Wednesday, December 14, 2011

The Keystone XL Pipeline Meets Public Choice Theory

If one considers alternative energy schemes as crony capitalist ventures, with taxpayer dollars being profit to the rent seeking special interests, then is the postponement of the XL pipeline  merely an exercise in the best interest of the special interest?

A special interest, in this case alternative energy, can only rent seek (acquire taxpayer dollars) if the special interest has a politico or collection of politico enablers. Governments do not think, act nor react. Only politicos think, act and react. Hence politicos through the mechanism of government allocate taxpayer dollars to special interests. Therefore, politicos associated with alternative energy have a vested interest in the political constituency exercise that taxpayer dollars generate.

Many of the politicos with a vested interest in the crony capitalism of alternative energy also have a vested interest in environmentalists. As the formula goes, the politico through the mechanism of government uses taxpayer dollars to build a political constituency. In this particular case the constituencies are associated in that the crony capitalist of alternative energy “appear” to also be the champion of the environmentalist. Therefore the politico enabler receives a double constituency building outcome through the awarding of taxpayer dollars.

Digressing for a moment, consider the concept of big oil windfall profit tax. Is crony capitalism, in the area of alternative energies, a substitute as it were for a big oil windfall profit tax, which creates the same "effect" for a particular political constituency? Stated alternatively, if one champions a big oil windfall profit tax and wants to capture the political constituency such a proposed tax caters to, then if one can not achieve the windfall profit tax does one use crony capitalism in the area of alternative energy to achieve the same political constituency building effect?

Now consider a fully engaged crony capitalist exercise in the area of alternative energy with hundreds of billions of taxpayers money allocated. Also consider that these alternative energies are not price competitive. Further consider that the same associated politicos have not only subsidized alternative energy but have mandated its usage. Therefore, a fully engaged crony capitalist system generating a non-competitive above market price has been guaranteed to perpetuate as the same politicos have added mandated usage. Political dupery at its zenith!

Enter the XL pipeline, a facilitator of lower priced, much less subsidized, and price competitive energy source. The fully engaged crony capitalist exercise, the political dupery as it were, views competition as a threat. Competition from the private sector no less. Hence simply eliminate competition and preserve the fully engaged crony capitalist exercise.

You see, its not that certain politicos are against monopoly, they are just against “private monopoly”.






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