SPECIAL REPORT: The Carnahan Wind Deal: Crony Capitalism in Missouri

In this 23-page report, NLPC Associate Fellow Fred N. Sauer looks at Wind Capital Group (WCG), a St. Louis-based company that has been the recipient of Obama administration stimulus funding, as well as other significant tax credits and subsidies.

WCG was founded in 2005 by Tom Carnahan, son of the late Missouri Democratic Governor Mel Carnahan and his widow, former Missouri Senator Jean Carnahan. He also is the brother of former Missouri Secretary of State Robin Carnahan and former Congressman Russ Carnahan.

The firm’s core activity is building and operating wind farms in the Midwest, with a focus on the northwest part of Missouri. But to really understand how the firm operates is to know who has become wealthy as a result. WCG is now almost wholly owned by an Irish company, NTR plc. The Carnahan family’s expertise is politics, not business. And Wind Capital Group, though touted as an … Read More ➡

Chevy Volt Sales Plunge; Cost to Taxpayers $15 Million in October

Volt and AkersonGeneral Motors had another disappointing month of sales for its much-hyped green wonder-car in October. Sales for the Chevy Volt plunged over 31 percent from last year, down to 2,022 units for the month. To put that number in perspective, Toyota sells that many Toyota Camrys in about two days. Or, GM is selling less than one Volt per Chevy dealership per month.

Despite the dismal sales figures, the loss to taxpayers for federal tax credits of $7,500 per vehicle that go to the wealthy buyers of Volts tallies out to $15,165,000 in October. If GM had come anywhere close to its initial lofty sales goals for President Obama’s favorite car (remember, he’s promised to buy one in three more years!) the tax bill would have been ten times the amount. I guess this is one instance where taxpayers can be thankful that GM’s false hope for the Volt did … Read More ➡

Alternative Bulbs: Another Phony Market Propped Up by Govt Mandates, Subsidies

Obama SwobodaEntrepreneurs in industries tied to the energy efficiency gambit, justified by the climate change House of Cards, all have the same false bravado: they are “game changers” and “market leaders” (for products nobody wants); all their squandered revenues are “investments;” their technological breakthroughs are always “just around the corner;” and it just takes one more round of mandates/grants/loans/tax breaks to achieve viability in the free market.

It’s true of renewable energy and electric vehicles, and as Cree Inc. CEO Chuck Swoboda (in photo with President Obama) revealed last week, it’s true of the alternative light bulb industry too. In a shareholder meeting at the company’s Durham, N.C. headquarters, he boasted about his marketing acumen that he says will persuade the public to embrace Cree’s light-emitting diode (LED) technology and abandon the traditional light bulb – which consumers will soon have no choice about. The meeting featured some new Cree television … Read More ➡

New Tesla Fires, Old Volt Ones Explained, Not Absolved

Tesla fireTesla’s once-Teflon Tony Stark Elon Musk, the adored Paypal/SpaceX/electric-car innovator who’s been showered with unmitigated media praise and highly inflated stock values, has another lithium ion battery fire to explain.

This one happened after a Model S crash in Mexico. The last one happened less than a month ago in Kent, Wash. Since then Tesla’s share price has fallen from $193.90 on Sept. 30 to $160.58 this afternoon. The irrational exuberance that made the electric automaker the darling of Wall Street has now become merely excitable, although still unjustifiably so. Even Musk himself told Bloomberg last week, “The stock price that we have is more than we have any right to deserve.”

While the fanboy fave exhibited a measure of humility about Tesla’s stock market prestige, the two fires have not moved the needle in that respect. The official stance the company took in both cases … Read More ➡

State Pension Funds and Big Investment Firms: What Could Possibly Go Wrong? (Part 2)

Piggy bankLast month, I wrote about pressure on state pension funds, many of which are underfunded and are facing immense pressure to chase higher returns. I profiled a $125 million investment made by the New Mexico Educational Retirement Board (NMERB) into Gramercy, a Connecticut-based hedge fund.

As we showed last month, there were some gaps between what Gramercy disclosed to NMERB and what we found in official records. Now Gramercy is making big news as a potential facilitator of a settlement between Argentina and holdout creditors.  According to news reports, Gramercy and other bondholders who took Argentina’s 2010 bond exchange are pushing a settlement.

