Green-jobs subsidies bust: $21 billion, 28,854 jobs

posted at 10:41 am on October 11, 2012 by Ed Morrissey

Remember this moment from the Romney-Obama debate last week?  Mitt Romney hammered Barack Obama on green-energy subsidies and the futility of government intervention designed to distort markets:

ROMNEY: … to oil, to tax breaks, then companies going overseas. So let’s go through them one by one.

First of all, the Department of Energy has said the tax break for oil companies is $2.8 billion a year. And it’s actually an accounting treatment, as you know, that’s been in place for a hundred years. Now…

OBAMA: It’s time to end it.

ROMNEY: And in one year, you provided $90 billion in breaks to the green energy world.

Now, I like green energy as well, but that’s about 50 years’ worth of what oil and gas receives. And you say Exxon and Mobil. Actually, this $2.8 billion goes largely to small companies, to drilling operators and so forth.

ROMNEY: But, you know, if we get that tax rate from 35 percent down to 25 percent, why that $2.8 billion is on the table. Of course it’s on the table. That’s probably not going to survive you get that rate down to 25 percent.

But don’t forget, you put $90 billion, like 50 years’ worth of breaks, into — into solar and wind, to Solyndra and Fisker and Tester and Ener1. I mean, I had a friend who said you don’t just pick the winners and losers, you pick the losers, all right? So this — this is not — this is not the kind of policy you want to have if you want to get America energy secure.

The second topic, which is you said you get a deduction for taking a plant overseas. Look, I’ve been in business for 25 years. I have no idea what you’re talking about. I maybe need to get a new accountant.

Today, Bloomberg Businessweek contributor Ira Boudway takes a look at the direct-subsidy program at the Department of Energy, funded with $21 billion in Obama stimulus cash thus far, and the jobs created by the program.  After noting the paucity of independent data on this question, Boudway simply indicts the Obama administration with DoE’s own figures:

In 2008 candidate Barack Obama promised to create 5 million green jobs. He laid out a plan to invest $150 billion over 10 years that would advance a clean-energy economy built around biofuels, hybrid cars, low-emission coal plants, and renewable sources such as solar and wind. How many has he actually created? ….

The American Recovery and Reinvestment Act of 2009 set aside $90 billion in renewable energy grants and loans for a grab bag of thousands of projects—wind farms, solar installations, natural gas fueling stations, biofuel research, and a $5 billion weatherization project for low-income homes. Digging into the public records of the $21 billion spent so far through 19 U.S. Department of Energy programs reveals 3,960 projects that employ 28,854 people.

That’s not 5 million.

No kidding.  It cost almost $728,000 per job in subsidies at that rate of job creation.  That’s an absurd return on investment, a figure that couldn’t possibly be regained even through fully confiscating the income taxes of the people who hold those jobs over a 40-year work cycle.  It’s that absurd ROI which made these firms losers from the get-go, and why only the Obama administration was feckless enough to sink its money — excuse me our money — into those failing ventures, such as Solyndra.

Speaking of which, the IRS has asked a federal judge to intervene to stop Solyndra’s bankruptcy plan.  They claim that the company is nothing more than a tax dodge for its major investors — including 2008 Obama bundler George Kaiser:

“The undeniable conclusion is that tax benefits drive this plan,” attorneys for the IRS wrote in a bankruptcy pleading. …

What’s more, government attorneys said that as far back as 2010, Solyndra owners had “planned meticulously” to be able to use Solyndra’s net operating losses to offset future tax liabilities.

“The only reason for the shell corporation to exist post-confirmation is to enable its owners to exploit these tax attributes, which would be lost in liquidation,” the IRS argued in court papers.

One owner valued the so-called tax attributes at $150 million, dwarfing the $7 million to $8 million set aside by the reorganization plan for unsecured creditors, according to the government’s objection, which was filed by the Justice Department on behalf of the IRS.

Under Solyndra’s reorganization plan, two big investors in the company, Madrone Partners LP and Argonaut Ventures, together would own nearly all of a shell company formed in the wake of Solyndra’s bankruptcy reorganization.

