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	<title>Another Idea &#187; economics</title>
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		<title>The ‘Hunger’ Hoax</title>
		<link>http://anotheridea.org/2011/10/the-%e2%80%98hunger%e2%80%99-hoax/</link>
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		<pubDate>Mon, 10 Oct 2011 21:45:52 +0000</pubDate>
		<dc:creator>National Review Online</dc:creator>
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		<guid isPermaLink="false">http://anotheridea.org/?p=3775</guid>
		<description><![CDATA[It’s part of the larger poverty hoax. Dan Rather opened a CBS Evening News broadcast in 1991 by declaring, “One in eight American children is going hungry tonight.” Newsweek, the Associated Press, and the Boston Globe repeated this statistic, and &#8230; <a href="http://anotheridea.org/2011/10/the-%e2%80%98hunger%e2%80%99-hoax/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p><em><strong>It’s part of the larger poverty hoax.</strong></em></p>
<p><img class="alignleft" title="Thomas Sowell" src="http://anotheridea.org/images/headshots/sowell_thomas.jpg" alt="Thomas Sowell" width="100" height="150" />Dan Rather opened a CBS Evening News broadcast in 1991 by declaring, “One in eight American children is going hungry tonight.” Newsweek, the Associated Press, and the Boston Globe repeated this statistic, and many others joined the media chorus, with or without that unsubstantiated statistic.</p>
<p>When the Centers for Disease Control and the Department of Agriculture examined people from a variety of income levels, however, they found no evidence of malnutrition among those in the lowest income brackets. Nor was there any significant difference in the intake of vitamins, minerals, and other nutrients from one income level to another.</p>
<p>That should have been the end of that hysteria. But the same “hunger in America” theme reappeared years later, when Sen. John Edwards was running for vice president. And others have resurrected that same claim, right up to the present day.<span id="more-3775"></span></p>
<p>Ironically, the one demonstrable nutritional difference between the poor and others is that low-income women tend to be overweight more often than others. That may not seem like much to make a political issue from, but politicians and the media have created hysteria over less.</p>
<p>The political Left has turned obesity among low-income individuals into an argument that low-income people cannot afford nutritious food, and so have to resort to burgers and fries, pizzas and the like, which are more fattening and less healthful. But this attempt to salvage something from the “hunger in America” hoax collapses like a house of cards when you stop and think about it.</p>
<p>Burgers, pizzas, and the like cost more than food that you can buy at a store and cook yourself. If you can afford junk food, you can certainly afford healthier food. An article in the New York Times of September 25 by Mark Bittman showed that you can cook a meal for four at half the cost of a meal from a burger restaurant. So far, so good. But then Mr. Bittman says that the problem is “to get people to see cooking as a joy.” For this, he says, “we need action both cultural and political.” In other words, the nanny state to the rescue!</p>
<p>Since when are adult human beings supposed to do only those things that are a joy? I don’t find any particular joy in putting on my shoes. But I do it rather than go barefoot. I don’t always find it a joy to drive a car, especially in bad weather, but I have to get from here to there.</p>
<p>An arrogant elite’s condescension toward the people — treating them as children who have to be jollied along — is one of the poisonous problems of our time. It is at the heart of the nanny state and the promotion of a debilitating dependency that wins votes for politicians while weakening society.</p>
<p>Those who see social problems as requiring high-minded people like themselves to come down from their Olympian heights to impose their superior wisdom on the rest of us, down in the valley, are behind such things as the hunger hoax, which is part of the larger poverty hoax.</p>
<p>We have now reached the point where the great majority of the people living below the official poverty level have such things as air conditioning, microwave ovens, either videocassette recorders or DVD players, and either cars or trucks.</p>
