Energy, Free Market Principles, and Republican Soul-Searching

Energy, Free Market Principles, and Republican Soul-Searching
September 10, 2012

James M. Taylor

James M. Taylor is senior fellow for environment and energy policy at The Heartland Institute, and... (read full bio)

The Republican Party is undergoing some much-needed soul-searching. On the one hand are grassroots conservatives and Tea Party-friendly reformers motivated by free markets, limited government, and faith in individuals. On the other hand are establishment Republicans who like having political power and trust their ability to put together an effective potluck of policies and positions that do not embody any consistent political philosophy. Grassroots conservatives welcome this soul-searching; establishment Republicans fear it.

‘Battle for GOP’s Soul’

The battle for the soul of the Republican Party has played out recently in hundreds of primary contests throughout the nation. Marco Rubio, Scott Walker, Rand Paul, and many others have proven that Republicans can run on strong political principle and prevail in primaries and general elections alike. In the process, they have proven wrong the Republican establishment’s warnings that in order to win elections, Republicans have to compromise principles, pick and choose when to support free markets, and accept a world of politics-as-usual.

The transformation of the Republican Party into a party of limited-government principles is accelerating but far from complete. For every Marco Rubio running an insurgency primary campaign based on strong political principle, there is a well-funded, establishment-supported Charlie Crist using all his political power to block it. 

Florida Example

Ironically, in Marco Rubio’s home state of Florida establishment Republicans retain one of their strongest bastions of entrenched political power. Republican state Agriculture Commissioner Adam Putnam earlier this year put together what analysts have dubbed the Crony Energy Bill, a pork-filled monstrosity heavily laden with handouts and subsidies to politically connected renewable power companies that would make Solyndra’s political benefactors blush.

The bill, H.B. 7117, provides $100 million in handouts to renewable energy companies, directs the state Public Service Commission to place new obstacles in the path of power plants using affordable coal and natural gas, and authorizes local governments to raise taxes and collect new fees to turn over to “green” power interests. The Republican-dominated state legislature played along with this Solyndra-style farce, passing Putnam’s bill in a near-unanimous vote.

Grassroots conservatives and Florida Tea Party groups vigorously opposed the bill and called upon Gov. Rick Scott (R) to veto it. After Scott’s staff indicated to Tea Party groups that the governor was leaning toward a veto, the politically ambitious Putnam—long rumored to be considering a 2014 primary challenge against Scott—launched a campaign of behind-the-scenes political pressure to ensure Scott did not veto the bill.

Scott ultimately allowed H.B. 7117 to become law without his signature, taking the unusual step of issuing a statement expressing concern about the bill while allowing it to become law.

Solyndra on Steroids

Make no mistake, the Crony Energy Bill is Solyndra on steroids. The Solyndra debacle appalled the American public when we learned the politically connected solar power company received $500 million in taxpayer subsidies before going under. Florida’s Crony Energy Bill similarly hands over $100 million to politically connected providers of expensive, failed energy sources.

But whereas the Solyndra handouts were spread out over 100 million American households, the Crony Energy Bill handouts are spread out over just 7 million Florida households. On a per-household basis, the Florida bill is approximately three times as expensive as the Solyndra handouts.

Putnam claims his energy bill is different from Solyndra because under his bill renewable energy companies collect their subsidies after, rather than before, selling power to consumers. Solyndra became a scandal, however, not because the company failed before delivering any product, but because government was caught foolishly sending scarce taxpayer dollars to a politically connected company in a failed industry that could not provide a cost-competitive product. 

By filing for bankruptcy before producing its product, Solyndra did people the favor of never forcing consumers to purchase ridiculously expensive solar power. The Florida Crony Energy Bill, unlike Solyndra, ensures consumers will be fleeced both coming and going, putting taxpayers on the hook for three times the per-household handouts that were given to Solyndra and putting electricity customers on the hook for purchasing substantially higher-priced electricity.

Disingenuous Language

Following the lead of prominent left-leaning politicians, Putnam distorts the language of markets and limited government to present the disingenuous argument that the Crony Energy Bill champions free-market values. Putnam imposes unprecedented restrictions on affordable energy, hands over unprecedented amounts of taxpayer dollars to failed but politically connected renewable power companies, and then writes newspaper editorials and press releases claiming his bill champions free markets and limited government.

This is no different from left-leaning global warming alarmists proposing to cap and tax carbon dioxide emissions while disingenuously claiming they are champions of free markets and limited government because they would allow some companies to trade emissions credits within this restrictive, government-created system.

Putnam and other establishment Republicans would be wise to learn the lesson of former Gov. Crist. Rubio understood Floridians were ready to turn away from Republican politicians selling the failed ideas of big-government liberals. Like Putnam, Crist championed renewable power subsidies and other leftist energy policies, all the while using disingenuous language to claim that he, rather than Rubio, was the true Reagan conservative. Florida voters saw through the ruse and voted Crist out of office.
Not surprisingly, Crist then ran as a left-leaning Independent on his way to obscurity.

Adam Putnam would be wise to learn the lesson of Charlie Crist, or he may be next. 

James M. Taylor (jtaylor@heartland.org) is managing editor of Environment & Climate News.

James M. Taylor

James M. Taylor is senior fellow for environment and energy policy at The Heartland Institute, and... (read full bio)