California Looks into the Fiscal Abyss and Sees Disaster.

California's Brown Raises Prospect of Pension Cuts in Downturn

 

“California Governor Jerry Brown said legal rulings may clear the way for making cuts to public pension benefits, which would go against long-standing assumptions and potentially provide financial relief to the state and its local governments.

 

Brown said he has a "hunch" the courts would "modify" the so-called California rule, which holds that benefits promised to public employees can’t be rolled back. The state’s Supreme Court is set to hear a case in which lower courts ruled that reductions to pensions are permissible if the payments remain “reasonable” for workers.“--https://www.bloomberg.com/news/articles/2018-01-10/california-s-brown-raises-prospect-of-pension-cuts-in-downturn

 

“On the basis of its fiscal solvency in five separate categories, California ranks 43rd among the US states for its fiscal health. ... On a long-run basis, California's net asset ratio of −0.62 indicates the state is reliant on debt to finance its operations. Long-term liabilities are 93 percent of total assets.

Jul 11, 2017 #43 | Ranking the States by Fiscal Condition: California | Mercatus ...https://www.mercatus.org/statefiscalrankings/California

 

Abstract: Government inefficiency is the major source of debt in most nations, states and other entities. The comparison is made between the corporate structure and its balance sheets and states. It is clear that the wise management of tax revenues is essential to maintaining a government that can avoid deficits and massive debt and avoid financial crises and defaults. Many states appear to be deliberately driving toward a financial collapse [NY, IL, MA, CA...]in the hope that they can gain power and wealth if the economy collapses. Many states are dominated by unions who refuse any spending cuts and thus directly contribute to massive deficits and defaults. Much of this process is inefficient and that inefficiency is the root cause by which states fail. Several states will financially collapse in the near future because they cannot effectively spend their current revenues and will not cut spending for a host of reasons.  California, Greece, and Portugal are among those on the current list to potentially default. These nations should be contrasted with Brazil, Canada and Australia for comparison. If they refuse to cut spending then default will be inevitable. They will then whine for alms. 

 

States derive and augment revenues primarily with tax or fee increases; corporations enhance revenues with sales of products. These appear to be independent variables until you realize that the state tax increases go directly to the cost [middle] lines of the corporations and private citizens in terms of property taxes and personal income taxes.  The net effect is corporate profit decline due to higher costs at constant revenue [top line].  Growth in business can, in many cases, offset this marginal tax cost in time and return the business to some desired profit level.  In times of recession when business revenues are decreasing or static this extra tax becomes a burden on profits from higher costs so fewer taxes are paid on corporate profits.  Thus, tax increases can actually reduce revenues. If the recession or bad times progress and if employees are laid off then net taxes on salaries fall and the state again obtains fewer revenues. States do not act in this manner. They tend to keep all employees and raise taxes to meet spending desires, but then tend to want to increase taxes whenever revenue falls for any reason. This is highly inefficient. Businesses and well-paid folk stream out of the leftist state. 

 

As a 5th generation 49-er, I am appalled at the plight of the self-inflected fiscal levels produced by left-wing fanatics and other protosimians. California will crash in fiscal terms and will beg for alms from President Trump, an illegal plea. Force them to cut spending and lower salaries and pensions. They are failures and Brown is the leading boob in the pack. Brown will beg for assistance and then spend more and raise salaries and import more illegal aliens to stuff ballot boxes.

 

Get out of California, fast!

Comments

William Stockton Added Jan 11, 2018 - 11:17am
CA is becoming a "progressive" cesspool.  This is what happens when a political corporation becomes the state religion.
 
I currently work with a Hispanic scientist with a master's degree.  He was unemployed in CA for four years and slept on the floor of his parent's home (which was really their sheet metal shop).  He describes misery as nothing I have ever experienced for that kind of duration.  He describes standing in the food lines with his master's degree of science in tow. 
His perception of CA is that all business is deeply controlled by the state and is "fine-based".  CA uses fines to supplement its depleted coffers.  Taxation was the "honest" way to extort funds.  Now, the state is escalating with more strongarm tactics.
 
He is a very hard-working and industrious.  No reason for his unemployment that I can see other than a lack of opportunity back in his home state.  
 
As a life-long progressive, he has recently turned to conservativism.  Amazing.
Leroy Added Jan 11, 2018 - 11:40am
Pension cuts will never happen without legislation from the federal government.
rycK the JFK Democrat Added Jan 11, 2018 - 11:46am
William
 
"CA is becoming a "progressive" cesspool."
A bit too kind. 
 
I have Portuguese and Spanish relatives in CA as well as being a 5th generation 49-er now living in exile, and lived in a town that was %65 Mexican [or Chicano as they prefer].  In my era there were plenty of jobs [Military, Silicon Valley, Sunnyvale, etc.] Not now.
 
Now, my friends and relatives are leaving CA due to the oppressive regime, absurd taxes and regulations and the length of time it takes to create a new business [2 years minimum and a host of 'inspectors' who haunt  your place constantly]. This progressive process is responsible for lost jobs and more homeless in that leftist state. The new nostrum that CA can be a sanctuary state only attracts criminals, dopers, losers and felons. 
 
"His perception of CA is that all business is deeply controlled by the state and is "fine-based""
 
This is true in my view and the idea that the state can raise employee costs [of all kinds] to levels that exceed the going wage markets proves that they are touchingly unfamiliar with basic economics, following Marx or Che as a better alternative. 
 
CA is hopeless with a Brown Legacy that dates back to the 1940s, corrupt, illogical and economically ineffective. 
 
