Sen. Chuck Grassley of Iowa today made the following comment on the aftermath of MF Global's collapse.  Grassley is a senior member of the Agriculture Committee.

"This week marked the one-year anniversary of MF Global's filing for bankruptcy protection.  While I'm pleased many people have received a large share of their money back from this fiasco, we still need to know more about what happened.  This is not a case of 'all's well that ends well.'  Even if farmers and investors ultimately get a substantial amount of their money  back through the bankruptcy process, what if they end up losing millions of dollars?  What about the shaken confidence in our regulators and the commodity trading system in general?   And what about the next time?  To date, there have been no announcements of criminal prosecutions and no clear explanation of how and why MF Global lost customer money that was supposed to be segregated.

"Now, the Commodity Futures Trading Commission is issuing proposed regulations in response to the MF Global and Peregrine Financial collapses.  More regulation isn't going to ease farmers and investors' concerns.   We don't even know what exactly happened at MF Global, so how can we be sure new regulations will help?  What ultimately would bring confidence back to those who participate in the futures market is knowing the regulators conducted a real analysis of what went wrong at MF Global, then found and implemented the best solution for preventing these incidents and prosecuted responsible parties if necessary.   Solutions might be better enforcement of existing regulations or targeted new regulations.  But proposing new regulations without a clear understanding of what went wrong puts the cart before the horse.   It doesn't restore the confidence that's been disrupted."

WASHINGTON, D.C.–U.S. Senators John Thune (R-S.D.) and Chuck Grassley (R-Iowa) continue to press for answers about the failed stimulus-funded battery company, A123. Thune and Grassley, who have taken the lead in seeking answers from both the Obama administration and A123 on the use of taxpayer dollars to fund the now-bankrupt green energy company, today sent a letter to U.S. Treasury Secretary Timothy Geithner. The letter outlines the Senators' concerns about reports that China-based Wanxiang Group Corp. intends to provide debtor-in-possession bankruptcy financing of A123, which has now received approximately $130 million of a $249 million stimulus grant and numerous Department of Defense contracts. Thune and Grassley's letter presses Geithner, who has oversight of the Committee on Foreign Investment in the United States (CFIUS), to protect U.S. military and taxpayer interests while reviewing the potential transaction.

"A123 has received millions of taxpayer dollars to develop technology and intellectual property that should not simply be shipped to China," said Thune. "Considering A123's grid energy storage activities and active military contracts, the Obama administration must thoroughly scrutinize any transaction that would lead to A123 being owned by a foreign company. After several attempts, Senator Grassley and I have yet to receive straightforward answers from the administration on taxpayer-backed A123. Given the urgency of the bankruptcy process, we expect the administration to respond to our questions without delay."

"When Senator Thune and I started asking questions about A123, the Department of Energy promised it was monitoring every aspect of A123's financial plans to make sure the American people's interests were protected," said Grassley. "It looks as if that effort has failed. A Chinese company could still gain access to technology supported by U.S. taxpayers and developed in part to help the Department of Defense. Since the Administration so far seems unconcerned about this possibility, this review by the Committee on Foreign Investment in the United States is the last line of defense. Without that intervention, the benefit of U.S. taxpayer dollars and military technology might go right to China. That can't stand."

On August 14, 2012, Thune and Grassley sent a letter to the Department of Energy after A123 announced a $450 million investment deal with Wanxiang to express concern about tax dollars going to a struggling company. There were clear indications that A123 was having financial problems even as the administration continued to pour millions of taxpayer dollars into the failing company.

On October 9, 2012, Thune and Grassley sent a letter to A123 expressing their concerns regarding the company's potential agreement to grant Wanxiang majority control of the company. On October 16, 2012, A123 filed for Chapter 11 bankruptcy and appeared to withdraw from the deal with Wanxiang. However, recent reports indicate that Waxiang intends to provide a $50 million in debtor-in-possession loan for A123 and intends to bid on A123's assets as part of the bankruptcy proceedings, which would likely require CFIUS approval.

WASHINGTON - The Obama administration's advanced battery manufacturing program through the federal stimulus package cost $158,556 per job created, and many of those jobs likely were temporary, according to an analysis released today by Sen. Chuck Grassley of Iowa and Sen. John Thune of South Dakota. The analysis came after Grassley pressed for verification of the administration's claims of the economic benefits of the $2 billion program, which included a grant to a now-bankrupt company, A123 Systems. According to the analysis, the bankrupt company cost taxpayers more than $300,000 per job reportedly created by the stimulus bill.

