IBJOpinion

GROSSMAN: Bill Gates wants to spend your money

Peter Z. Grossman
July 24, 2010
Keywords
Back to TopCommentsE-mailPrintBookmark and Share

Vpt-Grossman-PeterBill Gates, along with several other very rich men, have decided that what this country needs is a Manhattan Project for energy.

Just as the government built an atomic bomb during World War II, the government should spend billions of dollars to create the energy innovations for a low-carbon economy, according to Gates and friends.

I have a question for Mr. Gates: When was the last time you had to choose between an atomic bomb or a conventional explosive of similar yield? The question is not an idle one: The Manhattan Project created a product, where the cost was no object, to prove we could do something that would help us win the war. Energy technologies are ones we’ll need to buy, which we’ll do only if it makes economic sense. Government isn’t bad at grand technological feats. It is terrible at intentionally creating commercial products.

Now I would be truly impressed if Gates said he was going to put up billions of his own dollars to develop energy technologies, but I’m not surprised he isn’t opening his wallet. He’s a smart and savvy businessman, a billionaire who got that way by having a good sense of the market. He would know then that simply waving a check will not produce commercially viable alternative energy technologies.

In fact, if money were all that mattered, we’d have had those alternative energy technologies long ago. Former President Jimmy Carter persuaded Congress to authorize $88 billion to develop so called “synfuels”—oil and gas substitutes made from coal. Carter felt this was urgent because he believed that the world was rapidly running out of oil and natural gas, and that prices for both would rise forever. But all his assumptions were wrong and the synfuels project was soon closed down, I’m thankful to say.

Carter also set a goal of 20 percent of U.S. energy coming from the sun by 2000. No chance. Despite various subsidy programs, in most instances, solar energy is nowhere near a cost-effective substitute for conventional energy technologies. We get less than one-tenth of 1 percent of our energy from solar.

President George W. Bush wasn’t much better. In 2007, to reduce oil consumption, he and Congress pushed a goal of producing 36 billion gallons of ethanol by 2022. But ethanol from corn (the main U.S. source) is inefficient and expensive compared to oil and is no better for the environment. In the meantime, we have a mandated deadline that we almost certainly won’t meet and we’re providing billions of dollars a year in subsidies to try to get there, anyway.

President Obama’s ideas are no improvement. In his recent national address, he called for getting us off oil apparently by building lots of wind turbines. Never mind that they will not replace oil, since they are used for electric generation and we use very little oil to generate electricity. But we’ll be paying out lots of subsidies for wind turbines, too—to produce energy that is expensive and unreliable.

Gates and colleagues, who go by the name The American Energy Innovation Council, have no really new ideas. Yes, there is a call for a supposedly non-partisan government-created Energy Strategy Board, which seems a contradiction in terms. But really, the initiative is about more government funding in an area where government funding has done little good.

In the end, there is something unseemly about billionaires wanting to spend our money, especially where the payoff is so unlikely. When the wealthy members of the Innovation Council are ready to pass the hat to one another—and do it every year—then maybe we should listen. But until they’re ready to put their money where their mouths are, we shouldn’t be putting up the money for them.•

__________

Grossman is the Clarence Efroymson Professor of economics at Butler University.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Angela IS the best RD

  2. We are a nation of speed. All of our younger lives are filled with deadlines, quotas and bottom lines. We start to ease out of the pressured rat-race when we finally see "retirement." The most enjoyable travel on the planet is passenger rail service. Indy to Chicago does not beat Megabus or Southwest Airlines in speed. Passenger rail however has the best seating, mammoth legroon, seat backs that recline to more than 45 degrees and employers that really want you to return as a customer. Indiana municipalities need to maintain subsidies to support this transportation mode. Losing it is loss for all of us.

  3. Good day! I just want to testify how i got my loan from Mr. Eric Lefkofsky after i applied several times from various loan lenders who claimed to also testify right in this forum,i thought the testimonies where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan. Until a friend of mine introduce me to this popular Mr. Eric Lefkofsky who promised to help me and indeed he did as he promised without any form of delay. I never thought there are still reliable loan lenders until i met Mr. Eric lefkofsky who indeed helped me with the loan and changed my belief. I promised to share this testimony after I got my loan. I don't know if you are in any way in need of a genuine and urgent loan,free feel to contact Mr. Eric Lefkofsky via their email{grouponfunding@hotmail.com}

  4. Its a THUG issue. Bleecker Street and NYX are thug bars. They attract thugs of all races. Places that attract thugs need to be kicked out of Broad Ripple. Ain't nobody got time for that!

  5. Hello everyone, My name is Marian Gareth, I am from the Texas, United State, am here to testify of how i got my loan from Mr Andre Frank {frankloancompany@yahoo.com} after i applied Two times from various loan lenders who claimed to be lenders right in this forum,i thought their lending where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan.Until a friend of mine introduce me to Mr Andre Frank the C.E.O of Andre Frank Loan Company who promised to help me with a loan of my desire and he really did as he promised without any form of delay, I never thought there are still reliable loan lenders until i met Mr Andre Frank, who really help me with my loan and changed my lief for better. I don't know if you are in need of an urgent loan, free feel to contact Mr Andre Frank on his email{ Frankloancompany@yahoo.com} for help

ADVERTISEMENT