October 12, 2007
Somebody's Happy
To be fair, a lot of people are happy that VP Gore has won the Nobel Peace Prize (though I have enjoyed much blog commentary today from those who do not).
But I was surprised to see Professor Gregory Mankiw celebrate. As VP Gore is a member of his beloved Pigou Club, however, Mankiw is pleased.
That is the problem with the Pigou Club. Mankiw is right that that is probably the best way to cut emissions but he glosses over the necessity (or lack thereof) for cutting emissions. He says (I paraphrase) that it is a public good to cut emissions, so irrespective of DAWG, why not do it?
French fries are bad too. Trans fats. Too much sugar. Let's raise revenue with taxes, trying to do the least damage possible to innovation and investment -- let's not use the tax code to achieve dubious "social good." That argument is far more worthy of Gore than Mankiw.
Mankiw's Pigou Club is nonsense. Why should we raise the tax on gasoline? Even if we admit that we should reduce pollution through taxation, we should tax the emissions of pollutants and not the consumption of gasoline.
Posted by: Everyday Economist at October 12, 2007 7:47 PM | What do you think? [1]