Good, Bad, or Just Ugly

Government subsidies are, depending upon any individual’s priorities, one of the best government ideas ever to be implemented, an evil to be tolerated, or very bad policy. People adept at playing the stock market have learned to keep an eye out for many different indicators, and try to predict which corporations are going to be the beneficiaries or losers of government funds, both contracts and subsidies.

Successfully making such predictions gives the opportunity to buy or sell stocks before prices change as a result of subsidies. Other investors who buy stock for longer-term investments benefit when their companies are subsidized—it makes it more likely that their dividends and stock values will go up, while often bringing future payoffs for new and successful products. Free-market advocates are certain that subsidies, and nearly every other kind of government meddling in business affairs, are the worst thing that can happen in our economy.

They believe that the most appropriate products, industries, and technologies will automatically win out on a truly competitive and even playing field. But this would require a nearly pure economic system devoid of government interference, along with highly informed consumers—both highly improbable situations under any known form of
government.

Under the current political system, the reality is that corporations are too powerful to be stripped of their unwarranted subsidies, so if and until control of politics and government changes, advocates for a clean and safe future must swallow a bitter pill and continue to ask that a share of government money be allocated to fund their priorities.