Monday, April 2, 2012

Quick Hits - April 2, 2012

Solar Trust, an Oakland, CA based solar manufacturing company, and subsidiary of the bankrupt German firm, Solar Millennium, filed for Chapter 11 bankruptcy protection this morning in Wilmington Delaware.

The filing listed assets of between $1 million and $10 million along with liabilities of between $10 million and $50 million.

The company was highly touted by both President Barack Obama's Administration and that of California Governor Jerry Brown - particularly around the construction of a 1,000 MW solar plant planned for California.  In 2010, the company was the recipient of a $2.1 billion loan guarantee by the Department of Energy.

This is the latest of a growing line of failing 'green energy' firms pushed by the Obama Administration and receiving billions in taxpayer funds - another Solyndra - except that the dollar amount of the loan was nearly 4 times that received by Solyndra.

This comes as those in California are waiting for the 4th version of California's High Speed Rail Network business plan - the latest due today intending to reduce the costs from last November's plan ($98.5 billion plus a $20 billion contingency) to around a $68.5 billion cost - still double that which voters were presented in 2008 when they narrowly approved a $10 billion bond issue / down payment.

Other substantial changes is increasing the first segment to be built to cover 300 miles from Merced, California to the San Fernando Valley, just north of Los Angeles.  This is a major change from November's plan which had the first segment as being a 120 mile connection within California's Central Valley.

Left unknown are many other details and questions that the last business plan generated - absurd ridership estimates, uncompetitive pricing estimates for tickets, dependence on existing track which violate the terms of the $10 billion proposition, and how California, now running $25 billion annual deficits, is going to be able to afford this project.

The Brown government insists on pushing the project through despite these questions - and the preponderance of Brown political allies, including major Unions, on the High Speed Rail Authority Board.

In California, voters will be facing a decision on the 2012 ballot in a proposition that will drastically increase taxes not only on the wealthy in the state, but also on all who reside or visit the state via another hike of the state sales tax.  This plan, estimated by the Governor and it's public sector union backers, is to raise $9B of additional long as people keep spending at the current levels and the wealthy do not leave the state (as they have in other states that adopted similar taxes). 

California voters are being told that these $9B in additional revenues will be used to address and increase education spending...not directly towards either eliminating the massive budget deficits we are experiencing or addressing the root challenges that we face regarding education caused by overpowered public sector unions like the California Teacher's Union.

California is a state that possess a major entitlement addiction in addition to the greed of public sector unions and feckless progressive politicians who embrace tax and spend policies.  Dollars to address California's decline in education standards go instead to the unions and pensions as opposed to the children.  The University of California system was once the pinnacle of state university systems - but now is biased, bloated, and focused on everything but educating students.  Campuses are seeing huge demonstrations as tuition's are increased.

Today, there is an editorial in Canada's Globe and Mail newspaper that is directed towards Canadians - but is applicable not only to Californians, but also all Americans because it calls for the entitlement addiction to be broken if we are to resolve the fiscal challenges we face.

We start with a little history to set the table....
The Greek form of Armageddon came after decades of building a bloated public sector that devised ever more regulations, making starting up and operating a business a bureaucratic nightmare. Private-sector businesses collapsed or went underground. Tax evasion became a national art, reducing government revenues while deficit-fuelled government spending kept rising. The collapse comes, as it did in Greece, when private-sector wealth creation is overwhelmed by public-sector wealth destruction.

And what does this have to do with the Montreal students protesting against postsecondary tuition increases? Two words: entitlement addiction.

From this, we move one to one of the common elements we share:
In many countries, a big part of the spoiled over-class is unionized public employees. While workplace rigidity and excessive demands have led to the demise of unionized private-sector companies, employees of monopolistic government services face no competitive market discipline. In this country, a stark example is Air Canada and WestJet Airlines. While Air Canada unions seem determined to see their employer return to bankruptcy, WestJet’s nonunionized workers are keen to boost the value of the shares they hold in the company.

