The Patriot Post® · The Perils of Transformational Government

By Mark W. Fowler

In 2008, while on the campaign trail, former President Barack Obama said his administration was five days from “fundamentally transforming” the nation. It was a statement he later walked back in an interview with Bill O'Reilly.

Fast-forward 14 years. In an article from Forbes magazine, Biden was quoted as saying on May 24, 2022: "[When] it comes to the gas prices, we’re going through an incredible transition that is taking place that, God willing, when it’s over, we’ll be stronger, and the world will be stronger and less reliant on fossil fuels.“

After the American Revolution and the adoption of the Constitution in Philadelphia, none of the Framers would have thought the purpose of the American government was to fundamentally transform society. The government they designed was a limited government with most governmental powers limited to the States under the Tenth Amendment. Indeed, government overreach by the British monarch, King George, was one of the primary reasons for breaking from the British Empire in the first place. The Framers understood that the greatest good of the governed was only obtainable by affording the governed the maximum degree of freedom to pursue their self-defined interests. They rejected the notion that the class system, or feudalism, or any form of government with unchecked power could understand, define, and shape a society. In this new form of government, each state could operate as a social laboratory fashioning remedies and forming policy best suited to its needs.

The passage of time, the modernization of society, and the need to build infrastructure modified the role of the federal government over time. Although even as late as the 1930s, Washington, DC, was a sleepy backwater town known for its Southern efficiency and Northern charm. The Great Depression and the Second World War changed that, as the government marshaled resources to fight poverty and defeat foreign enemies. Subsequently, Medicare, Social Security, and the Great Society heralded even more changes. Big Government as a remedy for life’s unfairness became the mantra of the Ivy League academics, who came to work in Washington.

Hubris can obscure reality, and good intentions can displace objectivity in assessing the results of policy decisions. Bureaucratic inertia makes existing programs difficult to terminate without regard to their benefit or harm, and benefits once supplied are difficult to revoke. New legislators desiring to make their mark on society enact more social programs without ending existing programs.

Society works best when millions of citizens vote with their dollars on competing economic choices. Society, without mandates from the government, transitioned away from quill pens painlessly and smoothly only because the demand for quill pens dropped as better writing instruments became available. Betamax and VHS tapes gave way to compact disc players. Steam locomotives gave way to electric-diesel locomotives as technology changed. Large bulky computers gave way to laptops and tablets. Jet engines replaced propeller-driven planes not at the insistence of government but despite government, and because it made economic sense to do so.

At the beginning of the automobile industry, the near-simultaneous development of the petroleum industry and mass manufacturing led to a natural evolution of automobiles based on gasoline even though cars were also electric and even steam-powered. It was the collective votes of millions of consumers that led to the selection of gasoline as the most efficient and inexpensive power plant. The government did not force the issue. It is important that the public be given a voice in their economic choices. Millions of voices are more than likely to discover the most efficient use of resources compared to a handful of "governmental experts.”

Nevertheless, we now live in an era where the media and progressive leaders have assumed for themselves an importance and power far beyond their ability to understand the implications of their decisions. And the implementation of those decisions has significant unintended effects and costs on the average American.

The rise in gasoline prices is part of an intentional effort by the Biden administration and the Democrats to compel the transition to “green” energy. Many Americans who disagree with this for perfectly legitimate reasons and whose collective choices would be better are ignored.

Here is why this “top down” approach is fraught with peril. During the Obama presidency, “Cash for Clunkers” was implemented. This program provided subsidies for the purchase of new automobiles in exchange for older vehicles, which were mandated for destruction. One intent of this incentive was to keep unemployment low and stimulate spending, The effects were as follows: new car purchases were accelerated but dropped after the end of the program, with no net overall change in purchases of new cars. The cost of the program was $3 billion in government expenditures. The effect on new car purchases was $3 billion in lower spending for cheaper cars. In other words, a staggering $6 billion was spent with virtually no effect on the sales of new cars or unemployment. But the market for used cars was significantly tightened in that the destroyed trade-ins were not available for use by poor customers, for whom such cars were an important economic choice. The price of these older cars went up by about 10% or $2,000 on average, inflicting damage on the poorest purchasers of used cars. The most frequently purchased new vehicles were foreign and not American. Hardly a resounding success.

Another highly touted project at the time was Solyndra. Solyndra proposed to compete in the green energy market by selling a new form of solar panel. It received $535 million in U.S. government funds; $25 million from California in tax subsidies; and millions more from India and the Export-Import Bank in the period from 2009 until if filed for bankruptcy in August 2011. Additional costs included cleanup costs for toxic waste and disposal of unsold panels.

Here is why Solyndra failed. Its product (cylindrical panels) was ill-suited for residential roof and solar panel farms. It built a second factory at a time when future demand was unclear. There was a failure to understand the market and substantial inaccuracy in its financial records. Additionally, the government took a creditor position behind the private investors. There was a rush to approve the loan for political purposes. This meant that government money would be lost first, and private investors enjoyed a protected position. Perhaps part of that had to do with the fact that a rich supporter of the project was an Obama donor. But despite the capabilities and investigative powers of the United States government, no one could foresee Solyndra’s collapse coming just months after the loan was granted.

We have not built a new nuclear electric generating plant in decades, again because of government interference. Currently, most electrical energy is generated from coal. Soon, if electrical cars become popular, there will be a substantial increase in demand for electricity. This at a time when Texas experienced blackouts in a snowstorm, and California has frequent brownouts in peak demand times. There will be issues with supplies of metals integral to making batteries and with disposal of used batteries. But hundreds if not thousands of other logistics issues now unknown will also arise.

An administration incapable of foreseeing infant formula shortages after closing a major supplier and withdrawing from Afghanistan does not have the capability of managing a societal transformation. An energy secretary without a plan to boost domestic supply of oil and a transportation secretary more interested in a two-month parental leave while dozens of ships wait in the ocean to be unloaded is not staffed with people wise enough to see, understand, and coordinate this kind of transformation involving thousands of suppliers and manufacturers and millions of consumers. Do not look for success from this crowd.

The administration is primarily responsible for the present increase in oil prices. There has been no change in refinery capacity; no accident; no strike; and no change intrinsic to the industry since Biden’s inauguration. What has changed since 2020, when we were oil independent, is a complete reversal of policy. Lease approvals have been slowed-walked; the Keystone Pipeline shut down; and a general antipathy to the intricacies of oil production expressed. Sales of leases in the Gulf and Alaska were canceled. The policy change is intended to redirect consumer behavior on a massive scale and push drivers to purchase electric cars at a time when most U.S. electricity is generated from coal and plans for building additional generating capacity consist primarily of unreliable wind and solar.

Change in the mode of personal transportation is inevitable, but that change ought to be incremental driven by consumers on the demand side and innovators on the supply side. Anything else is doomed to be more expensive, riskier, and impose significant costs on the public.