<p>Why are such people called “poor”? Because they meet the arbitrary criteria established by Washington bureaucrats. Depending on what criteria are used, you can have as much official poverty as you want, regardless of whether it bears any relationship to reality.</p>
<p>Those who believe in an expansive, nanny-state government need a large number of people in “poverty” to justify their programs. They also need a large number of people dependent on government to provide the votes needed to keep the big nanny state going.</p>
<p>Politicians, welfare-state bureaucrats, and others have incentives to create or perpetuate hoaxes, whether about poverty in general or hunger in particular. The high cost to taxpayers is exceeded by the even higher cost of lost opportunities for fulfillment by those who succumb to the lure of a stagnant life of dependency.</p>
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		<title>In Verizon Strike, Unions Protest Obamacare Law They Supported</title>
		<link>http://anotheridea.org/2011/08/in-verizon-strike-unions-protest-obamacare-law-they-supported/</link>
		<comments>http://anotheridea.org/2011/08/in-verizon-strike-unions-protest-obamacare-law-they-supported/#comments</comments>
		<pubDate>Fri, 19 Aug 2011 19:49:20 +0000</pubDate>
		<dc:creator>The Heritage Foundation</dc:creator>
				<category><![CDATA[economics]]></category>

		<guid isPermaLink="false">http://anotheridea.org/?p=3762</guid>
		<description><![CDATA[Two unions are on strike against Verizon Communications in protest of proposed company policies that the unions themselves helped bring about.  <a href="http://anotheridea.org/2011/08/in-verizon-strike-unions-protest-obamacare-law-they-supported/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p><img class="alignleft" title="by Lachlan Markay" src="http://anotheridea.org/images/headshots/markay_lachlan.jpg" alt="by Lachlan Markay" width="100" height="150" /></p>
<p>Two unions are on strike against Verizon Communications in protest of proposed company policies that the unions themselves helped bring about. The new Obamacare law, which both unions supported, dramatically hikes the cost of Verizon’s employee health care plan. Efforts to pass some of that cost on to employees have sparked outrage, and now a strike.<span id="more-3762"></span></p>
<div id="attachment_3761" class="wp-caption alignright" style="width: 310px"><a href="http://anotheridea.org/wp-content/uploads/2011/08/ibew-strike.jpg"><img class="size-medium wp-image-3761" title="IBEW Strike" src="http://anotheridea.org/wp-content/uploads/2011/08/ibew-strike-300x200.jpg" alt="" width="300" height="200" /></a><p class="wp-caption-text">IBEW workers strike to protest consequences of Obamacare.</p></div>
<p>Verizon’s health care plan is what President Obama commonly referred to as a “Cadillac plan” – expensive and luxurious – during his push to get health care legislation through Congress. The new law will levy a 40 percent tax on all health care plans with individual coverage worth more than $10,200 and family coverage worth more than $24,000.</p>
<p>Though the tax will not go into effect until 2018, “Verizon is required to account for this cost now,” according to company literature distributed to employees. “Accordingly, we will need to modify plan designs to avoid the impact of this tax.”</p>
<p>Verizon says it current pays $4 billion annually to cover nearly 900,000 employees’ health care. Its hundreds of thousands of unionized employees, though, pay nothing towards their health care premiums. The company estimates the “Cadillac tax” will add about $200 million to those annual costs. “The unions and our employees must work with the company to find ways to address these economic realities,” Verizon insists.</p>
<p>But far from working with the company, 45,000 Verizon employees from the International Brotherhood of Electrical Workers and the Communications Workers of America went on strike on August 7 in protest of proposed changes to their health care benefits. The CWA called those changes “outrageous.” The IBEW called them “retrogressive.”</p>
<p>But both the IBEW and the CWA, like the vast majority of Big Labor, supported President Obama’s push for health care “reform.” The two unions did their part to bring about a law that increased the health care costs of one of their members’ largest employers, and are now furious that they’re being asked to shoulder some of that burden.</p>
