Government is fast becoming a parasite. Citizens are the host.

Regulation is now a growth industry. Aggressive prosecuting is the newest form of taxation, a money tree for government.

Government, colluding with its own regulators and leftist lawmakers, has quietly mapped out a carefully planned strategy, out of the public eye, to go after deep-pocketed businesses. And it’s working.

The strategy works like this:

Put as many laws and rules on the government books as possible, to multiply the ways a business can run afoul of laws, whether inadvertently or not. The average Floridian would be astounded to learn how much trial lawyers spend in Tallahassee each session to lobby for laws that allow plaintiff attorneys to scalp more money from businesses.

Encourage zealous behavior by regulators and prosecutors, and reward and promote the most aggressive regulators who are most successful at levying fines against businesses.

Make few distinctions between businesses that accidentally break a rule vs. those that knew it was a violation and did it anyway.

Try your case whenever possible in the press, to get more publicity and to gather the power of the press behind you. As attorney general, Charlie Crist was a master of this tactic. Due process is a casualty when the media is used to spread sensational accusations. Enlisting the aid of the press is a favorite tactic of unethical regulators and prosecutors like New York’s Eliot Spitzer.

Use regulations to pry money out of businesses to pay for (more…)

By the time the crony capitalists have their way, there is no chance ObamaCare will ever reduce costs. Gaming the system has already begun.

Jeffrey H. Anderson in the Weekly Standard

…States are not required to set up Obamacare exchanges, but it seems to have surprised observers that many are choosing not to. Politico reports that, with only 17 states so far having said they will set up the exchanges, the “Department of Health and Human Services’s role in bringing the law to life is going to be a lot bigger than originally thought.” More than a third of all states have already said they won’t set up the Obamacare exchanges. Among others, Republican governors Scott Walker, John Kasich, Sam Brownback, Rick Perry, Bobby Jindal, Nikki Haley, Nathan Deal, Paul LePage, Robert Bentley, Mary Fallin, and Sean Parnell have said they’ll refuse to set up the exchanges in their states.

In Missouri, voters took matters into their own hands, approving a ballot measure to vest authority over the decision in the Republican-led state legislature, rather than leaving it up to the Democratic governor. Missouri will not be establishing an exchange. Utah governor Gary Herbert, meanwhile, has opted for a sort of mild civil disobedience, saying that his state will continue to pursue “our version of an exchange based on defined contribution, consumer choice, and free markets” — a type of exchange that is rather plainly banned by Obamacare.

States’ refusal to be complicit in this crucial aspect of Obamacare should shine a spotlight on the development of the federal exchanges — and what it illuminates won’t be pretty.

The Obama administration’s congressional allies botched the drafting of this aspect of the health care overhaul, as the plain language of Obamacare doesn’t empower federal exchanges to distribute taxpayer-funded subsidies to individuals; it empowers only state-based exchanges to distribute the subsidies. (The administration pretends otherwise.) Moreover, the Department of Health and Human Services (HHS) is lagging behind in developing the federal exchanges.

It gets worse. HHS has contracted with a subsidiary of a private health care company to help build and police the very exchanges in which that company will be competing for business. The person who ran the government entity that awarded that contract has since accepted a position with a different subsidiary of that same company. An insurance industry insider (speaking on the condition of anonymity) says that HHS, in an attempt to hide this unseemly contract from public view until after the election, encouraged the company to hide the transaction from the Securities and Exchange Commission.

According to my source (the basis for most of this account), in January, HHS awarded Quality Software Services, Inc. (QSSI) what the Hill describes as “a large contract to build a federal data services hub to help run the complex federal health insurance exchange.” At that time, the director of Obamacare’s newly established Center for Consumer Information and Insurance Oversight (CCIIO) — which the Hill describes as “the office tasked with crafting rules for the national exchange” — was Steve Larsen. Larsen had been the insurance commissioner for Maryland when Obama’s HHS secretary, Kathleen Sebelius, was the insurance commissioner for Kansas, and the two are reportedly close. The CCIIO awarded the Obamacare exchange contract to QSSI while Larsen was the CCIIO’s director, and he played a central role in planning the construction of the exchanges — although it’s not known whether he made the decision to award the contract to QSSI or not.

Under the contract that it signed with HHS, QSSI’s power would be substantial — as QSSI would shape, run, and affect companies’ ability to compete to sell insurance through Obamacare’s federal exchanges. The Hill writes, “A draft statement of work for the contract awarded to QSSI states the contractor should provide services necessary to acquire, certify and decertify health plans offered on a federal exchange.” Moreover, “It stipulates the contractor should monitor agreements with health plans, ensure compliance with federal standards and” — somewhat strikingly — “take corrective action when necessary.”

Walter Russell Mead

One of the reasons blue programs jump the shark is that over time more and more special interests lobby politicians to get special features added. The small add-ons and tweaks make programs more expensive and complicated to administer—and much, much harder to reform. This process begins when the laws are written; the lobbyists are there to tuck special little surprises between the pages of the bill. It continues as the regulations necessary to implement the new laws are written; once again, lobbyists are on hand to mold the regs to their liking. And it persists year after year after year, as lobbyists look for ways to amend the existing laws or add new requirements by inserting language into other bills.

This is happening as states develop the requirements for insurance under Obamacare. Chiropractors and acupuncturists are lobbying to make sure that their services are included among the “essential” services that the new insurance must provide. The New York Times details some of this reportedly “marginal” tweaking that’s already going on:

According to proposals that the states have submitted to the Department of Health and Human Services, insurance plans will have to cover weight-loss surgery in New York and California, for example, but not in Minnesota or Connecticut. Infertility treatment will be a required benefit in New Hampshire, but not in Arizona.

Over all, the law requires that essential health benefits cover 10 broad categories, including emergency services, maternity and newborn care, hospitalization, preventive care and prescription drugs. But there is room for variation in those categories. Whether insurance will pay for hearing aids, foot care, speech therapy and various medications will vary significantly by state.

Whatever the merits of the claims, any new required service will inevitably drive up the cost of insurance.