In Canada, competitive forces have driven down rates of private-sector union membership to only 16 per cent, while public-sector levels have soared to more than 70 per cent. The gap is steadily widening between the wages and benefits of public employees and those of private-sector workers, whose taxes help cover the public sector payroll.

The more people become dependent on government, either through employment, government contracts or handouts, the less likely they are to vote for spending cutbacks.

California was the outlier in the Tea Party electoral revolution from the 2010 midterm elections....every single statewide office saw a progressive elected because the majority of California has an entitlement (and spending) addiction. California has created an entitlement society that ignores the real wealth of the state - and this has created a circumstance for the first time in California's history where it's losing population.

As columnist / author Mark Steyn has noted, "...We've spent so much of tomorrow for today....we've run out of tomorrow..."

That is where we are - and why this November's election is so important.

Remember when President Obama reassured Americans during the run up to Healthcare reform (Obamacare)...
“If you’ve got health insurance through your employer, you can keep your health insurance, keep your choice of doctor, keep your plan,” Obama insisted on Oct. 15, 2008.

But two years after signing the Patient Protection and Affordable Care Act into law, Obama gave many Americans a false sense of security that Obamacare won’t change the status quo.

Four reputable research institutions have run the numbers and found that not only is Obama’s claim false, but employees will be dropped from their current coverage by the millions. This week’s chart outlines each of the four studies.

Speaking at Friday’s YG Network Summit event on health care, Dan Elling, staff director for the House Ways and Means Subcommitte on Health, put it this way:

Eight out of 10 small employer health insurance plans are going to have to change the benefits packages available. That’s not being able to keep the plan you have.

There’s a small business owner with 58 employees from Missouri who runs a property casualty insurance business. He would be able to save $300,000 in 2014 alone by dumping his health insurance, and paying a $2,000 penalty under the employee mandate, and ship all this cost to the taxpayer.

So the backward incentives that are set up under the current law for employers to dump health insurance is the exact opposite message that we should try to be sending, which is first you got health insurance, great, lets try to make it better for you. We’re not going to make it more expensive.

Are we arguing that healthcare doesn't need reform?  Not at all.  Healthcare does need reform - but it also doesn't need to be an entitlement administered and controlled by the government. 

We need to lower healthcare costs, encourage the uninsured to obtain insurance coverages, and limit the power of private insurers to drop insured's if they start having major medical issues or limit their treatment.  We also need to do so by leveraging our core American strengths and values around capitalism (competitive markets), personal accountability / responsibility, and limited government interference into a marketplace.

Obamacare does none of this - and only feeds the entitlement addiction as well as the addiction for greater centralized government powers.

In the Eurozone, with continued economic and fiscal challenges, the unemployment level has hit a 15 year high - with 17 million out of work - and a 10.8% unemployment rate.
"We expect it to go higher, to reach 11 percent by the end of the year," said Raphael Brun-Aguerre, an economist at JP Morgan in London. "You have public sector job cuts, income going down, weak consumption. The economic growth outlook is negative and is going to worsen unemployment."

Separate data released on Monday showed manufacturing activity in the euro zone shrank for an eighth successive month in March, providing further evidence for Brussels' forecast that euro zone output will shrink 0.3 percent this year.
Despite the Assad regime in Syria 'accepting' the Kofi Annan UN sponsored peace plan last week, the Syrian military is continuing offensive actions against civilians throughout the country.  US Secretary of State Hillary Clinton expressed her doubts that Assad will really adhere to the UN plan - noting...
But, "rather than pull back, Assad's troops have launched new assaults on Syrian cities and towns," she said. "Rather than allowing access for humanitarian aid, security forces have tightened their siege of residential neighborhoods in Homs and elsewhere. And rather than beginning a political transition, the regime has crushed dozens of peaceful protests."

