Vice President Joe Biden paid a visit to the Durham-based Cree company yesterday. Cree is a leading maker of LED lights, touted as energy efficient bulbs.
According to Biden:
“I don’t think I’ve ever seen a success story quite like this one here at Cree,” Biden said. “It ties so much into what President Obama and I are trying to do.”
But behind that “success” lies a bit of forced taxpayer subsidization.
Visiting Cree allowed the vice president to talk about both the 375 jobs Cree has added since February 2009 and the $39 million in federal tax credits the company has received under a stimulus program for green energy manufacturers.
Tax credits are merely government spending through the tax code (not to mention the distortions it causes in the economy’s allocation of resources). So Cree’s “success” hinges on $39 million of subsidies from taxpayers. The fact that a production process that relies on subsidies to be profitable means that more resources are required to make fewer goods somehow escaped the VP. I’d love for Biden to explain to me how that creates wealth in the economy. The fact that, as noted in the article, Biden says this wealth-destructing business model is “a symbol of the Obama administration’s economic hopes” is truly frightening.
Biden was also noted as claiming the federal stimulus efforts have helped “create or save” 62,000 jobs in North Carolina. Biden, however, left out some inconvenient facts:
Not directly mentioned were the half-million North Carolinians now out of work. The state’s unemployment rate, which hit 11.1 percent in January, is the highest it has been since the state began keeping track in 1976.
Indeed, since the stimulus bill was made law in Feb. 2009, North Carolina has lost just under 90,000 jobs, while the unemployment rate climbed from 9.8% to 11.1%.
[…] much into what President Obama and I are trying to do.” (emphasis added)Of course, at the time, I questioned Biden’s definition of a “success story,” given the Cree was being propped up by $39 million in federal tax […]