Sunday, March 1, 2020

The Federal Government Holds All The Cards For Addressing the Climate Crisis, Don't Scapegoat Private Enterprise

If you want to advocate for a Cuba-like system in which there is no stock market and all means of production and distribution are part of a massive government, go for it. (and note that China's miracle of lifting 98% of its people out of extreme poverty in 30 years came from moving toward private ownership - along with a stock market).

But as long as America continues to have it's great free market system, everyone need to understand how it works. Investors are driven by self interest - and it is essential to the operation of the system that they be driven by self interest. When Americans need more toilet paper, toilet paper manufacturers expand their factories out of self interest, and investors provide the money for that expansion out of self interest, and tree farms expand out of self interest, and investors provide the money for that expansion out of self interest.

BECAUSE investors operate out of self interest, they respond very quickly to the slightest government pressures, whether that pressure is beneficial or injurious. As long as our government continues to subsidize oil well drilling and provide public land for it, investors will like oil stocks. On the other side, the enthusiasm for Tesla shares is greatly boosted by the subsidies for electric cars.

Investors and companies will rapidly respond to whatever sticks and carrots our government chooses for the Climate Crisis. So far, our leaders have been worse than unhelpful, for example, BOTH Trump and Bernie Sanders are proposing to block the import of solar panels into the United States. Please assign the blame where it is deserved, on our government, and not on our efficient free enterprise system.

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