Sunday, December 13, 2020

An Obama Crony Central Planning Doozy

Nancy Pelosi and Barack Obama

The Wall Street Journal reports:

Move over, Solyndra. Another green boondoggle from the Obama era has failed, and taxpayers are out as much as $510 million. Late last week Judge Karen Owens approved a Chapter 11 plan of reorganization by Tonopah Solar Energy. Tonopah operated the Crescent Dunes solar plant in Nevada that received $737 million in guaranteed loans from the Obama Administration.

The plan includes a settlement with the Department of Energy that leaves taxpayers liable for as much as $234.68 million in outstanding debt, but the total public cost is even higher. Crescent Dunes also received an investment-tax credit, and the 2009 stimulus legislation allowed it to receive a cash payment in lieu of credit. In 2017 the plant received more than $275.6 million from Treasury under the Section 1603 program, which it used to service its outstanding liabilities. So taxpayers already gave Crescent Dunes cash to pay off its taxpayer-backed loans.

This is one more cautionary tale in climate subsidies.

No this is not a tale of problems with climate subsidies. It is a tale of crony government power freaks making investment decisions with money that isn't their own. It is done with money taken from the masses for the benefit of those close to the power freaks.

Tonopah Solar Energy is a subsidiary of SolarReserve. 

Pacific Corporate Group is an investor in SolarReserve. Nancy Pelosi’s brother-in-law, Ronald Pelosi was executive director at PCG Asset Management(until 2009), a subsidiary of Pacific Corporate Group and a board member in September 2011 when the loan guarantee for Tonopah was finalized.

Incentives for government projects are always distorted by their nature. The profit and loss check is just not there. If the money is lost, the money-providers suffer no losses. No one is going to knock on Obama's or Nancy Pelosi's door asking them to sell a couple of their homes to return money to the "people" because of the crony idiotic project.

The only way these kinds of scams can be stopped is to end government investments in business projects.


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