CA is reputed to have unfunded entitlements exceeding $1 trillion dollars for which they can never resolve. They will bawl and smoke more grass and beg Trump to give them monies to support their perverted life-styles. Their credit rating is like that of Zimbabwe with similar leadership.
 
The courts will have to put in some kind of manager if they go bankrupt that will ruin all the facets of left-liberalism. They deserve this fate.
 
Dino Manalis Added Jan 11, 2018 - 12:40pm
Public pensions should gradually be converted into 401K plans and invested conservatively.  There needs to be fiscal restraint and pro-growth policies, money has to be used carefully and not wasted, it's important to keep consumer and business sentiment strong for them to spend and invest to raise tax revenues.
The Burghal Hidage Added Jan 11, 2018 - 1:00pm
Now it is 1984
Knock, knock at your front door
Its the suede denim secret police
they have come for your uncool niece
Come quietly to the camp
You'd look nice as a drawstring lamp
You'll croak, you little clown
When you mess with President Brown
Kalifornia, Uber alles!
 
Jello Biafra ( not exactly your raving right wing lunatic )
William Stockton Added Jan 11, 2018 - 1:24pm
rycK, ". . . and regulations and the length of time it takes to create a new business [2 years minimum and a host of 'inspectors' who haunt  your place constantly]."
 
This is the same as what my colleague reports.  It is impossible to start a business or buy any property there. 
 
The other phenomena of this state-wide dysfunction is that occupancy rates of residential and commercial structures are at a national low while 40% of homeless in the USA live in CA.  So much of CA property is sitting empty as property investment companies leverage these unoccupied "investments" turning them as quickly as they can for a profit.  Wow.  The trend now is for the state to support people who cant possibly afford even to live in its buildings.
 
This is a very strange and tragic situation indeed.  Can it get any more absurd?  Like you, I would bet it can and will soon.
Cliff M. Added Jan 11, 2018 - 1:41pm
How is the new tax cut/raise going to effect Cali? The salt deduction redo should have a big effect. How does this effect San Fran with it's high priced housing? For how not to do tax and spending cuts refer to the current Kansas fiasco where the departing Governor Brownbach is looking to leave a real mess to the legislature.His massive tax cuts left a huge revenue shortfall and now on his departure he proposes to pay for court ordered spending on the school system  with future revenue growth which is the same reason he made the mess in the first place.
Clinton was the last President to have any type of responsible economic policy. He raised taxes.
   Spending cuts are absolutely needed but who is going to do it with re-election the main concern of the political establishment.
   If Cali tanks this country has big problems.
The Burghal Hidage Added Jan 11, 2018 - 1:48pm
IF?
William Stockton Added Jan 11, 2018 - 2:03pm
Cliff, CA will be our "national lesson".  As progressives love to say, "California sets the trends for the rest of the nation".
 
 Spending cuts are absolutely needed but who is going to do it with re-election the main concern of the political establishment.
 
I can guarantee that government spending will be cut regardless of elections.  Governments & elections are supported by economies (even the likes of kim jong un regimes).  Without an economy, the government is useless . . . pointless.  
This is where the left turned hard left and went over the cliff.  They abandoned principles of economy, markets, & labor in favor of social justice which has negative benefits to society but a huge advantage for political organizations.
Cliff M. Added Jan 11, 2018 - 2:27pm
William explain to me how the left(democrats)who since Eisenhower the last fiscally responsible republican are the ones who drove us over the cliff.Historically since Ike democratic administrations have a much better track record. The republicans are the ones that scream about deficits while democrats have control but when they have the power "Deficits don't matter".
 As to abandoning principles of economy, markets and labor in favor of social justice, With the massive obstruction Obama faced social justice took center stage at the dismay of the many in the middle.
William Stockton Added Jan 11, 2018 - 2:59pm
Cliff, ". . . explain to me how the left(democrats) . . . are the ones who drove us over the cliff."
 
How about the 2016 presidential election?  The labor unions turned from democrat support to republican.  Actually, this is a continuous trend now from 2008.  
Trump was the only candidate saying anything substantial about getting labor markets healthy and reducing business regulations.
The left was ONLY talking more social justice crap. 
 
Really?  You cant see this?
 
We can debate about what it means to be fiscally responsible and we probably won't part paths very soon on that topic.  The government is a bloated mess . . . most of which is caused by years of outdated government policy buying talent & votes with promises of entitlements and retirement securities. 
Free-markets used to do this as well.  Most of those companies have disbanded retirement entitlements or reduced them substantially.  Entitlement packages introduce huge legacy costs for free-market and government institutions with no modern benefits.  I think the statistic is that 77% of government spending is legacy costs (entitlements). 
 
Time to stop the madness.  Everyone wants a protected future but the bottom line is that society can't afford it.
rycK the JFK Democrat Added Jan 11, 2018 - 3:38pm
Cliff M.
 
"The republicans are the ones that scream about deficits while democrats have control but when they have the power "Deficits don't matter"."
 
How about the $10 T doubling of our national debt??
 
Pelosi whines:
 
"Washington, D.C. – Democratic Leader Nancy Pelosi released the following statement after the Joint Committee on Taxation released their dynamic score of the Senate GOP tax scam, showing an increase in the deficit of $1 trillion over the next 10 years:“The JCT report shows that no amount of dynamic scoring fairy dust will fix the catastrophic deficits of the GOP tax scam.  Republicans are selling our children’s future to the wealthiest one percent and corporations shipping jobs out of America.
 
