Another Energy Company Goes Bankrupt, $39 Million Borrowed From Taxpayers

Published October 31, 2011

| FoxNews.com

An energy company that received a $43 million loan guarantee through the same federal program that backed Solyndra has followed the path of the failed solar firm and filed for bankruptcy.

Beacon Power Corporation filed for Chapter 11 bankruptcy on Sunday in U.S. Bankruptcy Court in Delaware. The company, which develops energy storage systems based on what are known as “flywheels,” had received the federal guarantee for a 20-megawatt energy storage plant in Stephentown, N.Y., back in August 2010.

The loan was expected to cover the lion’s share of the $69 million project, one of several that Beacon was developing across the country.

But the company’s CEO said in a statement to the court that all those projects are “capital intensive,” and the firm is struggling to attract the additional investment needed to keep everything running. The fact that the company faced being de-listed from the NASDAQ didn’t help, he said.

“At present, the revenues generated from the operation … are not sufficient to fully support those business operations, and the debtors currently operate at a loss,” CEO F. William Capp said in the court statement. “In addition, the current economic and political climate, the financing terms mandated by DOE and Beacon’s recent de-listing notice from NASDAQ have together severely restricted Beacon’s access to additional investments through the equity markets.”

The Massachusetts-based company also received $29 million in grants from the Energy Department and the state of Pennsylvania through separate programs for a plant in Hazle Township, Pa.

Beacon Power Corporation has not responded to a request for comment from FoxNews.com.

The bankruptcy filing comes as members of Congress dig deeper in their investigation into the billions of dollars in federal loan guarantees that were committed to alternative energy companies, including Solyndra. The Obama administration has also opened an inquiry.

Rep. Morgan Griffith, R-Va., who sits on the House Energy and Commerce oversight subcommittee probing the program, said the news about Beacon Power is troubling.

“We’re very, very concerned about this and many other loans that have been made by the Department of Energy over the last several years,” he told Fox News on Monday. Griffith said plenty of companies in the U.S. would make “good prospects” for federal help, but the committee investigation is trying to find out whether the government was “just trying to get the money out the door.”

Sen. Jeff Sessions, R-Ala., ranking member of the Senate Banking Committee, called the revelation of the bankruptcy another example of “the reckless abuse of taxpayers’ dollars in the pursuit of green jobs.” He also suggested that crony capitalism had a hand in the decision to give Beacon a loan.

One of the most controversial aspects of the Solyndra case — aside from the sheer size of the $535 million guarantee — was a decision earlier this year to prioritize private investors over taxpayers in case of bankruptcy. Republicans have accused the administration of giving precedence to investors in the companies who are also Obama backers.

“As with Solyndra, the head of Beacon Power appears to have been a supporter of President Obama’s,” Sessions said in a statement.

“Increasingly, we are moving away from our capitalist heritage and towards a system where most Americans play by the rules while some are able to rig the game in their favor. The real divide is not split along income lines, but between the politically-connected and those—whether businesses or individuals—who just want the freedom to earn a living.”

But an Energy Department spokesman said the agreement with Beacon included “many protections for the taxpayer” and that the government is the only “senior, secured lender” in the project.

“Protecting taxpayer dollars remains the top priority for Secretary (Steven) Chu and the department,” spokesman Damien LaVera said in a statement. “The department’s loan guarantee is for the project Stephentown Regulation Services, LLC, not the parent company, and the loan was set up in a way that ensures the department is not directly exposed to the liabilities of the parent company.”

LaVera noted that the New York plant, “which is operational and generating revenue,” is a “valuable collateral asset” for the company as it enters bankruptcy proceedings.

“Under the terms of our loan guarantee agreement, Stephentown Regulation Services, LLC currently has cash reserves and proceeds from the plant that it was required to hold as collateral on the loan,” LaVera said.

According to court filings, the company owes the government $39.1 million under the loan – though it had authority to borrow up to $43 million. LaVera said the company did not borrow the full amount because the plant was under budget.

When the project was approved, the Energy Department reported that the loan guarantee would help save or create 14 permanent jobs and 20 construction jobs.

Capp emphasized in the court filing that the company has a number of positive factors going for it.

After investing $200 million on “research and development” and racking up nearly three dozen patents, Capp said the company’s “long-term prospects are strong.”

He said the company’s “engineering and other technical personnel are excellent” and can produce “niche” products demanded by the marketplace.

He also noted a recent Federal Energy Regulatory Commission decision would make grid operators pay more for faster services — and said Beacon’s systems, which “react in seconds,” should allow the company to “earn significantly increased revenues” this way.

Energy Department spokesman Dan Leistikow also cited the FERC decision in touting the Beacon loan guarantee on an Energy Department blog Monday. He said the decision could help the company generate more revenue.

Defending the decision to back Beacon, Leistikow said the company is trying to address a lack of energy storage in the U.S., which accounts for a weakness in the country’s power grid.

“Even a small increase in America’s energy storage capacity would make our system more flexible, stable, and reliable, and play an important role in our overall effort to reduce the number of costly power disruptions each year,” he said. “One promising new technology for dealing with the moment-to-moment fluctuations in our power grid is flywheel energy storage.”

Flywheels like those developed by Beacon, he said, “are ‘charged’ by using electricity to spin them faster and ‘discharged’ by using flywheels to spin a turbine and generate electricity.”

He described the Beacon plant as a “shock absorber” for the grid, and said it was the first of its kind in the world.

He also noted that, unlike with Solyndra, the plant funded with help from DOE is still operational.

Campaign finance records show top Beacon officials contributing to Democratic candidates. Capp apparently was an Obama supporter, giving at least $500 to the Obama campaign in 2008. He also donated to Rep. Niki Tsongas, D-Mass.

