President Obama Should Stick His Corporate Welfare Where the Sun Don't Shine

President Obama's recent Saturday address touted yet another one of his faith-based initiatives.

No, not that sort of faith-based initiative—yuk! Instead, the President's true faith is in the State, specifically the notion that He and his Chosen Ones can do a far better job of steering the energy sector of the economy than can the efforts of private investors and companies, responding through prices and that old-fashioned supply and demand to supply what customers want, reaping the rewards if they get it right, bearing the losses if they choose incorrectly.

Faith-based, because there's no objective evidence that governments generally, or this one specifically, have a reliable record of taxing/subsidizing/mandating/regulating/bailing out the economy into prosperity. In fact, the evidence goes pretty much entirely the other way.

True Believers are never dissuaded by evidence, however. They don't think the Broken Window Fallacy is a fallacy at all; it's one of the pillars of their theology. So instead of private decision-making, we get political decision-making. Or: instead of what we want, expressed though our voluntary buying decisions, we're going to get what the government thinks we should have, expressed though its coercive power.

Specifically, in this case, solar power. Saith Obama:

For example, I want share with you one new development, made possible by the clean energy incentives we have launched. This month, in the Mojave Desert, a company called BrightSource plans to break ground on a revolutionary new type of solar power plant. It's going to put about a thousand people to work building a state-of-the-art facility. And when it's complete, it will turn sunlight into the energy that will power up to 140,000 homes — the largest such plant in the world. Not in China. Not in India. But in California.
The "incentive" Obama touts is described on BrightSource's project page:
The Ivanpah project has received a conditional commitment for a more than $1.3 billion loan guarantee by the US Department of Energy (DOE) to help fund this project. The loan is part of the DOE's Title XVII loan guarantee program, which was started in 2005 under the Energy Policy Act, to support commercially viable technology in addition to innovative renewable energy technology.
Translation: the US taxpayer is on the hook for over $1.3 billion if things go south for the project. And almost certainly, we'll be "helping out" at the other end too, as power companies are legislatively mandated to purchase BrightSource's undoubtedly expensive power.

This was the sort of deal that Enron dreamed about doing. They were just before their time.

Note that Obama is fudging a bit in claiming this boondoggle as his own: the enabling legislation was passed in 2005, signed by Dubya. Then-Senator Obama voted for it, however. The lopsided 74-26 Senate vote is recorded here. The Nays were an interesting coalition of liberals (Teddy Kennedy, John Kerry, Hillary Clinton, …) and conservatives (John McCain, Judd Gregg, the sorely-missed John E. Sununu…). Also interesting: Obama's vote became a small (and ultimately futile) issue in the 2008 campaign, when Hillary noted Obama's support for what she deemed (heh) the "Dick Cheney lobbyist energy bill."

(Another bit of history: New Hampshire's CongressCritters at the time were Charlie Bass and Jeb Bradley; they were two of the small group that managed to remove support for oil drilling in the Alaska National Wildlife Reserve from the 2005 bill. Which reminded me why, despite their replacements, I wasn't too sorry they lost in 2006.)

Unsurprisingly, Obama tries to paint this as a partisan issue, claiming that the recent GOP "Pledge" promises to "scrap all the incentives for clean energy projects." That would be nice, but I can't find such a promise, can you? A principled Republican opposition to corporate welfare would be good news, and also entirely at odds with recent history. I'll believe it when I see it.

So, as usual with corporate welfare, we have taxpayers taking all the risks, and bearing a lot of the costs, while the profits wind up in the pockets of the ostensibly private businessmen.

Exercise for the naïve: gosh, do you think the movers and shakers at BrightSource might—just might—be pretty well politically connected?

Why, yes they are. Don't take my word for it: thanks to OpenSecrets, you can search for donations from BrightSource (and also Bright Source) employees. In the resulting "Recipient" columns, you'll see "Obama, Barack (D)", "Boxer, Barbara (D)", "Democratic Congressional Campaign Cmte (D)", "Reid, Harry (D)", …

(The lone (R) I could find on BrightSource's recipient list is next to "Murkowski, Lisa". Why? Oh, yeah.)