Apparently, when Barrack Obama campaigned on ‘no more sweetheart deals’ and getting rid of crony capitalism he was only talking about deals by Republicans.

As mentioned in the interview, one must ask why this administration does not promote using current programs and free internet already provided for by taxpayers at the local libraries?

In any case: more free stuff to entice low information voters…

Motor Trend published Volkswagon’s claims as follows: (emphasis added)

Now Volkswagen is disputing the claims and suggesting that it bested GM last  year. According to Automotive News, Volkswagen’s 8.16-million figure  doesn’t include sales from commercial  truck divisions MAN and Scania. Once those figures are added, it will  significantly bolster VW’s annual sales tally.

On top of that, GM’s sales figure was padded with about one million sales by  Chinese automakers SAIC Motor Corp. and Wuling Motors Co. — companies with which  GM has joint ventures, but in which the American company does not have a  controlling stake. If those sales were excluded and VW’s truck figures added,  Volkswagen would probably steal the global sales crown from GM.

2011 Automotive Company U.S. sales  fast facts:

GM- U.S. sales rose by 13% over 2010 numbers,  while Volkswagon’s U.S. sales rose by 23.3%.  Chrysler sales rose by 26%, and Ford’s sales rose by 11% over 2010. Imports BMW and Merceces Benz were also up 13%,  according to KHSLTV.

GM’s Chevy volt sales took a nosedive from  previously reported anemic sales due to the reports of the car exploding in a fireball during testing. GM sold 7700 Volts in 2011 and only 603 volts were sold in Jan. 2012. This was well short of stated goals of 10,000 in 2011 and has forced GM to walk back there stated goal of selling 45,000 Volts in 2012.

Due to under-performing GM stock prices, the U.S. taxpayer is currently estimated to be on the hook for almost $24 billion dollars in losses.

GM Avoids Paying Taxes on Profits thanks to Obama and Geitner adding illegal exemptions into TARP deal. Pay-to-Play 101.

GM to date has not mentioned the total of $45 billion dollars in tax write-offs given to them in the Obama/Geitner TARP deal. The Harvard Law School Forum  published the following little-know facts  about GM’s deal:

New GM has the factories, offices, designs and some of the workers that Old GM had. It also acquired some $18 billion worth of its NOLs (the losses themselves were $45 billion). It could not use them to reduce its corporate income tax liability immediately – it earned no income against which to apply them. But in 2010 New GM did finally turn a profit. Presumably, it will now start using its NOL’s (net operating losses) to avoid its corporate tax. (emphasis added)

The problem lies within certain “notices” written by the Treasury where GM/U.S. Treasury will not have to abide by  tax laws that other companies who sell stock do.

To solve this problem, the Treasury issued a series of “Notices.” The Sec. 382 rules, it declared, simply did not apply to itself. When it sold its shares in New GM, its buyers might increase their ownership stake by 50 percentage points, but they would not trigger the Sec. 382 limits. The tax code offered no exception for government-owned shares, and the Treasury did not purport to find one. Instead, it just declared that the law did not apply. Treasury issued several similar “Notices” for AIG and Citigroup. Through the TARP transactions, both of these firms experienced ownership changes over 50%. By law, they lost their NOLs. By “Notice,” the Treasury announced that it would let them keep the losses. (that allows GM and the Obama-supporting UAW, to avoid paying approx. $45 billion dollars in taxes.)

In an article titled  Can the Treasury Exempt its Own Companies from Tax? The $45 Billion GM NOL Carryforward, the author of the above-linked report worked with Eric B.Rasmussan to expose just how the U.S. Treasury and the Obama administration illegally gave the GM Unions tax exempt status as the GM bailout moved forward: (emphasis added for clarity)

 We do not address the wisdom of the bailouts. Neither do we ask whether giving a multi-billion-dollar tax break to an automobile or financial company makes sense. Instead, we focus on the propriety of the Treasury’s manufacturing a tax break. We find two aspects of the transaction especially troubling:

• a. The GM Notice transfers a large amount of money to one of the largest contributors to the administration’s party, the UAW. The UAW was merely an unsecured creditor to GM – yet through the reorganization it emerged with a much larger equity stake than its interest warranted. Through this Notice, the government now transferred vast sums of money to it.

 

• b. The GM Notice hides the real cost of the TARP bailout. Involving as it does very complex provisions of the corporate tax code, the Notice escapes virtually all public scrutiny. Yet at root it cuts the firm’s future taxable income by $45 billion. The true total cost of the TARP transactions does not involve only the direct outlay; it also includes the $45 billion in future income that the Treasury freed from tax.

Finally the report further states that in order to avoid public outcry about the huge transfer of cash to the Obama-supporting UAW, they did it through a legally unauthorized exemption.

Had the administration given such a large amount of cash to the UAW, the public would have complained massively. The administration gave it through a legally unauthorized Sec. 382 exemption, and no one noticed.

We conclude the article by exploring procedural reforms Congress might adopt to prevent a recurrence of what happened with GM. We urge it to give legislators standing to contest in court any tax benefits that the Treasury provides.

Understanding these truths about how the Obama administration and the Treasury have transferred billions of taxpayer dollars to the crony-capitalists at GM and the UAW also debunks the rosy picture the media is painting about GM’s current boasting of a planned $10 billion dollars in profits in 2012. The stock held by the U.S. Treasury, bought and paid for with tax dollars is currently worth about half of what it needs to be to break even and recuperate the bailout cash. When Obama and the Liberal Democrats preach about evil corporations and successful business owners not paying their fair share of taxes today, they somehow refuse to mention GM and their $45 billion-dollar tax  exemption gift that was given to them as a down-payment for the United Auto Workers reelect Obama 2012 campaign.

Footnotes: Do Americans want four more years of  these types of taxpayer abuse and Liberal crony-capitalism? Barack Obama claims to have saved a million autoworker jobs while refusing to discuss how much it cost the taxpayer in real-time total dollars. While Obama-supporting Union workers at GM rake in record salaries and benefits, along with huge bonuses, the rest of America is stuck dealing with skyrocketing energy prices and an overall massive increase in the cost of everyday necessities, while the average wage increase for 2011 was a measly 1.9%, according to this BLS report.  Unemployment is still  stubbornly high , and now the Obama-led Democrats want to hand out another extension of  an already record high time limit of federal U/E benefits at taxpayer expense. America is being systemically collapsed under the weight of trillions of dollars in debt, and now we will soon see Obama and company raise the debt limit another trillion-plus dollars. The big news last week was that GM is the “largest” automaker in the world, (which is debunked here) and the “new GM success” is being used to promote Obama’s reelection. Had Ford Motor Company got a $45 billion-dollar tax exemption, ( like GM)  their profits would in fact, surpass GM’s 2011 earnings by tens of billions od dollars.  It is about time the American people demand an end to big corporations such as GM being allowed to steal billions of taxpayer dollars in order to give them to reelect Obama cronies and assorted union bed-pals. That starts with defeating Barack Obama in 2012.

[A]t least $200,000 of stock in medical device manufacturer ResMed was purchased in the $20 to $25 per share range. After Obamacare passed, ResMed jumped to $34, an increase of as much as 71%. “ResMed was a winner in the health care reform legislation—as Reuters declared—thanks in part to John Kerry’s efforts,” says Schweizer. The reason: earlier versions of the Obamacare bill would have slapped companies like ResMed with an “industry fee” tax. Kerry opposed the higher taxes on medical device companies and helped delay the taxes until 2013.

The sickest part is that John Kerry’s behavior here isn’t the exception in Congress – it’s the rule. But as disgusting as that is, there are two important lessons that can be learned from this situation: 1) members of Congress currently have way too much power, and 2) all of our laws must apply to all Americans in the exact same way.

1.) Members of Congress currently have way too much power.

“The Experience of every Age convinces us, that we must not judge Men by what they ought to do, but what they will do; and all History affords us but few Instances of Men trusted with great Power without abusing it, when with security they could”

John Trenchard, Cato’s letters #60

Right now, Congress has an unimaginable amount of power to impact industries throughout the economy both positively and negatively. But beyond that, individual congressmen who land positions on powerful committees can have an incredible influence on each bill – almost single-handedly. Giving politicians that kind of power is exactly what leads to corruption like the current insider-trading scandal.

Getting this Congressional power back under control may seem like a Herculean task, but the solution is really simple. It doesn’t even require some massive government “reform” bill. All Congress would have to do is… abide by the Constitution we already wrote and ratified in this country. How’s that for a radical idea?

When our Constitution was written, the federal government was mainly intended to handle national defense, foreign diplomacy, and ensuring the free flow of trade between the states. This is a point that James Madison made clear:

“The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the state governments are numerous and indefinite. The former will be exercised principally on external objects as war, peace, negotiation, and foreign commerce [...]“

Federalist #45

Very clear:

“The powers of the general government relate to external objects, and are but few. But the powers in the states relate to those great objects which immediately concern the prosperity of the people.”

Remarks at the Virginia Ratification Convention

Notice how straightforward Madison is – the federal government is designed to focus primarily on “war, peace, negotiation, and foreign commerce.” Domestic issues were supposed to be handled almost entirely by state and local governments – which are much more effective in those areas.

