In a new paper called “The Pathology of Privilege: The Economic Consequences of Government Favoritism,” my colleague Matt Mitchell explains that “Whatever its guise, government-granted privilege [to private businesses] is an extraordinarily destructive force. It misdirects resources, impedes genuine economic progress, breeds corruption, and undermines the legitimacy of both the government and the private sector.”

Take the Department of Energy’s 1705 loan guarantee program, for instance. That’s the program that extended $535 million in loan guarantee to Solyndra, a Solar Company that went under last summer leaving taxpayers with the tab. Since then, two additional companies—Beacon Power Corp and Abound Solar—have announced that they would suspend operations and filed for bankruptcy. Abound, had used about $70 million out of the $400 million it got through the DoE program, which is likely to result in a cost of $40 million to $60 million to U.S. taxpayers after Abound’s assets are sold and the bankruptcy proceeding is completed.