National Energy Policy -or- National Energy Politico Policy with Price Distortion Benefiting the Politico?

Each and every time energy prices increase to the point that consumers are upset about the price of energy (generally gasoline prices) the mantra is repeated of “why don’t we have a national energy policy!”. As the argument goes, we have had 40 some years to come up with policy yet we have no policy. Nay, nay! The US does have a national energy policy. Better stated, the US does have a national energy politico policy.


The US energy politico policy is based upon the vision of do-gooders combined with artificial pricing that purposefully, through politicos through the mechanism of government, suffers from just about every phenomena pointed out by public choice theory. Or more succinctly:


I think the government solution to a problem is usually as bad as the problem and very often makes the problem worse. - Milton Friedman


US energy policy is foremost driven by go-gooders also known as environmentalists. Their intentions are worthy but they suffer from the idea that categorical risk management trumps real world, real-time, real flesh and blood people that face trade-offs resulting in real world incremental risk management.

The next part of the US energy policy is artificial pricing. Alternative energy programs are uncompetitive at price point (P) hence taxpayer subsidy (s) is introduced to make the make prices  more competitive resulting in price P(s) which is artificial. Artificial to the tune of billions of taxpayer dollars every year, year in and year out.

The combination of unrealistic categorical risk management advocated by the do-gooders and P(s) then becomes the multi-billion dollar conduit for:

(1) dependent political consistency building exercises by politicos of a group of go-gooders through taxpayer dollars,

(2) the do-gooders worthy intentions, as always, are hijacked by a set of crony capitalists in search of taxpayer dollars as a substitute for competition [rent seeking],

(3) the rent seeking causing taxpayer dollars to be funneled into a myriad of uncompetitive items represented by P(s). These uncompetitive items act as a mirage for the do-gooders and mainly as dependent political consistency building exercises by politicos of the crony capitalist.

Meanwhile, back in the real world economy of real flesh and blood people, price (P) regarding energy escalates. James and Jane Goodfellow then complain about price (P). The complaint surrounding price (P) is that price should not be so high and hence where is the energy policy that would have stopped such as escalation in price?

The basic problem with the Goodfellow’s complaint is that price (P) is not functioning. In a world of scarce resources with alternate uses, the rationing agent is price. Price, in other words, functions in a world of trade-offs none of which are related to categorical risk management. Hence the result is that price is distorted and we arrive at the Goodfellow’s complaint about price.

One might say that energy prices, specifically gasoline, is not a price phenomena as much as a distorted price phenomena due to national energy politico policy with distortions in price benefiting the policy purveyors, that being the politico.