Steve alluded to it here and I DID have the intention of putting up the thread but, well, with the start of putting in new technology, things rolled off my “table” as it were. It was all about Gov. Sununu doing the right thing and denying wood electrical generational plants a subsidy. No, not one that would have come directly from the State of NH but one in which the State would force us all to give our own personal money to them via higher electrical costs. The fact that the House and the Senate, and the Republicans therein, decided “This Is A Great Idea!” is awful, given the NH GOP Platform:
We believe that individual liberty is guaranteed under the Constitutions of the United States and New Hampshire, that the liberty of the people must be protected above the power of the government, and that it is only through an adherence to our founding documents that we will continue to grow as a free, Constitutional Republic.
We believe in free people, free markets and free enterprise.
So here we are, the Republicans that make up the majorities in both chambers decided that their stated beliefs were, well, stupid. And does that make we voters stupid for voting for them that do stupid things?
They decided to ignore both of what I would consider to be major planks of the NH GOP and decided to act like Statist / Socialists instead. In short, they decided that Obama’s admonition of “I think when you spread the wealth around, it’s good for everybody“. So in this same vein, Jim sends out an email basically echoing the Obama socialist economic theory (emphasis mine):
From: “Jim Rubens” <firstname.lastname@example.org>
To: “Skip Murphy” <email@example.com>
Sent: 7/6/2018 11:41:45 AM
Subject: Call Your Rep: Save the North Country Forest Economy
The shutdown of wood-fired electric plants is now damaging our North Country New Hampshire economy. Only Berlin and Whitefield are now consistently buying wood chips. We are losing good-paying jobs, a market for low-grade timber, a needed forest management tool, and are more reliant on imported, non-NH fossil fuels. Free market theory fails when fossil-fuel externalities are unpriced at the point of purchase.
For these reasons and more, please call your Rep, politely asking them to vote to override the SB365 veto.
PS: Note that the Berlin biomass plant, in long-term supply contract with Eversource, continues to receive a renewable-fuel subsidy.
Let me quick point out that this is neither rational nor “conservative”. It is plain Crony Capitalism, plain and simple. This is Government deciding that it was going to make winners of two biomass / wood chip plants that can’t compete in the open market and make ALL of us losers via the a Govt diktat trying to ignore the fundamental economic law of Supply and Demand. From a political standpoint, decided that we consumers were to be slaves to their idea of a free market. Oh, stop it, this ain’t a free market by any stretch of anyone’s imagination outside of a nightmare.
And the Berlin biomass shouldn’t be getting a subsidy unless Eversource did it via a private (read “no government input or inteference”) contract. So, I emailed him back:
Forcing us all to pay for a government interdiction in the maketplace is a “goodness”? Forcing me, via higher electric prices, to pay simply to keep other jobs going?
>> Free market theory fails when fossil-fuel externalities are unpriced at the point of purchase.
Wrong – Free Markets don’t fail unless there are those that think a Proper Role of Government is to actively disrupt those markets a la Crony Capitalism. What a chuckleheaded sentence from one who has done nothing but benefit from said marketplaces.
Unless you now believe that EVERYONE should get a government subsidy – and you well know what that state of affairs is called, don’t you?
So these plants can’t compete in the Free Marketplace? Let them shut down. Let someone else purchase them and benefit from a lower cost of business with a different model – if they can. If they can’t – the market has spoken.
Don’t be a panderer.
I knew that Jim wouldn’t let that pass – and he didn’t:
Good to hear from you and to know that you are always alert to cronyist market manipulations.
Here, in New England electricity, we’ve got a towering cascade of subsidy and free rider policies embedded over time one atop the other, unlikely in the medium term to get unwound and simplified consistent with limited government.
I argue that NH’s North Country should not pay to price.
A few of the policy distortions:
— FERC regulated transmission costs gamed by Eversource whose corporate strategy is to build trans to the max to collect a ratepayer guaranteed 10+% return on all such investment approved by FERC. Check my blog to read a deeper dive into this.
— Deterioration of NH paper and pulpwood markets (market for lower grade timber) resulting from foreign trade and anti-competitive subsidy policies, in addition to non-sustainable forest harvesting among developing world paper-products exporters.
— Fossil fuel (in this case nat gas) subsidy in the form of ratepayer guaranteed or financed pipeline capacity and pipeline capacity constraint related price spikes.
— Unpriced nat gas externalities, such as earthquakes and global warming.
At least he acknowledges I don’t stand for such sloppiness and Crony Capitalism. Now, if only he would have done the same. Instead, he states that the Free Market should not be allowed to “hurt” the North Country. Well, that’s not my problem and I already made that clear here. These people made decisions to do what they do and where to do it. The fact that they were bad decisions should not be put on me or you – just them. Sure, there’s a ripple effect but stating that there is one is insufficient to mitigate it. Capitalism is best described as “creative destruction”; when capital is ill used in places in the economy where there is no return on investment, those entities should leave the economy and that capital reinvested somewhere else. Look, I’ve been part of that creative destruction on both side – in startups and huge companies. I’ve been in both when they died. And here’s what I learned that Jim Rubens doesn’t want others to learn:
NO one owes me a job. NO one owes me a living. NO one.
All of us work for companies for one and only one reason: to make that company a profit. When said company stops making profits and investors stop putting money into it, it dies. Sure, individuals get hurt – I KNOW that. But what too many people don’t recognize that the same folks also joined those companies of their own free will. Me, too.
So, once again, I responded:
So just because those examples exist is sufficient to add even more goverment rooted and caused price friction to the Marketplace? That government should take a larger role simply because somebody is whining like a two year old “It’s not FAIR!!!” that government regulations are playing, not being a neutral arbiter / umpire making sure that PRIVATE contracts are honored, to be even more actively seeking to create different winners in the marketplace at the expense of making many more losers?
I argue that it should not be up to me to pay that North Country’s price for Crony Capitalism. Nor anyone else, for that matter. Heck, you’re an investor – why not make up the differences and buy them out? Is your skin in the game? Or just wanting mine in it because “it feels good and ‘we’re all supposed to be in this together’ ” kind of deal?
What should be done is let those marketplace losers find ways to mitigate their inefficiencies – how about selling their over-priced electricity to those that are willing to gouge themselves with those higher prices and allow them to brag “Hey, I’m virtuous in buying ‘green’ energy – and its costing me a BUNDLE! But hey, I’m virtuous in doing so – pat me on the head”.
Righting something with a YAW (yet another “wrong”) that overrides the free market worth simply because of POLITICS is still a wrong even when you play “whataboutism” about other wrong-headed government policies. BTW, go ahead, price me those earthquake and “global warming” externalities. All you’d be doing is plucking numbers out of the air – or somewhere else.
I never did hear back as to what those externality costs were – not that I expected to. Nor did I hear back if he had his own money in the game on this – which would have made his email far worse by the way.
But worst of all, I never heard back why he truly believes that individual consumers like you and I should be bailing out these folks that made wrong decisions.
Ditto for all those NH elected Republicans in the House and Senate, either. I’ve been banging on Sununu’s political door for a while for really wrongheaded decisions – but on this, he was right and Rubens is absolutely wrong.