Posts tagged ‘DOE’

The Graveyard of Cronyism

Phoenix businesses add hundreds of jobs every week.  However, the only jobs that every get subsidized are in sexy businesses.  That is because the subsidies themselves make zero sense, from an economic or public policy standpoint.   The point is not to create jobs, but to create press releases and talking points for politicians and their re-election campaigns.

And there is little that is sexier to politicians spending taxpayer money to get themselves re-elected than solar and Apple computer.  Which brings us to this plant in Mesa (a suburb of Phoenix), which I am calling the Graveyard of Cronyism.

GT-Advanced

This plant was built by First Solar to build solar panels.  I would have to quit my day job and work full-time to figure out all the ways this plant was subsidized by taxpayers -- special feed-in tariffs for First Solar customers, government tax breaks for solar panel purchases, direct government subsidies and grant programs for solar panel purchases, the DOE loan guarantee program for solar... etc.  In addition, the City of Mesa committed $10 million in infrastructure improvements to lure First Solar to the site.  I can't find what economic development incentives there were but there must have been tax abatements.  In addition, the company was promised a further $20 million in economic development funds from the County, but fortunately (unlike most such deals) the funds were tied to hitting employment milestones and were never paid.  First Solar never produced a single panel at the plant before it realized it had no need for it.

More recently, Apple and sapphire glass manufacturer GT Advanced bought the empty plant from First Solar.  And again there was much rejoicing among politicians locally.  Think of it -- Two great press release opportunities for politicians in just three years for the same plant!  I never feel like we get the whole story on the development deals offered for these things but this is what we know:

Brewer and the Arizona Legislature approved tax breaks related to sales taxes on energy at manufacturing plants. The state also put the Apple/GT plant into a special tax zone that pays a 5 percent commercial property tax rate. Most Arizona companies pay a 19 percent rate this year and an 18.5 percent next.

[In addition,] Apple was slated to received [sic] $10 million from the Arizona Competes Fund for the Mesa factory. The Arizona Commerce Authority — the privatized state economic development agency which administers the $25 million sweeten-the-deal fund along with Gov. Jan Brewer — said neither Apple nor GT Advanced (Nasdaq: GTAT) have received any money.

Well, it turns out that artificial sapphire sounds really cool (a pre-requisite for crony deals) but it is not so great for cell phones.  Apple went another way and did not use the technology on iPhone 6 -- not just for timing reasons but because there are real issues with its performance.

So a second crony buys the plant and does not even move in.

What's next?  I am thinking the best third tenant at the sexy-crony nexus would be an EV battery plant, or even better yet Tesla.  It is too bad Fiskar motors went out of business so soon or they would be the perfect next crony fail for this site.

Fisker Considering Bankruptcy

What a surprise -- apparently forced to make their case to private investors now rather than just DOE bureaucrats whose main criteria is "did this company support President Obama in the last election", Fisker is having trouble raising money and may declare bankruptcy.

My Favorite Line of the Day

In a report from the DOE Inspector General, which said that $500,000 of equipment bought with stimulus money was missing at a battery company:

 “It would not be appropriate to release the name of stimulus-money recipient where the $500,000 worth of equipment could not be located.”

But it is A-OK to excoriate by name any number of corporations that create value legally if doing so advances this Administration's re-election prospects.

Electric Vehicle Mileage Fraud

I am glad to see that other sites with more influence than I are focusing attention on the electric vehicle mileage fraud.   The Green Explored site writes, via Q&O:

The EPA allows plug in vehicle makers to claim an equivalent miles per gallon (MPG) based on the electricity powering the cars motors being 100% efficient. This implies the electric power is generated at the power station with 100% efficiency, is transmitted and distributed through thousands of miles of lines without any loss, is converted from AC to DC without any loss, and the charge discharge efficiency of the batteries on the vehicle is also 100%. Of course the second law of thermodynamics tells us all of these claims are poppycock and that losses of real energy will occur in each step of the supply chain of getting power to the wheels of a vehicle powered with an electric motor.

Finally!  For months I have been writing about this and have started to believe I was crazy.   I have written two Forbes pieces on it (here and here) and numerous blog posts, but have failed to get much traction on it, despite what appears to be near-fraudulent science.  I wrote

the government wants an equivilent MPG standard for electric cars that goes back to the power plant to estimate that amount of fossil fuels must be burned to create the electricity that fills the batteries of an electric car.  The EPA’s methodology is flawed because it assumes perfect conversion of the potential energy in fossil fuels to electricity, an assumption that violates the second law of thermodynamics.   The Department of Energy has a better methodology that computes electric vehicle equivalent mileage based on real world power plant efficiencies and fuel mixes, while also taking into account energy used for refining gasoline for traditional cars.  Using this better DOE methodology, we get MPGe’s for electric cars that are barely 1/3 of the EPA figures.

