Politics and the Economics of the Carbon Tax

 Economists should not let the allure of an optimal tax create an impression that carbon taxation will benefit the economy. (photo/Dori)

Economists should not let the allure of an optimal tax create an impression that carbon taxation will benefit the economy. (photo/Dori)

A carbon tax involves some good economics and is probably the best way to address global warming. And yet I think that adopting the tax represents bad policy. My reservations involve the politics of policy implementation as examined by Nobel prize-winning economist James Buchanan.

Before getting to my concerns, let’s consider two other arguments against…

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Fire Safety or Compliance Waste?

Economist Daniel Sutter says fire protection ratings show how markets can ensure the quality of our services. Photo by Connor Betts on Unsplash.

Economist Daniel Sutter says fire protection ratings show how markets can ensure the quality of our services. Photo by Connor Betts on Unsplash.

Troy’s fire department rating will improve this October, which should lower our insurance rates.  Fire protection ratings show how markets can ensure the quality of our services.  They also provide an example of value creation as opposed to compliance-driven documentation.

The Insurance Services Office’s (ISO) Fire Suppression Rating Schedule dates back to 1909.  Insurance companies…

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Economics versus DIY

TROY economist Daniel Sutter says hiring a professional for home improvements may be the more economical choice. (Photo by Taduuda on Unsplash)

TROY economist Daniel Sutter says hiring a professional for home improvements may be the more economical choice. (Photo by Taduuda on Unsplash)

Millions of Americans engage in do it yourself (DIY) home improvements.  Each summer I choose a project, and about half of the time I actually do it.  This year’s project is painting our house’s exterior windows and trim.  And yet DIY produces professional angst for me as an economist, because core economic principles imply that…

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