“Hours before the Senate votes to raise taxes on 82 million middle class families and dismantle Americans’ health care, Republicans are in full-blown self-delusion about the true consequences of their monstrous bill.”--https://www.democraticleader.gov/newsroom/111730/
 
Note that Obama spent, on average, $1.25 trillion each year for 8 years so  it looks like she is upset about $0.10 trillion per year. Hypocrisy award for Nancy, the Queen of Homeless and Perverts
rycK the JFK Democrat Added Jan 11, 2018 - 3:39pm
William
 
"Trump was the only candidate saying anything substantial about getting labor markets healthy and reducing business regulations.
The left was ONLY talking more social justice crap. "
 
And they love their  illegal aliens at voting time. Hypocrisy in full bloom. Democrats must play the Race Card  daily to stay alive. 
rycK the JFK Democrat Added Jan 11, 2018 - 3:41pm
William
 
"Time to stop the madness.  Everyone wants a protected future but the bottom line is that society can't afford it."
 
The Welfare State with 100% taxes is their goal. They will fix traitorous Republicans like Lenin did with Kulaks. 
George N Romey Added Jan 11, 2018 - 4:34pm
I tell you what’s going to happen. We are going to print money out of the ying yang and the Fed is going to dole it out. Just like what they’ve done with banks. Money is never an issue if you have a printing press.
 
How long can we continue to just add to the national credit card? Some including here on WB think forever. The Federal Government will bail out the states.
rycK the JFK Democrat Added Jan 11, 2018 - 4:43pm
George
 
" We are going to print money out of the ying yang and the Fed is going to dole it out. "
 
Sounds like Hank Paulson and his response to subprime loans and such. But, does this apply to CA?? 
 
Such a money-grubbing approach does not stop CA from forming its own 3rd world economy based purely  on debt and the  constant quest for a sugar daddy to bail them out. 
 
"Money is never an issue if you have a printing press."
 
Like Argentina, Austria, Greece, Hungary in 1948 [add 26 zeros to the paper and we are fine?!]?? They all had their own currencies to print at will. Then there is Zimbabwe and Mugabe. 
 
The dollar is valued by the Forex market and if nations lose confidence in the dollar then they will sell it and the dollar will sink. 
 
" The Federal Government will bail out the states."
 
The states cannot, by law, go bankrupt so some kind of manager will have to instruct the so-called governor what to cut and what to fund. 
 
CA is a disgrace. 
John Minehan Added Jan 11, 2018 - 5:13pm
The Detroit Bankruptcy signaled two things: 1) unless the political winds change, no states will be bailed out; and 2) pensions are a target in a bankruptcy.
 
Now, NYS protects vested pensions in the State Constitution, so that could be a serious emotional event, but private pensions are vulnerable in bankruptcies and so are municipal ones.
 
If, I'm not mistaken, there is no Chapter in the Code for State Bankruptcies, so that could be an issue.
 
I wonder if states could go to the IMF to be bailed out?
John Minehan Added Jan 11, 2018 - 5:21pm
Apparently not as of August 2017 . . . .
George N Romey Added Jan 11, 2018 - 5:54pm
Until 80 year old pensioners show up on CNN claiming massive hardship then in comes the cavalry.
CA is not alone and other states will follow. PR was easy to ignore. A non state 1000 miles away from Miami with a few million mostly poor citizens. But what happened to PR we happen here in the states.
John Minehan Added Jan 11, 2018 - 6:38pm
Interesting Article about Illinois . . . . 
John Minehan Added Jan 11, 2018 - 6:39pm
"Until 80 year old pensioners show up on CNN claiming massive hardship then in comes the cavalry."
 
Which is why maybe the fix is the IMF.  Bailing out the States is the road to Weimar . . . .
John Minehan Added Jan 11, 2018 - 6:40pm
I also think solvent states like Texas will go thundering for the exits if the Federal Gov't tries to bail out places like IL, NY and CA . . . .
Jeffry Gilbert Added Jan 11, 2018 - 8:31pm
Force them to cut spending and lower salaries and pensions.
 
Cut AFDC and problem will be solved. AFDC = Aid For Dependent Corporations. Otherwise known as corporate welfare which is many multiples greater than social welfare. 
 
Its not incalcitrant unions/labor its corporate greed and politicians who enable it. 
Jeffry Gilbert Added Jan 11, 2018 - 8:41pm
Pension cuts will never happen without legislation from the federal government.
 
Already passed and in place. Another of Barry Soetero's great ideas. Even worse than cuts in many respects. One feature your IRA can be seized by the Treasury and converted to TBills.
 
Carlin - Retirement money at 2:00
Cliff M. Added Jan 11, 2018 - 8:58pm
ryck, Anybody that was stuck with the steaming pile of shit from the Bush legacy was stuck running a large deficit.
 It is interesting how Gary Johnson the liberal conservative was the only one prepared and actually talking about how to fix the deficit.10% cuts across the board. Nobody on the gravy train would stand for it even though it would be the fairest way to approach the issue.
Cliff M. Added Jan 11, 2018 - 9:05pm
Jeffrey, They got you by the balls. How true.Carlin was one of the wisest men of a generation.
Anyone reading this thread, Carlin-Retirement money at 2:00 is a must watch.
Lynn Johnson Added Jan 11, 2018 - 9:10pm
>> I also think solvent states like Texas will go thundering for the exits if the Federal Gov't tries to bail out places like IL, NY and CA . . . .
 
There is indeed a Texas flag on my pickup that reads "Secede".  We "hicks" are often berated for such considerations.
 