This same process will happen again and again and again. The nurse lobby will make sure that only licensed nurses can provide certain procedures. Other groups will protect their vested interests by influencing the regulations following amending laws. Ultimately even the positive features of the law will be significantly compromised by the steady accretion of small changes, almost unnoticeable in themselves in many cases—and even well intended sometimes—that over time will turn the law into an unholy mess.

The law is a blunt instrument; fixing the health care system by government fiat is like neurosurgery with a hammer. It’s going to hurt more than you think, and will harm more than it helps. Let’s hope politicians figure that out before too much damage is done.

Holman Jenkins on Obama’s “green” trade war with China.

…Recall, the purpose of subsidizing solar and wind was supposed to be saving the planet. To that end, China’s willingness to drive down the cost of solar panels and wind turbines might seem a godsend. Thousands of homeowners can afford to install renewable capacity who otherwise couldn’t.

But it turns out this wasn’t the purpose. The real goal was to create an empire of subsidized domestic “green” companies, dub them a “strategic” industry, and ladle out taxpayer dollars and regulatory favors in return for campaign donations to keep the machine going round and round.

Mr. Obama probably thinks this is how business is done. This is how industries are created: Saul Alinsky at the commanding heights.

He undoubtedly has plenty of so-called business people whispering in his ear, encouraging his worst instincts. Some 80% of companies receiving Department of Energy backing, according to the Hoover Institution’s Peter Schweizer, are “run by or primarily owned by Obama financial backers.” One, Mr. Al Gore, is worth an estimated $100 million, thanks to $2.5 billion in federal loans, grants and tax breaks, according to Friday’s Washington Post.

What about the “green” jobs that were supposed to sprout? By Mr. Obama’s own arithmetic, the $21 billion spent so far should have delivered 700,000 jobs. Actual count: 28,854, according to Friday’s Bloomberg Businessweek.

Look, a breakthrough may someday come to allow renewables to displace a significant amount of carbon energy. It may even come with help from federal research dollars.

It won’t come because we built an irrelevant solar and wind industry, based on inefficient technology, needing constant subsidies.

It won’t come because Mr. Obama slapped dumping duties on Chinese solar panels, sacrificing U.S. solar-panel buyers in an effort to prop up his crony partners.

It won’t come because the administration uses a dubious national security pretext to stop a Chinese firm from getting the same unwise handouts that the administration is dishing up to numerous Oregon wind farms, in the vicinity of the same, not-very-secret Navy bombing range.

It won’t come because the administration, in its latest action, accuses China of subsidizing its auto makers, another U.S. industry on which the administration itself has poured untold billions in subsidies.

Among the nuances of the presidency that Mr. Obama didn’t learn giving pep talks to community groups in Chicago, executive leadership is supposed to stand against the jingoism and rent-seeking that at any moment can blow up the world trading system on which our prosperity depends.

The silliness doesn’t just stop with wasteful handouts to Solyndra and one dozen other bankrupt green-energy companies. The money being wasted here is borrowed money. Both the U.S. and China are using China’s money to fight their green subsidy war. And while China might be prepared to write off its own losses, it won’t write off ours.

They don’t want Obama’s big mouth blowing their dirty little secret.

Joel Gehrke at the Washington Examiner.

President Obama invoked AARP to defend his health care law last night, prompting the influential group to release a statement telling him not to do that again.

“While we respect the rights of each campaign to make its case to voters, AARP has never consented to the use of its name by any candidate or political campaign,” the group posted in a statement. “AARP is a nonpartisan organization and we do not endorse political candidates nor coordinate with any candidate or political party.”

Obama can perhaps be forgiven for thinking he could mention AARP given how they coordinated with him to pass Obamacare, which is a golden goose for the organization.

“Thanks to its cuts to Medicare Advantage, Obamacare is expected to expand the number of seniors buying “medigap” supplemental insurance plans,” The Washington Examiner explained in an editorial. “AARP controls 34 percent of the market for such plans. According to a 2011 House Ways and Means Committee report, AARP stands to make between $55 million and $166 million from Obamacare in 2014 alone.”

Timothy Carney at the Washington Examiner

How does President Obama please his corporate backers while simultaneously lighting a populist fire? By advocating “a new economic patriotism,” where empty protectionist rhetoric is paired with meaty corporate-welfare policies.

“It’s time for a new economic patriotism,” Obama says in his latest campaign ad. This is his play for Ohio, where both campaigns believe the swing blue-collar vote craves protectionism. While much of Obama’s “patriotism” is fluff for the masses, his policies do pack some real economic nationalism in them — the red meat he gives to corporate America.

Let’s start with the fluff. “I want to stop giving tax breaks to companies that ship jobs and factories overseas,” Obama regularly says from the stump. He hit on that item in his “economic patriotism” ad. Sounds fine, but what is he actually talking about?

Not much, it turns out. Corporations pay income taxes on their profits. Profits, roughly, are revenues minus expenses. One expense businesses incur is moving labor or equipment to new locations. Obama is proposing that the cost of moving facilities out of the United States shouldn’t be deductible. Those costs should count as part of the company’s profits.

This targeted tax penalty would raise $14 million per year, or 0.0005 percent of the federal budget, according to the Joint Committee on Taxation.

Corporate income tax payments were about $237 billion last year. So the $14 million in (more…)

Charles Koch (yes, one of the Koch brothers vilified by the left)

…It shouldn’t surprise us that the role of American business is increasingly vilified or viewed with skepticism. In a Rasmussen poll conducted this year, 68% of voters said they “believe government and big business work together against the rest of us.”

Businesses have failed to make the case that government policy—not business greed—has caused many of our current problems. To understand the dreadful condition of our economy, look no further than mandates such as the Fannie Mae and Freddie Mac “affordable housing” quotas, directives such as the Community Reinvestment Act, and the Federal Reserve’s artificial, below-market interest-rate policy.

Far too many businesses have been all too eager to lobby for maintaining and increasing subsidies and mandates paid by taxpayers and consumers. This growing partnership between business and government is a destructive force, undermining not just our economy and our political system, but the very foundations of our culture.

