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Nov. 30, 2008 In just a few short months, the "Change" crowd of elected this November will make their primetime debut in Washington. They come bearing an endless number of nanny-state schemes, freedom-reducing gambles, and feelings-over-logic legislation, but by far the most destructive crackpot scheme involves government subsidies for so-called "Green Technology." Don't be fooled by the legalese – these environmental "subsidies" are little more than renamed taxes designed to rob both the free market and the free American of choice. In times of trouble, subsidies have always served as a means for protectionists and father-knows-best staters to hide their heads in the sand at the price of American productivity and consumer choice. There are a few reasons for this. Subsidies sound good. Who wouldn't want to give our hard-working men and women in Detroit some money for health care? Who wouldn't want to find the next big green technology to take our dependence on oil down a notch? The problem is, subsidies don't achieve their goals. The reason is simple: Research from Friedmans on both sides of the aisle – Thomas on the left, Milton on the right – convincingly shows that subsidies rarely work as planned and often end up as black holes of endless funding. This is due to a simple reason many free-marketers have known for years: Politicians do not know better than the market. At its heart, a subsidy is Big Government telling American taxpayers that it plans to spend their hard-earned money on a project, be it health care or green technology. The only problem is, who is to decide what project gets the funding? The decision, of course, falls to politicians whose primary concern is popularity, not good governance. According to research in the November Atlantic Monthly, it was politicians like this who decided to funnel endless sums of money into solar technology in Germany even though Germany is one of the cloudiest nations in Europe. The result was predictable: Billions of dollars in solar cells sat unused on rooftops because the energy they produced ended up being more expensive than heating oil. Who is to say these enlightened "Change" Democrats are any smarter? Does Jack Murtha in Pennsylvania really think he knows the energy needs of people in Washington State? Their track record leaves something to be desired: These are the politicians who pushed for massive ethanol subsidies, resulting in little more than turning profit into loss for American agricultural producers and raising the cost of food across the board. The ethanol subsidy may even be increased under the "Change" Congress – more evidence that disconnected politicians allow failing programs to prosper. What a liberal Congress won't admit –and what a liberal President-Elect openly ignores – is that the free market can decide these issues cheaply and effectively with minimal government involvement. Markets have done this for centuries without the hubristic assistance of Nancy Pelosi and Harry Reid. Better for the economy to let the market decide which green technologies are viable than to mandate funding of a project that may, as ethanol has, turn out to be misguided and damaging to already suffering American farmers. After years of being forced to grow soy on terrain not suitable for the crop because government subsidy made every other crop uncompetitive, as I witnessed while living in Indiana, isn't it time to step off the backs of burdened farmers and allow the market to function unencumbered? I have watched too many farmers and the communities they support suffer under agricultural subsidies and ethanol dictates. I have seen too many disconnected Indiana politicians support policies that handicap the state economy and decimate productivity. Yet under the new "Change" regime I am considered the enemy for questioning the omniscience of liberal, nanny-state policies. In the mindset of those "reformers" headed to Washington in January, why would a farmer know more about the needs of his market and the efficiency of his fields than a technocrat who can barely identify Indiana on a map?
It isn't surprising that such bullheaded policies have been roundly condemned by economists from both sides of the aisle – one doesn't even need an advanced degree to see why high-minded dictates from afar often fail to adapt to conditions on the ground. After all, isn't that the same complaint Democrats levied against President Bush and the Republican Party over their conduct in Iraq? Of course, cloaking socialism and central planning under the mantle of "Change" apparently means never having to say you're sorry.
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