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January 31, 2011
The Greedy Bastards Paradox
If we accept President Obama's economic arguments, his State of the Union address was most remarkable in the aftermath, when nothing happened.
For the sake of argument, let's agree with the President that the winning ticket of the global economic lottery will be investment in renewable energy, high-speed rail and other green industries. Bet on green and you win the future. Let's also stipulate, as the left believes, that private capital in America is in the hands of greedy bastards -- capitalists who will do anything for a buck.
The question then becomes why all those greedy bastards are not pouring money into the epochal investment opportunity that President Obama unveiled. Why is Wall Street not running up the stocks of companies positioned to flourish in the coming green economy? Where are the private equity firms that should be knocking down the doors of the solar shingle company that the President touted? Why aren't hedge fund sharpies jumping into high-speed rail? After all, if Warren Buffet or John Paulson delivered a speech that laid out the way to win the future, every other greedy bastard would be shoveling money into their ideas before the applause was over.
This is the greedy bastard paradox inherent in all government "investments." The state is left to fund the industrial policies of old or today's green schemes precisely because they are uneconomic. Economically viable investments need no government support because the greedy bastards of the private economy are already funding them.
What proponents of big government cannot fathom or choose to ignore is that successful investors deploy capital based on extensive research and due diligence. With trillions of investable dollars competing for profits, the name of the game is finding the best ideas. This is why the greedy bastards of capitalism spend a lot of money hiring analysts, industry specialists and consultants with expertise in every niche of the economy -- from energy to transport to nano technology, restaurants and healthcare. This well-funded army spends each and every day analyzing where money can be invested profitably.
But President Obama seems unaware or dismissive of the private sector's verdict on green industries. Yes, financial institutions and private investors are keeping a careful eye on new developments in energy, deploying some long term capital strategically and engaging in speculative investment. Certainly, hot money has jumped to exploit ethanol subsidies and other government boondoggles. But the big capital remains on the sidelines because investors find no economically viable energy alternatives in the foreseeable future. So President Obama's Sputnik moment is just another call to boldly take our tax dollars where those investing their own money are unwilling to go.
Some on the left would counter that Big Oil is somehow preventing or undermining investment into promising clean energy technologies. Here again they run into the greedy bastard paradox. If an epic financial bonanza is right around the corner, how can the oil majors possibly keep all the other money-grubbers out of the game? And if green energy is really poised to supplant petroleum, why wouldn't Big Oil go for the gold, if only to survive? Even the most orthodox leftist should recognize that a conspiracy theory based on capitalists leaving money on the table is bankrupt.
There is a message in the aftermath of President Obama's call for an American mission to a planet where green workers in green jobs will own the 21st Century. In the real economy, the problem with government trying to "pick winners and losers" is that only the losers are left hanging around for the government to pick. So if we really want to win the future, let's go with the greedy bastards who bet their own money and not those who are playing with ours.
Bogie is the pen name of a New York-based writer.