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'Gresham's Law of Green Energy' (Jonathan Lesser on bad energy driving out good)

By Eric Lowe -- February 1, 2011

[Editors note: this post is a summary/review of the article by Jonathan Lesser, “Gresham’s Law of Green Energy: High-Cost Subsidized Renewable Resources Destroy Jobs and Hurt Consumers” (Regulation magazine, Cato Institute).]

“Industries that require never-ending subsidies simply cannot increase overall economic welfare. To conclude otherwise is to believe in ‘free-lunch’ economics of the worst kind. Yet, free-lunch economics are driving the push for renewable energy.”

– Jonathan A. Lesser

Jonathan A. Lesser, of Continental Economics Inc., has written a penetrating essay describing the unmet promises of subsidies to so-called green energy (or politically correct, nonhydro renewables). He looks at the supposed benefits of these subsidies and the associated costs and comes to a familiar conclusion: government-subsidized energy is uneconomic energy.

The arguments for green energy subsidies are numerous; perhaps most used are those pertaining to putting people to work and even creating wholly new industries that will re-invigorate the entire economy (the Obama fantasy). …