Green Businesses and Cut-Throat Economies

Green Businesses and Cut-Throat Economies
When politicians manage the economy, failure is relentless.
by John Hayward 09/15/2011

A report at the Atlantic Wire on the growing scandal surrounding Solyndra begins, “On Wednesday, the bankruptcy of a solar power company in California with political ties to the Obama Administration appeared to be a story about the difficulties of nurturing green businesses in a cutthroat economy.”

Can someone show me where the Constitution authorizes the federal government to “nurture green businesses in a cutthroat economy?”

When is the free market not cut-throat? That’s a feature, not a bug. One of its advantages is that stupid business plans get their throats cut, and die. By contrast, there seems to be no way to stop President Obama from throwing billions of taxpayer dollars into “green energy” rat holes. Even as congressional hearings into the Solyndra disaster got under way, the Energy Department was announcing a new $1.2 billion loan for more solar panel projects. The total of such loans is pushing forty billion dollars. In the free market, no business plan as disastrous as “green energy” would be able to keep finding investors to take its sucker bets.

Of course, the point of all this is to use compulsive force to make American taxpayers “invest” in politically favored projects, which by definition can’t succeed in that “cutthroat” free market, because nobody wants their products enough to buy them at a profit. If “green energy” was a winner, it wouldn’t have to ride on Uncle Sam’s shoulders. The purpose of these initiatives is to compel Americans to change their behavior by reshaping the market, which created through the preferences and desires of millions of free people, and therefore hostile ground for statist ideology.

Political pressure was used to shovel tax money into a patently absurd “business model” at Solyndra, explained by solar industry analyst Peter Lynch as follows: “It costs them $6 to make a unit. They’re selling it for $3. In order to be competitive today, they have to sell it for between $1.50 and $2. That is not a viable business plan.”

Precisely! If it was a viable business plan, Obama contributors like billionaire George Kaiser wouldn’t be using green super-lobbyists to win compulsory taxpayer support. Emails have surfaced showing the White House pressured the Office of Management and Budget to rush their review so the Solyndra loan package would be ready for a well-timed Joe Biden​ photo op at a new factory location. That’s the kind of nonsense that gets your corporate throat cut, out on the high seas of the free market.

The brutal energy of the free market generates a massive amount of data, which is invaluable when business plans are devised to allocate resources. Pain is an excellent teacher, after all. Politicized, ideology-driven economics feed false data into a system that still retains the complexity of freedom, but none of its power. There are countless vendors and service providers, right down to whoever supplied water coolers for their offices, who made business plans on the assumption Solyndra was a real company, not a hollow shell inflated with tax dollars. A massive amount of false information has been fed into the market by billions of dollars in “stimulus” supports and the politically ordained deferral of failure.

At the same time, onerous regulations pumped out of the Obama Administration are forming a toxic cloud that chokes real businesses who had viable plans and generated true value. Instead of a fighting chance at success in the cut-throat market, they are led to the chopping block for orderly execution via mandate. Jobs that should have existed are being wiped out, but the underlying forces that made those jobs necessary and profitable have not been repealed. The rules of the game remain in place – the referees are merely changing the scoreboard to show numbers more to their liking.

Worst of all, the politicized economy is very slow to respond to the inputs it does receive. If an investment company had a trail of expensive disasters to match the Obama “green jobs” record, how long would the CEO last? By contrast, we’re still over a year away from having a chance to fire President Obama. In the meantime, he still manages to spend a lot of money, and there doesn’t seem to be anything captive taxpaying “investors” can do about it. When we finally do get a crack at the ballot box, Obama’s undetectable “business skills” will be only one of many criteria he is judged upon. Depending on news headlines in the fall of 2012, they might not even be one of the top five criteria.

The free market can be rough on losers, but at least they have a fighting chance… and after things fall apart, money and manpower are repurposed to other ventures. Command economies just keep plugging blindly away at failure for years at a stretch, while everyone suffers. Boardrooms are far better environments for dealing with busted business plans than congressional subcommittees.
________________________________________

To read another article by John Hayward, click here.