Now... there is a California secession movement (because of Trumps election).  I want to send them a donation.  Can I travel to California and vote for it?
 
The only down-side would be the need for a much bigger/longer wall. :)
 
Do you think we can convince Canada to annex the North East?
John Minehan Added Jan 11, 2018 - 9:19pm
"Do you think we can convince Canada to annex the North East?"
 
Might make sense.  Remember The Nine Nations of North America
Ben McCargo Added Jan 11, 2018 - 11:28pm
So...you want pensions to be cut then?  Let me guess, you don't have one, do you?  And before you get all mad, I'm just asking.  It's an unfortunate part of our time that pensions are needing to be reorganized.   As a soon to be retiree, i worry like all get out about Social Security.  Like Dino said, maybe there is something to be said about 401k's, especially those delving into minimal risk.   Use the fucker as a bank account almost.  Pensions, God bless those that have them; I wish them well on maintaining them.  
And what about immigration?
rycK the JFK Democrat Added Jan 12, 2018 - 12:42pm
Cliff
 
"ryck, Anybody that was stuck with the steaming pile of shit from the Bush legacy was stuck running a large deficit."
 
Obozo could have sent less. Quit  blaming others for the antics of that racist. He added $10T to the debt, or do you talk about that?
rycK the JFK Democrat Added Jan 12, 2018 - 12:44pm
Jeffry
 
"Pension cuts will never happen without legislation from the federal government."
 
Can you site a law or statute for this??
 
I did not think so.
rycK the JFK Democrat Added Jan 12, 2018 - 12:46pm
John
 
"I also think solvent states like Texas will go thundering for the exits if the Federal Gov't tries to bail out places like IL, NY and CA . . . ."
 
I hope so and I will move to TX.
rycK the JFK Democrat Added Jan 12, 2018 - 12:48pm
George
 
"But what happened to PR we happen here in the states."
 
??
 
The states, and putrid cities like Chicago, can sell stuff on their own, because I do not want my tax monies to support that toilet, or Detroit, or New Haven, or Baltimore. 
Jeffry Gilbert Added Jan 12, 2018 - 4:15pm
Can you site a law or statute for this??
 
Sure can. Had to look it up - took me only a few minutes. I was made aware of it through a phone solicitation from a guy representing the solution provider a couple years ago. 
 
It was buried in the 2015 $1.1 trillion “Cromnibus” legislation signed by President Barry Soetero.
 
Thanks for asking.
 
Have a great day! 
 
Cliff M. Added Jan 12, 2018 - 9:33pm
ryck,  What's the excuse for the republicans running a trillion dollar deficit this year in a "GOOD ECONOMY".  I don't want to hear shit form anybody about running deficits by both parties. The gravy train has gotten too large and the deficits are being run for issues that should not be priorities. The scumbags in office are blatantly exploiting and ripping off the American public. At this point I just want to see something different which is the reason too many including myself voted for the carpetbagger big cheese we now are enduring. I have seen enough of the corporate party and their political sellouts . This shit has to come to an end.
Flying Junior Added Jan 13, 2018 - 5:02am
Pension cuts will never happen without legislation from the federal government.
 
Why not?  The pensions are a state obligation.
 
Underfunded or unfunded pension obligations are a universal problem in states and municipalities today.  At least in states and cities that have not completely abrogated their pension responsibilities.  In San Diego we have taken very real steps to solve this problem.  If it makes you conservatives feel any better, Mayor Faulconer has privatized road repair and water mains.
 
In California, eliminating jobs in the civil service with pensions was quite recently a major wedge issue with dickhead republicans.  Fortunately this movement never really got much traction.  Conservative provocateur, Carl DeMaio, actually held a rally in my local grocery store watering hole parking lot trying to fire up the base to get pissed off at people who had pensions.  I think the logic was that if you or I didn't have a pension, why should anyone else?
 
This is the first that I have heard of conservatives condemning a democratic governor for trying to do the same.
 
Of course, the real problem is the pensions that the chief of police, fire chief, mayor and others receive, which is quite often greater than the annual salary that they were earning their last year in office.  We're talking about nearly a quarter of a million dollars per annum.  Far more that the average University of California or Department of Motor Vehicles pensioner.
 
In fairness to the author and anyone else who hates Jerry Brown and his father, Brown has been making some noises about eliminating state-funded pensions.  I guess you will have to show me a credible source that claims he will diminish existing retirement contracts.
 
Even the revered University of California is considering making it much more difficult to earn a pension today.  Maybe people are just living too long after they retire.  Like I said.  It's universal.  As of today, the University of California is honoring all of its commitments and has never made a squawk about not doing so in the future.
 
As far as the abyss...
 
Governor Brown took office for the second time with a state that was running a deficit.  We had Arnold Shwarzenegger for eight years.  His best idea to balance the budget was more slot machines.  I'm one of the schmucks that voted myself an extra 1/2 point sales tax under Brown.  Keep in mind that states cannot simply run up a debt in the way that the Feds can.  We have to pay off any debts.  Today the State of California is running a big surplus that will go into what Governor Brown calls a rainy day fund.  These funds will be needed for the next recession.
 
Thanks for caring, California haters.
 
As far as living in California.  It's really not that bad.  And no, people are not fleeing California in spite of the high cost of housing. Our population is still increasing.   We remain the strongest economy in the United States and show no signs of letting up.  Corporations are not fleeing either.  We still have Tesla Motors, so kiss my ass.
 