The linked articles provide much more detail on the calculations.  As a result, when the correct methodology is applied, even in all-electric mode the heavily subsidized Fisker Karma gets just 19 MPG-equivalent.

Do you want to know the biggest energy advantage of electric cars?  When you fill them with energy, you don't stand there at the pump watching the cost-meter spin, as you do in a gas station.   It's not that the energy cost is lower, it's just better hidden (which is why I suggested the Fisker Karma be renamed the Fisker Bastiat, after the French economist who wrote so eloquently about the seen and unseen in economic analysis).  It's why, to my knowledge, no electric car maker has ever put any sort of meter on its charging cables.

The Corporate State Rolls On

In a Senate budget hearing with the Department of Energy, one would have expected a lot of questions about the loan program to avoid future Solyndras.  But Al Franken uses his time to pester the DOE to give taxpayer money to a corporation in his state.

This is the answer as to why so many bone-headed loans were made despite evidence of likely disaster.  You can bet that Boxer and Feinstein were all over the DOE several years ago pushing for the Solyndra loan.  Franken doesn't give a rip whether the loan is smart or not, or whether the taxpayers' money is safe or not.  He wants a multi-million dollar press release to get himself in the Minnesota news for a newscycle or two helping out the home state.  After that, the money's purpose has been achieved and I can't imagine him caring what happens to it.  Certainly that is the fate of most of these jobs-related government investments - big splashes up front with promises of hundreds of new jobs, but absolutely no scrutiny in the back end when, likely as not, these jobs don't actually materialize.

My Questions for Chu

1.  Accepting for a moment that the purpose of the loan program under which Solyndra received its money was truly reduction of CO2 output and fossil fuel use, what is the metric the DOE uses to score these investments against these goals (e.g. tons of CO2 output avoided over the next 10 years per dollar of government investment).

2.  How did Solyndra and other companies that were accepted for the program score on your metric?  How did companies that were turned down score?

Of course there was no such analysis -- the government appears to have invested in whatever companies raised the most money for Obama or got Joe Biden's heart palpitating or both.  Even if one pulls the obvious politics out of it, it appears they invested in stories they found appealing, the same mistake many novice investors make.

The Left works hard to wrap itself in the mantle of science, and Republicans just let them do so.  If Chu wanted to take the high ground of  trying to do the right thing for US energy policy, questioners should have taken him at his word and challenged how well his internal process matched his bold words.   Politicians are too obsessed with finding some crime or smoking gun.  The underlying failure is that the loan process does not, never will, and in fact cannot match the stated ideals and goals of the program.

When Did We Vote For This?

Lost in the discussion of Dan Carol's criticism of Steven Chu and his conduct in the Energy Department was an amazing implicit assumption about the DOE's mission:

“Secretary Chu is a wonderful and brilliant man, but he is not perfect for the other critical DOE mission: deploying existing technologies at scale and creating jobs,”

Seriously, is this really their mission?

They Would Have Failed Anyway

This Newsweek article reviews the amazing coincidence that so many Obama DOE loans and subsidies benefited heavy-duty Obama campaign supporters.  The author seems surprised:

...these were highly competitive grant and loan programs—not usually a hallmark of cronyism. Often fewer than 10 percent of applicants were deemed worthy.

Nevertheless, a large proportion of the winners were companies with Obama-campaign connections. Indeed, at least 10 members of Obama’s finance committee and more than a dozen of his campaign bundlers were big winners in getting your money.

But his first sentence misses an important aspect.  Sure, competitive contracts for, say, building a bridge may not be fraught with cronyism.  If so, it is likely because these contracts have pretty clear decision criteria - ie we will take the lowest bid by anyone with minimum qualifications.

But the DOE loans were all to companies with sketchy prospects -- if they had actual profits or even a reasonable hope of profits, someone would have funded them privately.  So these are all wild longshots no one in the private sphere would touch.  Given that, what objective criteria can possibly exist?  And even if one can imagine such a criteria - e.g. least dollars invested per ton of Co2 mitigation - it is clear that no such criteria existed or were applied.  So of course it was going to be a crony-fest.

