So here’s the latest from our president’s erstwhile glorious peoples’ economic model — which he, oddly, no longer cites — socialist Spain, where a revolt is brewing.
It is by now fairly well-known in these parts, to the great embarrassment of the Obama administration, that the Spanish government’s “green economy” power grab that Obama so often publicly praised actually proved to be enormously destructive. As is pretty much always the case with the greens’ harebrained schemes these days.
But it just keeps getting worse, and news from Spain indicates a dawning realization among those who had bought into the hype that actions — even gestures of the feel-goodiest sort — really might have consequences.
One of the shackles placed on Spain by its politicians’ windmill and solar fetish was the creation of a tremendous “rate deficit.” That is, one more pile of taxpayer debt, though derived from a very specific boondoggle. It was caused by the politicians creating a centrally planne…er, “green” energy sector. That means mandating lots of “renewable” electricity but, as Obama admitted, these schemes cause electricity rates to “necessarily skyrocket.” Spain tried to kick the “necessity” down the road to future ratepayers. Aww.
This of course required the state to establish the permissible rate for electricity, still high if well below the cost of producing windmill and solar electricity. Which is very, very expensive. The difference was paid for with debt. Let those future suckers pay for our folly (sure glad our politicians resist such instincts!).
But the renewabubble burst because it always was a Ponzi scheme. And Spain, already going bust in appreciable part due to the debt — and lack of competitiveness the schemes caused despite shuffling much of the increased cost into later years — was unable to keep the charade going.
Incidentally, as many Americans have by now picked up on, bubbles are dangerous things and they typically threaten to bring some banks down when they burst. Spain’s already teetering banking industry informed the socialist government of this, which may be the only thing stopping the state from completely washing its hands of the mess it created. It is having a grande time trying to bring it under control.
Last Friday the government cut the subsidy to windmills and solar panels, again. This included cutting solar subsidies retroactively, in one sense, in that those who bought in at astronomical guaranteed returns for 25 years are taking a haircut even though they were locked into the Ponzi pyramid before some pollos starting coming home to roost.
Then, this week, the government approved another increase in the price of electricity for households and small business, to pop tomorrow (remember, bureaucrats set the rate, to hide what they were doing to the system and the costs they were heaping upon the people to pay off rent-seekers while giving politicians an identity to claim they were the renewable kings. They showed they were, ahem, “responsible”).
The New Year’s gift of increased electricity rates? 9.8%, which brings to about 20% the increase in the cost of electricity in 12 months piled on Spanish households and small businessmen. With more inevitably to come, as even Spain’s high electricity prices were 30% too low to pay for just the upfront costs of the renewabubble contraptions. And at such a wonderful time for the people to have to bail out the politically manufactured boondoggle. Thanks, green socialism!