- A double-edged waste of resources
One of the rights embodied in the First Amendment is the right to talk to legislators. These days, some groups spend a lot of money to talk to legislators and this has sent the liberal left into a frenzy. Liberals’ solution to the perceived problem of spending vast amounts to lobby government is to limit citizens’ ability to speak to their legislators. Here’s a thought: instead of stomping all over a citizen’s First Amendment rights, perhaps a better approach would be to remove the reason to spend so much money to talk to legislators – the massive amount of other peoples’ money the political class can arbitrarily hand out to powerful and well-connected special interest groups.
Taking money out of the hands of the political class and putting it back into the pockets of the people who earned it would not just leave money in the productive sector of the free market; it would remove the incentive for special interests to spend vast amounts of money to procure government favors.
The ethanol tax credit is a good example of this double-edged waste of resources. When the global warming Armageddon myth was in full swing, ethanol, a gasoline additive made mainly from corn, was widely viewed as a good way to lower carbon dioxide emissions. Never mind it takes more energy to produce ethanol than the energy created by ethanol or the use of food for fuel sent food prices skyrocketing and caused food riots in places like Mexico. The green energy ideologues convinced the political class that handouts to ethanol production would “create green jobs.”
So in 1995, the Wyoming government created an ethanol tax credit to encourage ethanol production in the state. That year, Renova Energy, an Idaho company, took an unused ethanol plant from Louisiana, rebuilt it in Torrington, Wyoming, and christened it Wyoming Ethanol. As the only ethanol producer in the state, it got the tax credit. Over the past 17 years, Wyoming Ethanol received $33.7 million in credits. Not a bad return on a here-today, gone-tomorrow eco-fad.
Well, tomorrow has arrived. In the last Wyoming budget, the legislature tried to derail the green gravy train and eventually compromised to end the ethanol handout in 2015. To lobby government on their behalf, Wyoming Ethanol retained two lobbyists who are registered on the Wyoming Secretary of State Lobbyist Registry, Tom Jones and Keith A. Kennedy. They are not required to report what they spent on lobbying until June 1, 2012 and are not required to report how much they were paid to lobby on the ethanol issue at all. As Wyoming Ethanol stood to lose $4 million per year to 2022 in handouts from government, it was well worth paying for these lobbying efforts.
Incidentally, Renova Energy has been in Chapter 11 bankruptcy since 2008. Construction on a Renova Energy ethanol plant in Heyburn Idaho was suspended in 2007 and they filed for Chapter 11 in 2009. In 2010, Renova auctioned parts the plant off because it couldn’t get financing. No doubt, if its Wyoming plant hadn’t been anointed with millions of dollars in other peoples’ money, it would be gone too. People are unwilling to waste their own money; unfortunately, government seems more than happy to do it for them.
The lesson here is straightforward. Instead of stomping all over citizens’ First Amendment rights, we must take the ability to pick winners away from government. Special interests will have no incentive to spend money to get handouts if government has no handouts to give. If the liberal left really wants to stop lobbying, it should lobby to get rid of the incentive to lobby.
(This article was published in the Casper Star Tribune, May 13, 2012)