Beacon employee Matthew Polimeno has donated $750 since 2008 to Tsongas’ campaign and another $250 to the failed campaign of Massachusetts Democratic Senate candidate Martha Coakley. CFO James Spiezio also donated $250 to the Coakley campaign in 2009.
Read more: http://www.foxnews.com/politics/2011/10/31/another-energy-company-goes-bankrupt-3-million-borrowed-from-taxpayers/#ixzz1cOn0FpRQ

Obama to Order FDA to Allay Drug Shortages

 

Published October 31, 2011

FoxNews.com

 

Acting once again without Congress, President Obama on Monday was directing the Food and Drug Administration to take steps to reduce drug shortages that administration officials say has placed patients at risk and led to price gouging.

The president was signing an executive order  – his fifth in a week — instructing the FDA to take action absent congressional approval.

Last year, the FDA reported 178 drug shortages — mainly cancer, anesthetics, electrolytes and emergency room drugs — and the agency says it continues to see an increase in shortages this year.

The White House also announced Obama’s support for House and Senate legislation that would require drug makers to notify the FDA six months ahead of a potential shortage. Under current regulations, drug manufactures are only required to notify the FDA if medically necessary drugs are being discontinued. Notification of shortages is strictly voluntary.

“The shortage of prescription drugs drives up costs, leaves consumers vulnerable to price gouging and threatens our health and safety,” Obama said in a statement before the order was signed. “This is a problem we can’t wait to fix. That’s why today, I am directing my administration to take steps to protect consumers from drug shortages, and I’m committed to working with Congress and industry to keep tackling this problem going forward.”

The executive action is part of an overarching push by the White House to portray Obama, who is facing re-election, as an effective counterpoint to congressional Republicans blocking his jobs legislation. Last week, he issued an executive order to help homeowners refinance at lower mortgage rates and to allow college graduates to simplify and lower their student loan payments.

On Friday he directed government agencies to shorten the time it takes for federal research to turn into commercial products in the marketplace.

Americans for Limited Government President Bill Wilson responded to the series of executive actions by accusing the president of  sidestepping the political process and “consent of the governed.”

“They overstep the president’s constitutional boundaries. Obama can rhetorically dress this up however he likes, but his actions are not predicated on the consent of the governed, they are fueled by his desire to maintain and expand power. This is not the rule of law, but the rule of man,” ALG President Bill Wilson said in a statement.

The FDA says major causes of drug shortages are quality or manufacturing problems, or delays in receiving components from suppliers. Drug makers also discontinue certain drugs in favor of newer medications that are more profitable. The FDA does not have authority to force drug makers to continue production of a drug.

Health and Human Services Secretary Kathleen Sebelius and FDA Commissioner Peggy Hamburg were expected to join Obama at the White House on Monday when he signed the executive order.

Also invited to attend was a Boston hospital pharmacy manager who has regularly encountered drug shortages, and a 49-year-old San Francisco cancer patient who told an FDA workshop last month how he grappled with a shortage in his chemotherapy drug.

Read more: http://www.foxnews.com/politics/2011/10/31/obama-to-order-fda-to-allay-drug-shortages/#ixzz1cNUuS5DO

 

This guy will go until he’s impeached or thrown out of office.  This is how he thinks – Me Me Me!  After all, he is smarter than us, you know.

Puff

 

More signs Israel preparing to launch attack

Leaves canceled, helicopter traffic surging

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Posted: October 30, 2011

Editor’s Note: The following report is excerpted from Joseph Farah’s G2 Bulletin, the premium online newsletter published by the founder of WND. Subscriptions are $99 a year or, for monthly trials, just $9.95 per month for credit card users, and provide instant access for the complete reports.

Israeli flag

A U.S. intelligence source has told G2Bulletin there are more indicators Israel is preparing to launch an attack – possibly against Iran. And if it does, it may be looking at how to undertake a multi-front strategy that would include an assault against Hezbollah in Lebanon, Hamas in the Gaza Strip or even Syria, according to a report from Joseph Farah’s G2 Bulletin.

Separate sources suggest that Syria would welcome such an attack to divert attention from its own internal violent demonstrations against the regime of Syrian President Bashar al-Assad.

The latest indications and warnings, or I&W, come two weeks following G2Bulletin’s initial report that the Pentagon was watching for a long-anticipated Israeli attack on Iran’s nuclear sites.

That came after revelations of an alleged Iranian plot to kill the Saudi Arabian ambassador to the United States. At that time, a U.S. intelligence source who monitors Israeli I&W said the U.S. was watching “an indicator and warning matrix” in which the U.S. can “go so far as to plot the illumination tables to pick out what nights would be best” for such an attack.

He said that U.S. analysts were concerned that an attack could be “imminent.” The intelligence source said there was a “green light” for the Israelis “to do a strike,” although it wasn’t clear whether that green light is coming from within the Israeli political and military command structure, or from the U.S. government.

The source now reports further I&W to include unusual helicopter traffic at one of the Israeli training bases.

The source reports that the traffic involves some 20 utility helicopters and three attack helicopters.

For the rest of this report and other Intelligence Briefs, please go to Joseph Farah’s G2 Bulletin:

• Iran: Intentions in event of attack
• Iran/United States: Indictment focuses on high tech
• Iraq/Iran: Iraqi Kurdish leader to visit Tehran
• Europe: Excitement over euro deal may be premature
• Europe/China: Beijing to the rescue?
• Iraq/United States: Question of protecting technology

Keep in touch with the most important breaking news stories about critical developments around the globe with Joseph Farah’s G2 Bulletin, the premium, online intelligence news source edited and published by the founder of WND.
Read more: More signs Israel preparing to launch attack http://www.wnd.com/?pageId=362321#ixzz1cNbPgJPg

 

Why Liberals Love Halloween

By Windsor Mann on 10.28.11 @ 6:08AM for The American Spectator

Not that sugar candy makes them any sweeter.

Halloween is a big party. It is the third biggest political party in America. This annual holiday is a nonpartisan event, but politics shows up like everyone else –  cloaked and masked. Not everyone parties with politics, but liberals are most inclined and best equipped. They have the best reasons to love Oct. 31. Here they are:

1. Halloween compels diversity. Everyone feels pressure to create a unique costume. Consequently, everyone becomes artsy. Halloween mandates that you pretend to be something you are not, much as red-state liberals do during political elections.

