It's Not Easy Being Green

It was the poster child for the Obama’s green energy and green jobs program. But two weeks ago Solyndra shuttered its operations, laid off 1,100 people, and filed for bankruptcy after vaporizing over a half billion dollars in taxpayer money. Obama may be our worst president but he is an even worse venture capitalist.

Solyndra was a green-tech start up which had developed a novel photovoltaic element for solar panels. Conventional solar panel arrays are flat, and when installed in multiple rows on a roof, they must be tilted toward the sun. Also, rows must be spaced several feet apart to avoid casting shadows on each other, meaning that a considerable area of a roof is squandered. Moreover, the material used to convert light energy into electrical energy is silicon – a material used also in the production of semiconductors and therefore in increasing demand. Because this forced the solar industry to compete for silicon with the computer industry, silicon prices began increasing by double digit percentages after 2005.

That same year Solyndra founder Dr. Chris Gronet, an expert in semiconductor materials, devised a cylindrical photovoltaic cell design that consisted of a glass tube inside of another glass tube. Wrapped around the inner tube were 150 solar cells made from copper, indium, gallium and diselenide, rather than silicon. The cylindrical design, looking somewhat like a fluorescent bulb, could absorb light from any direction, including reflected and diffused light, and convert it to electricity. Arranged side by side in an array, the Gronet array weighed less than conventional solar panel designs and therefore eliminated the need to reinforce a roof. High winds exerted less force on a roof than with flat solar panels, and the absence of silicon got rid of a pricey commodity which, at the same time, would keep the price of competitive silicon-based panels high.

The downside to Gronet’s design was that it was more expensive in materials and manufacturing cost. Still, he believed that if the sell-through volume could be increased, manufacturing scale economies and automation would allow it to be produced in quantities that would make the venture profitable. That would prove to be an insurmountable “if.”

In 2006 Solyndra, along with a number of other companies, applied for a new federal loan program that had been created the previous year to fund innovative energy technologies. By the end of 2007, the Department of Energy completed enough preliminary due diligence to short-list 16 companies – among them, Solyndra. Another year passed for the DOE to complete its investigations. In late 2008 a favorable recommendation was forwarded to the credit committee for a $535 million loan. However, in the waning months of the Bush administration, the committee rejected the recommendation and called for an independent study of the company's long-term market prospects, including the possibility of obsolescence. The committee did say that "the project appears to have merit."

During his election campaign, Obama had made renewable energy and green jobs a priority of his administration, so his Energy Secretary was told to speed up green-tech loan programs in the pipeline. White House emails show that a lot of pressure was being pushed down the line to speed up approval of the Solyndra loan guarantee. Biden wanted to attend the groundbreaking of a new Solyndra manufacturing plant and he wanted to announce the approval of the loan guarantee at that event.

Here is part of an email between the Office of Management and Budget and the office of the Vice President that was among those subpoenaed by the House Oversight Committee when the Solyndra story broke:

We have ended up with a situation of having to do rushed approvals on a couple of occasions (and we are worried about Solyndra at the end of the week). We would prefer to have sufficient time to do our due diligence reviews and have the approval set the date for the announcement rather than the other way around.

Solyndra had leased a plant (called Fab 1) in Fremont, CA in 2007 and began commercial production in 2008. But silicon prices began to decline in 2008 as more worldwide production capacity came on line. Heavily subsidized factories were opening in China. This had the unhappy consequence of allowing conventional solar panel producers to drop their prices. Solyndra’s value proposition evaporated – evidently without the notice of anyone in the Obama administration and the Energy Department, anxious as they were to spend stimulus money, which the Solyndra loan had now become.

The Solyndra loan guarantee was finalized in September 2009 and construction of the new plant (Fab 2) was started. DOE issued this press release:

The guaranteed loan, expected to provide debt financing for approximately 73% of the project costs, will allow Solyndra to initiate construction of a second solar panel fabrication facility (Fab 2) in California ….

Interestingly, the Fab 2 factory was to be built in two phases. The government funding would help pay for the first phase, which would cost an estimated $733 million. For the second tranche, the company would have to turn to the stock market.

It’s worth noting at this point in the Solyndra story that we Southern boys know you can’t jump part of the way over a ditch; if you jump you’d better get all of the way across. Likewise, we know that you shouldn’t build a factory with only part of the money committed. It’s best to have all of the money in hand, or if not, you’d best be absolutely sure you can get the rest. Solyndra had neither. But this didn’t trouble the DOE.

In December 2009 Solyndra filed papers with the US Securities and Exchange Commission for an initial public stock offering worth $300 million. For a company that had generated so much excitement – $600 million in venture capital had been syndicated at that point – the details in the S-1 were grim. The company had an accumulated deficit of $505 million and expected to incur net losses "for the foreseeable future." The second phase of factory construction would cost an additional $642 million – over twice what the IPO was raising.

According to the S-1, Solyndra’s revenue in the nine months ending October 2009 was $59 million and half of that was concentrated in just three customers – not a broad market. The cost of goods sold for the same period was $108 million and the electrical capacity of the product sold was 17 megawatts. That works out to a sale price of $3.42 per watt and a cost of $6.29 per watt. They surely couldn’t hope to make that up on volume. And they surely had no way with those losses to ever pay back the DOE loan. You’d think somebody on Team Obama would have noticed that.

