Wind energy jobs created?

“Iowa has enjoyed tremendous economic benefits by being a leader in both wind power development and wind manufacturing.”  So wrote Mike Prior, Milford, interim executive director, Iowa Wind Energy Association, in a letter to the editor on 2/4/2012, (“Wind energy is important jobs provider”)  He went on to extol the many benefits that Iowans have enjoyed as a result of the funding that taxpayers have provided to those in the industry.  He urged that we, “… continue to invest in Iowa’s future.”

Good economic analysis must consider both what is seen and what is not seen.  We see the jobs.  We see the payments to farmers.  What we don’t see are the other jobs that would have been created if people had been left to spend or invest their own money.  Other jobs would have been created that would not be dependent on government handouts.  Instead, we hear a never-ending story about how we must continue to provide taxpayer support or the investment and jobs will be lost.  This is very typical when government creates new “incentives” and makes “investments” in what should be left to the private sector.

Welfare for wind energy producers is like all other special interest giveaways: the benefits are large and concentrated among the few who who are politically connected, and and costs are relatively small and disbursed among many taxpayers. This is a classic case in public choice theory.  Those who directly benefit have a great incentive to lobby government to continue the subsidies, and those who pay the taxes don’t have a strong incentive to oppose any specific program.

We need legislators who will stand against political favors for special interest factions who press their political power for their own self interest.

Link to Register article:  http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=2014302040081

Stop States from offering special economic incentives

It is not surprising that the Iowa Chamber Alliance advocates that the State of Iowa should provide more money to provide economic incentives for businesses to expand or locate in Iowa.  (See The Des Moines Register, “Study: Iowa is losing its edge on incentives” 3/7/2013.)  The economic incentives paid by States and municipalities to businesses have become obscene.
Our governments should not be in the business of trying to figure out which businesses or industries might be successful in adding good jobs in Iowa.  When governments subsidize businesses, including farmers, we taxpayers take the risks and private individuals reap the benefits.  This is not free-market capitalism, this is crony capitalism – where businesses that have political power are given special favors by governments.
It would be ideal if our U.S. Congress, using their Constitutionally granted Commerce Clause powers – to regulate commerce among the States, would prohibit the States from making any payments, or providing any subsidies that are not generally available to all businesses in the State.  States would still be allowed offer general incentives, like lower taxes, but they would be prohibited from competing based on special incentive given to individual businesses.