What happens when government begins to direct more and more of a country’s economy with the wealth it has taken from its people through taxation? China and Al Gore provide us examples. According to a Bloomberg report quoted by The Wall Street Journal,
“[T]he net worth of the 70 richest delegates in China’s National People’s Congress . . . rose to 565.8 billion yuan ($89.8 billion) in 2011, a gain of $11.5 billion from 2010.” That averages out to more than $1 billion per delegate, and we’re not even talking about the senior party leadership.
The excellent Wall Street Journal article continues.
All this is good to know as a reminder that China, so recently extolled as the very model of technocratic know-how, turns out to be a country heavily populated at the top by rent-seekers and kleptocrats. Should that be surprising? Not if you think that nothing else can come from the lucrative crossroads where politically directed capital and politically connected individuals meet.
Enter Al Gore.
Earlier this month the Washington Post’s Carol Leonnig reported that the former vice president’s wealth is today estimated at $100 million, up from less than $2 million when he left government service on a salary of $181,400. How did he make this kind of money? It wasn’t his share of the Nobel Peace Prize. Nor was it the book and movie proceeds from “An Inconvenient Truth.”
Instead, as Ms. Leonnig reports, “Fourteen green-tech firms in which Gore invested received or directly benefited from more than $2.5 billion in loans, grants and tax breaks, part of President Obama’s historic push to seed a U.S. renewable-energy industry with public money.”
This is all fine and dandy for dandies like Al Gore, but what about those in the working class who don’t have the government connections? The picture is pretty glum.
The Post story mentions one of the beneficiaries of Mr. Gore’s investment acumen, Milwaukee-based Johnson Controls, which won a $299 million award from the federal government in 2009 to make electric-car batteries. Here’s how that worked out:
“The company has dramatically scaled back, after executives concluded demand for electric cars was far lower than the administration forecast. The factory outfitted with stimulus funds is nearly idle, and plans to build a second plant have been postponed.”
In the end, these examples show why political philosophy is so important and so far reaching. Philosophy guides actions. Actions have consequences.
When the history of this administration is written, maybe someone will note the dissonance between the president’s hip persona and his retro ideology. Here was a man who promised a “transformative” presidency. Yet when transformation came, it amounted to a two-pronged attempt to impose, from one side, a version of European social democracy by way of Obamacare, and from the other side a version of Chinese state-directed “capitalism” by way of the stimulus.
As a political matter it may have been Mr. Obama’s good luck that the bankruptcy of both models became obvious only after he had gotten his way legislatively on both.