Gov. Mitch Daniels

Indiana’s governor is a rare bright light in politics today -- a politician who, once elected, still defends limited government.  Mark Hemingway, of The National Review, gives "Mitch the Knife" credit for being "extraordinarily successful at implementing innovative and effective public policy."  I agree.

But then a reader sent this letter, responding to Hemingway quoting Daniels’ saying a coal plant "will employ a process called ‘coal gasification’ to exploit the state’s coal reserves more efficiently, creating jobs and lowering utility bills."

Patrick Barron, West Chester, Pa., wrote:

It should not be government’s role to intervene in the market for the sole purpose of creating jobs. If utilities find that this new process will save them money, they will make the investment on their own. I certainly hope that the taxpayers of Indiana are not paying their utilities a subsidy to invest in a clean-coal technology that will cost more than the savings from using locally mined coal. Governors need to be less involved in such details, not more involved, as Mr. Hemingway’s essay implies. This is just another subtle demand for better philosopherkings to rule us. The free market needs no such ruler, no matter how brilliant he is, or pundits think he is. The sole role of government is to protect our life, liberty, and property.

Barron makes a good point.  I asked Governor Daniels for a reply.  He emailed this:

John, I appreciate the purist's position taken by the writer, but I'd submit that it doesn't completely square with this situation, for reasons including:

1. We're talking here about a regulated monopoly, almost the last one, in electric utilities.  So until the Millennium, there's no escaping some govt contact with its activities.  Their profit margins are controlled, which means they operate by different incentives than the writer correctly wants to see dictate economic decisions.

2. Our goal here, in issuing permits and, yes, some modest tax reductions for two "clean coal" plants (one entirely private sector, to produce natural gas from coal), was to generate more indigenous power and to add to Indiana wealth on an all-in basis.  We currently pay >$1B to buy coal from out of state, due to federal environmental regs, so paying ourselves and generating jobs here in the process seemed sensible.  The "green" lobby hates these projects, if that tells you anything. This is really a fight about growth or no-growth, to us.

A conservative's dilemma in a job like mine is to stand (still) on pure principles, or to apply them to the mixed, far-from-free economy of today and try to take it back a step or two toward the world Mr. Barron envisions.

Cheers.....(by the way, could be mistaken but I don't think those were my words but rather those of Mr. Heminway in describing what we have done in this area.)