In March 2010, auditors with PricewaterhouseCoopers questioned whether Solyndra could survive. Despite raising $970 million in venture capital by that point, the company's deficit had reached $557.7 million. One hopes the auditor’s opinion was known by the White House, but Obama went ahead with his visit to Fab 2 in May, praising the company and insisting he was "not prepared to cede America's leadership" in green technology. Tell that to China.

Two months after Obama’s visit to the new Solyndra factory, the IPO was canceled "due to adverse market conditions" and the availability of alternative funding from existing investors. Solyndra once again turned to the government for help, asking for $469 million to pay for phase two of the factory's construction.

The competitive climate for Solyndra continued to worsen throughout 2010 and the company continued to burn cash. Inventories were piling up. Dr. Gronet, Solyndra’s founder, was pushed out and replaced as CEO.

In late 2010, the Energy Department warned that it would not release any more of the loan money unless Solyndra lined up additional private financing. Solyndra's two largest investors – Argonaut Ventures and Madrone Partners – agreed to provide a $75 million loan with the option of another $75 million later. In return, they wanted the DOE to restructure Solyndra's loan agreement by extending the repayment schedule and taking a junior position behind their loan in case of bankruptcy. Not only is that unheard of, it’s also illegal for the government to take a junior position. DOE did it anyway.

In February 2011, DOE gained observer rights in all Solyndra board meetings and was included in all conference calls. Its loan officer, Jonathan Silver, agreed to the restructuring terms knowing it was a big risk. Silver would later justify the decision, explaining that had he refused, Solyndra would have been forced to shut its doors immediately and at least this way the operating assets of the company would be of greater value if bankruptcy occurred. Apparently it never occurred to Silver that the Solyndra assets were so specialized that they would be worth little to anyone else except another business willing to pursue Solyndra’s flawed business model. At this point Solyndra had received $460 million from the DOE and the new factory had started production in January.

But the market changes that had pushed Solyndra to the brink just kept on coming. In the first eight months of 2011, solar cell prices fell another 42% largely because of $30 billion in Chinese government subsidies to its solar sector. The US share of the worldwide solar-panel market had fallen from a peak of 43% in 1995 to just 7%. Obama and the Solyndra investors were betting against the house, and in this case, the house was the Chinese government.

An August 2009 email exchange between DOE staff members acknowledged that a credit-rating agency predicted Solyndra would run out of cash in September 2011. Despite that, when the House Oversight Committee began subpoenaing the White House for documents related to the loan guarantee, Solyndra launched a $480,000 public relations effort directed at Congress. In July 2011 lobbyists filed with the Senate to begin lobbying activity, staging media events so Solyndra’s CEO Brian Harrison could publicly affirm the firm’s fiscal stability. One of those events included a series of meetings with Congressmen, including Representatives Henry Waxman (D-CA) and Diana DeGette (D-CO). Harrison said lawmakers should "separate Solyndra and its business results from the political process that is ongoing."

Market conditions continued to deteriorate, forcing Solyndra to cut its revenue expectations. Its private backers balked at giving the second $75 million loan unless the government loan was again restructured. This time DOE refused, forcing the company to shut down and terminate 1,100 people on August 31. On September 6, the company filed for bankruptcy protection and two days later the FBI raided the company’s headquarters and its officers’ homes.

The government had loaned about $527 million to the company by the time the end came Obama’s green dream had proved a nightmare and taxpayers had lost over a half billion dollars.

But Solyndra’s troubles had caught the attention of Republicans on the House Energy and Commerce Committee, who months earlier had started investigating the company's loan. They also had learned that Argonaut Ventures is run by George Kaiser, a billionaire Oklahoma oilman who served as a campaign contribution bundler for Obama's 2008 campaign. Kaiser made 16 visits to the White House since 2009, according to White House visitor logs, and was a big contributor to Lady Obama’s charities as well as Obama’s election and reelection campaigns. Is there a rat in this wood pile? Stay tuned.

Solyndra’s CEO and CFO have been called to testify before a House committee. Their lawyers have announced that both will plead Fifth Amendment protection. Lamar Smith (R-TX) has sent a letter to Attorney General Holder asking that he appoint an outside investigator through the US trustee’s office, which can request one in bankruptcy court if there’s suspicion of fraud or misconduct.

Solyndra's rise and fall spanned six years – short even by Silicon Valley standards. Its bankruptcy provided yet another example of waste in Obama’s stimulus spending not to mention setting off a debate about using taxpayer money to play venture capitalist.

Was Solyndra’s ill-fated end predictable? Absolutely.

Solar and wind power are in the same category of junk science as ethanol. They look good on paper but they perform terribly in the marketplace. No one has earned a return of their investment in these “feel good” technologies.

Solyndra had a clever product concept but its economics were awful and its technology was far more risky than flat panel silicon arrays. Selling a watt at $3.42 even at a loss didn’t come close to flat panel prices of $1.25 per watt. And the company’s value proposition depended on the price of silicon remaining high to keep silicon-based competitors from lowering prices. Nature abhors a vacuum and economics abhors a shortage. Invariably new capacity comes on line to exploit the high prices caused by shortages and predictably there will be too much new capacity, producing too much output and tanking prices. That happened with silicon.

And who in his right mind would start a new venture like this one in business-hating California not to mention the Bay area community of Fremont? Regulations are driving businesses out of that state mostly into the business-friendly arms of Texas. Regulations jack up the cost of nearly everything including energy. Unemployment is higher in California than the national average because of regulations and safety standards. Regulations govern water, air, waste management, environment disturbance – everything – all of which increases the operating expense of business in California.

