I’ve written before that one cause of our slow economic growth is that businesses can’t properly plan for the future because they lack certainty.
Of course, uncertainty is a fact of life—a business never knows exactly what the business cycle holds, what competitors may be doing that will affect their market, and what outside events might affect consumers, and therefore their company's prospects.
Yet businesses shouldn’t have to also worry that government might change the rules that have governed their business operations. Unfortunately, increasingly government has been creating significant uncertainty for business by meddling as never before in what used to be known as the private sector. The federal government has been generating unprecedented levels of onerous new regulations (including laws like the ObamaCare, which could significantly impact employment costs), threatening to levy new taxes, running trillion-dollar annual deficit which have a significant impact on the availability of capital for other enterprises, and—perhaps most disturbingly of all—distributing huge amounts of taxpayer money and other favors to select enterprises, which put their competitors at a disadvantage.
That’s why I can sympathize in part with the Romney campaign’s statement that it wants to provide biofuel growers and refiners with the “certainty they need to follow through on their investments in promising technologies.” Yet sadly, in this case, the “certainty” that a Romney administration is offering is that it would continue some of the bad policies that are making energy so costly today, and that are warping the energy market by favoring some fuels over others.
Specifically, the Romney campaign has indicated that as a part of its effort to advance energy independence it would keep the “renewable fuels mandate” which requires that oil companies must integrate a certain portion of biofuels or pay a fine. The problem has been that biofuels haven’t panned out quickly enough for energy companies to come close to meeting mandates, which has left companies paying the EPA hefty fines.
As Citizens Against Government Waste explains, the current mandates are still unrealistic and the costs of these penalties are being passed on to consumers in the form of high fuel costs, which is bad for families as well as businesses across the board.
Rather than assuring the biofuel sector that they can count of government handouts and regulations that force companies into their market, Governor Romney would do better to focus on providing certainty to companies everywhere that his Administration would get government out of the business of picking winners and losers, reduce unnecessary regulations, and facilitate greater energy development regardless of source to make energy prices less of a burden for everyone. That would be the kind of certain that would do more than benefit one politically-attractive industry, but Americans everywhere.