Paul E. Vallely, major general, retired, U.S. Army, is chairman of Stand Up America. He has a distinguished military career of 32 years, serving in many overseas theaters including Europe and the Pacific Rim countries as well as two combat tours in Vietnam. The general has been a military analyst on television and radio for several years.More ↓Less ↑
On March 3, 1993, two months after taking office, President Bill Clinton announced the National Performance Review.. On the same day, the White House Office of Domestic Policy issued a press release that began with a quote from Clinton followed by the announcement that Al Gore was to lead a revolution:
“The people demand and deserve an active government on their side. But they don’t want a government that wastes money, a government that costs more and does less. They voted for change. They wanted a literal revolution in the way government operates, and now, you and I must deliver.”
President Bill Clinton
Remarks to the Cabinet
February 10, 1993
Today, the President has asked Vice President Gore to lead a revolution in Washington that will change the way government does business. The American people deserve a government that treats them like customers. …
A few months later, a report was produced from the National Performance Review, and the next phase of the project began with a rename. The National Performance Review became the “Reinvention of Government.” With that, the revolution announced on March 3 began.
Al “Mussolini” Gore led an IT-centered revolution with the mandate to “Do More with Less.” The objective was to redesign the systems of government in the corporate model. The rule book for ethics in government was virtually shredded, and over the next eight years, legal constraints on government agencies were eliminated, allowing the government employees, IT consulting firms and representatives from the largest corporations to collude in the redesign of government systems.
Government employees were given the mandate to consider the corporations they formerly regulated as “partners” and “customers” in the redesign effort. Not surprisingly, the overhead functions of the large corporations were aggregated, normalized and passed off to the public sector. The result of this incestuous relationship between government and corporations was that the citizens and small businesses became the targets for regulation as captives in a “market” ruled by corporate titans. In redesigning the systems of government, they changed the nature of the government.
The easiest place to see the “Invisible Hand” is in the integrated school-workforce development system: the National Human Resource Management System. The schools were repurposed to become the supply chain for workers – incorporating “worker skills” into the curriculum and vocational training beginning at the high school level and in some states at the junior high school level.
The old state unemployment office was given a new mission: One Stop Shop – tasked with doing everything that has to do with the “development” of the market captives to keep them working. One Stop Shops list jobs, coordinate training and maintain “performance records.” Essentially, this system is the aggregated and externalized personnel department for the corporate collective.
The universities were repurposed to become the Research and Development departments for the corporate collective. Product commercialization and “small business development” centered on technology-oriented businesses (anything with a chip) is connected to the universities by “partnership agreement” through “Innovation Centers.” The Innovation Centers provide subsidized facilities for the startups, business advisers with connections to venture capitalists, and academic advisers with connections to the government grant and patent systems.
The above is the “New Economy,” sometimes called the knowledge-based economy. The idea is that R&D and product commercialization can be commodified into an assembly-line process. What it actually produces is an economic mirage. Essentially the Invisible Hand produced a small-business bubble machine – exemplified by the dotcoms of the late 1990s.
If the startup business is a winner, the venture vultures win – and they win big but they never lose. The Reinvention of Government project included financing mechanisms through tax credits and securitization under “New Markets Initiatives” implemented by Treasury Secretary Robert Rubin, a former employee of Goldman Sachs.
There are a number of elements to the design of the “New Economy,” all of which combine to form a System. Apparently, the Chinese are very good at systems thinking from a holistic approach and/or the venture vultures are very good at turning a loss into a profit – or both – but regardless, the opportunity was created for Communist Chinese infiltration of the American economy, including infiltration of our critical infrastructure through the university system – small-business bubble machines. The story of Hoku Scientific is a classic case in point. The history of Hoku’s beginnings combined with the method of the Chinese takeover and the timing of its appearance on the scene are straight out of Sun Tzu’s “Art of War.”
With a lot of help, an unqualified team of people – high school chums – were able to start a business, get an NSF grant, get a Navy contract, go public on the hype of the Navy contract, then announce a new business to manufacture polysilicon. They were able to get the city of Pocatello, Idaho, to give them a 99-year lease on 67 acres of property for $1 per year with an option for another 450 acres. Idaho Power built a new substation and ran a new transmission line for the planned manufacturing facility.
Never mind the expertise they didn’t have; they also didn’t have the money to build a manufacturing plant. What they did was to play the Wimpy game: “I’ll gladly give you polysilicon tomorrow if you give me millions of dollars today.” They kept up the charade for several years, selling future deliveries of polysilicon, collecting the money and keeping just enough construction activity at the site to make it appear as if progress was being made.
On Aug. 17, 2009, Hoku Materials was granted Foreign Trade Subzone status. On Sept. 29, 2009, in a company press release, it was announced that Tianwei had enough unfulfilled contracts for delivery of polysilicon that they were converted into stock, giving them a controlling interest in Hoku. They also announced that they were increasing the size of the Board of Directors to include Tianwei officials and that Wei Xia of Tianwei would be chairman of the Board. Tianwei is a subsidiary of China South Industries Group, a Chinese state-owned conglomerate of companies. Exit stage left: About a week later, Dustin Shindo, the CEO of Hoku, and his high school pal, Karl Taft, were off to start a new business, KAI Medical.
Oh, and one more little detail: The contract Hoku got with the Navy for $4.5 million was to install “fuel cell plants” as a demonstration project in a Navy building in Hawaii. The subcontractor Hoku hired to supply the “fuel cell plants” and to do the installation was IdaTech, a wholly owned subsidiary of Idaho Power.
In an article found on the Internet regarding the successful completion of the first phase of the Navy contract, the “fuel cell plants” were described as being about the size of a washing machine. A quick peak over at the IdaTech website shows the products they have for sale, and they fit that description. What IdaTech sells are battery backup systems for telecom. This is a common piece of equipment; every server in the country has a battery backup system for orderly shutdown in the event of a power failure.
On the USASpending website, which shows government contracts, an Army Corp of Engineers purchase order for an IdaTech backup power system was found priced at $67,000 for the unit. It could be a coincidence, but the amount of money Hoku agreed to pay IdaTech was just about enough to cover 10-12 units with installation at the $67,000 price, that leaves about $3.5 million unaccounted for on the Navy contract.
This is your new, centrally planned, university-led, knowledge-based economy. It is economic warfare fought on an intellectual playing field – and we are losing.