Commentary

Bushwhacked

Did you know we have something of a socialist in the White House? The Group of Eight countries have given their imprimatur to an anticapitalist energy plan. George W. Bush signed off on it. The news about the July G-8 meeting in Genoa focused on the fellow with the fire extinguisher. Less noticed was the G-8’s blueprint for funneling subsidies and tax breaks to solar, geothermal and wind power. What about those devilishly dirty fossil fuels? All government support for them should be removed, the G-8 concluded.

Maybe it should be. But this woolly-headed declaration ignores the principles of the free market: If an energy source like biomass is so great, it should be able to prove itself without handouts. Remember the expensive alternative energy debacle launched by Jimmy Carter?

What’s insidious about the G-8’s energy communiqu(c) is that it calls on international lending agencies to expand renewable energy in developing nations. So we’re just a step away from having the World Bank and the International Monetary Fund demanding that, as a condition for a loan, poor societies waste resources building windmills.

You would think that Bush and Dick Cheney would know better than to countenance this nonsense. That’s especially true given the genesis of the report that the G-8 rubber-stamped in Genoa. The G-8 manifesto is redolent with the rhetoric of left-leaning nongovernmental organizations, known as NGOs, which had a major hand in drafting the thing. Strangely, these NGOs get major funding from the very companies and governments they seek to undermine (see my Aug. 6 column).

Some of these NGOs, like the World Wildlife Fund and the European Network on Debt & Development, were allowed into the G-8 communiqu(c)- drafting tent because they sound moderate. World leaders on the order of Bill Clinton, Britain’s Tony Blair, France’s Lionel Jospin and Germany’s Gerhard Schrder have parroted their lines about fostering public/private partnerships aimed at enhancing environmentally correct economic development that is fairly distributed.

The Third Way approach of Clinton, Blair and their gang is eerily reminiscent of the Fabian Socialism of the late 1800s, which sought to win over ordinary folk by making socialism appear reasonable. Prime Minister Jospin updates Fabianism nicely when he says France is “delighted to see the emergence of a planetary citizens’ movement.” The goal, he says, “is to put in place a lasting system of regulation that makes the planet a common asset exploited in an equitable manner.”

The inspiration for the energy portion of the Genoa manifesto originated at a closed-door meeting at 10 Downing Street on Nov. 11, 1999 with a bunch of greens Blair wanted to appease. He carted their ideas to the G-8’s July 2000 summit in Okinawa. There he won approval for a renewable-energy task force made up of government reps, industry figures and NGO types. The task force’s final report was to be unveiled at the Genoa 2001 conclave, where Blair assumed Al Gore, a committed green, would be on hand as President to help shepherd the thing through. Well, Blair didn’t need to worry. Even though his man didn’t end up occupying the U.S. chair in Genoa, it mattered not a bit because Bush went along with the report.

The scary aspect of the President’s G-8 acquiescence is that his own energy plan for the U.S. has a spiritual kinship to the Genoa document, relying less on the invisible hand of the marketplace than on the heavy hand of government. In fact, the plan, as approved by the Republican-controlled House, has outdone Bush in its extravagance with government subsidies.

True, the greens are upset about the Bush-Cheney domestic energy program and its endorsement of oil drilling in the Arctic National Wildlife Refuge. The greens want it all. They want to take government handouts themselves while also killing subsidies for coal, oil and nuclear fission. Bush is different in that he wants to subsidize everything, renewable or nonrenewable. Instead of letting capitalism sort out energy needs and sources, he wants his government to sort them out. He has become a Third Way kind of a guy.

Steve H. Hanke is a professor of applied economics at the Johns Hopkins University and a senior fellow at the Cato Institute.