Green Triumphalism
Via a reader, the cost of a few politicians deciding that there absolutely had to be an Australian-assembled hybrid.
"My wife was looking for an Australian-made hybrid car," Rudd told John Laws in March, 2007, "and I'm sure some of your listeners would have found this out "“ you can't find one.
"So, that started me thinking about why don't we have one in this country."
There are certain people from whom the phrase "that started me thinking" serves as a 150-decibel alarm. We weren't to know it at the time, but Kevin Rudd turned out to be one such bloke. Instead of settling on a nice secondhand Prius, Rudd's simple quest to find some wheels for the missus quickly led, once he was elected, to the $500 million Green Car Fund.
Why couldn't Ms Rein have been interested in something less expensive, like knitting? No, scratch that "“ once her husband "started thinking", we'd have been stuck with a $2 billion National Crochet Initiative.
Subsidies appear to amount to about $(AU)100,000 per private car sale. This is a sort of new brand of left-progressive triumphalism that reminds me of an essay Ayn Rand wrote decades ago on statism and prestige. These are the modern Green equivalents of the Brandenburg Gate -- they cost a lot of money, they don't really do anything useful, but everyone can point at them and marvel.
And speaking of which, our current Administration in the US in by no means immune
U.S. President Barack Obama will attend a groundbreaking ceremony on Thursday for an LG Chem plant in Holland, Michigan, the company said Sunday. It is very unusual for an incumbent U.S. president to appear at such an event for a foreign company, and it is the first time for a Korean firm.
LG is investing US$300 million to build the plant which will produce batteries for electric vehicles. First-phase commercial production is scheduled to begin in the first half of 2012, and once completed in 2013 the plant will churn out lithium ion cells for 200,000 hybrid cars annually.
Ah, there Coyote goes exaggerating -- because the article explicitly says that a private company will be investing the money, so this isn't really a government project. Ah, but read to the last paragraph
As part of efforts to revive the auto industry by bringing more green vehicles to the road, the U.S. government has lent considerable support to LG's Holland plant, including $151 million from a federal stimulus program. The Michigan state government also offered tax cuts worth $130 million, which together with the stimulus funds will almost offset LG's entire construction costs. The plant will help ease unemployment in the state by creating some 400 jobs, U.S. media reported.
So $281 million of the $300 million LG is investing is actually taxpayer money. More brave capitalists! But fortunately we will have lots more batteries so rather than burn gasoline, electric vehicles can charge themselves from coal plants.
PS- Don't forget the jobs, though, created for the low low taxpayer cost of $702,500 each!
PS #2 - I had not noticed before I wrote it, but both of these articles also share in common the government subsidizing foreign companies to manufacture in their country, rather than producing these goods elsewhere and importing them. This reduces the benefit of these investments even further - its pretty clear that both batteries and Prius's would have been made somewhere in the world, so they would have been available to consumers (probably at lower prices), but these investments merely were to shift production across some line on a map.
Update: John Stossel discusses another form of modern statist triumphalism -- the government-funded sports stadium
South Africa's ability to pull it all together for six weeks doesn't mean the World Cup will be a net benefit to the country in the long term. As the ESPN video below explains, South Africa's government spent $6 billion on the tournament. Tournament-related revenues are expected to fall well short of that figure. Some of the hundred million dollar stadiums built for the tournament won't get much use now that the games are over. The video points to one stadium built for the tournament which will likely remain vacant"â€it sits over over slums that lack running water.
Fond memories of the month South Africa performed marvelously on the world stage are nice. But $6 billion is a lot to pay for a memory. These spectacles"â€the World Cup and the Olympics"â€are nearly always money losers. They're a lousy investment in wealthy countries. They're particularly garrish in countries that aren't as affluent.
Remember that Greece got the same kudos for not screwing up the Olympics, but years later it sure seems like the $15 billion that was sunk into those games by the Greek government has contributed to its financial crisis.
Allen:
Isn't it a bit loosey goosey to call tax cuts a "tax payer money"?
July 13, 2010, 8:40 amrichard:
Warren,
> Don’t forget the jobs, though, created for the low low taxpayer cost of $702,500 each!
Suppose you have nothing to do (*), can you make a list of various 'green jobs' projects and how much they cost per job?
It must be easy to collect a dozen projects and I bet that none of them costs less than $500k
(*) Just kidding ;-)
July 13, 2010, 9:04 amBob:
I live in Holland, and I find it ridiculous that the President of the United States has nothing better to do than attend a groundbreaking ceremony usually handled by the local mayor.
As a sidenote, this plant is one of two battery plants being located in Holland. The other is a Johnson Controls - Saft joint venture going into an existing Johnson Controls plant. It also got major governmental incentives. Ironically, that plant was part of Prince Corp. which was started by the late Ed Prince (father of Erik of Blackwater fame), who built the entire enterprise from nothing with little or no governmental incentives. Prince Corp. was sold to Johnson Controls after Ed's death for a reported 1.3B.
July 13, 2010, 10:28 amstan:
Of course Obama has to go celebrate. This is a huge win for him (comparatively). When you spend trillions of dollars and the result is a loss of millions of jobs, any spending which actually INCREASES the number of jobs is a fantastic improvement. And it ONLY cost 700 grand per job. In Obama's world, this is dirt cheap!
It's a twofer -- it actually increases the number of jobs, and it cost so much less than all the failures. No wonder it smells like sweet success to him.
[Reminds me of the peewee football team which had every punt blocked until the time the center snap rolled back to the punter on the ground and the punter fell on it. The loss of ten yards was their best result from a punt attempt all season! So it's like Obama just fell on a fumbled snap and only lost 700 grand per job. Fire up the band and play the fight song!]
July 14, 2010, 7:26 amcaseyboy:
Oh Stan, you hit that one out of the park. Of course the 400 employees aren't hired yet are they? They won't really be created or saved until 2012. A lot can happen in that amount of time.
July 14, 2010, 8:25 amkebko:
One thing to keep in mind in the coming comparisons of electric cars to gas powered cars is that one of the main economic advantages of an electric car is that you avoid many of the taxes that fund the transportation infrastructure, since you're buying from the coal plant instead of the gas station.
July 14, 2010, 11:09 amTed Rado:
Simple calculations show that the electric auto is a joke. Battery capacity on the VOLT is 16 KWH, which is about 21 HP hours. Thus, you can use 21 HP for an hour or 10.5 HP for two hours. Then you go to gas with a 40 KW capability. All you save is about 0.8 gals of gas at the start of the trip before the engine (1 liter!)kicks in. Electricity at 10c per KWH vs. gasoline at $2.50 saves you about $1 per trip, net. Whoopie! And all these wonders only cost you 10-15 thousand more than a more powerfull regular car.
The total electric cars are even worse. They have up to 35 KWH batteries, or about 47 HP hours. After that, you have to spend 6 or 7 hours recharging. The cars are also very expensive because of all the expensive gear on board. Meanwhile, you have to generate the electricity. If you have more that a 15 KWH battery, you exceed the idle (night time) electric generating capacity, and dedicated power plants must be built. The problems go on and on. Any engineer can find a whole bunch more.
Bottom line: Will lots of people be willing to pay a high price for an underpowered car, or in the case of a totally electric vehicle, one that is both underpowered and must be recharged for 6 hours every 60-100 miles?
What happens if you run out of juice away from home? Check into a motel for 6 hours and plug your car in? You can't walk down the street and bring back a gallon of electrons.
The Japanese have a 600cc car in production. Why don't we simply import those?
All this nonsense is due to government trying to determine winners rather than let the marketplace do it. Remember the California law that mandated that by 2000, 10% of cars had to be electric? Politicians subsidize their pet ideas, leading to humongous wastage of time and money. How many in congress are engineers, or are willing to listen to those who are?
July 15, 2010, 12:15 pmIgotBupkis, President, United Anarchist Society:
> electric vehicles can charge themselves from coal plants.
What, you mean the Ones The Big 0 is closing down and refusing to allow permits to be made which will replace them?
Those plants?
Kebko -- a not insignificant detail. Just a matter of time before the state governments add a nice "processing fee" for the tag of electric vehicles to make this loss of income up. Might want to actually call that to the attention of some state organizations whose job it is to make sure those funds are properly collected, get them lobbying the state legislatures to produce bills covering the shortfall.
July 19, 2010, 3:22 am