Government Electric and Tonight's Speech

A joke making the rounds during my brief, late 1990s stint with General Electric’s ideological and political forerunner, Enron, keyed off of that company’s disastrous energy venture in India and its fabled arrogance. It went, in short, who else would believe they could sell turbines to Indians?

Give it a minute. Then hold that thought.

Last week, to optically set the stage for Tuesday night’s rhetorical pitch for more big government to prop up certain favored losers called the ‘clean energy economy’, President Obama teamed with his BFF — and big-time lobbyist for/vendor to massively increased government mandates — CEO Jeff Immelt of GE for a photo-op at a GE plant in Schenectady, NY.

GE makes a gas turbine there, several of which it has signed a contract for sale to India. So that made a very good backdrop, if for a very confused message.

The logic goes something like this: GE makes renewable energy gizmos, manufacturing jobs for which Obama wants to create here by mandating markets for and otherwise propping them up with taxpayer dollars. Therefore, GE’s economic, non-mandated, efficiency-enhancing fossil fuel turbine is evidence that energy technology innovations are possible and therefore the federal government ought to mandate all sorts of uneconomic ‘renewable’ efficiency killers.

Which reminds us of Enron-style arrogance.

Apparently our president is convinced that all he need do is offer poll-tested, trendy buzzwords ‘clean energy’ and the American public will flock to his policies, no matter how flea-bitten, like Wall Street to a ’90s IPO using the word ‘internet’. But the economic folly of mandating people use more expensive, vastly less efficient energy sources is probably a tougher sell today, even if draped in lots of ‘jobs’ talk as is this pitch.

Obama’s choice of dance partner for his photo-op made more sense. There are reasons Immelt has said things like “We’re all Democrats now”, and “The government has moved in next door, and it ain’t leaving. You could fight it if you want, but society wants change. And government is not going away”. These reasons are GE’s ‘renewables’ gadgets produced in anticipation of certain policies it also lobbies aggressively for because, well, without government coercion there is no market for them.

GE’s wish-list nicely parallels Obama’s proposals to mandate, coerce and underwrite them into use through taxpayer-funded wealth transfers.

Obama’s stagecraft actually proved far too much. No ‘renewable’ mandate makes us use, makes GE manufacture, or makes the Indians buy the fossil turbine whose innovation, construction and export Obama will recite again as proof of the fact that energy technology innovations are possible and that therefore the federal government ought to mandate all sorts of things.

But he cannot escape how the chosen prop was not some uneconomic political icon singled out for taxpayer largesse. Remember, Obama praised it as something for export to India, a nation notoriously exempt from and disinterested in Kyoto-style energy rationing policies.

Innovations and improvements in efficiency like this turbine are what businesses pursue (unless distracted by federal programs encouraging them to instead divert their capital to guaranteed returns no matter how old the technology, like windmills and solar panels). Obama’s policies call for forcing less efficient boondoggles into the economy. One has nothing to do with the other. The only tie binding the turbine and renewables is Obama’s openly admitted war on coal.

Further exposing Obama’s logic, this turbine, his prop, was not something invented because it was mandated here in the U.S.A.; that is important because Obama’s argument is also that if we are to become a leader in developing something for export then, well, we had better federally mandate its use here. This is nonsensical. The Chinese aren’t making less expensive windmills and solar panels — the real target of Obama’s wealth transfers — because they’ve mandated them; they haven’t. China makes them cheaper because they don’t mandate them, so it is not an uneconomic location for manufacturing things. That China makes them at all is because other countries mandate them.

If the developed world abandoned its ‘renewables’ foolishness, you would see China’s wind and solar industries vaporize. They are playing us. Don’t begrudge them that. But don’t enable it any further, either.

And it is equally absurd to argue (as Senate point-man John Kerry expressly does) that if we don’t want to import all of our supply of windmills and solar panels then we had better mandate and otherwise prop-up their use. Wha? The answer to that fear is to not mandate them. Poof! There goes the worry about importing our windmills and solar panels from China. And, again, with it those parasitic industries preying on our folly which are then ironically and cynically cited as evidence that we must dig deeper on the mandates and subsidies! Sigh.

Obama could have chosen to stand in front of a windmill or solar panel. Instead, he chose a non-mandated, economic, efficiency enhancing and actually innovative product — none of which describe windmills and solar panels. He thereby undermined his inevitable State of the Union call for more wealth transfers to prop up windmills and solar panels.

According to the Wall Street Journal, Obama’s SOTU themes will be ‘competitiveness’ and ‘investment’, “daring Republicans to resist his push for new spending in areas that he will call vital to the nation’s future [like his preferred…] infrastructure, science and energy”. He demands we be competitive in the uneconomic, calls for innovation in the old and for the taxpayer to ‘invest’ in things that can’t find investors enough to stay afloat. In a country where the Snuggie and Vince the Sham-Wow guy find investors and markets.

What a humiliation that windmills and solar panels can’t. Here’s to hoping that even in Washington, neither can this absurd call to dive further down the rabbit hole of ‘renewable’ energy.