||:Oct 5, 2009;
||:Free Press Editorial;
Phony wind, solar energy ‘surge’
The economic ideal in America is that a business competes with other businesses for customers by offering better or cheaper products or services. Government’s role is supposed to be that of neutral umpire — preventing fraud and protecting property rights, but leaving it to consumers to pick winners and losers.
We have fallen far from that ideal, which is evident in the expectations many in our supposedly free market have of government.
Here is the lead of a Hearst Newspapers article: “Business leaders ... said an infusion of more than $1 billion in federal grants for renewable energy projects is driving a surge of private investment in wind and solar operations.”
But any such “surge” is artificial. The question is not whether wind or solar power is “surging” when it is propped up by subsidies from taxpayers, but whether it is successful standing on its own two feet.
If Uncle Sam showered enough subsidies on a company building solid-gold countertops (if there were such a company), it could bring the price of gold countertops down enough to make them seem cost-competitive with marble or Formica countertops. But that would be an illusion. Consumers still would be footing the bill, but they would be paying the tab through taxes rather than through free-market choices.
By the same token, government can make expensive wind and solar power projects seem cost-effective by offering them big subsidies. It can also do that by placing burdensome new taxes on production and use of oil, natural gas and coal, thus making their costs artificially high. But that, too, is smoke and mirrors.
Private investment that results from subsidies or from contortions of the tax code — and that would fail without those intrusions in the free market — is nothing to celebrate.