Revelations that a hedge fund owned by Democratic Party megadonor James Simons invested heavily in several solar energy companies while his close friend, US Senate Majority Leader Chuck Schumer (D-NY), boosted the Biden administration’s Inflation Reduction Act (IRA) raise questions about not only the ties between the two men but also between climate ideology and special monied interests. Inflation has soared due to massive federal spending on renewable energy technologies that greatly enriched the industry on President Joe Biden’s watch. The Schumer-Simons connection casts a shade on congressional ethics while revealing conflicts of interest within a lucrative industry that has exploded in response to claims of climate change urgency.
Inflation Warming Under IRA Big Spending
The IRA, passed solely with Democratic votes, was touted as a win-win-win plan to reverse inflation by boosting the economy through colossal spending on solar and other renewable technologies. The Congressional Budget Office forecast the costs of the IRA's energy and climate provisions to be $391 billion between 2022 and 2031, while Democrats employed accounting gimmicks to argue the IRA would reduce the budget deficit. Subsequent analyses peg the IRA price tag closer to $1 trillion, in part due to uncapped tax credits.
The Wall Street Journal summarized a Goldman Sachs report that reflected the more likely cost scenario -- $1.2 trillion -- for the IRA:
“By Goldman’s estimate, the IRA tax credits will cost tens to hundreds of billions more than CBO estimated over 10 years. The forecast misses include electric vehicles (difference: $379 billion), green energy manufacturing ($156 billion), renewable electricity production ($82 billion), energy efficiency ($42 billion), hydrogen ($36 billion), biofuels ($34 billion) and carbon capture ($31 billion).
“Democrats have created an enormous new corporate entitlement whose costs will increase on autopilot and blow up the deficit while raising energy prices for average Americans.”
Regardless of whether Schumer knowingly benefited his close friend Simons while finagling the IRA, the conflicts of interest between the renewables industry and government climate policy are as glaring as the environmental damage caused by solar panel manufacturing. The supposed win-win-win of the IRA is proving in an election year to have been a lose-lose-lose of greater inflation fueled by public debt that will inequitably stall the economy while polluting the environment.
Follow the Climate Money
The adage “follow the money” seems apropos when tracing Simons’ solar investments while Schumer and Biden’s IRA salesmanship flared. The Washington Free Beacon reported that Simons wired $2.5 million to Schumer’s Senate Majority PAC eight days before he and Sen. Joe Manchin (D-WV) publicly presented the IRA and paid the PAC another $2.5 million one week after Biden signed the bill into law. The profits made by Simons on investments in solar companies were stellar:
“At the very least, it suggests Simons sought to take advantage of the solar industry handouts earmarked in the IRA by increasing his exposure to various solar companies, some of which are based in China, including one tied to forced labor…
“Broadly, solar stocks surged in value after Schumer and Manchin unveiled the IRA with its solar tax credits.”
The Biden equity mantra is also imperiled by elitist profiteering linked to climate and other administration policies that favor wealthy donors and corporate behemoths (like Big Pharma) at the expense of blue-collar taxpayers and fiscal frugality.
Fiscal Fantasies
The US Treasury has fallen into step with delusional Bidenomics ideas that fiscal policy built on leveraged spending to subsidize select manufacturers will somehow improve the economy and achieve climate and social justice Utopia, as told in a feature story on the Department of Treasury website:
“[F]or the purposes of a benefit-cost analysis to evaluate the IRA, fiscal costs are the wrong costs to consider. That’s because the tax credits paid by the federal government are received as benefits by American drivers who purchase electric cars, homeowners who install efficient heat pumps, and investors who build factories and power plants to equip and fuel the clean energy transition. The bulk of the IRA’s fiscal costs are these types of tax credits, that is, reductions in taxes paid by individuals and businesses. Each of those is a cost to the federal government, matched by an equal benefit to the recipient, with no net cost to the economy.
“In fact, simple economic theory shows that the fiscal costs of a subsidy will always exceed its true economic costs.”
Here is laid bare the folly of the environmental justice and renewable energy snake oil scam. Environmental “science” is employed to manipulate public policy to financially benefit a cadre of well-positioned “stakeholders” who hold all the stakes, in this case using the circular rationale that “economic theory” (that assumes economic benefits premised on dubious climate theories) predicts environmental benefits will exceed “true” economic costs. Inflation fueled by servicing the national debt, disparate tax impacts of renewable energy subsidies, rising electricity rates, child labor, toxic pollution emitted in renewables manufacturing, and grotesque profits hoarded by a handful of privileged insiders are all dismissed by the Biden Treasury as having “no net cost to the economy.”
Consumers – and voters in the 2024 election – may beg to differ.
