The federal government has lost another 72 million of your tax dollars. Here we go again.
The feds have gambled with your money again, and they've lost it again; this time with a company called Beacon Power. You've probably never heard of this company. Candidly, before the announcement of its bankruptcy filing this week, neither had I. Just as you probably had never heard of Solyndra before its bankruptcy, neither had I. But your government has heard of both.
Solyndra and Beacon received loans the government guaranteed – $535 million and $72 million respectively. In each case, your tax dollars were spent when these companies borrowed money they couldn't return. In each case, federal bureaucrats used your money to pay back loans investors gave to these failing companies because the bureaucrats want to wean us off of oil and onto so-called green energy, and because the government was friends with the investors. In each case, the investment the federal government made in these firms was risky and was lost.
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How did this happen? The phenomenon of the government picking winners and losers is as old as our country itself. When we were colonists and the king and Parliament imposed the Stamp Act on us – everyone needed to affix a government stamp to all documents in his possession – the king gave the monopoly on selling the stamps to his favorite colonists. Competition for business in stamps was illegal. Abraham Lincoln gave away federal land to his favorite railroads so they could have a leg up on the competition that had to pay for its land. Woodrow Wilson gave government business to bankers who were his political allies, and they made money even in bad times, while the competition struggled.
But we have not seen government intervention into the free market the likes of which has become apparent recently. President George W. Bush borrowed money in your name and bailed out the insurance company AIG, General Motors and Chrysler before they went bankrupt, and hundreds of banks. President Obama has received legal authority from Congress to bail out or even to finance whomever he wishes, and he has used the bureaucrats in the Department of Energy to advise him how to do so.
When you invest your own money, your biggest concern is that you'll lose the investment. To relieve you of that, you research a company before lending it your money or buying its stock. You make your decision on the likelihood of yield and the amount of money you will earn from the investment, and whether or not you can afford the loss of your investment. This is your natural right to choose to do with your money as you wish.
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But when the government invests money for you, its decision-making is not grounded in free choice or in sound business judgment. Its decision is grounded in power and politics. The power is its ability to extract tax dollars from you even if you profoundly disagree with the way it will spend what it has extracted. The power is the government's ability to borrow cash in your name, even if you disagree with the borrowing. Since the government isn't risking its own money, but yours, it needn't worry about affording a loss.
Stated differently, the government doesn't care if it loses your money. It only cares if it loses your votes and thus loses power. Its goal is not a return on investment; its goal is staying in power. Its decision-making on risking your money is not based in sound business judgment, but on power politics. It wants to tell you how to live, and it wants you to keep it in power.
Calling this crony capitalism actually gives cronyism a good name. Capitalism is freedom. It is your unfettered ability to do with your money – as an investor, as a consumer, as a saver, as an employer, as a worker – as you wish, with no government intervention. We have seen what happens when the government intervenes: Your money goes to a place you would never voluntarily send it. That's not capitalism. That's private ownership but government investment. That's private ownership but government control. That's extracting money by the force of law and spending it against your will. And that is called fascism.
Do we want this fascism here? It already is.