Tag Archives: Economy

Economy, Media, Politics

8.6 Percent Jobless Rate Is Bogus

The percent figure that the Bureau of Labor Statistics put out yesterday is not what it appears to be.

The administration goes through some machinations of the number of people out of work to make the unemployment percent seem to go down. They no longer count, like they no longer exist, those people out of work who gave up looking, the underemployed, and those whose 99 weeks of unemployment compensation has run out. When you count them as still alive, the unemployment rate is 15.6 percent.

When you don’t count the them, you cut (on paper) the number of people in the job pool. That is how the administration and their media followers can say the percentage dropped .4% from 9 to 8.6 and yet make it sound like things are getting better. When they are not.

“When the unemployment rate declines, we want to see both employment and participation increase as discouraged workers return to the labor force. Today, we got the former, but not the latter, making the 0.4 percent drop look a bit suspect,” Neil Dutta, US economist at Bank of America Merrill Lynch, told clients. “We would not be surprised to see the unemployment rate give back some of its decline in the coming month(s).”

Considering that nearly half of the jobs created were for the Christmas retail season, expect them to go away in January.

This smoke and mirrors scheme was explained last August in this post.

Economy, Energy, Media, Politics

Throwing Good Money After Bad, Again

Speaking of the government stimulus spending and green jobs. The Obama administration picked Southeast Michigan as one of 20 regions from around the country for economic growth grant money. The goal is to create an economic cluster of so-called clean technology manufacturing that is expected to generate jobs, business and exports for the region. Emphasis on jobs, business, and exports for the region.

News of the transaction is also noteworthy. You have the headline-grabbing union-busting Huffington Post putting a happy face on the deal. But when you follow the link to the story, you’ll see evidence that this is yet another waste of taxpayer money in the name of green jobs. Apparently, the thieves at the Huffington post don’t even read the stories they steal, let alone give credit to Jaclyn Trop, the writer of the story.

In reading the story, the economic growth stimulus money will be used in the Southeast Michigan Advanced Energy Storage Systems Initiative. Batteries. Great idea when you consider that Michigan is home to more than 35 advanced battery companies and suppliers for battery systems and electric vehicles, more than any other state, according to the Michigan Economic Development Corp.

Sounds like a good investment of taxpayer money. Except for the fact that, once again, markets exist when there is demand for a product. Lacking demand, there is no market, no business. According to the article, this is a product that nobody wants. What is the point of boosting manufacturing of a product that is already over supplied and without market demand sufficient to stay in business and effectively compete with China?

Michigan has given solar and lithium-ion battery manufacturers tens of millions of dollar in state tax incentives in recent years, but both industries are building more products than there is demand for, according to industry reports.

OK, that was the ‘good’ news. The bad news is . . .

The worldwide manufacturing capacity of lithium-ion batteries for electric vehicles will greatly exceed supply unless demand by automakers increases significantly in the short run, according to a September report by Bloomberg New Energy Finance.

and

Energy Conversion Devices Inc., the Auburn Hills maker of solar panels and lithium-ion batteries, has been trying to sell its battery operation. And its losses grow since demand for solar panels in Europe has dried up and Chinese companies have offered lower-priced alternatives.

Given the circumstances in the marketplace, I’m not anticipating this government spending will have a different result than Solyndra. Meanwhile, keep a sharp eye out for all the new jobs, business, and exports for Southeast Michigan.

China, Economy, Energy, Politics

Where Is The Green Energy Market?

To say that there is no green in the so-called green energy sector is indicative of why that is. It is not because people don’t want a low-cost, in terms of dollars and efficiency, solution to their energy needs. It is because there is no practical market for it yet. Not for Solyndra. Not for BrightSource Energy either.

If Solyndra’s bankruptcy was not a sign of no market in this industry, all you have to do is to look at BrightSource Energy’s registration statement for going public. In their own words, without government money, they can not survive.

We depend heavily on government policies that support renewable energy and enhance the economic feasibility of developing solar energy projects.

They can’t even say that what they want to do can even be done.

