Free Markets, Free People

Daily Archives: February 20, 2012

Crony Capitalism is phony Capitalism–example 6,981: solar subsidies

Via Hot Air is an article by Bjorn Lomborg in Slate.  It reviews the subsides of German toward “green energy” and how that has worked out for them.

Lomborg points out that when the global warming scare was at its height, Germany bought in, hook, line and sinker.  And, as is their way, decided they’d become the “photovoltaic world champion” as it switched to solar power.

How much did the German government commit to this pursuit of clean and green?  $130 billion dollars.

What happened when this tax payer funded gravy train left the station?

Germans installed 7.5 gigawatts of photovoltaic capacity last year, more than double what the government had deemed “acceptable.” It is estimated that this increase alone will lead to a $260 hike in the average consumer’s annual power bill.

Because, you see, solar power is more expensive than that nasty fossil fuel generated energy.  Details, details.

Anyway the government handed out $130 billion in subsides, German’s responded and the net result was a huge drop in greenhouse gasses, namely CO2, right?  Yeah, not so much:

Moreover, this sizeable investment does remarkably little to counter global warming. Even with unrealistically generous assumptions, the unimpressive net effect is that solar power reduces Germany’s CO2 emissions by roughly 8 million metric tons—or about 1 percent – for the next 20 years. To put it another way: By the end of the century, Germany’s $130 billion solar panel subsidies will have postponed temperature increases by 23 hours.

Reality … what a slap in the face that must have been.  Suddenly, the German government gets “religion”:

According to Der Spiegel, even members of Chancellor Angela Merkel’s staff are now describing the policy as a massive money pit. Philipp Rösler, Germany’s minister of economics and technology, has called the spiraling solar subsidies a “threat to the economy.”

But, as usual, the German government had to learn this the hard way. Markets, we don’t need no stinkin’ markets.  For a $130 billion dollar “investment”, Germany now gets 0.3% of its total power from solar.  Any guess why governments should steer clear of picking winners and losers?

The German government has burned $130 billion to raise the average power bill by $260 a year and delay the dreaded temperature increases by … 23 hours.

Brilliant!

~McQ

Twitter: @McQandO

So how do you talk about contraception without going all “SoCon?”

Or, as I recommend in my previous post, how do you make issues such as contraception relevant to the economy and point out its real cost?

Well, don’t forget, at base it is another government mandate.  It is government deciding what private employers and insurers will cover and how they’ll cover it.  It is obviously not “free” as they claim, but another in a long line of redistribution schemes cloaked in “good intentions” and the “common good”.

It is, in fact, just another straw on the back of the private insurance camel, the addition of which this administration hopes will eventually break its back and allow government to take over that role.

Having directed all insurance companies to provide it at “no cost” to their insured and falsely claiming to the public that they’re getting something for nothing, the administration takes a step toward that goal.

How?

One major feature of the ACA [ObamaCare] is to put so many mandates on private insurance plans (abortion pills and contraception being just a couple of them) that it becomes increasingly difficult for employers to afford private health benefits for their employees.

As more and more employers have to dump private insurance, the idea is that people will demand a government replacement plan. Lurking in the back of the ACA is the public option, which will spring to life once enough people have lost their private insurance. (This can very well happen even if the Supreme Court declares the individual mandate unconstitutional.) Once it is activated, the public option will enroll more and more Americans until it effectively wipes private options off the table.

Socialized health care through the back door.

Precisely.  There is more than one way to skin a cat.  And that’s what is evident here.  This is an alternative cat-skinning method.

The White House argues the new plan will save money for the health system.

"Covering contraception is cost neutral since it saves money by keeping women healthy and preventing spending on other health services," the White House said in a fact sheet.

"For example, there was no increase in premiums when contraception was added to the Federal Employees Health Benefit System and required of non-religious employers in Hawaii. One study found that covering contraception saved employees $97 per year, per employee."

But it isn’t cost neutral at all.  And whatever an employee “saves” on the one hand, goes away plus some to cover the expense, because here’s reality:

[I]nsurers say there’s nothing "free" about preventing unwarranted pregnancies. They say the mandate also covers costly surgical sterilization procedures, and that in any case even the pill has up-front costs.

"Saying it’s revenue-neutral doesn’t mean it’s free and that you’re not paying for it," an industry source told The Hill.

Doctors still have to be paid to prescribe the pill, drugmakers and pharmacists have to be paid to provide it – and all that money has to come from insurance premiums, not future hypothetical savings, the source said.

And all of that cost is going to be paid for by those employees who are “saving” money in higher premiums – especially those 50 somethings who are no longer in the child bearing years and ‘saving’ nothing but paying for it anyway.  By the way one of the ways to lower insurance cost is to do away with government mandates and let the insured choose what coverage they’d like to pay for.  But government will have none of that.  That would actually remove straws from the camel’s back.

