One of the very few concrete statements Barack Obama has been willing to make about his second-term agenda is that there will be more Solyndras. He’s ready to double down on the staggering failure of his “green energy” programs. Why not? It’s your money he’s gambling with, or more accurately, your children’s money.
For example, during the first presidential debate, Obama said, “On energy, Governor Romney and I, we both agree that we’ve got to boost American energy production, and oil and natural gas production are higher than they’ve been in years. But I also believe that we’ve got to look at the energy sources of the future, like wind and solar and biofuels, and make those investments.”
Socialists love to co-opt the language of freedom to disguise compulsion. Nowhere is this more evident than their appropriation of free-market words like “investment” to describe central planning. Obama routinely uses it to replace the far more accurate term “subsidies.” Try replacing investments with subsidies in the Obama quote above, and see how it sounds.
True “investment” requires free choice – it can never be a matter of Big Government re-distributing funds from taxpayers to favored industries. If “investment” can be made involuntarily, than slavery and indenture are also forms of investment. Promises that the product of forced labor would be used for “the benefit of all” would not make the indentured feel any more like “investors.”
The other defining characteristic of a true investment is the rational management of risk, in the pursuit of profit. The successful investor takes risks, and sometimes they don’t pan out, but those risks are not blind or foolish. Mitt Romney memorably characterized Obama as being “good at picking losers” due to the staggering failure of his “stimulus” programs. An investor skilled at picking losers quickly goes bankrupt, and no longer stinks up the marketplace with his lousy investments. But that’s not a problem for Obama, not when he can tap into your income stream, and rack up mind-boggling levels of debt, instead of going bankrupt.
Along those lines, Business Insider reports that three major players in Obama’s beloved solar industry warn that it’s “floundering,” and it won’t be coming back any time soon. The latest grim predictions come from DuPont, whose electronics and communications division suffered a 28 percent last year, driven largely by “lower photovoltaic volumes.” A “flat” 2013 is anticipated, and while they’re hopeful things will pick up after that, it sounds like wishful thinking without much sound data to back it up. General Electric and Siemens have already offered comparably dour forecasts.
DuPont CEO Ellen Kullman also said that Obama’s heavy-handed efforts to make the domestic solar industry more viable through tariffs on Chinese goods has “left the market perplexed.” Wealth is data; perplexed markets are antithetical to healthy wealth creation.
The problem with these green energy markets is pretty clear: there isn’t enough demand for their costly, inefficient products to facilitate large-scale profitable enterprise. Unfair competition from cheap Chinese solar panels is often blamed, but fat tariffs designed to wipe out that “unfair” foreign competition don’t seem to have helped much. (And truth to tell, China’s solar market is not doing well, either.) Obama loves to throw around the word “sustainable,” but like many of the words he uses as stage props, he hasn’t pondered every aspect of its meaning. Sustainable enterprises satisfy demand at a profit; when that cannot be done, the enterprise cannot be sustained.
The Obama response is to practice economic necromancy, using government power and compulsory subsidies to sustain a zombie green energy market until future conditions change the supply and demand calculation. In other words, he’s betting that the sources of reliable energy that American consumers prefer will become so scarce and expensive that Obama’s preferred power sources will become more reasonable alternatives. He’s done everything he can to use compulsive power to hasten that day… and if he gets re-elected, he will redouble his efforts, confident that he can complete his “transformation” of American once he never has to worry about facing the voters again.
This is all based upon a series of mistaken beliefs and outright fantasies. Remember when Obama was running around the country and repeatedly mis-representing the amount of oil available for domestic development? He deliberately conflates proven reserves (the oil resources we’re already developing) with the vastly larger potential resources we have discovered. This is part of the effort to obscure the realistic, voluntary evolution in energy development that American can undertake, with much lower overall cost to consumers and taxpayers. We’ve got more than enough oil to become energy independent for over a century, and that’s more than enough time for other power sources – maybe even something that isn’t on the radar screen in 2012 – to be perfected. The compulsive agenda Obama prefers is based on a carefully manufactured sense of false urgency.
It’s all about force and compulsion. Consumers and investors have not freely chosen to support what Obama wants… and that creates an opportunity for him to exercise power. He’ll find no end of rent-seekers lining up to collect his subsidies, and provide him with various political and financial rewards in return. The cost to the rest of us, in both dollars and liberty (which are far more closely related than anti-materialistic leftist dogma would have you believe) is absolutely unacceptable. And it’s increasingly risible to describe any aspect of the process as “investment.”
Update: A further thought, inspired by reader HeavyHammer on Twitter… the DuPont CEO’s comments about Obama’s tariffs “perplexing” the market illustrate another downside to command economics. Corporate welfare distorts the very forces that might otherwise lead “favored” industries to sustainable profitability. I tend to believe free market competition presents a very forbidding landscape for wind and solar power at the moment, but any chance they have to whip themselves into fighting shape for such competition is ruined by large-scale infusions of subsidy money, which facilitate poor business practices. It’s like pumping bad data into a computer program and expecting an accurate result.