Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, and so forth.
Free-market advocates refer to governmental favoritism as “crony socialism,” “venture socialism” or “corporatism,” a modern form of “mercantilism” to emphasize that the only way to run a profitable business in such systems is to have help from corrupt government officials.
In this view, high levels of interaction between corporations and governments are considered socialist, which is taken to its maximum in the form of nationalization of industries.
If Maxine Waters has her way, we will nationalize the oil industry and who knows what else:
It is a dangerous idea in a free nation but if President Obama is allowed to continue forcing the government will on private enterprise, that is a logical end result.
A good example of Obama cronyism can be seen in the solar industry, a pet project of the president’s.
Eighty percent of $20.5 billion green energy DOE loans went to Obama top donors. Furthermore, some of those dwarf in size those given to Obama bundler George Kaiser, owner of the now defunct Solyndra.
The list—which features the likes of Google owners Larry Page and Sergey Brinn, Robert F. Kennedy Jr., Ted Turner, John Doerr, and Al Gore—raises new questions about the procedures used to administer the controversial DOE loans.
Solar power costs 35 cents per kilowatt hour compared with coal, gas and oil at 5 cents per kilowatt hour. It’s cost prohibitive in a bad economy.
It’s quickly becoming a scam.
Instead of letting the free market work, President Obama is attempting to force it on the public for the “common good” which happens to benefit Obama’s friends in far too many cases.
Solyndra, now a subject of a criminal investigation, took $535 million in Department of Energy loans even when they knew they were in fiancial trouble.
Obama controlled the loan process, which is unheard of. He pushed it with tax dollars despite warnings not to because he wanted to jump start the solar business.
“This deal is NOT ready for prime time,” one White House budget analyst wrote in a March 10, 2009 email, nine days before the administration formally announced the loan.
One of the largest private investors in the deal, Oklahoma billionaire George Kaiser, was also a prominent fundraiser for Obama’s 2008 presidential campaign. [ABC News]
CBS News reported that there were 11 more Obama Solyndras that were part of his energy program. They are failures after collecting $6.5 billion in federal assistance (tax dollars).
At the time of the report, five filed for bankruptcy. The junk bond-rated Beacon, Evergreen Solar, SpectraWatt, AES’ subsidiary Eastern Energy and Solyndra.
According to CBS News, Beacon Power, a “green energy storage company,” recieved $43 million from the government. Standard and Poor’s had given the project a rating of “CCC-plus.”
CBS News’ Sharyl Attkisson takes a look at them. Attkisson was one of the original reporters that uncovered the Solyndra scandal.
First Solar received $17.3 million in government grants and $15 million in government loans to expand from Arizona into Ohio.
With the help of Ex-Im, which received $455 million in government-backed loans, First Solar is now buying up their own unwanted panels with our tax dollars.
Oh, and you should know that this funds two farms, not in the U.S., but in Canada. Click here for the details.
Arvia Few, another investment by an Obama bundler, received $1.2 billion in DOE loans for a solar power plant (NRG). Guess who owns a stake in another NRG project – Warren Buffet.
Abound Solar, which recently went bankrupt, took $400 million in energy loans even while they knew their panels went on fire when exposed to the sun.
Colorado Rep. Cory Gardner, who is one of the investigators trying to determine if crimes were committed, said,
“We heard from one employee, a whistleblower employee, who made the statement; the solar panels worked fine as long as you didn’t put them in the sun.”
Apparently, almost everyone knew the panels suffered catastrophic failures.
One of the companies biggest backers is Pat Stryker, a big Obama bundler. She has been a visitor to the White House several times. [Are you surprised?]
Obama thinks government can run the electric car business, but that’s not panning out either.
Obama invested in Fisker, a pricey foreign car company. The Obama administration loaned $200 million to Fisker.
When Fisker was given the money, they were supposedly going to purchase a GM plant in Delaware and hire 2,000 American auto workers to build an electric hybrid family car called the Atlantic. They decided against it.
Fisker collected $169 million so far and built a hybrid sedan called the Karma. It’s assembled in Finland.
ABC News is reporting that Fisker may never build electric cars in the United States but they are working on a new business plan with the U.S. government (those great business people who invest our money so intelligently).
After taking over GM, Obama rushed them into putting out a battery-operated car, the Volt, the little fire-starter that nobody wants. Obama used bailout dollars to make it happen.
