Even before he took the oath of office, Barack Obama embraced the financial crisis of 2008. In the words of his then Chief-of-Staff Rahm Emanuel, “You never want a serious crisis to go to waste,” and Obama saw the recession as an opportunity for him to play investor picking winners and losers with hundreds of billions of borrowed dollars. This was his moment to “transform” the American economy to match his vision for a brave new world.
Lavishing billions on green technology was high on Obama’s list of favorites. In just three years, his Administration has pumped $80 billion into so-called “clean energy” companies. Even that staggering amount is barely half of the $150 billion he said he wanted to spend if given enough time in the White House. At every opportunity Obama championed investment in green technology as “the way to a more prosperous, brighter future.” There was a very personal reason Obama was willing to plunge the nation deeper in debt with high-risk adventures in the middle of a serious economic recession. “I want to make sure the planet is as beautiful for my daughters as it was for me,” he admitted during a debate in Des Moines, Iowa in December, 2007. Most fathers are willing to sacrifice of their own treasure for the benefit of their children. Obama put the treasure of generations of other American’s children yet to be born on the line for a mythical better world for his two daughters.
Obama admitted with his policies “electricity rates would necessarily skyrocket,” and his Energy Secretary volunteered that the Administration would pursue policies to get gas prices at the pump “in line with Europe.”
Thus far, Obama & Co. have been successful in driving energy prices higher. As for saving the planet and other ancillary benefits, the record isn’t very good.
Last week, Ener1, an electric car battery company that received a $118 million grant from Obama’s Energy Department filed for bankruptcy. The White House once forecast that Ener1 would employ 1400 people by 2013. Just before declaring bankruptcy, the company had only 350 workers. Ener1 and the White House had tied the company’s fortunes to the success of the Norwegian carmaker Think, and the Think City plug-in. Ener1 was to supply the batteries. Think suffered their own financial crisis, however, and declared bankruptcy in 2010, the year following the $118 million grant to Ener1.
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The financial problems with Ener1’s primary targeted manufacturer didn’t give pause to the White House, however. On January 26, 2011, Joe Biden visited Ener1 in Indiana. That was the day following the State of the Union speech in which Obama touted his prescient investment skills and painted a vision of an America in 2015 as “the first country to have one million electric vehicles on the road.” So certain were Biden and Obama of the wisdom of their investment that Biden said the millions spent on companies like Ener1 were “sparking whole new industries that will ensure our competitiveness for decades to come—industries like electric vehicle manufacturing.”
Ener1’s demise follows the collapse of the California solar energy company, Solyndra, and Beacon Power, a Massachusetts energy storage company that had received $535 million and $43 million DOE loan guarantees. Concerns of crony capitalism, favors for Obama campaign supporters, and fiscal malfeasance have spawned no less than five separate federal investigations of the Solyndra collapse alone. “One bankruptcy may be a fluke, two could be coincidence, but three is a trend,” said Rep. Cliff Stearns (R-FL), Chairman of the House Sub-Committee looking into the growing litany of problems with the DOE green energy loan program.
There’s more.
Part of being a successful investor involves timely investment of capital to coincide with increased market demand. Unfortunately for the taxpayers and scores of left behind workers, Obama’s timing hasn’t been all that good.
Ener1 said the company’s financial woes were accelerated when “demand for litihium-ion batteries slowed due to lower-than-expected adoption for electric passenger vehicles.” That explanation qualifies as an major understatement.
“Rather than electrifying auto buyers, the plug-in revolution is feeling more like a fizzle,” according to a USA Today report just last month. Sales of the Chevy Volt and the Nissan Leaf, the first two plug-in electric cars from major manufacturers to enter the market represent just 0.1% of the 2011 sales in the nation through November. Even the extremely modest market expectations by GM and Nissan proved to be overly optimistic. Instead of a public warming to Obama’s fantasy car, public acceptance is waning. Last July 1% of car buyers said they would at least consider buying a Volt, but by December just 0.6% expressed any interest.
The year just completed was the best since 2008 for an auto industry that was hard hit by the recession, but the encouraging news of 2011 didn’t extend to the plug-ins. In fact, sales for the Volt are so anemic that dealers are saying “no thanks” to GM for new allocations of inventory. For example, in the New York City market, GM had allocated 104 Volts for 14 dealerships in December. But, the dealers took just 31 according to an industry publication. On the opposite coast, GM allocated six new Volts to a dealer who had only sold ten in all of 2011. He didn’t take any of them. Brett Hedrick, the dealer, said for GM to think “we need six more Volts is just crazy. We’ve never sold more than two in a month.”
The anemic sales aren’t because Obama didn’t put a pretty big effort behind his dream; (i.e. gambling with a whole lot of your grandchildren’s money). According to a report in the New York Times, in addition to the $50 billion or so to bailout (seize) General Motors, some portion of the $14 billion Obama loaned GM to “retool” plants was allocable to the Volt. Obama threw in another $240 million in grants specifically designated to develop the Volt. Then there was $150 million to save-and-create jobs for the Volt’s South Korean battery manufacturer (not Ener1 in Indiana). For good measure, Obama tossed in another $1.5 billion in subsidies to buy-down the exorbitant cost of the Volt by $7,500 per vehicle. And, still he can’t sell them. But, oh well, as Obama says, “Some technologies don’t pan out; some companies fail.”
Lost in much of Obama’s green debacle is his other stated objective to save-the-planet for his daughters. It turns out that the mythical environmental benefits of his plug-in fascination were premised on a hoax, too.
A study conducted by the British Government (who is also heavily subsidizing battery technology) and the car industry blows apart the claim that battery cars lower greenhouse emissions. "Electric cars could produce higher emissions over their lifetimes than petrol (gas) equivalents because of the energy consumed in making their batteries," according to the analysis. The study found that a battery car would need to be driven over 80,000 miles just to break even with total emissions produced by a gas powered car. While driving the electric car produces fewer emissions, the problem is that emissions produced in "manufacturing electric cars are at least 50 percent higher because batteries are made from materials such as lithium, copper and refined silicon, which require much energy to be processed." If the need for a second battery replacement is factored into the equation, as well as the disposal of old batteries, total emissions far more than double for a plug-in electric car.
Barack Obama came to the Oval Office with exactly zero experience in the private sector, never having run a business, taken a business investment risk, or even held a private sector job. Worse than no experience, he routinely expresses his disdain for the great American free-market economy. It is little wonder then that rather than respecting the wisdom of the market place, Obama thinks he can dictate and redirect market forces by wasting billions on his whims and fantasies to facilitate a political – not an economic - agenda. If he were failing so miserably with his own money, it would be a tragic personal story of mistaken judgment and failure. But, he’s squandering the resources, opportunities, and careers of countless Americans, some yet to be born, and imperiling the future of the greatest nation in the history of the world. That is unforgivable.
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