Thursday, June 30, 2011

Risking Taxpayer Money

COLUMN NOTES: I changed my mind again. I am going to keep posting the full column here because I want a secondary online depository. I'm also going to try and link to articles and other sources of information I use to write the columns.

HARBESON: Windstream in it for the money

CLARKSVILLE — There’s no doubt Windstream Technologies has developed quite an interesting product. I was initially impressed by the publicity surrounding its wind turbine and when I looked deeper, I saw even greater potential.

First of all, any product that can help people get off the grid is a plus, so a turbine capable of supplying even partial energy needs using wind speeds as low as 4 to 5 mph certainly seems promising.

It’s fairly small and unobtrusive and I even like the design, too. As a matter of fact, I could see one of these babies looking very smart as a coffee or end table in a room decorated in a modern-style design. (Hmm, I wonder if such an installation might actually be operational inside government buildings where politicians are busy blustering.)

In addition, Windstream gained extra publicity when it installed its first turbine as part of the League of Green Embassies program and the company apparently even has a significant amount of preorders waiting.

So with all this going for the company, why does Windstream need to ask taxpayers to take on their risk? Where are the private investors?

If a company can’t convince traditional bankers to assume the risk, there are other ways to raise funds or move a product forward. What has it tried in order to gain access to the nonbank private investment dollar? For that matter, why aren’t the owners trying to sell the idea to an existing company who has the capital and/or infrastructure to build this product?

There are many alternatives and possibilities in the private market.

Do companies like Windstream get tied so strongly into government as the solution because they are in a business which is highly regulated and controlled? Windstream CEO Dan Bates seems to be all for using government to benefit his company because he’s promoted government caps on carbon emissions to force the market to move in ways that benefit his business. Is this really the best means to grow a business?

Maybe New Albany is better off not having companies which constantly look to government goodies. Windstream only came here because Indiana state government bribed them with deals using taxpayer money in the first place. Companies who arrive on such terms are certainly more likely to think they deserve more and more in order to stay.

Windstream ended up in North Vernon, accepting a government-backed loan for less money than they requested from New Albany. This may be partially due to North Vernon’s site being the old Regal Rug factory. A location that was previously used for assembly-type work likely requires less setup costs than New Albany’s retail site. Yet, Windstream still didn’t do it without using local politicians to force taxpayers to take on the company’s risk by providing banking services.

People who promote these special government favors like to label such actions as being “business-friendly.” But for “business-friendly” to be a meaningful term, it must be applied universally, not by handing out special financing deals to certain companies.

A friendly business environment is one that gets out of the way of hard-working, ambitious people so they can develop and grow their product or service without being constantly propped up by government assistance.

Less regulation and less taxation create an environment where self-sustaining businesses are free to invest as they see fit, and no one forces those who don’t gain favor of politicians to subsidize those who do.

It appears that dealing with companies who only come to town because they were bribed means cities will have to deal with demands for even more handouts. Which is kind of like finding out someone only married you for your money.

— Sellersburg resident Debbie Harbeson wonders if anyone has ever measured the mph that hot air moves inside government buildings filled with politicians.

1 comment:

  1. That's good. The only problem I have with the newspaper's site is that HTML tags (well, italics and blockquote, at least) don't work there, and there's no preview function to let you find that out without posting a comment that looks pretty strange.