Monday, June 18, 2007

Subsidizing America

I’ve been mulling over an idea for a book lately.
It’s premise would be rooted in the idea of subsidies that have been used to prop up various areas of the US economy over the years, and would question whether they have been good for the country in the long run.

A contemporary example would be milk subsidies, and how their existence allowed dairy operators in America to exist in an artificial economic environment. Fast-forward to this decade, in which the government is subsidizing the implementation of ethanol fuel as a substitute for 100% gasoline.

I recently noticed a label on a gasoline pump recently, touting the fuel as being “enriched” by 10% ethanol. I laughed out loud at the audacity of the marketing gambit: The fuel was in fact being diluted by grain alcohol by 10%, not enriched.

What is happening as ethanol is being foisted on the American consumer, corn is being grown more as an energy crop instead of a food crop, and the government is only staving off the inevitable by promoting gasohol usage?

If you think this is far fetched—look at Toyota Motor Company, which is heavily subsidized by the Japanese government. Could that automaker have surpassed GM without such unfair advantages as cheap labor and cheap financing by Tokyo?

In the long run, are subsidies for favored sectors really a good thing, or are they only applying rose-colored glasses to bigger problems that must be confronted eventually?

The price of milk has eventually come to reflect the real costs of producing the commodity…Toyota’s exponential growth has come at the expense of declining quality in its products…and America’s addiction to cheap gasoline must come to grips with the fact eventually, we’re going to have to either run our transportation machines on something other than fossil fuels, or quarantine the use of gasoline, diesel and oil exclusively for transportation, and require electricity generation by alternative methods like nuclear, solar and wind.

Are subsidies for stopgap measures delaying the emergence of alternative, real technologies, by dulling the pain neccessary to cause the American public to realize these changes must come. Are economic subsidies really only economic analgesics?

Is our national reluctance to accept the inevitable, and instead supplant flawed solutions funded by subsidies, really symptomatic of a larger national problem of putting off until tomorrow what we should be dealing with today?

1 comment:

Anonymous said...

What bothers me about the welfare issue is that it is aimed almost solely on the individual when in fact corporate welfare, wealthy corporate welfare, is costing this country, this capitalistic, let the market rule, billions.