All things considered, this investment was an equity risk – an entirely inappropriate use of taxpayer money. Even though the DOE transaction was called a loan, that doesn’t change the fact that the loan was exposed to an equity risk but would at best earn a creditor’s return – interest.

Obama and his boys bought the sizzle, not the steak, because they are bush league business men and they were using other people’s money. Maybe they got taken in by the $600 million in private equity that was in the deal when the DOE was approached. But the IPO told a tale that should have gotten the DOE’s attention. Wall Street had no stake in the deal to protect and didn’t want one. Solyndra’s equity investors, on the other hand, were already in the hole, and like the gamblers they were, they kept ponying up to protect their stake, perhaps hoping they wouldn’t have to face their investors when the money was gone – something Obama won’t have to do.

The Solyndra loan was made out of a $38.6 billion program to promote the theology of green energy. The Washington Post says the fund has created exactly 3,545 jobs after parceling out half its dough. That works out to around $5 million a job for those of you in Palm Beach County, Florida.

Kermit the Frog was right. It’s not easy being green.

Groundhog Day

Obama’s grandiloquent rhetoric soared with promise upon promise – jobs, infrastructure rebuilding, tax breaks (unless you’re the guy who’s paying for all this stuff) – brought to you by an omnipotent all-caring government that can, shucks, do just about anything and give us so many good things. Good old Uncle Sam!

Now is the time to jumpstart job creation … invest in areas like energy, healthcare, and education that will grow our economy, even as we make hard choices to bring our deficit down. That is what my [plan] is designed to do …

… this plan will save or create 3.5 million jobs … jobs rebuilding our roads and bridges; constructing wind turbines and solar panels; laying broadband and expanding mass transit.

Because of this plan, there are teachers who can now keep their jobs and educate our kids. Healthcare professionals can continue caring for our sick.

Because of this plan, 95% of the working households in America will receive a tax cut – a tax cut that you will see in your paychecks …

Because of this plan, families who are struggling to pay tuition costs will receive a $2,500 tax credit for all four years of college … Americans who have lost their jobs will receive extended unemployment benefits …

I reject the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity. In the wake of war and depression, the GI Bill sent a generation to college and created the largest middle-class in history.

In each case, government didn’t supplant private enterprise … It created the conditions for thousands of entrepreneurs and new businesses to adapt and to thrive.

… this plan will require significant resources from the federal government …

In order to save our children from a future of debt, we will end the tax breaks for the wealthiest 2% of Americans …

But this wasn’t the speech delivered by Obama last Thursday to the special joint session of Congress. No, this one was delivered in February 2009 to another joint session a month after Obama’s inauguration. That was 30 months ago. The grandiloquence of Stimulus I took about $900 billion out of the private sector and created few of those 3.5 million jobs – in fact unemployment rose – and we remain trapped in a recession that is largely the product of Obama’s policies.

So those of us who turned on our televisions Thursday evening to watch the pre-game show for the Packers-Saints game thought we were reliving the nightmare of Phil Connors, the meteorologist sent to cover the coming out of Punxsutawney Phil in the movie Groundhog Day. Obama was on every major station and his much-heralded jobs speech was little more than the recycled words and ideas he fobbed off on Americans 30 months ago. He may call his “plan” the American Jobs Act, but it’s Stimulus II through and through and would transfer another $500 billion from the private sector to public waste.

Compare the following to the preceding:

The purpose of the American Jobs Act is simple: to put more people back to work and more money in the pockets of those who are working. It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for long-term unemployed.

It will provide a jolt to an economy that has stalled … You should pass this jobs plan right away.

Pass this jobs bill, and thousands of teachers in every state will go back to work. These are the men and women charged with preparing our children for a world where the competition has never been tougher.

Pass this jobs bill, and companies will get a $4,000 tax credit if they hire anyone who has spent more than six months looking for a job.

Pass this jobs bill, and the typical working family will get a $1,500 tax cut next year.

… the notion that the only thing we can do to restore prosperity is just dismantle government, refund everybody’s money, and let everyone write their own rules, and tell everyone they’re on their own …

… where would we be right now if the people who sat here before us decided not to build our highways, not to build our bridges, our dams, our airports? What would this country be like if we had chosen not to spend money on public high schools, or research universities, or community colleges? Millions of returning heroes, including my grandfather, had the opportunity to go to school because of the G.I. Bill.

What kind of country would this be if this chamber had voted down Social Security or Medicare just because it violated some rigid idea about what government could or could not do? How many Americans would have suffered as a result?

I am well aware that there are many Republicans who don’t believe we should raise taxes on those who are most fortunate and can best afford it. But here is what every American knows: While most people in this country struggle to make ends meet, a few of the most affluent citizens and most profitable corporations enjoy tax breaks and loopholes that nobody else gets.

And by the way, I believe the vast majority of wealthy Americans and CEOs are willing to do just that if it helps the economy grow and gets our fiscal house in order.

Should we keep tax loopholes for oil companies? Or should we use that money to give small business owners a tax credit when they hire new workers? Because we can’t afford to do both. Should we keep tax breaks for millionaires and billionaires? Or should we put teachers back to work so our kids can graduate ready for college and good jobs? Right now, we can’t afford to do both.

This isn’t political grandstanding. This isn’t class warfare. This is simple math.

Regardless of the arguments we’ve had in the past, regardless of the arguments we will have in the future, this plan is the right thing to do right now. You should pass it. And I intend to take that message to every corner of this country.