With partisan rhetoric on the rise this election season, it’s important to remind ourselves of what the role of business in a free society really is—and even more important, what it is not.

The role of business is to provide products and services that make people’s lives better—while using fewer resources—and to act lawfully and with integrity. Businesses that do this through voluntary exchanges not only benefit through increased profits, they bring better and more competitively priced goods and services to market. This creates a win-win situation for customers and companies alike.

Only societies with a system of economic freedom create widespread prosperity. Studies show that the poorest people in the most-free societies are 10 times better off than the poorest in the least-free. Free societies also bring about greatly improved outcomes in life expectancy, literacy, health, the environment and other important dimensions.

So why isn’t economic freedom the “default setting” for our economy? What upsets this productive state of affairs? Trouble begins whenever businesses take their eyes off the needs and wants of consumers—and instead cast longing glances on government and the favors it can bestow. When currying favor with Washington is seen as a much easier way to make money, businesses inevitably begin to compete with rivals in securing government largess, rather than in winning customers.

We have a term for this kind of collusion between business and government. It used to be known as rent-seeking. Now we call it cronyism. Rampant cronyism threatens the economic foundations that have made this the most prosperous country in the world.

We are on dangerous terrain when government picks winners and losers in the economy by subsidizing favored products and industries. There are now businesses and entire industries that exist solely as a result of federal patronage. Profiting from government instead of earning profits in the economy, such businesses can continue to succeed even if they are squandering resources and making products that people wouldn’t ordinarily buy.

Because they have the advantage of an uneven playing field, crony businesses can drive their legitimate competitors out of business. But in the longer run, they are unsustainable and unable to compete internationally (unless, of course, the government handouts are big enough). At least the Solyndra boondoggle ended when it went out of business.

By subsidizing and mandating politically favored products in the energy sector (solar, wind and biofuels, some of which benefit Koch Industries), the government is pushing up energy prices for all of us—five times as much in the case of wind-generated electricity. And by putting resources to less-efficient use, cronyism actually kills jobs rather than creating them. Put simply, cronyism is remaking American business to be more like government. It is taking our most productive sectors and making them some of our least.

The effects on government are equally distorting—and corrupting. Instead of protecting our liberty and property, government officials are determining where to send resources based on the political influence of their cronies. In the process, government gains even more power and the ranks of bureaucrats continue to swell.

Subsidies and mandates are just two of the privileges that government can bestow on politically connected friends. Others include grants, loans, tax credits, favorable regulations, bailouts, loan guarantees, targeted tax breaks and no-bid contracts. Government can also grant monopoly status, barriers to entry and protection from foreign competition.

Whatever form these privileges take, Americans are rightly suspicious of the cronyism that substitutes political influence for free markets. According to Rasmussen, two-thirds of the electorate are convinced that crony connections explain most government contracts—and that federal money will be wasted “if the government provides funding for a project that private investors refuse to back.” Some 71% think “private sector companies and investors are better than government officials at determining the long-term benefits and potential of new technologies.” Only 11% believe “government officials have a better eye for future value.”

To end cronyism we must end government’s ability to dole out favors and rig the market. Far too many well-connected businesses are feeding at the federal trough. By addressing corporate welfare as well as other forms of welfare, we would add a whole new level of understanding to the notion of entitlement reform.

If America re-establishes the proper role of business in society, all kinds of benefits will accrue. Our economy will rebound. Our liberties will be restored. And when President Obama tells an entrepreneur “You didn’t build that,” everyone will know better.

Daniel Halper in the Weekly Standard

Lis Smith, a spokesman for President Barack Obama’s reelection campaign, touted Solyndra by saying the failed energy company that received federally backed loans has been “widely praised as successful and innovative.”

“The reality is that Solyndra received funding through a Department of Energy program created under the Bush administration — a program that has supported tens of thousands of jobs across the country and is moving forward with investments in innovative projects like the first nuclear plant built in the U.S. in decades and the world’s largest wind farm,” Lis Smith told the Detroit News. “In fact, both Republican and Democratic administrations advanced Solyndra’s application, and the company was widely praised as successful and innovative both before and after receiving the Department of Energy loan guarantee.”

So let’s recap the facts about Solyndra.

“In March 2009, Energy Secretary Steven Chu announced a $535 million conditional loan guarantee to Solyndra — making it the first to receive a loan since the 2005 program began. At that point, administration officials pushed for the DOE to hasten its final decision on approving the loan so Vice President Joe Biden could announce it on a planned trip to California. The loan was funded with stimulus money and formally announced in September 2009,” the Washington Post explains.

The DOE learned in December 2010 that Solyndra could not make its loan payment, in violation of itsfederal loan deal. Solyndra executives had been privately warning administration officials that the firm was at risk of liquidation.

Yet in February 2011, the department restructured the loan, with some investors agreeing to provide Solyndra $75 million more in financing. …

In August 2011, the company filed for bankruptcy.

It is hard to see what successes Smith might have been referring to.Unless one looks at it through the president’s prism. ”If you’ve got a business. you didn’t build that,” Obama recently said. “Somebody else made that happen.” So perhaps that is what Smith meant here: Solyndra is a business that government helped build.

The Mercatus Center at George Mason University has a special website just for the topic of cronyism.

Mouse over the pieces of the ice berg for pop-ups.

Mickey Kaus

Good news for Obama: Government-subsidized battery maker A123 may make it past election before going bankrupt. From Reuters:

The company, which received a $249 million grant from the Obama administration as part of a program to develop advanced lithium-ion batteries, said in documents filed with U.S. regulators that it “expects to have approximately four to five months of cash to support its ongoing operations” based on its recent monthly spending average. [E.A.]

A123 supplies batteries for the troubled Fisker company as well as other auto manufacturers. It says it intends to raise more money. …

P.S.: Here’s a nagging question Obama chronicler Jonathan Alter may be able to answer: In his 2011 State of the Union address, Obama laid out a plan to have “a million electric vehicles on the road by 2015,” a goal that now looks increasingly unrealistic insane. Did Obama know the million-EV goal was BS when he announced it?

