The partisan furor surrounding the collapse of solar equipment
manufacturer Solyndra, a Fremont, Calif. firm which secured a $535
million government loan from the Energy Department, underscores
congressional hypocrisy when it comes to widespread cronyism and
corruption.
The Washington Post
reported that "The Obama White House tried to rush federal reviewers
for a decision on a nearly half-billion-dollar loan to the solar-panel
manufacturer Solyndra so Vice President Biden could announce the
approval at a September 2009 groundbreaking for the company's factory,
newly obtained e-mails show."
According to Post stenographers Joe Stephens and Carol D. Leonnig, those "August 2009 e-mails released exclusively to The Washington Post," shorthand for a controlled leak
by Republican staffers, "show White House officials repeatedly asking
OMB reviewers when they would be able to decide on the federal loan and
noting a looming press event at which they planned to announce the
deal."
In response to White House pressure, "OMB officials
expressed concern that they were being rushed to approve the company's
project without adequate time to assess the risk to taxpayers, according
to information provided by Republican congressional investigators."
Solyndra,
a poster-child for the administration's PR campaign to expand "green
jobs" was part of Obama's lifeless "stimulus package" which White House
flacks argued would ameliorate unemployment through tax cuts and other
perks to corporations in the wake of the on-going economic meltdown.
"It was alarming," Frank Rusco, a program director at the Government Accountability Office, told
The New York Times.
GAO
auditors found "Energy Department preliminary loan approvals--including
the one for Solyndra--were granted at times before officials had
completed mandatory evaluations of the financial and engineering
viability of the projects."
"They can't really evaluate the risks without following the rules," Rusco said.
But
in Washington, the well-connected follow their own rules so it was
hardly surprising that Solyndra executives hired Washington lobbyists in
early 2009, retaining McBee Strategic Consulting.
"Five lobbyists employed by the McBee group eventually worked on Solyndra's behalf," the Times
disclosed, "including Michael Sheehy, a former top aide to
Representative Nancy Pelosi of California, the House Democratic leader.
Solyndra has paid McBee Consulting $340,000 since 2009."
However,
despite intense pressure to approve the loan the firm's business model
in the highly-competitive solar energy market was flawed from the
get-go.
Although the unique design of their solar panels may not
have relied on silicon, and executives assumed their "competitors would
continue to pay a relatively high price for silicon, allowing Solyndra
to charge the premium required to turn a profit," industry experts
"outside the federal government, going back to 2008, were predicting
silicon prices were headed for a steep fall."
Between 2008 and
2009 when the loan was approved, sinking demand for solar energy as a
result of the economic crisis, drove down the price of silicon from more
than a $1000 a pound to less than $100 in the twinkling of an eye.
Despite
high-profile investors, loan guarantees, a new factory, and frankly a
better made, more efficient product, Solyndra was forced to sell its
panels well-below production costs, seriously wounding the company.
Taxpayers and laid-off workers were left holding the bag.
Factor
in the collapse of the commercial and home real estate markets, the
dearth of new factory construction, and allegations of "unfair-trade
complaints against China for out-sized subsidies to its clean-energy
companies,"
Bloomberg News averred, and the entire renewable-energy sector was in deep trouble.
"China
provided $30 billion in credit to its biggest solar manufacturers last
year, about 20 times the U.S. effort, Jonathan Silver, executive
director of the Energy Department's loan program, told a congressional
panel Sept. 14," Bloomberg reported.
The
former socialist republic, which learned a lesson or two from other
Asian "tigers" and the United States for that matter when it came to
development, "frequently provides both zero-cost financing, occasionally
free land and other kinds of incentives and subsidies" to its wind and
solar companies, Silver told Congress.
The problem is not
that the Chinese state subsidizes manufacturing but that the United
States refuses to do so. Witness the near hysteria by rightist
troglodytes over modest efforts by the federal government to construct a
network of high-speed bullet trains across the United States.
Grifters
in Congress, academia and the business press however, in thrall to
Reaganite fantasies of "free trade" and "free markets" are willfully
blind to the historical role played by the American state, and it was
hardly an "invisible" one, in directing national priorities and
resources during the period of rapid industrialization.