The Chevy Volt is a heavily subsidized vehicle. It is priced at $39,995 but it actually costs about $89,000 to make and it has a $12,000 body. What a deal for taxpayers. The plan is to build them in China where 70% of GM’s R & D is now going.
Barack Obama forced taxpayers to give Tesla Motors $465 million to develop electric cars, bringing the wonders of sustainable transportation to the common man, provided the common man has $100,000 to drop on a Tesla Roadster that is. This also created 400 of those wonderful “green jobs,” at a taxpayer cost of only $1,087,500 per job. Wow!
A Michigan hybrid battery plant, Compact Power [div. of LG Chem], built with $150 million in taxpayer funds recently put workers on furlough before a single battery was produced. In other words, people were employed to build nothing.
There was a lack of demand for lithium-ion cells. Didn’t anyone notice this before they invested our tax money?
Ener 1 Inc HEVV.PK, which received a $118.5 million Department of Energy grant to make lithium-ion and other batteries for electric cars, filed for bankruptcy protection amid heavy competition and after the demise of a large customer. In other words, they lost one customer.
Free Beacon had a good example of crony socialism in the Duke Energy case:
- Jim Rogers is the CEO of Duke Energy Corp. and he is the co-chairman and lead fundraiser for the Democratic National Convention host-committee. He and his wife have given hundreds of thousands to Democratic candidates and to the DNC, $19,200 went to Obama.
- Rogers offered a $10 million line of credit to help finance the convention and it will be backed by the Duke shareholders though “in theory” they pay it back if it is used.
- Not to fear – nothing crony about this – it’s all to “showcase the city of Charlotte. Nothing more, nothing less,” according to the Duke spokesman. That’s a bald-faced something.
- The 2009 stimulus package provided Duke with federal grants totaling $230.4 million for a number of “green” energy projects including “smart grid” development and wind energy storage. This created 196.6 jobs (whether they were high tech or low skilled jobs I don’t know, perhaps a combination). They received a $350,000 grant to assist GM in developing my favorite car, the Volt! They received other monies.
- Rogers is active in DC and has spent $26 million plus in lobbying the federal government on energy-related issues since 2007.
- It gets better. They hired the George Soros-Obama central planner, John Podesta and his brother (Center for American Progress) to lobby. Rogers paid the $860,000 to lobby to “support the passage of climate change and energy legislation” and “energy efficiency and clean energy solutions,”
- Duke used to give more to Republicans for energy but reversed course in 2010.
Light-Squared, a company run by and invested in by Obama donors, is a 4G network that was approved despite their inability to put out a GPS system that does NOT interfere with military communications. They were given the contract despite warnings from the military.
It also appears that their competitor was forced into bankruptcy by Obama’s regulatory agencies. The company has since failed.
There are many other examples, particularly in the wind industry, but I’d be remiss if I didn’t mention one in the drug industry.
This LA Times article is a must read!
The government was suddenly and inexplicably worried that smallpox might be used in chemical warfare though there is no evidence that it is possessed by any terrorist group or anyone for that matter besides a few scientists in the Russian and United States government and it is under lock and key.
Our government has enough of the vaccine to handle any attack, at a cost of $3 per shot.
The vaccine must be given within four days of exposure.
A company called Siga, controlled by a big Obama donor, has a drug to handle the cases that are diagnosed too late. However, it cannot be tested on humans due to ethical constraints and there is no way to know if animal tests would be valid, so there is no way to know if it works.
The FDA has already said it will not be approved for use.
This questionable & experimental smallpox drug that might not work and will not be approved by the FDA has been forced through by the Obamanistas. It also has the limited shelf life of 38 months.
The $433 million contract went to a top Obama donor with our taxpayer money and wait until you hear how it was pushed through.
The contract for New York-based Siga Technologies Inc., whose controlling shareholder is billionaire Ronald O. Perelman, one of the world’s richest men and a longtime Democratic Party donor, was secured by senior Obama officials after the company complained that contracting specialists at the Department of Health and Human Services were resisting the company’s financial demands.
The Obamanistas replaced the lead negotiator to make sure the financial demands were met!
Obama’s “collective” will not work. His democracy with a small “d” will not work. His decisions based on the “common good” will continue to breed corruption.
Al Sharpton said the Americans overwhelmingly voted for socialism when they voted for Obama. In Obama’s case, crony socialism might be a more apt term.
Did We? Is this what the American people want? I guess we will find out on November 6th.