Downside: The creative diversity gets competitive (read: unfair and mean). People often pick their costumes in order to win prizes and contests such as “Wildest Costume” or “Best John Edwards Lookalike.” Such contests discriminate against those who cannot afford $400 haircuts, paternity tests, and public humiliation (assuming they do not know Maury Povich).

2. It is an opportunity to express your inner child. Liberals have a thing for psychobabble, and psychobabble and psychopaths go well together. Halloween is for kids, who are not yet fully able to distinguish between reality and make-believe. Any adult who loves Halloween is someone with an inner child that needs expressing. Such people have aged but not completely matured. Halloween lets them prove it.

Downside: If you express your inner child too much, your own children may start to view you as their equal and not as an authority figure. This could make it harder for you to teach them how to recycle and how to respect every culture other than their own.

3. It alleviates hunger. Halloween is the only day of the year when millions of Americans go out of their way to feed complete strangers. They buy food for the explicit purpose of giving it to people they may or may not know and who may or may not need it. If every day were Halloween, famine would disappear (as would memories of Live Aid).

Downside: The downside to the “mi casa, su candy” pledge is the second element. Candy contributes to childhood obesity, which Michelle Obama says is really, really bad.

4. Ask, and ye shall receive. On Halloween, all you have to do to get free goodies is knock on a door. In other words, all you have to do to get other people’s stuff is ask for it, and these people will happily give it to you out of social obligation. Halloween is welfare without the paperwork.

Downside: Most Halloween goodies come wrapped in paper or plastic, which environmentally unconscious people will turn into litter.

5. It has no patriotic or Christian undertones. Its lack of nationalistic and Judeo-Christian themes brings people together. Halloween is a perfect day for internationalists (citizens of the world) and devil worshipers (citizens of the netherworld) to unite. This must be why so many people want to hear “We Are the World” at Slayer concerts.

Downside: It is not easy to be a Satanic humanist who slaughters humans. At least that has been my experience.

6. It promotes walking over driving. Trick-or-treating is a neighborhood activity. By walking –  not driving –  from house to house, trick-or-treaters reduce carbon emissions and help save the environment.

Downside: Walking is not possible for the wheelchair-bound and other physically disadvantaged groups. For them, ramps and/or candy delivery services are preferable. Check with your local Meals on Wheels.

7. Gay activists love it. For various reasons, Halloween is big in this community. The day offers an occasion for sexual nonconformists to act not as “someone else” but as caricatures of themselves, openly and without apprehension. If you want to dress in drag, you can do so without fear of harmful social repercussions.

Downside: Drag queens are a form of hierarchy.

8. It allows for witch-hunting. In a pre-Halloween television ad last October, then-Republican Senate candidate (and self-confessed former “dabbler” in witchcraft) Christine O’Donnell declared, “I’m not a witch” –  a line so effective in establishing innocence that thousands of lives could have been spared during the Inquisition had anyone thought of it at the time.

Downside: None.

9. It’s an excuse for feminists to flout their femininity. Even the bra-burning Gloria Steinem can show a little skin on Halloween, the one night of the year when all women can dress as strippers without damaging their ideological credibility. Indeed, on no other day is it so easy to reconcile women’s rights and fishnet tights. You can stand for the former and strut in the latter.

Downside (for men): Feminists don’t make for the best eye candy.

That’s why liberals love Halloween. Though it may be just a one-night stand, the two are made for each other. The pretense of disguise lets liberals be themselves. Luckily the affair happens but once a year.

About the Author

Windsor Mann is a writer living in Washington, D.C., and the editor of The Quotable Hitchens: From Alcohol to Zionism.

http://spectator.org/archives/2011/10/28/why-liberals-love-halloween

 

Uncle Sam Is No Venture Capitalist

It’s yet another inauspicious announcement the Obama Administration didn’t want you to hear. Late on Friday, the White House announced that it ordered an independent review of loans made by the Department of Energy to energy companies after months of weathering criticism for its $528 million loan to the now-bankrupt Solyndra solar panel company.

The White House’s independent investigation, though, isn’t the only one in town. The FBI raided Solyndra after it declared bankruptcy, and Congress is diving in with an investigation of its own. Energy Secretary Steven Chu, who has been a strong advocate of this federal loan program, is set to testify before a congressional committee in mid-November on his involvement in the scandal. And Heritage’s Lachlan Markay reports that the House Energy and Commerce Committee announced Friday that it will vote to subpoena a host of White House documents related to Solyndra, including messages from the President’s Blackberry. The White House, though, would not comment on whether it will comply with the subpoena.

Even the mainstream media is picking up on the story. On yesterday’s Meet the Press, host David Gregory asked White House senior adviser David Plouffe whether, in times of dire economic straits, the government should be playing venture capitalist and trying to prop up green energy industries. Plouffe’s answer? In a nutshell, other governments are doing it, so we should, too: “Listen, you see what’s happening in other countries, you know, huge investments in this clean energy sector. We have to do everything we can.”

But as the motherly advice goes, just because all your friends are jumping off a bridge, that doesn’t mean you should do it, too. Unfortunately, this seems to be the logic the Obama Administration is operating under, despite the weight of common sense that should otherwise be holding it back: If the centrally-controlled economy of China does it, so shall America.

The latest proposal on the table is the Clean Energy Deployment Administration–a veritable “green bank” that would provide loan guarantees to energy and automotive projects that Washington deems worthy. And what it amounts to is a costly subsidy financed by the taxpayers that invites the government to stick its finger into the private energy marketplace. If the company defaults, the taxpayer is on the hook–just like in the case of Solyndra. The total cost of the program? Ten billion dollars, with projected costs hitting an additional $1.1 billion over the next five years.