But my point is this - even without fraud or cronyism.  Even if every choice were made by the best and the brightest in a politically color-blind fashion, the program would still be failing.  Because by definition the program's success would require a few folks in Washington to be smarter than, and to have more and better information than, the entire rest of the country which turned down the opportunity to invest in these companies.

Update on Fisker Karma

I had some fun yesterday, dashing off a quick note about the Fisker Karma electric car and just how bad the electric mileage is if you use the DOE methodology rather than the flawed EPA methodology to calculate an mpg-equivalent.

It was the quickest and shortest column I have ever written on Forbes, so of course it has turned out to be the most read.  It has been sitting on top of the Forbes popularity list since about an hour after I wrote it, and currently has 82,000 reads (I am not a Twitter guy but 26,000 tweets seems good).

I wanted to add this clarification to the article:

Most other publications have focused on the 20 mpg the EPA gives the Karma on its backup gasoline engine (example), but my focus is on just how bad the car is even in all electric mode.    The calculation in the above article only applies to the car running on electric, and the reduction in MPGe I discuss is from applying the more comprehensive DOE methodology for getting an MPG equivilent, not from some sort of averaging with gasoline mode.  Again, see this article if you don’t understand the issue with the EPA methodology.

Press responses from Fisker Automotive highlight the problem here:  electric vehicle makers want to pretend that the electricity to charge the car comes from magic sparkle ponies sprinkling pixie dust rather than burning fossil fuels.  Take this quote, for example:

a Karma driver with a 40-mile commute who starts each day with a full battery charge will only need to visit the gas station about every 1,000 miles and would use just 9 gallons of gasoline per month.

This is true as far as it goes, but glosses over the fact that someone is still pouring fossil fuels into a tank somewhere to make that electricity.  This seems more a car to hide the fact that fossil fuels are being burned than one designed to actually reduce fossil fuel use.  Given the marketing pitch here that relies on the unseen vs. the seen, maybe we should rename it the Fisker Bastiat.

Green Cronyism

I am willing to believe that the initial push into alternative energy subsidies was undertaken with good, honest (though misguided) intentions to change the US energy mix.  But once such a program is begun, it inevitably gets turned into cronyism.

The best example is probably corn ethanol.  A combination of subsidies and mandates have pushed an enormous proportion of our food supply into gas tanks, for little or even negative environmental effect.   Environmentalists and the Left turned against it, but for a few large corporations like ADM, the subsidies have become life and death, and they do anything they have to to get Congress to maintain them.

The best evidence that corn ethanol shifted from a green program to pure cronyism was the imposition of large import tariffs.  The only possible purpose of these tariffs was to enrich farmers and a few manufacturers.  After all, if one really cared any more about getting more ethanol in the fuel supply, one would welcome low cost imports.

Well, the Solyndra debacle has started to make clear that cronyism has taken over solar subsidies as well.  Every day we find yet another high-ranking Obama supporter with his thumb on the scales tilting the DOE funding decision toward Solyndra.

Now we will see the ultimate test:

A group of U.S. solar-panel makers Wednesday called on the federal government to punish Chinese rivals with extra duties for allegedly dumping their products on the U.S. market…

The U.S. makers are asking the Department of Commerce and the International Trade Commission to impose a duty on panels imported from China, a market that totaled $1.6 billion in the first eight months of 2011. SolarWorld accused Chinese manufacturers of selling solar panels at less than half of what the production costs would be in a comparable free-market economy, and is asking for tariffs to make up the difference.

One could argue that this is in direct response to the Solyndra failure.  Solyndra's failure has been blamed on low cost panel manufacturing in China.   Again, if we care just about energy, we should be thrilled about low-cost Chinese solar panels.  If the Chinese government wants to somehow subsidize our consumption of solar panels, great!

Watch this proposal.  Any politician that jumps on this solar tariff bandwagon will be saying "My statements about wanting to see more solar usage is just a bluff, I only really care about subsidizing a few selected businesses."

Lending to Enron

Had Obama been around 10 years earlier with his green jobs program, Enron might never have gone bust - it could have just gotten DOE loans

Federal Financing Bank?

Bruce Krasting at Zero Hedge has been on the case of the Federal Financing Bank.  I am still unclear if the agency is actually providing the cash or just the guarantee, but it was the one rolling out the Solyndra loan (under DOE auspices, I suppose).

In July, it was still sending cash of some sort to Solyndra - it may be that this was just a drawdown of money under its original loan commitment, or it may be new money.  A couple of things you can see are:

  • A heck of a lot of money was still going out the door to solar programs, likely with no oversight
  • Ford, the supposedly bailout-free company, sure seems to be gobbling up a lot of government guaranteed loans for something.
  • We were lending to Solyndra at 0.89% interest.
All told, a whopping 3/4 of a billion dollars of government guaranteed loans to private companies went out the door in July alone.
Other observations from the report:  The report is hard to read, as it is hard to correlate the new financing activity to changes in the balance sheet.  But there is just a ton of loan activity to rural electric companies.  Wasn't rural electrification an issue in the 1930's?  Isn't it time to let rural electric companies stand on their own two feet and get their own money from the capital markets?
There is also a lot of activity issuing HOPE for Homeowners money - it looks like the government is lending (to banks?) at 0.01% interest.  What is the difference between a 0.01% thirty year loan and a gift?

Owning Solyndra

Kevin Drum makes a pleas for liberals to, in effect, rally around Solyndra and be proud of the investment.  I am sure Republicans would give the same advice to liberals.  I want to look at a few of his arguments.

First, for libertarians like myself, the argument that Republicans did it too, or the Republicans started it, are a non-starter.  In particular, I actually thought the Obama Administration's attempt to blame Bush for Solyndra was an Onion article, since its almost a caricature of this administrations refusal to take responsibility for anything.  Unlike Republicans, I don't see this so much as an Obama failure as a government failure, and I don't really care if it is of the red or blue flavor.

Second, the fact that private investors put their own money into it is irrelevant.  Private investors poured money into Pets.com too.  Obama was pouring my money into Solyndra, and yes the fact that it is my money makes a difference.

Further, private investors put their money into Solyndra years before the taxpayer did.  It may well have been that they had a reasonable expectation at that time of investment returns.  That is their problem.  Our problem is that by the time Obama put our money into the company, it was pretty clear to everyone in the industry that Solyndra was going nowhere.

Drum and his source, Dave Roberts, attempt to argue that the drop in silicon prices and addition of low-cost solar capacity in China didn't occur until months after Obama's decision to fund Solyndra.  But that is a tortured argument.  In point of fact, everyone in the industry saw this coming - after all, the capacity Roberts describes as coming online in June was under construction months and years before that, and was known to be coming by everyone in the industry.  When I was in a global manufacturing business, we kept up with everyone's plans for capacity additions -- I can't even imagine waking up one day and saying, "huh, a bunch of capacity just opened in China."  (by the way, it is pretty typical of liberals to see prices as a given, rather than as a part of a feedback system where high prices lead to actions that might well lower prices over time).

This timeline is therefore pretty disingenuous

March 2009: The same credit committee approves the strengthened loan application. The deal passes on to DOE’s credit review board. Career staff (not political appointees) within the DOE issue a conditional commitment setting out terms for a guarantee.

June 2009: As more silicon production facilities come online while demand for PV wavers due to the economic slowdown, silicon prices start to drop. Meanwhile, the Chinese begin rapidly scaling domestic manufacturing and set a path toward dramatic, unforeseen cost reductions in PV. Between June of 2009 and August of 2011, PV prices drop more than 50%.

I am sure that this is wildly logical to a journalism major, but someone in business would laugh off the implication that what happened in June was wholly unforeseeable in March.  Want more proof?  The loan guarantee itself is proof.   Years earlier, the company attracted a billion dollars of private capital.  Now it takes a government guarantee to get capital?  And you think nothing had changed with the insider's perception of the opportunity?

A good analogy might be if I invested in Greek bonds today.  And then in 3 months the Greek government defaults and I lose all my money.  I suppose I could craft a timeline that said the default did not happen until months after my investment, but could anyone living right now say that I really had no reason on September 16, 2011 to expect a Greek default?

The real howler in the article is this one:

There was no scandal in the loan process, and there's nothing unusual about having a certain fraction of speculative programs like this fail. It's all part of the way the free market works.

First, I agree there is no scandal here if one defines scandal as something out of the norm.  Republicans want to count political coup on Democrats so they want to say this is fraudulent.  But fraudulent implies that we could find honorable technocrats who could have avoided this problem.  We can't.  This kind of failure is fundamental and inseparable from the act of government trying to pick winners, and would exist no matter what people were in place.

Second, calling this "the way free markets work" is obscene.   Free markets don't use force on investors to make them put money into certain investments.

