Wednesday, June 30, 2010

Electric Sheep

Hey taxpayer, did you know that your government has decided that some of your hard earned money needs to be funneled to boutique electric car makers? That's right, it's for your own good too. You see, these electric cars are being hailed by everyone within earshot as the next big thing that will save us from the evils of fossil fuels. Oh, electric cars have been around for about a hundred years you say and will never really catch on because of their limited range and long recharge time? Well, too bad because there's nothing you can do about it. And if you complain be sure to know that you'll be attacked as insensitive to the environment, disdainful of technology, and uncaring about our dependence on foreign oil. What's the matter with you? Why these electric sports cars boast an impressive roster of celebrity customers that have shelled out $109,000 each for their eco-bling. Oh, did I forget to mention that they get a nifty federal and state tax credit for their selfless purchase? Yes, yes, our government knows winners when they see them. Especially if you're one of the owners of this company or someone holding one of their IPO's.

It must be fun to have access to other people's money and also be able to decide how to spend it.

It must be nice.


Project Savior said...

Green Tech will be developed and marketed. It's just a question of who does the research and gets the payoff. China and India are researching Electric Cars and other Green Tech ideas. If we continue to support oil companies with $30 Billion a year while giving pennies to new technologies, while China does the opposite they will rule the future.

VH said...

If Green Tech, and in this case, electric cars, are dear enough to be developed and marketed, then it doesn't need massive government subsidies to be viable in the same way that the automobile and airplane didn't.

China and India could be blowing billions into the wind if their "green" subsidies don't pan out. Why do we have to chase them off a bridge?

BTW, can you name one piece of ubiquitous consumer technology that was developed over the last 100 years that was heavily subsidized by a government and that they got a big payoff for?

Project Savior said...

Can you name a piece of technology in the 100 years that wasn't the result of heavy government subsidies?
To answer your question:
1) The computer, First big contract by the US Census Bureau to keep track of the population, then contracted by the US Navy to improve to the point that it could track ballistics. The PC was made possible by research into semi-conductors for NASA.
2) Airplanes - First bought for the US Postal Service then for an Air Force.
3) Electric Grid - Built under the New Deal
4) The Internet - Expanded from the Darpanet by the US Government.
5)Drugs - All new drug classes are derived from NIH research funded by the government.
6) The Automobile which runs on Public Roads paid for by the Government.
7)GPS - Cable/Satellite TV - Google Maps: Rely on Satellites launched on Government Rockets.
Over 50% of our GDP comes directly from research that was initially funded by the Government which between 1940 and 1970 was 2.5% of GDP or a 2,000% yearly return on investment. Even at a tax rate of 10% that would be a 200% rate of return. I consider that a big pay-off.

VH said...

1) Charles Babbage the inventor of the "difference engine" and arguably the father of modern computing was not subsidized. And the method used by the US Census Bureau was invented by Herman Hollerith (founder of IBM)--did he get subsidized by the U.S. government with millions? He worked for the census bureau but he had already conceived his computing patent when he started working there.

The PC was made possible by private companies like IBM and HP who successfully built, marketed and created the programs and machines that early adopters wanted. Nobody bought a PC made by NASA or the government.

There is no denying that government played an important role in the development of the modern computer, particularly due to military applications, but its been private enterprise that has brought it to the masses without government subsidization.

2) Orville and Wilber Wright and other aviation pioneers didn't need government subsidies to create their inventions. The USPS and Air Force involvement came later. And it could be argued that the big payoff has always gone to the private companies that build the planes--Boeing, McDonnell Douglas--and not the government that has to buy them.

3) The electric grid is not a ubiquitous consumer technology that can be bought and sold like electric cars, airplanes, computers. It's a public monopoly.

4) Yes, this is true. But the commercialization, expansion and accessibility of the internet was done by private enterprise and was not subsidized with millions of taxpayer funds for it to happen.

5) The invention of penicillin didn't need government subsidies. And most bio-tech medications that have been and are currently being developed are done overwhelmingly with private funding. A small amount from government subsidization. Which makes me wonder if its needed at all and its not just padding companies' bottom line. Just because the government decides to subsidize something doesn't make it necessarily the right thing to do.

6) I guess Henry Ford and Karl Benz get no credit for their invention? And all done without government subsidies too. Public roads are a public monopoly and doesn't apply as a consumer good.

7) Commercial communication satellite's have been launching since the 1960's. And should the government be spending millions by providing consumers with more TV channels while the federal deficit grows? That sounds like a sweet deal and a big payoff for Cable/Satellite corporations.

Over 50% of our GDP comes directly from research that was initially funded by the Government which between 1940 and 1970 was 2.5% of GDP or a 2,000% yearly return on investment. Even at a tax rate of 10% that would be a 200% rate of return. I consider that a big pay-off.

I have no idea how you came to your figures so I am highly skeptical of them. How much of private investment would be part of your calculations? And the big pay-off always seems to go to those industries and fortunate few companies that get heavily subsidized by tax payer funds because some politico's want to make it seem like its their great contribution to the country. It will get them votes even if the down the road the subsidized tech goes nowhere---like synfuels and hydrogen cars.

If electric cars are the wave of the future, then they don't need to be subsidized because they will sell themselves just like cars, radios, and airplanes. And I don't understand the fear that if China invests heavily in "green tech" that somehow they will "rule the future." How? They can't prevent any of their supposed developments to remain a secret if they want to rule the future by making and selling electric cars or any other technology for that matter. Even the spread of nuclear technology can't be prevented no matter how hard governments try.

VH said...


Don't get me wrong, I think it would be a very good thing if battery technology advanced to such a degree that electric power could compete with petroleum in transportation markets. I simply don’t think government subsidies or mandates are likely to hasten the day in which that wish will be translated into reality.