Most of the people in my community have enough food to feed their families.  For those in need, there are charitable services.   Even if they have to walk to the grocery store, they are still fine.  We buy fresh produce from the finest agricultural region in the world.  We buy cherries in the winter from Chile.  We have just about anything that you can imagine in our baskets available at any time throughout the year.  Swiss chard, mangoes, papayas, peaches...
 
Eat your heart out, William.
John Minehan Added Jan 13, 2018 - 8:04am
"Of course, the real problem is the pensions that the chief of police, fire chief, mayor and others receive, which is quite often greater than the annual salary that they were earning their last year in office.  We're talking about nearly a quarter of a million dollars per annum.  Far more that the average University of California or Department of Motor Vehicles pensioner."
 
Remember this?
Cliff M. Added Jan 13, 2018 - 9:10am
I can not see how this new tax bill which will heavily target good wage earners in California, New York , New Jersey etc. will help stimulate growth. Once again as has been going on for the last 30 or so years   solid part of the consumer base is selectively targeted to squeeze more revenue and income from . Over the last 30 years the lower middle income earners have been consistently squeezed
on the income side shrinking growth and the consumer base which is drastically needed if growth is the goal. Eventually the target must be where the disposable is . Al or most of the income growth going to the top is the major reason the economy has grown at half the speed of smell.Putting disposable income into the hands of those who will actually dispose of it is key to get past the launch speed we now seem to not be able to surpass.
  Beating up on the real main street consumer base is not the answer.
 
Cliff M. Added Jan 13, 2018 - 9:12am
 The new tax bill is going to be nothing more than a vomit job that continues to enhance those gaining the most.Does not pass the smell test.
rycK the JFK Democrat Added Jan 13, 2018 - 10:36am
Cliff
 
" The new tax bill is going to be nothing more than a vomit job that continues to enhance those gaining the most.Does not pass the smell test."
 
How do  you know that?
 
How else do  you grow the economy and raise wages? By EO or government spending, which did not work in the Obama regime?
 
Obama   pushed the debt from $10T to $20T and the growth was less than 2% in GDP  terms.
 
Under Trump the economy seems to be expanding!  Why??
Cliff M. Added Jan 13, 2018 - 11:41am
ryck, More of the same will produce more of the same. It is extremely early for Trump accolades. This policy is targeted at those who have done extremely well in the recent past. Why would we expect different.Big rewards for the contributor class and some more meager crumbs for the masses.
rycK the JFK Democrat Added Jan 13, 2018 - 11:58am
Cliff M.
 
"ryck[sic], More of the same will produce more of the same."
 
You do not know this!
 
"Why would we expect different.Big rewards for the contributor class and some more meager crumbs for the masses. [parroting  Pelosi?]
 
 We have millions that have no jobs or skills or are in prison [1.5 million now] or welfare or are ex-cons and cannot get a job.  Clearly, there is no leftist plan to 'employ' these evident from the Obama  Era other than to just  throw monies at the problem.
 
Already, Trump accolades, the black unemployment  is the lowest it has been in decades. 
 
What  if  you are  wrong and the economy smokes like it did with the  JFK and RWR tax cuts?? Obama doubled the debt with phony spending on phony companies:
 
List: 36 Of Obama’s Taxpayer-Funded Green Energy Failures
http://nation.foxnews.com/obama/2012/10/20/list-36-obama-s-taxpayer-funded-green-energy-failures
 
"So far, 36 companies that were offered federal support from taxpayers are faltering — either having gone bankrupt or laying off workers or heading for bankruptcy. This list includes only those companies that received federal money from the Obama Administration’s Department of Energy and other agencies. The amount of money indicated does not reflect how much was actually received or spent but how much was offered. The amount also does not include other state, local, and federal tax credits and subsidies, which push the amount of money these companies have received from taxpayers even higher."
 
The complete list of faltering or bankrupt green-energy companies:
    Evergreen Solar ($25 million)*
    SpectraWatt ($500,000)*
    Solyndra ($535 million)*
    Beacon Power ($43 million)*
    Nevada Geothermal ($98.5 million)
    SunPower ($1.2 billion)
    First Solar ($1.46 billion)
    Babcock and Brown ($178 million)
    EnerDel’s subsidiary Ener1 ($118.5 million)*
    Amonix ($5.9 million)
    Fisker Automotive ($529 million)
    Abound Solar ($400 million)*
    A123 Systems ($279 million)*
    Willard and Kelsey Solar Group ($700,981)*
    Johnson Controls ($299 million)
    Schneider Electric ($86 million)
    Brightsource ($1.6 billion)
    ECOtality ($126.2 million)
    Raser Technologies ($33 million)*
    Energy Conversion Devices ($13.3 million)*
    Mountain Plaza, Inc. ($2 million)*
    Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*
    Range Fuels ($80 million)*
    Thompson River Power ($6.5 million)*
    Stirling Energy Systems ($7 million)*
    Azure Dynamics ($5.4 million)*
    GreenVolts ($500,000)
    Vestas ($50 million)
    LG Chem’s subsidiary Compact Power ($151 million)
    Nordic Windpower ($16 million)*
    Navistar ($39 million)
    Satcon ($3 million)*
    Konarka Technologies Inc. ($20 million)*
    Mascoma Corp. ($100 million)
 
 Can  you explain why so many of these companies failed??
 
Why not blame it on Bush or Reagan??  I would expect that. 
 
"Big rewards for the contributor class and some more meager crumbs for the masses."
 
Did  you ever get a job from a poor person? The entrepreneurs run the economy and provide most of the new jobs--ignoring the phony government  jobs. 
 
