If not for high taxes and targeted tax credits, capital would flow toward whatever technologies or business investors thought most promising -- this is how markets help society. Thanks to the web of taxes and credits, though, capital instead flows wherever politicians and bureaucrats have decided is best.
Obama, to be fair, offsets some of the distortion inherent in subsidies and tax credits, because he is trying to create so many -- not just wind, but solar, natural gas, nuclear, and biomass. While this avoids the error of putting all of our energy eggs in one basket, it still is less efficient than the free market.
Friday, February 26, 2010
Obamanomics: Business rows; Government steers
My column today explores how Obama is simultaneously "pro-business" and anti-market: