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Monday, February 25, 2008

Free Market Greenies?

Bravo! to Right Hook for attempting to unravel the nonsense that is Kate Knuth's thinking on matters economic. She's a master of packing so much, as Right Hook would put it, Bravo Sierra in a single press release, it's nearly impossible to shovel through it all and still hold down a full time job (not to mention your lunch).

There's one aspect of the Green Garroter's plan that jumps out at me as an indicator of her economic cluelessness, and it is this: she seems to believe that if business interests are on board with her nutty ideas then that is proof that they are free market friendly and good for the health of our economy.

Here's what I'm talking about, from the transcript of a KARE 11 television story:
The Green Solutions Act sets up a "cap and trade" program which would require those companies and utilities exceeding the carbon limits to buy allowances from the state. Those would be issued in limited quantities and sold at auction.

Once companies reach their targets, or move under the carbon cap, they could resell or trade their credits.

"The sectors of the economy emitting greenhouse gases, causing global warming pollution, will have to purchase allowances in order to cover those emissions," explained Representative Kate Knuth of New Brighton.

"It's a very simple and powerful way to set a market framework."

Knuth said the notion of curbing man-made causes of climate change is catching on throughout the business world.

"Just yesterday 480 investors met at the United Nations," Knuth noted.

"These are people who control $20 trillion in investments who came to talk about how we address global warming."
One reason that businesses petition government (and quasi-governmental agencies like the U.N.) is that they want relief from previous, and considered, government actions. That is not what happened at the United Nations. What happened at the U.N. was that these "investors" were looking for government mandated advantages in the "market" in the form of either 1) a subsidy or 2) a monopoly.

Alternative fuels are a great example of a subsidy. Wind, solar, biofuels, you name it - these forms of power generation are more expensive than sources like oil, coal, natural gas, and nuclear, and would have no hope of competing in the marketplace without subsidies from government. Those looking to invest in alternative energy sources are not free market capitalists who recognize a lucrative market segment to serve - these people are nothing but rent seekers working the levers of governmental power for their own benefit.

In terms of creating monopoly, the effective banning of the incandescent light bulb is a good case. Those with a head start producing compact fluorescent light bulbs cheer this sort of action, regardless of the wants of the consumer. They see the closing off of the illumination business to incandescents as a financial boon to their bottom line - they could care less about market economics.

These investors probably aren't really even "green", in the sense that they care first and foremost about the environment. They're more likely Green, as in wanting to make mucho green backs off of this latest hysteria. And if doing so requires getting in bed with government to make that happen, so be it. Why do you think these guys have such round heels?

If Clueless Kate wants to sit down with a real capitalist working on alternative energy, perhaps she could look up T.J. Rodgers, founder of Cypress Semiconductor. Rodgers recognized the potential of semiconductor production to improve solar capture materials and invested his own money in SunPower Corporation, a producer of solar cells, panels, and systems, which provides this as their mission:
By integrating processes and technologies across the value chain, SunPower plans to reduce the installed cost of a solar system by 50% by 2012.
Rodgers is not out there looking for subsidies or mandates to make this venture work; he's going to make this happen through technology improvements and business savvy. This is what real free market economics looks like, not the phony government-led economics that Knuth and her green nut ignoramus friends worship.

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