<p>True, both the IBEW and the CWA opposed the Cadillac tax specifically. But its eventual inclusion in the final bill did not stop them from supporting the legislation. “While the unions would like to see the measure stripped in that process,” the Associated Press reported, CWA President Larry Cohen “said he was not prepared to threaten to withdraw the CWA’s support for the overall health care measure if the tax stays in place.”</p>
<p>The IBEW, for its part, released a video on the eve of the House of Representatives’ passage of the bill imploring its members to support the legislation. The video shows IBEW President Edwin Hill telling union members that the bill “is one that I personally believe is in your best interests.”</p>
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		<title>Job Destruction Makes Us Richer</title>
		<link>http://anotheridea.org/2011/07/job-destruction-makes-us-richer/</link>
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		<pubDate>Sun, 31 Jul 2011 13:19:04 +0000</pubDate>
		<dc:creator>Townhall</dc:creator>
				<category><![CDATA[economics]]></category>

		<guid isPermaLink="false">http://anotheridea.org/?p=3752</guid>
		<description><![CDATA[Here&#8217;s what President Barack Obama said about our high rate of unemployment in an interview with NBC&#8217;s Ann Curry: &#8220;The other thing that happened, though &#8212; and this goes to the point you were just making &#8212; is there are &#8230; <a href="http://anotheridea.org/2011/07/job-destruction-makes-us-richer/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p><img class="alignleft" title="by Walter E. Williams" src="http://anotheridea.org/images/headshots/williams_walter.jpg" alt="by Walter E. Williams" />Here&#8217;s what President Barack Obama said about our high rate of unemployment in an interview with NBC&#8217;s Ann Curry: &#8220;The other thing that happened, though &#8212; and this goes to the point you were just making &#8212; is there are some structural issues with our economy, where a lot of businesses have learned to become much more efficient with a lot fewer workers,&#8221; adding that &#8220;you see it when you go to a bank and you use an ATM; you don&#8217;t go to a bank teller. Or you go to the airport and you&#8217;re using a kiosk instead of checking in at the gate.&#8221; The president&#8217;s statements suggest that he sees labor-saving technological innovation as a contributor to today&#8217;s high rate of unemployment. That&#8217;s unmitigated nonsense. Let&#8217;s see whether technological innovation causes unemployment.<span id="more-3752"></span></p>
<p>In 1790, farmers were 90 percent, out of a population of nearly 3 million, of the U.S. labor force. By 1900, only about 41 percent of our labor force was employed in agriculture. By 2008, fewer than 3 percent of Americans were employed in agriculture. Through labor-saving technological advances and machinery, our farmers are the world&#8217;s most productive. As a result, Americans are better off.</p>
<p>In 1970, the telecommunications industry employed 421,000 workers as switchboard operators, annually handling 9.8 billion long-distance calls. Today the telecommunications industry employs only 78,000 operators. That&#8217;s a tremendous 80 percent job loss. What happened? The answer: There have been spectacular labor-saving advances in telecommunications. Today more than 100 billion long-distance calls a year require only 78,000 switchboard operators. What&#8217;s more is the cost of making a long-distance call is a tiny fraction of what it was in 1970. Can we say these technological innovations made the nation worse off?</p>
<p>Professor Russell Roberts, my George Mason University colleague, gives other examples in his Wall Street Journal article (6/22/2011) &#8220;Obama vs. ATM&#8217;s: Why Technology Doesn&#8217;t Destroy Jobs.&#8221; He says that today just a couple of workers can manage the egg-laying operation of nearly a million chickens laying 240 million eggs a year, through a highly mechanized and computerized process. Thousands of toll collectors are replaced by E-ZPass machines. Autoworkers are replaced by robots. Fifty years ago, a typical textile worker operated five machines capable of running thread through a loom 100 times a minute. Today machines run six times as fast, and one worker can oversee 100 of them.</p>
