I have been recording episodes of John Stossel's new show on Fox Business and a couple of weeks ago was pleasantly surprised to see two people from Minnesota on it. They were discussing a company called Serious Materials which seems to get a high amount of tax credits from the energy programs of the Obama Administration. Then we learn that the connections run much deeper: There are frequent visits from both the president and vice-president, but even more frequent are the visits between Energy Department official Cathy Zoi and Robin Roy, vice president for policy at Serious. You see, they're married. The Freedom Foundation of Minnesota provided much of the evidence that demonstrates this non-transparent use of weatherization funds. They've provided a video you can watch to see more.

On its website, Serious Materials says it did not get a taxpayer subsidy. But that's just playing with terms. What it got was a tax credit, an opportunity that its competitors did not get: to keep money it would have paid in taxes. Let's not be misled. Government is as manipulative with selective tax credits as it is with cash subsidies. It would be more efficient to cut taxes across the board. Why should there be favoritism?

Because politicians like it. Big, complicated government gives them opportunities to do favors for their friends.

Labels: economics