The Department of Energy’s Loan Guarantee Program—its green energy loan program—is a money loser, according to the GAO.

The Government Accountability Office says the DOE’s oft-touted $28 billion loan program will cost taxpayers $2.21 billion over the lifetime of the loans. Not only that, the costs to taxpayers for green loans has risen about $500 million as “the result of loan guarantee defaults” from companies like Solyndra and Abound Solar.

That’s not bad by itself; the sorts of projects and companies being loaned to via this, essentially, venture funding program are high risk, losses are normal, and for a venture capital effort to lose money overall isn’t at all unusual.

What makes this particular program and its losses bad, however, is that it’s a government program. True venture capital entities, whether they fund through lending or any other method, are private companies. The participants in a private venture capital enterprise are voluntary participants who know, or have the opportunity to learn, beforehand the risks entailed in such a thing and who commit their own money to the effort.

When government gets involved in venture capitalism, the participants—the taxpayers—are not voluntary, they’re dragooned into the effort by the government’s commitment of those taxpayers’ money; the taxpayers have no opportunity to evaluate, before their money is irrevocably committed, the risks being run; and government is committing OPM to the enterprise, not its own money (indeed, the government has no money of its own to commit; it has only those taxpayers’ money).

Government has no legitimate role in the venture capital market.

Governor and Ambassador, and currently Chairman of the Atlantic Council, Jon Huntsman had some thoughts in a weekend Wall Street Journal.

Expanded exports and open markets were central to our economic-security efforts to reconstruct Europe and Japan and keep lower-income countries free from communism.

Indeed. Such free trade imperatives remain central to freedom, to helping lower-income countries escape despotism generally, and to mutual and widespread prosperity. Huntsman went on:

Whereas today the world economy is replete with far-flung supply chains for manufacturing physical goods, it will be the free flow of designs and ideas that will increasingly constitute the economic linkages of the future.

True enough. The global economy, spurred on by that globalization, is evolving. Actually, the evolution will take a number of unexpected turns and paths, but Huntsman’s guess is as good as any.

But then Huntsman went astray.

….proliferation of empowered megacities and centers of creative innovation will challenge geographic borders, making it hard for capitals to call the shots.

The subhead of Huntsman’s piece emphasizes that basic problem.

Trade will be more important than ever 30 years from now. And a lot more complicated to regulate.

No. It’s not complicated at all to not regulate, and governments don’t need to—shouldn’t—call the shots. It’s not very much more complicated to not regulate very much. A free market doesn’t need very much regulation, and a free market global economy, for all the individual nations’ domestic laws may not be overly free, is the most prosperous global economy. Those who don’t want to play by free market rules when they enter that economy can’t force other nations to trade with them. That’s a free market decision.