As readers are well aware, Antifascist Calling
does not carry water for the Obama administration, a government as
duplicitous as the previous Bush regime. However, there is more than a
hint of a manufactured scandal by congressional Republicans over the
Solyndra affair. While political blood sport may titillate Washington
pundits, something far more sinister than a questionable loan is going
on here.
In fact, the targets of the Republican attack machine are two-fold: discredit any
government efforts to boost the industrial sector while disparaging
renewable energy entirely as a potential, albeit weak threat, to the
multinational energy conglomerates who provided 77% of their $18.8
million in campaign contributions to the GOP, according to
OpenSecrets.org.
Contrast
congressional market fundamentalist zeal here with their deafening
silence when it comes to the heavily-subsidized U.S. "defense" industry,
where mammoth cost overruns and mega-profits for the
Military-Industrial Complex are factored in to the acquisition of
weapons systems which have cost the American people trillions of dollars in investments elsewhere.
Deepening Crisis
That
Solyndra went belly-up and filed for bankruptcy protection last month,
laying off nearly 1,100 workers, is another sign that the global crisis
which eviscerated productive sectors of the economy, continues to have
disastrous effects for the vast majority of Americans.
As the
World Socialist Web Site
reported, "census bureau figures that came out Tuesday, showing the
largest number of Americans living in poverty since records began in
1959, are a damning indictment of American capitalism and the entire
political system."
The manufacturing sector, long the staple of a
healthy economy, has undergone a major transformation since the 1970s.
As U.S. firms, challenged by stiff competition from their capitalist
rivals, sought to lower costs and increase shrinking profit margins,
jobs were offloaded to low-wage platforms.
Yankee corporations
however, that fled offshore to hide their assets and dodge taxes in
so-called "free trade" and other "special" industrial zones where high
productivity and low labor costs were guaranteed by repressive,
U.S.-allied comprador regimes, made out like proverbial bandits.
As
a result, entire industries withered and died, and large swathes of
America's industrial heartland were transformed into economic dead
zones.
Those corporatist chickens, demented stepchildren of neoliberal globalization, have now come home to roost.
"In
2010 there were 46.2 million people--almost one out of every six
residents--living below the official poverty line, including 16.4
million children," socialist critic Jerry White wrote. "Of these nearly
half, or 20 million, were described as living in deep poverty,
subsisting on less than half the income the US government says is needed
for basic food, shelter, clothing and utilities."
Contrast
deepening levels of poverty with administration moves to secure a
"settlement" with financial elites who profited on both ends of the
2007-2008 crisis. Their reckless, and fraudulent, credit default swaps
and brisk trade in worthless mortgage-backed securities have cost
American taxpayers trillions of dollars with no end in sight.
But as New York Federal Reserve board member Kathryn Wylde told
The New York Times,
"Wall Street is our Main Street--love 'em or hate 'em. They are
important and we have to make sure we are doing everything we can to
support them unless they are doing something indefensible."
As the World Socialist Web Site
noted, "In the name of the free market, they slashed taxes on the
corporations and the rich, deregulated industry and the banks and backed
a corporate offensive against the jobs and living standards of the
working class."
And despite the fact that "corporations and the
banks are now sitting on a cash hoard of $2 trillion," said economic
gangsters are "refusing to hire any workers," thus exacerbating the
crisis for average workers through unemployment, wage deflation and the
loss of basic social benefits while boosting profits.
In his latest iteration as a "fighter" for "ordinary Americans," Obama's budget director told
The New York Times
that the president's new "deficit-reduction plan" would impose "a lot
of pain," cutting some $320 billion from Medicare and Medicaid.
That
proposal would impose higher premiums and deductibles for beneficiaries
while slashing payments to "teaching hospitals and rural hospitals" as
well as charging "co-payments to frail homebound older people who
receive home health services," the Times reported.
Under
the plan the federal government would also "reduce the growth of
federal payments to states for treating low-income people under
Medicaid," effectively telling older citizens and the poor, "hurry-up
and die," the mantra of "libertarian" Tea Party loons who view the lack
of affordable health care as "the price of freedom."
Meanwhile,
Obama's Air Force Secretary Michael Donley "signaled the service is
ready for a fight and vowed to 'protect' most big-ticket hardware
programs from steep budget cuts," including the cost-overrun-plagued
F-35 fighter program,
The Hill reported.