The IRS specifically cites Kaiser in its filing:

In one email, dated Dec. 7, 2010, Steve Mitchell, a managing director at Argonaut who served on Solyndra’s board, told attorneys that there was a “decent likelihood” that Solyndra would go bankrupt within 10 days.

Mr. Mitchell devoted much of the rest of the email to “the need to preserve an estimated $750 million of NOLs in Solyndra,” referring to net operating losses, according to the court filing.

“We need to discuss appropriate course of action in the event of filing and trustee appointment,” Mr. Mitchell told the attorneys. “The company has a significant NOL, potentially as high [as] $750 million, and George [Kaiser] has a high interest in understanding any manner in which we can preserve the NOLs.”

So as it turns out, not only was the government picking losers … that may have been the entire point, at least for Obama’s bundler.


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The Libs are always whining about tax money being misspent. The standard line is how the US spends money on wars rather than schools, or healthcare, or food for the poor.

Let me ask a question — Just how many meals could you buy with $21 billion?

bartbeast on October 11, 2012 at 10:46 AM

It cost almost $728,000 per job in subsidies at that rate of job creation.

If he really wanted to goose the economy, he could have handed that money directly to the American people and let them spend it as they wish.

But of course, tyrants don’t do that sort of thing.

UltimateBob on October 11, 2012 at 10:46 AM

All this tax loophole stuff is just unfair to middle class Americans. Why doesn’t this administration adopt the Longoria Rule? It’s the only really fair and just tax plan.

bloggless on October 11, 2012 at 10:47 AM

So as it turns out, not only was the government picking losers … that may have been the entire point, at least for Obama’s bundler.

I nominate this statement for the biggest “Well Duh” award of the year…

SWalker on October 11, 2012 at 10:48 AM

Another day … another impeachable offense, and the election is still going to be “close?”

Thanks LSM …

ShainS on October 11, 2012 at 10:48 AM

“Green-jobs subsidies bust: $21 billion, 28,854 jobs”

How many are phony green jobs like garbage pickup or janitor?

lilium479 on October 11, 2012 at 10:50 AM

I have been saying all along Obama never intended the ‘Stimulus Bill’ to help the economy; it was bailout for Democratic states and payoffs to his cronies. Obama figured the economy would recover on it’s own, and he’d use this to line Democratic pockets for the future.

A huge fricken slush fund.

I’d be VERY interested in seeing how much these bundlers donate back to the Democratic party of the the millions of tax payer dollars that were handed to them as part of this scheme.

manofaiki on October 11, 2012 at 10:50 AM

It sure sounds like George Kaiser doesn’t want to pay his “fair share.”

magicbeans on October 11, 2012 at 10:51 AM

Look, I’ve been in business for 25 years. I have no idea what you’re talking about.

This may have been his best line of the night.

Washington Nearsider on October 11, 2012 at 10:51 AM

But don’t forget, you put $90 billion, like 50 years’ worth of breaks, into — into solar and wind, to Solyndra and Fisker and Tester and Ener1. I mean, I had a friend who said you don’t just pick the winners and losers, you pick the losers,

that was a sharp blow by Mitt on that point to frame the green energy pork outlay within the context of oil subsidies. +++

ted c on October 11, 2012 at 10:53 AM

This may have been his best line of the night.

Washington Nearsider on October 11, 2012 at 10:51 AM

It was a good one, but Romney had too many to choose from. I loved that he nailed Obama on all the money he p-ssed away on now defunct green energy companies. That $90 billion figure was damning.

Doughboy on October 11, 2012 at 10:54 AM

Come Nov 7th, the garbage in the WH will be swept back into the sewers of Chicago…

RedInMD on October 11, 2012 at 10:54 AM

How many of those 28K green jobs are directly with the government (DOE, EPA and God knows what else) and how many are just government-financed grants for projects overseen by the government? I doubt if private enterprise (unless its a bunch of neo-hippies with more political connections than sense) would invest in what is essentially medieval technologies that perform as efficiently as medieval technologies might be expected to. What next? the abolition of digital clocks and the financing of sundial technology?

