i understand your point, however your "driver's seat" metaphor blurs the accountability of political representation IMO. Are voters in the "driver's seat"? Local governments?

What I see as a valuable point is that federal governments with subsidies that "distort" markets for public goods and externality regulation, worsen the "tragedy of the commons".

Explaining many things to a naive person, or a kid, boils down to this type of issue, you can even extend it to nation states.

Without experience of violence, most people would intuitively understand that a "competition" between governments is problematic.

Same issue, different undertones: tax havens.

I really disagree with the idea that goverment subsidies are either inherently good or bad overall.

Agricultural subsidies are often poorly distributed and managed from corruption and greed, but agricultural subsidies is also the only alternative to the granary system to prevent famine, and the granary system regularly failed and still resulted in famines. Countries with any decent agricultural subsidies however have essencially eliminated famine, despite the low 1-2% profit margins but 30% variations in yearly yield that farms have to weather.

It's because the accountability isn't clear cut. Many hands have touched those levers of power over the last 20 years this specific problem has incubated, not all of them governmental.