Our proprietary technology has a limited history and may perform below expectations when implemented on utility-scale projects.

We use proprietary technology that has not been previously implemented on utility-scale projects of the size and complexity of the Ivanpah Solar Electric Generating System, or Ivanpah, and Ivanpah may experience technological problems that neither we nor any of the third-party independent engineers that have reviewed our projects are able to foresee. The systems that we will implement on utility-scale projects include a solar field with heliostats controlled by advanced software systems that concentrate sunlight onto a receiver to produce high-temperature steam. If the implementation of our proprietary technology is unsuccessful, it could negatively impact the successful operation of projects using our systems and may result in additional payments, deductions or defaults under key project documents, including our PPAs or other financing arrangements.

The company’s registration statement is as dismal as anyone could imagine. Scaring away any private-sector investor with no expectation of a government bailout. Except for Robert F. Kennedy, Jr’s. venture capital company,  VantagePoint Partners, the largest investor in BrightSource Energy. BrightSource received a $1.4 Billion loan guarantee from Obama’s Department of Energy.

The lesson to learn is that just because it sounds like a good idea, doesn’t make it worth throwing good money after bad. Regardless of the size of political contributions made to the administration. That, and government can not create a market because it wants to. Markets are created when companies make something they can sell at a profit that customers want.

Contrary to what Obama may think, he is not creating jobs in this country (China, yes) by gambling with the taxpayers money on green energy. With every dollar Obama removes from the private sector, he is killing them.

With his regulations and drilling moratorium, and pipeline rejection, he is killing even more jobs. Kind of makes you wonder about President Obama’s priority. Is it jobs in a free-market economy or jobs in a government controlled economy?

Economy, Energy, Politics

BrightSource Energy Inc.

Another Obama Scandal In the Making

Peter Schweizer disclosed this “green” boondoggle in his new book, Throw Them All Out. Big Government has the story.

It has to do with a “green energy” company called BrightSource Energy Inc., which develops solar energy products (or intends to someday, anyway). In 2010, BrightSource was in deep trouble. It was $1.8 billion in debt and was losing money hand over fist–a $71.6 million loss on a mere $13.5 million in revenue. A company destined to go down the drain, one would think. But no! The Obama administration bailed out BrightSource to the tune of a cool $1.4 billion in loan guarantees.

How could that possibly have happened? Well, start with the fact that the principal investor in BrightSource is VantagePoint Partners. Robert F. Kennedy, Jr. is a Venture Partner in VantagePoint. But BrightSource had an even more valuable contact than that:

Sanjay Wagle…was one of the principals in Kennedy’s firm who raised money for Barack Obama’s 2008 presidential campaign. When Obama won the White House, Wagle was installed at the Department of Energy (DOE), advising on energy grants.

Well, that was convenient! So BrightSource got its $1.4 billion. BrightSource isn’t out of business yet, but how promising was the Obama administration’s investment? Check out the registration statement for the company’s IPO. This is from the discussion of risk factors:

This offering involves a high degree of risk. … We have generated substantial net losses and negative operating cash flows since our inception and expect to continue to do so for the foreseeable future as part of the development and construction of solar thermal energy projects using our systems.

We have generated substantial net losses and negative cash flows from operating activities since we commenced operations. We have incurred losses of approximately $204.1 million from our inception through March 31, 2011. For the year ended December 31, 2010 and three months ended March 31, 2011, we incurred a net loss of $71.6 million and $26.8 million, respectively, and our operating activities used cash of $64.1 million and $28.8 million, respectively.

We expect that our net losses and our negative operating cash flows will continue for the foreseeable future, as we increase our development activities and construct solar thermal energy projects. …

Our proprietary technology has a limited history and may perform below expectations when implemented on utility-scale projects.

We use proprietary technology that has not been previously implemented on utility-scale projects of the size and complexity of the Ivanpah Solar Electric Generating System, or Ivanpah, and Ivanpah may experience technological problems that neither we nor any of the third-party independent engineers that have reviewed our projects are able to foresee. The systems that we will implement on utility-scale projects include a solar field with heliostats controlled by advanced software systems that concentrate sunlight onto a receiver to produce high-temperature steam. If the implementation of our proprietary technology is unsuccessful, it could negatively impact the successful operation of projects using our systems and may result in additional payments, deductions or defaults under key project documents, including our PPAs or other financing arrangements.

