Friday, November 24, 2006


A feel-good standard in U.S. politics is the idea of an "energy policy." Most people think that there ought to be one, presuming (usually sight unseen) that it would be beneficial. But the resulting political documents are usually all about dispensing favors.

Another problem involves all of the unintended but implicit energy policies. A prime example is discussed in this week's New Yorker by James Surowiecki, who observes that protection of U.S. sugar producers pushes prices up to the extent that domestic ethanol is produced with cheaper corn -- which is heavily subsidized.

It raises the very simple point that policy cross-checks are a pretty good idea. Trade policy, energy policy, and all the rest have cross-cutting implications which can be huge but which get little attention.