Apparently this has been in the works for a while, according to a presentation Gramercy made to New Hampshire’s retirement fund in 2012. Click here to download a 47-page pdf version. We obtained this via New Hampshire’s Right-to-Know law. Note the detail on page 22 on Gramercy’s … Read More ➡

Taxpayer-Funded Solar Company Leaves Environmental, Financial Mess

solar panelsIt may be the height of irony that a company that was supposed to soar to the top of the new clean energy economy, with the help of U.S. taxpayers to undergird President Obama’s stimulus visions, has instead left both an environmental and financial mess after its demise.

Yet that’s exactly the case with miserable failure Abound Solar, which the president’s Department of Energy thought so much of, they awarded it a $400 million loan guarantee. That proposition quickly soured and the government halted payouts after about $70 million. The company went bankrupt in June 2012, leaving taxpayers out between $40 million and $60 million that was never recovered.

There was other collateral damage, not the least of which was a huge toxic mess from unused panels and abandoned chemicals at Abound’s former facilities. The environmental nightmare was discovered earlier this year, but this month – thanks to … Read More ➡

GM Dealers Say Low Demand, Not Lack of Supply Explain Poor Truck Sales

Chevy pickupThe past month has brought much confusion and concern for General Motors’ shareholders regarding the most important and profitable segment of sales for the company. As the company prepares to report earnings for the third quarter this week, media reports are still unclear on just what is going on with GM’s new truck lineup; specifically pertaining to the reasons behind the disappointing sales figures that were reported for the month of September when Ford’s truck offerings left them in the dust.

While GM’s Obama-appointed management spun the story (claiming supply could not keep up with demand) to some in the media who are gullible enough to print the misinformation without question, some GM dealers were more honest with their assessment.

GM’s management has lots of experience when it comes to trying to deceptively explain away poor sales of much-hyped vehicles. The Chevy Volt has never lived up to … Read More ➡

Walmart Prefers Political Correctness to Profitability

Mike Duke photoLast week it was Walmart CEO Mike Duke’s duty to find an explanation for continuing declines in same store sales, as the company hosted its 20th Annual Meeting for the Investment Community on Tuesday.

Despite the fact that the most recent quarterly report ended in July and brought a surprising (to analysts) .3 percent drop for the second quarter, when a one percent gain was expected, Duke cited the two-week old government shutdown and a “tough and unpredictable global economy” as reasons for the poor performance.

“It should come as no surprise that the government shutdown is on the minds of our U.S. customers,” Duke told his audience. “As you would expect, we’re following the situation very closely.”

Of course the shutdown came long after the second quarter reports, so there had to be other explanations.

“The competition is also tough,” Duke said. “I see it when I … Read More ➡

GM’s Advertising Identity Crisis Hurting Sales

Volt gay adIt looks like General Motors is going through an identity crisis as its marketing strategy has flip-flopped by changing its targeted audience. The new General Motors’ truck ad, “Strong,” targets conservatives by honoring a heroic and manly GM truck buyer with lyrics that describe him as a “love one woman for all his life” type of guy who arrived at work on time for twenty straight years. The rugged, heterosexual identity of today’s GM differs greatly from last year’s politically correct version when the company won praise for running a “gay” Chevy Volt ad and for flying rainbow banners to celebrate America’s sexual diversity.

As mentioned recently on NLPC, the new GM truck ads have done little to pull buyers of any sexual orientation into dealerships. A recent survey (unveiled here) points to the fact that conservative truck buyers still hold it against GM for taking billions of taxpayer dollars … Read More ➡

Survey: Auto Bailout is Drag on GM Truck Sales

A consumer survey taken last week on behalf of the National Legal and Policy Center confirms that public disapproval of the auto bailout continues to dog General Motors, and is likely hurting pickup truck sales, a highly profitable segment of its line.

When 500 consumers in Texas were asked, “Would your decision to buy a specific brand of truck be influenced by whether that company received financial assistance from the federal government?,” 40.08% answered “absolutely.”  Another 11.75% responded “very likely,” and 10.60% responded “likely.” Thus, more than 60% said that the bailout would have some influence on their decision.

Only 23.89% responded “not too likely.”

Texas is the largest truck market in the country, with more sales than the next three states combined.

The release of the survey results comes amidst a major advertising campaign for GM’s full-size trucks – the Chevrolet Silverado and GMC Sierra – with significant visibility … Read More ➡