Why is it bad to subsidize an industry such as wind or solar but it is all right to subsidize a company for locating in a particular spot?
There are many who call for an end to subsidies for alternative energy, but do they complain about subsidies for fossil fuel companies? For example, Sasol is getting a $2 billion subsidy from Louisiana to build a gas-to-liquid plant. See "Sasol Betting Big on Gas-to-Liquid Technology", John M. Broder and Clifford Krauss, New York Times, 2012-12-17.
I wonder if any economist has ever done a long-term study on the value of subsidies. I know there have been subsidies to get companies to locate in a particular city or state, and many companies abandon that city or state before the locality has even recouped its investment. I also know that government subsidies have transformed the economy mostly for the benefit of many. Lincoln called for subsidies to the transcontinental railroad which greatly improved the U.S. economy. Would we have computers and the Internet without many other government subsidies?
What we really need are some metrics that show whether a government subsidy will provide a huge social benefit or will only be a drain that lines the pockets of a few.
