Even though the intelligent economists (better known as Austrian economists) have been warning governments against the false hopes of Keynesian economics since Keynes first published his works nothing has changed. Although it’s been demonstrated time and time again that “public works” projects serve no purpose other than transfer taxpayer money into the hands of politically well connect companies without any actual benefit to the people governments still implement them.
I know the government is adverse to hearing the arguments put forth by intelligent people but how many times do the government’s failures have to be pointed out until the people wake up and realize something has to change. Let’s look at the fairly recent stimulus plan and it’s effect on the “green” energy market:
According to a Feb. 17 letter signed by Energy and Commerce Committee Chairman Fred Upton, Michigan Republican, and Oversight Subcommittee Chairman Cliff Stearns, Florida Republican, to Energy Secretary Steven Chu, the Fremont, Calif.-based solar panel manufacturer should never have received a $535 million loan guarantee from the stimulus.*
The company became the first recipient of an Energy Department loan guarantee under the stimulus in March 2009, which was intended to “finance construction of the first phase of the company’s new manufacturing facility” for photovoltaic solar panels.
The Energy Department estimated in a March 20, 2009 press release that the loan guarantee would create 3,000 construction jobs and a further 1,000 jobs after the plant opened.
Instead, Solyndra announced on Nov. 3 it planned to postpone expanding the plant, which put the taxpayers on the hook to the tune of $390.5 million taxpayers**, or 73 percent of the total loan guarantee, according to the Wall Street Journal.
It also announced that it no longer planned to hire the 1,000 workers that Obama and Biden had touted in their speeches and that it planned to close one of its older factories and planned to lay-off 135 temporary or contract workers and 40 full-time employees.
A closer look at the company shows it has never turned a profit since it was founded in 2005, according to its Securities and Exchange Commission (SEC) filings.
This is the result typical of government intervention in any market, they prop up the companies who are politically well connected which gives them an unfair advantage over those who lack such connections. In a majority of cases the politically well connected companies are also those that are incompetent (birds of a feather flock together after all) and lack profits (because people view profit making corporations as “evil” and “greedy”). The companies that are actually competent and provide goods that consumers want are left to flounder and eventually be killed off by their competition who can afford to outspend them now that they have that half a billion dollars in stimulus money.
But the most heinous piece in this puzzle is the fact that money stolen from taxpayers is used to fund these stimulus plans without delivering any benefit to those taxpayers.