Keynesians in our midst

Dan Way, associate editor of the Carolina Journal (www.CarolinaJournal.com), wrote about “green” energy subsidies in the October 2015 issue. They continue to haunt North Carolina’s economy. Mr. Way notes environmentalists admit that North Carolina is “a national leader in clean energy technology” because of the Democrat-sponsored S.B. 3.

This legislation passed the General Assembly in 2007. It mandates that our electric utilities buy increasing amounts of “renewable” sources—the extra costs passed on to consumers, of course—and gives a 35 percent tax credit to solar projects not economically sustainable without the taxpayer subsidy.

Economist Dr. Roy Cordato, vice president of the John Locke Foundation, expressed amazement that environmentalists acknowledge that the solar industry is, essentially, “a creature of the state,” rather than of the market—government forces consumers to buy the product paying more than market-driven sources would cost. Remember Obamacare?

Also amazing, to me, this article shows that some Republican State legislators have bought into the scheme. It’s quite natural that Democrats believe in the Keynesian economic illusion that money taken from productive earners and distributed to nonproductive projects and government will create wealth. They really believe that phony “investment” will add sustainable jobs and “business opportunities.”

Of course, they also greedily expect these make-believe projects will produce “new tax revenues” for governments’ to spend on other unproductive activities. For Rep. Michael Wray, D-Northampton this is a “top priority.” We expect better from Republicans.

State Republican Representatives Charles Jeter, John Szoka, Jason Saine, and Republican Senators Jerry Tillman and Brent Jackson were praised by the project manager at Carolina Solar Energy in Durham for supporting his welfare, according to Way’s article.

It’s disturbing, but not surprising that Republicans accept cronyism—the corrupt relationship between business interests and government. We see this all too often at the national level on a more massive scale using different tactics, but we shouldn’t expect it in “conservative” North Carolina.

David Stockman described the Bush administration participating in cronyism in his book, The Great Deformation: “The bailouts, the Fed’s frenzied money printing, the embrace of primitive Keynesian tax stimulus by a Republican White House amounted to something terrible: a de facto coup d’etat by Wall Street, resulting in Washington’s embrace of any expedient necessary to keep the financial bubble going—and no matter how offensive it was to every historic principle of free markets, sound money, and fiscal rectitude.”

To some this may sound too dramatic a comparison with North Carolina State energy policy—maybe even irrelevant—but I believe basic principles (or lack thereof) apply. Further, the attitude of some of our elected officials is not far removed from suggesting that, given the opportunity, they might also support similar bad fiscal policies in Washington.

Dr. Cordato calls energy subsidies “terrible economics.” Promoters of this pseudo-business scheme and the politicians that support it ignore “how many jobs the private sector might have created had the government not diverted (other people’s) money to the favored green-energy industry.” Apparently, some Republicans don’t understand this.

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About R. E. Smith Jr.

Mr. Smith writes essays and commentary on politics, American history, environment, higher education and culture. He's been published in print media and at blog sites for about 25 years. Smith's formal education includes B.S. and M.S. degrees from the State University of New York and Syracuse University. He has earned a 21-credit hour Certificate in Professional Writing from the University of North Carolina-Wilmington. Training/work experience: NYS Ranger School; U. S. Army, Corp of Engineers; soil scientist and forester with USDA; Assoc. Professor at SUNY; real estate agent; small business owner.
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