5 March 2010
8 out of 10 stimulus dollars go overseas
[Rob Sanchez] @ 12:15 pm [Email author] [Email this article] [Print this article]
The good news is that the Obama stimulus money targeted for green industries is creating jobs. The bad news is that most of the jobs are in China. Two video reports describe what is happening. There are companion articles to the videos that fill in more details of the story. The video and text articles aren’t the same so to get the complete picture check both of them out.

Nearly $2 billion in money from the American Recovery and Reinvestment Act has been spent on wind power, funding the creation of enough new wind farms to power 2.4 million homes over the past year. But the study found that nearly 80 percent of that money has gone to foreign manufacturers of wind turbines.
So Where Are the Jobs?

“Most of the jobs are going overseas,” said Russ Choma at the Investigative Reporting Workshop. He analyzed which foreign firms had accepted the most stimulus money. “According to our estimates, about 6,000 jobs have been created overseas, and maybe a couple hundred have been created in the U.S.”

New Wind Farms in the U.S. Do Not Bring Jobs
ABC News Reports, Jonathan Karl, Feb. 9, 2010:
Article and video

The story continued when an ABC News affiliate in San Diego did a follow up story with some very clever investigative reporting. Who would have ever thought of actually going to an office of one of the companies that are receiving billions of taxpayer dollars?

A-Power Energy Generation Systems is one example. The company lists a downtown San Diego office suite as its business and mailing address in filings with the Securities and Exchange Commission. However, that office suite is vacant.

Foreign Firms Benefitting From U.S. Green Energy Funding, KGTV 10, February 8, 2010
video and article on same page

These stories were originated by an organization called the “Investigative Reporting Workshop“, which is affiliated with the School of Communication at American University. They have an article on the website that adds more fuel to the fire: “Renewable energy money still going abroad, despite criticism from Congress, by Russ Choma, February 8th, 2010.

The Workshop was the first to report last October that more than 80 percent of the first $1 billion in grants to wind energy companies went to foreign firms. Since then, the administration has stopped making announcements of new grants to wind, solar and geothermal companies, but has handed out another $1 billion, bringing the total given out to $2.1 billion and the total that went to companies based overseas to more than 79 percent.

In fact, the largest grant made under the program so far, a $178 million payment on Dec. 29, went to Babcock & Brown, a bankrupt Australian company that built a Texas wind farm using turbines made by a Japanese company.
Of course the Chinese stuck their hooks into Texas also.

The same day the Workshop’s first reported on this story a consortium of American and Chinese companies announced a deal to build a $1.5 billion wind farm in Texas, using imported Chinese turbines. Company officials said they planned to collect $450 million in stimulus grants for the project. The deal would create dozens of jobs in the U.S. and thousands in China. The news provoked outrage among lawmakers, particularly after the Energy Department seemed to take a neutral stance, declining to say whether it would reject such an application.

The tragedy with all of this is that most of the money isn’t going to go to home grown crooks — it’s going to fund scams in other countries. Americans will get a few of the leftover crumbs when and if the foreign companies decide to hire workers to install the equipment, but even then there is no guarantee that they will hire Americans — remember the Texas bridge welders from Italy?

If Obama and Congress insist of throwing billions of dollars around, why aren’t they making sure that the only pigs at the trough are U.S. citizens?

VDARE.com: Blog Articles — proudly powered by WordPressThe articles on VDARE.com are brought to you by the VDare Foundation.We are supported by generous donations from our readers. Contributions are tax deductible and appreciated. ContributeCopyright © 1999-2008, VDARE.com

The Unraveling of America - Part 1

Following the financial system collapse of 1933, the Glass-Steagall Act was enacted to separate investment banks from commercial banks.

The following study was done after the Savings and Loan Crisis of the 1980's.

Congressional Research Service, 1987

In the nineteenth and early twentieth centuries, bankers and brokers were sometimes indistinguishable. Then, in the Great Depression after 1929, Congress examined the mixing of the "commercial" and "investment" banking industries that occurred in the 1920s. Hearings revealed conflicts of interest and fraud in some banking institutions' securities activities. A formidable barrier to the mixing of these activities was then set up by the Glass-Steagall Act. It consists of four sections of the Banking Act of 1933. Its language makes it a felony for anyone -- banker, broker, dealer in securities, or savings institution -- to engage in the deposit-taking and securities businesses at the same time. For Federal Reserve member banks, it included reinforcing language designed to separate the two activities directly and through corporate affiliation or interlocking directorates.

In 1999, contrary to the current Clinton mudslinging of right-wing political blogs, Senator Phil Gramm (R,TX) introduced legislation to repeal Glass-Steagall. Now, I know I am ruffling some right-wing feathers out there, but don't fret. This legislative corruption was supported by Democrats, Independents, and Republicans in a firestorm of deregulation which, to this day, still rages.

LosAngeles.InjuryBoard.com

In 1999, former Senator Phil Gramm (who is, incidentally, Senator John McCain's economic adviser and cochairs his presidential campaign) set out to completely gut the Glass-Steagall Act, and did so successfully, replacing most of its components with the new Gramm-Leach-Bliley Act: allowing commercial banks, investment banks, and insurers to merge (which would have violated antitrust laws under Glass-Steagall).

