Wednesday June 20, 2012

 

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Doubling Down on Fascism

by Michael Chapdelaine

09/25/11

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On September 13, the American Energy Innovation Council (AEIC) released their report Catalyzing American Ingenuity: The Role of Government in Energy Innovation. The report finds that the private sector doesn’t have adequate incentive for research, development, and demonstration of new, clean, secure, commercial scale, alternative energy sources.

Government, in the view of the AEIC, needs to work in financial and strategic concert with industry. The report reiterates a previous call by the AEIC to increase and sustain public investment in the alternative energy industry. Their plan includes the formation of a national board for energy strategy, national technology centers, new energy agencies, a prototyping and piloting program, and new energy usage fees.

The AEIC is composed of so-called top business leaders. Who does that include? None other than the heads of failing businesses such as Bank of America’s Chad Holliday and General Electric's Jeff Immelt, each respective recipients of hundreds of billions of dollars in bailouts and guarantees from the U.S. Government and both currently facing the same Government lawsuit tied to the matter! The ultimate bill was, of course, sent to the U.S. taxpayer.

Bank of America was, again, despite assurances of their fiscal health, just last month on the verge of bankruptcy. Yet they’re among those advising Americans on the road to economic success as if they have the kind of business sense required for realizing broad, sustainable transformations within our country.

This report also arrives alongside the failure and bankruptcy of the Obama administration’s favored player in solar, the $535 million Government-backed loan recipient, Solyndra. The AEIC laments the comparative lack of funding for alternative energy and makes the case for the U.S. Government to match its role to that in other preferred industries:

Throughout the history of the United States, the [sic] federal government has played a central role in catalyzing and driving innovation and technology development in a variety of strategic areas — defense, health, agriculture, and information technology, to name a few — and it has often done so with strong results.

The AEIC would have alternative energy brought into the fold of the military-industrial-media-etcetera complex. Environmentalists should see the danger this poses to their cause and proposed solutions as it would set up alternative energy to be the next economic bubble. Capitalists should see the danger this poses to further discrediting capitalism. Cognizant, conscientious citizens should see the danger this poses to the nation’s already grossly disparate concentration of wealth, social mobility, justice, and stability.

Where will the tax base be for municipalities to fund alternative energy upgrades? Where will people get the money to outfit their McMansion with solar panels while already delinquent on their mortgage?

Microsoft’s Bill Gates, a contributor in the AEIC vision, states the following:

No matter how well intentioned, utility companies and other private investors simply are not going to invest deeply in the kind of R&D needed to create scalable, low-cost, low-carbon energy innovations They have little or no economic incentive to do so. This is a unique but critical role for government, one central to our long-term economic competitiveness.

It’s deceptively true, incentive is lacking; but, the fascism called for by the AEIC isn’t the solution. This isn’t hyperbole or rhetoric, it’s the correct descriptor. It’s not capitalism (private ownership of goods and means), socialism (privately owned goods produced by the state), or communism (everything owned by the state); it is fascism. Don’t conflate the AEIC's suggested partnership of business and government with anything other than fascism: both goods and the means of production privately owned albeit directed and controlled by the state.

Nazi View of the Role of Government Catalysis as Told to American Economics Professors (German Economic Policy, Dr. Wilhelm Bauer, 1939)

As vows have already been exchanged in this marriage between corporations and the state, AEIC member and General Electric Chairman & CEO, Jeff Immelt, simultaneously chairs Obama's Council on Jobs and Competitiveness.

Of course, trans-national corporatists, already in control of half the nation’s capital, have no qualms about posing as bold “capitalists” when their own money isn’t at risk, profits remain private, and loss compensation is extracted from the American taxpayer. Unsurprisingly, they think the funds to fuel the green bubble ought to come from the Government, even though it’s already arguably between $14.7 to 211 trillion in debt. They don’t care if their ventures fail because they will, at worst, walk away with multi-million dollar severance packages while growing numbers of the American people take up dumpster diving to make ends meet.