So what about the Administration’s argument that other countries are investing heavily in these industries, so the United States must keep up? In a new paper, Heritage’s Nicolas Loris analyzes the green bank program and points out a harsh reality: When subsidies are removed from these green energy industries, they collapse because they were developed in a bubble and can’t survive on their own. Loris explains that European countries–which pursued the path the Obama Administration would like to go down–learned that lesson the hard way and are making an exit:

When faced with a need for drastic budget cuts and job creation, Spain, the United Kingdom, Germany, France, and the Czech Republic decided to reduce subsidies for green energy programs, such as wind and solar energy. As a result, some industries have collapsed and others are either collapsing or face difficult roads ahead.

Although each European country has taken a different approach to subsidize green technologies, the results have been the same: Artificially propping up industries by reallocating labor and capital toward uncompetitive projects, forcing higher energy prices on ratepayers, and failing projects are costly to the economy and the taxpayer.
Europe has seen that picking winners and losers in green energy doesn’t work and brings with it a steep cost. The Obama Administration has seen it first hand with Solyndra, the hundreds of millions of taxpayer dollars it wasted, and the 1,100 former employees now out of work. But for some reason, even that first-hand experience can’t convince them to stop playing with taxpayer dollars as if it’s their “Monopoly” money to burn.

Congress should refuse to expand loan guarantee programs and quit putting taxpayers on the hook for an untold number of projects that could fail. The American people simply can’t afford to have Washington put them in the venture capital business.

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Britain’s Aid Disease

By Hal G.P. Colebatch on 10.26.11 @ 6:07AM for The American Spectator

A country that can no longer defend itself is happy to provide millions in foreign aid to the world’s worst tyrants.

 

Britain’s apparent determination not only to commit national suicide but to drag as much as possible of the developing world down with it, gathers pace with the latest largesse to be showered on various Third World regimes.

These recipients of Britain’s generosity are not simply corrupt — Indonesia has been notoriously corrupt, but though the local generals have pocketed a percentage of the aid money which they have received, projects have been built, and living standards have risen. The recipients of British aid, however, include not just corrupt dictatorships, but blood-soaked tyrannies whose rulers not only make no serious effort at development, but probably have no concept of it.

That it will buy Britain any good will is a pipe dream, and that it will result on any positive improvement in the recipient countries’ living conditions or democratic institutions is probably even less likely.

The planned jump in aid has been damned by the Parliamentary Public Accounts Committee, charged with overseeing Government spending, which added that the Department of International Development had a “poor understanding” of the scale and likelihood of aid being lost to fraud. The chairman of the PAC, Labour MP and former minister Margaret Hodge, has said:

“The department is going to be spending more in fragile and conflict-affected countries and the danger to the taxpayer is that there could be an increase in fraud and corruption.

“However, the department could not even give us information as to the expected levels of fraud and corruption and the action they were taking to mitigate it.”

Prime Minister David Cameron — apparently motivated by a confused desperation to have the Conservative Party shed a “nasty” image — has pledged that foreign aid will rise by about 34 percent from 8.4 billion pounds this year to 12.6 billion pounds in 2015, equal to 479 pounds — or about $1,000 — for every household in Britain. For a country is a deep economic crisis this is looks like not only madness, but a direct betrayal of its own people.

The countries concerned include the following, as listed in the Daily Mail:

• Burma, with one of the worst human rights records in the world, comparable to communist countries in the days of Stalinism, including genocide, will receive an increase of 82 percent to 185 million pounds. Its government is a peculiarly toxic cocktail of militarism and socialism, there is no political liberty and development remains mired in hopeless stagnation. There is a story from a few years ago that one Burmese signatory was allowed to travel to Singapore for medical treatment and broke down weeping when he saw what capitalism had achieved.

• Somalia, a hopeless failed state and pirate headquarters, will receive an increase of 205 percent, to 250 million pounds by 2015. It is reckoned to be not just corrupt, but to be the most corrupt nation on Earth.

• Yemen will have its aid approximately doubled from 46.7 million pounds to 90 million pounds a year, despite being a breeding ground for Al Qaeda terrorists.

• Zimbabwe, under the demented tyrant Robert Mugabe, does best of all, with an increase in aid of 70 million pounds to 350 million pounds. A genocidal war was carried out by Mugabe against the Northern Ndebele (Matabele) tribe, using North Korean-trained troops. Torture in police cells is taken for granted. Once among the most prosperous food-growing countries in Africa, it has been reduced to destitution by Mugabe’s policy of confiscating mostly white-owned farms to redistribute among his cronies.

James Delingpole has written in the highly respected Daily Telegraph:

The biggest recipient of our foreign aid largesse is currently Pakistan, to which over the next four years, we will be sending a total of £1.4 billion. This is roughly the same amount that Pakistan has earmarked to spend on a new fleet of Chinese-made submarines; these will go nicely with the two squadrons of Chinese J-10 fighters which Pakistan has also bought at a cost of $1.4 billion. So, in effect, our foreign aid donations are helping to underwrite the military expansion of the country which until recently was shielding the world’s number one Islamist terrorist, organised the massacre in Bombay and is doing so much to fund the Taliban insurgency killing and maiming our forces in Afghanistan.

Still, at least [Britain] is winning hearts and minds in Afghanistan, with spectacular projects like the amusement park and ferris wheel in Lashkar Gar (pop: 100,000) which you, dear taxpayer, cheerfully funded with a mere £420,000 of your hard earned dosh. One day a week, it’s Women Only day. That’ll certainly put paid to any funny ideas the Taliban may have of taking over the country as soon as we’ve made our ignominious departure: “You have the watches; we have the time; but, aieeee, nooo, we cannot compete with your secret propaganda weapon: impressive views of the green zone from a precariously swinging chair while struggling to eat candy floss through a burka.”

I said Britain seemed determined to drag the developing world down with it, and while I admit this is somewhat hyperbolic, it is not entirely so. This aid tends to be not merely useless, it is actively destructive. At best, the aid removes incentives for the local rulers to develop their own economies and tax-bases, at worse it will help finance, or make other monies available to finance, armies, secret police and torture chambers. All this is also, of course, in addition to the aid contributed by non-Governmental organizations, whose quality is extremely variable.

