When the government insists on “helping” the private sector – this sort of stupidity is what you get.
The very famous Ronald Reagan line is: “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’” He wasn’t even a little incorrect.
The lather-rinse-repeat cycle is always the same. Government champions itself as the answer to a private sector “problem.” But wait, before we go any further: Nigh always the “problem” government “identifies” – isn’t actually a problem. Government identifies problems – the way Bernie Madoff’s victims identified good investment guidance.
Now that government has made the determination that it is going to “help” – it bull-in-a-china-shop’s its way into the middle of the private sector. Creating massive disruption – and crowding out private participants. The entire market warps and distorts – as it is forced to accommodate this massive interloper.
The results are as awful – as they are predictable. The examples are limitless. See: Obamacare. Or Dodd-Frank. Or Sarbanes-Oxley. Or….
Then government – the entity that just demonstrably worsened the situation – declares itself the “solution” to the problems it itself just caused. And further involves itself in the private sector. Which further warps the private sector. Which leads the government to declare itself the “solution”…. Lather, rinse, repeat…ad nauseam.
A prime example of this government inanity – is the energy sector. Private energy providers have done a magnificent job over the last century-plus maximizing fabulous, low-cost…you know, actual energy – oil, natural gas, coal, nuclear, etc.
Then the government decided to “help.” They started regulating the daylight out of these actual energy sources. And taxing the daylight out of them (and the rest of us) to fund fake energy sources – the non-energy-producing, uber-expensive likes of wind, solar, ethanol, etc.
This isn’t government picking winners and losers – it’s government picking losers at the expense of winners. And again reminds us of one of life’s empirical truths: If it’s a good idea – no government money is necessary. No one needs to subsidize ice cream.
And this is federal government inanity – so it screws up things all across the country. And individual states have to deal with the fallout from the federal foolishness. Texas is currently in the midst of this expensive, utterly unnecessary nonsense.
The Lower Colorado River Authority (LCRA) provides power in the Lone Star State. In 2009, it in San Patricio County cut a 20-year deal with Papalote Creek II (a subsidiary of E.ON and Sumitomo Matsui Banking Corporation) – to purchase 200 megawatts of wind-generated power.
Enter the original sin: Again, the federal government subsidizes wind “energy” out the wazoo. Which gets people who would otherwise never try to provide wind power – because it makes zero free market economic sense – trying to provide wind power. The sector – has begun its government-induced warping.
LCRA understood all this – and built into the contract an out should wind energy prices drop below a certain level. So they could renegotiate at the new, lower rate. (Conversely, Papalote Creek II had a similar out should the price rise – and they could renegotiate at the higher rate.)
Thanks to fracking and other private sector innovations in the actual energy sector, all energy prices fell – wind included. So low, it reached the magic number in the contract – and LCRA exercised their option.
Papalote Creek II refused to enter into resolution arbitration – as the contract they signed required. A federal judge mandated arbitration – which LCRA won.
Then comes further ridiculousness. When you’re a hammer – everything looks like a nail. When you count on government for your very survival – you always run to government when things go awry. Government-funded Papalone Creek II – looks at the entire world and everything in it through a government-only prism.
Having failed in the Real World private energy sector, government-centric Papalone Creek II went running to government – the courts – to bail them out. And in an example of the belt-and-suspenders approach – they also went to the Texas legislature looking for another bailout.
Another empirical truth: The answer to too much government – isn’t even more government.
But sadly, bizarrely, a Texas REPUBLICAN state representative is ignoring this empirical truth – and attempting to throw Papalone Creek II that government lifeline. Behold J.M. Lozano – and his House Concurrent Resolution (HCR) 117.
Actually, it isn’t totally bizarre (though it remains inordinately sad) – Papalone Creek II is in Lozano’s district. That said, nothing justifies what his bill is attempting to do.
First, it is a terrible idea for any legislature to parachute into the middle of courts – in the middle of cases – and disrupt and distort them. We have separate government branches for a reason. Let the judicial branch do – what the judicial branch does. Unfettered by legislative branch manipulation.
Second, this is legislation attempting an after-the-fact rewrite of the LCRA-Papalone Creek II contract – all to the one-sided benefit of Lozano-district-residing Papalone Creek II. Which just isn’t cricket – in fact, it’s dirty pool.
HCR 117 isn’t a bill – so much as it is a really bad joke. Representative Lozano isn’t at all amusing here.
Lozano’s legislative colleagues should give his bill no thought, no time – and no quarter.
This is a guest post by Seton Motley Founder and President of Less Government