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If Obama Loses, It Will Be Because Of This One Chart

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James Pethokoukis, American Enterprise Institute

In his State of the Union response the other night, Indiana Gov. Mitch Daniels neatly summed up Mitt Romney’s (who has a roughly 90 percent chance of being the GOP nominee according to Intrade) economic case against President Barack Obama: “The president did not cause the economic and fiscal crises that continue in America tonight, but he was elected on a promise to fix them, and he cannot claim that the last three years have made things anything but worse.”

In other words, the Obama Recovery stinks. Even if today’s GDP report — for the fourth quarter of 2011 — shows 3 percent growth or better, it would be just the fourth time that has happened since the economy began turning up in June 2009: 3.8 percent in the fourth quarter of 2009, 3.9 percent in the first quarter of 2010, and 3.8 percent in the second quarter of 2010. But no 3 percent-plus quarters since then.

The first nine quarters of the Reagan Recovery, by contrast, looked like this:  5.1 percent, 9.3 percent, 8.1 percent, 8.5 percent, 8.0 percent,  7.1 percent, 3.9 percent, 3.3 percent, 3.8, percent, 3.4 percent. In fact, the Reagan Boom went from the first quarter of 1983 until the second quarter of 1986 without notching a sub-3 percent GDP quarter.

So while the Reagan Recovery quickly made up for lost years of growth, not so much for the Obama Recovery, as this chart in today’s Wall Street Journal makes clear:

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And few economists are expecting the Obama Recovery to take off anytime soon. The IMF predicts just 1.8 percent growth for 2012 (and that’s assuming no EU sovereign debt meltdown). And the Federal Reserve sees growth in the 2.2 percent to 2.7 percent range with unemployment around 8.2 percent to 8.5 percent. Ugh!

The WSJ offers two explanations for the anemic rebound:

Economists say the nature of the recession helps explain the slow recovery. Aftershocks from the financial crisis have left banks reluctant to lend, making it hard for companies, and especially start-ups, to get access to capital. The housing market, which has historically helped lead the economy out of recession, remains deeply depressed.

Many business leaders say they are also being held back by policy-related uncertainty, everything from the threat of new regulations and higher taxes to the fear that political gridlock could hamper the government’s ability to respond to a new crisis. Recent economic research has given some weight to those complaints. A study by a trio of academic economists found that policy uncertainty has risen in recent years, and that periods of uncertainty have in the past corresponded with rising unemployment and slowing growth.

Whichever explanation holds more weight with voters may go a long way toward deciding who’ll be America’s next president.

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Another Stimulus-Backed Energy Company Files for Bankruptcy

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After months of financial turmoil, an Energy Department-backed lithium ion battery company has filed for Chapter 11 bankruptcy protection.

Lachlan Markay

January 26, 2012 at 10:39 am

The company, Ener1, received a $118 million grant from DOE in 2010 as part of the president’s stimulus package. The money, which went to Ener1 subsidiary EnerDel, aimed to promote renewable energy storage battery technology for electrical grid use.

But despite generous federal support for the company, Ener1 was racked by problems last year. In October, NASDAQ delisted the company due to non-compliance with Securities and Exchange Commission filing requirements. A month later, the company’s president, chief executive, and top financial officer were fired.

On Thursday, Ener1 announced it will initiate a pre-packaged Chapter 11 bankruptcy plan as part of an agreement to restructure the company’s debt obligations.

Ener1, Inc. (OTC: HEVV) (the “Company”) today announced that it has reached agreement with its primary investors and lenders on a restructuring plan that will significantly reduce its debt and provide up to $81 million to recapitalize the Company to support its long-term business objectives and strategic plan.

