[Editor Note: This discussion is taken from chapter 5 of the author’s Oil, Gas, and Government: The U.S. Experience (Cato Institute: 1996).]
“Allocation regulation, in turn, sought to cure the problems created by price regulation. Government intervention during wartime encounters many examples of regulation begetting other regulation, a major theme of peacetime intervention as well.”
Government direction of economic activities, rare in U.S. history, has typically accompanied wartime situations. In particular, government petroleum planning has occurred during World War I, World War II, and the Korean Conflict. Standby oil and gas planning also followed the Korean Conflict.
General Theory
Economic understanding reaches the conclusion that consumers are best served when entrepreneurs are not subsidized or penalized by government involvement. Conceived abstractly, consumers could be a private individual or even a government agency.…
Continue Reading“Greenhouses set up next to carbon-dioxide emitting factories give food producers easy access to the gas their plants love…. Everyone on the planet eats food, so perhaps a tax should be imposed on every global citizen to remunerate the creators of carbon dioxide.”
I doubt this suggestion will find much support; I don’t even believe in it! But the reason that I don’t believe in it has nothing to do with my feelings over the goodness or badness of the externalities in question. Instead it stems from a recognition that we just don’t know what the relevant externalities are.
One of the greatest contributions of the Marginal Revolution from 1871-74 was a focus on subjectivity as the fount of value. From thence forth no economist could say that value was inherent in a good or the result of its costs of production, as had been the case for thousands of years.…
Continue Reading“One acre or 1,500 acres? 88 percent capacity factor or 22 percent? Less than $1,500,000 per megawatt of capacity or $6,400,000 per megawatt? Location near the customer load or remote? Highly dispatchable electricity or non-dispatchable? Do we need to really ask these questions.”
The huge California Valley Solar Ranch (CVSR) central-station solar plant is apparently now at “full power” thanks to a loan guarantee from the U.S. taxpayers of $1,237,000,000. Information regarding this project has been published here by Earthtechling, and also here, by the U.S. Department of Energy.
In an earlier article by Eric Lipton and Clifford Krauss in the New York Times entitled A Gold Rush of Subsidies in Clean Energy Search, the full cost of the project was established as $1.6 billion. Lipton and Krauss indicate:
… Continue ReadingThe project is also a marvel in another, less obvious way: Taxpayers and ratepayers are providing subsidies worth almost as much as the entire $1.6 billion cost of the project.