DOE Loans Loaded with Red Tape
Economist Milton Friedman once told an insightful anecdote concerning his trip to an Asian country in the 1960s. He was shown a canal project and was shocked to see the lack of heavy moving equipment, which would have made removing earth, rocks, tress etc. much easier. When he inquired about this, the government official accompanying him told him that this was a “jobs program,” to which Milton replied “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.” Government spending does not create jobs or spur economic growth, as this anemic recovery has brutally shown.
With the revelation that 80% of all DOE loans went to Obama donors, we should all be crying foul at the shameless display of crony capitalism. However, given news documents obtained by the Independence Institute, it also full of red tape. So Obama helps out his buddy bundlers with some loans that are so burdensome it causes the companies to collapse. I don’t know if this pure ineptitude or political astro turfing to show like he’s doing something about clean energy. Either way, it’s bad politics.
- The Recovery Act;
- The Davis-Bacon Act; Office of Management and Budget regulations;
- Environmental laws (including those involving “air emissions, discharges to surface water or ground water, noise emissions, solid or liquid waste disposal, the use, generation, storage, transportation or disposal of toxic or Hazardous Substances or wastes, or other environmental health or safety matters”);
- The Investment Company Act;
- The Employee Retirement Income Security Act;
- Buy American regulations;
- Lobbying laws;
- Foreign asset control laws;
- Prohibited person laws;
- Prohibited jurisdiction laws;
- Corrupt practices laws;
- The Anti-Terrorism Order.
Scratch the surface of any one of the above categories and you find requirements like this one, in the OMB compliance section:
“OMB shall have certified in writing (in form and substance satisfactory to DOE) that the DOE Credit Facility Documents and the Project comply with the provisions of the Omnibus Appropriations Act, 2009, P.L. No. 111-8, Division C, Title III, as amended by Section 408 of the Supplemental Appropriations Act, 2009, P.L. No. 111-32.”
Keep in mind that’s just one provision in more than 100 pages of detailed requirements that span the breadth and depth of federal laws and regulations. And in case the loan guarantee agreement by the DOE is not suffocating enough, the following legal, financial and regulatory blanket — as revealed in the Abound Solar documents — is placed atop the specific, enumerated rules and regulations loan-guarantee recipients are required to obey:
The Abound Solar loan-guarantee documents suggest that a newborn company, which lays down with the DOE, runs the risk of being smothered by the federal leviathan before ever bringing a product to market.
Wow…talk about government efficiency.