches her ideology. At the same time, Governor Palin's removal of the cronyism of the Murkowski administration’s oil tax structure helped double the number of oil companies investing in drilling in Alaska and brought a record number of oil jobs in each year from 2007-2009. Natural resource and logging jobs increased 13.7% during her tenure according to Alaska Department of Labor and Resource Development data. During that same timeframe, Perry’s Texas, another energy rich state, had a 0.5% decrease in energy development jobs (from mining, logging, and oil and gas production) according to calculation of Texas Workforce Commission data. Governor Palin never has claimed that government can create jobs, noting in one of her State of the state speeches that government can only “provide the tools” for jobs to be created. Governor Perry tried to claim that his administration actually “created jobs” while sparring with Governor Romney earlier this month. Meanwhile, as with many policy issues, Governor Romney’s record likewise does not match his current rhetoric. As Governor of Massachusetts, Romney created a $15 billion Green Energy Fund that went to subsidize solar panel companies, yet his recently released jobs plan states that such initiatives make “little sense”.

Additionally, Governor Palin rightfully notes that energy development and subsequent job growth is more than just expanding drilling. It also involves taking forward-focused action such as encouraging the building of refineries. Governor Romney makes no mention of the need to build refineries even in the 16-page energy policy component of his 160-page economic plan, and Governor Perry has yet to lay out a plan of any specificity. However, if America has the potential to become the largest energy producer in the world, should not America be prepared to refine these resources? America has not built any new refineries since 1976. Over the last 35 years, oil refineries have become more modern and more efficient in their refining capacity enabling them to refine more oil, but they have also decreased in number. If energy development is going to increase, would not it behoove a president to promote increased refineries to keep pace with the increased production? Drilling in ANWR alone has the potential to increase production by 1.5 million barrels per day, which would require the work of about 12 refineries working at the current capacity of about 123,627.9 barrels per day (the rate of the current operating refineries per calendar day). If energy development is no longer handcuffed by over-regulation, expanding refining capabilities to meet the increased development would be needed.

Governor Palin is the only declared or potential candidate whose record truly matches their rhetoric. Investing in socially-engineered green energy projects is not good economics, especially when it is simply a trade of political favors. Instead, energy development that unshackles the private sector and provides forward-focused objectives is what America needs for her national, economic and energy security. She is uniquely positioned to address the issue of energy, leaving her political opponents green with envy.

Crossposted here and here.

Governor Palin's Free Market Populism Bests the Boys' Crony Capitalism

Under the false premise that the government can create jobs, the Obama administration is proposing yet another stimulus/jobs bill that would use nearly half a trillion in taxpayer dollars as another supposed attempt to help the American economy. This new jobs bill is considered by some, however, to primarily be a bailout for blue states. This comes on the heels of the Solyndra scandal where President Obama’s hybrid of crony capitalism and corporatism meant taxpayer dollars went to funding a failed solar panel company with strong ties to his campaign donors. Solyndra is not the only company to fall under the Obama administration’s “too green to fail” mentality when it comes to stimulus funding, as four other “green” companies who received stimulus funding also have gone bankrupt. This loan guarantee program for green companies that was a key component of the 2009 stimulus bill has cost American taxpayers $38.6 billion, but has yielded fewer than 4,000 of the promised 65,000 jobs from the loan program. The stimulus bill as a whole was supposed to prevent unemployment from going above 8%, but instead it has been above 8% since February of 2009.

Additionally, although Governor Romney’s healthcare reform bill was not specifically intended to spur job creation, it's big government action has impacted jobs-- for the worse. A report published this week estimates that Romneycare has cost Massachusetts more than 18,000 jobs. Beyond their similar approaches to healthcare reform, Governor Romney’s policies and stances are similar to President Obama’s in that he feels that subsidies and corporatism are part of a “pro business/big government” mindset, as his administration offered special technology loans to lure business from other states. As a presidential candidate for 2008 and 2012, Romney has supported both energy subsidies and insurance subsidies, and he still supports TARP—all means of government funneling taxpayer dollars towards business.

Governor Perry, who is touted by many as the “jobs” candidate, may have had a lot of jobs come to Texas during his tenure, but he also implemented “pro business” loans like both President Obama and Governor Romney. Like President Obama, he scratched the back of his political donors at the expense of taxpayers. His Emerging Technology Fund also proved to be a mechanism of reciprocity to his political donors to the tune of 200 million in taxpayer dollars. The Wall Street Journal reports that one such donor invested more in Perry’s campaign than the company for which they were seeking a grant. Interestingly, the grant was initially denied by a regional committee, but was later approved by a Perry appointed committee:

In 2009, when Mr. Nance submitted his application for a $4.5 million Emerging Technology Fund grant for Convergen, he and his partners had invested only $1,000 of their own money into their new company, according to documentation prepared by the governor's office in February 2010. But over the years, Mr. Nance managed to invest a lot more than $1,000 in Mr. Perry. Texas Ethics Commission records show that Mr. Nance donated $75,000 to Mr. Perry's campaigns between 2001 and 2006.

