Should the federal government give loan guarantees to mature energy industries such as coal and nuclear?

No

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by Gary C. Gibson

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The federal government has scheduled some billions for clean coal technologies. Coal power plants produce perhaps one third of the carbon dioxide emissions of the United States-the effort to separate and sequester carbon dioxide is on-going. Very few coal power plants sequester carbon dioxide underground. Clean coal is not a mature technology, and it may deserve some federal help to increase yet their are better ways to produce energy and conserve power.

The U.S. Air Force burns a lot of fuel and seeks to have a liquid coal-jet fuel mix at about a 50% level in order to have some domestic fuel sources of substance. Coal power plants can be built that convert coal in to a synthetic natural gas and then is burned with amine extraction of carbon dioxides and heat recycled to produce a second turbine in a more efficient power use of coal. Plants in Virginia and North Dakota have smaller scale plants, and the prospects for converting the hundreds of power plants to carbon dioxide emission free status anytime in the next decade or two seems poor.

Nuclear power is something else...the Federal Government should set safety standards but stay out of plant construction. AS it is too many Chernobyl's would follow any population disaster such as bio-war that left few plant operators. Private enterprise can afford to build nuclear plants themselves when the market deems it profitable. Since General Atomics built the first commercial nuclear reactor in California private enterprise has kept an ability to build faster better plants-just because the people are a little slow on energy use and its economic position it doesn't mean the government should leap in to the fray to make everything worse with deficit spending.

The federal government should never 'bail out' mature American industries. Auto manufacturing is nearly 100 years old in the United States and is over-mature to such an extent that ever foreign tin-pot dictator can make better, faster, cheaper cars. The United States automobile industry is as moribund and glorified as other ancient bureaucracies with the founding genius long dead. In the free riding economic era of the Bush administration the infrastructure of the United States rotted as vested interests propped up the establishment by robbing from Peter to pay Paul. When industries naturally lose their competitive ability as foreign rivals have learned how to plagiarize and improve the genuine antique articles just let them die and move on to something new. Creativity isn't dead in the United States it is just oppressed by the establishment.

The recent Citibank guarantee of 300 billion in bad debts and direct loans of 45 billion dollars is an example of the throes of a vx poisoned insect writihing under the agony of its own establishment dismanagement. Instead if restricting seniorage to a reasonable degree and regulating financial services enough to prevent the minting of bunk currency the federal government through all reason to the winds and let banks loan out more money than they reasonably could afford to do without going in to default. Then of course the predatory class new that they could dump the mess on to the middle class and poor while yet demanding 'tax cuts' for the wealthy to 'stimulate' business-better that they send over Barney Franks for that at least is cheaper.

An essential role for an honest government is to keep banks honest. The Clinton and Bush administrations failed significantly at that task. Banks needed to be required to keep more of the depositors money in their vaults. Competition to expand and loan out more money at riskier and lower rates with less security of repayment needed to be limited by the Federal Government; natural competition would otherwise create the situation that has developed with large scale bank defaults and investment banking failures. In the banking crisis the regulation should have prevented banking takeovers of other banks in order to reduce the development of the cycle of vicious competition that would require an eventual public intervention.

The housing industry itself required cheaper labor often from Mexico with faster mass production methods to sprawl suburban dwelling of too large of a size complete with instant lawns and quarter million dollar and up price-tags. The homes then could be used as ATM machines and second mortgaged with paper sold to global 'realtors'. The cycle of cheap quick profits in an unregulated and corrupt banking and federal regulation environment undermined the security of the United States. Concurrently the auto industry was encouraged to produce large SUV's at low miles per gallon performance standards achieved by the early Bush administration support for exception of SUV's from better m.p.g. efficiency standards. The Bush administration also cancelled the Clinton program of requiring Detroit to produce a 75 mile per gallon automobile with the premise that a hydrogen powered car would be better.

Hydrogen powered cars do offer certain advantages regarding fuel availability in the United States and reduction of pollution, yet they also do not provide the simplicity that early U.S. automobiles had for American shade tree mechanics to repair. Even worse than the modern automobile that requires a computer technician to 'diagnos' the hydrogen powered automobile will need an advanced stage of corporate controlled elite technologically procedures to maintain. Electric cars with simple wheel motors and interchangeable components with few parts that can be powered by electrons, batteries and fuel cells at home an in high surfaces should be the new technology that the federal government supports. The U.S. Government ought to develop a principle of perpetual technological revolution in the industries that it selects for public support. Leading edge change and democratization to enable Americans to participate themselves in the production and acquisition of new technologies at the lowest cost should be the goal of federal support decisions even if it is simply in research phases.

As technology advances the U.S. Government cannot choose to intervene invariably in retention of obsolete industries because of the leverage of employees working in those areas. Logically the failure to transition in a volatile technological environment in a timely way will result in a broader economic downturn locally with a failure to increase of employment in new technological based industry than can be compensated for by the short-term continuity of the comparatively obsolete employment sector. Toynbean factors of challenge and response historically demonstrate that successful nations or civilizations often or even normally failure to overcome their own prior success and fall behind foreign imitators accustomed to synthesizing and producing new industries or business and government models.

The Obama administration has so far taken aboard political 'stars' in to its cabinet. Politicians in some ways tend to be the least trusted at comprehension of public affairs. Even lawyers if compared to the airline industry could be thought of as mechanics that no the aircraft, yet they do not necessarily have the competence to be pilots. Politicians may no how to manipulate the public and be popular enough to get elected and yet fail to comprehend the significant and substantial issues of the age and what might be done to overcome the challenges with right responses. Hopefully Obama can select a few competent individuals to his administration as well as politicians that just want to have political power.

The federal government should not just prop up the rich and established industries because they have the extortion leverage of people losing jobs. To prop up anachronistic and wealthy establishments is to directly oppress start up rivals equally deserving of support. The dynamics of global business let U.S. politicians and businesses far too often look abroad for greener fields for investment. The federal government should not dump additional debt that quickly leaks out of the border bucket to farquar knows where.

A secure national border with no illegal immigration. An environmentally rational economic policy of sustainability. No federal debt. Housing loan security requirements reduced for homes that are monolithic domes made to last without maintenance for 500 years with an effective r factor of 100, basic low-cost medical care available for purchase as needed by the poor with short term guaranteed federal loans to the sick-those are some of the federal priorities alongside an electric vehicle transition directly that should be reinforced through federal policy.

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