As
well, Donley "placed the multibillion-dollar effort to develop a new
bomber aircraft on his don't-cut list" saying, "developing the
'long-range strike family of systems,' including the new bomber, is
essential."
According to the Secretary, accepting cosmetic
reductions in the bloated "defense" budget will mean "we will need to
accept greater risk," if by "risk" Donley means shaving a penny or two
off the share price of the largest defense corps.
Grifter's Ball
The
Troubled Assets Relief Program (TARP) enacted by the Bush regime in
2008, and supported by then-candidate Obama and the Democrats, followed
by 2009's American Recovery and Reinvestment Act, the so-called
"stimulus package," were rushed through Congress under crisis conditions
allegedly to "save the economy."
In practice however, both
legislative edicts were fantastic boondoggles that rewarded
"too-big-to-fail" investment banks that brought on the crisis in the
first place while shortchanging foreclosed homeowners and tens of
millions of laid-off workers.
A so-called "stimulus" that
disavowed any direct creation of jobs by government action, such as
massive spending on public works and infrastructure repair as was done
during the Great Depression, was doomed to fail.
This failure is
borne out by an official unemployment rate of 9.1% with some 14 million
people looking for work. However, the government's broader, and more
accurate index of the jobs crisis, which measures those who either
stopped looking for work or are involuntary part-time workers rose to
16.2% in August, a staggering 25.3 million people.
As economist Michael Hudson
observed:
"From the outset in 2009, the Obama Plan has been to re-inflate the
Bubble Economy by providing yet more credit (that is, debt) to bid
housing and commercial real estate prices back up to pre-crash levels,
not to bring debts down to the economy's ability to pay. The result is
debt deflation for the economy at large and rising unemployment--but
enrichment of the wealthiest 1% of the population as economies have
become even more financialized."
How has this played out in the real world?
Marxist economist Richard Wolff
wrote
scant weeks before Solyndra's collapse: "As demand for goods and
services shrank fast, businesses and the rich stopped investing in
production. Their investible funds were idled, and that only aggravated
the crisis. The self-regulating, efficient capitalist market system
proved to be the myth its critics had mocked. However, the market system
did spread the US crisis quickly to Europe and beyond."
"The
bailout of casino capitalists vested a new ruling class with $13
trillion of public IOUs (including the $5.3 trillion rescue of Fannie
Mae and Freddie Mac) added to the national debt," Hudson noted. "The
recipients have paid out much of this gift in salaries and bonuses, and
to 'make themselves whole' on their bad risks in default to pay off."
"An
alternative," Hudson wrote, "would have been to prosecute them and
recover what they had paid themselves as commissions for loading the
economy with debt."
The result of these reckless policies are
plain as day: from rising unemployment to collapsing infrastructure, and
from a steady rise in home foreclosures to increased levels of
immiseration, Bush-Obama policies have benefited those who wield real
power in the capitalist world: the financial oligarchs and militarists
who prospered from the bailouts and "War on Terror" military spending.
But
the "government could have used its equity ownership and control of the
banks to provide credit and credit card services as the 'public
option'," Hudson noted. In other words, rather than bailing-out the
fraudsters, the state could have invested public funds in programs that actually benefit the public, a novel idea rejected out of hand as "socialist tinkering."
However,
Hudson averred, "this is not the agenda that the Bush-Obama
administrations chose. Only Wall Street had a plan in place to unwrap
when the crisis opportunity erupted."
"Stockholders were bailed
out, counterparties were saved from loss, and managers today are paying
themselves bonuses as usual," Hudson wrote. "The 'crisis' was turned
into an opportunity to panic politicians into helping their Wall Street
patrons."
But the bailouts did far more than merely enrich the thieves, it actually exacerbated the global meltdown.
"As
the crisis flared in 2008," Wolff observed, "governments unfroze credit
markets by pouring money into tottering banks and insurance companies.
Governments printed and created new money to pay for part of these
policies; to cover the other part governments borrowed."
And
whom, pray tell, were the American people's new creditors? Why "the
banks and insurance companies they had bailed out" of course!
"Governments," Wolff wrote, "also borrowed from the companies and rich
individuals who had withheld investing in the production of goods and
services and had thereby worsened the crisis."
Is this a great system, or what!
