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Wednesday, September 07, 2011

A REPLY TO MY CONGRESSMAN, FRESHMAN RICHARD NUGENT

After a long break, I'm back!  Mwah!
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At a recent Town Hall meeting, I submitted a written question about energy policy and Sheriff Rick's office wrote me a reply regarding HR 49 - American Energy Independence and Price Reduction Act.  The bill was introduced by Rep. Don Young (R-AK) and will deal with topics such as drilling for oil and gas in ANWR.

The one aspect I am not crazy about is provisions for revenue to be set aside into an alternative energy trust fund, and I set forth my reasons in my reply below. 


(Interested readers can find the text of the Bill here.
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Dear Sheriff Rick,

Thank you for your letter to me of August 26 regarding energy policy and HR 49.  On the whole, I am pleased that Republican members of the House (at least) are taking our future energy needs seriously.  The one thing that you mentioned that I oppose is the provision to establish the ANWR Alternative Energy Trust Fund.

Government subsidies to private concerns are not based on sound policy, on science and engineering or on economics.  They are based on politics, pure and simple.  Creating a government-run fund to finance alternative energy is just a misuse of badly needed revenues that will, inevitably (and make no mistake about the certainty of it), be used to provide funding to the favored recipients of whichever legislator has the most political pull in Washington or to whichever President is in power.  I'm all in favor of using whatever sources of energy may be reasonably used, but they must make economic and engineering sense on their own, not with the US government's wallet appended.  As a graduate student of economics, I learned the old canard known as the "infant industries" argument that has been used in history to justify ruinous tariffs and ridiculous subsidies and bailouts (Chrysler even tried a variety of this when it sought loan guarantees in the 1980s).  Just recently, Solyndra LLC went bankrupt after having received a $535 million dollar loan guarantee and a billion dollars in private equity largely based on that guarantee.  Not coincidentally, George Kaiser, the principal Solyndra investor, was a large contributor and a bundler for Barack Obama (See this article.)   Solyndra was not the only bankrupt alternative energy company in the news this month;, there was also Evergreen Solar ($43 million from the state of  Massachusetts) as well as SpectraWatt (here).

But the poster child for bad energy subsidies has to be ethanol.  Ethanol, which many in the green movement now descry as causing more harm than good, takes something like three gallons of fossil fuel (for the farm equipment, for the trucks to move it, for the energy to distill it, etc.) to make just four gallons of ethanol.  It also raises food prices, since corn is a primary animal feed and this artificially raises the price of corn.  (This year's "Arab Spring" uprisings may have been as much about hunger from rising food prices than about any latent yearning for better government.)  But no one seems to be able to stop it because there are too many people making too much money from it, the news media has fallen in love with the idea as a solution to the mythical menace of anthropogenic climate change, and the lobby even hired former General Wesley Clark as a spokesman for themselves.  And there are plenty of Republicans from farm states who will stand up in the well of Congress and argue for the subsidies.

The TEA Party movement was based, in part, upon the realization by everyday Americans that the US Government has become captured by the fantastical myths and emotion-based belief systems of the Left and that we just can't afford it anymore.  We must be cold-eyed realists about the direction of this country if we are to save this Republic we love.  Realistically, oil, coal, natural gas and nuclear power are going to be the major sources of energy for this nation for the foreseeable future.  If alternative energy has a future, freely-determined market forces will be the driver of any new technological development.  American ingenuity is legendary and the idea that government subsidies are needed to spur technological innovation is ridiculous.  How many subsidies did Silicon Valley need to produce their technological revolution?  Businessmen are pragmatists; if they see the government ready to underwrite the risk of new technology, they'll be only  to happy to lobby fiercely for their share of the taxpayer's money.  Let's shut that window firmly once and for all.

Thanks for writing, I enjoyed your presentation at the Knights of Columbus in Spring Hill, and thanks for keeping the faith.




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UPDATE

I had to add this, it's just hysterically funny!  We need more ads like this!

Roger Williams for Congress - The Donkey Whisperer