The economy created a disappointing 115,000 jobs in April, and the “official” unemployment rate “dropped” to 8.1 percent (from 8.3%) as a result of more Americans leaving the job market altogether. The economic recovery is stalled and does not look to change any time soon. It is appropriate to ask: how did we get here?
After his election, President Obama wasted no time investing in green energy ventures he confidently predicted would occasion America’s next “Sputnik moment.” However, just as there were no “shovel ready” stimulus projects, the green dream was just that. Bankrupt solar company Solyndra is the poster child for Mr. Obama’s green misadventures, and representative of the wider wreckage his policies have caused.
In the past several months, the following green companies – which received state or federal funding guarantees – declared bankruptcy or laid off hundreds of workers to avoid bankruptcy: Ener1 (renewable energy storage battery technology components), Abound Solar Manufacturing (solar panels), Beacon Power (energy storage), Evergreen Solar (solar panels), SpectraWatt (silicon solar cells), and Solar Trust of America (1,000 megawatt solar plant).
The sheer volume of this waste is astounding. Solyndra defaulted on a $535 million federal loan guarantee, leaving recession-battered taxpayers holding the bag. Solar Trust received a $2.1 billion federal loan guarantee, but last month, the company sought bankruptcy protection in Delaware after failing to meet a federal Energy Department loan guarantee deadline.
Against this backdrop of waste, crony capitalism and failure arrives Mr. Obama’s opponent Mitt Romney, who represents something else entirely: private sector success at Bain Capital. Founded in 1984 by Mr. Romney and two partners, Bain has risked billions investing in hundreds of companies across America. No investment was guaranteed to succeed; many did not pan out. But here’s a very short list of Bain’s more famous successes: AMC Entertainment, Brookstone, Burger King, Burlington Coat Factory, Clear Channel Communications (the largest radio network in America), Domino’s Pizza, Dunkin’ Donuts, Guitar Center, Staples, Toys “R” Us, and Warner Music Group.
Thus, if you go to the movie theater, eat a hamburger, wear a coat, listen to the radio, eat pizza or donuts, play guitar, and buy printer ink, toys or music albums, you’ve benefitted from Bain Capital and Mr. Romney’s leadership. Unlike in politics, where results too often play second fiddle to good intentions, in business, results determine survival. Mr. Romney survived and thrived at Bain.
The Romney/Bain formula works because it starts from a different point and produces a different result. Bain risks private capital on private ventures to create private jobs and private wealth. In contrast, the Obama/Solyndra formula risks public money on private ventures and creates no private jobs or (non-union) wealth. And despite the recession, Bain-esque opportunities presently exist in America, for example the private sector oil and gas boom that President Obama is simultaneously taking credit for while attempting to derail.
Beyond Solyndra, President Obama’s energy policy is characteristic of his failure-first approach. For instance, he has thwarted the Keystone Pipeline (which would create thousands of good oil jobs) and praised the virtues of algae (which promises no sure jobs) while attempting to take credit for the private sector oil boom occurring in places like North Dakota. This oil shale-rich state boasts the nation’s lowest unemployment rate (3%) as a result of its booming oil industry. North Dakota represents the Romney/Bain approach, which is why it has succeeded. Mr. Obama’s silence on this success is bewildering.
As President Obama kicks off his reelection campaign by talking about ways to “win the future” through “shared responsibility” and “shared sacrifice,” it is apparent that despite the clear evidence of what currently works (oil) and what does not (algae), he cannot or will not own up to his economic failures. Indeed, when pressed on his administration’s support for Solyndra, Obama offered a Clinton-esque dodge, “This was not our program, per se.” This was an outright lie. During a May 2010 visit to Solyndra, Obama triumphantly proclaimed, “This new factory is the result of [Recovery Act, i.e. stimulus] loans.” Further, when asked if Solyndra’s failure would cause him to rethink his support for green technology, Mr. Obama replied, “I’m proud to say that we’re going to continue to support it.”
In stark contrast, unlike Solyndra, Bain Capital is still in business and despite the recession, it is poised to invest in companies and produce jobs as a result. The reason why is simple: the Romney/Bain formula works; the Obama/Solyndra formula does not.
This November, voters have a clear choice – Solyndra v. Bain: government failure versus private sector success. No one doubts Mitt Romney’s ability to turn around ailing entities, and no one believes in Barack Obama’s ability to do so. And while it’s too late to save Solyndra, the bankruptcy process through which it traveled presents a useful metaphor. In bankruptcy, debts are discharged, creditors paid, and viable businesses emerge reorganized, often under new leadership. November’s election presents voters a similar opportunity to reject the bad deals made by the Obama Administration, reorganize America’s leadership, and oust the man responsible for it all, the Debtor-In-Chief.
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