What if Trump succeeds? What  you say then?
Cliff M. Added Jan 13, 2018 - 12:38pm
The current economy is weeding out those in the middle that create the small business's that hire the most people.Startups are near 40 year lows. New startups don't employ nearly as many as in the past.
 Kudos if Trump succeeds .We need widespread success not just success for the select few.
rycK the JFK Democrat Added Jan 13, 2018 - 2:35pm
Cliff
 
"We need widespread success not just success for the select few."
 
We did not get that with the previous administration with high taxes and obtrusive rules and regulations. 
 
"Kudos if Trump succeeds "
 
Do you really think the Dems will give him any credit?? They will just surge farther left. 
Cliff M. Added Jan 13, 2018 - 2:54pm
ryck, We don't win with either party here.
Flying Junior Added Jan 13, 2018 - 3:21pm
Hey ryck,
 
I just picked one of your failed companies at random.  It looks like their latest project in Israel partnering with General Electric will be an astounding success, providing clean energy to 120,000 homes.
 
http://www.brightsourceenergy.com/ashalim-solar-project#.Wlpo3jdG3v8
 
I guess it might be amusing to see what a few other of these companies are up to today.  I have read a great deal of criticism of Obama's stimulus package on this site from both the left and the right.  My city received useful funds.  It's hard to look it up eight years later.  But I remember we used some of the money to repair and rebuild a jetty that leads from the bay to the open ocean.
 
Here's a fun trip down memory lane.  Cash for clunkers?
 
John M.
 
Excellent example of what can happen when watchdog groups and local newspapers no longer exist.
Flying Junior Added Jan 13, 2018 - 3:22pm
I believe that Obama was also making $8,000 available to first-time home buyers.  Gotta love that guy.
Bill H. Added Jan 13, 2018 - 3:49pm
 
Solar energy companies are fighting against resistance from Big Oil and large electric utilities. In many cities, both entities have lobbied for and succeeded in procuring outrageous permitting and inspection fees for installation of solar systems, not only to mention outrageous surcharges from electric utilities on customers who have solar systems. In my area, a company that was proposing setting up solar charging stations for electric vehicles has put the project on-hold for now due to similar occurrences.
Flying Junior Added Jan 13, 2018 - 3:51pm
Hey, look at that.  A123 Systems is building lithium-ion batteries for buses, trucks and cars.
 
http://www.a123systems.com/
rycK the JFK Democrat Added Jan 13, 2018 - 3:54pm
FJ
 
" A123 Systems "
 
 Grasping at straws??
 
How much do the cost and when will they be available??
rycK the JFK Democrat Added Jan 13, 2018 - 4:02pm
Bill H.
 
How about Bloom that gets money from taxes on existing land-line coal fired plants?  Fair?
 
The solar types got all sorts of gratuitous loans and perks and political assistance in setting up plants and how many failed??
 
[see list above]
 
How about this from 2010?
 
Spain’s Solar Energy Bubble Bursts. California is Next. The First of a Series of GanGreen Asset Bubbles Bursting.
"
Abstract: Well-meaning but idiotic government workers in Spain subsidized a hopeless solar power project that is now essentially worthless. The cost was astronomical and the government is now withdrawing the subsidies as even the most dedicated leftist can work the numbers and see that this project is terminal and will never work out. This is a classic debt-driven asset bubble formation folly and now it comes crashing down in disgrace. Clumsy excuses are offered for this mess by the Times and we are encouraged to hear that the government regulators in Spain are still ‘learning’ how to subsidize a worthless project. Maybe some of them can rush over to California and show them some new tricks before that state crashes in debt."
 
The Promise and the Glory!
 
PUERTOLLANO, Spain — Two years ago, this gritty mining city hosted a brief 21st-century gold rush. Long famous for coal, Puertollano discovered another energy source it had overlooked: the relentless, scorching sun.[1]--Solar Industry Learns Lessons in Spanish Sun By Elisabeth Rosenthal, New York Times, Published: March 8, 2010 [Emphasis is mine in all quotes.]
 
Soon, Puertollano, home to the Museum of the Mining Industry, had two enormous solar power plants, factories making solar panels and silicon wafers, and clean energy research institutes. Half the solar power installed globally in 2008 was installed in Spain”-- Solar Industry Learns Lessons
 
The government is behind us! A stimulus! Jobs!!
 
Armed with generous incentives from the Spanish government to jump-start a national solar energy industry, the city set out to replace its failing coal economy by attracting solar companies, with a campaign slogan: “The Sun Moves Us.””-- Solar Industry Learns Lessons
 
Ooops? What went wrong??
 
But as low-quality, poorly designed solar plants sprang up on Spain’s plateaus, Spanish officials came to realize that they would have to subsidize many of them indefinitely, and that the industry they had created might never produce efficient green energy on its own.”-- Solar Industry Learns Lessons
 
Where was the quality control governance? Didn’t the government have ‘experts’ on hand to inspect the wonderful new facilities?? Where was Phil Jones or Michael Mann? If they had used high-quality parts and service would this have changed the outcome??
 
Puertollano’s wrenching fall points to the delicate policy calculations needed to stimulate nascent solar industries and create green jobs, and might serve as a cautionary tale for the United States, where a similar exercise is now under way.
 
