Saturday, September 24, 2011

The Solyndra Scandal in Context - Republicans pursued clean energy loans, too

The Solyndra Scandal in Context - Republicans pursued clean energy loans, too

As I predicted, Solyndra's bankruptcy is serving as the new Climategate -- it's giving conservative politicians who once felt the need to grope for some sort of muddled centrist-sounding position (e.g.,"the science is uncertain," or "all of the above") the pretense they need to transition to full-on oppositionalism.

We see this now as Republicans decry clean energy loan guarantees that they were begging for a few years ago. I had some fun with Mitch McConnell a few days ago, and ThinkProgress has a great post nailing Daryl Issa -- who even now is investigating Solyndra -- for pleading with DOE's Steven Chu to fast track a loan guarantee to Aptera Motors, an electric car manufacturer.

The hypocrisy charge is legit, as far as it goes, and it's catnip for the media and for activists. But let's not forget: the main problem with Issa's effort to cripple the clean energy loan guarantee program is not that he did something contrary earlier, but that it's a bad idea to cripple the clean energy loan guarantee program.

I worry that the hypocrisy attack makes it look like Republicans were doing something embarrassing or unseemly by pursuing loans for clean energy companies in their districts. Quite the contrary! If I were one of Darryl Issa's constituents, I would be most pleased to hear that he was angling to get some advanced manufacturing in my district. Electric cars are are a booming market and it would be to a region's great benefit to establish an early foothold as a center of research, skills, and experience. Issa was serving the people who elected him.

This gets at a weird schizophrenia in public dialogue about energy policy. In an economist's dream world, all units of carbon emissions are priced equally. The government does not pick winners or otherwise interfere in the market. The carbon price creates demand for new low-carbon options, which pulls new competitors into the market. Lots of left pundits seem to have convinced themselves that this is the only thing they can credibly advocate for. Anything else is vaguely malodorous.

This is pure mythology, though. For one thing, a carbon price wouldn't be enough to spur innovation (see here or here). Putting that aside, though, it's not like a price on carbon would, in and of itself, make energy markets "free" or "fair." There are no markets in the world more riddled with state intervention, collusion, price-fixing, subsidies, tax breaks, cartels, monopolies, etc. etc. The government is always and already involved in energy markets, always and already "picking winners and losers."

Conservative Republicans don't care if they have to lie all day every day. They don't care if we all eventually find out they have been flaming two faced hypocrites for the millionth time. It is all about the politics of destruction and hysteria.