Not surprisingly, Paul Krugman has weighed in on the side of the subsidized "green" economy, claiming that basically we can subsidize our way to prosperity, which logically is impossible. (Yeah, I know that at Princeton, everything is possible -- when one is spending someone else's money.)
Furthermore, if one even doubts the efficacy of replacing all so-called fossil fuels with solar panels, then one is suffering from a delusion put there by the evil oil companies. Krugman declares:
We are, or at least we should be, on the cusp of an energy transformation, driven by the rapidly falling cost of solar power. That’s right, solar power.Yeah, it was those oil companies that created that sticky wicket known as "Opportunity Cost" which always seems to get in the way of the Obama administration's financial schemes. However, Krugman manages to take something that very well might be true -- that the cost of making solar panels has been falling -- and then present a false argument with it, something I will cover later in this post.
If that surprises you, if you still think of solar power as some kind of hippie fantasy, blame our fossilized political system, in which fossil fuel producers have both powerful political allies and a powerful propaganda machine that denigrates alternatives.
First, let me briefly address the "fracking" issue he presents. I agree with Krugman that the environmental risks of using current methods to drill for natural gas in the Mid-Atlantic states (including the area where I live) in some areas might be quite risky. In fact, I recently was a featured speaker at a meeting in which I laid out the issues as I saw them, and put forth an objection that Krugman ignores: the use of eminent domain.
While private companies cannot seize another's private property, the energy companies can ask local and state governments to take land by eminent domain, and that is what some of them are doing. As I see it, if firms have to engage in such tactics in order to be profitable, then what they are doing is simply another form of receiving subsidies, and a drain on the economy.
Thus, I agree that the social costs of "fracking" may be high, although given Krugman's animus against oil, coal, and gas, I am not ready to believe whatever he says about them. Furthermore, many of the "externalities" are property rights issues, and much of what Krugman advocates is anti-private property, which means he wants the political system to decide the social costs of fossil fuels-based energy, and the political system is utterly untrustworthy.
As for solar power, Krugman claims that it will be competitive with oil and coal once the "social costs" are factored into the equation. Obviously, that is a red herring, as Krugman wants the government to pile so much regulation and red tape into the system that in the end, the energy economy of 1800 would be more "efficient" than what we have now.
Krugman continues to excoriate anyone who raises a question about Solyndra, but I believe that when we permit the political system to determine the economic winners and losers, we get not just one bankrupt company, but an entire bankrupt economy. As Ted DeHaven of the Cato Institute points out, the Solydra affair was a prime example of "crony capitalism," and Krugman claims to be against such things (except when he is for them).
Yes, it is fallacious to say that because Solydra went bankrupt, ALL solar energy is bad. That is not my point. What I AM saying is that for the past three decades, we have been propagandized with the false stories that affordable solar energy IS JUST AROUND THE CORNER.
Well, maybe it is now, but I have my doubts. At the present time, solar panels make sense for small operations and for things like calculators, but the idea that we can use it to replace entire electric grids still seems like fantasy to me. Unlike Krugman, I'm in the 99 percent and cannot afford to put huge numbers of solar panels on my house.