For now, electricity generation from the sun’s rays needs to be subsidized because it requires the purchase of new equipment and investment in evolving technologies. But costs are rapidly dropping. And regulators are still learning how to structure stimulus payments so that they yield a stable green industry that supports itself, rather than just costly energy and an economic flash in the pan like Spain’s.”--Solar Industry Learns Lessons
 
 
[1] Solar Industry Learns Lessons in Spanish Sun  By Elisabeth Rosenthal, New York Times,
Published: March 8, 2010 http://www.nytimes.com/2010/03/09/business/energy-environment/09solar.html?em [Emphasis is mine in all quotes.]
 
 What happened?? Greatness was just within their feeble grasp. Ah!? Socialist  government?? The problem? 
rycK the JFK Democrat Added Jan 13, 2018 - 4:18pm
FJ
 
A123?!
 
Not Another Solyndra
http://www.slate.com/articles/business/the_juice/2014/04/the_rebirth_of_a123_systems_not_another_solyndra_after_all.html
 

Does anyone remember target="_blank">A123 Systems? The Michigan-based electric-car battery maker has gone down in public memory as target="_blank">Solyndra 2.0. Less than three years after receiving hundreds of millions from the government and holding a splashy initial public offering, it plunged into bankruptcy in the fall of 2012.


But a funny thing happened to A123 on the road to ignominy. While the solar startup Solyndra target="_blank">liquidated and vanished beneath the waves, costing taxpayers around half a billion dollars, A123 Systems emerged from bankruptcy in January 2013 under new, Chinese ownership. It has continued to innovate and find new customers for products that barely existed in 2009, the year of its IPO. A123 Systems was conjured into being—and ultimately broke itself—by responding to direct government financing aimed at boosting energy efficiency. It has now found a second, post-bankruptcy life thanks in large part to newly enacted government standards mandating greater energy efficiency.
 
"Cirino takes over after a long road from startup to bankruptcy to buyout at A123."
http://www.crainsdetroit.com/article/20170828/news/637536/a123-systems-parts-ways-with-ceo-names-replacement
 
A123 Systems, LLC, a wholly owned subsidiary of Wanxiang Group
 
 Impressive projections. But so did Solyndra and other farces. 
 
bunk. What happened to the US loans to these turkeys? 500 Million? In default? That is their 2019 goal?
 
Parasites at best. 
 
Leroy Added Jan 13, 2018 - 8:49pm
"Why not?  The pensions are a state obligation."
 
States like Illinois--and California as I read here--have it enshrined in the state constitution prohibiting the reduction of state pensions.  If it is a private fund, then, yes, maybe the benefits are reduced.  But for state pensions mentioned above, the taxpayer has to pick up the slack.  It would not sit well with me to sacrifice my pension to ensure state employees got a better one.  Illinois is raising taxes.  People are moving out in droves.  Those that remain pay even higher taxes.  Many states are at or near the point where they are paying retired educators more in pensions than they are to actually teach, and it is getting worse.  The future is that we will pay more for less service until the state runs out of money.  Don't know what happens after that.
Benjamin Goldstein Added Jan 14, 2018 - 12:13pm
Leroy: This is madness. I remember conservatives trying to write anti-gay marriage rules into constitutions and I hated it. More often, however, it is liberals who trash all constitutions and the highest ranking documents with their petty policies. Everything that they want is a human right. Pensions may not be reduced. The German TV tax. It's madness. But logical in its madness, if whatever you want is progress towards the future there will never be a reason to reassess and take things back. Eastern Germany had the slogan, 'Forwards ever, backwards never!' (no joke, German: Vorwärts immer, rückwärts nimmer!). So fiscally approaching the abyss is progress.
rycK the JFK Democrat Added Jan 14, 2018 - 2:38pm
Leroy 
 
But for state pensions mentioned above, the taxpayer has to pick up the slack.  It would not sit well with me to sacrifice my pension to ensure state employees got a better one.  Illinois is raising taxes.  People are moving out in droves.
 
 If the state granted excessive pension and cannot pay for them then what is the role of the federal government?
 
"The future is that we will pay more for less service until the state runs out of money."
 
 Yes and why should I subsidize IL or CA? What is the law here?
 
rycK the JFK Democrat Added Jan 14, 2018 - 2:40pm
BG
 
" So fiscally approaching the abyss is progress."
 
What kind of progress is getting so deep into debt the state needs a bailout?
Benjamin Goldstein Added Jan 14, 2018 - 3:04pm
What kind of progress is getting so deep into debt the state needs a bailout?
Greek progress? Upcoming: Italian progress and Spanish progress. ;)
Leroy Added Jan 14, 2018 - 11:33pm
" If the state granted excessive pension and cannot pay for them then what is the role of the federal government?"
 
There is no role for the federal government to my knowledge.  Ultimately, however, the pensions will come under the control of the federal government, one way or the other.  That's part of the problem.  The states know that they are too big to fail.  Ultimately, the cost will be socialized. The government can't just bail out the bad states and the expense of the good states.  That will never pass muster.  It will be all the states or none.
rycK the JFK Democrat Added Jan 15, 2018 - 2:20pm
BG
 
100% agreement  on EU debtors. 
 
Leroy
 
"The states know that they are too big to fail.  Ultimately, the cost will be socialized. The government can't just bail out the bad states and the expense of the good states.  That will never pass muster.  It will be all the states or none."
 
[1] Ultimately, the cost will be socialized.
That does not necessarily mean Federal. 
 
[2]  The government can't just bail out the bad states and the expense of the good states.
 Ask a Dem about this 
Bill Kamps Added Jan 15, 2018 - 2:26pm
ryck, big difference between the  Federal government, and its debt, and California government and its debt.  The Feds can create money, and California cannot.  The Feds can create bonds, and sell them to China and other countries, with these bonds the Feds can pay the interest on previous bonds, if necessary.
 