"The taxpayers paid $2 billion for a pretty lackluster return," Grassley said. "The Administration billed this program as an all-around success toward creating jobs, but the results are a lot more mixed. The program cost $158,556 per job, including jobs that were later cut. Under the best-case scenario at the now-bankrupt A123, it cost $317,435 per job.  The expense is significant, especially when many of the jobs were temporary.  The Administration should not overstate the value of this program as a boon to economic recovery.  The facts show otherwise.   Adding insult to injury, A123 executives reportedly are seeking to retain $4.2 million in bonuses through the bankruptcy process."

"President Obama's failed stimulus spending program contributed to America's dangerously-high $16 trillion national debt and record federal deficits of over $1 trillion year after year," said Thune. "The Obama administration took nearly $2 billion of taxpayers' hard-earned money so the federal government could spend more. Spending $158,556 per job, many of which were temporary, was a waste of taxpayer dollars and failed to create the economic growth the president promised when he jammed his stimulus through Congress."

Earlier this month, a Department of Energy spokesman released an update on the advanced battery manufacturing program in response to the bankruptcy of A123 Systems, one of the grant recipients.  The update said the program awarded $2 billion in grants to 29 companies to build or retool 45 manufacturing facilities spread across 20 states to build advanced batteries, engines, drive trains, and other key components for electric vehicles.

The update said the initiative was responsible for "employing thousands of American workers" but provided no documentation to support this claim. Grassley pressed for documentation and ultimately received some data showing a total of 12,613.77 jobs were "created" by the advanced battery manufacturing initiative from the signing of the stimulus act on February 13, 2009, to the present. Given the $2 billion cost of the program, that represents $158,556.88 per job created. Many of those jobs are likely temporary, but the Energy Department does not track how long the jobs are retained. Also, the data show the program did not achieve the overall goal of the stimulus program to create jobs as rapidly as possible.

Grassley and Thune released an analysis of the program prepared by their staff.  The analysis is available here.

By author/contributor G. Keith Smith, M.D.

The myth that lack of health insurance is a cause of 18,000 deaths per year, along with nearly a million bankruptcies, has been promulgated yet again in The New York Times by economist Paul Krugman.

One of his outrageous fact-free claims is that uninsured people avoid the emergency rooms for fear of large bills, and so they die. But if the poor are avoiding the emergency rooms, how can health care for the poor in the emergency rooms be bankrupting hospitals? This claim is also false. Otherwise, why is there a building crane in front of every big city emergency room I've ever seen?

"So there's no real question that lack of insurance is responsible for thousands, and probably tens of thousands, of excess deaths of Americans each year," writes Krugman. But the Institute of Medicine's estimate that lack of insurance leads to 18,000 excess deaths each year is almost certainly incorrect. Richard Kronick's recent study debunks this idea completely. He concludes: "It is not possible to draw firm causal inferences from the results of observational analyses, but there is little evidence to suggest that extending insurance coverage to all adults would have a large effect on the number of deaths in the United States."

Krugman asserts that expansion of Medicaid, on which ObamaCare depends for its claim of increasing coverage, saves lives. This has been proven false by Professor June O'Neill, former director of the Congressional Budget Office. Patients might as well wear their Medicaid card around their neck rather than keeping it in their wallet. It is like a scarlet letter that precludes entrance into most physicians' offices. This card gives many, just like our Canadian brethren to the north, only a right to hope for care.

Many physicians are also curtailing their exposure to Medicare patients because of payment and regulatory hassles, threats of stiff penalties (including jail time for miscoded claims), and government price controls mandating artificially low payments.

"Coverage" doesn't mean care. It can instead be a barrier to access to care. Think about it. If you have "insurance" coverage (whatever that means) and your insurance company decides that they don't want to pay for a bone marrow transplant, or they set the payment for one so low that no one will do it (one and the same thing), you are not going to get a bone marrow transplant. Period. If the IPAB (Independent Payment Advisory Board) decides that the payment to a physician for an open heart surgery is less than anyone is willing to do it for, guess how many open heart surgeries will be done? Folks like Krugman, not the market, will be in charge of deciding what these types of procedures are worth. Even more government involvement in health care is what he is advocating.

Of the 1.5 million individual bankruptcies declared every year, 62% involve medical bills. Less well known is that 78% of those filing for medical bill reasons had insurance. These folks have "coverage." Is this the security Mr. Krugman would bring to us all?

Concerning bankruptcy, keep in mind that Krugman is the poster child for Keynesian economics, the economic thought that holds that an individual or a government can borrow its way to prosperity. This economic theory has prevailed in this country for a long time, primarily because big-government advocates love to spend the wealth belonging to future wage earners, as the future voter's wrath represents no threat to them. Krugman, as a mouthpiece for this insanity, which will bankrupt both federal and state governments, bears a lot of responsibility. The central bank and deficit spending have no greater advocate than he.

Krugman's economic myths can cause real mortality. But neither he nor The New York Times can be sued for economic malpractice.

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