Thursday, October 18, 2007

Is All Speech Free?

Can "free speech" by government officials be very costly? That is the issue being aired in an article by the Glenwood Springs Post.

Mark Udall is only one of several politicians including Bill Ritter, Diana DeGette, and John Salazar being accused of depressing the eventual value of the gas gusher on the Roan Plateau by introducing regulatory uncertainty. The amount of devaluation being mentioned is a billion dollars in state revenues.

These people pretend that their words have no impact:

Deb Frazier, spokesperson for the Colorado Department of Natural Resources, said she doesn't see a link between what elected officials say and potential Roan revenues. She added, "The last time I looked we were a democracy and we could comment on it."

Most of these idealists and extremists have never had a job in the private sector and either do not understand how it thinks, or more likely pretend that they don't.

We will try to create an example that they might be able to understand.

Suppose several competing investors were considering building a super luxury hotel on a south sea island. Suppose also that one was willing to pay a billion dollars for the land at auction. Now, suppose that several government officials began publicly promoting the eviction without compensation of all civilians from that island and the creation of a military base.

Even if the military base were never created, investors would be unwilling to pay much for the island, certainly not a billion dollars, out of fear that they might eventually be evicted. Worse from their standpoint is that eviction might come sooner, rather than later.

Does anyone recall when Bill Owens remarked offhandedly that "Colorado is on fire?" Those words were free speech, but no one thought them cheap.

The Americans for American Energy group is correct when it says:

...negative statements by elected officials regarding drilling on the Roan causes energy developers to "foresee heightened regulatory risk" associated with possible drilling there and "erodes the confidence of investors that they will be able to realize a reasonable and timely rate of return." That could affect bidding prices for gas leases, it argues.

AAE added that "given the magnitude of the potential bonus bid at stake - in excess of $1 billion - the loss Colorado taxpayers already may have suffered is likely to be substantial."

No comments: