Bring on the Incentives

I was reading this in the NY Times this morning and it struck me how powerful incentives have been historically. It supplants in my mind how important incentives can be to get the ball rolling. Check out this excerpt:

During a bubble, investment is spurred by technological progress and new economic assumptions — in this case about the price of oil, climate change and the desire to curb carbon emissions. Government does its part by using subsidies and the tax code to encourage the new industry. Just as in the 19th century the federal government offered land grants to inspire a railroad boom, Congress today is pushing an alternative energy boom by mandating ethanol use and giving generous tax credits for solar and wind-based energy. The investment has already led to more efficient solar panels, wind turbines and storage batteries.