I listened to the speech and I’ve read the speech – several times. Obama could have saved millions of football fans and Congress 43 minutes by skipping his limo ride to the Capitol and telling us to reread his failed 2009 jobs plan. Both speeches claim Obama knows how to create jobs, both have a sprinkling of goodies for all but the job creators, both defend the role of government, and both talk about those bad ol’ people and companies who don’t pay their fair share of taxes. This time he didn’t say how many jobs his plan would create, but once again he wants to spend a lot of money and hope for the best. If government spending money created jobs, we would be awash in them right now.

Did you ever notice how often Obama uses straw men, false choices, and blame shifting in his speeches? This one was filled with them. A straw man argument distorts and misrepresents an opponent’s position. A false choice, also known as an either-or fallacy, is presented as the only two available options to choose from, when in fact there may be other alternatives. Both are logical fallacies used in argumentation to misled and confuse an opponent or a constituency that one wants to influence. Look at Obama’s use of them in Thursday’s speech.

What I will not do is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades. I reject the idea that we need to ask people to choose between their jobs and their safety. I reject the argument that says for the economy to grow, we have to roll back protections that ban hidden fees by credit card companies, or rules that keep our kids from being exposed to mercury, or laws that prevent the health insurance industry from shortchanging patients. I reject the idea that we have to strip away collective bargaining rights to compete in a global economy. We shouldn’t be in a race to the bottom, where we try to offer the cheapest labor and the worst pollution standards. America should be in a race to the top.

Is any person or party asking people to choose between their jobs and their safety? Is anyone saying that economic growth is held back because hidden credit card fees are banned, or because children are now protected from mercury exposure, or that laws were passed to prevent insurance companies from shortchanging patients? Who holds the position that collective bargaining rights must be stripped in order for us to be competitive in the global economy? Who advocates for the cheapest labor or the worst pollution standards? I know of no one holding these positions. But apparently Obama does. And by inference he’d have you think it is the Republicans.

Here’s another Obama straw man in Thursday’s speech:

… the notion that the only thing we can do to restore prosperity is just dismantle government, refund everybody’s money, and let everyone write their own rules, and tell everyone they’re on their own …

Who believes that, Obama?

And let’s throw in a false choice or two:

Should we keep tax loopholes for oil companies? Or should we use that money to give small business owners a tax credit when they hire new workers? Because we can’t afford to do both. Should we keep tax breaks for millionaires and billionaires? Or should we put teachers back to work so our kids can graduate ready for college and good jobs? Right now, we can’t afford to do both.

Then top it off with some blame shifting:

I know that some of you have sworn oaths to never raise any taxes on anyone for as long as you live. Now is not the time to carve out an exception and raise middle-class taxes, which is why you should pass this bill right away….

Gee, I haven’t heard any calls to raise taxes on the middle class. Have you?

How did the Republicans avoid falling out of their chairs and rolling in the aisles with laughter with this line?

This isn’t political grandstanding. This isn’t class warfare.

If it isn’t political grandstanding and class warfare to claim that the wealthiest Americans and corporations don’t pay their “fair share” of taxes, what is it? The top 1% of income earners pay more than the bottom 95% combined and about half of the income earners pay no federal income taxes. Maybe Obama was thinking of Jeff Immelt, CEO of GE and one of Obama’s best buds, who was sitting in the balcony with the first lady. GE paid no tax on its $14 billion in profits last year – although quite legally. Obama can’t get straight in his mind the difference in tax evasion and tax avoidance.

There is no legal obligation to pay taxes not owed. Paying more than the statutory tax requirement is not a test for patriotism, despite Biden’s assertion to the contrary. Yet this didn’t prevent Obama from trotting out his customary bromide that Warren Buffett pays less tax than his secretary. Unmentioned was the fact that Buffett’s company pays him a token salary of $100,000. Virtually all of his income is in the form of dividends and capital gains which are taxed at a lower rate and taxed differently than ordinary W-2 income. So he probably does pay lower federal income tax than his secretary if she is paid more than $100,000.

This statement, made early in the speech, is grandstanding – and false.

And everything in this bill will be paid for. Everything.

As usual, Obama’s math is to spend now and pay over the next ten years. In other words, pay for it over the next five Congresses? No Congress can commit a future Congress to do anything. Of course, everything the government spends must be paid for by tax revenue or debt. The claim infers it won’t be debt. But it surely won’t be concurrent with spending.

At about the midpoint of the speech, Obama makes this unbelievable statement:

Now, the American Jobs Act answers the urgent need to create jobs right away.

Right away? Really? The country has been wallowing in record unemployment since Obama took office, and it has grown worse with him in office, yet he has a plan to create jobs “right away”? Why has he waited three years to reveal it? Would that qualify as grandstanding?

Within minutes of beginning his speech, Obama had this to say:

I am sending this Congress a plan that you should pass right away. It’s called the American Jobs Act. There should be nothing controversial about this piece of legislation.

Well, controversy is in the eye – and mind – of the beholder. Can permanent private sector jobs be created by temporary targeted tax cuts? I don’t think so. Obama wants to extend unemployment benefits even more than 112th Congress’ extension to 99 weeks. No new jobs are created by paying people not to work. No new jobs were created by the last temporary payroll tax cuts. To include them in the jobs plan and expect to get different results is pretty controversial, I’d say.

Now, I realize that some of you have a different theory on how to grow the economy. Some of you sincerely believe that the only solution to our economic challenges is to simply cut most government spending and eliminate most government regulations.

Well, there’s that doggone straw man again.