Systemic and widespread changes toward alternative energies would assuredly be a great benefit to America. However, subsidizing and nurturing alternative energies, while retaining subsidies and/or tax breaks for fossil fuels, is asinine. As it is, we currently pay more per ounce for Coca Cola® soft drinks than we do oil thanks to preferential treatment. As long as the net value of fossil fuels is so heavily distorted, alternatives will not make meaningful headway beyond creating the illusion of progress toward alternatives and energy independence.

Truthfully, absent government-established preferential status and factoring in often disassociated costs (e.g., repeated foreign resource wars, climate change impacts, health hazards via pollution), a gallon of gas would properly run multiples above its current price per gallon. Under those real free-market conditions, making public investments, subsidizing alternatives, and establishing government energy “hubs” would be plainly unnecessary; they would easily out-compete fossil fuels and people would be clamoring for the renewable options. The Libyan conquest, with eyes open, has to be yet another glaring reminder that foreign policy is still entirely out of line with the green agenda. Resource allocation of all kinds is in all the wrong places.

Of course the “free market” is failing to deliver from the AEIC market perspective; it isn't the market structure that corporatists rely upon or desire. The reality is that the market is captive, it is heavily manipulated, and it is based around credit. Rather than entrenchment, Solyndra’s failure should absolutely provoke a sincere examination (Republican-leaning critics may be rightly critical for the wrong reasons while disregarding their own culpability) of all the aspects of that failure.

Why did they go under? Why weren’t they able to compete with Chinese solar manufacturers? Questions such as these should lead to, for instance, much-needed consideration of the deleterious effects of our trade policies oriented toward unfettered access to U.S. markets. These questions, unsurprisingly, are not sincerely addressed by General Electric; they're sending thousands of jobs making light bulbs and X-ray machines to China.

Will Federal Government investment miraculously work despite current trade policy, when smaller-scale experiments are giving us evidence to the contrary? It is doubtful, taking history as the evidentiary basis, that an American alternative energy industry will flourish as Washington is on course for even more free trade agreements, and correspondingly, still further dissociation between domestic incomes and consumption of foreign products.

Solyndra went under with comparatively few domestic competitors. In fact, the once very promising and publicly traded Evergreen Solar, trying to survive without Government-guaranteed loans, also moved toward bankruptcy in August. Alternative energy companies, in general and irrespective of levels of Government support, are having much difficulty if not failing outright in the U.S.

Technically sound, innovative, well managed, alternative energy businesses face the basic challenge of getting loans; good ideas and potential products are languishing even though the U.S. Government has already, repeatedly flooded (world) markets with tens of trillions of dollars, via troubled asset relief, quantitative easing, temporary liquidity guarantees, and other financial schemes, that seemingly evaporate. How can that be? Where’s the trickle down?

Wall Street financial institutions are among those that soaked up the dollar flood, using it to put lipstick on their abhorrent balance sheets and pay out exorbitant bonuses, as lending locked up for main street America, good and bad borrowers alike. We have witnessed and continue to experience the offerings of corruption and corporatism. Moreover, it remains extremely difficult for individuals and smaller companies to attempt to self finance when interest rates are effectively zero, punishing savers, and serious gains on capital can’t even be made.

Washington could, in five steps, set the conditions for alternative energy to experience genuine, steady, impressive growth:

  1. Bring the troops home; stop the foreign conquests and resource wars; invest tax dollars in domestic, not colonial infrastructure.

  2. Tax American corporations operating offshore at the onshore rate; force repatriation of foreign profits.

  3. Withdraw from all international monetary, financial, and trade institutions; impose tariffs on foreign goods and services equalizing foreign to domestic manufacturing costs.

  4. Terminate all preferences set into legal and regulatory structures for fossil fuels; allow a true free market for sustainable, alternative energy options to fairly compete.

  5. End the Federal Reserve System, bring fractional reserve banking to an end, write off all toxic assets, jail the criminal bankers, and seize and return that which has been stolen to the American people.

These steps would set the conditions for the entire American economy to reset and recover.

 

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