Was he misled by advisers? If the latter, have any suffered adverse consequences ? Was he too inexperienced to know the extent to which bureaucracies tend to tell the boss what he wants to hear, even if it’s a fantasy? Or did he not care?

Drugmakers led by Pfizer (PFE) Inc. agreed to run a “very significant public campaign” bankrolling political support for the 2010 health-care law, including TV ads, while the Obama administration promised to block provisions opposed by drugmakers, documents released by Republicans show.

The internal memos and e-mails for the first time unveil the industry’s plan to finance positive TV ads and supportive groups, along with providing $80 billion in discounts and taxes that were included in the law. The administration has previously denied the existence of a deal involving political support.

The documents were released today by Republicans on the House Energy and Commerce Committee. They identify price controls under Medicare and drug importation as the key industry concerns, and show that former Pfizer Chief Executive Officer Jeffrey Kindler and his top aides were involved in drawing it up and getting support from other company executives.

Charles Gasparino

Back when he agreed to advise the Obama administration on economics, General Electric CEO Jeff Immelt told friends that he thought it would be good for GE and good for the country. A life-long Republican, Immelt said he believed he could at the very least moderate the president’s distinctly anti-business instincts.

That was three years ago; these days Immelt is telling friends something quite different.

Sure, GE has managed to feast on federal subsidies, particularly the “green-energy” giveaways that are Obamanomics’ hallmark.

But Immelt doesn’t think he’s had anywhere near as much luck moderating the president’s fat-cat-bashing, left-leaning economic agenda of taxing businesses and entrepreneurs to pay for government bloat.

Friends describe Immelt as privately dismayed that, even after three years on the job, President Obama hasn’t moved to the center, but instead further left. The GE CEO, I’m told, is appalled by everything from the president’s class-warfare rhetoric to his continued belief that big government is the key to economic salvation.

Or, as one friend recently put it to me, “Jeff thought he could make a difference, and now realizes he couldn’t.”

Immelt’s conversion from public Obama supporter to a private detractor is important: It shows how even businessmen who feast off his subsidies worry about his overall economic agenda and its long-term impact on the economy.

Don’t expect Immelt to say anything publicly about the downside of president’s economic agenda anytime soon: He’s still serving as what is considered the top outside economic adviser to the White House. (A GE spokesman insists that the reports I’m sharing here about Immelt’s private criticism of Obama are “ludicrous.”)

GE has too much to lose for Immelt to publicly ’fess up to his disdain. The president now routinely talks up his desire to tax businesses that create jobs overseas, and GE overseas expansion is well-documented. Nor does the company want to put all its green subsidies at risk.

And of course the last thing Immelt or his shareholders need is for the president to turn his class-warfare fire on them, as he did to his erstwhile pals in the banking business.

Yet friends report that Immelt’s displeasure with the president’s economic policies is real and palpable in private settings…

Or could he be trying to have it both ways? If Obama loses, he gets to say I told you so. If he wins, well, he denies ever saying such things.

Jonathon Karl

Attention U.S. taxpayers:  You now own a piece of a French car company that is drowning in red ink.

That’s right.  In a move little noticed outside of the business pages, General Motors last week bought more than $400 million in shares of PSA Peugeot Citroen – a 7 percent stake in the company.

Because U.S. taxpayers still own roughly one-quarter of GM, they now own a piece of Peugeot.

Peugeot can undoubtedly use the cash.  Last year, Peugeot’s auto making division lost $123 million.  And on March 1 – just a day after the deal with GM was announced – Moody’s downgraded Peugeot’s credit rating to junk status with a negative outlook, citing “severe deterioration” of its finances.

In other words, General Motors essentially just dumped more than $400 million of taxpayer assets on junk bonds.

GM has said the deal is designed to give GM access to Peugeot’s expertise in small car and hybrid vehicle technology and ultimately allow both GM and Peugeot to save money by pooling their resources. But auto industry analysts find the deal mystifying.

An analysis by auto industry consultants IHS said it is “somewhat baffling that GM is willing to get involved in an alliance that it frankly does not need for size or complexity, while still avoiding any public plan to rationalise its European production, cut costs, or deal with labour rates.”

John Stossel:

Now that Mitt Romney is likely to be the Republican nominee, we can expect new attacks on his “vulture capitalism.” That’s how Rick Perry characterized his private equity work. Newt Gingrich’s supporters ran an ad about Romney’s firm, Bain Capital, that said, “Their greed was only matched by their willingness to do anything to make millions in profits.”

Give me a break.

“Greed” means you want more for yourself. Fine. If you obtain it legally, without force or privilege—say, by buying a business and making it more efficient, or shifting resources to where consumers prefer them—that is a good thing. “Creative destruction” makes America richer.

Shifting resources does mean some people lose their jobs. That is sad for those who are fired.

But on balance, it’s a good thing. Intuition tells us that it would be better if no one ever lost a job and that capitalists who close businesses are evil. But America would not be better off today if elevator operators and factory workers who made typewriters had their jobs preserved by a “compassionate” government.

America is richer today because those workers lost their jobs, because money once paid them is put to better use. In addition, most of those workers found new jobs where their skills better served consumers. Some even say they were glad that they were fired, because now they are more productive, and being productive makes people happy.

But we in the media almost never tell that story. That’s because we only report what we see.

We can see, and interview, the sad people who get fired. We take pictures as they leave their jobs on that last day when the factory closes. We interview them about the hardship to their families. It’s a sad and moving story. We tell it well. But we never tell the flip side, the creative part of creative destruction. That’s because we don’t see it. We don’t see the better things that are done with capital that once went into the factory. We don’t see what many of the workers do next.

None of us covered the first few weeks of Apple or Google or Staples or Domino’s Pizza. We had no clue that those companies were about to produce cool new things, thousands of jobs and billions of dollars in value. Staples and Domino’s, by the way, were funded by Bain Capital…

And bankers?

