In the past week, following the publication of my May 22 Washington Times op-ed, where I pointed out that “The result of the ‘investment’ made by ‘Obama Capital,’ which has used hundreds of billions of dollars of the taxpayers’ money to ‘create jobs,’ has been a persistent 8 percent unemployment rate and annual trillion dollar-plus deficits;” along with my blog post and Mark Theissen’s op-ed on May 24, the issue of public versus private equity has exploded in the media. The Romney campaign released two Web ads this week, while the issue of which type of spending is more wasteful is being hotly debated across all media outlets.
The first Romney ad criticized green energy loans by the administration, including specific information about individual company losses and layoffs, and stated that more than $16 billion in such expenditures had gone to firms that had made campaign contributions to the President. White House press secretary Jay Carney’s response to the ad claimed that the investments in green energy are needed because otherwise the industry would be “ceded to the “Chinese or the Europeans or the Brazilians or the Indians, or any other nation.” That is the same lame excuse that leads to other kinds of protectionist and wasteful government spending.
The second Web ad specifically criticized the $535 million in taxpayers’ money that went to Solyndra, including footage of yesterday’s visit by Gov. Romney to the shuttered Solyndra plant. In that ad, he specifically contrasted his business experience with the President’s giving away of taxpayers’ money, and directly called the loans to campaign contribution-related companies ”crony capitalism.”
Adding to the counterattack against the President’s trashing of Bain Capital, his most popular ally in his re-election effort, former President Bill Clinton, joined several prominent Democrats in defending Governor Romney’s business experience. In fact, President Clinton went further than the others, stating on CNN yesterday that while he still believes President Obama will win re-election, Governor Romney “had a sterling business career” and went out his way to strongly defend private equity. Mr. Clinton said, “But if you go in and you try to save a failing company, and you and I have friends here who invest in companies, you can invest in a company, run up the debt, loot it, sell all the assets, and force all the people to lose their retirement and fire them.” He added, “Or you can go into a company, have cutbacks, try to make it more productive with the purpose of saving it. And when you try, like anything else you try, you don’t always succeed.”
President Obama and his re-election team are going to regret that they started this fight. The Romney team and others who are commenting on the public versus private investment debate have just begun to scratch the surface of the government’s “investment” failures. One green energy example included in the first Romney ad is ECOtality, which received $126.2 million to install electric car chargers in five states among other projects, has lost more than $45 million, and whose president, now under investigation for insider trading, was hosted in the First Lady’s box and singled out as a stimulus “success story” during the 2010 State of the Union address. Another included in the ad is First Solar, which received more than $3 billion in loan guarantees, fell to a record low on the stock market this month, and fired 30 percent of its workforce.
Each of these companies could be the subject of its own ad. In fact, CAGW has published a list of 21 companies that have received $8.4 billion in green energy loans or loan guarantees and have either gone bankrupt or are close to declaring bankruptcy, or otherwise have completely failed to deliver anything of value in exchange for being given the taxpayers’ hard-earned money. That list is bound to grow larger over the next few months. CAGW’s 2011 Porker of the Year , Secretary of Energy Stephen Chu, told the House Energy and Commerce Committee on February 12, 2012, that ”it is very likely that there will be other companies in the portfolio that won’t succeed.”
Today’s news that the unemployment rate rose to 8.2 percent, the underemployment rate rose to 14.8 percent, and only 69,000 new jobs were created in May are not exactly helpful to the Obama administration’s claim that all of their expenditures have paid off handsomely for taxpayers. Indeed, as a result of this news, the stock market tanked, erasing all of the gains made to date in 2012, and the 10-year Treasury note hit another record low.
There is more than enough documentation of the negative return to taxpayers from President Obama’s “investments” to keep up the drumbeat of evidence of wasteful spending from now until at least November 6. I encourage everyone to contribute to this worthy cause.