'Venture socialist' didn't sign up for it

Leave it to Seattle to spawn an entirely new category of investor: the "venture socialist."

Venture capitalists have created trillions of dollars in market value in new companies of all sorts over the past two decades. The model is simple: Well-heeled investors underwrite startup businesses. In return for the high risk of funding new businesses, success pays very substantial rewards. Much of the time, the business fails and most or all of the investment is lost.

The model advocated by Michael Butler and Randy Shefman ("Working our way out of the energy trap," Jan. 4) is something completely different. The terminology, "... the market will be guided by regulation and public policy, and ... investors and government officials need to form public-private partnerships" means Butler and Shefman want the government to reduce their and their clients' financial risk by defining and controlling the market, and investing tax dollars the government must first take from someone else -- us.

This is a bad idea in so many different ways it's difficult to know where to start.

First, the history of government intervention in energy markets is astoundingly consistent. Every time the government tries it, catastrophe results. Butler and Shefman acknowledge that with their in-depth review of how recent public-private partnerships investing in energy have failed abysmally. Yet they seek more of the same.

Second, if government "regulation and public policy" control the energy market, the market will be subject to manipulation and distortion by factors that have nothing to do with what's in society's best interests. This is an especially important failing when the government takes "extra" money from us to purportedly achieve something greatly to our benefit.

Example: The government's commitment to ethanol, which is environmentally and economically indefensible as a fuel source. We pay higher taxes, higher food prices, higher fuel prices and we burn more fuel, which means we're not a bit less dependent on politically unstable regions. This isn't "energy policy," it's a taxpayer-funded giveaway by opportunistic farm-state senators and representatives and their allies in Congress and the White House to a few well-heeled agricultural corporations and large commercial farmers.

Third, it isn't surprising that American politicians of both parties most closely resemble practitioners of the world's oldest profession. The surprises are how cheap they are to buy, and how quickly they'll totally sell their constituents out. You don't get near single-digit approval rates without major effort.

Butler and Shefman want to greatly expand the same politicians' power and control over a huge segment of the U.S. economy. Perhaps they'd care to offer an example of where such centralized control has ever yielded anything but economic misery and intolerable suffering by the citizens of the countries where it's been attempted?

Finally, with the taxpayers defraying some or most of the risk typically associated with venture investing, a "moral hazard" is created. Politicians don't care if they waste money; they care only about retention of power.

Mixing tax dollars with private investors' funds encourages riskier investments because the cost of failure to the investors is offset by the taxpayers' money.

It's none of my business if Butler and Shefman can persuade their investors to back a new energy source using thousands of gerbils running inside a giant wheel. But it's definitely my business and I very much object to their utilization of the coercive power of government to make me an involuntary passive investor in their schemes.