Why should solar energy be collected on the Moon instead of LEO?

LEO is a stupid place to collect solar energy for use on Earth. A satellite in LEO will only be in sight of a ground station for at most a few minutes per orbit. It'll also be in the dark about half the time. GEO makes much more sense because you're always in sight of the ground stations and you're only in the dark during eclipse seasons, which total less than 1% of the time. It doesn't make much sense at all to use the moon for solar power.

Lunar minerals could be mined and shipped back to Earth.. Bullshit. The cost per pound would bankrupt almost any project. Most materials cost from fractions of a dollar to a few dollars per pound. That includes depreciation on equipment and transport. These would go way up for lunar materials.

Shipping the materials back to Earth doesn't make economic sense. Using them in space can.

.. or used for Moon-based manufacturing of lunar hotels and science facilities. Yes. There are how many lunar hotels? How many space tourists per day? What science facilties can be built cost effectively on the Moon compared to Earth?

Ever hear of concrete? Years ago, Japanese researchers showed you can make concrete out of lunar soil. You'd need some form of water (and perhaps there's ice on the moon to supply that). In short, you can make facilities as big as you want on the moon just like you can on Mars, and do it without having to ship everything from the Earth.

Where was the focus on CATS that could support a whole new economy of scientists, colonists and lunar tourists?

Where is the economic incentive for CATS? Is it the government's job to pay for it or industry's job to provide it? Right now, government has little interest in CATS. The mainline manufacturers have no economic incentive to provide it. All sorts of companies have come and gone over the past 10-20 years promising CATS but to date, none have delivered. Damned shame, but there you have it. I'd love for Cessna to go back to building new airplanes for $40,000 instead if $180,000, but I've given up holding my breathe while waiting for it to happen. At $20 million a pop, people aren't exactly breaking down the doors to their travel agents to book flights into space. Lower costs will be required to make that happen. Until a proven market for cheaper boosters materializes, there's no incentive to build them. Most satellite owners are more interested in reliability than they are in low cost. Kind of a chicken and egg situation.

Why put huge telescopes on the Moon? Current plans for awesome scopes call for free flying or orbital space scopes.

There are limits on how large a mirror you can launch, even if you fold it. A cutting edge Earth-based telescope can be built for less than 10% of a space based one, anyway. Optical telescopes on the moon are likely to present some problems, but you could build some terrific radio telescopes inside craters on lunar farside.

Want to guess how hard it would be to finde the small fraction of Earth rocks on the Moon let alone the ones containing valuable data?

I asked Larry earlier about a radio telescope. The only thing I know of that might be really superior on the farside of the Moon. However it seems to me that a large Earth based intereferometer might be far more cost effective based on what's goiing on with optical telescopes. If not that, how about a free flying radio interferometer in the outer solar system (Jupiter orbit or beyond) where radio noise from Earth would be reduced by a factor of 25 or more?

Ground based radio telescopes are being drowned by radio noise. Lunar farside would completely shield the instruments from all Earth-based and Earth orbit transmissions. You could build one in a crater like the one in Puerto Rico, only bigger due to the lower gravity. Sending radio telescopes to the outer solar system would cost far more than the Cassini probe. It's possible you could build a better instrument on lunar farside for about the same amount of money, with the added advantage that it wouldn't take years to arrive on station.

To be fair to the press there are people promoting these things, but as an engineer I've got to ask is it cost effective? I believe human's on Mars are more cost effective than robots at doing geology and astrobiology and have posted numbers to back it up. I doubt that anything I have heard pushed on the Moon is really the most cost effective way to investigate the subjects promoted.

Yes, I know you want to go straight to Mars. Others including myself disagree. That's what debate is all about. For the moment, it looks like our side has won the argument, at least for the time being. For the first time in years, NASA is being directed to look beyond LEO. There's tons of hard engineering to do to make any of this happen. In the process, new ideas are likely to come forward that may supercede what either of us currently advocate. This is what happened during Apollo when the two leading concepts were direct ascent from Earth or Earth-Orbit Rendevous. In the end, Lunar Orbit Rendevous proved to be a better idea. It's quite possible that some better idea will come from the engineering studies and change the direction of what Bush proposed yesterday. Time will tell.