So, regulations that kept the markets safe for 60 years were stripped.

In 2000, shortly after George W. Bush was elected president, Congress and President Clinton were trying to pass a $384 billion omnibus spending bill, and while the debates swirled around the passage of this bill, Senator Phil Gramm clandestinely slipped a 262-page amendment into the omnibus appropriations bill titled: Commodity Futures Modernization Act. It is likely that few senators read this bill, if any. The essence of the act was the deregulation of derivatives trading (financial instruments whose value changes in response to the changes in underlying variables; the main use of derivatives is to reduce risk for one party). The legislation contained a provision -- lobbied for by Enron, a major campaign contributor to Gramm -- that exempted energy trading from regulatory oversight. Basically, it gave way to the Enron debacle and ushered in the new era of unregulated securities.

Mr. Gramm isn't done.

http://www.commondreams.org/view/2008/09/24-1

The legislation's "Legal Certainty for Bank Products Act of 2000," Title IV of the law - a law that Gramm snuck in without hearings hours before the Christmas recess - provided Wall Street with an unbridled license to steal. It made certain that financiers could legally get away with a whole new array of financial rip-off schemes.

One of those provisions, summarized by the heading of Title III, ensured the "Legal Certainty for Swap Agreements," which successfully divorced the granters of subprime mortgage loans from any obligation to ever collect on them. That provision of Gramm's law is at the very heart of the problem. But the law went even further, prohibiting regulation of any of the new financial instruments permitted after the financial industry mergers: "No provision of the Commodity Exchange Act shall apply to, and the Commodity Futures Trading Commission shall not exercise regulatory authority with respect to, an identified banking product which had not been commonly offered, entered into, or provided in the United States by any bank on or before December 5, 2000. ..."

LosAngeles.InjuryBoard.com

In 2003, Gramm left the Senate to join UBS, which had acquired investment house PaineWebber due to his deregulation bill. At UBS, Gramm lobbied Congress, the Fed and the Treasury Department. During Gramm's tenor at UBS and as a lobbyist, Congress passed the Responsible Lending Act, billed as an anti-predatory-lending measure, but was called the "Loan Shark Protection Act" by consumer advocates, as it was designed to preempt stronger state laws against anti-predatory lending.

And, of course, The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 pulls the rest of the rug from under the American people.

The Uptick Rule

The Uptick Rule was instated in 1938 by SEC to block the downward spiral of short selling when a stock or financial instrument was taking a nose dive.

Investopedia: Uptick Rule

A former rule established by the SEC that requires that every short sale transaction be entered at a price that is higher than the price of the previous trade. This rule was introduced in the Securities Exchange Act of 1934 as Rule 10a-1 and was implemented in 1938. The uptick rule prevents short sellers from adding to the downward momentum when the price of an asset is already experiencing sharp declines.

Since 1938, short selling on the down-tic was outlawed until July 2007 when the SEC struck down the measure. The "UpTick Rule" kept the stock market from collapsing by a rush to hedge on the fall of stocks.

TraderMike.net

The SEC has voted to remove the “short sale tick test”, Rule 17 CFR 240.10a-1 for all equity securities. Effective Friday, July 6, traders will be able to short all securities on an up, down, or zero tick.

The Commission first imposed restrictions on the execution prices of short sales almost seventy years ago, when we adopted the "tick test" of Rule 10a-1 in 1938. The tick test permits short sales only at a price above the last sale price, or alternatively, at the last sale price -- if that is higher than the previous price.

Globalization will be the topic of discussion in my next Part II of this series.

***

GM Bailout

One topic no one mentions in the Detroit Bailout controversy is all the offshoring that has been, and still continues, in the auto industry. GM has announced new plants in China, Mexico, Brazil, Russia and India, coinciding with plant and dealership closings in America. GM's dealership closings will cost 100,000 jobs. GM plant closings will eliminate 20,000 jobs. The ripple effect through local economies may cost over a million US jobs.

More plant closings, job cuts due at GM


The Treasury Department has loaned GM $13.4 billion dollars so far.

Guess where the bailout money will go?


GM to invest $200 million in India engine plant

General Motors to invest $300 m in Maharashtra car plant

GM buys India dream, to spend $500m more

GM Cuts Dealers & Starts to Outsource Overseas

GM announces $5 billion investment in China

UAW Furious Over New GM Plant in China

GM opens new China plant


GM Mexican Plants Expand as Carmaker Seeks Funds for Rescue

"GM, for instance, has invested $3.6 billion in Mexico in the last three years."

General Motors to Invest $1 Billion in Brazil Operations

"According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the government and will be used to complete the renovation of the line of products up to 2012."

General Motors to Build Chevrolet Cars in St. Petersburg, Russia


The bailout money is going OFFSHORE!

****

Offshore Outsourcing in America's "White-Collar" Industry

Offshore Outsourcing in America's "White-Collar" Industry:
This article addresses America's growing outsourcing industry and analyzes whether this is a benefit or a detriment.
http://www.associatedcontent.comarticle/263877/offshore_outsourcing_in_americas_whitecollar.html