But for some reason, today’s Congress wastes the vast majority of its time messing around with domestic legislation that it has no real authority to pass. If members of Congress could manage to limit themselves to exercising the powers that were actually granted to them in the Constitution, they wouldn’t have had the inside information they used to make these immoral trades in the first place. Problem solved.

Isn’t it amazing what can happen when the Constitution is read and applied?

Of course, there will be those who say, “The government will still be responsible for funding the military. So Congress will still have insider information about all of those massive defense contracts.”

That’s true, defense spending will still be an area of concern. But if Congress were to actually limit itself to Constitutionally mandated actions, federal spending would be a fraction of what it is today. In that case, it would be much easier for citizen groups to follow and analyze which members of Congress are benefitting inappropriately from insider information.

That wouldn’t completely solve the problem though. That’s where Lesson 2 comes in.

2.) All of our laws must apply to all Americans in exactly the same way.

“The Experience of all Ages may convince us, that Men, when they are above Fear, grow for the most part above Honesty and Shame.”

John Trenchard, Cato’s letters #61

Part of the reason insider-trading became such a common practice is Congress exempted itself from laws that made it illegal. So at some point, the politicians in Washington must have actually gotten together and said, “Wow, this insider-trading is really dishonest. No one should be allowed to make a fortune off of unknowing investors like that… you know, except us.”

When members of Congress are able to act as if they are a privileged class, it’s no wonder why so much of the legislation they pass is complete garbage. They know that they don’t have to live under the laws that they enact, so they are free to make a joke of our legislative process without feeling the effects.

The law that was just passed made the market tank? Don’t worry about Congress, they had insider information so they sold their stocks ahead of time. Obamacare is a disaster? No problem, they made sure they can keep their federal health plan instead. Unemployment is really high? Not to worry, they’ve got lucrative Congressional pensions.

The answer to all of this is to require all laws to apply to every American the same way – including public officials – similar to what Friedrich von Hayek suggests in The Road to Serfdom. No more exemptions. No more loopholes. No more waivers. If it’s wrong for private investors to engage in insider trading (and it is), then it’s wrong for members of Congress to engage in insider trading.

This requirement would also have another benefit besides simply eliminating Congress’ ability to write itself “Get out of jail free” cards. Much of the problem with Congressional insider trading stems from lobbyists and crony capitalists who are trying to “encourage” politicians to give them special tax breaks or legal advantages over their competition (see: Nancy Pelosi and the Visa IPO).

But when laws have to be applied generally, it makes it much more difficult for members of Congress to give those special interests what they want. If Congress isn’t able to give out valuable special favors, there’s no reason for crony capitalists to give politicians access to insider information and exclusive IPOs.

Whenever members of government are abusing their offices, lessons need to be learned from those situations and changes need to be made. In this case, Congressmen are using power not authorized by the Constitution and are exempting themselves from legal consequences to gain an unfair advantage in the stock market.

That cannot be tolerated. If our public officials are allowed to act as if they are above the law it will destroy this country. Members of Congress who are engaging in insider trading need to be held accountable and soon. Otherwise, no “Get out of jail free card” in the world will be able to clean up the mess they’re making.

President Obama, in his 2011 State of the Union speech, said, “This is our generation’s Sputnik moment.” Substituting the word “apparatchik” – government by party leaders, bureaucrats and the well-connected – for “Sputnik” would have been much closer to the truth.

Obama’s green jobs agenda spends billions of taxpayer dollars to destroy existing jobs and replace them with jobs in politically-favored businesses. It’s crony capitalism that is building a political power structure based on false claims about clean green jobs. If Spain’s experience with solar farms is any guide, subsidizing renewable energy in the U.S. may destroy two jobs for every one created.

The late Professor Frederick Seitz, president of Rockefeller University, president of the U.S. National Academy of Sciences, and a recipient of the National Medal of Science, said, “The United States is very close to adopting an international agreement that would ration the use of energy and of technologies that depend upon coal, oil, and natural gas and some other organic compounds. … This treaty is, in our opinion, based upon flawed ideas. Research data on climate change do not show that human use of hydrocarbons is harmful.” The international agreement to which he referred was the Kyoto Protocol. Global warming alarmists have resorted to fixing data, hiding data, and other things to keep people from learning the truth. The climate is cooling, and it’s been cooling since 1998. Eventually, the truth will prevail, but in the meantime, President Obama continues to retard progress to develop current energy sources. Under orders from Obama, the Environmental Protection Agency (EPA) is moving ahead with regulations to reduce CO₂ emissions.

To say that the U.S. is rich in energy resources is an understatement. The U.S. has been blessed with enough resources to meet our energy needs and to export our surpluses, but they have not developed. Instead, liberals would rather see our economy go down the tubes than develop what they consider “dirty energy.” The U.S. has 22,450,000,000 barrels of proven oil reserves, and 250 trillion cubic feet of proven natural gas reserves. The U.S. has more energy in natural gas than the entire Middle East has in oil. There no reason for the United States to import oil and gas from other nations.

