Cronyism is not Capitalism

Big Solar’s Subsidy Bubble.  WSJ - an excerpt

The Department of Energy’s Inspector General revealed last week that the legendary solar-panel manufacturer Solyndra—a poster baby of the Obama stimulus—lied to the feds to get a $535 million loan guarantee before going bust in 2011.  

Solyndra is a cautionary tale, but the Obama Administration is still throwing caution to the sun.
The IG report, which follows a four-year investigation by the IG and FBI, describes how Solyndra engaged in a “pattern of false and misleading assertions,” including inflating the value of corporate contracts and sales, to win a giant loan guarantee in 2009. 

All evidence suggests that DOE was a willing victim. The IG notes that DOE loan officers felt “tremendous pressure” from the White House and Congress to rush through loan-guarantee applications. In their haste DOE officials failed “to ask specific questions, and require specific assurances” and overlooked major red flags. 

The larger problem is that the White House is more concerned with boosting the politically favored solar industry than protecting taxpayer dollars. More troubling, the solar industry may be growing too big to fail, and the Administration is assisting another taxpayer solar scam . . . 

Last week the utility commission bowed to political pressure by temporarily extending current rates so the leasing companies can continue enrolling new customers. What does it say that the President is using his bully pulpit to abet an industry that is essentially fleecing the American public?

Full Story

What? Socialism not working? I'm Shocked. Shocked.

WSJ.  By MAOLIS CASTRO And KEJAL VYAS Aug. 26, 2015 5:30 a.m. ET - Excerpt

LA SIBUCARA, Venezuela—Hours after they looted and set fire to a National Guard command post in this sun-baked corner of Venezuela earlier this month, a mob infuriated by worsening food shortages rammed trucks into the smoldering edifice, reducing it mostly to rubble. 

The incident was just one of numerous violent clashes that have flared in pockets around the country in recent weeks as Venezuelans wait for hours in long supermarket lines for basics like milk and rice. Shortages have made hunger a palpable concern for many . . .

Food-supply problems in Venezuela underscore the increasingly precarious situation for Mr. Maduro’s socialist government, which according to the latest poll by Datanálisis is preferred by less than 20% of voters ahead of Dec. 6 parliamentary elections. The critical situation threatens to plunge South America’s largest oil exporter into a wave of civil unrest reminiscent of last year’s nationwide demonstrations seeking Mr. Maduro’s ouster. 

Full Story

The Clinton Plan to Distort Market Signals

WSJ By ANDY KESSLER Aug. 24, 2015 7:13 p.m. - An excerpt . . .

Hillary Clinton’s big economic idea—ending corporate “short-termism,” as she calls it—will do more harm than good. On the campaign trail she rails against American corporations and the mysterious “tyranny of today’s earnings report.” Her solution is to raise capital-gains taxes and lengthen stockholding periods. Imagine anxiously waiting to unload during this month’s global selloff because of a holding period. Chalk it up as another misguided effort that will distort the information investors and companies rely on to make good decisions. 

Markets run on signals. . . Anything that mucks up those signals will be disastrous for decision making and the productive fabric of the economy. . . Less trading means less information. Russia’s old stock exchange shut down amid the revolution in 1917 and eventually became a naval museum. Soviet planners embarked on five-year plan after five-year plan with no price signals. That experiment eventually failed. 

The Chinese are about to unveil their 13th Five-Year Plan. None of the previous plans highlighted Alibaba and the importance of online commerce. That’s because progress happens by surprise, not government planning. Investors need report cards to judge progress, and thus there’s quarterly disclosure. . .  

The Taxpayer Relief Act of 1997, passed by a Republican House and Senate and signed by a Democratic president, Bill Clinton, lowered capital gains rates to 20% and ushered in an era of innovative business models knocking out tired ones. That kind of reform would spur long-term corporate thinking. But Mrs. Clinton’s plan will simply penalize those being productive in the economy and hamstring innovation.

Full Story 

Minimum Wage Destroys Jobs in Seattle

Seattle Restaurants Suffer Worse Job Loss Since The Great Recession, Connor D. Wolf - Daily Caller.  Excerpt . . .

According to a report released Sunday by the American Enterprise Institute (AEI), the $15 minimum wage has caused Seattle restaurants to lose 1,000 jobs — the worst decline since the 2009 Great Recession. 

“The loss of 1,000 restaurant jobs in May following the minimum wage increase in April was the largest one month job decline since a 1,300 drop in January 2009, again during the Great Recession,” AEI Scholar Mark J. Perry noted in the report.
Full Story

Latest Keynesian Failures

St. Louis Fed official: No evidence QE boosted economy

Jeff Cox | @JeffCoxCNBCcom

Excerpt . . .

In a white paper dissecting the U.S. central bank's actions to stem the financial crisis in 2008 and 2009, Stephen D. Williamson, vice president of the St. Louis Fed, finds fault with three key policy tenets.  

Specifically, he believes the zero interest rates in place since 2008 that were designed to spark good inflation actually have resulted in just the opposite. And he believes the "forward guidance" the Fed has used to communicate its intentions has instead been a muddle of broken vows that has served only to confuse investors. Finally, he asserts that quantitative easing, or the monthly debt purchases that swelled the central bank's balance sheet past the $4.5 trillion mark, have at best a tenuous link to actual economic improvements. 

Full Story

FBI Criminal Probe - Hillary's emails

FBI investigation of Hillary’s emails is ‘criminal probe’

An excerpt . . .

The FBI investigation into former Secretary of State Hillary Rodham Clinton’s unsecured e-mail account is not just a fact-finding venture — it’s a criminal probe, sources told The Post on Wednesday. 

The feds are investigating to what extent Clinton relied on her home server and other private devices to send and store classified documents, according to a federal source with knowledge of the inquiry. 

“It’s definitely a criminal probe,” said the source. “I’m not sure why they’re not calling it a criminal probe. 

“The DOJ [Department of Justice] and FBI can conduct civil investigations in very limited circumstances,” but that’s not what this is, the source stressed. “In this case, a security violation would lead to criminal charges. Maybe DOJ is trying to protect her campaign.”
Clinton’s camp has downplayed the inquiry as civil and fact-finding in nature. Clinton herself has said she is “confident” that she never knowingly sent or received anything that was classified. 

The inspector general for the intelligence community has told Congress that of 40 Clinton e-mails randomly reviewed as a sample of her correspondence as secretary of state, four contained classified information.

If Clinton is proven to have knowingly sent, received or stored classified information in an unauthorized location, she risks prosecution under the same misdemeanor federal security statute used to prosecute former CIA Director Gen. David Petraeus, said former federal prosecutor Bradley Simon.

Full Story 

"21st Century Socialism" devastates Venezuela

Venezuela supermarket looting leaves one dead, dozens detained - Yahoo News

CARACAS (Reuters) - One person was killed and dozens were detained following looting of supermarkets in Venezuela's southeastern city of Ciudad Guayana, the state governor said on Friday, amid the ongoing food shortages in the recession-hit OPEC nation.  

Shoppers seeking scarce consumer staples including milk, rice and flour broke into a supermarket warehouse on Friday morning, leading businesses in the area to shut their doors, local newspaper Correo del Caroni reported. . .  

Full Story