Speculation

Lately some politicians and pundits have tried to turn speculation into a dirty word. A prime example is the line that blames high gasoline prices on speculation and speculators. Even worse than speculation is “wild speculation.” Yet, since no one can predict the future, speculation is inevitable. The electorate, in fact, is about to engage in a huge speculation that we call a presidential election. To make an informed decision, we try to equip ourselves with as much knowledge as possible. Still, we can’t know absolutely what a candidate will do once elected. As brokerages always remind investors, “past performance is no guarantee of future results.”

When Bain Capital, the private equity company formerly run by Mitt Romney, invests in a troubled company, it is engaging in a form of speculation no matter how much homework they do beforehand to mitigate their risk. Sometimes they succeed in saving the troubled company, sometimes they don’t. But always the money they invest is their own and that of volunteer investors.

Most of us don’t consider ourselves venture capitalists. The risk inherent in that activity is more than most cautious lay people can stomach. Yet, know it or not, most of us have been drawn into that role by President Barack Obama. He, the speculator-in-chief, has taken millions of our tax dollars and invested them in risky solar energy companies. Some of those investments lost money. Solyndra is well-known for that. The results of other solar investments are pending. The point is that solar energy is largely speculative. And such speculation should be left to those who have money to risk, not foisted upon taxpayers who are already trillions of dollars in debt.

Solar energy may eventually become the standard for powering the world, but that is speculation. It is pushed by the panic created around anthropogenic global warming theory and the hubristic belief that we can control climate change through government policy. Let private industry and private capital pursue cost-effective ways of capturing solar energy if they can. Just don’t drag me into it. I can’t afford to lose the rent money.

Dwight Boud

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