Senor Shriver Tilts For Windmills

Since it seems my comment will never be allowed to escape moderation limbo, I'll summarize my criticism of Adam Shriver's paean to windmills here.

Let's start with the relatively elementary fallacy that government spending on windmills will generate jobs. The problem with this plan is that the government has to get its funds ultimately from the private sector (it can take the long way around and print the money, but ultimately such a deficit must be paid for with taxes or inflation). That really deserves emphasis: anything the government does is ultimately parasitic on funds created by the private sector.

Reducing the amount of money in the private sector is going to invariably have one or more of several effects: a) it will reduce the revenues of firms; b) it will reduce the amount of capital investment in firms; c) it will reduce the amount of savings accrued in banks; d) it will reduce the amount of private consumption. Obviously, all of these effects have a negative impact on jobs. (This reasoning is best exposited by Hazlitt in Economics in One Lesson.)

At best, the government can shift employment from (unsubsidized) firms to (subsidized) firms. Of course, it will only be a "shift" if the government uses its tax dollars as efficiently as the private sector would have -- and considering that those funds must be funneled through a vast bureaucratic apparatus of collection, decision and distribution, none of which is susceptible to market incentives towards economy, that is a virtual impossibility.

Shriver paints a roseate picture of the possibilities of subsidies:

There's no reason our country couldn't become the leader in a new green economy if we invested in green energy as much as we do in fossil fuels.

I'm not sure what he means by money "invested" in fossil fuels (as far as I'm aware, there are no subsidies comparable to the ones being proposed and implemented for windmills), but why in any case should oil or wind be subsidized at all? If wind is really a better source of energy than fossil fuels, why not let the companies duke it out in the ledger books, and let the investment capital flow to the victor?

Such a contest would seem, at least, more chivalric, which you would think would be more suitable for a man who tilts for windmills (if not at them).