Scriptor on October 11, 2012 at 10:55 AM

Digging into the public records of the $21 billion spent so far through 19 U.S. Department of Energy programs reveals 3,960 projects that employ 28,854 people.

That’s not 5 million.

weren’t these guys touting their skills at math????? Looks like math is hard HARD yo!

ted c on October 11, 2012 at 10:58 AM

would invest in what is essentially medieval technologies that perform as efficiently as medieval technologies might be expected to. What next? the abolition of digital clocks and the financing of sundial technology?

Scriptor on October 11, 2012 at 10:55 AM

No kidding, anyone who has ever done the math (I know maff sure is hard) knows that these “Green Energy” solutions cannot provide the level of energy production required to sustain modern society.

SWalker on October 11, 2012 at 10:59 AM

21 billion divided by roughly 29k = about 724,000 per job. Obviously the implication of this particular data point is that we should just pay existing companies $724,000 per full time hire and the economy would go gang busters since most jobs being created nowadays are part time to begin with.

-Krugman

abobo on October 11, 2012 at 11:02 AM

Whoo boy !
Paul vs. the Stimulus Chief tonight !
Whoo boy !!

pambi on October 11, 2012 at 11:02 AM

After Obama’s defeat in the election next month, it will finally, FINALLY be “safe” for journalists to practice actual journalism on his thoroughly corrupt administration. I bet we will get an avalanche of stories of dirty dealing at the highest levels. Probably a lot worse than we suspect, even at our most cynical.

jwolf on October 11, 2012 at 11:03 AM

All this tax loophole stuff is just unfair to middle class Americans. Why doesn’t this administration adopt the Longoria Rule? It’s the only really fair and just tax plan.

bloggless on October 11, 2012 at 10:47 AM

It did. It’s called “Obama plan”. He *is* the real eye candy, remember?

Archivarix on October 11, 2012 at 11:04 AM

Green-jobs subsidies bust: $21 billion, 28,854 jobs

Dems:…what?…what?…what about it?… that’s a good value!…don’t believe me?…ask Secretary Chew Choo!

KOOLAID2 on October 11, 2012 at 11:04 AM

Ed, the article reads as if you’re confusing Solyndra and it’s post-confirmation existence, and those are two completely different companies.

It’s not Solyndra that the IRS is alleging primarily organized with tax motivations, it’s the reorganization plan for the new-Solyndra. It looks as if the IRS is complaining that the proposed application of tax law in this instance would allow new investors to take advantage of tax shelter created by the old company (and the old investors). The old investors already have written off their investment, so the IRS seesm to be essentially claiming there are going to be two shelter events when there should only be one, (if I’m reading this properly).

Of course old-Solyndra investors “planned meticulously” to use shelter created by losses at Solyndra; they would be remiss if they hadn’t done so, and maybe even liable to the shareholders for mismanagement. The IRS is saying, though, that those tax losses should die with the bankruptcy filing and not survive to be used by new investors in new-Solyndra (who have no economic interest n the old losses). I agree with them, if I understand properly whats happening here, but I sure don’t blame the old investors or the new investors (whomever is behind the scheme) for trying to keep the shell company out of the bankruptcy filing (so the losses can be used).

MTF on October 11, 2012 at 11:05 AM

So using our money for a sham to benefit his buds. Now that is an impeachable offense. Do you mean to tell me that Obama’s long arm of the law, the IRS, is revolting and staging a coup? Think about it. Their employee’s taxes are going up too!

skeeterbite on October 11, 2012 at 11:12 AM

http://www.washingtontimes.com/news/2012/oct/10/kelly-libya-security-cut-while-vienna-embassy-gain/?page=all#pagebreak

No money for security staff nor the DC3 plane in Libya, but Barry/Hillary bought a fleet of Volts for the Vienna embassy and bought a $100000 charging station.