To implement this restructuring plan, the Company has voluntarily initiated a “pre-packaged” Chapter 11 case in U.S. Bankruptcy Court in the Southern District of New York, in which it is requesting that the Court confirm a pre-packaged Plan of Reorganization to implement the restructuring.  The Company filed a proposed Disclosure Statement and Plan of Reorganization with the Court and anticipates completing the restructuring process in approximately 45 days…

The pre-packaged restructuring plan, which has been unanimously accepted by all of Ener1′s impaired creditors, provides for a restructuring of the Company’s long-term debt and the infusion of up to $81 million of equity funding, which will support the continued operation of Ener1′s subsidiaries and help ensure that the restructuring will not adversely impact their employees, customers and suppliers.  Of this amount, a new debtor-in-possession (DIP) credit facility of up to $20 million will be available upon Court approval to support working capital needs during the restructuring.  The balance, for a total of up to $81 million, will be available over the four years following Court approval of the restructuring plan and subject to the satisfaction of certain terms and conditions.

Ener1 is not the first energy storage technology company to file for Chapter 11 after receiving significant stimulus support. Beacon Power, which manufactures flywheel energy storage technology, received a $43 million loan guarantee from the same stimulus program that funded Solyndra. Despite having used $3 million marked for loan repayment to continue funding its daily operations, Beacon filed for Chapter 11 in November.

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Navy Buys Biofuels for $15 Per Gallon From Stimulus-Linked Firm

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Lachlan Markay
December 13, 2011 at 11:00 am

A California company has been hired to provide 450,000 gallons of advanced biofuels to the U.S. Navy – the “single largest purchase of biofuel in government history,” according to the Navy – at $15 per gallon, or about four times the market price of conventional jet fuel.

The Institute for Energy Research unearthed the purchase in a recent post on its website:

Last week, the Navy signed a contract with two biofuel companies to purchase 450,000 gallons of advanced biofuels at $12 million to assist in President Obama’s goal to establish a domestic biofuels industry and to advance it in ways that do not require Congressional approval. Of course, given the Navy’s mission, they claim to be pursuing biofuels to ensure adequate fuel in the future without relying on crude from the Middle East or other overseas sources that may be a threat to our national security. While this purchase is only a drop in the bucket compared to the Navy’s annual usage of more than 670 million gallons, their goal is to fuel a normal Navy mission with a 50-percent blend of biofuels and gasoline by 2016.

The company selling the fuel to the Navy is called Solazyme. The company’s corporate board includes “strategic advisor” T.J. Glauthier, who “advises companies dealing with the complex competitive and regulatory challenges in the energy sector today.”

Glauthier was the Deputy Secretary and Chief Operations Officer of the Department of Energy from 1999 to 2001, meaning he has experience dealing with energy issues on both sides of the regulatory equation.

Also of note: Glauthier served (pro bono) on President Obama’s White House Transition Team, where he specifically worked on the energy provisions of the stimulus package, according to Solazyme’s website. Solazyme itself landed a $21.8 million stimulus grant to build a biofuel refinery.

Now the company looks to have scored big once again. But the benefits extend beyond the immediate profit to be made from the sale. As Wired Magazine noted, “the often-struggling biofuels industry will be a lot closer to proving its viability” with Solazyme’s massive Navy contract.

“Our use of fossil fuels is a very real threat to our national security,” the Navy insisted in defending the purchase, apparently in reference to the supposed limits on fossil fuel availability. But as IER noted, the United States sits on enough oil and natural gas to power the country for hundreds of years – if only the federal government would permit expanded exploration and development.

The administration seems to be looking for ways to push alternative fuels without congressional action, and the military is the logical place to start. Heritage research fellow Jack Spencer noticed the trend earlier this year: “The Pentagon and the environmental movement seem to have found common cause by linking America’s national security to the basic tenets of the President’s green agenda,” Spencer noted. “Unfortunately, there are real costs for national security, energy technology, the taxpayer, and the American consumer.”

Government efforts to prop up favored industries also tend to benefit the politically connected. Solazyme certainly fits the bill.

(h/t J.E. Dyer and Whitney Pitcher)

Posted in Energy and Environment, Featured, Scribe

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Obama’s agenda: Overwhelm the system

Posted June 6, 2010

Rahm Emanuel cynically said, “You never want a crisis to go to waste.” It is now becoming clear that the crisis he was referring to is Barack Obama’s presidency.

