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The tax-dodging Treasury secretary and the chief of the unconstitutional department of energy announced more than half of a billion dollars in unconstitutional government handouts to energy companies this week, most of which will go toward expensive, inefficient wind power through a foreign-owned company. And this is just the “first round.”
Under the guise of “creating jobs” and “clean energy,” this portion of the $54 billion allocated for energy in the “stimulus package” is expected to eventually siphon more than $3 billion from the productive economy — killing a great number of jobs in the process.
But according to the press release issued by the Treasury, the first round of funding under section 1603 of the so-called Recovery and Reinvestment Act will provide “access to jobs in the renewable energy industry” to more than 2,000 Americans, working out to about $250,000 per job, assuming the government’s projections are accurate.
“The Recovery Act is investing in our long-term energy needs while creating jobs in communities around the country," boasted Treasury secretary Timothy Geithner. "This renewable energy program will spur the manufacture and development of clean energy in urban and rural America, allowing us to protect our environment, create good jobs and revitalize our nation's economy."
Energy secretary Steven Chu also glorified the central planners’ wisdom in allocating vast resources where the market refused to. "These grants will help America's businesses launch clean energy projects, putting Americans back to work in good construction and manufacturing jobs,” he claimed, conveniently omitting the fact that the majority of these “grants” — almost $300 million — will be funneled to Iberdrola Renewables, Inc., a subsidiary of Spanish giant Iberdrola Renovables SA.
"The approval of these grants today is a key event for Iberdrola Renewables," said Ralph Currey, the president and CEO of the firm. "The Treasury grant program is serving its intended purposes. The staff at the Treasury Department has implemented the grant program with speed and care."
The company has spent big bucks on lobbying, according to Federal Election Commission records, and some observers are already speculating about potential “political payback.” Among the recipients of Iberdrola largess in 2008 were Senator Max Baucus, Representative Charlie Rangel, Senator Dick Durbin and many more.
“The initiative will help double our renewable energy capacity over the next few years and make sure America leads the world in creating the clean energy economy of the future," energy chief Chu continued. But aside from the fact that a foreign company’s subsidiary will actually be doing any “leading” that may take place, experts say wind power is an economic disaster that exists only because of government subsidies and regulations.
“Even after several decades of technical development, wind energy remains economically unviable. Wind power devours colossal amounts of public money and depends on artificial markets for its existence. Considering the minuscule benefit, our money ought to be better spent,” notes the North American Platform Against Wind Power, an organization that opposes further development of such technologies, especially if it involves taxpayer money. “Documentation continues to grow of the negative effects of industrial wind turbines on people, landscapes, tourism, property values, wildlife, and public budgets. A "reality check" is long overdue.”
In Britain, criticism has been fierce as well. “What this represents is a return to the planned economy in the name of environmentalism — a kind of Green Stalinism,” wrote senior research fellow of Jesus College at Oxford, Niall Ferguson, about Britain’s government-mandated wind power scheme in a column entitled ‘Wind farm claims are so much hot air’ for the Telegraph. “The consequences are the familiar Soviet ones: centrali[z]ed decision-making and locali[z]ed devastation.” He also noted that the only beneficiaries of these programs are a few energy companies and their friends in high places, while ordinary citizens will be stuck with the bill.
And after a report from the German government — the country with the highest use of the technology — concluded that wind power was expensive and inefficient, opponents could finally prove what they knew all along. “At last. This report confirms what we have been saying,” noted Angela Kelly, the director of an umbrella group for opponents of wind power called Country Guardian. "Wind power is three times more expensive than conventional electricity. It is a scandalous waste of taxpayers' money."
One group that did celebrate the government’s handout program was the American Wind Energy Association (AWEA), a lobbying group that spends millions trying to influence government on behalf of the industry. "For these grantees and many other projects that are preparing their applications, we are seeing business activity picking up and turbine and parts orders being sent all the way up the value chain," noted Robert Gramlich, the organization’s senior vice president for public policy. "That activity had all but dried up and it is very encouraging to see this turnaround under way."
But if wind power was truly economically viable, it would not need to use government subsidies and grants. The whole industry would likely cease to exist if wealth could not be involuntarily seized from taxpayers. And in addition to the waste and misallocation of resources occurring on a mass scale through the construction of such facilities, ordinary people will be paying more for electricity.
Worse than the inefficiency and the myriad of problems with wind power that are now being encouraged, there is no constitutional authority for the federal government to dole out money to businesses. And even if there was, these programs discourage production and innovation in favor of begging and lobbying the government. The grants — along with the rest of the “stimulus” plan — should be immediately scrapped. The funds should be promptly returned to taxpayers who could then spend them as they see fit, creating jobs that will actually benefit the people — and for a lot less money.
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