Mar. 12th, 2006

kajarainbow: (old wolfie icon by unknown)
B is better for the general population than A. Government subsidies B to give it an extra advantage over A. Later, C comes along and is better still than B, but B still has the subsidy. In effect, the inferior B is given advantage over the newcomer C.

Now consider this: In World War II, the USA government created a subsidy for a kind of cloth used by our troops, in order to increase production of that cloth. Our troops no longer use that cloth. The subsidy still remains. In short, it was easier to just keep shovelling the public's money into that industry's mouth than lift a finger to change the law.

This sort of thing seems to happen a lot.

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kajarainbow

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