Overcoming ideologies: or the power of simple things

Nobel Prize Joseph E. Stiglitzh has the capacity to say simple things which unfortunately still do not appear so obvious to most people, particularly those in power.

In an article about Overcoming the Copenhagen Failure, he writes "Perhaps it is time to try another approach: a commitment by each country to raise the price of emissions (whether through a carbon tax or emissions caps) to an agreed level, say, $80 per ton. Countries could use the revenues as an alternative to other taxes – it makes much more sense to tax bad things than good things. ...

One could wonder why people continue not to understand simple concepts like the ones expressed by Stiglitz. As a matter of fact also taxing financial transactions, some of which tend to pollute like carbon, is not at all a bad idea, and it makes much more sense than taxing good things like your income, your consumption or your production. And please do not continue to tell that trades, particularly when frequent, provide liquidity and efficiency to the markets.

Stiglitz keeps saying basically that it's better to try to alleviate poverty rather than spending money in wars; it's better to save the planet rather than some banks; it's better to tax bad things rather than good things! It's simple, it's a matter of allocation of scarce resources (for those having studied economics is a first year exam or Economics 101) and policy priorities with attached correct cost/benefit analysis (which is not very often done although economists study it).

Along the same lines and about taxation I still contend that is also better to tax financial transactions, similarly to carbon taxes, which apply the "polluter pays principle" (to the extent that some transactions are bad things) rather than taxing the consumption of a simple beer (good thing unless you drink and drive...).