Tab Clearing

Long overdue.  Many of these lack deserve much more explanation.  Have fun.


http://cnsnews.com/news/article/us-governments-foreign-debt-now-47495-household

 Since January 2009, the total U.S. government debt held by foreign interests has climbed from approximately $27,653.29 per household to approximately $47,494.93 per household—an increase of about $19,841.64 per household.

 http://www.federalnewsradio.com//189/3085581/Pay-gap-between-government-private-sector-widens-to-34-percent

Depending on methodology, federal employees earn less, the same, or more than their private sector counterparts.  The divergent results seem to hinge one how you account for non-wage benefits.

A list of failed/failing federal green energy grants.

1. Evergreen Solar ($24 million)*
2. SpectraWatt ($500,000)*
3. Solyndra ($535 million)*
4. Beacon Power ($69 million)*
5. AES’s subsidiary Eastern Energy ($17.1 million)
6. Nevada Geothermal ($98.5 million)
7. SunPower ($1.5 billion)
8. First Solar ($1.46 billion)
9. Babcock and Brown ($178 million)
10. EnerDel’s subsidiary Ener1 ($118.5 million)*
11. Amonix ($5.9 million)
12. National Renewable Energy Lab ($200 million)
13. Fisker Automotive ($528 million)
14. Abound Solar ($374 million)*
15. A123 Systems ($279 million)*
16. Willard and Kelsey Solar Group ($6 million)
17. Johnson Controls ($299 million)
18. Schneider Electric ($86 million)
19. Brightsource ($1.6 billion)
20. ECOtality ($126.2 million)
21. Raser Technologies ($33 million)*
22. Energy Conversion Devices ($13.3 million)*
23. Mountain Plaza, Inc. ($2 million)*
24. Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*
25. Range Fuels ($80 million)*
26. Thompson River Power ($6.4 million)*
27. Stirling Energy Systems ($7 million)*
28. LSP Energy ($2.1 billion)*
29. UniSolar ($100 million)*
30. Azure Dynamics ($120 million)*
31. GreenVolts ($500,000)
32. Vestas ($50 million)
33. LG Chem’s subsidiary Compact Power ($150 million)
34. Nordic Windpower ($16 million)*
35. Navistar ($10 million)
36. Satcon ($3 million)*

  Another electric car company failure.

The administration of BHO is breaking the law and not issuing reports on the success/failure of the stimulus package. 

GM Bankruptcy V2.0

As a result of the VERY political way that the Federal bailout of GM was managed, to include the unusual bankruptcy process, GM now stands in jeopardy of losing everything.  Essentially the judge who oversaw the initial process may reopen the case because he feels information was kept or even hidden from him regarding the full disposition of old GM's full assets and liabilities. 

 If the case is reopened, all of GM's old liabilities and obligations come roaring back as well as an obligation to immediately repay the remaining taxpayer investment.  Repaying the taxpayer will consume almost all of GM's operating cash, leaving them in a very difficult situation.

Why is this such a mess?  It appears to many that b/c the FedGov was looking for short-term political gain they didn't take sufficient care with the process.

“They didn’t care about the company long-term,” risk analyst Whalen said. “The process was politically driven to be done as fast as possible, focused on securing short term support from the [United Auto Workers union].”
The allegation of union favoritism has dogged the Obama administration throughout the auto bailout. In addition to General Motors Canada’s debt, Treasury faced similar charges while handling the bankruptcy of Delphi, GM’s independent parts supplier.
“The government did a sloppy job with the bailout,” the bankruptcy expert said. “We have a fully functioning bankruptcy process based on centuries of common law, standard ways of doing things.”
“The federal government didn’t want pension plans to bear any costs associated with traditional bankruptcies … and now you’re faced with this.”

Again, this is the problem with crony/political capitalism.  Not only does government have a terrible record of picking companies that are unfit, but governments also have a terrible record of short-cutting market processes to deleterious effect. 
The full article is HERE.

Politics > Contract

In a further revelation about how entirely terrible the auto bailouts were, the Daily Caller has been doing some good investigative journalism and uncovered evidence that administration officials intentionally subverted contract law, pension agreements, and bankruptcy law in an effort to help union members and do harm to non-union employees. 

This is directly related to economics because as the government expends efforts to determine winners and losers in the marketplace the co-ordinative ability of the market is severely compromised.  People begin to make business and personal choices based not market support, but on the likelihood that government will support them.  This leads to misallocation of resources - harmful because of the money spent, but much more harmful because those resources (money, people, etc...) are not being used to produce something people actually want to buy. 

The several dozen failed fedgov investments in green energy projects come to mind here. 

Pocket Change

The Treasury is estimating that the fedgov will lose $25B of the $85B invested in the auto company bailout. 

Essentially, the administration's rosy expectation of recouping our expenditure rests on being able to sell GM stock at, what now looks like, an unreasonable high price.

Not that this alone is enough to declare the auto bailout terrible.  But it does mean that not only do you have to think about the interest expense of borrowing the $85B to lend to GM/Chrysler, but you also have to think about the $25B expenditure.  Those jobs the bailout "saved" are pretty expensive after all.

And I'm completely avoiding the issue of whether the bailouts were a good idea or not (hint, they weren't).