Annan has urged the Syrian government to lay down its arms first, a challenge Assad's loyalists are rejecting. On Saturday, Foreign Ministry spokesman Jihad Makdessi said the government will not pull tanks and troops from towns and cities engulfed by unrest before life returns to normal there, describing the military's actions as those to reinforce "stability."

However, British Foreign Secretary, William Hague is delivering a far more harsh statement to the Syrian dictatorship, saying that Assad must obey a new peace plan or other countries will start to arm the rebel movement against him.

In Egypt, where the Muslim Brotherhood already has a strong majority in the Egyptian Parliament, they are seeking to obtain the Egyptian Presidency...
“Egyptian military judges dropped convictions against Muslim Brotherhood presidential candidate Khairat el-Shater, clearing the nominee of the nation’s dominant political party to run in the election, the group’s lawyer said.

“We have taken administrative, legal and judicial measures before the military judiciary and based on this, all convictions have been dropped,” Abdel Monem Abdel Maqsoud said in a phone interview in Cairo yesterday. “All legal obstacles have been removed, and el-Shater now has the right to fully exercise all his political rights,” he said.”

If the Muslim Brotherhood seizes control of the Egyptian government, peace in the region will be further away not closer. The radical fundamentalist Muslim Brotherhood will likely invoke Shari'a law throughout Egypt - accentuating the domestic violence and lack of rights that women and Christians already are facing. They have pledged to terminate the 1978 peace treaty with Israel. Yet, against the wishes of Congress, President Obama still insists on providing Egypt with $1.5 billion annually in military aid....this to a country whose population prefers a closer relationship / alliance with Iran as opposed to the United States.
A new survey conducted in post-revolution Egypt found that the Muslim nation has an increasingly deep trust and admiration for Iran and wants a replacement of the US with Iran in their country’s foreign policy.

An overwhelming majority of Egyptians support replacing US economic aid with funds from Iran or Turkey, according to new poll results, while a decreasing number of the subjects view the treaty with Israel as positive.

Eighty-two percent of the Egyptians questioned opposed US economic aid to Egypt – according to the figures released this weekend by the US-based Gallup polling organization – up from 71% in December 2011 and 52% last April.
(hat tip - Gateway Pundit)

Let's grant them their wish, particularly if they embrace the MB and radical fundamentalism.

The Justice Department is apparently close to achieving a settlement with Apple and five major publishers over eBook price fixing....
In the Steve Jobs Biography written by Walter Isaacson it seems pretty clear what the goals are, and it seems the justice department might agree. Isaacson quotes Jobs as saying: "So we told the publishers, 'We'll go to the agency model, where you set the price, and we get our 30 percent and yes, the customer pays a little more but that's what you want anyway.' ... So they went to Amazon and said, 'You're going to sign an agency contract or we're not going to give you the books.'"

When the iBooks platform launched on iOS two years ago Amazon controlled 90 percent of the e-book market. Today the hold about 65 percent market share, with Barnes & Noble sitting at 20 percent, and Apple at 10 percent.
The result should be lower eBook prices for readers....

On This Day in History

1513 - Spanish explorer Juan Ponce de Leon lands on the Florida coast near present day St. Augustine and claims the territory for Spain.

1801 - Admiral Horatio Nelson leads a Royal Navy fleet to victory over the Danes in the Battle of Copenhagen.

1917 - Jeannette Rankin takes her seat as the first woman elected to Congress, representing Montana.  She becomes one of the 50 members of the US House of Representatives to vote against the 1917 declaration of war against Germany, and on 12/8/1941, cast the only dissenting vote against FDR's call for a declaration of war against Japan the day after Pearl Harbor was attacked.

1917 - In an address to Congress, President Woodrow Wilson asks Congress for a declaration of war against Germany.

1982 - Argentina invades the British colony of the Falkland Islands in an effort to seize the disputed islands whose resident's overwhelmingly prefer to remain British. 

2005 - Pope John Paul II dies at age 84.  He served nearly 27 years as Pontiff - the second longest serving Pope.

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