I’ve commented on the corruption of the Solyndra scandal, but it’s important to understand this is not just a story of sleaze.
From an economic perspective, the real problem is that green-energy programs cause a misallocation of capital. Simply stated, government intervention diverts resources from more productive uses.
Here are a couple of examples, explained in videos put together by Senator Jim DeMint’s office.
The first video shows how a subsidiary of Coca-Cola used White House favoritism to subsidize its energy costs.
And the second video explains how a Spanish company, thanks to the Obama White House, benefited from industrial policy.
And what’s the economic impact of these forms of crony capitalism? I did a back-of-the-envelope calculation, estimating that there’s about $160,000 of investment for every real job in the private sector.
Click here to listen to the list of green-energy programs that create jobs more efficiently.