The most inept, corrupt and dishonest administration in history.

bayview on October 11, 2012 at 11:13 AM

Boy, this is REALLY an abuse of the net-operating-losses rules.

rockmom on October 11, 2012 at 11:16 AM

Speaking of which, the IRS has asked a federal judge to intervene to stop Solyndra’s bankruptcy plan. They claim that the company is nothing more than a tax dodge for its major investors — including 2008 Obama bundler George Kaiser:

First the State Department throws the White House under the bus on Wednesday on Benghazi, before the White House could do it to them, and now the IRS launches a probe of the poster child for green energy crony capitalism three weeks before Election Day. Team Obama has to be spitting fire over getting hit not just from Team Romney and their supporters, but from sources they think should always be on their side (toss in Piers Morgan’s lambasting of DWS over Benghazi and Frontline’s interview of one of Obama’s schoolmates, who is wondering how this goofball ever became president, and even all of the regular stalwarts in the broadcast media like CNN and PBS have been letting the White House down).

jon1979 on October 11, 2012 at 11:16 AM

http://www.washingtontimes.com/news/2012/oct/10/kelly-libya-security-cut-while-vienna-embassy-gain/?page=all#pagebreak

No money for security staff nor the DC3 plane in Libya, but Barry/Hillary bought a fleet of Volts for the Vienna embassy and bought a $100000 charging station.

The most inept, corrupt and dishonest administration in history.

bayview on October 11, 2012 at 11:13 AM

Don’t forget, this administration was able to find the funding to provide Valerie Jarrett with a full Secret Service detail.

SWalker on October 11, 2012 at 11:17 AM

After Obama’s defeat in the election next month, it will finally, FINALLY be “safe” for journalists to practice actual journalism on his thoroughly corrupt administration. I bet we will get an avalanche of stories of dirty dealing at the highest levels. Probably a lot worse than we suspect, even at our most cynical.

jwolf on October 11, 2012 at 11:03 AM

Yea, right

skeeterbite on October 11, 2012 at 11:17 AM

Please, Paul Ryan, tell the Solyndra story tonight!

PattyJ on October 11, 2012 at 11:22 AM

After Obama’s defeat in the election next month, it will finally, FINALLY be “safe” for journalists to practice actual journalism on his thoroughly corrupt administration.
jwolf on October 11, 2012 at 11:03 AM

You can dream, but the media will be spending all their time, resources and energy to attack the new administration.

bayview on October 11, 2012 at 11:24 AM

When the government has to dump money into any industry be assured it is a loser business. If the investment was so good free enterprise would invest and own the business. Government is last gasp effort to get a business going because politicians could give a crap about the survival, after all it is our money not theirs. Their only concern is ONLY about getting a vote and payoff to their political contributors.

Wade on October 11, 2012 at 11:26 AM

After Obama’s defeat in the election next month, it will finally, FINALLY be “safe” for journalists to practice actual journalism on his thoroughly corrupt administration.
jwolf on October 11, 2012 at 11:03 AM

What are you smoking?

Wade on October 11, 2012 at 11:27 AM

$728,000 per job in subsidies at that rate of job creation.

Guess we should thank our lucky stars that only 675,000 were created. The promised 5 million would have cost $3,640,000,000,000. But what’s a trillion dollars to Barack Obama? Chump change.

smellthecoffee on October 11, 2012 at 11:28 AM

Wouldn’t it have been cheaper just to GIVE those 30,000 people a million dollars each? LOL! /sarc

kcd on October 11, 2012 at 11:29 AM

The Libs are always whining about tax money being misspent. The standard line is how the US spends money on wars rather than schools, or healthcare, or food for the poor.

Let me ask a question — Just how many meals could you buy with $21 billion?

bartbeast on October 11, 2012 at 10:46 AM

It’s amazing that the larger dimension of the solar energy subsidies are completely overlooked by the right. But then again, most of Romney’s campaign rests on oversimplifications dependent on voter ignorance. This isn’t about the US government picking winners or losers- it’s about China killing off American companies in a manufacturing sector it’s determined to dominate.

http://www.humanevents.com/2012/02/24/chinas-trade-war-bankrupted-solyndra/

http://www.forbes.com/sites/simonmontlake/2012/07/25/chinese-solar-manufacturers-face-blowback-as-trade-war-escalates/

bayam on October 11, 2012 at 11:30 AM

When the government has to dump money into any industry be assured it is a loser business. If the investment was so good free enterprise would invest and own the business.
Wade on October 11, 2012 at 11:26 AM