As a matter of fact in 2010 Obama’s administration added new regulations at an average rate of ten per day! It would take a team of readers eleven months to read them and they added a cost of $11,000 per worker to small businesses – the biggest job generator in our economy. So yeah, eliminating government regulations that interfere with economic recovery would be a good start.

Obama sent his jobs “plan” to Congress on Monday. It has no chance of passing and Obama knows it. But since Obama can’t run on his record in 2012, he has to run against something and it looks like Congress is it. By proposing something he knows won’t pass the in Congress, Obama put his skills at straw men, false choices, and blame shifting to their best use in last Thursday’s speech. This bill was always about votes, not jobs.

Did anyone see which way Andie MacDowell went?

Chief Petty Officer

The Obamacrats and their codependents, the mainstream media, had a hissy fit last week when Speaker John Boehner refused to summon the House into a special joint session of Congress on Wednesday as ordered by the White House. Obama wanted to pontificate about his latest jobs plan – Number 342 if you’re counting. But what really torqued them is that Boehner checked his Droid and said, “Wednesday’s out but it looks like Thursday’s open if you can finish before the Saints-Packers kickoff,” forcing the Sun King to shrug and say “I’ll take it.”

Weak. Incompetent. Unorganized. And those complaints came from Obama’s liberal supporters!

One clown, Clarence Page on MSNBC's "Hardball," even suggested that Obama ignore Boehner and go to the Capitol on Wednesday as planned to deliver his speech, telling the Republicans if they didn’t want to show up that was their choice. “Let the cameras pan the empty seats,” Page snorted, “and see what kind of message that sends to the public”. Thankfully, most people don’t take idiotic ideas like Page’s seriously because they understand what Article I of the Constitution says better than he does.

No president has a right to dictate the proceedings of a constitutionally co-equal branch of government anymore than members of Congress can go to the White House without an invitation.

The White House knew that Obama’s speech would conflict with Wednesday’s Republican debate – the first involving newcomer Rick Perry. They knew because it was hosted by … no, not those evildoers at Fox … but their friends at POLITICO and NBC and broadcast live by their friends at MSNBC, CNBC, Telemundo and live-streamed by POLITICO. Yet Obama spokesman Jay Carney would have us believe the choice of Wednesday was, ah shucks, “just a coincidence.” He went on to say, "And obviously one debate of many that's on one channel of many was not enough reason not to have the speech at the time that we decided to have it." They decided?

Even Democrat Party windbag James Carville, when interviewed about the tiff, said “Given a choice between watching a debate and the speech I would have watched the debate, and I’m not even a Republican.”

When the story started to develop legs, the White House mouthpieces began tripping over their own feet. It was leaked that Obama didn’t cave; he was furious that Boehner – the equivalent to Darth Vader at the White House – wouldn’t give him Wednesday. What probably made Obama furious was not so much the speech kerfuffle but the fact that Boehner comes out on top once again. Boehner forced spending cuts in the continuing resolution stare-down. Then he forced Obama to blink after The Man of the People said there would be no spending cuts without tax increases during the debt ceiling standoff. Now this.

The White House press corps wouldn’t let the story die. They wanted details of how the White House ended up with egg on its face.

Here’s what I’ve been able to piece together.

Around mid-morning on Wednesday August 31, White House Chief of Staff Bill Daley phoned Boehner to say a letter was coming to Boehner and Senate Majority Leader Harry Reid asking to speak Wednesday. Then without a solid affirmation from Boehner, White House Communications chief Dan Pfeiffer sent out a Twitter announcing the address on Wednesday, which Fox congressional correspondent, Chad Pergram, said came only 15 minutes after Boehner’s office received Daley’s call. Boehner sent back a letter “respectfully inviting” the president to speak Thursday night because the House would be getting back to work Wednesday afternoon, had a vote scheduled for 6:30 p.m., and would not have the time to do a three-hour security sweep and have Obama speak at 8 p.m.

Obey’s boys figured out that if the boss wanted an audience, he’d best not demand prime time on Thursday and compete with the NFL seasonal kick off, so the Sinaitic emanations were moved back an hour to 7 p.m. where he became the warm up act for a football game.

Press Secretary Carney’s excuse for the foul-up was feeble: "We contacted the speaker's office, informed them that we were going to be asking for that day [Wednesday]. No objection was raised at that time," Carney said. Later Pfeiffer used the identical “no objection” explanation when asked his version of what happened. Sounds like a cover story to me, because if Carney and Pfeiffer believed they had Boehner’s okay, they would have said so instead of using weasel words like “no objection was raised.”

In fact Brendan Buck, a spokesman for Boehner, said "No one in the Speaker's office – not the Speaker, not any staff – signed off on the date the White House announced today." Buck continued "Unfortunately we weren't even asked if that date worked for the House. Shortly before it arrived this morning, we were simply informed that a letter was coming. It's unfortunate the White House ignored decades – if not centuries – of the protocol of working out a mutually agreeable date and time before making any public announcement."

This isn’t the first time Obama has had trouble treating his constitutional equals as equals. Following the electoral sweep last November, the White House announced the president would hold a November 18 White House meeting with Congressional leaders without first confirming it with the Republican leaders. Boehner cited a scheduling conflict, forcing Obama to reschedule the meeting to November 30. After first acknowledging with “all due respect to the separation of powers,” Obama used the State of the Union speech in January of 2010 to criticize the Supreme Court’s Citizens United decision. This past July he demanded – demanded – that House and Senate leaders come to the White House to present their plan personally to him for resolving the debt ceiling crisis when House and Senate negotiations broke down.