Ivanpah is being primarily financed by a U.S. Department of Energy, or DOE, guaranteed loan facility, which requires the project companies to remain in compliance with numerous financial, construction and operational covenants to draw funds under the loan facility, compliance with which are within the control of NRG Solar, the majority equity owner and operator of Ivanpah….

Furthermore, adoption of our systems for use in solar-to-steam applications, such as thermal EOR, depends on successful implementation of the 29 MWth EOR project for Chevron in Coalinga, California that is expected to begin operations in the second half of 2011. We have recently experienced significant cost overruns related to the project. If the Coalinga Solar-to-Steam for EOR project does not meet expectations, our ability to sell additional thermal EOR systems may be negatively impacted.

How on Earth does a company like this survive for 15 minutes? Crony capitalism. This risk disclosure conveys a sense of how deep the rot runs:

We depend heavily on government policies that support renewable energy and enhance the economic feasibility of developing solar energy projects. Renewable energy sources currently benefit from various federal, state and local governmental incentives such as investment tax credits, or ITCs, cash grants in lieu of ITCs, loan guarantees, renewables portfolio standard programs, or RPS programs, modified accelerated cost-recovery system of depreciation and bonus depreciation. For example, the Internal Revenue Code of 1986, as amended, or the Code, provides an ITC of 30% of the cost-basis of an eligible resource, including solar thermal energy projects placed in service prior to the end of 2016. Additionally, many states have adopted RPS programs mandating that a specified percentage of electricity sales come from eligible sources of renewable energy.

Companies like BrightSource can survive only as long as governments continue to pursue foolish “green energy” policies. If the voters ever wise up, they are finished:

However, the regulations that govern the RPS programs, including pricing incentives for renewable energy, or reasonableness guidelines for pricing that increase valuation above conventional power (such as a projected value for carbon reduction), may change. If the RPS requirements are reduced or eliminated, we could sustain fewer future power contracts or receive lower prices for the sale of power in future power contracts, which could have a material adverse effect on us and our project development plans. Such material adverse effects may result from decreased revenues, reduced economic returns on certain project company investments, increased financing costs, and/or difficulty obtaining financing. Furthermore, the American Recovery and Reinvestment Act of 2009, or ARRA, included over $80 billion in incentives to encourage investment in the renewable energy sector, such as cash grants in lieu of ITCs, bonus depreciation and expansion of the DOE loan guarantee program. Although the ARRA expanded the DOE loan guarantee program, this program faces challenges and may not continue past the projects already financed such as Ivanpah. In addition, the cash grant in lieu of ITCs program only applies to projects that commence construction prior to December 31, 2011.

Notice how the stimulus act makes an appearance. BrightSource isn’t a scandal like Solyndra yet, but give it time.

Posted on November 16, 2011 by John Hinderaker in Energy Policy, Obama Administration Scandals

The above was graciously lifted from John Hinderaker at PowerLine Blog.

Economy, Politics

Robert F. Kennedy Jr., Green Investor

The firm is called Vantage Point Capital Partners. And Bobby, as he is known on the Ring of Fire talk radio show, is one of the ‘venture partners‘ in Vantage Point. Vantage Point not only creates jobs in China, they have an office in Beijing.

Now I know that you rich republicans out there are always looking for a quick way to make a buck. Did you miss this? I don’t know how I missed this one.  BrightSource, a California solar panel company (that is creating jobs in China and Germany).

Check this for a smart investment. And imagine, God forbid, if taxpayer money were put into a company like this?

In 2010, BrightSource was in deep trouble. It was $1.8 billion in debt and was losing money hand over fist–a $71.6 million loss on a mere $13.5 million in revenue. A company destined to go down the drain, one would think. But no! The Obama administration bailed out BrightSource to the tune of a cool $1.4 billion in loan guarantees.

