As demand for oil plummets during the coronavirus pandemic, President Trump is reportedly considering a bailout for the oil industry. While it’s important to note that the oil and natural gas industry employs more than 9 million people, the government shouldn’t be picking winners and losers, even in a time of crisis.
Proponents of capitalism fight a near-constant uphill battle when it comes to defending the good name of the free market. People are all too eager to blame capitalism for the challenges we face as a nation. In reality, the economic challenges we face today are not due to capitalism but due to an unprecedented pandemic. Still, this disruption in the market is no excuse for cronyism.
Capitalism, in its most true form, is an economic system that creates opportunity for all. It offers no guarantee of success or stability to entrepreneurs but promises unlimited potential to those who are capable of identifying the demands of consumers. The volatility of the market is what makes it effective, as in order to succeed, a business must constantly adapt, compete, and deliver for consumers. Adapting to the new normal during the coronavirus crisis is something all industries must do, and the government hand-picking favorites now as a quick fix has the potential to raise consumers’ prices and prevent innovation by stifling market competition.
After all, traditional energy industries are not the only ones suffering in this age of the coronavirus. Since stay-at-home orders began, more than 600,000 jobs in clean energy have been lost. There is little talk about uplifting renewables, and conservatives have long opposed subsidies to clean energy. The hypocrisy of opposing subsidies for one industry while calling for bailouts of a competitor cannot be lost on us.
None of this is to say that oil and natural gas, and even coal, are not essential parts of our country’s energy portfolio. We need energy, and an all-of-the-above, competitive approach is best suited to provide that while reducing carbon emissions. In fact, natural gas has been a driving force in lowering American carbon emissions in recent years. However, it would not be consistent to support only these industries in stimulus discussions. While we are in a time of crisis, the impact of intervention in the market will last long beyond the challenges we currently face.
Although the market is hurting, our knee-jerk reaction shouldn’t be bailouts. The best economic prosperity occurs, and sustains itself, when competition exists. When the government tips the scales in favor of one entity over another, true competition ceases to exist.
Of course, an absolutely unregulated market is impossible, but the fundamental basics of it remain the same: The rules that do exist are the same for everyone, and supply and demand matter. For the free market to function properly, only consumer choice can drive who wins and who loses.
The coronavirus has thrown a temporary wrench in the energy market, but if we continue to set a standard of bailing out oil when times get tough, we will permanently affect how competitive renewable, clean energy can be. In a capitalist economy, government favoritism should be called out. When it isn’t, as in this case, the hypocrisy turns off those who would otherwise give the free market a chance.
As conservatives, we spoke out when expensive renewables were propped up, and to be consistent. We must speak up now as well.
Danielle Butcher (@DaniSButcher) is the executive vice president and chief operating officer at the American Conservation Coalition.
