The U.K.'s Daily Mail reports about a $1.4 billion bailout for a firm tied to environmental lawyer and Presidential nephew Robert F. Kennedy, Jr. The Mail reports,
"The revelation was made in an explosive new book, Throw Them All Out, which exposes the secret financial deals of an inner circle of businessmen and politicians in the White House. The author Peter Schweizer says that the payment was made to Kennedy Jr. thanks to connections in Washington."
BrightSource Energy is a solar power company whose investors include Vantage Point Capital Partners, an investment firm where Kennedy serves as a partner and senior advisor.
According the U.S. Department of Energy, BrightSource Energy received a $1.6 billion loan guarantee from the Department for a solar project in the California desert in April 2011 (to create 86 jobs!). According to the DOE, the project "will nearly double the generation capacity of concentrated solar in the U.S."
The Daily Mail makes much of (1) the role of a former BrightSource employee who later worked from the Department of Energy and (2) Kennedy's ties to the Democratic establishment. But focusing on the role of individuals implies that the problem is fixable: remove the conflicts of interest and favoritism and the program would work just fine.
But the real story is so much bigger. Government, by its very nature, makes for a terrible venture capitalist. Risk taking, risk assessment, and risk management--picking winners and losers among private ventures--are just not skill sets to be found in a government agency, especially one filled with nuclear scientists and the like.
Michael Shellenberger and Ted Nordhaus of the Breakthrough Institute argue in a recent New Geography post,
"We should stop bluntly subsidizing the deployment of more of the same energy technologies--whether current-generation wind, solar, biofuels, or nuclear--and retool energy incentives to demand steady and continual innovation and cost improvements."
They may have a point, but it is unclear whether the Department of Energy is the proper vehicle for even such "retooled" energy incentives. The graph below shows the Department's budget over the last 40 years.
That spike you see in recent years is the 2009 Obama stimulus program, which provided funds for efforts such as the loan guarantee program. When you assign an institution (public, private, or whatever) the task of shoving as much money out the door as quickly as possible, mistakes will be made. The DOE has proven to be unequal to the task.
Regardless, the Daily Mail quotes Schweizer from his book, making a good point,
" 'Politicians have made politics a business. They are increasingly entrepreneurs who use their power, access, and privileged information to generate wealth. And at the same time well-connected financiers and corporate leaders have made a business of politics. They meet together in the nation’s capital to form a political caste. In short, the Permanent Political Class has clearly figured out how to extract wealth from the rest of us based solely on their position and proximity to power.' "
No comments:
Post a Comment