The regional panel that reviewed Convergen's application turned down the company's $4.5 million request when it presented its proposal on Oct. 7, 2009. But Mr. Nance appealed that decision directly to a statewide advisory committee (of which Mr. Nance was once a member) appointed by Mr. Perry. Just eight days later, on Oct. 15, a subcommittee unanimously recommended approval by the full statewide committee. On Oct. 29, the full advisory committee unanimously recommended the approval of Convergen's application. When asked why the advisory committee felt comfortable recommending Convergen's grant, Lucy Nashed, a spokesperson for Mr. Perry, said that the committee "thoroughly vetted the company."

This was only one example of the reciprocity between Perry donors and grant recipients. The Dallas Morning News shares this graphic depicting hundreds of thousands of campaign donations from companies who would later receive grant funding from Governor Perry’s initiative:

Governor Palin, on the other hand, realizes that government neither creates jobs, nor is supposed to be a channel to funnel taxpayer dollars back to political donors. She recognizes that government’s role is not to be pro business, but pro market, where through billions of transactions the American public determines the success and failure of business by what they choose to buy, not by what government chooses to subsidize. In her Tea Party speech earlier this month, she spoke of the need for less federal government intervention, not only in less regulation and more federalism, but also in removing subsidies, loopholes, and bailouts—the very things her potential political opponents engage in-- from the economic equation (emphasis added):

But here’s the best part: To balance out any loss of federal revenue from this tax cut, we eliminate corporate welfare and all the loopholes and we eliminate bailouts. This is how we break the back of crony capitalism because it feeds off corporate welfare, which is just socialism for the very rich. We can change all of that. The message then to job-creating corporations is: We’ll unshackle you from the world’s highest federal corporate income tax rate, but you will stand or fall on your own, just like all the rest of us out on main street.

Governor Palin knows better than anyone else the need to remove crony capitalism from politics. As she noted on Greta van Susteren’s show earlier this week she has the “bumps and bruises to prove it”. ACES, her oil tax plan, reformed Governor Murkowski’s crony corruption tainted plan that was written to favor certain oil companies and ultimately also led to the arrest of oil company personnel, gubernatorial staff, and state legislators. ACES was not a behind closed doors deal. In fact, Governor Palin did not allow lobbyists in her office at all. Instead, it was a plan written and passed in a transparent manner, was presented to the people of Alaska more than two weeks before it was presented to the legislature, and did not involve undue influence from the oil companies. Following the passage of ACES, Alaska saw a record number of oil jobs during Governor Palin’s tenure. Not only were the number of jobs increasing, the legislation made development more attractive for other companies beyond the “Big Oil” companies favored by Governor Palin’s predecessor. Since the passage of ACES, the number of companies filing with the state of Alaska has doubled.

Even though a third of Alaskan jobs are tied to the oil industry, Governor Palin’s stellar jobs record extends behind solely that industry. Critics may argue that in an energy rich state, jobs naturally increase during a time when oil prices are high (as was the case during Governor Palin’s tenure) as more energy industry jobs are created. When Governor Palin took office in December of 2006, Alaska was pulling up the rear when it came to jobs, ranking 49^th out of the 50 states and Washington D.C. In her first year in office, Alaska was 6^th best in improvement in unemployment. By the end of the final year of her tenure, Alaska was ranked 21^st in the country. This kind of impressive record on jobs is how Alaska was 2^nd best in job growth during her tenure. Data from the Alaska Department of Labor and Workforce Development, showed that in addition to a 13.7% increase in resource development jobs, Alaska saw a nearly 5% increase in business service jobs and a 6.4% increase in education and health related jobs during Governor Palin's time in office.

Governor Palin’s record reinforces her rhetoric. Instead of giving companies millions or billions in taxpayer dollars in an attempt to create jobs or giving preferential treatment to favored companies or campaign donors, Governor Palin sought to remove the ties of cronyism and truly create a level playing field where businesses are neither too influential to fail, nor too small to succeed. This is what separates Governor Palin from all of her potential political opponents who have gained for themselves the moniker of crony capitalist or corporatist. Instead, she is, in the words Jim Pethokoukis of CNBC, a free market populist. This doesn’t make her William Jennings Bryan in skirt railing against big business, but instead a conservative warrior fighting against entangled web of business, political donors, and big government.

Crossposted here and here.