"Obama will strategically invest $150 billion over 10 years to accelerate the commercialization of plug-in hybrids, promote development of commercial scale renewable energy, encourage energy efficiency, invest in low emissions coal plants, advance the next generation of biofuels and fuel infrastructure, and begin transition to a new digital electricity grid. The plan will also invest in America's highly skilled manufacturing workforce and manufacturing centers to ensure that American workers have the skills and tools they need to pioneer the green technologies that will be in high demand throughout the world."
Note that word "strategically." It is there to suggest that Obama knows how best to "invest" the $150 billion. (Of course it is not his money, and he'll have none of his own at risk, so from his perspective, it won't really be investment.) But how does he know that the things he names ought to get the money? Will he give it to cronies of his campaign contributors? Will he appoint Al Gore to pick grant recipients? Lobbyists will make a fortune steering "green" inventors and promoters to the $150 billion.
Politicians have a lousy record trying to make "strategic investments." President Jimmy Carter's Synthetic Fuels Corporation cost taxpayers at least $19 billion but failed to give us alternative fuels. In the 1950s Japan's supposedly omniscient Ministry of International Trade and Investment rebuffed Sony and was sure the country should have just one car producer.
Neither Gore nor Obama can know how the money should best be invested. Investing is about predicting the future, and the future is always uncertain. We know from experience that people who have their own money at risk -- who face a profit-and-loss test and possible bankruptcy -- are much better predictors than people who play with other people's money. Just compare North and South Korea.
One reason decentralized markets are preferable to government central planning is that human beings are fallible. Mistakes are inevitable. Some investments will be errors. Mistakes in the market tend to be on a comparatively small scale. If one company invests in plug-in hybrids and it goes bust, only a relatively few people suffer. The assets of the bankrupt firm pass into more capable hands.
But decisions by government, especially the federal government, affect all of us. When government makes a mistake, the bureaucracy can't go bankrupt. Instead, it will use its failure to justify increased appropriations in the next budget.
If "green jobs" make so much sense, the market will create them. They will be created by private entrepreneurs and venture capitalists who are eager to profit from winning investments. The best ideas will rise to the top, and green energy will gradually replace coal and oil.
If politicians were serious about creating jobs and cleaner technologies, they would step aside and let the free market go to work.
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