But more importantly, government loan guarantees go only to those companies who the free market has chosen NOT to fund.  If the free market was willing to toss another half billion into Solyndra, its owners would not have been burning a path back and forth to Washington.  So by definition, every single government loan guarantee in this program is to a company or a technology that the free market, knowledgeable investors, and industry insiders have rejected as a bad investment.  For the program to work, one has to believe that Obama, Chu, and some career energy department bureaucrats have a better understanding of commercializing technologies than do private investors (who are investing with their own money) and industry experts.

Postscript:  I have to also comment on this from the timeline:

February 2011: Due to a liquidity crisis, investors provide $75 million to help restructure the loan guarantee. The DOE rightly assumed it was better to give Solyndra a fighting chance rather than liquidate the company – which was a going concern – for market value, which would have guaranteed significant losses.

The author glosses over it, but this is the $75 million I discussed the other day that dropped the US out of the senior position and guaranteed that the taxpayer would lose everything rather than only a portion of the investment

The notion of giving it more time was absurd.  Even closed with everyone laid off the company is burning a million a week in cash.  How much was it burning when open? And if it was totally clear at this point that the market had fundamentally shifted and the company could not compete, what the hell was the time going to help?  Maybe they were hoping to win the Publishers Clearing House Sweepstakes?  I suppose it could have been to give them time to try to sell the company, but there is no evidence any such discussions were taking place.

In fact, it is pretty clear that the US Government got played with that $75 million investment.  Any private lender who had allowed someone else to grab the senior position for a trivial investment in a company on the express train to chapter 7 would be fired immediately.

And if you want fraud, you might look at Solyndra's summer asset sales.  All the company's assets of any liquidity and value were sold over the summer to Argonaut, who also happens to be the owner of the majority state AND the company who invested $75 million in return for the senior position.  Depending on the sale price for this self-dealing, one could argue that the time the $75 million bought was merely the time needed to loot the company of any valuable assets before it went bankrupt.

Postscript #2:  I have written before about how much expertise about business tends to be claimed by liberal journalists and places like Think Progress.  I had a funny thought trying to imagine the Think Progress business school and what it would teach.  Might be a parody I need to write sometime.

Solyndra Bankruptcy Process

I thought this article from Zero Hedge was a pretty good window into the bankruptcy process for those of us unfamiliar with what goes on.  The most interesting point is that by allowing Argonaut to cut ahead of taxpayers as the senior creditor, the Obama Administration virtually ceded control of the bankruptcy process to Argonaut.  Argonaut has put up the debtor-in-possession financing as well, and the combination of these two positions gives it pretty tight control of the process going forward

The plan put forward is a four-week sale of the company. The logic behind this very rapid schedule is that Solyndra is still burning cash at the rate of $1mm a week. How long will the $4mm DIP financing last? Four weeks. The terms of the DIP makes it a sure thing that Solyndra is going to be sold ASAP. That sounds good. But not for the DOE.

The one-month period is a very short time frame. The likely result will be that no serious alternative buyer will appear. Should that happen, the senior creditor will get all of the assets of the company at the end of 30 days. That would be Argonaut. It's possible that Argonaut will end up owning a company that lists $850mm in assets for less than $100mm.

I am not sure taxpayers were ever going to get anything out of this mess -- the combination of a high-cost manufacturing plant with me-too technology in a commoditized business was never going to be wildly valuable -- but the Administrations decision to allow Argonaut to jump the seniority line has pretty much assured that whatever value that might be there will go to Argonaut and not the taxpayers.

Postscript:  Someone might argue that the decision in February to allow Argnaut the senior position was required to get them to put up the $75 million that was necessary at the time to keep operating.  I am positive this is true, given the condition of Solyndra finances at the time.  However, the right answer at the time was to shut the thing down then, while the US had seniority and before Argonaut cleaned out all the assets of value (as they did this summer, selling inventories and receivables to themselves).  The company had no real prospects of ever making money when it was first financed two years ago and certainly did not in February.  The $75 million in February was less financing and more a pre-emptive bid for the company's carcass in the inevitable bankruptcy, and it will likely play out exactly this way.

Update:  I have read that Argonaut may be interested in the $500 million of tax losses.  These are tricky to use, and only Argonaut of all potential buyers could reasonably make use of them.  These might be worth $150 million in avoided taxes, so the $75 million price might make sense.  If Argonaut pulls this off, it would mean that the decision to accept their $75 million in financing is even more costly to the taxpayers.  Not only did they miss out on whatever value might be in the company, but it also created the opportunity for $150 million in tax avoidance that comes right out of Uncle Sam's coffers.