<p>You say, &#8220;Williams, certain jobs are destroyed by technology.&#8221; You&#8217;re right, but many more are created. Think about it. If 90 percent of Americans still had been farmers in 1900, where in the world would we have gotten workers to produce all those goods that were not even heard of in 1790, such as telephones, steamships and oil wells? We need not go back that far. If there hadn&#8217;t been the kind of labor-saving technical innovation we&#8217;ve had since the 1950s &#8212; in the auto, construction, telephone industries and many others &#8212; where in the world would we have gotten workers to produce things that weren&#8217;t heard of in the &#8217;50s, such as desktop computers, cellphones, HDTVs, digital cameras, MRI machines, pharmaceuticals and myriad other goods and services?</p>
<p>What technological innovation does is reduce the value of some jobs, raise the value of others and create many more jobs. Some workers are made better off through greater employment opportunities. Others are made worse off by having to accept less attractive employment opportunities, an adjustment process that can be painful. Since technological progress makes goods and services cheaper, and of higher quality, to stand in its way, in the name of saving jobs, will make us a poorer nation. What we&#8217;re witnessing in our economy is what economic historian Joseph Schumpeter termed &#8220;creative destruction,&#8221; the process in which something new replaces something older.</p>
<p>By the way, we can always count upon an infinite number of potential jobs. The reason is that human wants are insatiable. People always want more of something. That want will create jobs for someone else.</p>
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		<title>Andrew Cuomo Limits Government</title>
		<link>http://anotheridea.org/2011/04/andrew-cuomo-limits-government/</link>
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		<pubDate>Mon, 04 Apr 2011 17:40:42 +0000</pubDate>
		<dc:creator>National Review Online</dc:creator>
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		<guid isPermaLink="false">http://anotheridea.org/?p=3749</guid>
		<description><![CDATA[The Democratic governor could teach Washington a thing or two about being adult. A newly elected governor just persuaded his dysfunctional state legislature to close a multi-billion-dollar deficit, keep taxes in check, and limit annual Medicaid spending. Surely, these must &#8230; <a href="http://anotheridea.org/2011/04/andrew-cuomo-limits-government/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p><img class="alignleft" title="by Deroy Murdock" src="http://anotheridea.org/images/headshots/murdock_deroy.jpg" alt="by Deroy Murdock" width="100" height="150" /><em><strong>The Democratic governor could teach Washington a thing or two about being adult.</strong></em></p>
<p>A newly elected governor just persuaded his dysfunctional state legislature to close a multi-billion-dollar deficit, keep taxes in check, and limit annual Medicaid spending. Surely, these must be the misdeeds of stone-hearted Scott Walker, Wisconsin’s GOP chief executive, or that ax-wielding alumnus of the Gingrich Congress, Governor John Kasich (R., Ohio).</p>
<p>Actually, these and other reforms are the handiwork of none other than Andrew Cuomo, New York’s Democratic governor. <span id="more-3749"></span>This son of liberal icon and former New York governor Mario Cuomo was President Clinton’s Housing secretary and once belonged by marriage to the Kennedy family.</p>
<p>Despite these sterling liberal credentials, Cuomo’s performance thus far has advanced the cause of limited government in the Empire State far more than did his past three predecessors &#8212; the hapless David Paterson, the pantsless Elliott Spitzer, and the clueless Republican, George Elmer Pataki.</p>
<p>“You can’t spend more money than you make,” Cuomo said on February 5, setting a tone for his administration. “There are only two groups of people who don’t understand this. No. 1 is the leadership of the New York State legislature. No. 2 are my daughters.”</p>
<p>Cuomo subsequently lived up to those encouraging words:</p>
<ul>