Obama is no fool. He is not incompetent. To the contrary, he is brilliant. He knows exactly what he’s doing. He is purposely overwhelming the U.S. economy to create systemic failure, economic crisis and social chaos — thereby destroying capitalism and our country from within.Â

Barack Obama is my college classmate (Columbia University, class of ’83). As Glenn Beck correctly predicted from day one, Obama is following the plan of Cloward & Piven, two professors at Columbia University. They outlined a plan to socialize America by overwhelming the system with government spending and entitlement demands. Add up the clues below. Taken individually they’re alarming. Taken as a whole, it is a brilliant, Machiavellian game plan to turn the United States into a socialist/Marxist state with a permanent majority that desperately needs government for survival … and can be counted on to always vote for bigger government. Why not? They have no responsibility to pay for it.

— Universal health care. The health care bill had very little to do with health care. It had everything to do with unionizing millions of hospital and health care workers, as well as adding 15,000 to 20,000 new IRS agents (who will join government employee unions). Obama doesn’t care that giving free health care to 30 million Americans will add trillions to the national debt. What he does care about is that it cements the dependence of those 30 million voters to Democrats and big government. Who but a socialist revolutionary would pass this reckless spending bill in the middle of a depression?

— Cap and trade. Like health care legislation having nothing to do with health care, cap and trade has nothing to do with global warming. It has everything to do with redistribution of income, government control of the economy and a criminal payoff to Obama’s biggest contributors. Those powerful and wealthy unions and contributors (like GE, which owns NBC, MSNBC and CNBC) can then be counted on to support everything Obama wants. They will kick-back hundreds of millions of dollars in contributions to Obama and the Democratic Party to keep them in power. The bonus is that all the new taxes on Americans with bigger cars, bigger homes and businesses helps Obama “spread the wealth around.”

— Make Puerto Rico a state. Why? Who’s asking for a 51st state? Who’s asking for millions of new welfare recipients and government entitlement addicts in the middle of a depression? Certainly not American taxpayers. But this has been Obama’s plan all along. His goal is to add two new Democrat senators, five Democrat congressman and a million loyal Democratic voters who are dependent on big government.

— Legalize 12 million illegal immigrants. Just giving these 12 million potential new citizens free health care alone could overwhelm the system and bankrupt America. But it adds 12 million reliable new Democrat voters who can be counted on to support big government. Add another few trillion dollars in welfare, aid to dependent children, food stamps, free medical, education, tax credits for the poor, and eventually Social Security.

— Stimulus and bailouts. Where did all that money go? It went to Democrat contributors, organizations (ACORN), and unions — including billions of dollars to save or create jobs of government employees across the country. It went to save GM and Chrysler so that their employees could keep paying union dues. It went to AIG so that Goldman Sachs could be bailed out (after giving Obama almost $1 million in contributions). A staggering $125 billion went to teachers (thereby protecting their union dues). All those public employees will vote loyally Democrat to protect their bloated salaries and pensions that are bankrupting America. The country goes broke, future generations face a bleak future, but Obama, the Democrat Party, government, and the unions grow more powerful. The ends justify the means.

— Raise taxes on small business owners, high-income earners, and job creators. Put the entire burden on only the top 20 percent of taxpayers, redistribute the income, punish success, and reward those who did nothing to deserve it (except vote for Obama). Reagan wanted to dramatically cut taxes in order to starve the government. Obama wants to dramatically raise taxes to starve his political opposition.

With the acts outlined above, Obama and his regime have created a vast and rapidly expanding constituency of voters dependent on big government; a vast privileged class of public employees who work for big government; and a government dedicated to destroying capitalism and installing themselves as socialist rulers by overwhelming the system.

Add it up and you’ve got the perfect Marxist scheme — all devised by my Columbia University college classmate Barack Obama.

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Wayne Allyn Root was the 2008 Libertarian Party vice presidential nominee and serves on the Libertarian National Committee.

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