December 11, 2016

Buffalo Billion Indictees: Scapegoats of the Empire State?

cnse-solarcity-grnd-level-render-08sep14-copyToday’s Buffalo News print edition devotes its entire front page to the indictment of prominent Buffalo businessman Louis Ciminelli and eight others on federal charges of bribery and fraud in relation to their participation in Gov. Andrew Cuomo’s “Buffalo Billion” program. The news story is accompanied by the usual “perp walk” photograph, showing Ciminelli following his attorney past the metal detector and conveniently under the “Probation and Pretrial Services” sign at the federal building downtown.

It all seems just a little too convenient for those of us who have long predicted a disastrous end for the governor’s billion-dollar boondoggle. Since the plan was first rolled out in February 2013, Solar City’s stock has skyrocketed from around $15 per share to a peak of $84 a year later (just as Cuomo’s subsidies kicked in) and then plummeted to back to Earth after several quarters of dismal earnings reports.

Solar City is the recipient of 75% of the Buffalo Billion’s largesse and its failure to produce products people buy voluntarily, without government incentives, has it looking like another Solyndra before its state-subsidized Buffalo factory is even built. Should it blow up soon after the governor handed it $750 million in taxpayer funds, the peasants just might get out their pitch forks. At that point, heads will have to roll and nothing satisfies a mob like the fall of a successful businessman.

But let’s not forget the real cause of this disaster, whenever it finally occurs: central economic planning by the government (whether federal, state or local). That’s what killed Buffalo during the post-WWII era and that’s what could kill it again, despite the organic revival happening outside Cuomo’s crony capitalist debacle.

When the government directs capital, whether towards “green energy,” manufacturing or “infrastructure,” it is overriding the choices of millions of people who have already decided not to spend their dollars on those projects. It should come as no surprise, then, that when the government finally stops intervening and allows people to spend money as they wish, the government’s “investment” turns sour.

Not only has society lost the money wasted on the government’s unsustainable project, but it has lost the viable projects consumers would otherwise have funded had their money not been taxed and spent by the government. That’s called “opportunity cost,” something college freshman learn on about their third day in Economics 101.

Lest anyone remember those lessons when the Buffalo Billion goes up in flames, we now have an alternate narrative the perpetrators can promote to avert attention from themselves. “It was all those greedy businessmen and a few bad apples in the government who ruined everything,” they’ll say. “Otherwise, it would have worked.”

Sure. For the first time ever.

This writer is reminded of Martin Sheen’s immortal quip from the classic Apocalypse Now, “charging a man with murder in this place was like handing out speeding tickets in the Indy 500.” So, too, is charging businessmen with bribery when the government starts handing out hundreds of millions of dollars in taxpayer funds.

Businessmen, like everyone else, respond to incentives. In a free market, they innovate and improve because pleasing customers is the only way for them to make profits. But in a government-directed economy, it’s not customers they have to please, but politicians. And politicians don’t need innovation or improvement. They need campaign contributions, kickbacks and other kinds of political support.

An even closer Hollywood analogy might be A Few Good Men, where a high-ranking colonel orders two enlisted men to carry out unofficial discipline on a fellow marine and then cuts them loose to face charges alone when the marine is unintentionally killed.

That movie loosely follows the story of the real-life British soldiers charged with murder in an earlier film, Breaker Morant. There, it is a high-ranking British commander, Lord Kitchener, who orders his troops to take no prisoners and then turns his back on them for political reasons when they are brought up on charges.

The latter film was based on a book written by Edward Witton, one of the defendants, called Scapegoats of the Empire.

Ciminelli and his fellow defendants just might be Scapegoats of the Empire State, fall guys for yet another in a long line of politicians who visited economic destruction on Western New York.

We don’t know if the defendants are guilty or not. They’re indicted, not convicted. But whatever the facts of the case turn out to be, one thing is certain. We’ll never see a picture of the architect of this disaster walking under a “Probation and Pre-trial Services” sign.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

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