Ponzi Republic
Not a single
top executive of any Wall Street firm has been prosecuted by the
federal government for their crimes. Take Goldman Sachs as a prime
example, a firm which journalist Matt Taibbi memorably described as "a
great vampire squid wrapped around the face of humanity, relentlessly
jamming its blood funnel into anything that smells like money."
As
McClatchy News
investigative reporter Greg Gordon revealed, on the cusp of the housing
bubble's collapse, "Goldman Sachs Group peddled more than $40 billion
in securities backed by at least 200,000 risky home mortgages, but never
told the buyers it was secretly betting that a sharp drop in U.S.
housing prices would send the value of those securities plummeting."
Those
fraudulent deals "enabled the nation's premier investment bank to pass
most of its potential losses to others before a flood of mortgage
defaults staggered the U.S. and global economies."
"Only later,"
Gordon wrote, "did investors discover that what Goldman had promoted as
triple-A rated investments were closer to junk" and that "pension funds,
insurance companies, labor unions and foreign financial institutions
that bought those dicey mortgage securities are facing large losses."
Taibbi recounted last spring for
Rolling Stone that the Senate Subcommittee on Investigations mammoth 650-page report,
Wall Street and the Financial Crisis: Anatomy of a Financial Collapse,
supplied "a panoramic portrait of a bubble era that produced the most
destructive crime spree in our history--'a million fraud cases a year'
is how one former regulator puts it."
"But the mountain of
evidence," Taibbi wrote, "collected against Goldman by [Senator Carl]
Levin's small, 15-desk office of investigators--details of gross,
baldfaced fraud delivered up in such quantities as to almost serve as a
kind of sarcastic challenge to the curiously impassive Justice
Department--stands as the most important symbol of Wall Street's
aristocratic impunity and prosecutorial immunity produced since the
crash of 2008."
Contrast Justice Department inaction regarding
Goldman Sachs, including ignoring potential perjury by Goldman's CEO
Lloyd Blankfein as Taibbi and other investigators revealed, with their
zeal to lower the boom on Solyndra.
In connection with the company's Chapter 11 bankruptcy filing, the FBI "executed a search warrant" on the firm September 8, the
Los Angeles Times
reported, "but declined to discuss what they were investigating. FBI
spokesman Peter D. Lee said documents related to the search had been
sealed."
This is the same secret state agency that is curiously
indifferent to far-larger grifts run by the big money boys. Keep in
mind, this is the Justice Department satrapy waging covert war against
the antiwar movement, illegally spying on Muslim-Americans, ginning-up
phony "terror" plots through their employment of paid informants and
provocateurs while allowing real terrorists, such as the network which assisted the 9/11 plotters as
The Miami Herald recently disclosed, run wild in Florida. Yes, that FBI!
"Republicans," the Los Angeles Times
observed, "have seized on Solyndra's downfall as a sign that President
Obama's stimulus and 'green jobs' campaign were failures."
"They
have also noted that key Obama backer George Kaiser was a major investor
in Solyndra, the first company to receive a Department of Energy loan
guarantee to boost alternative energy companies." But then again, so was
Madrone Capitol, a private equity fund affiliated with the
powerfully-connected Walton family of Wal-Mart fame, long-time GOP
supporters.
Kaiser, a Tulsa, Okla. billionaire and head of The
George Kaiser Family Foundation, "holds about 35.7 percent of Solyndra,
according to a company filing with the Securities and Exchange
Commission. Kaiser made 16 visits to the president's aides since 2009,
according to White House visitor logs,"
Bloomberg News reported.
A
"bundler" for Obama's 2008 presidential bid, Kaiser raised somewhere
between $50,000 to $100,000 for the campaign and contributed some $2,300
personally, according to the Federal Election Commission. What Bloomberg fails to report however, is the more than $7.5 million
in campaign contributions made over the last decade by the Walton
family to the Republican party and assorted right-wing causes.
While
evidence of irregularities may suggest that Solyndra executives were
less than forthcoming in their application for federal loans, and that
well-connected billionaire donors to the president's campaign may have
helped tip the scales in their favor, their behavior, and potential
losses to taxpayers, pale in comparison to the far larger, and more
damaging, crimes of Wall Street con artists who continue to thumb their
noses at the public and evade justice.
