A transparently cynical ploy 1

It seems that Obama continues to take conservatives for fools, believing that he can easily trick or bribe them into acting against their own interest and the interest of the nation as they understand it.

From The Heritage Foundation:

Facing new polling showing that 52% of the American people believe that he does not deserve a second term in office, President Barack Obama attempted to reach out to conservatives yesterday by promising $8.33 billion in federal loan guarantees for a pair of nuclear reactors in Georgia. The President told an enthusiastic audience of union officials in Lanham, MD: “Those who have long advocated for nuclear power — including many Republicans — have to recognize that we will not achieve a big boost in nuclear capacity unless we also create a system of incentives to make clean energy profitable.”

In other words, as newspapers across the country have noted this morning, President Obama’s nuclear loan guarantee announcement is really nothing more than a transparently cynical attempt to revive his moribund cap-and-trade/energy tax proposals currently languishing in the Senate. In reality, the $8.3 billion announced yesterday is actually just a first down payment on the $18.5 billion in loan guarantees that were authorized under the Energy Policy Act of 2005. While the administration should be applauded for following the law, loan guarantees are not enough to recreate a robust nuclear industry in the United States. Indeed, an expansion of the program could do much more to stifle the industry’s growth than to help it.

And expanding the nuclear loan guarantee program is exactly the approach the Obama administration plans to pursue. Their 2011 budget provides an additional $36 billion in loan guarantee authority to nuclear energy projects. When added to the $18.5 billion previously authorized under the Energy Policy Act of 2005, the American taxpayer will now be subsidizing $54.5 billion in loans to the nuclear industry. But just as conservatives do not support subsidies for wind, solar or biomass energies, conservatives should not support subsidies for nuclear power, either. …

President Obama’s bureaucratic/special interest/Washington approach to energy policy is clear: tax and regulate those energies unpopular with his political base while subsidizing and mandating the use of those energies that his supporters favor. This is the same approach the United States tried in the 1970s under President Jimmy Carter, and it was a colossal failure.

What America really needs is a true free market approach to the energy sector, and the nuclear industry is a great place to start. Specifically, the federal government should: limit the loan subsidies of Energy Policy Act of 2005 to existing law; avoid creating a government-dependent nuclear industry; remain committed to scientific conclusion on Yucca Mountain; introduce market principles into nuclear waste management reform; and focus the government on key responsibilities like establishing predictable and effective regulation that will ensure safety and security.

Just as with the health care debate, the White House seems to believe they can win conservative support for their big government policies by buying off selected industries. What the White House continues to fail to realize is that true conservatives are pro-market, not pro-business. Subsidies and mandates are never the answer to an ill-functioning market. A predictable and reliable regulatory framework where firms and consumers can find the best solutions through undistorted price signals is the better approach for energy, health care … and really just about everything.

  • Hunter

    While market principles may work for most industries with some basic regulation, some require very long term investment before they pay dividends. Examples I can quickly think of is the power/water/communications grid, and space 'roads, and ports'. Both big Labor and Big Business ultimately stifle innovation and competitive purifying market forces.The upfront cost is so high that government creation and maintenance of infrastructure is a necessity – private market forces are simply not up to the challenge . However I see an alternative to compulsory big government autocracy – mass co-operative share holding of huge public projects. Space is the ideal example here – if you so chose you may buy a stake in the space program, for the first 10+ years is may seem like a donation – but maybe you and surely your decedents may benefit form the infinite bounty of the universe. This illustration is how all massive public projects like universal medical care should be organized – buy the generous and the willing. With social networking this is a serious possibility. When people are able to give (and receive eventually in the not so near future) by their own choice – we could create a nation of innovative visionary social capitalists. The constitution of this new society would be based (with a few exceptions) on an old rule: Do unto others as you would have them do to you.