With as poor an investment picture as you could possibly imagine, can you imagine the excitement at Vantage Point when they learned that the Department Of Energy was going to give them a $1.4 Billion loan guarantee? A loan guarantee?

Taking a gamble that no investor would take, Obama’s energy department rolls the dice in a game that you would not play. What, $1.4 billion and no “thank you” from Bobby?

And for a real eye-opener from, or about, this most open and transparent administration, look how contributors become government employees or get their company bailed out, or both. You might be surprised to also see the presence of many of the Soros-backed organizations in the company and in the administration.

As the Church Lady would say, Isn’t that special?

Links:

Economy, Fair Tax, Politics

The FairTax Generates More Revenue

The Americans for Fair Taxation (AFFT) issued this press release (below). Aside from the economic stimulus that the FairTax would provide all on its own, without special government subsidies or more deficit spending, the revenue stream coming into the federal government is more stable than under the current abortion of the IRS tax code.

The IRS depends on your payroll taxes to fund the federal government. The more people find themselves out of work, the tax base shrinks further, the less revenue the government gets and the more debt the government acquires, adding to the burden of current and future generations of Americans.

By contrast, when all the federal tax categories you pay are eliminated and replaced with the progressive consumption-based FairTax, that revenue stream to the federal government is not exclusively tied to employment. The result is the largest tax base humanly possible and a more stable income stream.

When you hear, like you may have heard yesterday, that consumer spending increased ‘more than expected’ (by a laughable one half of one percent) you should also understand that it translates to increased revenue to the federal government. When the tax burden is spread out over everyone instead of to only those who are lucky enough to still have a job, we reach the fairness that the administration claims they want without penalizing the people who have the ability to create jobs.

Special note to FairTax supporters in the Florida Panhandle. I have a quantity of 4ft. by 8ft. FairTax signs that are FREE to anyone who has a good location (high-traffic area) to display them. Let me know if you want one. This is what it looks like.

FOR IMMEDIATE RELEASE
Contact: James Lafferty
(703) 931-­‐2324
jameslafferty@usa.net

Americans Frustrated Watching Tax Policymakers Play “Ground Hog Day”
Washington, DC – Americans for Fair Taxation (AFFT) released today revenue
estimates that the FairTax, a national sales tax, would have collected far more
federal revenue in 2009 and 2010 than the current income tax based system.
The estimates demonstrate that FairTax-generated revenues for 2009 would have been $171 billion more than the IRS revenue and in 2010; the FairTax would have generated $267 billion more.

AFFT provided the data to the Joint Select Committee on Deficit Reduction or
Super Committee recently and is releasing it to the public today.

“ Watching Washington tax policymakers churn a few well-worn and ineffective
ideas to come up with the same disappointing results is like watching the movie
‘Ground Hog Day’, except this is real life not a movie” said AFFT Chairman and
Co-Founder Leo E. Linbeck, Jr.

“No wonder the American people are so frustrated! Some in Washington want to
adjust and tinker with the current sclerotic system but working Americans are
ready to throttle it and them and start fresh. The time for reform is over. We need to be seeking replacement.

“The FairTax is a hybrid within the range of consumption tax alternatives— more
transparent, simpler and it returns the power to determine how much tax is paid to the American people.

“We believe it addresses the nearly $1.5 trillion in deficit reduction the
congressional deficit committee is charged with making, and responds to the nearly $4 trillion in cuts offered by Democrats and other partisan issues.

The FairTax projections are based on a 23 percent tax inclusive rate of taxation as proscribed in the Fair Tax legislation (HR 25/S 13).

The estimates were provided by David Tuerck, Chairman of the Economics
Department and Executive Director of the Beacon Hill Institute at Suffolk
University in Boston.

“Because revenues from a consumption tax are always more stable over the
business cycle than revenues from an income tax, it stands to reason that the
FairTax would have reduced the deficit in recent years, had it been in place,” said
Tuerck.