During his negotiations with House leaders over the terms of the debt ceiling increase, Obama got into a shouting match with Eric Cantor and then walked out of the meeting. On more than one occasion he has belittled and behaved with the pettiness of a child toward people who disagree with him or refuse to give him his way. He is more the Chief Petty Officer than a president. Unlike a parliamentary system in which the prime minister speaks for the government, the president speaks only for his administration, which is one of three parts of our government.

After being AWOL most of August raising money for his reelection and riding around in a multi-million dollar bus on a Midwestern stump speech circuit trying to resuscitate his sinking poll numbers, Obama took another of his endless vacations at a $50,000 a week hideaway on Martha’s Vineyard while the country languished above 9% unemployment. Yet he accuses Congress of being “do nothing” and insists that they open their fall session with a speech from him. I’m sure that after being called “sons of bitches” by James Hoffa, who introduced the President’s Labor Day Teamsters speech in Detroit – and being called “barbarians” in the Vice President’s Labor Day speech – the Republican caucus can’t wait to hear the jobs speech and its predictable cry for bipartisanship in putting “country above politics.”

Before last week, presidents and congressional leaders customarily agreed on the schedule for joint session speeches in private before making a public announcement. But this is difficult for a person like Obama who views himself as Maximum Leader and sees Congress as his personal staff. The flap over something which should have been routine displays his ignorance of congressional relations protocols, his lack of understanding the meaning of the Constitution, which he claims to be expert in, his bankruptcy of political skill other than giving speeches, and his misuse of the exclusive nature of joint session addresses.

Joint sessions of Congress are rare, and special joint sessions are even rarer. Historically they have been reserved for occasions in which the President must address a major issue of national concern – usually related to national security. Therefore, Franklin Roosevelt delivered his “Day of Infamy” speech in a special joint session the day after the Pearl Harbor attack, and he delivered another to report the outcome of the Yalta Conference and its plan for post-war reorganization of Europe. Truman announced the Marshall Plan, Carter the SALT II treaty, and Reagan reported the Geneva Summit results in special joint sessions. Bush I made a joint session address to explain the need for the first Gulf War and spoke again to announce its victory. Bush II spoke to a special joint session only once in eight years – to announce the War on Terror after the 9/11.

Clinton was the first president to politicize a special joint session address. He gave only one address in eight years and that was to hawk HillaryCare and ask Congress to pass it – which it refused to do. Obama has already made one special joint session address in September 2009 to sell ObamaCare. When I say “sell” it was to sell the voters, since Obama already had absolute majorities in both houses of Congress to pass both bills. ObamaCare was rammed through without a single Republican vote and a majority of the voters still hate it.

Special joint sessions are held in the House chamber because it’s larger than the Senate chamber. Therefore it’s the Speaker’s call to grant and schedule the request for a joint session, although the Senate Majority Leader’s concurrence is sought for courtesy’s sake. Also for courtesy’s sake, a presidential request would probably never be turned down even when the purpose is a political domestic policy proposal as were Clinton’s and Obama’s addresses. Notwithstanding the current 0-2 batting average on political sales jobs, Thursday’s was Obama’s second try – this time facing a House majority opposing his program.

The choice of venue and time to speak about jobs was Obama’s. This speech didn’t merit a special joint session. It should have been delivered in half the time from the Oval Office. He chose a special joint session because he knew most networks would give it air time, which they did, and because he wanted to put the spotlight on Congress as the villains in obstructing his jobs program – which was little more than the shovel-ready horse hockey that has already failed to create jobs. Thursday’s was an unvarnished reelection stump speech, which Obama delivered as if he were a coach trying to rally a team down by five touchdowns in the fourth quarter. He pleaded “pass this bill” more than a dozen times. Bill? What bill? Did he drop off a bill when he came to the Capitol? Nope. There is no bill, no details of how he wants to spend a half trillion dollars. No nothing. Because spending bills originate in the House. Fat chance of that happening, which Obama knew at the get-go when he started this latest special joint session charade.

Boehner gave a plausible, if not totally accurate, reason for postponing Obama’s speech by one day. Still, the Obamacrats howled. Never before in the history of the Republic, they wailed, had Congress turned down a president’s request to deliver an address on a particular day. Switching into overdrive, the mainstream media went after Boehner the Bad for dissing their guy. This excerpt from the Baltimore Sun is typical of the liberal hit pieces:

There was an era when a president of the United States told Congress he was going to address it on a matter of national importance, and that was that. Can anyone seriously imagine that if Democrat Lyndon Johnson or Republican Ronald Reagan had said he wanted to speak in the House chamber on a certain date, Congress under either party's control would tell him no, and when he could?

Well, as a matter of fact there was a time when a request from Ronald Reagan was turned down by the House Speaker “Tip” O’Neil. But whereas Boehner “respectfully invited” Obama to speak on the following night because of logistical reasons, O’Neil refused Reagan’s request altogether.

It happened during the summer of 1986 when Reagan wanted to speak only to the House – not a joint session of Congress – before it voted on funding the anti-communist “Contra” rebels who were fighting the Sandinistas in Nicaragua. Reagan already had the Senate’s funding votes but he didn’t have the House’s. House Speaker O’Neil didn’t want to be vilified for blocking the funding, which could have happened in a House-only speech so he offered Reagan two choices – three, really. He could speak to a joint session, which would deflect the spotlight from the Democrat-controlled House, or he could speak to the House only, provided he would allow members to ask him questions, or he could not speak to the House. It was a Hobson’s choice. Reagan chose “none of the above,” shrugged off the rebuff, and asked one of his aides: “They have televisions up there on Capitol Hill, don’t they?” So he made his case on television, won the House vote, and got the funding for the Contras.

Reagan’s House-only speech would have been a political play. Obama did the same thing Thursday. Spending bills have to originate in the House. Obama wants to spend jobs into existence, which are the only type of jobs he’s ever held, so Obama, who has the Senate votes in his pocket, hopes he can put the House Republican majority on the hot seat one year before their reelection and portray them as the heartless “tax cuts for the rich” guys who won’t help him put America back to work.

Politics ain’t beanbag. This is the same guy who invited House Budget Committee Chairman Paul Ryan to listen to his budget speech at George Washington University and then lambasted the Ryan Roadmap for American plan as unworkable. The same guy who appeals for non-partisanship and then allows his political bag men to call Republicans and Tea Party advocates terrorists, barbarians, and sons of bitches. Preempting the Republican debate and stumping his reelection with a joint session speech would have been a solid twofer if Obama had been able to pull it off. Boehner was right not to let the House become a reelection prop.

When my wife and I want to go to someone’s house for a visit, we call ahead to make sure that it’s convenient. Usually we bring something – maybe a dessert or a bottle of wine. My advice to Obama is this: the next time you want to speak to Congress, call ahead and make sure your visit is okay.

Oh yeah … stop and get some donuts.

Why We Have Monday Off

How did a railway car business, a recession, a labor strike, and a reelection campaign over 110 years ago result in most of us having the day off Monday?

It’s an interesting story.

In the days before airplanes and automobiles, the only way to travel from town to town was by train. The network of tracks laid in the second half of the 19th century made the country mobile and allowed people to travel from coast to coast and border to border.

One of the entrepreneurs who capitalized on America’s increasing mobility was George Pullman. Rail travel in his day alternated between boredom and hunger, but Pullman solved both problems with his eponymously named sleeper car, also called the “palace car,” and later his dining car. Pullman named his company The Pullman Palace Car Company.

After Lincoln’s assassination, George Pullman – always alert to PR opportunities – arranged to have the president’s body transported from Washington to Springfield in a sleeper, giving his invention national attention. The orders poured in from the railroads despite the fact that the cost of sleepers was more than five times that of a regular railway car. The Pullman car was marketed as "luxury for the middle class" – a market the railroads wanted to attract.

In 1867 the company introduced The President, a sleeper with an attached kitchen and dining car, which he called “the first hotel on wheels.” The food was as good as that served in the best restaurants and the service was without equal. The Delmonico, the world's first sleeping car devoted to fine cuisine, was launched the following year, and its menu was prepared by chefs from New York's famed Delmonico's Restaurant. Both the President and the Delmonico and subsequent Pullman sleeping cars offered first-rate service which was provided by recently-freed house slaves who served in the combined roles of porter, waiter, chambermaid, entertainer, and valet.

Pullman went on to create the “vestibule car” in 1887 which virtually made an entire train into a single car by enclosing the space between cars. An accordion connector kept out wind and noise and allowed passengers to move from car to car during their journey.

Pullman never sold his cars – he leased them and charged the railway lessees the premium they charged their passengers to travel in luxury. In time he would have 2,000 cars in operation, making his company worth $62 million in 1893 – $1.5 billion in today’s dollars.

Always pushing the innovation envelope, Pullman built the town of Pullman, Illinois just south of Chicago. It was designed to be a utopian workers' community that would be insulated from the moral and political seductions of nearby Chicago. No alcohol was permitted to be sold or consumed in his town.

The town of Pullman was feudally, organized: row houses for the assembly and craft workers, modest Victorians for the managers, and a luxurious hotel where Pullman himself lived and where visiting customers, suppliers, and salesman would lodge while in town. Housing construction was state-of-the-art with underground sewage lines, and the town included a library and church.

Residents were exclusively the employees of the Pullman Company. Like his rail cars, Pullman leased the housing to them at prices that were established to make a profit for the company’s shareholders, and the monthly rental was automatically deducted from paychecks, which were drawn on the Pullman bank. Pullman sold city water and gas to the residents – at a 10% markup, of course. The church was never occupied because there was no sect that could afford the rental.

A Pullman employee characterized life in Pullman, Illinois this way:

We are born in a Pullman house, fed from the Pullman shops, taught in the Pullman school, catechized in the Pullman Church, and when we die we shall go to the Pullman Hell.

Nevertheless, despite its fiefdom-like quality, the town and company operated successfully for more than a decade.

After years of economic expansion and national prosperity, however, a two-year recession began in 1893 during which the demand for Pullman cars declined markedly. Pullman has promised his shareholders a 6% return, and to keep that promise he laid off hundreds of workers and cut the wages of those who remained. Rents were not cut and it was not unusual for workers to have little to live on after rent. "I have seen men with families of eight or nine children crying because they got only three or four cents after paying their rent," one worker complained. Another described living conditions as "slavery worse than that of Negroes of the South."

On May 12, 1894, therefore, 3,000 employees walked out of the Pullman factory, demanding lower rents and higher pay. The American Railway Union, led by the young pacifist and socialist, Eugene V. Debs, came to the help of the striking workers by offering to represent them. Debs gave Pullman five days to respond to the union demands. But Pullman refused to negotiate, locked up his home, and left town, causing a fellow business owner to say of him, "The damned idiot ought to arbitrate, arbitrate and arbitrate! ...A man who won't meet his own men halfway is a God-damn fool!"

On June 26, all Pullman cars were cut from trains. Within four days, 125,000 workers on 29 railroads had quit work rather than handle Pullman cars. When union members were fired, entire rail lines were shut down. Chicago was under siege.

One consequence of the strike was the interruption of federal mail delivery. Debs agreed to let mail trains into the city, but rail owners mixed mail cars into all their trains. Interference with the mails is a federal crime, and on July 2 a federal injunction was issued against the leaders of the American Railway Union. The injunction claimed that the strike interfered with the delivery of mail, violated the Sherman Antitrust Act, and represented a threat to public safety. Among other things, it enjoined the union leadership from communicating with their subordinates. Absent any leadership, chaos began to reign among the strikers.

Illinois Governor John Altgeld, a pro-labor Democrat, refused to use the armed force of the state militia to break the strike, but he did not interfere with local authorities who were responding to the developing situation. Altgeld agreed to use the National Guard to protect private property if necessary, but above all, he did not want federal troops involved as strike breakers. Nevertheless, President Grover Cleveland, hemmed in by nervous railroad executives, interrupted mail trains, and a federally-issued injunction declared the strike a federal crime and deployed 12,000 troops to break it up.

The timing was awful. On July 3, Federal troops entered Chicago against Governor Altgeld's repeated protests. Early Independence Day celebrations were exploding fireworks, putting everyone on edge. When federal troops appeared, the strikers flew into a rage. What had been a reasonably peaceful strike now turned into complete mayhem. On July 4 mobs of people began tipping over rail cars and building blockades to combat the federal troops. The chaos was made worse because the injunction prevented the union leaders from communicating with the strikers. Therefore, the rioting grew and spread, fires were set to seven buildings, and by July 6 over 6,000 rioters had destroyed about 700 railcars and caused an estimated $340,000 in damages – the equivalent of almost $9 million today.

Even though there were 6,000 federal and state troops, 3,100 police, and 5,000 deputy marshals in Chicago fighting the strikers, they were unable to prevent the violence from growing, and on July 7 an attack on the federal troops caused soldiers to fire into the crowd killing at least four and wounding at least 20. With the deaths of strikers, their rioting began to lose momentum.

Eugene Debs and four other union leaders were arrested and later released on $10,000 bond. As the strike began to fail, Debs tried to get the American Federation of Labor to join them with sympathy strikes. The AFL leaders refused. Then Debs tried to abandon the strike, proposing to the railroad owners, who had hired replacement workers, that they rehire their original workers except those accused of strike crimes. His proposal was turned down.

By the end of the month, 34 people had been killed, the strikers were dispersed, the troops were gone, the courts had sided with the railway owners, and Debs was in jail for contempt of court. On August 2 the Pullman works reopened and on August 3 the strike was declared over.

Debs went to prison, his American Railway Union was disbanded, and Pullman employees signed a pledge that they would never again unionize. Other than the American Federation of Labor and the various railroad brotherhoods, industrial workers' unions were effectively stamped out and remained so until the Great Depression.

Notwithstanding a unanimous Supreme Court decision validating Cleveland's actions, Governor Altgeld continued to protest that, in breaking the Pullman strike, President Cleveland had put the federal government at the service of the railway owners. Altgeld would become an outspoken opponent of Cleveland’s nomination at the upcoming 1896 Democrat convention.

The Pullman strike had made national news. President Cleveland realized that he had to do something to curry favor with the growing labor movement, which viewed him with contempt. Moreover, people across the nation continued to protest Cleveland’s actions. Six days after the strike had ended an Illinois congressman introduced a bill establishing a national holiday called Labor Day to recognize – and for all practical matters, to appease – the American worker. It passed both houses unanimously and Cleveland signed it into law. Samuel Gompers, head of American Federation of Labor, which had sided with the government in its effort to end the strike by the American Railway Union, spoke out in favor of the holiday.

George Pullman died of a heart attack two years after the strike on October 19, 1897. He was hated to the end. His family was so concerned that his corpse would be desecrated by former employees that he was buried at night in an eight-foot deep tomb with floor and walls of steel reinforced concrete then covered with asphalt and more steel rails and concrete. Pullman will have a hard time getting out of that on Resurrection Day.

Grover Cleveland was the first Democrat to be elected president after the Civil War. He is the only president to serve two non-consecutive terms in that office, and it was his intention to be nominated by his party in 1896 and win a third term – the first president at the time to do that. That made him anxious to placate organized labor and to cooperate with a Republican House and Senate and the Republican congressman who proposed the establishment of Labor Day.

But it was not to be. Cleveland could not shake his handling of the Pullman strike. Altgeld made sure the convention was reminded of it. William Jennings Bryan won the Democrat nomination but went on to lose the general election to Republican William McKinley – who was followed by two more Republican presidents.

Labor Day has come to symbolize the end of summer, although technically summer does not end until the autumnal equinox, which falls on September 23 this year. For trivia collectors, Waffle House, the southern cultural icon, opened its first restaurant in 1955 on Labor Day in Avondale Estates, a suburb of Atlanta, Georgia. For fashionistas and the acolytes of Miss Manners, white clothing is not worn after Labor Day. And for the sports-minded, Labor Day is the official beginning of the NFL regular season. But it all began with a railway car business, a recession, a labor strike, and a reelection campaign over 110 years ago.

That’s why we don’t have to work this Monday.