It’s easy to criticize the federal government’s attempt to boost economic growth by promoting “green” technology. The idea has a certain superficial charm, and it goes something like this: Since we all know that environment-friendly and energy-efficient technologies are the Next Big Thing, why shouldn’t the federal government “invest” billions of public dollars in the green energy industry? That will (a) create jobs in the short term and (b) put the U.S. economy ahead of the curve in the long term.
Here’s why: Because (a) it won’t and (b) it won’t.
Government bureaucrats don’t know the future. They don’t know what the Next Big Thing is, even if they’re good at sounding like they do. And even if they did know the future, they wouldn’t know what to do about it: Since they’re not “investing” their own money but spending somebody else’s, their incentive isn’t to make money for themselves or others but to score points with the electorate and/or the media. Which is why their brilliant “investment” schemes almost always end up costing the taxpayer millions with no net positive result.
Case in point: Solyndra Energy, maker of solar energy panels. Two years ago, the present administration in Washington gambled $535 million on this green energy company. Now the company’s filed for bankruptcy, and almost all its 1,000 or so employees are out of a job.
We in South Carolina might be tempted to ridicule Washington bureaucrats for buying into such a crackpot scheme. It’s a perfect example of government-run economics at its worst. The federal government needs to quit wasting our money on hare-brained schemes, right?
Well, right.
But before we say too much, let’s consider follies closer to home.
As we pointed out last month in our annual guide, The Best and Worst of the General Assembly (see page 12 in particular), our state lawmakers do this kind of thing all the time. The dollar amounts may be smaller, but the potential for folly is exactly the same. Just this year, legislators introduced at least three bills offering tax credits to individuals and companies for a variety of “green” initiatives – purchasing hybrid cars, buying solar energy equipment, and promoting ethanol and soy-based biodiesel.
Bear in mind, too, that South Carolina has a long history of dumping taxpayer dollars into companies that end up either going elsewhere or declaring bankruptcy. Within the past two years, state and local governments put up $40 million to bring an electric bus manufacturer to Greenville, only to find that one of the company’s major investors had pled guilty to fraud charges. And recently a company called AQT Solar got more than half a billion dollars in incentives to come to put down roots in Richland County. AQT may be a fine company – we have no reason to doubt it is – but so far there are no signs of its promised 1,000 jobs.
So by all means, let’s point the finger at the federal government’s Solyndra debacle.
But let’s do a little self-analysis, too.