Democrats alone, the editors of the Washington Post remind us, aren’t responsible for the mess at Solyndra. Congress, Energy Secretary Chu told what the paper called a “Republican-controlled House committee” (wonder if they would have called the House Energy and Commerce Committee a Democrat-controlled committee when the president’s party held the majority) that Congress authorized the program during the George W. Bush administration.
This is just a reminder that Republicans have not always held true to small-government principles — and why we need organizations like the Tea Party to hold their feet to the fire. The political favoritism the administration showed to the company — and some of its backers — is just part of the scandal. The Post editors contend “the real scandal is the loan guarantee program itself“:
The United States needs alternatives to oil, for reasons ranging from climate change to national security. Shoveling taxpayer dollars into profit-seeking manufacturing companies is not the way to develop them.
You can call it crony capitalism or venture socialism — but by whatever name, the Energy Department’s loan guarantee program privatizes profits and socializes losses. It’s an especially risky approach in the alternative-energy space, where solar energy is many years from being cost-competitive with fossil fuels for most uses — and history is littered with failed government attempts to back the next big thing.
Emphasis added. Yes, they’re right, the real scandal is a government program putting its capital into the marketplace.
Now, to be sure, crony capitalism has grown considerably in our nation’s capital since January 20, 2009, but it’s been around a lot longer than that. And it’s nice to see the editors of one of the nation’s largest (and most liberal) dailies remind us of the real problem of government subsidies for private industries: they privatize profits and socialize losses.
Without putting some skin in the game, or perhaps, by putting taxpayers’ skin in the game, entrepreneurs can’t responsibly weigh the risks of their business decisions. Their cost-benefit analysis is flawed because the government is footing some of their costs — and taking care of their losses.
I am skeptical about the Post’s assertion that the United States “needs” alternatives to oil. If we needed them, private actors would develop them on their own without government support. What we do need is for the government to stop regulating the energy marketplace and allow entrepreneurs and investors, acting on their own initiative, to develop new, cheaper, cleaner and more efficient means to power our homes, our industries, our transportation and recreation.
All that said, it’s great to see a liberal newspaper embracing a key tenet of capitalism.
NB: Had planned to post on Chu’s testimony if I could confirm the impression I gained in watching/reading about it that he never acknowledged making any mistakes. Have yet to review the testimony so this may just be an impression.