The Michigan View.com:No joke: Biden reveals The Great Stealth Stimulus Scheme

Posted by hpayne on September 30, 2010

Burning tax dollars like monopoly money, Governor Granholm and President Obama have “invested” millions in A123, a Michigan battery company even as industry experts say that electric vehicles are not the future of transportation that politicians claim. But the cavalier $249 million bet on batteries is just the tip of the iceberg.

In an extraordinary interview with Time Magazine’s Michael Grunwald, Vice President Joe “Big F-ing Deal” Biden reveals that billions in stimulus money has been spent — not to help revive frozen credit markets, fund construction jobs, or provide help for the unemployed as advertised — but on politically-favored companies that Washington has decided will produce the products of the future.

“This is a chance to do something big man!” Biden thrilled to Time.

The staggering transfer of wealth from taxpayers to political favorites is not only a disguised attempt to transform America’s economy; it is also a significant diversion of American capital at a time when viable businesses are starved for investment dollars. The result is a stimulus bill that is actually retarding America’s long-term recovery.

A123, for example, has struggled, piling up losses and is failing to deliver on its tech promises to capital investors. Business writer Ira Stoll in Futureofcapitalism.com tells of one investor, Bronte Capital’s John Hempton, who lost his shirt in A123. Now, however, the chumps are taxpayers who are unknowingly subsidizing a marginal enterprise.

Asks Stoll: “Why should I or an ordinary Michigan taxpayer be taxed to subsidize batteries for BMW buyers or to prop up the value a company held by investors in Mr. Hempton’s hedge fund? It’s a reverse Robin-Hood.”

The audacity of such shadow investment schemes is described in detail by Time’s Grunwald, an admirer of Obama’s radical green ideology. A fellow traveler, Grunwald delights in describing the administration’s “stimulus” deception.

“The American Recovery and Reinvestment Act of 2009 — President Obama’s $787 billion stimulus — has been marketed as a jobs bill, and that’s how it’s been judged. But the battle over the Recovery Act’s short-term rescue has obscured its more enduring mission: a long-term push to change the country,” writes the Time reporter. “Some Republicans have called it an under-the-radar scramble to advance Obama’s agenda — and they’ve got a point”

Obviously comfortable with the left-wing Time scribe, Biden is glib in his description of the Obama administration as Masters of the Universe reshaping American industry in their image.

Yes, the stimulus has built roads, but “in the words of Vice President Joe Biden, Obama’s effusive Recovery Act point man, ‘Now the fun stuff starts!'” writes Grunwald. “The ‘fun stuff,’ about one-sixth of the total cost, is an all-out effort to exploit the crisis to make green energy, green building and green transportation real; launch green manufacturing industries; computerize a pen-and-paper health system; promote data-driven school reforms; and ramp up the research of the future. ‘This is a chance to do something big, man!’ Biden said during a 90-minute interview with TIME.”

While administration grown-ups “argued for tax cuts and income transfers to get cash circulating quickly,” Obama and Biden saw the nearly trillion-dollar stimulus like teenagers eye the liquor cabinet when the parents are gone: A chance to par-tee!

“Biden recalls brainstorming with Obama about an all-in push for a smarter electrical grid that would reduce blackouts, promote renewables and give families more control over their energy diet: ‘We said, “God, wouldn’t it be wonderful? Why don’t we invest $100 billion? Let’s just go build it!”‘”

Let’s just go build it. What the heck. No accountability. No investor analysts to quibble over details. Not their money.

And so our juvenile leaders have had a ball. They have converted the Energy Department “into the world’s largest venture-capital fund,” in Grunwald’s phrase. They have poured money into shelved ideas that private markets won’t touch or abandoned long ago: “electric cars; renewable power from the sun, wind and earth; cleaner coal; advanced biofuels; and factories to manufacture green stuff in the U.S.”

Seeing himself as a 21st century FDR, Obama wants a New Deal that will leave monuments to his legacy. In fact, they will be monumental white elephants littering the landscape: huge wind farms, fleets of electric government vehicles, sprawling desert solar arrays.

Like Granholm’s stimulus-funded A123 factory in Livonia, these monuments exist entirely at the will of parallel government mandates for unreachable mpg rules, alternative energy requirements for utilities and so on. These companies will shrivel without fickle government subsidies.

The winners of tax dollars are the rich and the politically-connected. Multi-millionaires like carmakers Elon Musk and Henrick Fisker or the politically-connected A123 which is providing truckloads of recycled electric-car batteries for a grid-storage project in Detroit and elsewhere.

As A123’s Bart Riley, one of the Obamaphiles, tells Time: “If we can show the utilities this stuff works it will take off on its own.” Of course, if it worked, the utilities would already have done it — but such is the arrogance of Obama’s Masters of the Universe.

“Today, grid-scale storage, solar energy and many other green technologies are too costly to compete without subsidies,” continues Grunwald as he describes billions being consumed by the Energy Department on “research too risky for private funders, focusing on speculative technologies that might dramatically cut the cost of, say, carbon capture — or not. “We’re taking chances, because that’s how you put a man on the moon,” adds director Arun Majumdar, a materials scientist from the University of California, Berkeley, to the magazine. “Our idea is it’s O.K. to fail. You think America’s pioneers never failed?”

Yes, they failed. But with their own money.

The effort has spawned armies of lobbyists — a growth industry in a government-run economy — but “surprisingly few scandals,” claims Grunwald. But what he doesn’t acknowledge is that the entire effort is a scandal — a stealth effort to divert taxpayer dollars to an Extreme Makeover of American capitalism to European market socialism.

It’s like kids in a candy store. And they are eating your candy.

Henry Payne is editor of the Michigan View.com

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