by Nick Loris
John Broder of The New York Times has an interesting piece on Al Gore’s financial profit tied to his global warming alarmism and push for renewable energy. Gore’s venture capital firm invested in Silver Spring Networks, a company that makes hardware and software to improve efficiency in the nation’s electricity grid.
When President Obama told a crowd at a solar power plant in Florida, ironically on an cloudy day where the sun was nowhere to be found, that $3.4 billion of the so-called stimulus package would be allocated for smart grid investment, it significantly reduced the risk of Gore’s investment: “Of the total, more than $560 million went to utilities with which Silver Spring has contracts. Kleiner Perkins and its partners, including Mr. Gore, could recoup their investment many times over in coming years.” Broder calls Silver Spring “a foot soldier in the global green energy revolution Mr. Gore hopes to lead.”
If Al Gore wants to invest his money in green technology, windmills, solar panels or algae, he can do as he pleases. It’s his money. The taxpayer does not have such autonomy. Along with Gore’s investments, the government is taking other people’s money to invest in these projects who do not have a say in the matter. It’s what economist Frederic Bastiat described as legalized plunder: “See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.”
When it comes to investment, that’s exactly what venture capitalist firms are for – to supply funding for the early stages of high risk, potentially high profit start-ups. The government footing a portion of the bill significantly reduces the risk and there’s a reason they need to do so. It’s because these projects are too expensive to compete in the market otherwise and even after years of subsidies and tax breaks, renewable energy still only provides a small fraction of our energy. Maybe wind and solar investments will occur without government support but that’s for the market to decide.
In a speech last year, the former vice president called for the United States to commit to having 100 percent of the country’s electricity supplied by renewable energy within 10 years. With cap and trade, a mandated renewable electricity standard, and billions of dollars in taxpayer-funded green energy investments, it’s no surprise “few have put as much money behind their advocacy as Mr. Gore and are as well positioned to profit from this green transformation, if and when it comes.” But it’s not just Gore. Large energy companies are hedging their bets on political policy designed to make renewable energy more competitive and are pushing for federal funding.
Gore responded to criticism of this saying, “I absolutely believe in investing in ways that are consistent with my values and beliefs. I encourage others to invest in the same way.”
That’s fine. Many Americans do invest in ways consistent with their values and beliefs and many hold stock where they work or what they think will be profitable. It becomes objectionable when the government forces people to invest in projects, whether they’re profitable or not. But if the government is investing in them, it’s a pretty telling sign they won’t be. This isn’t laizze-faire capitalism; it’s crony capitalism.
by Nick Loris