Of course there are other free market approaches that would most likely be effective if government would allow them:

[P]arents who let their children become obese by feeding them irresponsibly should bear the financial cost of the extra health care that their children will require. This can, again, be done if private insurance companies are allowed to operate on the terms of free markets. Just like a smoker should have to pay a higher health insurance premium than a non-smoker, private insurance companies should be allowed to charge higher premiums of a family that eats themselves obese than of a family that eats responsibly and attends to their own health.

Find obesity to be a national problem?  What’s the most effective way to fight it?  Mandates and complicated and expensive government programs that only address the problem generally?  Or making the obese pay for the consequences of their irresponsible behavior?

I know, how horribly anti-American – making people take responsibility for their actions (something the GOP claims to believe in) and pay their own costs.  In the new America, apparently everyone has to pay, no one is held accountable and by the way, it “will be cheaper in the long run” if government does it.

The latter is the eternal promise of nanny government rarely if ever having come to fruition.

But, back to the title and the point – now if some want to add “and it’s against my religion”, fine, wonderful, great.  That’s added impetus on top of the economic one to reject Obama’s argument.  But it shouldn’t be the primary argument.  Instead it should be an argument that voters add themselves among themselves.  The broad economic argument about the real cost, not to mention the ideological argument against the growing social welfare state are extraordinarily powerful and appealing.  If others want to add their own arguments in addition to this, fine and dandy. 

That’s how you do it.

~McQ

Twitter: @McQandO

A post wherein I agree with Ron Paul

Actually, there’s a lot Ron Paul says I agree with, but there’s about 5 to 10% of what he says that makes him, at least to me, unsupportable.

But he and I see eye to eye on this thought (from an article about an interview he did with Candy Crowley):

Paul seemed almost baffled that everyone has been talking about social issues at a time when he and others are more concerned with preserving basic civil liberties and the economy.

Folks, for this election social issues is a loser.  Sorry to be so blunt, and burst the social issue’s activists bubble, but this is the distraction the Obama administration badly needs and it is playing out pretty much as they hoped, with the candidates concentrating in an area that is so removed from the real  problems of the day (and the real problems of the Obama record) that it gives relief.

Additionally, it gives visibility to the one area that usually scares the stuffing out of the big middle – the independents who are necessary to win any election (and, until this nonsense started, pretty much owned). 

What is going on now is a self-destruction derby.   And the tune is being called by the left (if you think the George Stephanopoulos question on contraception that started all this nonsense during one of the debates was delivered by an objective and unbiased journalist, I have some beachfront land in Arizona for you) and kept alive by the media.

How I see it is Americans, in general, don’t give much of a rat’s patootie about all this nonsense at this moment in history.  They’ve watched their economic world collapse, they’re upside down in their houses (or have lost them), they’re seeing their children, great grandchildren and great, great grandchildren enslaved to government debt, they’re out of work and they’re suffering – economically.

And the GOP goes off on the usual nonsensical social issue tangent when there is a table laden with a feast of issues that are relevant to the problems with which the majority of Americans are concerned.

Take a look at Memeorandum right now, for instance, and what headlines do you see?  “Santorum attacks Obama on prenatal screening”.

Really?  Could we maybe see attacks on Obama for adding 4 trillion to the debt, or the highest unemployment rate in decades, or the failed stimulus, or his persistent attacks on fossil fuel even while we sit on more of it than most of the world combined but are getting much less benefit from that because of him? How about Keystone?  Gulf permatorium?  Solyndra?  ObamaCare?

Instead what sort of attacks are made against Obama? Senior Obama Advisor: Rick Santorum’s ‘Phony Theology’ Comment ‘Well Over the Line’, which spawned, Santorum explains ‘phony theology’ comment, says Obama is ‘a Christian’ which results in, Santorum denies questioning Obama’s faith.

I cannot imagine a stupider subject being the focus of headlines at this time in our history nor a worse place  for a GOP candidate than talking about other people’s faith or lack thereof. There is no upside to that.  This is the sort of nonsense and ill discipline that has cost the GOP elections in the past, and is well on its way to doing it again.

The middle is watching and my guess is it is not happy with what it sees.  If ever the GOP wanted to lay out a strategy to drive independents back to the Democrats, they’re well on their way.  They are playing to every stereotype the left puts out about them.

What should the GOP be talking about?  Things like this and this.  The attacks should be on Obama’s economic record and leadership, not who is a better Christian.

Take a hint from the Clinton campaign GOP (as loath as they are to do so, I’m sure): “It’s the economy, stupid!”

~McQ

Twitter: @McQandO