That sure worked well for the housing and financial sectors

February 25, 2009 by Keith Lockitch

If there is one lesson we should take from our current economic troubles, it is the destructiveness of government intervention aimed at manipulating the market. As my ARC colleagues have been arguing, this is the real cause of the collapse in the housing and financial markets–not “free markets run amok.”

Yet, what do Obama’s plans for energy policy consist of? Massive government intervention aimed at creating non-market outcomes.

Obama plans to implement a variety of new policies aimed at kneecapping and hamstringing the fossil fuel-based industries that actually keep our economy running, while at the same time pouring massive subsidies into pathetic, market-failed “green energy” technologies such as wind and solar.

Advocates of a “green economy” fantasize that a green energy industry will somehow be an engine of economic growth, complete with millions of new jobs. I have recently argued that this is nonsense.

Even leaving aside the fact that consistent greens are opposed to all forms of energy, not just carbon-based energy, the notion that government carrots and sticks will somehow create a booming green economy is as bogus as the belief that they could turn mortgage-backed securities into risk-free investments.