All Businesses Are Equal, but Some Businesses Are More Equal Than Others
Many problems in public policy are government-created, and the best solution is not more government. Unfortunately and predictably, solutions involving more government will be supported by groups that are short-sighted and will benefit directly from them.
As the latest illustration of this, biodiesel producers in Missouri are calling for extending the $1-per-gallon biodiesel blender’s federal tax credit. In its Friday issue, the St. Louis Business Journal published two articles that profile a struggling biodiesel plant as it waits for extended handouts from the government.
Meanwhile, there exists a lack of demand for biodiesel in the market, and the government has responded by setting a mandate to create an artificial level of demand. From one article:
Environmental mandates that require oil companies to blend petroleum-based diesel with minimum levels of biodiesel [...] have increased demand, and therefore prices, for biodiesel and helped offset the loss of the expired tax credit.
The problem with mandates and production subsidies like those for biodiesel is that the government is encouraging energy producers to invest in an infrastructure that is neither efficient nor cost effective. Residents of Missouri and other states could achieve higher levels of utility if government stayed out of the market and allowed the profit-and-loss system to allocate resources. As another positive consequence of eliminating handouts to biodiesel producers, fewer resources would be distracted from the development of other alternative energies that are perhaps more viable.
“Unfortunately and predictably, solutions involving more government will be supported by groups that are short-sighted and will benefit directly from them.”
HA HA! I think the inverse would also be true insofar as with the Koch’s lobbying for public policy which directly benefits their private and/or ideological goals. You can’t argue against the notion that Rex won’t benefit either, in the short run at least, if the earnings tax was abolished. Will you people come up with some insightful arguments instead of this elementary crap that even an intoxicated socialist can throw in your face? This statement also applies to any selfish “rational” group or individual looking out for their interests and as I recall that’s the basis for capitalism. Like the Wall Street pirates which crashed our economy thanks to the neoliberial rhetoric of Friedman, Reagan, and Greenspan.
Comment by Douglas Duckworth — August 27, 2010 @ 3:57 a.m.
“Residents of Missouri and other states could achieve higher levels of utility if government stayed out of the market and allowed the profit-and-loss system to allocate resources.”
So do you believe the government should have never built the Interstate Highway System? I mean, you know, considering the infrastructure never really had any demand despite the auto industry capturing government, destroying the streetcar system, and making it happen under the argument of “national security,” “personal freedom,” and the second to the last instance of manifest destiny. The fact of the matter remains that government intervention in the market not only created most of our infrastructure, which private enterprise takes for granted, but the modern mortgage — from which our consumption society thrives upon. Hayek remains a lunatic.
Comment by Douglas Duckworth — August 27, 2010 @ 4:06 a.m.
@1
You are referring to political capitalism. Ie the Enron playbook. This is atrocious. Certainly Greenspan is in that camp, and Reagan to a lesser extent, but Friedman and Hayek were adamantly against this sort of oligarchism.
Comment by vroman — September 2, 2010 @ 10:23 a.m.