Liberals: Wrong Again. Do They Care?

It is a phenomenon we see over and over again: a liberal will make a wild accusation or engage in defamatory speculation about a political opponent. The accusation will then be taken up by left-wingers across the internet and, if it looks promising, it will be repeated in far-left newspapers like the New York Times. Liberals everywhere will eat it up and elaborate on it. Then, in due course, it will be proved entirely baseless.

What happens next? Do liberal web sites, columnists and reporters retract their fictitious claims and apologize? Hardly ever. By the time the truth comes out, they have moved on to some new libel or conspiracy theory. The truth remains a stranger to most of the readers who rely on such dishonest sources for information.

A case in point happened in February, in connection with the Left’s hysterical attacks on Governor Scott Walker’s administration in Wisconsin. A popular theme on the Left was that the Koch brothers, Charles and David, were somehow behind Walker’s desire (and that of the Republican legislature) to balance Wisconsin’s budget. Some lefty–I’m not sure who came up with it first–seized on an obscure provision in the Governor’s budget proposal to suggest that the whole essence of the budget was a “payoff” to the Kochs’ company, Koch Enterprises. Here is how the theory went on the Daily Kos:

1) Koch Brothers get their puppet Governor Walker in power
2) Governor Walker gins up a crisis
3) Democrats and Progressives take the bait and counter-protest on collective bargaining
4) Governor Walker will compromise on collective bargaining if the rest of the budget is passed as is
5) Bill passes, with trojan horse give-a-way to the Koch Brothers nested in
6) Koch Brothers will buy Wisconsin state-owned power plants for pennies on the dollar in closed unsolicitated [sic] bids for which there will be no oversight
7) Koch Brothers get the best vertical monopoly in a generation

I know, reading the Daily Kos can lower your IQ. Here is ThinkProgress on the same theme:

Gov. Scott Walker’s (R-WI) demand that he be allowed to sell off Wisconsin’s state owned power plants with no-bid contracts has fueled suspicion that Koch Industries might take advantage of the deal, especially given Koch’s support for the Walker campaign and his current power grab.

A Forbes blogger, amazingly enough, had one of the most florid versions of the conspiracy theory:

What this says is that the State of Wisconsin can sell or contract out management of state-owned heating, cooling and power plants without the requirement that bids for such a sale or leasing be solicited so as to maximize what the government can pocket through such an arrangement.

Put another way, the state can pick who they want and make whatever deal they want without anyone else having a chance to bid on the deal. … So, who in the state of Wisconsin would be in a position to buy or operate these utilities and benefit from a bid-free scenario?

There are a few companies that seem best positioned to fill this roll. They are, courtesy of –

Flint Hills Resources, LLC, through its subsidiaries, is a leading refining and chemicals company. Its subsidiaries market products such as gasoline, diesel, jet fuel, ethanol, olefins, polymers and intermediate chemicals, as well as base oils and asphalt. A subsidiary distributes refined fuel through its strategically located pipelines and terminals in Junction City, Waupun, Madison and Milwaukee. Another subsidiary manufactures asphalt that is distributed to terminals in Green Bay and Stevens Point.

Koch Pipeline Company, L.P. operates a pipeline system that crosses Wisconsin, part of the nearly 4,000 miles of pipelines owned or operated by the company.

The C. Reiss Coal Company is a leading supplier of coal used to generate power. The company has locations in Green Bay, Manitowoc, Ashland and Sheboygan.

All three of these Wisconsin based companies are the largest –or among the largest – in their fields. And they all have one thing in common.

Each of these companies is a subsidiary of Koch Industries.

Now, the theory in play suggests that the entire bruhaha over collective bargaining rights is simply a distraction to get the following deal; The governor will, eventually, back off his efforts to kill the state employees union. In response, the state congress will pass the budget as currently written- including the section that allows the state utilities to be sold to whomever the Governor wants and at whatever price Walker chooses to sell for.

The result (according to the conspiracy theory) – Koch Industries gets to buy or operate the Wisconsin state utilities for pennies on the dollar, creating one of the greatest state monopolies we’ve ever seen.

The liberals’ theory made no sense at all, and a Koch spokesman explained that Koch is not in the business of owning power plants that heat schools and prisons and has zero interest in acquiring Wisconsin’s decrepit facilities. I explained at greater length why the left’s speculation was absurd:

Of all the dumb theories liberals have offered to distract attention from what is happening in Wisconsin, this is the funniest. The idea that Koch Industries is supporting Governor Walker in order to get access to some broken-down, environmentally inadequate, unprofitable heating and cooling plants for Wisconsin’s universities and prisons is so silly that it could be believed only by the likes of Lee Fang and Paul Krugman.