California cannot create money.  They have to pay interest on their debt not with newly created debt, but with taxes on residents and corporations.  The same mentality that leads to Federal debt, does not work at the state level. 
 
While pensions vary from state to state, in many states the pensions are too generous, and dont pass any kind of sanity test.  My sister in law worked for 25 years as a school teacher in Missouri.  She retired at the age of 51 with a pension indexed to inflation at 80% of her salary which she will get for life. If she lives to 85, she will collect a pension for 34 years based on working 25.  Further, she now works as a substitute teacher, and if she works 4-5 days a month, her monthly earnings including her pension, will exceed her earnings when she worked full-time.   The state currently has more people on a pension, than they have government employees.
 
There is no way this pension passes any kind of actuarial soundness.  The pension plan is woefully underfunded because the promises are just too great.
 
Yes the Feds may eventually bail out the states, but a restructuring of the pension plans, and spending plans will need to be done.   The people in the states that are doing well, are not going to bail out the bankrupt states without some push back on spending.
rycK the JFK Democrat Added Jan 15, 2018 - 3:29pm
Bill,
 
But they can create unique deficit and spending scenarios by warping accounting rules where bonds can be issued and quickly sold, frequently in less that 4 hours. 
 
 From the past to illustrate how they do things:
 
 Some details ooze out after a time:
 
"SACRAMENTO, California (Reuters) - California lawmakers on Friday approved a state budget filled with spending cuts and creative accounting to fill a $19.1 billion deficit, 100 days after a spending plan should have been in place."--https://www.reuters.com/article/us-california-budget/california-budget-approved-100-days-late-idUSTRE6972R920101008
 
The plan includes more than $1 billion in revenue from postponing a corporate tax break and roughly $3 billion is added from transfers from state funds”-- California budget approved 100 days late
 
The term transfers, particularly as how it is used in this context and not addressing the old San Francisco cable car ticket mechanism, is onerous and intimidating. This may indicate that more cities, like Los Angeles, have been tapped to loosen up on their cash surpluses, if any exist, and to gently hand over that cash to the liberals in Sacramento.
 
The plan also would put before voters a measure in 2012 to bolster a rainy-day fund and roll back public pension increases for new state employees approved in 1999.”-- California budget approved 100 days late
 
That is nonsense. With their current sour junk-level bond credit rating and huge debt load, the idea of putting aside some cash that could be used to address emergencies is foolish.
 
This cannot continue. 
Bill Kamps Added Jan 15, 2018 - 3:44pm
Yes, there are a number of states in dire situations, and they will try to juggle things for as long as they can.  They will delay paying contractors, etc.  But the pension numbers are deadly, they just keep expanding, and will eventually force a problem. 
 
Part of their nonsense is that they are strong arming companies to help them with their float, so they have more cash on hand.  They can tell big contractors to wait on payments, or even force them to agree to take 90 cents on the dollar to keep them from delaying the payment to the contractor for a long time. 
 
We are in new territory, since the Feds have never bailed out a state before, and in theory they cant file bankruptcy.  But who knows right? Something is going to happen that hasnt happened before.  Either promised expenses and pensions get cut, the state files for bankruptcy, or the Feds come to the rescue.  
George N Romey Added Jan 15, 2018 - 4:11pm
Like with banks the Federal Government will create a TARP like product and force all states to take a predetermined amount. The amount likely far into the trillions will just be added to the debt. 
rycK the JFK Democrat Added Jan 16, 2018 - 2:16pm
Bill Kamps
 
"Yes, there are a number of states in dire situations, and they will try to juggle things for as long as they can."
 
True, and I think they deliberately do this because they think the federal government has no choice but to fund their excesses and they will find this as a convenient way to get more free money. 
rycK the JFK Democrat Added Jan 16, 2018 - 2:21pm
GNR
 
"Like with banks the Federal Government will create a TARP like product and force all states to take a predetermined amount. "
 
And what about states that are solvent??
 
Should TX take in more money and not use it for debt and then be obligated to what: pay it back. CA, IL, MA and other destitute states do not WANT to pay it back the want a subsidy. 
 
Going broke deliberately should b a felony on the state level. Jail Brown and his cronies. 
Bill Kamps Added Jan 17, 2018 - 9:18am
It has been pretty well reported that CA government is more concerned with protecting their "way of life" than with making the state financially solvent.  In other words they dont care they are going broke, they want to keep their high level of regulations, and high cost of living in place. 
 
People think the end game is the Feds will bail them out, but it hasnt happened yet.  Will all the Democrats in Congress come to their rescue? even those from solvent states?  What will those voters say? How will they get a majority in Congress?  Congress has difficulty passing laws to fund the Federal government and they all know they HAVE to do that, but still struggle.  They dont have to bailout CA.
 
Cities have been effectively bankrupt before, New York, and more recently Detroit, and the Feds didnt just come in and pay the bills.  Granted CA is much larger, but still it remains to be seen if the precedent will be set.
rycK the JFK Democrat Added Jan 17, 2018 - 11:36am
Bill
 
"Cities have been effectively bankrupt before, New York, and more recently Detroit, and the Feds didnt just come in and pay the bills.  Granted CA is much larger, but still it remains to be seen if the precedent will be set."
 
 Great post and I agree. 
 
Let us not forget the leftist 'solution' to all problems:
 
[1] "tax the rich, tax more and more..."
[2] if #1 fails then blame capitalism. 
 
Let CA crash.