The Next Bubble?
By Arnold Kling
If Congress and the president want to push the country in a greener direction, there are easier — and safer — ways of doing it. Put a price, in the form of a tax, on the pollution or emissions you don’t want (such as carbon). And subsidize early-stage, basic research at the university and lab levels.
Beyond that, let the unique power of the market to experiment through trial and error and to sort and filter innovations proceed without meddling. And let entrepreneurs compete vigorously to pump those innovations into the marketplace without government’s attempting to pick winners and losers. Otherwise we are setting the stage for another bubble. It likely won’t be as large as the housing bubble, but it will be costly and wasteful all the same.
I have to admit that I was expecting better from the Obama Administration, given that it has many highly-regarded economists who know better than to get into the business of picking winners and losers among energy-related firms. Larry Summers in the past expressed contempt for the public-private hybrid of Freddie Mac and Fannie Mae. Someone should ask him what makes Fisker automotive a better government project.
UPDATE: The head of the IPCC runs a company with Kleiner-perkins investing? And I’ve read that Al Gore is an investor in Fisker. Crony capitalism? It doesn’t get much cronier.