Here are the facts: Wisconsin owns around 34 heating and cooling plants, scattered around the state, that are used to provide heat and air conditioning to universities and prisons. These plants are mostly coal-fired, antiquated, environmentally shaky, and fully depreciated. There is no particular reason why Wisconsin should be in the heating and cooling business, and proposals to sell these plants have been around for some years. In its 2005 budget, Wisconsin’s legislature proposed to unload these unprofitable turkeys, but Governor Jim Doyle vetoed that legislation.

In 2005, the state of Wisconsin analyzed these power plants and concluded that “the value of the 34 plants [was] $235.9 million, offset by $83.9 million in debt.” Which is to say, a pathetic $4.4 million apiece. These power plants are probably more a liability than an asset, since they have a long history of problems in complying with environmental regulations:

Jeff Plale, a former Democratic state senator who was hired by the Walker administration to run the Division of State Facilities, said he didn’t think a bidding process is appropriate for the sale of the heating plants. “A bid implies that there is a value in the physical asset,” he said.

It’s difficult to tell what kind of price they could fetch, particularly because of environmental liabilities. Several of the old coal plants are in potential violation of the Clean Air Act because they lack modern pollution controls, Plale said.

“A number of these plants have potential environmental liabilities hanging over their head. How that falls into the mix still needs to be addressed,” Plale said.

So it is quite possible that the value of these 34 obsolete plants may be negative. The head of Wisconsin’s Sierra Club chapter agrees:

“The state knows darn well that it has got compliance issues with these aging coal plants, and so the violations are going to have to be corrected,” said Jennifer Feyerherm of the Sierra Club in Madison. “How the governor thinks he can put lipstick on that pig and sell huge financial and environmental liabilities to someone else, good luck. Bottom line, those plants need to be cleaned up.”

Around Wisconsin, the conventional wisdom is that the state will be lucky to find anyone willing to take these liabilities off the state’s hands. Koch Industries does not own any similar facilities anywhere in the world, and it is no wonder that Koch has said that it has zero interest in relieving Wisconsin of the burden of these antiquated plants.

But no smear is too dumb for Paul Krugman. The incorrigibly lazy Krugman gets most of his column ideas from the likes of ThinkProgress and Firedoglake. So he, too, jumped on board the heating plant bandwagon:

And then there’s this: “Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).”

What’s that about? The state of Wisconsin owns a number of plants supplying heating, cooling, and electricity to state-run facilities (like the University of Wisconsin). The language in the budget bill would, in effect, let the governor privatize any or all of these facilities at whim. Not only that, he could sell them, without taking bids, to anyone he chooses. And note that any such sale would, by definition, be “considered to be in the public interest.”

If this sounds to you like a perfect setup for cronyism and profiteering — remember those missing billions in Iraq? — you’re not alone. Indeed, there are enough suspicious minds out there that Koch Industries, owned by the billionaire brothers who are playing such a large role in Mr. Walker’s anti-union push, felt compelled to issue a denial that it’s interested in purchasing any of those power plants. Are you reassured?

That’s classic Krugman logic. There is zero evidence to support the theory he puts forth, except–apparently–the fact that Koch publicly stated it had no interest in the heating and cooling plants. In Krugman’s twisted world, that supports the “suspicious minds” who just made up the theory that Krugman now happily peddles.

That all happened last February. By now, most people have forgotten the episode and Krugman, along with the left-wing bloggers who feed him material, has moved on to other smears. So little attention will probably be paid to this story in Saturday’s Milwaukee Journal Sentinel:

As the Walker administration explores a plan to sell off the state’s energy plants, which provide heat and steam to college campuses and prisons, local utilities are expressing interest in buying the plants. …

The clause drew fire from critics of the Republican administration, who wondered whether it was intended to help the administration sell the facilities to Koch Industries Inc., the largest corporate backer of the governor’s election campaign through its political action committee.

Kansas-based Koch, which operates paper mills and coal transportation firms in the state, vehemently denied any interest in buying or leasing the state facilities.

As it turns out, the potential buyers for the small power plants are much closer to home – including investor-owned utilities in Milwaukee and Madison.

In recent investor presentations, Wisconsin Energy Corp. listed the potential acquisition of state energy plants as the first of several investment opportunities it is considering. …

David Parker, an investment analyst with Robert W. Baird & Co. in Milwaukee, expects many states and communities will try to unload their state energy facilities to boost budgets in tight fiscal times.

He predicts that within the next few years, states will be taking a hard look at whether they want to be in the business of supplying their own energy to government buildings, and may consider selling the power plants as a way to generate revenue without raising taxes. …

The key for the state is to avoid taxpayer expense in having to upgrade aging plants, some of which are in violation of air pollution laws.

So there you have it: another Emily Littela moment for the Left. Except that Paul Krugman never says, “Oops, never mind,” let alone apologizes for the lies and smears he perpetrates in his column. Don’t expect this occasion to be an exception.

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