Also, this is despite desperate economic problems at home. Although the exact numbers are hard to know, there are repeated reports of old-age pensioners freezing to death because of the cost of fuel bills, which are set to soar again.

The care of inmates of aged-care homes has been the cause of one scandal after another and I would guess that a push for euthanasia to save public money in the near future is all but inevitable. I will try not to again so soon mount my hobby horse of Britain’s gutted defense forces, except to mention that a few years ago it had more men in Germany, in the Army of the Rhine, than it has in all three services combined today. I have also been informed that the four aircraft defending the Falkland Islands are for ground-support, not air-defense — in other words the Falklands defenses are even weaker than I realized.

Many other thing adds up to an appalling loss of national self-respect, symbolized by the loss of even the Royal Yacht, Britannia, hulked in Scotland as a relic, and perched as it were, on top of the rubble of cultural ruin. Refitting it to modern standards would have cost, according to one estimate, about 11 million pounds, a small fraction of the amount which has been squandered on the useless Millennium Dome or will be squandered on the Olympic Games (the best British Olympics, the “austerity games” held directly after the war, were run on a shoe string).

I am prepared for a chorus of voices claiming this is not the time — if there is ever a time — to be spending money on as Royal Yacht (unlike Pakistani submarines), but nations live in part by symbols that reinforce national pride and self-respect, and Britannia, before it became a symbol of defeat, despair and decline, did this beautifully (the left hated it). As a bit of swank it was usually commanded by an Admiral rather than a mere Captain.

It has also had a record of practical use as a floating trade exhibition, and conference venue — the Royal Family actually used it only for a small part of the time — and refurbishing it would have given a little valuable work to Britain’s moribund shipyards, with their miles of empty and derelict docks and slipways.

About the Author

Hal G.P. Colebatch’s ”Immram,” Counterstrike, is being published by Australian publisher Imaginites.

http://spectator.org/archives/2011/10/26/britains-aid-disease

 

We have the same problem!  With Liberals running the show, nothing will change.

Puff

 

Ohio’s Issue Initiatives

By Matt Naugle on 10.27.11 @ 6:06AM for The American Spectator

Obamacare will be judged by voters on November 8, its last stop before reaching the Supreme Court.

As they await next year’s likely Supreme Court’s ruling on the constitutionality of the Patient Protection and Affordable Care Act, better known as “Obamacare,” states continue to grapple with its odious expenses as they decide whether to accept federal money for health care insurance exchanges so long as the law’s constitutionality remains in doubt.

As this chart from ALEC shows, a vast majority of states from California to Maine have passed measures to reject aspects of the new health care law. And because this month, the Department of Justice filed petitions for certiorari, asking for a final review by the Supreme Court in HHS v. Florida, the last citizens’ initiative to be voted on before oral arguments at the Supreme Court begin is on Ohio’s November 2011 ballot.

Polling shows that while Ohio voters are eager to reject (via the Issue 2 initiative) Gov. John Kasich’s strict anti-collective bargaining laws for public employees, there is bipartisan support for Issue 3, which would create a new amendment in Ohio’s constitution explicitly prohibiting the federal or state government from mandating citizens’ participation in private health care systems.

The mixed polling results may explain why Presidential candidate Mitt Romney, who endorsed both issues in June, came to Ohio to speak at a call-center for Republicans, only to refuse to endorse them. However, more than 24 hours later, Romney has backtracked again and endorsed both issues. He said he is “110%” behind both issues and he apologized for the confusion. However, a Lexis-Nexis search reveals Romney in 2006 campaigned in Ohio in support of Massachusetts-style health insurance mandates.

Issue 3, originally sponsored by local Tea Party groups and the Ohio Liberty Council, saw more than 27,000 volunteers join in the largest, truly grassroots ballot initiative in the state, and perhaps the country. Jeff Longstreth, campaign manager for Issue 3, notes that less than $50,000 was spent on collecting the first 441,000 signatures, with an overwhelming 90 percent validity rate.

As the federal law trumps state authority, Longsreth is quick to say the “first priority is to prohibit a forced insurance program on the state level.” But he adds, “The individual mandate is unconstitutional. We believe our ballot initiative adds strength to that argument. And because it was a citizen driven initiative, it will send a clear message to anyone in the federal level that forcing citizens to buy products from private insurance companies is wrong.”

The opposition to Issue 3 is led by Innovation Ohio, a union-funded think tank run by former staffers of former Gov. Ted Strickland. Its communications director, Dale Butland, a former press secretary for Sen. John Glenn, believes the problem with Issue 3 is how broadly it defines a “health care system.” He asks, “If no one can be required to be in a health care system, how can deadbeat parents be forced to buy health care for their children? Or how could [the] Ohio State University require students to buy health insurance?” Butland also believes that under the initiative’s strict wording, Ohioans could not be forced to pay for Mental Retardation and Developmental Disabilities (MRDD) levies and the legislature would be unable to rework the state’s scandal-ridden workers’ compensation system.

Issue 3 backers are quick to refute these points, noting that child support orders are already binding on both parties and are part of preexisting law. Also, universities can still mandate health insurance coverage because attending them is voluntary and as such a far cry from forcing citizens to purchase health insurance simply because they are alive. Also, as a matter of state law, levies to provide health services for the less fortunate do not require anyone to join a health system any more than the taxes that pay for roads compel a taxpayer to drive on them.

Ohio, as a depressed manufacturing state, has a majority of voters in favor of collective bargaining rights. So expect Issue 3 to pass on November 8. However, with turnout expected to be low and a month of early voting, the fate of Issue 2 is still up in the air. It will probably come down to which side is better organized. Win or lose, the outcome will be reverberate nationwide, as the contentious issue of mandated care moves to the Supreme Court.

About the Author

Matt Naugle writes about state governments for The American Spectator. 

http://spectator.org/archives/2011/10/27/ohios-issue-initiatives

 

China’s Morally Hollow Economy

By Samuel Gregg on 10.28.11 @ 6:07AM for the American Spectator

It’s setting off open discussion and concern about Chinese realities that Communism and blind commitment to economic growth are powerless to address.

In recent weeks, China has been consumed by an unprecedented internal debate concerning a subject bound to make its Communist rulers nervous. At issue is the moral health of Chinese society.

Widespread Chinese discussion of this most un-politically correct subject was triggered by the October 21 death of a two-year old girl in the city of Foshan in Guangdong province. She died of internal injuries sustained after being run-over not once, but twice in a local market.

Accidents happen. But what made little Wang Yue’s death a matter for intense public discussion was the fact that nearly 20 people simply walked by and ignored her plight as she lay bleeding in the gutter.

What, hundreds of Chinese websites, newspapers and even state media outlets are asking, does this say about Chinese society? Have Chinese people lost all sense of concern for others in the midst of the scramble for wealth unleashed by China’s long march away from economic collectivism? One local official summarized the collective angst by stating: “We should look into the ugliness in ourselves with a dagger of conscience and bite the soul-searching bullet.”

The problem, from the perspective of China’s party-government-military elites, is such soul-searching may lead increasing numbers of Chinese to conclude that the circumstances surrounding Wang Yue’s death are symptomatic of deeper public morality problems confronting China, some of which could significantly impede its economic development.

One such challenge is widespread corruption. By definition, corruption doesn’t easily lend itself to close study. Its perpetrators are rarely interested in anyone studying their activities. Few question, however, that there’s a high correlation between corruption and widespread and direct government involvement in the economy. The more regulations and “state-business” partnerships you have (and China has millions of the former and thousands of the latter), the greater the opportunities for government cadres to extract their personal pound of flesh as the price of doing business.

Back in 2007, for example, a Carnegie Foundation study of China reported that approximately “10 percent of government spending, contracts, and transactions is estimated to be used as kickbacks and bribes, or simply stolen.” The situation has since become even worse. In late 2009, for example, China’s state anti-corruption watchdog admitted that 106,000 officials had already been found guilty of corruption that year — an increase of 2.5 percent from 2008.

From an economic standpoint, high corruption levels are a powerful disincentive for foreign investment. And if corruption grows to sufficient levels in China, there’s a strong possibility it may start cancelling-out the attraction of the lower labor costs that are one of the biggest magnets for foreign investment in China.

The ethical predicaments corroding China’s economy, however, go beyond everyday corruption. They also touch on China’s willingness to tell the truth about what’s really going on in the Chinese economy.

While hardly anyone questions China’s economy is growing, doubts are continually expressed concerning the veracity of its growth figures — including by some members of China’s elite. In 2010, for instance, Wikileaks revealed that China’s present Vice Premier Li Keqiang had expressed little confidence in his own country’s GDP numbers during a 2007 conversation with the American ambassador.

The causes for such uncertainty are several. But one that has consistently plagued China since the 1980s has been outright fudging and lying on production and growth numbers by local officials eager for political advancement.

Why does this matter? It’s important because domestic and foreign businesses need reliable data if they’re going to be able to make prudent investments. Conversely, misleading GDP data helps generate a cycle of expectations, risk-assessment, investments, production and exports that is built on lies. And if the falsehoods are big and systematic enough, they will severely undermine business confidence and leave a legacy of distrust of China among foreign investors and international markets.

Many members of China’s Communist party elite — but especially its younger set — are very conscious of these problems. Their concerns were vented in an unprecedented fashion at an informal October 6 meeting held at the China World Trade Centre which gathered together the children of those party leaders who ended the anarchical insanity associated with the “Gang of Four” 35 years ago.

Instead of being a gathering during which preparations were supposed to be made for next year’s Party Congress, young apparatchik after young apparatchik stood up and slammed the state of Chinese society. Some spoke of the “rapid decline of moral standards.” Others referred to “rampant corruption.” Still more expressed their disgust at the perks enjoyed by party and government officials. One well-connected cadre even insisted: “The Communist Party is like a surgeon who has cancer.… It can’t remove the tumor by itself, it needs help from others, but without help it can’t survive for long.”

And herein lies the dilemma for those members of China’s elites who are aware of the threat that widespread corruption, nepotism, and all the usual phenomena associated with one-party states represent to China’s economic and political future. The ideology that still (at least theoretically) justifies their leading place in society and politics — i.e., Communism — has literally nothing to offer by way of serious moral counsel.

Communism is, after all, based on a materialist conception of life, and materialism can’t generate any coherent ethic, beyond recourse to appeals to speeding up the so-called “dialectics of history” or the mailed fist of raw power. That’s why Marxists typically dismiss concerns for objective morality as “bourgeois false consciousness.”

Nor does the other force that increasingly serves to legitimize the rule of China’s elites — old-fashioned nationalism — have much to offer by way of moral guidance. Indeed, nationalist regimes are invariably associated with widespread corruption because of their propensity to meddle widely and deeply in every aspect of economic life.

Either way, if China’s rulers are going to confront some of the looming moral problems threatening to compromise China’s economic progress (not to mention the present elite’s power-monopoly), then they need to find some alternatives — and quickly. Revolutions have, after all, started on far less.

About the Author

Samuel Gregg is Research Director at the Acton Institute. He has authored several books including On Ordered Liberty, his prize-winning The Commercial Society, and Wilhelm Röpke’s Political Economy.

http://spectator.org/archives/2011/10/28/chinas-morally-hollow-economy

 

The Answer Is a Balanced Budget Amendment

By Steven G. Calabresi from the October 2011 issue of the American Spectator

The question is how to solve our problem of unsustainable debt.

The United States of America is on the road to bankruptcy, with a federal debt of more than $14.2 trillion, almost half of which is owned by foreign countries. (Communist China alone owns fully a quarter of the foreign-held portion). The problem is so well known that it almost came as an anticlimax when Standard & Poor’s recently downgraded U.S. debt from its coveted AAA rating to an unheard-of AA+. As for the budget deficit, it is expected to total $1.3 trillion for this year alone, with tax revenues of about $2.3 trillion and total expenditures of about $3.6 trillion. If a household ran its budget like that, we would say it was headed for a rude shock.