Mandating Faulty Accounting to Reach Absurd MPG Standards

President Obama wants a 56.2 mile per gallon standard for cars by 2025.  Both advocates and opponents of this say the only way to make this is if everyone drives an electric car or plug in hybrid.  But the fact of the matter is, even those don't get 56.2 mpg, except through an accounting fiction.

A while back I ran the numbers on the Nissan Leaf. According to the EPA, this car gets an equivalent of 99 MPG.  But that is only by adopting the fiction of looking only at the efficiency in converting electricity to power in the wheels.  But the electricity comes from somewhere (the marginal kilowatt almost certainly comes from a fossil fuel) and the new EPA methodology completely ignores conversion efficiency of fuel to electricity.  Here is how I explained it at Forbes:

The problem is that, using this methodology, the EPA is comparing apples to oranges.   The single biggest energy loss in fossil fuel combustion is the step when we try to capture useful mechanical work (ie spinning a driveshaft in a car or a generator in a power plant) from the heat of the fuel’s combustion.  Even the most efficient processes tend to capture only half of the potential energy of the fuel.   There can be other losses in the conversion and distribution chain, but this is by far the largest.

The EPA is therefore giving the electric vehicle a huge break.  When we measure mpg on a traditional car, the efficiency takes a big hit due to the conversion efficiencies and heat losses in combustion.  The same thing happens when we generate electricity, but the electric car in this measurement is not being saddled with these losses, even though we know they still occur in the system.

Lets consider an analogy.  We want to measure how efficiently two different workers can install a refrigerator in a customer’s apartment.  In both cases the customer lives in a fourth floor walkup.  The first installer finds the refrigerator has been left on the street.  He has to spend much of his time struggling to haul the appliance up four flights of stairs.  After that, relatively speaking, the installation is a breeze.  The second installer finds his refrigerator has thoughtfully been delivered right to the customer’s door on the fourth floor.  He quickly brings the unit inside and completes the installation.

So who is a better installer?  If one only looks at the installer’s time, the second person looks orders of magnitude better.  But we know that he is only faster because he offloaded much of the work on the delivery guys.  If we were to look at the total time of the delivery person plus the installer, we’d probably find they were much closer in their productivity.  The same is true of the mileage standards — by the EPA’s metric, the electric vehicle looks much better than the traditional vehicle, but that is only because someone else at the power plant had to do the really hard bit of work that the traditional auto must do itself.  Having electricity rather than gasoline in the tank is the equivalent of starting with the refrigerator at the top rather than the bottom of the stairs.

The DOE has actually published a better methodology, going from "well to wheels," creating a true comparable efficiency for electric cars to gasoline engine cars.  By this methodology, the Nissan Leaf all electric car only gets 36 MPG!  In fact, no current electric car would meet the 56.2 MPG standard if the accounting were done correctly.  Which is why the EPA had to create a biased, inaccurate MPG equivalent measure for electric vehicles to artificially support this Presidential initiative.

The Administration's War on Due Process

Obama's Department of Education has been issuing a series of new rules to colleges that accept government funds (ie pretty much all of them) that going forward, they will be required to

  • Expand the definition of sexual harassment, forcing it to include even Constitutionally-protected speech.  Sexual harassment will essentially be redefined as "somehow offending a female."
  • Eliminate traditional protections for those accused of sexual harassment under these new definitions.  The presumption of innocence, beyond a reasonable doubt guilt standards, the ability to face and cross-examine one's accuser, and the right of appeal are among centuries old common law traditions that the DOE is seeking to eliminate in colleges.

Unfortunately, this is a really hard threat to tackle.  Most of those concerned with civil rights protections outside our small libertarian community are on the left, and these same people are often fully vested in the modern feminist belief that all men are rapists.  It also puts libertarians in the position of defending crude and boorish speech, or at least defending the right to that speech.

But at the end of the day, the DOE needs to be forced to explain why drunk and stupid frat boys chanting crude slogans outside the women's center on campus should have fewer rights as accused than does a serial murder.

Michael Barone has more today in the Washington Times:

But more often they involve alleged offenses defined in vague terms and depending often on subjective factors. Lukianoff notes that campus definitions of sexual harassment include "humor and jokes about sex in general that make someone feel uncomfortable" (University of California at Berkeley), "unwelcome sexual flirtations and inappropriate put-downs of individual persons or classes of people" (Iowa State University) or "elevator eyes" (Murray State University in Kentucky).