Formed in 1995, AFFT is a nonprofit, nonpartisan, grassroots organization
dedicated to replacing the current tax system with a progressive national retail
sales tax.

(For a copy of the FairTax data go to www.fairtax.org or call 703-931-2324)

Economy, Organized Labor, Pensacola, Politics, Whiners

Is Occupy Pensacola Here To Stay?

The Occupy Pensacola bunch have shown, among other things, that their word is worth nothing. They have now violated their ‘agreement‘ with Pensacola’s Mayor Hayward by three days. What remains to be seen now is whether the mayor is willing to continue to deal with the dishonest entity called Occupy Pensacola or simply move them out.

occupy-pcola-10Speaking to some of the folks there today, they’re not planning on moving any where any time soon. Noble as their cause may be (and it depends on who you ask as to just what their cause is), they are staying put until they fix all that’s wrong in the world. I found some of them to be free-spirited, believing they are doing something good, some totally naive regarding work, responsibility, and wealth, and some were just homeless that came to live there.

If there is a common thread in their ‘complaint,’ it is centered around money and wealth. They want some of it and they resent the fact that Washington (both political parties) isn’t taking if from those that have it and giving it to them.

occupy-pcola-5
Dixie Meise, Safety / First Aid, Occupy Pensacola

What it means to Dixie Meise, the ‘safety and first aid’ person in camp, is that the homeless all need a place to call home. And they expect to stay there until homelessness is ended. How’s that War on Poverty working anyways?

Dixie estimates about 50-60 percent of those present were homeless people. There were many empty tents, apparently belonging to people who have jobs during the day, then return to camp to spend the night.

Calls to Mayor Hayward’s office and an email to ATU (Amalgamated Transit Union) president Mike Lowrey as to the future of Occupy Pensacola and the labor union’s support of them have so far gone un-answered.

Economy, Media, Organized Labor, Pensacola, Politics

Obama’s Jobs Act And The Left’s World View

If you want to know why the U.S. economy and jobs picture still sucks, all you need to do is examine the world where the political Left lives. Take this video clip of The ED Show on the Lean Forward (Bend Over) Network for example. The subject is about President Obama’s bus tour trying to push his Jobs Act, aka the class-warfare-tax-increase-labor-union-bail-out bill.

There is one undeniable fact where the first two years of the Obama administration is concerned. Whether by hook or by crook, Obama got everything he wanted. He got the un-Affordable Health Care Act, he got his so-called stimulus bills, he got his auto industry and Wall Street, the mortgage industry, student loan industry. The bail outs, all of them. And most behind closed doors without any input from the ‘other side of the aisle.’

In this video, ‘Democratic Strategist’ Krystal Ball does her best to deny all of it in what has become the Democrats’ narrative.

The republicans have been coming up with the narrative that the President got everything he wanted in the first two years he had a Democratic congress, he had a Democratic Senate so of course he got everything he wanted, when the reality was Republicans from day one said we will defeat this president and they did everything they could to obstruct progress, to obstruct the focus on jobs, to obstruct doing anything that would help the American people.

Since Republicans were not successful in stopping any of it, her point is . . .?

Then there’s this gem from Mr. Pro-Capitalism himself Mike Papantonio, host of the Ring of Fire talk radio show and frequent guest of Sargent Shultz’s show.

Shultz asks Papantonio about taxing the millionaires and billionaires. “What about the millionaires? Do you think the majority of wealthy people in this country would be OK with .5 percent over a million dollars?”

They do. I don’t think they have problems with it Ed because most millionaires understand, they believe in capitalism. And in order for capitalism to work, you have to put money into the system. You have to move it by uh uh if you move it by way of government into people’s hands, that works!

When the Left has their own version of reality and their own definition of capitalism, is it any wonder why Obama’s ‘economic recovery’ has been a dismal failure?

2012 Election, Economy, Organized Labor, Politics

Big Labor Wins Big In Ohio

2 Comments

The people of Ohio just voted to give labor unions the pin number to their checking account. That is what will happen when the public employee labor unions (teachers, police, fire, state, and municipal) look to the taxpayers for money to bail them out of the union’s unfunded benefits. And when that fails, they will petition Washington to bail them out. That’s when they’ll have your pin number.

