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The regulation-subsidy vicious circle

By: Timothy P. Carney
Examiner Columnist
06/23/09 3:44 PM EDT

"If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it." That quotation, attributed to Ronald Reagan, has proven poignant in the new age of bailouts and Obama.

A recent instance: fuel economy subsidies.

Obama in May unilaterally hiked federal fuel economy standards, but he has tried to allay worries that this would kill automakers by pairing the increased regulation with subsidies. Today, the Energy Department announced $8 billion in loans to three automakers including Ford Motor. The AP reported today on Secretary Steven Chu's announcement: "These loans will help the auto industry meet and even exceed the president's tough fuel standards.... This is part of President Obama's commitment to a new energy strategy for America. ... This means the most fuel-efficient cars in the world must be made right here in America."

Regulate, subsidize, repeat.




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