All of which means that just about any student can be hauled before a disciplinary committee. Jokes about sex will almost always make someone uncomfortable, after all, and usually you can't be sure if flirting will be welcome except after the fact. And how do you define "elevator eyes"?

Given the prevailing attitudes among faculty and university administrators, it's not hard to guess who will be the target of most such proceedings. You only have to remember how rapidly and readily top administrators and dozens of faculty members were ready to castigate as guilty of rape the Duke lacrosse players who, as North Carolina Attorney General Roy Cooper concluded, were absolutely innocent.

What the seemingly misnamed Office of Civil Rights is doing here is demanding the setting up of kangaroo courts and the dispensing of what I would call marsupial justice against students who are disfavored by campus denizens because of their gender or race or political attitude. "Alice in Wonderland's" Red Queen would approve.

As Lukianoff points out, OCR had other options. The Supreme Court in a 1999 case defined sexual harassment as conduct "so severe, pervasive, and objectively offensive, and that so undermines and detracts from the victims' educational experience, that the victim-students are effectively denied equal access to an institution's resources and opportunities." In other words, more than a couple of tasteless jokes or a moment of elevator eyes.

Women'g groups all the time say things like "all men are rapists."  That's pretty hostile and degrading to men.  My guess is that somehow this kind of gender-hostile speech will not be what gets investigated by these kangaroo courts.

I wrote about related events at Yale here.

Bank of America May Be Screwing Up Foreclosures, But At Least They Did Not Send in a SWAT Team

I am sure everyone is resting easier now that the government has taken over all student loan activity.  Now we won't see any of that abusive behavior by private lenders.  Ha ha, just kidding.  Don't get behind on your government student loans! Via Radley Balko (Updates:  Still bizarre the DOE has this kind of firepower, but DOE says its a criminal / fraud case, not a payment issue.)

Kenneth Wright does not have a criminal record and he had no reason to believe a S.W.A.T team would be breaking down his door at 6 a.m. on Tuesday.

"I look out of my window and I see 15 police officers," Wright said.

Wright came downstairs in his boxer shorts as the officers team barged through his front door. Wright said an officer grabbed him by the neck and led him outside on his front lawn.

"He had his knee on my back and I had no idea why they were there," Wright said.

According to Wright, officers also woke his three young children ages 3, 7, and 11, and put them in a Stockton police patrol car with him. Officers then searched his house.

As it turned out, the person law enforcement was looking for was not there - Wright's estranged wife.

"They put me in handcuffs in that hot patrol car for six hours, traumatizing my kids," Wright said.

Wright said he later went to the mayor and Stockton Police Department, but the City of Stockton had nothing to do with Wright's search warrant.

The U.S. Department of Education issued the search and called in the S.W.A.T for his wife's defaulted student loans.

More Thoughts on EV MPG

After several posts yesterday, I rewrote my thoughts on EV's and the new EPA mileage numbers.  I am more convinced than ever that this standard borders on outright fraud, particularly when the DOE published what should be the correct methodology way back in the Clinton Administration and the EPA has ignored this advice and gone with a methodology that inflates the MPG (equivilant) of EV's by a factor of nearly 3.  For example, the list the Nissan Leaf with an MPGe of 99, but by the DOE methodology the number should be 36.

The full article is in Forbes.com and is here.  An excerpt:

The end result is startling.  Using the DOE's apples to apples methodology, the MPGe of the Nissan Leaf is not 99 but 36! Now, 36 is a good mileage number, but it is pretty pedestrian compared to the overblown expectations for electric vehicles, and is actually lower than the EPA calculated mileage of a number of hybrids and even a few traditional gasoline-powered vehicles like the Honda CR-Z.

Supporters of the inflated EPA standards have argued that they are appropriate because they measure cars on their efficiency of using energy in whatever form is put in their tank (or batteries).  But this is disingenuous.  The whole point of US fuel economy standards is not power train efficiency per se, but to support an energy policy aimed at reducing fossil fuel use.  To this end, the more sophisticated DOE standard is a much better reflection of how well the Nissan Leaf affects US fossil fuel use.  The only reason not to use this standard is because the EPA, and the Administration in general, has too many chips on the table behind electric vehicles, and simply can't afford an honest accounting.

Wow! Nancy Pelosi Cuts Auto Development Cycle From 6 Years to 6 Months

It used to be that it took something like 5-6 years to develop a new vehicle from scratch.  Apparently, though, GM has accelerated this to 6 months, as Nancy Pelosi is taking personal credit for the recently released GM vehicles.

