Governmental pipe dreams: should government subsidize private sector economics?

  “Government's view of the economy could be summed up in a few short  phrases: If it moves, tax it.  If it keeps moving, regulate it.  And if it stops moving, subsidize it.”     -Ronald Reagan-

   
   Whilst perusing my RSS feeds last week, I ran upon an intriguing article from the Guardian.  Its essence can be encapsulated in the opening paragraph, which reads thus: “Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian.”   The article went on to show that biofuel initiatives have caused far more economic damage than anyone had estimated, stating that:  “Rising food prices have pushed 100m people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt. Government ministers here have described higher food and fuel prices as the first real economic crisis of globalization”.  The potential political ramifications of the report are likely to put massive pressure on world leaders to reconsider subsidizing biofuel on the levels that they presently are. 
        Reading this article caused me to think of the recent government move to subsidize loan institutions, and to wonder what unforeseen consequences will occur as a result of the government bail out during the sub-prime mortgage crisis.  It is obvious that in the short term this government assistance was welcome, and probably helped to reduce the depth of the current economic recession. The question is, what will be the long term ramifications?  Will government subsidy be the de facto solution for unwise and greed driven financial moves gone awry in the public sector? The government is increasingly moving to a policy of in stepping in to assist the private sector, but is that wise?  Is providing financial assistance for underdog alternative fuel technologies really the answer to our fuel crisis?  Is taking on the debt of irresponsible lenders really the solution to our financial woes?  I think in both cases the answer is no.
        While I am not opposed to some governmental subsidy and tax breaks, I do not think that most governmental intervention into the private sector is wise.  America became great on a free market economy, and it continue to perform best in a free market.  Free market pushes strong business and strong tech to the top, and buries weak ideas.  I really feel that solar power will be coming into its own in the next ten years.  Its widespread use will be due not to government assistance however, but to its increasingly strong technology.  Increased productivity and decreased cost is what is, and what should, propel a business forward.  Government subsidies often create false market conditions, allowing weak businesses to cripple along to the disadvantage of strong tech, not to mention the taxpayer. The real solution is to allow market forces to work of their own accord, with minimal government interference.  It may be painful to wait the extra time for a new technology to bloom, but forcing unripe technologies into the market before they’re ready is just a recipe for disasters such as the global food shortage we are now mired in.  Lets end on the lighter side with a working model of an ethanol powered perpetual motion machine. Wonder of wonders, there’s hope for the world yet!