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. …
“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.
“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.