House Speaker Nancy Pelosi and top Obama administration officials defended last year's federal bailout of automakers on Monday, pointing to new vehicles at the Detroit auto show as a sign of the industry's rebirth. ...

"We've seen ideas turned into policy turned into product," Pelosi said.

Pelosi and company fawned over cars like the Volt, expected to be a money-loser from the get-go, while ignoring the trucks and larger family cars where GM actually makes money.  Bob Lutz steps up to take on the Orren Boyle mantle:

GM vice chairman Bob Lutz said Sunday that Washington's interest in the auto industry was welcome after being ignored by U.S. lawmakers for decades while other nation's backed their carmakers.

He said he had always thought the U.S. "was the only car-producing nation in the world where the administration and the politicians ... didn't know about American car companies, didn't care about American car companies - none of the politicians drove American cars."

"It's like we were the stepchild of the American industry and the American economy," Lutz said.

This is hilarious - few other industries have been the subject of more government bailouts and protection and subsidies than the auto companies.  Remember all those DOE and DOT grants?  Remember Chrysler bailout #1?  Remember the tariffs and import quotas?  But wait, it gets even more barf-inducing:

"Unfortunately it took the financial failure of the American automobile industry to make the whole country aware of the importance of the American automobile industry," Lutz said at a Society of Automotive

Analysts event.

See, its all of our fault they went bankrupt, not their crappy management, crappy designs, and crappy labor agreements.  All our fault.  I feel so terrible.

Only A Company Living Off of Government Pork Would Make This Decision

Aptera apparently wants to build electric cars using our tax dollars.  They are looking for a manufacturing plant location.   They seem to be homing on an one of the last locations on the planet I would build a new manufacturing facility:

At least we learn that the company is might soon be closing in on a new production facility as a result of a new application to the DOE's AVTMP [advance vehicle technology manufacturing program]. The loan application asks for a 10-year facility plan, which meant Aptera needed to actually come up with such a plan. Aptera's production schedule "calls for more than 10,000 units in the first 3 years and more than 300 employees," so it is looking for a new place to build the cars somewhere in Southern California, specifically somewhere in San Diego County.

High land prices?  Hugely expensive land use and environmental regulations?  High taxes?  Really high local wages?  Perfect, lets build an auto assembly plant!

Light Rail Uses Twice the Energy as Driving

One of the justifications for diverting highway money to ridiculously expensive light rail systems is that light rail supposedly reduces energy consumption.  Really?  This is via the most recent report from the DOE's Transportation Energy Book, as highlighted by the Anti-Planner (click to enlarge):

light-rail-energy

The figures for cars are from tables 2.12 and 2.13 of the same report.  Even the best light rail systems are not substantially more efficient than cars, and this gap will likely continue to close, as it has for years, as cars get more efficient.

A Note on Freight: By the way, passenger rail promoters in the US always point to the Europeans as having a better rail system.  But while the Europeans put more of their passengers on rail than does the US, they put less of their freight there.  I would argue that the US system is much more "green", as the differences in energy use between a ton mile of freight on road vs. rail is much larger than the difference in energy use of a passenger mile on road vs. rail.  And besides, from a lifestyle standpoint, would you really want more freight on the roads?  (This is a real tradeoff -- unless one spends the absurd amount of money to build two separate systems, a rail network can be optimized for freight or passengers -- the two do not coexist very well on the same tracks).

Postscript: Just to head off the obvious rhetorical battles -- the incremental energy efficiency of moving one driver to a light rail rider of an existing system is very high.  The car consumption goes away and the train does not incrementally increase its energy use much with one more passenger.  So at the margin, it is correct when someone tells you that it saves energy to shift your commuting to an existing light rail line.  However, it does not make sense, from an energy perspective, to build a light rail line in the first place.  The investment is too high, the energy savings are negligible or non-existent, and the operating cost are so high that light rail tends to crowd out bus operations that help the poor.  As I have written before, for every light rail system I have checked, the cost to build the system is enough to buy every daily rider a Prius and the operating deficit enough to keep every one of these Prius's filled with gas.

Update:  I further understand that cars in the city likely have lower gas mileages than these averages, particularly for commutes that might be substituted by light rail.  But light rail is sold as if it is substantially more energy efficient, and it really would have to be orders of magnitude more efficient to justify the capital costs that are so much higher than for an equivalent capacity of roadway.  The efficiency is just not there.