<li>Cuomo ignored the bellyaching of left-wing class warriors and demanded the expiration of a so-called “millionaire’s tax” that boosted the 6.85 percent income-tax rate to 7.85 percent for singles earning as little as $200,000 and 8.97 percent for those making at least $500,000.&nbsp;<br />
<blockquote><p>“The old way of solving the problem was continuing to raise taxes on people, and we just can’t do that anymore,” Cuomo told the <em>New York Post</em>. “The answer is going to have to be that we’re going to have to reduce government spending.”</p></blockquote>
</li>
<li>And reduce spending Cuomo did. His $132.5 billion budget is $3.4 billion lower than last year’s, an honest 2.5 percent cut.</li>
<li>Cuomo killed the spending formulae that were “marbleized throughout New York State laws,” as he put it. They automatically boosted annual Medicaid and education expenditures, demanding 13 percent hikes in those programs this year. Instead, Cuomo got Democrats and even the hospital-workers union to accept a 4 percent yearly spending cap on Medicaid and education.</li>
<li>Scrapping these formulae cut this year’s deficit by $10 billion and next year’s by $13 billion, and set spending growth on a flatter trajectory.</li>
<li>Cuomo secured permission to cut state agencies by 20 percent, close up to six prisons, and merge the state banking and finance departments, among other agencies.</li>
<li>The budget lets Cuomo squeeze $450 million in concessions from unions. If they balk, he may sack 10,000 government workers.</li>
<li>Cuomo’s proposed ceiling on medical-malpractice awards perished in negotiations, as did his wish for a 2 percent cap on property-tax hikes. Still, he accomplished all of this without increasing state borrowing.</li>
</ul>
<p><em>The New York Post</em> reacted with a two-word headline: “PIGS FLY.”</p>
<p>Cuomo’s seriousness jarringly contrasts with Washington, D.C., where unseriousness is a governing philosophy.</p>
<p>Under Cuomo’s leadership, Albany passed its first on-time budget in five years.</p>
<p>Under Nancy Pelosi and Harry Reid’s reign, conversely, last year’s Democratic Congress failed to adopt a budget. Democrats and Republicans now finance the federal government with two- and three-week continuing resolutions &#8212; the fiscal equivalent of Scotch tape and shoelaces.</p>
<p>Congressional Republican leaders have attacked the federal budget with a butter knife, rather than a meat cleaver. They have offered a mere $61 billion budget reduction, not the $100 billion they promised to slice from this year’s budget. They largely have ignored Sen. Tom Coburn’s (R., Okla.) discovery of $82.4 billion in abandoned accounts that have grown moldy in federal coffers since at least 2005. Rep. David Schweikert’s (R., Ariz.) Forgotten Funds Act would channel these dormant dollars into deficit reduction.</p>
<p>Also, the Government Accountability Office recently concluded that Washington really is a giant Department of Redundancy Department. It identified perhaps $100 billion in overlapping projects, such as 47 job-training programs, 82 teacher-quality initiatives, and 2,100 federal data centers. Regardless, Republicans have failed to squeeze at least another $39 billion from this Mt. Whitney of waste to keep a key promise that helped them secure the House of Representatives last November.</p>
<p>Even less inspiring, Democrats are trimming the budget with an emery board. The $6 billion they agreed to cut in March shrank 100 percent of Obama’s $3.7 trillion budget way, way down to 99.84 percent of the original. Cuomo’s $10 billion state-budget cut is one-and-a-half times what Washington Democrats previously agreed to remove from the entire federal budget.</p>
<p>Meanwhile, Senate Democratic leader Harry Reid of Nevada moaned that “mean-spirited” Republicans would end federal subsidies for Elko, Nevada’s Cowboy Poetry Festival. Reid argued on the Senate floor on March 8 that, absent federal funding, “the tens of thousands of people who come there every year, would not exist.” This is frightfully close to Nero fiddling amid the flames.</p>
<p>Obama, Reid, and Washington’s other kindergartners should ride Amtrak to Albany and let an adult named Andrew Cuomo show them how it’s done.</p>
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		<title>Obama&#8217;s Badger State Blues</title>
		<link>http://anotheridea.org/2011/02/obamas-badger-state-blues/</link>