Michael Moore says, “Capitalism has no moral core.”

Is that right? Since the word “capitalism” is ambiguous, the answer depends on what we mean. If it’s crony capitalism — well, yeah. It stinks. Handouts to Solyndra and special deals for Goldman Sachs and GM are not capitalism. That’s “crapitalism.”

Many people hate banks, private-equity firms and mortgage brokers. In light of the last few years, this isn’t totally unjustified. I resent the bankers who got rich by taking foolish risks and then, when they failed, got bailed out with our tax money.

I guess I shouldn’t blame bankers. I should blame the politicians. They gave our tax money away. If someone offered me money to cover my losses, I’d take it, too.

The real evil bankers are the government cronies, like those at Fannie Mae and Freddie Mac. They took our money by force, our taxes, then paid themselves fat salaries and promised us that none of our money was at risk. And then they squandered more than $100 billion, betting that housing prices would always rise and few people would default.

I resent them and their backers in government.

But in a real free market—no government privileges or barriers to competition—capitalism is great. It’s the only system with a moral core because it’s based on freedom, not force.

LightSquared CEO Sanjiv Ahuja abruptly announced his resignation Tuesday amid revelations of his company’s political proximity — and his own closeness — to the White House and Obama administration officials.

The Daily Caller first reported one week ago on emails and documents that indicate political ties and numerous meetings between LightSquared and Obama administration officials as the was undergoing regulatory review.

Ahuja’s resignation comes after Obama’s FCC suspended conditional approval of a waiver LightSquared needed to complete its high-speed broadband network. Until two weeks ago, the company’s final approval appeared imminent.

Ahuja, who had never donated to Democrats before and has not since, gave the maximum allowable $30,400 contribution to the Democratic National Committee on the same day his lawyers were trying to arrange a meeting for him at the White House with top Obama technology adviser Aneesh Chopra and other officials.

In emails between Ahuja’s lawyers and White House officials Ahuja wanted to meet with, his lawyers pointed out that he would attend an Obama fundraiser on or about the same day he wanted the meeting.

Holman Jenkins

No political party would have let GM go under because of Lehman, and a column uninformed by political realism is uninteresting to read or write. But a decent bailout would have addressed the structural burdens that Congress, mostly for its own convenience, inflicted on the homegrown auto makers. That didn’t happen.

If the U.S. president told the bank holding your mortgage to cancel your debt and hand you the house free, it wouldn’t make you more productive or efficient. It just screwed someone you owed money to. And clearer than ever is that GM could have survived the Lehman episode with a simple bridge loan. America’s biggest auto maker could have returned to the slog without dishonoring billions of dollars in obligations to bondholders and other creditors.

But the most egregious aspect of the Obama bailout is its annexation of the auto sector to the administration’s green energy schemes. It’s no exaggeration to say the auto industry is being used to fulfill a throwaway line in an Obama speech calling for one million electric vehicles on the road by 2015.

We’ve often noted the direct handouts, in the form of billions of dollars in subsidies to both manufacturers and buyers of green cars. But these are only half the story. Mr. Obama made a splash last year when he announced that, by 2025, the U.S. fleet would be required to get 54.5 miles per gallon.

The corollary of an implausible mandate is a steady traffic in auto industry lobbyists to Washington, campaign check in hand, to water it down. Of these, the most important are very large mileage credits awarded to electric cars (though they basically run on coal), and then the doubling of these credits as an “incentive multiplier.” In effect, auto makers have been virtually required to build electric cars and dump them on the public at a loss in order to create headroom for the cars that actually earn a profit.

The latter, of course, are pickups in the case of U.S manufacturers. Lo, pickups have also been quietly showered with special breaks under the broad rule Mr. Obama announced.

Just ask Volkswagen and Daimler: Here we have almost a parody of public choice theory, (more…)

The oil industry and labor unions predicted the Keystone XL pipeline would create 20,000 jobs. Obama killed it.

But all is not lost — the oil can move on Warren’s train.

Warren Buffett’s Burlington Northern Santa Fe LLC is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp.’s Keystone XL oil pipeline permit.

With modest expansion, railroads can handle all new oil produced in western Canada through 2030, according to an analysis of the Keystone proposal by the U.S. State Department.

“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern, a unit of Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc., said in an interview. If Keystone XL “doesn’t happen, we’re here to haul.”

It helps to have a crony in the White House.

Joe Stephens and Carol D. Leonnig in the Washington Post.

This is a scathing look at Obama’s crony-capitalism at its most foul, conveniently published on Christmas, when few pay attention.

Linda Sterio remembers the excitement when President Obama arrived at Solyndra last year and described how his administration’s financial support for the plant was helping create hundreds of jobs. The company’s prospects appeared unlimited as Solyndra executives described the backlog of orders for its solar panels.

Then came the August morning when Sterio heard a newscaster announce that more than a thousand Solyndra employees were out of work. Only recently did she learn that, within the Obama administration, the company’s potential collapse had long been discussed.

“It’s not about the people; it’s politics,” said Sterio, who remains jobless and at risk of losing her home. “We all feel betrayed.”

Since the failure of the company, Obama’s entire $80 billion clean-
technology program has begun to look like a political liability for an administration about to enter a bruising reelection campaign.

Meant to create jobs and cut reliance on foreign oil, Obama’s green-technology program was infused with politics at every level, The Washington Post found in an analysis of thousands of memos, company records and internal ­e-mails. Political considerations were raised repeatedly by company investors, Energy Department bureaucrats and White House officials.

The records, some previously unreported, show that when warned that financial disaster might lie ahead, the administration remained steadfast in its support for Solyndra.

The documents reviewed by The Post, which began examining the clean-technology program a year ago, provide a detailed look inside the day-to-day workings of the upper levels of the Obama administration. They also give an unprecedented glimpse into high-level maneuvering by politically connected clean-technology investors.

They show that as Solyndra tottered, officials discussed the political fallout from its troubles, the “optics” in Washington and the impact that the company’s failure could have on the president’s prospects for a second term. Rarely, if ever, was there discussion of the impact that Solyndra’s collapse would have on laid-off workers (more…)

Joel Kotkin

…Despite his occasional remarks that decry “fat cat”’ bankers, Obama has effectively serviced the financial bigwigs. Bank prosecutions have declined markedly under Obama — to levels not seen for more than 25 years. Obama has even tried to derail aggressive bank prosecutions pursued by state attorneys general, most of them liberal Democrats.

This is remarkable since a considerable number of people on Wall Street should likely be in the dock — or in jail — for systematically ruining the national, and even global, economy. Instead, financial powers have enjoyed several big bonus years and have been on a spending binge at overpriced New York restaurants and tony boutiques. Struggling homeowners of middle America may be happy to know that the Manhattan luxury apartment market is running low on inventory.

Even while trying to exploit the Occupy Wall Street movement for political purposes, Obama still leads in financial sector donations, according to the Center for Responsive Politics. He has secured more cash from the financial elite, at this point, than all the GOP candidates combined. He has even raised twice as much as they have from Bain Capital, the venture firm co-founded by Romney. Why not give up on the white working class when you can sew up the Harvard and Wharton business school constituency?

..Nor can we expect this pro-Wall Street tilt to shift in a second term. Obama’s virtual toadying to Wall Street is long-standing. He was the finance industry’s favorite against Hillary Clinton and then-GOP nominee Sen. John McCain (R-Ariz.). He may call them “fat cat” bankers, but Obama has been a kitten when dealing with financiers.

WSJ

It took a $142 billion taxpayer bailout to convince the Obama Administration to pledge in February to wind down Fannie Mae and Freddie Mac, rein in the Federal Housing Administration and encourage the revival of a private mortgage market. So it’s distressing to see Congress move in exactly the opposite direction less than a year later, with the quiet approval of the White House.

While cable TV is chasing the trivia of Fannie and Freddie bonuses, the real news is that late Monday a bipartisan Congressional committee announced an agreement to increase FHA’s maximum mortgage limits to $729,750 from $625,500 through Dec. 31, 2013. The bill is linked to a continuing resolution to fund Congress past Saturday, increasing the likelihood that this backroom deal will become law. The House is scheduled to vote on the bill today without debating these changes, in what ought to be an embarrassment to Speaker John Boehner and Majority Leader Eric Cantor.

The National Association of Realtors is lauding this idea as great for housing “stability,” by which it means that the taxpayer subsidies for its industry will keep coming, even for fancy homes. The median sales price of existing single-family homes nationwide in the third quarter was $169,500, according to the Realtors’s own data. Politicians from higher-cost regions argue that higher loan limits are needed, but even Los Angeles has seen median prices fall to $324,800 from $402,100 in 2008—well below $729,750.

This FHA payoff to the housing lobby comes as the agency has had to publicly reveal the extent of its financial travails. In its annual report to Congress Tuesday, the Department of Housing and Urban Development and an independent auditor reported the FHA has a 0.24% capital reserve, well below its statutory 2% minimum for the third year running. Take $1.1 trillion of outstanding loan guarantees divided by $2.6 billion in capital reserves and you get a 422-to-1 leverage ratio, up from 33-to-1 in 2009. By this standard, Lehman Brothers was risk-averse…

L. Gordon Crovitz writes about Google exec Eric Schmidt’s moment of candor.

“So we get hauled in front of the Congress for developing a product that’s free, that serves a billion people. OK? I mean, I don’t know how to say it any clearer,” Mr. Schmidt told the Post. “It’s not like we raised prices. We could lower prices from free to . . . lower than free? You see what I’m saying?”

An absence of consumer harm didn’t stop senators from offering some improbable recommendations. Among them: that Google replace its algorithm with a panel of experts to ensure “fair” search results. As Google tries to improve the relevancy of its search results for consumers, some sites inevitably come up higher and some lower in the results. The losers now lobby Washington.

“Regulation prohibits real innovation, because the regulation essentially defines a path to follow,” Mr. Schmidt said. This “by definition has a bias to the current outcome, because it’s a path for the current outcome.”

Then there’s Grove’s Law:

Mr. Schmidt recounted a dinner in 1995 featuring a talk by Andy Grove, a founder of Intel: “He says, ‘This is easy to understand. High tech runs three times faster than normal businesses. And the government runs three times slower than normal businesses. So we have a nine-times gap.’ All of my experiences are consistent with Andy Grove’s observation.”

Mr. Schmidt explained there was only one way to deal with this nine-times gap, which this column hereby christens “Grove’s Law of Government.” That is “to make sure that the government does not get in the way and slow things down.”

Which politician has the strongest financial and political ties to Goldman Sachs?

The Voice in My Head:

Goldman Sachs Loves Obama

That post in 2008 was based on the reporting of Sharyl Attkisson (now of Fast and Furious reporting fame) detailing how Obama was raking in more money from Wall Street, especially Goldman Sachs, than was John McCain. And it was where this logo was birthed:

The point being now — if Occupy Wall Street was a genuine grassroots movement genuinely outraged by the idea that banksters own the government, then they would be marching on the Obama White House.

Neil McCabe

How did a failing California solar company, buffeted by short sellers and shareholder lawsuits, receive a $1.2 billion federal loan guarantee for a photovoltaic electricity ranch project—three weeks after it announced it was building new manufacturing plant in Mexicali, Mexico, to build the panels for the project?

The company, SunPower (SPWR-NASDAQ), now carries $820 million in debt, an amount $20 million greater than its market capitalization.  If SunPower was a bank, the feds would shut it down.  Instead, it received a lifeline twice the size of the money sent down the Solyndra drain.

Two men with insight into the process are SunPower rooter Rep. George R. Miller III, (D.-Calif.), the senior Democrat on the House Education and Workforce Committee and the co-chairman of the Democratic Steering and Policy Committee, and his SunPower lobbyist son, George Miller IV.

Nah, say it ain’t so.

Miller the Elder is a strong advocate for SunPower, which converted an old Richmond, Calif., Ford plant in his district to a panel-manufacturing facility.

