The Corner

The Green Mafia

I have argued here and in my latest book that governments and mafias are functionally similar organizations. It can be hard to tell one from the other — but in Europe, you don’t have to! From The Daily Mail:

The mafia is ramping up investment in wind farms to launder criminal earnings and benefit from generous EU subsidies, a report by Europe’s policing agency has warned.

Attracted by generous EU and state handouts, and coupled with lax controls, the Europol analysis found that Italian  gangsters are increasingly  seeing renewable energy as easy pickings.

‘The Italian mafia is investing more and more in renewable energy, especially in wind farms, to profit from generous European grants paid for by member states which allow them to mix dirty money with legitimate economic activities,’ the report said.

At least the Italians have the decency to treati their mafiosi as criminals. In 2001, Al Gore was just another washed-up politician with nothing to his name besides $1 million or so in Occidental Petroleum stock. Today he’s a man with a nine-digit net worth who “earns his keep in Silicon Valley beyond simply attending the annual holiday party.” The main difference between our green mafia and Italy’s green mafia is that the Italian mobsters provide goods and services for which there is a real demand in the marketplace, whereas Fisker Automotive made consumers an offer they could refuse, and did. 

The real damage from these kinds of green shenanigans is not the out-of-pocket cost of the subsidies, grotesque as that may be, but the distortion in the investment market and, consequently, in the operations of other businesses. Solar and wind are in fact good technologies in the right applications — but powering major utilities is not one of them. (Fun fact: Oil and gas wells frequently run on solar power, and there is at least one oil refinery that can power its operations entirely on wind when its turbines are running at capacity.) But investors rarely say no to free money, so they go where the subsidies are, whether those subsidies take the form of direct payments, loan guarantees, or consumer mandates. Mandates are particularly nice subsidies, if you can get them: Shares of Cigna, Aetna, and United Health have vastly outperformed the rest of the market since the passage of Obamacare. There simply would be no ethanol business without the federal mandate requiring its use, and T. Boone Pickens would very much like to see a federal law passed requiring Americans to buy more of his product.

Being exploited by gangsters is embarrassing, but in the long run our perfectly legal green regime probably will do more harm.

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