Perverse Incentives 

See that bum on the sidewalk?  He’s worth $500 million more than I am.  I owe $500 million — and he’s just broke.

–Donald Trump, in less heady times

The first rule of holes:  when you’re in one — stop digging.

–Thomas L. Friedman

What prompts the above anecdotes isn’t the lack of a coherent, intelligent U.S. energy policy — that would actually be an improvement.

Rather, it’s the asinine incentives and subsidies to consume and behave precisely the wrong  way(s).

Car Incentives

Exhibit A would be the juicy tax incentives (still) given to anyone who buys a car weighing more than 6,000(!) pounds.

If you’re not familiar with the genus, that includes behemoths such as the Cadillac Escalade and the Nissan Armada.

Retail, these gas guzzlers go for something like $60,000 and $40,000, respectively.

However, factor in the accelerated depreciation that’s permitted on these vehicles, and the after-tax cost — depending on the driver’s tax bracket — falls to as little as 50% of that, or $30,000 and $20,000.

Exhibit B

Exhibit B would be the interminable — and now perhaps fatally stalled — effort to tighten emissions of mercury and other pollutants at industrial sites that operate boilers.

Given the grave health threat posed by mercury, you’d think that tighter standards would be a no-brainer.

But, in light of industry’s success in thwarting said standards, you’re left to presume that the status quo is all about lobbying clout, not public welfare.

Which is not only tragic, but economically ignorant and short-sighted.

As EPA head Lisa P. Jackson told Jon Stewart on Thursday night’s “Daily Show,” the companies that make lead-reducing filters and scrubbers employ people, too.

“Pain’s Surcease”*

If there’s a silver lining in the foregoing, it’s that the path toward an enlightened energy policy isn’t really so difficult, after all.

The first step consists not so much in doing anything especially difficult or brilliant, but in finding the political will to stop doing things that are dumb or perverse.

(On second thought, maybe that’s the formidable task.)

*“Pain’s surcease” is one of my favorite lines from Faulkner.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

Leave a Reply