Animal Farming for Energy Subsidies
A few weeks ago, I wrote about the problem of identifying energy subsidies. If you want to cut them, you have to know what they are first, and while it may seem obvious at times, it’s not always so clear what really is a subsidy and what isn’t. The discussion at least implicitly assumes that all subsidies are a bad thing, which they are not.
At least since the Reagan administration, a current running through much of the political debate is the assertion that government (with a big G) is part of the problem. Left to their own devices, markets, free of government constraint or incentives, will get things right.
To economists, this is a very appealing proposition. We are trained to