The congressman hosted an Oct. 14, 2010, tour of the plant with company CEO Thomas H. Werner and Interior Secretary Kenneth L. Salazar to promote the company’s fortunes.

“The path to a clean energy economy starts here, in places like SunPower’s research and development facility,” said Salazar during the tour.

“The work that comes from these facilities transforms renewable energy ideas into a reality.  When renewable energy companies continue to invest in places like California, the realization of a new energy future is within our reach,” he said.

Miller the Elder said he was grateful for Salazar’s interest.

“We’ve worked hard to make renewable energy a priority because it represents America’s future economic growth.  Today, businesses like SunPower are moving forward, hiring 200 people for good clean energy jobs in the East Bay,” he said.

The “green economy” is a figment of liberal politicians’ imaginations. Considerable real world experience (Spain, for example) shows this to be true.

But that doesn’t stop politicians from lining the pockets of favored companies.

To understand “green jobs” just follow the money.

…DOE announced a $737 million loan guarantee to help finance construction of the Crescent Dunes Solar Energy Project, a 110-megawatt solar-power-generating facility in Nye County, Nev. The project is sponsored by Tonopah Solar, a subsidiary of California-based SolarReserve.

The Energy Department said the project will result in 600 construction jobs and 45 permanent jobs.

“If we want to be a player in the global clean energy race, we must continue to invest in innovative technologies that enable commercial-scale deployment of clean, renewable power like solar,” Energy Secretary Steven Chu said in a news release. “Solar generation facilities, like the Crescent Dunes Solar Energy Project, help supply energy to local utilities and create hundreds of good, American clean energy jobs.”

That comes out to $16 million per job.

Whatever else these green-tech loans are, they certainly are not job-creation stimulus.

But that’s not the best part.  As both Gateway Pundit and American Glob discover, one of SolarReserve’s “investment partners” is Pacific Corporate Group, through its Clean Energy and Technology Fund.  And PCG’s executive director is Ron Pelosi — brother of Nancy Pelosi’s husband.  Suddenly, this deal makes a lot more sense than spending $737 million for forty-five jobs.

More solar dollars.

Energy Secretary Steven Chu said the department has completed a $737-million loan guarantee to Tonopah Solar Energy for a 110-megawatt solar tower on federal land near Tonopah, Nev., and a $337-million guarantee for Mesquite Solar 1 to develop a 150-megawatt solar plant near Phoenix…

SolarReserve LLC of Santa Monica, the parent company for Tonopah, is privately held. The Energy Department said its rules prevented it from discussing the company’s financial information. Sempra Energy of San Diego, which owns Mesquite, is publicly held.

So $737 million of public money is being loaned, but we don’t get to know the financial details?

Why does the Energy Department have “rules” forbidding public disclosure?

Whew.

Remember the big stink raised by the fulminating left when Dick Cheney convened a panel of experts to help craft his energy policy? They demanded to know who and when, blah blah blah, when it was clearly none of their business.

These solar deals are clearly public business, but the details are kept secret.

Rich Lowry:

We have seen the future, and it went bankrupt.

If the praises of high-ranking Obama-administration officials were a viable business plan, the solar-panel maker Solyndra would be an industrial juggernaut. Vice President Biden insisted that the jobs created by the California-based firm would “allow America to compete and to lead like we did in the 20th century.”

In a visit to Solyndra in May 2010, President Obama called it “a testament to American ingenuity and dynamism.” He all but redefined the traditional statement of Americanness to encompass motherhood, apple pie, and the conversion of sunlight into electricity through cylindrical thin-film solar cells, the specialty of Solyndra.

Obama and Biden were literally invested in Solyndra’s success. The company got a half-billion-dollar federal loan guarantee, the first in a highly vaunted Department of Energy green-jobs program, as part of the stimulus. This was supposed to be the new economic model: government and its favored industries cooperating to lead the country into a green, politically approved recovery.

As noted in earlier posts, the firm just filed for bankruptcy.

Taxpayers get to eat the loss on Obama’s reckless investment.

…President Bush was flayed for the Enron bankruptcy, based on his tenuous ties to the firm. If the same media rules applied, Solyndra would be Obama’s Enron, given his active promotion of the company and his lavish funding of it. A prodigious Obama-Biden fundraiser is a major backer of the failed concern.

Solyndra’s crash comes during a wave of solar bankruptcies. The government’s enthusiasm for solar power far outstripped that of consumers. Spain provided something of a precursor. It massively subsidized a solar-power industry that collapsed when the government realized its generosity was unsustainable and cut back. One Spanish newspaper had a headline, “Spain admits that the green economy sold to Obama is a ruin.”

China is picking up the pieces. Not only does China coddle solar firms, it inherently is a lower-cost manufacturing environment. Its cheap, simple solar panels are more marketable than the more sophisticated version attempted by Solyndra. Our subsidies for the purchase of solar panels are often used to buy Chinese products. Inevitably, the U.S. solar industry will seek to score the trifecta of government support already achieved by the boondoggle fuel ethanol — subsidizing its production, mandating its use, and barring its foreign competitors…

Zach Carter and Jordan Howard at Huffington Post (follow link to see their slideshow)

As the nation struggles with a stagnant economy, President Barack Obama has preached overhauling the U.S. tax code to spur economic growth. But as he gears up for what looks to be a tough reelection campaign, the president has surrounded himself with the current loophole-riddled system’s prime offenders: corporate executives whose companies have profited off of those loopholes while reaping millions for themselves.

Institute for Policy Studies, a liberal think tank, named in a new report 25 major American corporations whose CEOs were paid more last year than their firm’s total U.S. income tax bill. Of those business elites, 10 have substantive ties to Obama — including some who have official economic policy advisory positions in his administration — according to a HuffPost analysis of the report.

All told, these 10 CEOs with Obama connections brought in over $158 million for themselves last year. Their companies’ federal tax bill, however, was a combined net benefit of $5.4 billion — meaning the federal government actually owed these companies billions of dollars. Eight of the 10 firms not only did not pay taxes; they received large refunds. The 10 companies scored combined U.S. profits of $26.8 billion.