Making matters worse is that our debt is structural rather than cyclical: the federal budget is in deficit both in good economic times and bad. When George W. Bush took office in 2001, the gross federal debt was $5.76 trillion. When he left eight years later, the debt was up to $10.626 trillion, an increase of $607 billion a year. During Barack Obama’s presidency it has risen by $1.7 trillion a year and now almost 40 percent higher than when he took office. Deficits of this size are quite simply unsustainable.

The only way to fix this mess is to radically cut federal spending, cap the budget with pay-as-you-go spending rules, and then enact a balanced budget amendment (BBA).

The most important point is that we need to cut spending, not raise taxes. Total federal spending as a percentage of Gross Domestic Product (GDP) has skyrocketed from around 18 percent, when George W. Bush became president, to more than 25 percent today. This shows that our current deficit problem is entirely due to overspending. If tomorrow we cut spending back to the levels of January 20, 2001, when Bush took office, the deficit would almost disappear.

Then we need to cap and balance the budget, once we’ve cut overall spending back to 2001 levels. To do this effectively, we need to enact a federal BBA to the U.S. Constitution. This amendment should have several features.

First, it should require that the president submit to Congress each year a balanced federal budget with no fiscal gimmicks. Presidential failure to do so would be an impeachable offense. Congress should be constitutionally required to hold a vote in both houses on the president’s proposed budget within three months, with the president and Congress having up to six months to adopt a final budget in any given calendar year (this requirement should be waivable during any time of declared war for up to two years). If they fail to do that, all federal spending except for payments on the debt should be frozen at levels 10 percent lower than in the preceding fiscal year. To help impose this, any one of the several states should have standing to sue in the Supreme Court’s original jurisdiction for enforcement of this requirement.

Second, the BBA should cap federal spending at 18 percent of GDP. A spending cap of this proportion would keep the federal government at the size it was under President Bill Clinton — hardly onerous or severe. The amendment should require a two-thirds vote of both houses of Congress to enact any new taxes or to raise tax rates. Votes to raise the national debt limit should also require a two-thirds majority. These provisions are essential to prevent a BBA from becoming just an excuse to raise taxes.

THE USUAL RESPONSE to calls for such an amendment is that we ought not tamper with the Constitution. Critics of a BBA also claim it is not needed since a majority of Congress could balance the budget today if it really wanted to. There are at least five reasons why those critics are dead wrong.

First, it is a core principle of American constitutionalism that there be no taxation without representation. The American Revolution was fought in part to prevent taxation by a British Parliament in which Americans were not represented. When Congress borrows 40 cents of every dollar it spends, as it is doing today, it passes the burden of paying for current spending on to our children and grandchildren who cannot vote right now — nothing less than taxation without representation.

Second, a core purpose of the Constitution is to protect fundamental principles like freedom of speech and of the press from being whittled away during moments of legislative passion. Exactly the same argument holds true with respect to spending more money than the government collects in tax revenue. Constitutionalizing the balanced budget requirement is as necessary as constitutionalizing the protection of freedom of speech and of the press. This is an argument that was first made more than 30 years ago by Noble Prize laureate Milton Friedman. It is just as true today as it was then.

Third, there is an economic reason why it is easier to assemble lobbies for government spending than it is to assemble a nationwide lobby for a balanced budget. Consider the farm lobby that argues for agricultural price supports, or the AARP that lobbies for benefits for the elderly. It is cheaper and easier for small groups with a shared common interest to lobby Congress than for a large, diffuse majority of the American population to do the same. That’s why the silent majority is silent. A BBA in the Constitution would prevent the special interests from ripping off the children and grandchildren of the silent majority. James Madison wrote in The Federalist No. 51 that the secret of constitutional government was to make ambition counteract ambition. The way to check and balance over-spending is to constitutionalize a pay-as-you-go rule while making tax increases hard to enact.

Fourth, yet another economic reason for a BBA is that it would reduce risk and thereby promote investment. When people are looking for a place to invest, one of their first questions is how risky is the investment and how large is the potential reward. Foreign and American investors since World War II have invested in the U.S. and in its debt because our Constitution of checks and balances makes it hard to do crazy things like nationalize industries or set up a single payer health insurance monopoly.

A BBA would reduce further the risk of investing in the U. S., and that would promote investment and economic growth by constitutionally committing itself not to overspend. The risk of inflationary devaluation of the dollar would thus go way down. This in turn would bolster the dollar as the world’s reserve currency. It would also prevent federal borrowing from crowding out private sector borrowing in the U.S. This would free up a capital for investment in job-creating ventures.

A fifth argument for the BBA paradoxically grows out of one of the arguments commonly made against it: it would be purely symbolic. Or as James Madison would have said, “a mere parchment barrier” against overspending.

This criticism fails for many reasons. A BBA of the kind I argue for would have enforcement teeth. Presidential failure to submit a good-faith balanced budget would be a specific ground for impeachment. Then too, if Congress failed to enact a balanced budget, state governments could sue for an across theboard spending cut of 10 percent.

But suppose Congress wimps out and enacts a BBA without teeth. Would such a symbolic victory be worth anything? The answer again is clearly yes. Almost every state has some form of a balanced budget requirement in its constitution or law. The fact is that balanced budget requirements actually do work at the state level. This strongly suggests they would work at the federal level as well.

CONSTITUTIONAL PROVISIONS, even symbolic ones, set the agenda of political debate. The Second and Tenth Amendments clearly do that in the U.S. today, even though the federal courts almost never enforce them. A BBA would work very much the same way.

The case for a BBA is so powerful that Germany and Switzerland — both models of fiscal sobriety — actually require a balanced budget in their own constitutions. And now Germany and France have actually proposed requiring that all Eurozone countries amend their national constitutions to require a balanced budget. What is good enough for almost every state in the Union and for many countries of Europe is certainly worth trying at the federal level here.

So what harm could come from enacting a BBA to the U.S. Constitution? Is there any argument against such an amendment that outweighs the arguments in favor of it?