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		<pubDate>Thu, 24 Feb 2011 17:18:44 +0000</pubDate>
		<dc:creator>Wall Street Journal</dc:creator>
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		<description><![CDATA[A union defeat in Wisconsin could hurt the president&#8217;s re-election bid. During the past eight days, thousands of Wisconsin teachers walked out of classrooms, shutting down schools. Tens of thousands of public employees staged an apparent wildcat strike, flooding Wisconsin&#8217;s &#8230; <a href="http://anotheridea.org/2011/02/obamas-badger-state-blues/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p><img class="alignleft" title="by Karl Rove" src="http://anotheridea.org/images/headshots/rove_karl.jpg" alt="by Karl Rove" width="100" height="150" /><br />
<em><strong>A union defeat in Wisconsin could hurt the president&#8217;s re-election bid.</strong></em><br />
During the past eight days, thousands of Wisconsin teachers walked out of classrooms, shutting down schools. Tens of thousands of public employees staged an apparent wildcat strike, flooding Wisconsin&#8217;s state capital in a round-the-clock protest. And Democratic legislators engaged in a most undemocratic action, fleeing Wisconsin to deny the state Senate the supermajority required for a quorum.</p>
<p>They did this to oppose Wisconsin Gov. Scott Walker&#8217;s efforts to require public employees to increase contributions to their retirement and health-insurance plans, and to rein in their collective-bargaining power to negotiate for higher benefits.<span id="more-3737"></span></p>
<p>President Barack Obama has joined labor&#8217;s attacks, criticizing Mr. Walker&#8217;s proposals as &#8220;an assault on unions.&#8221; According to news reports, Mr. Obama&#8217;s personal political machine, Organizing for America, was thrust into the battle, providing buses to transport striking government workers to the protests, mobilizing phone banks, and rallying protesters from nearby states.</p>
<p>Why is the president trying to bully the Wisconsin governor? After all, Arizona, Utah, Arkansas, Louisiana, Mississippi, Alabama and West Virginia are among the states to explicitly prohibit collective bargaining for public employees, which is far beyond what Mr. Walker is seeking. The answer is found in four digits: 2012.</p>
<p>Unlike those states, Wisconsin is a 2012 battleground. Gerald McEntee, president of the American Federation of State, County and Municipal Employees, told a reporter from this newspaper last week that a union defeat in Wisconsin &#8220;can put [Mr. Obama] in some danger&#8221; of losing the next election. Labor spent $400 million to elect Mr. Obama in 2008: Mr. McEntee was sending a not-so-subtle message that unions would be unable to spend so generously on his behalf in 2012 if they continue hemorrhaging members and dues money.</p>
<p>And hemorrhage they have. According to the Bureau of Labor Statistics (BLS), last year alone 612,000 U.S. workers dropped their union memberships, each representing as much as $500 in lost dues. While labor is still powerful, its decline has been precipitous among private- sector workers. According to the BLS, just 6.9% of private-sector workers (7.1 million) are unionized, while 36.2% of public- sector workers (7.6 million) are. And the number of public-sector union members is rising.</p>
<p>The growth of public- employee unions has paid off handsomely for some. The BLS reports the average annual wage for a state-government employee is now $48,742, but $45,155 for a worker in the private sector. What&#8217;s more, the Bureau says the cost of benefits for state and local government workers has risen 50% more than those for private-sector employees since 2001.</p>
<p>This matters to taxpayers. Public-employee unions push to increase their numbers and get more benefits by expanding government&#8217;s cost and size. This often puts them at odds with the citizens who pay the bills.</p>
<p>Union demands have helped produce an estimated $3.5 trillion in unfunded liabilities for state and local government pension and health-care plans. They&#8217;ve also led to personnel practices that tie the hands of local elected officials, often resulting in perverse outcomes. For example, union insistence on &#8220;Last In, First Out&#8221; often means the best and brightest teachers are let go when districts downsize or schools close.</p>
