July, 2015, Part 2, By The Numbers: Subsidizing Billionaires, Alzheimer's Crushing Weight, and More

On a semi-regular basis we revisit the theme "by the numbers" just to check in on the state of the country and political class using actual realities and their underlying numbers, not the spin or lies from our politicians. You see, politicians usually have nothing to gain by looking at reality and the numbers since they are more than likely to have screwed up reality and our lives in the first place.

That is why they would rather lie and deceive than tell the truth. But that approach can be destroyed by looking at the hard numbers behind the mess they have created. I once worked for a boss whose favorite saying was: "There is nothing more devastating to an opinion than the right number.” And that is what we try to do with this theme, devastate politicians’ opinions by looking at the right numbers.

So let’s take a look at the numbers that have recently cropped up and again prove that the political class in America continues to be one of the worst set of people to ever hold office, given the state of the country, the many ways they screw up our wealth and government functions, and their inability or non-desire to step up and tell the truth.

1) Yesterday we discussed the reality that even though Obama and his supporters would like us to think that the economy is doing well, we showed with a series of real numbers how that is not the case. With first quarter GDP shrinking, 45 million Americans still needing food assistance every month, low or no wage growth, etc., the economic numbers and reality show a very weak, under performing economy.

And new numbers from the University of Michigan's famous index of consumer sentiment adds to that proof of a low performing economy. During the month of July the index value dropped from 96.1 in June to 93.3 in July. Experts had predicted that the index would be basically unchanged in July, surprising them also. The Greek financial crisis and the economic slide in China were most often cited by survey respondents as the reason for their growing pessimism. 

Just another nail in the theory that we have always subscribed to: Washington politicians have no idea how to manage a growing and vibrant economy.

2) We have often decried the reality that Washington politicians are very good at handing out taxpayer wealth to companies and individuals who do not deserve such wealth. Those individuals and companies should be using their own wealth or their stockholders' wealth to fiannce their operations and take the financial risk associated with their operations. 

Which makes the following story from the June 12, 2015 issue of The Week magazine, based on an article from the LA Times, most appropriate. Billionaire Elon Musk has three companies that he has put together: Tesla Motors, SolarCity, and SpaceX. 

Together, the American taxpayer, courtesy of the Washington political class, has funded and underwrote those operations to the tune of $4.9 billion via grants, tax breaks, and environmental credits. Additionally, SpaceX has received $5.5 billion in government contracts from NASA and the Air Force. 

The obvious question is if these are such good ideas and Musk is so rich, why isn't he funding these operations out of his own checkbook and the checkbooks of his backers, why are the American taxpayers funding these business risks for him? Government and politicians should not be in the business of picking winners and losers in a free market, that is the job of the market and those that compete in that market. 

Those billions of dollars benefited virtually no one who helped fund them, the American taxpayer, and benefited only the insiders and favored few who were involved with those businesses.

3) Frequent readers of this blog know that we have shown dozens and dozens of time how Obama Care is the worst piece of legislation ever passed. It tries, and fails, to solve a public health issue with a lame, unwieldy and expensive insurance solution. Past proof of our assertion on this legislation can be viewed by entering the phrase, "unfolding disaster that is Obama Care" in the search box above.

More proof that Obama Care totally missed the mark was presented in an article on Alzheimer's disease in the May 29, 2015 issue of The Week magazine. The numbers from that article are truly frightening:

• 5.3 million Americans currently suffer from Alzheimer's disease.
• Those 5.3 million sufferers consumer almost 18 billion hours a year in unpaid care from friends and family.
• However, with 76 million Baby Boomers entering their golden years, that affliction number is likely to go as high as 13.8 million in the coming decades.
• Treatment costs for those almost 14 million Alzheimer's patients could get as high as $1.1 TRILLION annually and consume over 30% of Medicare's annual budget.
• Such a wave of will swamp nursing homes and the country's ability to pay for and care for the millions more of Alzheimer's patients in the coming years.

While this trend has been gong forward in unabated, the Obama administration has been worried about how much a Bronze Plan in the Obama Care legislation would cost. In reality, the numbers do not lie since a Bronze Plan cost, and Obama Care in general, will be overwhelmed by the Alzheimer's numbers and become meaningless unless the challenge of Alzheimer's and other aging diseases is resolved.

Unfortunately, the Obama administration has not addressed or set out a strategy for resolving this issue, costing the country five years in finding a remedy for the disease and the crushing financial numbers it will cause.

4) Let's get back to the economy for our final set of numbers. An article in the July 17, 2015 issue of The Week magazine reported on how Microsoft was laying off almost 8,000 workers which works out to about 6% of the entire workforce.  The company is also taking a $7.6 billion write down as a result of its acquisition of Nokia's smartphone business. Not a good economic indicator omen when a bell weather company like Microsoft is taking such dramatic actions.

So, today the numbers showed that Americans are having less and less confidence in the economy, the political class continues its crony capitalism ways related today to subsidizing billionaire Elon Musk, Alzheimer's disease makes Obama Care even more irrelevant in the long term, and Microsoft is feeling the pains of a weak economy. The numbers do not lie even if politicians do.

