So Obvious The Mainstream Media Missed It
There’s little doubt past presidents used the power of their position to favor or influence key constituencies. But I can’t think of many, if any, at least in my memory, who’ve been as brazen about it as this President has. The you-scratch-my-back, I’ll-scratch-yours style of political patronage-building Barack Obama learned in Chicago has also been a hallmark of his economic program. And the cronyism has become even more overt with reelection on the line. Consider, as an example, the $1 billion back scratch the President just gave General Electric’s Jeffrey Immelt, which was so obvious that only the mainstream media could have missed it.
The President was in North Carolina Wednesday, on another one of those non-campaign-related campaign stops, proposing massive new federal “investment” in green car technologies that average Americans just aren’t buying, as indicated by the disaster called the Chevy Volt. Here’s what risky new “investments” the president was doubling-down on this week, according to one report :
“Obama’s $1 billion incentive for local communities is designed to promote use of advanced technologies such as more charging stations for electric vehicles. Obama has called for 1 million plug-in vehicles on American roads by 2015. If Congress approves the incentive plan, up to 15 communities would be picked as models of innovation. Obama also was calling for increasing a tax incentive to $10,000 from $7,500 for people who purchase certain advanced vehicles.”
This fulfills a prediction I made last week, in a blog post called ”Green Car Cronyism,” in which I suggested that General Electric’s bulk purchase of Chevy Volts was part of a mutual back-scratching scheme meant to justify still more green “investment” by government — this time, investment in the car charging infrastructure GE produces. Here’s what I wrote:
“The public isn’t buying Obama’s electric lemon, the Chevy Volt (a vehicle in which taxpayers are also heavily invested), so the Obama administration is coming to GM’s rescue by encouraging federal agencies, through an executive order, to buy these expensive glorified golf carts in order to “green” the federal vehicle fleet. This is a bailout by other means of a company that bet big on a vehicle loved and applauded by social engineers and politicians but which the general public has shunned.
Now comes GE (whose CEO is fast friends with President Obama) to do its part, since the company stands to make billions when government starts spending your tax dollars to provide the costly infrastructure that’s required to make the whole electric car thing work. Without many, many more charging stations, the promised “EV revolution” can’t take off. We already hear grumbling from green car advocates that this lack of infrastructure is a major problem (since the fault couldn’t possibly be in the fact that these vehicles are too expensive and impractical to appeal to anyone except wealthy eco-yuppies who want to flaunt their “Planet Saver” merit badge). But who should pay for this build-out? Such concerns and questions inevitably will lead to the next government-centered “solution,” taxpayer-financed EV infrastructure – which is where GE plans to make a taxpayer-assisted killing.
Low public demand for electric lemons also means low public demand for GE charging technology, so Volt sales must be artificially inflated, in this way, in order to justify dragging taxpayers even further down a road they don’t seem inclined to travel.”
GE announced its intentions to purchase 12,000 Chevy Volts and other hybrid vehicles sometime around Feb. 20, which is when I saw it reported on an automotive website. And Wednesday – less that three weeks later – President Obama proposes spending $1 billion on the installation of electric vehicle charging stations, which is likely to mean a windfall for GE. Although it may be hard to prove, without a congressional or criminal investigation, all the elements of a classic crony capitalist quid pro quo are there, hiding in plain sight.
And lest you think I’ve gone off the deep end and joined the black helicopter crowd, or that I’m prone to conspiratorial web-spinning, let me quote (at length) from a recent post by alternative energy investment guru Jeff Siegel, who lays out GE’s motives for splurging wildly on a piece of scrap like the Chevy Volt.
“So why is GE so hell-bent on pushing electric cars for their employees?
Well, one reason is that by using electric cars, GE will simply save money.
No matter how you slice it, electric car fleets do pencil out to be economically superior to vehicles that rely on gasoline or diesel. Fact is, the running costs on plug-in cars are one-fifth to one-third those of gasoline.
No wonder half of GE’s 45,000 salespeople will soon be driving electric cars!
But there’s something bigger at play here…
Something that investors should pay close attention to.
$4.3 Billion Up for Grabs
Last year, GE spearheaded a national road tour to encourage businesses to adopt electric vehicles.
The company was joined by GM (NYSE: GM), Ford (NYSE: F), Toyota (NYSE: TM), Mitsubishi, Coda, Navistar (NYSE: NAV), and Smith Electric Vehicles (which, by the way, actually has an IPO in the works right now).
But why would GE, which doesn’t even make electric cars, lead a pack of automakers on such a tour?
Because GE’s got some serious skin in the EV game, that’s why.
Although GE does not make electric vehicles, it does make electric vehicle charging stations.
And unlike today’s standard plug-in charging systems that take about 12 hours to charge a vehicle, GE’s WattStation can do it in as few as four.
GE’s been very busy over the past few years cultivating relationships with car manufacturers and battery suppliers.
The company is one of the largest shareholders of battery maker A123 Systems (NASDAQ: AONE), and last year, they did a deal with Nissan to explore new ways to promote the widespread adoption of electric cars…
GE has also inked deals with EV company Better Place, which will allow GE charging stations to be compatible with Better Place’s EV infrastructure.
And of course, there’s that massive Chevy Volt order.
No, this isn’t some random last-minute attempt to make a few bucks off the burgeoning electric vehicle market…
This is a well-calculated plan — devised years ago — to get a big piece of the pie.
And why not? This is a booming market.
According to the folks over at Pike Research, in less than five years, more than 1.5 million charging locations will be available in the United States, with a total of 7.7 million worldwide.
Pike notes that this will translate into revenues of more than $4.3 billion for makers of electric vehicle charging equipment in just five years. That’s up from only $400 million in 2011.
Don’t think for a second GE’s sitting this one out!”
Sitting it out? Hell no. The company has just been furnished another front row seat at the federal trough by Barack Obama, just weeks after GE helped-out Obama and Government Motors by doing a bailout-by-other-means of the Chevy Volt. Obama is known to be very good friends with GE CEO Immelt. They’re so tight, in fact, that some would even call them cronies.