<p>Wisconsin&#8217;s governor knows this firsthand. In 2003, during his first term as Milwaukee county executive, Mr. Walker faced a huge budget deficit. He could have either raised already astronomical property taxes or found savings in personnel costs, the biggest part of his budget. Collective bargaining tied his hands, and once unions refused concessions his only option was to fire people. He reduced the county government&#8217;s work force by 20%.</p>
<p>Seared by this episode, Mr. Walker now wants statewide local governments and school districts to have the management tools to avoid layoffs. Hence his proposals to limit collective-bargaining rights for benefits and to require public approval of pay raises greater than inflation.</p>
<p>Fortunately for Mr. Walker and others contemplating his course, there&#8217;s a lesson in the experience of Indiana Gov. Mitch Daniels. Upon entering office in 2005, Mr. Daniels signed an executive order ending collective bargaining for state workers. This and other controversial actions caused his approval ratings to fall into the 30% range.</p>
<p>But by re-election time, Mr. Daniels&#8217;s decisions had paid off. The state&#8217;s finances were in good shape and Indiana&#8217;s economy was doing better than its neighbors&#8217;. While Mr. Obama was carrying the state in 2008, Mr. Daniels won a second term with 58%, proving that the right policies are often the right politics.</p>
<p>Events in Wisconsin have offered a vivid contrast between two chief executives. One (Mr. Walker) is taking meaningful steps to achieve fiscal balance. The other (Mr. Obama) is encouraging public employees to violate their contracts while his policies cause record deficits and reckless spending.</p>
<p>Let&#8217;s hope the differences between the two won&#8217;t be lost on Badger State residents or the rest of America.</p>
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		<title>Green jobs company endorsed by Obama and Biden squandered $535 million in stimulus money</title>
		<link>http://anotheridea.org/2011/02/green-jobs-company-endorsed-by-obama-and-biden-squandered-535-million-in-stimulus-money/</link>
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		<pubDate>Tue, 22 Feb 2011 16:20:12 +0000</pubDate>
		<dc:creator>Daily Caller</dc:creator>
				<category><![CDATA[economics]]></category>

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		<description><![CDATA[Solyndra, Inc. was supposed to have showcased the effectiveness of the Obama administration’s stimulus and green jobs initiatives, but instead it has become the center of congressional attention for waste, fraud and abuse of such programs. <a href="http://anotheridea.org/2011/02/green-jobs-company-endorsed-by-obama-and-biden-squandered-535-million-in-stimulus-money/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p><img class="alignleft" title="by John Rossomando" src="http://anotheridea.org/images/headshots/rossomando_john.jpg" alt="by John Rossomando" width="100" height="150" />Solyndra, Inc. was supposed to have showcased the effectiveness of the Obama administration’s stimulus and green jobs initiatives, but instead it has become the center of congressional attention for waste, fraud and abuse of such programs.</p>
<p>According to a Feb. 17 letter signed by Energy and Commerce Committee Chairman Fred Upton, Michigan Republican, and Oversight Subcommittee Chairman Cliff Stearns, Florida Republican, to Energy Secretary Steven Chu, the Fremont, Calif.-based solar panel manufacturer squandered $535 million of stimulus money.<span id="more-3733"></span></p>
<p>The company became the first recipient of an Energy Department loan guarantee under the stimulus in March 2009, which was intended to “finance construction of the first phase of the company’s new manufacturing facility” for photovoltaic solar panels.</p>
<p>The Energy Department estimated in a March 20, 2009 press release that the loan guarantee would create 3,000 construction jobs and a further 1,000 jobs after the plant opened.</p>
<p>And President Barack Obama and Vice President Joseph Biden each personally showcased Solyndra as an example of how stimulus dollars were at work creating jobs, during appearances at the company over the course of the following year.</p>