BINGO! Give this man a prize!!

kcd on October 11, 2012 at 11:37 AM

I’m thinking that Mitt has plenty of ammo he can use for the next two debates that the public at large is still unfamiliar with. Obama has pretty much spent all his. This may indeed be a bloodbath

steel guy on October 11, 2012 at 11:44 AM

This is right up there with the “Saving” of the auto industry. By wiping out the investors and the non-union employees pensions/healthcare and leaving the union members at full pay and benefits Obama “Saved” the auto industry. The tax payers are on the hook for about $50 billion dollars that will never be repaid. Four more years of this economic genius in the WH and we will all be broke!

inspectorudy on October 11, 2012 at 11:47 AM

…Frontline’s interview of one of Obama’s schoolmates, who is wondering how this goofball ever became president…

jon1979 on October 11, 2012 at 11:16 AM

What? Where was this clown in 2008? For all the stories about where Obama went to school, and the lack of schoolmates coming forward, I thought he was privately tutored.

Mitoch55 on October 11, 2012 at 11:54 AM

Just how many of these 28,584 job are already gone or will be gone when all these fly-by-night companies Titanic?

MaiDee on October 11, 2012 at 12:02 PM

This is why I always vote democrat. I couldn’t care less about wasted wealth or opportunity.

tom daschle concerned on October 11, 2012 at 12:04 PM

I think 0bama is playing SimCity with the United States.

freedomfirst on October 11, 2012 at 12:11 PM

When fighting our local proposed solar project, we came up with a list of names of principals that included the son of a US senator(D), intimate friend of the mayor of a very large CA city(D), and numerous Dem operatives from way back. But no news organization was interested.

In fact, when I told people other than locals, the usual response was laughter.

jodetoad on October 11, 2012 at 12:11 PM

MTF on October 11, 2012 at 11:05 AM

Isn’t the banking of pre-bankruptcy losses for future use by the entity that emerges from bankruptcy exactly the special deal that the IRS allowed Government Motors and the greedy UAW? Is Solyndra just asking for the same deal?

slickwillie2001 on October 11, 2012 at 12:14 PM

Come Nov 7th, the garbage in the WH will be swept back into the sewers of Chicago…

RedInMD on October 11, 2012 at 10:54 AM

Keep in mind teh one will be in office until January. He’ll have plenty of time to continue his miscreant behavior.

I don’t believe the idea of impeachment should be dismissed. But there I go, being all 0DS.

freedomfirst on October 11, 2012 at 12:15 PM

the IRS has asked a federal judge to intervene to stop Solyndra’s bankruptcy plan.

I question the timing. I suspect that not enough of the money given to Solyndra has shown up in the Obama bank accounts, either personal or campaign related, and by god, they’re gonna get what they’re owed.

“I don’t get my cash, you don’t get your tax breaks.”

Most read book by Obama? “How to be President”, by Robert Mugabe.

BobMbx on October 11, 2012 at 12:40 PM

They claim that the company is nothing more than a tax dodge for its major investors — including 2008 Obama bundler George Kaiser:

You can take the crook out of Chicago, but you can’t take Chicago out of the crook.

Any bets Holder will sink this IRS case?

George Kaiser also got Michelle her $100k job at the hospital in Chicago. After SENATOR Obama got the hospital a $1 million grant (to dump poor/uninsured patients on other hospitals), Michelle’s salary went to $300k a year.

GarandFan on October 11, 2012 at 12:48 PM

You’re fired” — Big Bird

Schadenfreude on October 11, 2012 at 1:39 PM

slickwillie2001 on October 11, 2012 at 12:14 PM

Probably, though I don’t know much about that plan. I confess I lost interest (in disgust) after the court OK’d the government plan to steal from the creditors and give money to the UAW.

It isn’t unusual to try to preserve tax losses in a reorganization, that’s for sure. It’s an asset the bankrupt estate can try to use to attract new investors, if tax planning was properly done back when the company was still living, but I bet the IRS makes a similar objection each and every time they see an opportunity.

MTF on October 11, 2012 at 2:28 PM