Crony Capitalism Gone Wild: The 'War on Terror'
While Republican bag men for the superrich point to the Solyndra scandal, and there is something fishy going on here, as evidence of corruption in the White House, the fact is, Obama, like every president who occupied the Oval Office before him, is a wholly-owned creature of the ruling class.
Never
mind that Team Obama recently abandoned plans to beef-up national air
quality rules to reduce the emission of cancer-causing chemicals in
smog. That move followed an intense lobbying campaign by polluters in
the chemical, mining and petroleum sectors and their bipartisan
congressional pets who alleged that the $90 billion price tag would
"kill American jobs." Or that the "environmental president," in a course
reversal sure to have oil industry executives jumping for joy, will
soon approve plans to build the Keystone XL pipeline that will carry
mega-polluting Canadian tar sands oil to Gulf Coast refineries.
And
never mind that the White House, the Republican-controlled House and
the Democratic-controlled Senate are conspiring against the American
people to gut Social Security, Medicare and Medicaid through a
congressional Supercommittee whilst continuing to bailout financial
jackals to the tune of some $13 trillion, even as the Securities and
Exchange Commission blithely shredded thousands of incriminating
documents that let the gangsters off the hook as
Rolling Stone revealed in August.
And
of course, pay no attention to the expansion of the imperialist
Empire's endless wars and occupations, its extension of outsourced "War
on Terror" CIA torture programs into
Somalia, or that the Obama administration, as
The Washington Post
recently reported "is assembling a constellation of secret drone bases
for counterterrorism operations in the Horn of Africa and the Arabian
Peninsula," the on-going assault on civil liberties here in the heimat or mounting evidence that the provocateurs who murdered nearly 3,000 people on 9/11 may have been given a
leg up by U.S. secret state agencies as they prepared to slam hijacked passenger airliners into buildings.
What
partisan hacks in both corporatist political parties will never
acknowledge, let alone investigate or prosecute, are orders of magnitude
greater, "War on Terror" boondoggles. Two examples:
• The National Security Agency's multibillion dollar fiasco, Trailblazer. As
The Baltimore Sun
revealed, the firm that NSA chose to head the project, Science
Applications International Corporation, "forged close ties to several
key defense and intelligence agencies, including the NSA. Among those
who have served on SAIC's board of directors are former NSA Director
Bobby Ray Inman; former CIA Directors John M. Deutch and Robert M.
Gates; and former Defense Secretaries Melvin R. Laird and William J.
Perry." As investigative journalist Tim Shorrock pointed out for
CorpWatch,
"SAIC is deeply involved in the operations of all the major collection
agencies, particularly the NSA, NGA and CIA. SAIC, for example, managed
one of the NSA's largest efforts in recent years, the $3 billion Project
Trailblazer, which attempted (and failed) to create actionable
intelligence from the cacophony of telephone calls, fax messages, and
emails that the NSA picks up every day. Launched in 2001, Trailblazer
experienced hundreds of millions of dollars in cost overruns and NSA
cancelled it in 2005." Indeed, the Sun's exposure of SAIC's shoddy work on the project, as journalist Jane Mayer disclosed in
The New Yorker,
led Obama's Justice Department to prosecute whistleblower Thomas Drake,
not those responsible for ripping off taxpayers or standing-up illegal
driftnet spying programs. Congressional action? Zero, but SAIC walked
away with the money and continues to be rewarded by the secret state and
now ranks No. 6 on
Washington Technology's "Top 100" list of largest government contractors with some $5.1 billion in Defense Department contracts.
•
The Department of Homeland Security's Secure Borders Initiative or
SBInet, a failed project to construct a "virtual electronic fence" along
the border with Mexico. When DHS finally pulled the plug earlier this
year, SBInet's lead contractor, Boeing Corporation, held contracts
valued between $2 and $8 billion according to estimates by the
Government Accountability Office. Boeing is a major "War on Terror"
beneficiary, clocking-in at No. 3 on Washington Technology's
"Top 100" list, with some $8.4 billion in revenue largely from the
Defense Department. As the CIA's torture flight "booking agent," Boeing
subsidiary
Jeppesen Dataplan, Inc.
profited handsomely from illegal Agency programs that secretly
kidnapped and transferred "terrorist" suspects to foreign prisons and
CIA "black sites." Victims who tried to litigate their claims against
Jeppesen in the federal courts were rebuffed by Obama's Justice
Department which asserted bogus "state secrets privilege" claims,
alleging that litigating cases involving CIA kidnapping and torture
would endanger "national security." In 2008, the GAO determined that
there were "significant problems" with deployed technologies. Designed
to detect a "target" with radar and then use video cameras to locate
illegal entries, GAO investigators found that the radars were "too slow"
and were often triggered by rain and "other weather phenomena."
