“Putting green lipstick on a pig doesn’t turn that pig into Ralph Nader.”

Mead on green subsidies:

Advocates of industrial policy have been pointing to ‘smart subsidies’ for green technology as proof that government can function as an effective venture capitalist, directing subsidies effectively toward ‘sunrise’ industries.

We will probably be hearing less of those claims now as the public digests the massive excess, failure and fraud that have turned the Obama administration’s green subsidy program into a symbol of good intentions gone awry.  It turns out public policy is hard, and not every green minded NGO apparatchik is very good at hard things.

Decrying what it calls a “gold rush” mentality that primarily benefited companies like Goldman Sachs and others in need of no special help, a recent article in the New York Times surveyed a range of projects where taxpayer and ratepayer subsidies have taken all risk from the private sector and all but guaranteed large profits “for years to come.”  Even some of the companies involved in the porkfest acknowledge that things got a little out of hand; some projects that have been heavily subsidized “would have been built anyway,” they say.  The drunken sailor on shore leave style economic stimulus spending gets special attention as wasteful, misguided and lavished on corporate welfare for energy giants.

Read the rest here.

President Obama was recently asked my George Stephanopoulos on GMA if he regretted the Solyndra loan. No, he said, because you have to look at the whole portfolio of investments. They knew that some of the loans would fail, as many investments do.

First, based on recent investigations, the White House team feared that Solyndra was a failing business model before the loan guarantee was granted. Second, the government should play a minimal role, if a role at all, in venture capitalism. As was noted, many of the projects that were heavily subsidized would have been built anyway, but now the government can claim the credit for the success and growth. With that credit comes a license to spend more, and with increased spending comes increased waste.

When looking at the whole portfolio, as President Obama instructs us to do, we should see a stronger case for the government to cut many such green subsidies.

 

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