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24 October 2012

Obama's Glass House: His Investments Abroad

Obama and Biden like to claim that Bain Capital had the companies it invested in make investments abroad, especially in China or Mexico.  It turns out that they count heavily on the main stream leftist media to protect their glass house from stone throwers.

Thanks to Obama's insistence that the government take a big stake in the bankrupt GM after its restructuring as a government and union owned company, it is fully fair to look at its investments abroad if one is going to cast aspersions on those of Bain Capital abroad.

According to China Daily, GM is expanding its investment in China from its current $1 billion a year to $1.5 billion a year to make a total investment in China's 12th Five-Year Plan (2011-2015) of $7 billion.  GM hopes to increase its sales in China from 2.35 million vehicles in 2010 to 5 million by 2015.  To do this, it is designing and developing new models in China.  GM production plants in China are joint ventures with the Chinese Communist Government.

GM announced in 2011 the investment of $540 million in a plant in Mexico to make engines.  In July of this year, it announced the planned investment of $420 million in two factories to make the Chevrolet Trax and full-sized trucks.

How about Obama's promise to create American jobs of the future in green energy?  This effort was promoted by Section 48C Advanced Energy Manufacturing Tax Credits.  41% of its awards went to foreign-based companies who were awarded an average of $20 million compared to an average of $11 million for U.S.-based companies!  17 of the 25 foreign-based companies receiving Obama awards are or have plans to set up wind or solar manufacturing facilities in low-wage countries.  Those 17 foreign-based companies manufacturing in low-wage countries accounted for $406 million, so a super premium award averaging $23.9 million goes to those manufacturing in low-wage countries.  Six of the U.S.-based companies with awards are also planning to manufacture their products in low-wage countries.

As almost everyone now knows, Obama only picks the loser green energy companies for awards.  As these companies have gone bankrupt, their assets are often picked up on the cheap by foreign investors or companies.

Miasole, a U.S. solar energy company, received $101.8 million in tax credits.  In October 2012, it was sold to China's Hanergy Holding Company for a mere $30 million.

Ener1 was approved for $118.5 million of 48C tax credits in 2009 for its batteries.  Biden toured its plant in Indiana just after Obama announced his plan to have 1 million electric vehicles operating by 2015.  In January 2011, the same month as the Biden tour, Ener1 entered into a joint venture with Wanxiang Electric Vehicle Co. to make lithium-ion batteries for Chinese cars.  Ener1 moved some of its engineers to China along with some of its manufacturing equipment to ramp up the Chinese production.  In 2010, Ener1 lost $165 million.  In January 2012, Ener1 declared bankruptcy.  Its remains were bought by a Russian businessman with close ties to the Russian President Dmitry Medvedev, who Obama patted on the knee and told he would be more flexible after the election.  Perhaps in addition to giving the Russians what they want on missile defense, he also plans to give them more American green energy businesses nurtured on 48C tax credits.

Smith Electric Vehicles was awarded $32 million of American Recovery and Reinvestment Act money.  Its losses since 2009 have been $128 million.  In February 2011, it teamed with Wanxiang Electric Vehicle Co. to make school buses.  Their agreement had Wanxiang make a $25 million equity investment in Smith Electric Vehicles and an investment of $75 million to develop and manufacture school buses and other electric vehicles in China.

Cardinal Fastener received $480,000 from Obama's 48C tax credit program to make fasteners for wind energy generators.  Obama visited their factory in Bedford Heights, Ohio and promised American green energy jobs, as he always does.  Soon afterward, Cardinal Fastener released 12% of its workforce.  In June 2011, it filed for Chapter 11 bankruptcy.  Germany's Wurth Group acquired it in January 2012 for a mere $3.9 million.

Remembering Obama's not so ready shovel-ready infrastructure projects, some wound up being  managed and supplied by foreign companies.  ABC News highlighted a $400 million bridge renovation project in New York, the new $7.2 billion Bay Bridge from San Francisco to Oakland, and a $190 million project in Alaska which were to be managed by foreign firms.  Parts of the San Francisco - Oakland bridge were manufactured in China.  The state of California had to reject some of the federal money so they could keep their Chinese contractor.

Finally, if you want to encourage American companies to invest in plants and facilities abroad and to train workers there rather than in the U.S., leave the developed world's highest corporate tax rate where it is as the trend in the rest of the developed world is to decrease corporation taxes.  You can export even more jobs by raising the long-term capital gains tax from an already high 20.0% to 23.8% as required by ObamaUncaringTax in 2013.  Add a 4.7% tax increase for Medicare to high paid managers so small and medium businesses will be discouraged from expanding operations in the U.S.  Follow this up with another 80,000 pages of new business regulations and add the regulations of ObamaCare and Dodd-Frank Too-Big-to-Fail to that.  Then throw in a slew of EPA rulings to take effect after the election, several of which are designed to keep us from using coal for anything, thus driving up our electricity costs and making vital electricity less dependable.  Export American jobs so they can use cheap coal-fired power plants abroad.

To top this all off, the gift for a 10-year veteran of the Obama Veterans Administration is a pen set made in China.

Obama's complaints about Bain Capital foreign investments are a case of incredible hypocrisy.  Obama is a con man, but how he can even dream that this level of hypocrisy will go undetected by Americans is beyond me.  Or maybe not.  He does think we are incredibly, stone-like stupid.  For that reason alone, we should vote him out of office.

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