One concern conservatives have is that it might lead to tax increases. I share that concern and therefore would couple it with a super-majority requirement for tax increases. That should make a BBA clearly appealing to conservatives of all stripes. But what if such an amendment gets ratified that does not protect against tax increases? Would we then be worse off?

I think the answer is no. It is harder politically for Congress to tax real people living today than it is to borrow money from the children and grandchildren of the silent majority. People living today will mobilize in many ways against tax increases. The correct solution is to cut, cap, and balance, but I would not let concerns about tax increases stop us from doing what virtually every state constitution does.

Another real concern for conservatives is that a BBA could lead to dangerous cuts in spending on national defense. This concern I share. The U.S. is a world leader and the greatest force for liberty and economic opportunity in history. We must always be ready to defend liberty worldwide.

The problem is, however, that current levels of deficit spending — almost half of which is financed by foreign countries — is itself a threat to U.S. global might. We simply cannot defend liberty in Asia, for example, if we continue to borrow massively from the Chinese. We cannot defend freedom in Arab countries while being so dependent on Saudi Arabia and others for imported oil and purchases of our debt. The status quo is at least as threatening to America’s military might as is living under a BBA, for the status quo is not sustainable.

Finally, some conservatives argue that the solution to congressional deficit spending is a line item veto amendment giving the president the same power over spending enjoyed by a majority of state governors. I am quite skeptical about such an amendment because of the enormous power it would shift from Congress to the president. Imagine for a moment that President Obama could threaten senators or representatives with line item vetoes of locally important spending projects unless they voted his way on socialized medicine. Or on a card check law reform making it easy to fraudulently form a union. Do we really want to cede that much power from Congress to the president? I do not think so.

In sum, we need to cut, cap, and balance. To do that permanently, we must enact a BBA. Nothing less than the future of government of the people, by the people, and for the people is at stake.

About the Author

Steven G. Calabresi is a professor of law at Northwestern University and a co-founder of the Federalist Society.

http://spectator.org/archives/2011/10/28/the-answer-is-a-balanced-budge

 

Solyndra scandal probe widens as White House orders new review

Faced with a growing scandal over the bankrupt Solyndra solar power company, the Obama administration has ordered an independent review of government loans to energy companies. Republican lawmakers say they’ll subpoena internal White House communications on Solyndra.

By Brad Knickerbocker, Staff writer / October 29, 2011 The Christian science Monitor

The headquarters of bankrupt Solyndra LLC in Fremont, California. The Obama administration has ordered an independent review of loans made by the Energy Department to energy companies.

The Obama administration has ordered an independent review of loans made by the Energy Department to energy companies – a clear response to the controversial and now-bankrupt Solyndra Inc. solar energy company.

It’s the latest step in the face of growing criticism over the $528 million government loan to Solyndra, which was part of the administration’s economic stimulus package meant to advance green energy. Last month, FBI agents and investigators from the Department of Energy’s Office of Inspector General searched Solyndra headquarters in California for documents and other information.

Heading the review announced Friday is former Treasury official Herbert Allison, who oversaw the Troubled Asset Relief Program, part of the 2008 Wall Street bailout.

“Today we are directing that an independent analysis be conducted of the current state of the Department of Energy loan portfolio, focusing on future loan monitoring and management,” White House chief of staff Bill Daley said Friday afternoon – the traditional time for burying announcements. “While we continue to take steps to make sure the United States remains competitive in the 21st century energy economy, we must also ensure that we are strong stewards of taxpayer dollars.”

Announcement of the internal review of procedures dealing with Solyndra was not enough to satisfy congressional critics.

Leaders of the Energy and Commerce Committee subcommittee on oversight and investigations say they’ll meet this coming week to consider a resolution authorizing the issuance of a subpoena for internal White House communications relating to the Solyndra loan guarantee.

“Subpoenaing the White House is a serious step that, unfortunately, appears necessary in light of the Obama administration’s stonewall on Solyndra,” Fred Upton (R) of Michigan and Cliff Stearns (R) of Florida said in a statement. “Since we launched the Solyndra investigation over eight months ago, the Obama administration has unfortunately fought us every step of the way, even forcing us to subpoena documents from [the White House Office of Management and Budget].”

Apparently, White House officials weren’t the only ones pushing special consideration for green energy.

Sen. Orrin Hatch (R) of Utah, who has criticized the Obama administration’s backing of Energy Department loan guarantees to Solyndra, pushed for more than $20 million in government funding for a clean energy firm in his home state, reports USA Today.

“Hatch aides [said] earlier this month that the Republican lawmaker had never pushed for taxpayer money to be used for Raser Technologies, which operated a geothermal power plant in southern Utah and also developed hybrid plug-in vehicles,” the newspaper reported Friday. “But on Friday, Hatch spokesman Matthew Harakal said that after an internal audit following publication of the USA Today story on Hatch’s support for Raser, the Utah senator’s office found that Hatch actually requested seven earmarks for more than $20 million from 2006 to 2008 to help fund research and development projects for the automotive wing of the company.”

None of the requests were funded, and Raser Technologies filed for bankruptcy in April.

Meanwhile, the Solyndra scandal – if that’s what it is – has indirectly touched at least one Republican presidential hopeful.

“Mitt Romney is facing scrutiny this week for associating himself with a lobbyist whose firm worked for failed California solar panel company Solyndra,” The Hill newspaper in Washington reported this week. “Lobbyist Alex Mistri co-hosted a Romney fundraiser Wednesday that included a number of lobbyists and members of Congress, held at the American Trucking Association near Capitol Hill.”

Also attending the Romney fundraiser co-hosted by lobbyist Mistri was Rep. Darrell Issa (R) of California, chairman of the House Committee on Oversight and Government Reform investigating Solyndra.

Material from the Associated Press was used in this report.

 

You can bet the “White House Review” is a CYA maneuver.  These people are nothing but lying, dishonest scumbags.  They will use the results of this “Internal Review” to obviscate and refute any real findings.

Puff