With labor-lubricated forces spending more than $30 million to only $9 million spent by the Kasich team, 63% of Ohio voters rejected the same reforms that they enacted earlier this year: banning strikes by all 350,000 state government workers, outlawing collective bargaining among state employees, forcing more meritocratic calculations on pay for state employees, reducing workers’ sick leave and limiting time-off to five days a week, and requiring all public employees to pay 15% of their health care premiums and 10% of their salaries toward pensions.

UPDATE 4:30pm: You might ask, how Ohio voters could have approved this, given that the Obamacare mandate was shot down by a similar margin? All you need to do is to look at the ballot the voters were shown.

Issue 2
Referendum
REFERENDUM ON NEW LAW RELATIVE TO GOVERNMENT UNION CONTRACTS AND OTHER GOVERNMENT EMPLOYMENT CONTRACTS AND POLICIES

A majority yes vote is necessary for Amended Substitute Senate Bill No. 5 to be approved. Amended Substitute Senate Bill No. 5 is a new law relative to government union contracts and other government employment contracts and policies.

A “YES” vote means you approve the law.
A “NO” vote means you reject the law.

YES (To approve the law)
NO (To reject the law)

SHALL THE LAW BE APPROVED?

Who can make any sense of what a vote one way or the other would do? Ohio is a big labor union state. Do you think this ballot was written so vaguely, probably by BIG LABOR, to be deliberately deceptive?

One thing is for sure. The legislature is not done with this issue.

Link: Ballot Language

2012 Election, Economy, Fair Tax, Politics

The Time For Bold Tax Reform Has Come

1 Comment

In 1913, the 16th Amendment to the Constitution, which gave the government the authority to tax people’s income (up to 100% of it), was sold to the public as only taxing the rich. Sound familiar?

By 1913, 36 States had ratified the 16th Amendment to the Constitution. In October, Congress passed a new income tax law with rates beginning at 1 percent and rising to 7 percent for taxpayers with income in excess of $500,000. Less than 1 percent of the population paid income tax at the time.

Americans Paying Zero Federal Income Tax Grows

There is a growing number of Americans who pay zero federal income tax after taking advantage of deductions and credits.  This, a result of morphing the income tax system into spending programs during the Clinton administration. The number of Americans in this group has increased by 35%. Up from 43.4 million people in the 2006 tax year to 58.6 million in the 2009 tax year.   No doubt due to record unemployment and more wealth-spreading going on.

Prior to The Taxpayer Relief Act of 1997, tax relief was generally given in the form of lower tax rates or increased deductions or exemptions. But the 1997 Act  launched the modern proliferation of individual tax credits and refundable credits that are in essence spending programs operating through the tax system.

Large Number of Non-Payers Make Tax Reform Difficult

Federal tax reform requires that the base of the federal income tax be widened, so that overall tax rates can be reduced. However, because of the large number of Americans currently paying zero federal income tax, any attempt to broaden the tax base will be a difficult sell for lawmakers. The millions of Americans who have no federal income tax liability will either be indifferent about tax reform or will positively oppose it, as it would require bringing them into the federal tax base.

When more people don’t pay taxes than pay taxes under the current system, why would anyone think that these non-payers would vote for anyone who would make them pay a ‘fair’ share? Similar problems are bankrupting European countries over benefits. Reforms there means taking benefits away.

These findings raise serious questions about the future of the U.S. income tax system, and the possibility of base-broadening tax reform when the majority of the federal tax burden is borne by a shrinking pool of taxpayers.

I got your base-broadening tax reform right here. It’s called the FairTax and it is what ‘Phase 2’ of Herman Cain’s economic plan is all about. It broadens the tax base from 140 million people to every living human being within the borders of the United States. Under the FairTax, the tax base includes our population of 320 million, plus foreign tourists, diplomats, and illegal aliens. You can’t get a broader tax base nor a better stimulus for job creation, economic growth, personal economic security and national economic security.