<p>Biden personally announced the closure of Solyndra’s $535 million loan guarantee in a Sept. 9, 2009 speech, delivered via closed-circuit television, on the occasion of the groundbreaking of the plant.</p>
<p>The vice president justified the federal government’s investment in Solyndra in front of employees and other dignitaries, including Secretary Chu and former Calif. Gov. Arnold Schwartzenegger, saying the jobs the company intended to create would “serve as a foundation for a stronger American economy.”</p>
<p>“These jobs are the jobs that are going to define the 21st century that will allow America to compete and to lead like we did in the 20th century,” Biden said.</p>
<p>According to Biden’s speech, the $535 million loan guarantee was a smaller part of the $30 billion of stimulus money the administration planned to spend as part of its Green Jobs Initiative.</p>
<p>Obama made similar claims in a May 26, 2010 speech at the plant, but the 1,000 jobs he and Biden touted in their respective speeches failed to materialize.</p>
<p>Instead, Solyndra announced on Nov. 3 it planned to postpone expanding the plant, which cost the taxpayers $390.5 million, or 73 percent of the total loan guarantee, according to the Wall Street Journal.</p>
<p>It also announced that it no longer planned to hire the 1,000 workers that Obama and Biden had touted in their speeches and that it planned to close one of its older factories and planned to lay-off 135 temporary or contract workers and 40 full-time employees.</p>
<p>A closer look at the company shows it has never turned a profit since it was founded in 2005, according to its Securities and Exchange Commission (SEC) filings.</p>
<p>And Solyndra’s auditor declared that “the company has suffered recurring losses, negative cash flows since inception and has a net stockholders’ deficit that, among other factors, [that] raise substantial doubt about its ability to continue as a growing concern” in a March 2010 amendment to its SEC registration statement.</p>
<p>“While we understand the purpose of the Loan Guarantee Program is to help private companies engaging in clean energy products to obtain financing by providing loan guarantees, subsequent events raise questions about Solyndra was the right candidate to receive a loan guarantee in excess of half a billion dollars,” Upton and Stearns wrote.</p>
<p>A June 2010 Wall Street Journal report indicating that Solyndra’s majority owner, Oklahoma billionaire George Kaiser, was a major fundraiser for the 2008 Obama-Biden campaign has stimulus opponents such as Citizens Against Government Waste crying foul.</p>
<p>“We have said this is pork-barrel spending since the beginning,” Leslie Page, spokeswoman for Citizens Against Government Waste, told The Daily Caller. “And the one thing about pork is its corruptive influences.”</p>
<p>Kaiser flatly denied he had anything to do with the loan guarantee when he was asked by the Journal, but Page nonetheless sees cronyism in the loan guarantee because personal involvement of the president and vice president in the project.</p>
<p>“This seems like a quid pro quo, and it raises a lot of questions,” Page said.</p>
<p>Other stimulus critics say Solyndra shows just how flawed the program has been from the beginning and how it has failed to create jobs and needs further oversight.</p>
<p>“It would have been a lot more effective to put money into the hands of the private sector,” said Alex Cortes, chairman of the Restore the Dream Foundation and DefundIt.org. “This is just another example of the failure of the stimulus.”</p>
<p>Solyndra is just the tip of the iceberg, according to Cortes, who plans to raise awareness of other stimulus pork projects such as an approximately $800,000 television ad campaign in New York aimed at promoting healthy eating habits.</p>
<p>“While that’s all well and good … it doesn’t do anything to create jobs,” Cortes said.</p>
<p>And Mattie Corrao, government affairs manager with Americans for Tax Reform, said the Solyndra loan shows how hollow Obama’s promise to keep close track over how stimulus money has been spent has been.</p>
<p>“[The administration] is trying to pretend we’re creating jobs and hoping the taxpayers are dumb enough and blind enough to believe the lie,” Corrao said. “But after two years of unemployment about 9 percent, people aren’t going to believe it anymore.”</p>
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