More numbers tomorrow and they are likley NOT to be good numbers since they involve the Amerian political class.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:www.loathemygovernment.comIt is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.Please visit the following sites for freedom:http://www.reason.com/http://www.cato.org/http://www.robertringer.com/

http://realpolichick.blogspot.com

http://www.youtube.com/watch?v=08j0sYUOb5w

The Corpse of Solyndra, SolarCity, and A123 - Three More Crony Riddled Alternative Energy Failures, Courtesy Of The Obama Administration

Over the past two days we have reviewed the many, many failed attempts by the Obama administration to promote alternative energy projects. Two days ago we reviewed the collapse of Abound Solar and Compact Power. Yesterday, we reviewed the disgraceful waste of taxpayer wealth that went to First Solar, NGR, and Congentrix. All of these companies, and many, many more, are either already bankrupt, going through bankruptcy, or in stall mode, having returned nothing beneficial back to America but enriched the political cronies of this administration.

Unfortunately, the disasters keep on coming faster than we can review them. Today, we will review the three latest collapsed efforts, starting with A123:

1) According to an October 16, 2012 Bloomberg news article, A123 Systems Inc. an electric car battery maker, has filed for bankruptcy and said it would sell its automotive business assets to another company. A123 just happens to be a company that received a $249.1 million Federal grant, not a loan or loan guarantee, so that the potential of recovering any of that taxpayer wealth is quite small.

In the bankruptcy filing, the company said that it will sell off its remaining assets for $125 million. Thus, the market value of the company is only about half of what the government gave it to operate. It is not a good investment when the initial value of your investment is down about 50% in just three years, during the time period that the stock market experienced significant positive gains.

Additionally, the company listed assets of $459.8 million and debt of $376 million as of Aug. 31 in the Chapter 11 bankruptcy documents, a difference of $83.8 million, one third the value of the taxpayer investment. Terrible, terrible waste and investment of taxpayer money for nothing in return.

How terrible? According to Bloomberg, the company has had 14 consecutive quarters of negative financial results and its stock has fallen about 85% in just the past year. That terrible. But just another “bump in the road" as the Obama administration likes to categorize its failings.

2) Recent news reports indicate that the Internal Revenue Service and Treasury Department's inspector general are investigating and auditing SolarCity, another solar energy company that has received taxpayer wealth from the Energy Department’s many corporate welfare programs. The issue being investigated is whether or not Treasury Department inappropriately give stimulus money to the company.

President Obama's economic stimulus program converted a long-standing tax credit for renewable energy investment into a direct grant from the Treasury Department worth 30% of a company's investment in a renewable energy project. SolarCity has applied for approximately $325 million in these stimulus grants, according to the SEC filing.

The specific potential criminal or ethical act is whether or not SolarCity repeatedly overstated the value of its renewable energy investments, according to the SEC filings indicate. The Treasury department had awarded smaller grants than SolarCity had tried to claim. Now the department's inspector general and the IRS are doing a broader audit of all the projects for which SolarCity and other large solar companies got stimulus cash. Investigators want to know if the companies regularly overstated the value of their investments and thus received overly generous taxpayer grants.

By the way, SolarCity is owned and operated by Elon Musk, a California businessman. You may recognize the name from previous posts in this blog. Mr. Musk is also the primary owner of Tesla Motors, the electric car company that has already received nearly a half a billion dollars of taxpayer wealth to help finance the Tesla operation, the purpose of which is to make all electric cars that will be out of the financial reach for except the richest Americans. Mr. Musk, no unexpectedly, has been an often and generous campaign contributor to President Obama in the past.

3) And what would a review of solar energy wasteful spending be without the latest insult form the Solyndra mess? According to a recent Wall Street Journal editorial:

• The Solyndra Federal loan guarantee has already cost the American taxpayer about $530 million. Is that the end of the misery?
• According to the Journal piece: “No such luck. In the latest twist, Solyndra's investors could be rewarded for their failure, thanks to a tax benefit the Administration handed out in a bid to evade political accountability.”
• It turns out that the Internal Revenue Service recently objected to Solyndra's Chapter 11 reorganization, claiming its "principal purpose is tax avoidance."
• How can a bankrupt company with no sales or revenue avoid taxes? According to the IRS analysis, the only real assets Solyndra still has left are what the IRS calls "tax attributes."
• These tax attributes are estimated to be between $875 million to $975 million in net operating losses that can reduce future taxable income by as much as $350 million.
• Since tax-loss carry-forwards are worthless if a company doesn’t have profit’s, the IRS is challenging the position held by Solyndra's owners who are requesting the bankruptcy court to liquidate the rest of the business and contribute a net $6.7 million to pay off creditors for pennies on the dollar.
• And then magically, out of the Solyndra corpse, a holding company would then arise of the bankruptcy that would not make any products, but would receive the tax benefit.
• Thus, the owners and operators of the new shell company could use the tax losses against other tax gains. Out of a business failure comes tax advantages, only in America.

And guess what? One of the owners and stakeholders in the new shell company with the hefty tax break owner would likely be Argonaut Ventures I. Argonaut is Solyndra's largest shareholder and the primary investment arm of the George Kaiser Family Foundation. Who is George Kaiser: according to the article: “Mr. Kaiser is a Tulsa oil billionaire who bundled campaign checks for Mr. Obama in 2008.”

Thus, even when an Obama backed company fails and dies, political cronies of this President still seem to come out ahead at the expense of the American taxpayer.

More waste of taxpayer wealth, more political cronies of the President that get enriched for failures, and nothing back to society of any worth in the alternative energy field. Unfortunately, just another business as usual day in Washington D.C., the home of wannabe, but failed, venture capitalists.

We invite all readers of this blog to visit our new website, "The United States Of Purple," at:

http://www.unitedstatesofpurple.com/

The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.

The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of our times.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedomfor both yourselves and others everyday.

Please visit the following sites for freedom:

http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment