Some More on That Maroon, Tierney

The GristMill blog responds to NYT columnist John Tierney's latest hodge-podge of ill-advised ideas (previously posted here), in particular his assertion that market forces will automatically kick in to bring us to the next plateau of energy usage:

What if the oil peak comes sooner than anybody thinks? What if war breaks out in the Middle East? What if terrorists disable multiple major oil pipelines simultaneously? What if there is a sudden, widespread need for alternative fuels and nothing is there to satisfy it?

Will capitalists suddenly and magically have access to scaleable new sources? Will millions of suburbanites smoothly and happily move back to cities?

No: People will lose jobs. They will lose houses. They will lose food. People will suffer. Lots of people. And this will be a perfectly natural market response.

True marketeers will argue that under those circumstances the pain suffered under the free market will be less than that suffered under any course of action involving dread government. "The worst possible system, except for all the others." Maybe so, maybe not.

But people like Tierney, with their childlike faith that the market will ease us painlessly through any conceivable energy transition, are just irresponsible. Believing in markets does not require having your head up your ass in the sand.

There's some more on the other side of the flip...

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Andrew Leonard, over at Salon's How the World Works blog (which focuses on globalization economic issues and is fast becoming a favorite daily stop--it requires a subscription to access the link, or sitting through a web ad), responds to another assertion of the column--that "government should finance basic research, not pick winners and losers."

In today's New York Times, conservative columnist John Tierney pooh-poohed Bush's support for alternative sources of energy, parroting that tried-and-true attack on industrial policy: "governments shouldn't be picking winners and losers." Except, the history of Canadian oil-sands production is a clear triumph of government targeting. The federal government has given massive tax breaks for oil-sands production, allowing the complete writing off of capital costs related to development. The Alberta government also collects a mere 1 percent royalty on oil-sands profits until all capital costs have been recovered. All told, according to Stephane Dion, a former minister of the environment, the incentives and tax breaks since the 1960s add up to some 40 billion (Canadian) dollars of government support.

Huh. Maybe government can pick winners. As long as the environment is not included as one of the lucky prize-getters.