I posted the other day about the federal government giving $10 million of our tax dollars to a private company for developing an “affordable” light bulb that costs $50.
Now, thanks to the pen of Alexander Hoffman (creator of this gem), we have an excellent cartoon to commemorate this achievement.
Since we’re on this topic, I want to atone for an admission in my previous post (as noted by Seth, Bill, Dan, and Talon’s Point).
If you believe the calculations cited in the article from the post, it’s possible that this light bulb might save money in the long run. I should have noted that there are two possible interpretations of that data.
a) It’s wrong, which is what you’d expect from the crowd that routinely trumpets misleading data on everything from global warming to job creation.
b) It’s right, in which case there’s no need for a $10 million taxpayer handout since consumers will figure out that the bulbs save money.
Which is why, in the absence of war, I’ll relentlessly publicize this poster showing that more government is not the answer.
Just to be clear: This light bulb act was enacted by George Bush (R). Obama (D) simply let the law expire.
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Matt: That’s absolutely true. But when you endorse government intervention, you are implicitly assuming that government operates with 100% perfect wisdom and efficiency. Yes, it’s true that a company may impose costs on others without compensation, like pollution. But do you honestly believe that the government always allocates costs with perfect efficiency and fairness? Surely you must admit that the government occasionally gives subsidies to companies, not because they are providing a product or service that would otherwise be underfunded due to market inefficiencies, but rather because the owner made a big campaign contribution, or because the politicians want to suck up to a politically-powerful interest group. Or because the politicians simply made a mistake: they think they know what’s best for the economy, but do they really?
Sure. In general, when the government subsidizes a business, the money has to come from other individuals and businesses. So there are then two possibilities:
(a) The government is taking money away from failing businesses to give it to successful businesses. That is, it is taking from the poor to give to the rich. That’s hardly fair. There must be some number of companies on the edge, who could have survived with lower taxes, but with the higher taxes they go broke and people lose their jobs.
(b) The government is taking from successful businesses to give to failing businesses. That is, the government is taking resources away from people who have demonstrated that they can manage those resources well and give the resources to people who have shown that they can’t manage them well. It’s difficult to see how this would benefit society or the economy as a whole.
Don’t forget that the “affordable” lightbulb is most likely made in China
Reblogged this on Gds44's Blog.
In a well-functioning market, sure. But the lightbulb market suffers from, among others, negative externalities, such that the private marginal cost is lower than the social marginal cost (that is, since electricity involves pollution, and since there are no carbon taxes or other mechanisms to make the cost of electricity reflect these social costs, electricity is artificially cheap).
Reblogged this on American Freedom.