Cat of the Day

There must be something in the air today.

On the same day that Dr Steve posted his What is capitalism piece and TAFKAS posted on the regulatory and public policy wisdom of Ross Gittens, TAFKAS will offer a link to another great article by Kevin Williamson from National Review – Capitalism’s Cold War.

But here is Williamson quoting Mercatus scholar Matthew D. Mitchell:

There have now been over 100 peer-reviewed academic studies of targeted subsidies. The overwhelming majority of these fail to find any evidence that subsidies benefit the broader communities that offer them. What does matter is the overall environment. Policymakers who stick to the provision of public goods, keep their taxes low and their regulations reasonable can see their states and cities grow. Those who offer targeted subsidies to high-profile firms like Foxconn and Amazon do nothing to improve the lot of their constituents.

Holden.  Ford.  Toyota.  Lots of people to blame.  Any lessons learned?

Perhaps the relevant State Departments of Other Peoples Money Showering might read some of these peer-reviewed academic studies of targeted subsidies before throwing money at another business.

Yet again Williamson hits it out of the park in yet another compulsory read.  There is much more in this one that this quote, so read for yourself.

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10 Responses to Cat of the Day

  1. A subsidy is nothing but a euphemism for government gambling with other people’s money.

  2. Roger

    [Politicians] who offer targeted subsidies to high-profile firms like Foxconn and Amazon do nothing to improve the lot of their constituents.

    They do, however, improve the lot of crony capitalists, not to mention storing up favours for a career after politics.

    Or am I being too cynical?

  3. The BigBlueCat

    Let’s not forget the Luxury Car Tax and the 5% tariff on imported cars that aimed at “protecting” our vehicle manufacturing industry (now defunct). Surely the Luxury Car Tax should be repealed since there is no industry to protect (not forgetting that protectionism like this is anathema to a true free-market economy). I realise it’s a “tax on the rich” since it applies to vehicles with a GST-included value over $66,331, but nevertheless, it’s a tax that now has no purpose other than revenue and should go.

  4. Roger

    …it’s a tax that now has no purpose other than revenue…

    Doesn’t that apply to all taxes?

    The question is whether the revenue thus acquired will be expended by government in a justifiable manner.

    Other than defence and foreign representations, plus the salaries of the people’s representatives and its own employees, what expenditure can the Commonwealth justify?

  5. Noodles Romanoff

    Any lessons learned?

    We will never learn that lesson. There will always be governments trying to engineer a market to avoid blame for the natural death of an inefficient industry.

  6. The BigBlueCat

    Doesn’t that apply to all taxes?

    Primarily, yes. But there are other purposes …..

  7. John A

    Roger #2938597, posted on February 19, 2019, at 7:48 pm

    …it’s a tax that now has no purpose other than revenue…

    Doesn’t that apply to all taxes?

    The question is whether the revenue thus acquired will be expended by government in a justifiable manner.

    Other than defence and foreign representations, plus the salaries of the people’s representatives and its own employees, what expenditure can the Commonwealth justify?

    Law and order
    Civil and military defence

    THAT IS ALL

  8. Pyrmonter

    How dare TAFKAS suggest that the publicists and spivs who pass for ‘commentators’ on public policy, Messrs Campbell, Kauter, Begg and Photios, should be denied their opportunities to bend the ear of the ‘state as entrepreneur’.

  9. David Archibald

    Williamson recently came out in favour of a carbon tax. He is thus a discredited element.

  10. Pyrmonter

    For an example of methodological individualism taken too far, John Tamny has a reply: https://www.realclearmarkets.com/articles/2019/02/19/why_are_libertarians_so_up_in_arms_about_amazon_103627.html
    (Apparently it is the duty of directors to seek to nobble government. One wonders what he’d say about taking out a hit on a competitor’s CEO).

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