On September 21, 2012, Evan Halper, Ralph Vartabedian and Julie Cart write in the Los Angeles Times that corporate prospectors are receiving billions in subsidies and decades of higher energy rates.
Driven by the Obama administration’s vision of clean power and energy independence, the rush to build large-scale solar plants across the Southwest has created an investors’ dream in the desert.
Taxpayers have poured tens of billions of dollars into solar projects — some of which will have all their construction and development costs financed by the government by the time they start producing power.
Banks, insurers and utility companies have jumped in, taking advantage of complex state and federal tax incentives to reap outsized returns. Among the solar prospectors in the Mojave are investor Warren Buffett’s Berkshire Hathaway Inc., General Electric, JPMorgan Chase & Co., Morgan Stanley and technology giant Google Inc.
The cost for decades to come will also be borne by ratepayers. Confidential agreements between solar developers and utilities lock in power prices two to four times the cost of conventional electricity. The power generated by the mega-plants will be among the most expensive renewable energy in the country.
AND NO ONE is asking the question? Who should be the beneficiaries of the ownership of this massive productive capital investment funded by taxpayers and utility ratepayers?
Although the U.S. pioneered photovoltaic solar cells decades ago, it has fallen increasingly behind lower-cost manufacturers of the technology in countries that offer low-cost labor and few environmental restrictions, including China, South Korea and Malaysia. The cheap panels have been fueling a fast-growing solar consumer market in the U.S. and have opened vast opportunities for service-sector jobs in the sunlight-extraction business.
Although American scientists are still at the forefront of emerging solar research, the challenge is how can we make traditional solar panels at the lowest cost and continue to innovate with new technology that delivers greater performance at less cost?
Part of the problem is that the U.S. government has held back with a lack of government initiatives to support the unleashing of the full technological power of computerized robotic superautomated manufacturing, which would significantly lower costs but employ far less people. What consistently is missed is the necessity to unlock job-destroying technology with the empowerment for ordinary citizens––working people, the middle class and the poor––to benefit from insured capital credit to become individual owners of new productive capital that will bolster our manufacturing capabilities and at the same time significantly improve quality and performance and lower costs of products and service as investment in the American economy grows. This will result in “real” job creation with more and more people earning two incomes, one from their labor worker input and a second income from their capital worker input, which over time will become their dominant source of economic security.
What is needed is a massive loan guarantee economic growth plan with aims to balance production and consumption by empowering EVERY American to acquire private, individual ownership in future income-producing productive capital investments and pay for their loans out of the earnings of the investments.
The government, through the stimulus program, has been giving taxpayer grants to companies with the goal of generating “employment.” For the most part these are not loans or loan guarantees, thus there is no provision for a first-position recoupment position. There is no employee ownership stipulation. The government should always require broadened ownership, in companies the financial assist, of the productive capital assets among the employees, who would pay back their acquisition of ownership out of the earnings of the investment.
Today we accept as normal public ownership of gigantic capital instruments like mass rail, subways, government office buildings, universities, water systems, and power systems. These government-owned enterprises and services could be transformed into competitive private sector companies managed by Private Facilities Corporations with the use of the asset or facility leased to the normal using body. The wages of the Private Facilities Corporation(s) are passed through to the leasing body. This would allow us to build the ownership of what is now public capital into individuals and reduce the cost of government, including public pension systems. Thus, when you build the ownership into the employees of the Private Facilities Corporation(s), who now have a vested interest in its quality of operation and maintenance, the contracted lease rental fee committed by the government entity will give the employee stockholders a reasonable return and lesson or replace the need for supplemental redistribution programs. Consumer Stock Ownership Plan financing can simultaneously build the ownership into the consumers of monopolies such as telecommunications, water and power companies, mass-transit, and even cable and satellite television, who are the source of all their funding, and dividends paid out to the consumer owners would become an offset to their utility bills.
While financial support from the government is the purpose of the stimulus program, the structure of the support should be in the form of insured loans as restructuring and investment capital. Such a financial mechanism should be put in place that will guarantee loan risks provided by banks and lending institutions. Otherwise, the system will continue to limit access to capital acquisition to those who already own capital—the rich.
Criteria must be created to qualify the corporations subject to this policy and those corporations that qualify overseen so as to insure that their executives exercise prudent fiduciary responsibility to generate loan payback. Once the guaranteed loans are paid back, the new capital formation will continue to produce income for existing and future owners.
The companies receiving such financial support should always qualify as succeeding companies within a major industry with long-term productivity growth potential with the resulting benefit of promoting the diffusion of advanced technology into civilian industries. The loans should be used to modernize and build new superautomated and computerized robotic assemblies. Where necessary the monies should be used for supplemental retraining of labor workers to qualify them for the new jobs created. Most important, the profits from the investments should be fully paid out to new capitalists owners––the corporate employees. This should be a condition to receive the capital investment loans. The goal would be to create new capitalist owners simultaneously with the growth of the economy financed with government loan support. The profits would represent wealth created by public capital invested in such companies and industries.
The desired result would be to decrease, rather than increase, the existing concentration of productive capital ownership and thus economic power in the hands of a minority. The credit mechanisms supported by the government would not involve the expenditure of any tax money and would support profit-making operations for the primary purpose of earning dividends for the companies’ stockholders, including the newly created capitalist owners. Businesses supported by such credit mechanisms would have a profit motive and operate with the requirement for efficiency imposed by a market economy.
The goal would be to broaden the ownership of private corporations so as to make the interests of private industry more synonymous with the public interest and vice versa––while broadening private enterprise capitalism to include everyone in the society. Such policies and programs aimed at broadening productive capital ownership would foster extensive utilization of the most modern and efficient technological innovations and result in the revitalization of American free-enterprise capitalism mirrored in a strong growth-projected economy.
http://www.latimes.com/news/local/la-me-bigsolar-20120921,0,7995250.story