Green energy alternatives may satisfy our energy needs some day, but today green energy is little more than a way for President Obama to dole out federal dollars to his favorites at the expense of coal, oil, and natural gas producers. Today’s science and technology do not exist in green energy areas to meet even a small part of our current energy needs.

Said Jerry Bower in his Forbes blog, “What is the difference between crony capitalism and socialism? Not much.”

But that’s just my opinion.

The Solyndra Scandal

The Solyndra Scandal just won’t go away, much to President Obama’s chagrin. And new revelations are coming out almost daily.

DOE’s Purpose

From the Department of Energy (DOE) itself we get its loan programs purpose: “The Department of Energy’s Loan Programs enable DOE to work with private companies and lenders to mitigate the financing risks associated with building out commercial-scale clean energy projects, thereby encouraging the broader and more rapid growth of the sector.”

Will someone please tell me just what business DOE, or the government, for that matter, has “mitigating financial risk?” I thought that it was the jobs of private sector managers to mitigate financial risk through study, evaluation, and, if no market for the proposed product and/or service existed, turn down the proposal. Was not this country founded on the principle of free enterprise, where people are free to succeed or fail on their own, without government?

DOE’s Record So Far – Projects That Have Received DOE Loans

• Vogtle Nuclear Power Plant, the nation’s first nuclear power plant in the last three decades, but produces electricity at triple the cost of current rates. And all it cost us taxpayers was $8.33 billion.
• Shepherds Flat Wind Farm, the world’s largest wind farm. It produces electricity, but not at a cost-effective price.
• POET’s Project Liberty, a cellulosic ethanol power plant. Yet a cost comparison study between corn based and cellulosic ethanol has found that corn is still the cheapest way to make ethanol. Further, there are still problemswith ethanol.
• Project Amp is a large rooftop solar project. While solar generated power is falling, it is still higherthan coal or natural gas generated electricity.
• Agua Calentia, a 290 MW photovoltaic generation facility in Arizona, received a $967 million loan guaranteefrom DOE, despite the fact that solar generated power costs more than coal or natural gas generated power.
• DOE has given loans for several concentrating solar power (CSP) generation facilities, such as the $1.2 billion loan to SunPower, currently building the California Valley Solar Ranch. 
• DOE is supporting solar manufacturing plants that will help reduce the cost of solar power, such as Solopower and 1366 Technologies that got $150 million from DOE the day after Solyndra was raided by the FBI. And though not mentioned by name, let’s not forget the most famous solar manufacturer, Solyndra. (BTW, Solopower uses the same technology as Solyndra)

Boy, DOE sure can pick ‘em!

Whether He Likes It Or Not, This Is Obama’s DOE and Green Jobs Situation

• The Obama administration said a $38.6 billion DOE loan guarantee programwould create or save 65,000 jobs. The program has created 3,545 new, permanent jobs after giving out almost half the allocated amount of loan money. As of September, 2011, DOE had dispensed $18.1 billion. Just so you know, that’s $5,105,782 per job.
• President Obama pledged in 2008, while a presidential candidate, to create five million green jobs over 10 years. That pledge was overly optimistic. A study by the Brookings Institute found clean-technology jobs accounted for just 2 percent of employment nationwide, while the nationwide unemployment rate is currently over 9 percent, about 13.9 million people.
• The green jobs and new jobs record is even more depressing when you consider that almost any job can be considered a new green job. For example, anything that helps put America on the path to a cleaner and more efficient future can be considered a green job. That means jobs in the public transit sector (drive an electric motor bus), jobs in green building (janitor in a green building), or jobs in energy efficiency (making light weight, high strength steel) can be considered new green jobs. (Building an SUV? Blue-collar. Building a hybrid? Green-collar) The category can get imprecise. There can be temptation towards green-jobs inflation, because the idea is that environmentalism can actually add green jobs is key to this argument. Obama has said that he wants to create 5 million new green jobs, but it’s impossible to sayhow many of those jobs will be new, and how many will be shifted over from less green industries. 
• Money to help support the renewable energy industry from the 2009 stimulus bill continues to go overseas. In fact, more than 80 percent of the first $1 billion in grants to wind energy companies went to foreign firms. The largest grant made under the DOE program so far, a $178 million payment, went to Babcock & Brown, a bankrupt Australian company that built a Texas wind farm using turbines made by a Japanese company. All this from a president who chastises companies for out-sourcing.

When government steps in to pick winners and losers based on politics it promotes crony capitalism. A restrained federal government is essential to stopping the crony capitalism that’s ruining our markets.

But that’s just my opinion.