Video: DWS flummoxed on public-equity layoffs in auto industry
posted at 12:41 pm on May 25, 2012 by Ed Morrissey
It’s fair to say that The Blaze and CNN contributor Will Cain wins the Internet today. When pressed on CNN to answer charges of hypocrisy for Barack Obama’s attack on Mitt Romney for his record at Bain Capital as a private-equity executive while actively fundraising from the same industry — in fact, fundraising from the same company, with a Bain Capital exec as a bundler — DNC chair Debbie Wasserman Schultz insists that the comparison isn’t just apples to oranges, it’s “apples to coconuts.” Taking money from private-equity firms isn’t at all the same as voting for someone who thinks that rescuing companies involves laying off a whole bunch of people.
That’s where Will makes the real “apples to apples” comparison, which Wasserman Schultz refuses to answer, via Daniel Halper at The Weekly Standard:
Yet a little later in the interview she was stumped. “Let’s compare apples to apples,” the other CNN host said to the DNC chair. “It seems to me the criticism you’re offering is that Mitt Romney went into businesses and laid people off. But wouldn’t the apples to apples comparison be that’s exactly what Barack Obama did when he touts the auto industry as a feather in his cap, didn’t the federal government and Barack Obama go in and layoff thousands of autoworkers to save that industry?”
Wasserman Schultz then ducked by changing the topic.
She didn’t just duck — she explicitly refused to answer Will’s question. It’s entirely on point, though, especially after bailout IG Neil Barofsky reported that many of the dealership closures and layoffs were unnecessary, and the decisions to close them weren’t based on sound economics, either, at least in GM’s case. In a private-equity arrangement, these kinds of problems would have investors voting with their feet. In public-equity decisions, such as the GM case, there is no such feedback loop.
Marc Thiessen made the same comparison yesterday in the Washington Post:
Since taking office, Obama has invested billions of taxpayer dollars in private businesses, including as part of his stimulus spending bill. Many of those investments have turned out to be unmitigated disasters — leaving in their wake bankruptcies, layoffs, criminal investigations and taxpayers on the hook for billions. Consider just a few examples of Obama’s public equity failures:
● Raser Technologies. In 2010, the Obama administration gave Raser a $33 million taxpayer-funded grant to build a power plant in Beaver Creek, Utah. According to the Wall Street Journal, after burning through our tax dollars, the company filed for bankruptcy protection in 2012. The plant now has fewer than 10 employees, and Raser owes $1.5 million in back taxes.
● ECOtality. The Obama administration gave ECOtality $126.2 million in taxpayer money in 2009 for, among other things, the installation of 14,000 electric car chargers in five states. Obama even hosted the company’s president, Don Karner, in the first lady’s box during the 2010 State of the Union address as an example of a stimulus success story. According to ECOtality’s own SEC filings, the company has since incurred more than $45 million in losses and has told the federal government, “We may not achieve or sustain profitability on a quarterly or annual basis in the future.”
Worse, according to CBS News the company is “under investigation for insider trading,” and Karner has been subpoenaed “for any and all documentation surrounding the public announcement of the first Department of Energy grant to the company.”
● First Solar. The Obama administration provided First Solar with more than $3 billion in loan guarantees for power plants in Arizona and California. According to aBloomberg Businessweek report last week, the company “fell to a record low in Nasdaq Stock Market trading May 4 after reporting $401 million in restructuring costs tied to firing 30 percent of its workforce.”
No wonder DWS won’t answer the question.