Separation of (My) Church and State

I’m a business owner, late budding entrepreneur, life-long penny-pincher and as such, observe the alter of pure and fair capitalism. I believe in minimal government interference (obviously there must be regulation at several levels) and in particular, despise any form of government subsidy as, in my opinion, that leads to an unbalanced playing field in some way.  As such, I’ve paid particular attention to the City’s recent interest in advancing the subsiding of various energy programs.

The City, in hand with the Tab, spent months pushing home energy assessments through Next Step Living. On its face, a great program that I myself signed up for (read aforementioned penny-pincher reference).  All users of electricity pay a premium on their bills that then get doled out to upgrade insulation at only the homes that are both informed enough to know about the program and have the money to pay for half the insulation.

In theory, this means that only the wealthier home owners will take advantage of the program. Landlords won’t do it as its their tenants that pay the bill and renters won’t do it as its not their house.  Thus in my opinion, another program designed to help lower-income families, but instead, raises their rates to subsidize the wealthier.  Also, if it is a good deal, i.e. for me, if there were no subsidy, my payback would have been roughly 5 years.  That is something I would do without the subsidy for a home I plan to live in for at least 30 years.

The Cause – when you subsidize companies, they are less motivated to be efficient. The Effect – Next Step Living went out of business about 6 weeks ago.  The Problem – The fact that Next Step Living went belly-up has gone generally unreported.  The City has ignored it and the Tab has made no reference to it (although last week they did run their Home Energy Assessment profile, just with a different company

There are hundreds of families that ponied up deposits for insulation and haven’t even heard the company is gone (rumor has it they closed so fast that crews literally left mid-insulating). Two weeks before they went bankrupt, there was the announcement of a new program targeting business.

My questions:
Am I too much of a hard-ass and need to lighten up?
Do these programs hit their target?
How accountable should the City/Tab be in promoting this program?  Particularly, how much due diligence should they be doing the fiscal health of organizations before sending citizens to them?

BTW, they replaced all my light bulbs for free too.

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Lynne LeBlancKathleen Kouril Grieser Recent comment authors
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Kathleen Kouril Grieser

Steve, thank you for this great post. Your points about the unintended consequences of subsidies are thought-provoking. I have similar concerns about the long-term leasing of our public property to Ameresco, a very profitable solar company, founded by an extremely wealthy businessman and Maxi 72 class yachtsman with close ties to Mayor Warren’s best man John Kerry and a history of large contributions to candidates seeking higher office. I was surprised that no one on the City Council seemed interested in taking a closer look at that deal.

Lynne LeBlanc

You raise an interesting question: if administration and the 4th estate promote particular companies, should they be held in some way financially accountable for unsuccessful ventures? Is this false and misleading advertising? Collusion?