Information derived from sensors were to be forwarded to "command
centers" where a "common operating picture" would be compiled by Customs
and Border Patrol analysts and shared with other agencies. The
so-called "common operating picture" would appear on computer screens as
a geospatial map where "border entries" could be tracked in "real
time." Despite congressional criticism, DHS Secretary Janet Napolitano
said in January 2011, that the agency would be redirecting funding
originally intended for SBInet "to a new border security technology
effort." At the time of this writing, Boeing gets to keep the boodle
already doled out and will soon rake-in even more. Last month,
Defense Systems
reported that Boeing's Phantom Ray, a jet-powered drone that can cruise
at more than 600 miles per hour at 40,000 feet, is in the running to
secure multibillion contracts for the Pentagon's next generation fleet
of killer robots. "Key to its intended role," Defense Systems
informed us, "the Phantom Ray can carry up to 4,500 pounds of
ordinance, extra fuel and/or sensors in its payload bays. The bays are
large enough to accommodate two 2,000 pound Joint Direct Attack Munition
satellite guided bombs." There's no word yet from the Phantom Ray's
intended targets--Somali herders and Afghan and Pakistani
villagers--what they might think about Boeing's latest technological marvel.
What lessons can we learn from the examples cited above? Not many, if we rely on corporate media.
As part of capitalism's manufactured "debt crisis," the
Associated Press reported that the Aerospace Industries Association (
AIA),
a Washington, D.C. lobby shop which represents America's
Military-Industrial-Security Complex, claimed that cuts to the bloated
"defense" budget "would have a devastating impact on a defense
industry."
To meet the challenge, AIA has launched their "Second to None" campaign and a related
web site.
According to industry flacks, which include usual suspects BAE Systems,
Boeing, General Dynamics, L-3 Communications, Lockheed Martin, Northrop
Grumman, Raytheon and dozens more, "American leadership in aerospace
and defense is being threatened by forces in Congress and the
administration. The security of our troops, our technological future and
our economic stability are all at risk. We must preserve jobs across
the nation that keep our nation strong. Join us and act now before it is
too late."
Though there's little chance AIA's dire predictions
will come to pass, alarmism sells particularly when the target audience
are members of Congress.
As the bipartisan congressional
Supercommittee prepares to gut the social safety net while leaving
imperialism's war budget virtually untouched, an investigation by Alternet and
Salon
revealed that "when it comes to the military budget," Democrats "have
received far more money from Pentagon contractors than [Arizona Senator
Jon] Kyl or any of their Republican colleagues on the panel."
"Since
2007," investigative journalist Nick Turse wrote, "Democrats on the
supercommittee have received more than $1 million in defense industry
donations, while contributions to the Republicans added up to only
$321,000."
Indeed, "panel co-chair Sen. Patty Murray ... has
received more defense industry dollars over that period than the
combined total of the top four Republican recipients on the
supercommittee. Even so, her haul from the Pentagon's weapons-makers
isn't the largest by a panel Democrat, a distinction held by her
colleague from South Carolina, James Clyburn."
"An analysis of
official government data paints a disturbing picture of big money, cozy
relationships and potential influence that, alongside a concerted
lobbying effort by the Pentagon and its powerful defense contractors,
makes substantial reductions to the Department of Defense's budget
improbable and steeper cuts to entitlement programs, like Medicare and
Medicaid, more likely."
"Before Thanksgiving," Turse notes,
"Clyburn and his supercommittee colleagues will be forced to make a
clear decision for cuts to programs like Medicare and Medicaid or the
type of budgets that have resulted in nearly $8 trillion in national
security spending since 2001."
Any bets on which way the axe will fall?
By the way, what was that $500 million loan flap to Solyndra about?
