Government Investments

According to an item in the Atlanta Journal Constitution...

The idea sounded terrific. Use tree waste to create fuel, help break our dependence on Mideast oil, and create hundreds of jobs in rural Georgia to boot. What's not to like about that?

One problem. The Range Fuels cellulosic ethanol factory is now closed. Apparently, it wasn't such a terrific idea. Unfortunately, approx. $162 million in federal, state and local grants is now up in smoke.

While $162 million is relative chickenfeed in an era where we have all discovered the number "trillion", this anecdotal episode is instructive regarding government "investment", aka spending taxpayer dollars.

I would imagine it went down something like this...

Owner of Range Fuels to state Senator Foghorn: Ralph, I got a great idea for alternative energy and creating jobs. We make fuel out of tree waste. We call it cellulosic ethanol and...

Foghorn: How much?

Owner: Excuse me?

Foghorn: How much, boy, tell me what ya need.

Owner: Uh, I don't know, maybe $162 million.

Foghorn: Consider it done. I know the local boys will pony up some of it, cuz I got pictures they don't want the world to see. But I'll need to call Senator Blowhard in Washington, give me just a minute...Blowhard you ol' sumbitch, it's Foghorn...

Blowhard: How Much?

Foghorn: You even want to know what it's for?

Blowhard: Not really.

Foghorn: How soon?

Blowhard: We're voting on a bill tomorrow to keep orphans from starving, I'll stick it in that.

Foghorn: My best to the Missus.


The moral of the story is that when you're playing with other people's money, you're not as prudent as when your own money is at stake. When we hear about government "investments" in things like clean energy, we should ask ourselves whether they are using sound investment principles or simply picking winners and losers on the basis of political connections.