HuffPost’s calculations are based on data compiled in the report by the IPS. The IPS figures, in turn, are drawn from documents the companies filed with the Securities and Exchange Commission.

Obama has repeatedly spoken of improving the corporate tax code by closing special loopholes for politically connected companies and using that money to lower the official corporate tax rate. President Ronald Reagan embarked on a similar project in 1986, enabling the federal government to increase tax revenues even as it lowered the formal tax rates. Although corporate tax revenue is at postwar lows, Obama’s plan is much less ambitious: He doesn’t want to actually increase tax revenues at all. The benefits from closing loopholes would exclusively flow straight to other corporations.

But Obama has given several of the executives who benefit most from the current system prominent economic advisory positions. The Obama administration declined do comment for this story.

Of Obama’s corporate favorites, General Electric CEO Jeff Immelt and Honeywell CEO David Cote have served in the highest-profile public positions associated with the administration. Immelt has been pilloried with criticism ever since Obama named him head of his Council on Jobs and Competitiveness. GE required massive amounts of government aid when the subprime mortgage bets made by its financial wing, GE Capital, resulted in enormous losses during the financial crisis. While the company is headquartered in the U.S., a majority of its employees are based abroad (GE is somewhat unique among major companies for disclosing this figure, a fact Immelt has touted in recent speeches), and it has a robust staff of former U.S. Treasury officials who deploy complicated accounting maneuvers to lower the company’s tax bills. Immelt made $15.2 million last year, with GE’s $3.3 billion tax benefit accounting for more than half of the 10 companies total tax benefit…

Obama’s absurd “green jobs” fetish is finally being seen by liberals for what it is.

From today’s LA Times lead editorial.

When Solyndra, a Bay Area maker of industrial solar panels, announced plans to file for bankruptcy protection Wednesday, it wasn’t just a blow for the company’s 1,100 laid-off employees or the investors who have pumped millions into the venture. It called into question the Obama administration’s entire clean-energy stimulus program.

Solyndra was the first company to be awarded a federal loan guarantee under the stimulus, worth $535 million. Taxpayers are likely to end up on the hook for much if not all of that amount, a highly embarrassing development for President Obama because he was among the company’s biggest cheerleaders. He visited its Fremont plant in May 2010 even though PricewaterhouseCoopers had weeks earlier raised doubts about its plans for an initial public offering by questioning whether it could continue as a going concern.

That’s especially troubling because Solyndra is backed by one of Obama’s key fundraisers, George Kaiser of Tulsa. Congressional Republicans were raising alarms about Obama’s connections to Solyndra well before Wednesday’s announcement, with GOP members of the House Energy and Commerce Committee voting in July to subpoena documents from the Office of Management and Budget on the loan-guarantee decision.

Two important questions are raised by Solyndra’s failure: Should the government be in the business of picking winners and losers by providing loan guarantees to risky energy ventures? And is Obama using stimulus funds to reward his political contributors?

In short, does Obama just have his head in the clouds, or does he have his head in the clouds and his hands in corporate pockets?

Ace of Spades:

3M Claims Democratic Lobbyist, Talking Head, and Former Clinton Staffer Lanny Davis Tried to Extort $30 Million From It

3M claims an investment company conspired with high-powered lobbyist Lanny Davis in a smear campaign to “coerce” it into paying “tens of millions of dollars … to save them from the consequences of yet another unprofitable investment,” a screening test for methicillin-resistant Staphylococcus aureus…Davis, who worked as a special counsel for President Clinton from 1996 to 1998, has lobbied for a string of controversial clients since leaving the White House, including African dictators, military coup supporters in Honduras, and the government of Pakistan.

PJ Tatler

Why did the Department of Justice raid Gibson Guitars twice in the span of two years, yet leave competitor C.F. Martin untouched? Both appear to use the same allegedly illegal woods. The allegation floating around is that it’s because Gibson’s CEO supports Republicans and Martin’s supports Democrats, and we have a Democratic administration hell-bent on punishing Republicans. Instinctively, I want to reject that theory. It’s too simple and too, I don’t know, obvious and even un-American. Gibson’s CEO may face jail time, and the company may end up failing under the weight of the federal boot. And over what?

Why does Warren Buffett, billionaire businessman, keep supporting President Obama despite the president’s obvious economic failures? Reading Tim Carney’s piece about Buffett and bank bailouts that appeared yesterday, it’s evident that at every turn over the past couple of years, Buffett has managed to cash in on huge government actions. Carney suggests that Buffett bought a major stake in Bank of America on the belief that the Obama administration will end up bailing that bank out, stuffing more money into Buffett’s pockets. One would expect a savvy and fair-minded businessman to oppose the rampant regulatory state that Obama has unleashed on the nation’s economy, but if the businessman stands to profit from it? If can use his influence to direct it to move in ways that help him? Does Buffett continue supporting Obama because he, Buffett, basically owns the president and knows he can make money off of his policies?

Jammie Wearing Fool busts Obama’s favorite crony-capitalist for rank hypocrisy.

Not only did this Obama stooge not pay any taxes on $5 billion profits, his company has shed 36,000 jobs since 2009 (H/T).

Now as Obama’s unemployment rate threatens to sink his presidency, here comes Jeffrey Immelt to lecture business owners.

“The people who are part of the business sector, the people in this room, have got to stop complaining about government and get some action underway,” he told the group. “There’s no excuse today for lack of leadership. The truth is we all need to be part of the solution.”

Hmm. Sounds like shared sacrifice.

Immelt is the chair of President Obama’s Council on Jobs and Competitiveness. He said the group has made a number of recommendations for changes in government policies that should be able to help job creation, such as the executive order announced Monday asking independent agencies to rid their books of old and outdated regulations.

Immelt said he is committed to working with Obama on other moves that can help hiring, and that he expects to have proposals by the end of the year that should help to create up to 1 million jobs.

Why doesn’t he start at GE?

On the upside, Immelt is actually creating some jobs. In Mexico.