This page has been archived and commenting is disabled.
Bleeding the Taxpayer: An Old Technology Dolled Up As New
Wolf Richter www.testosteronepit.com www.amazon.com/author/wolfrichter
On September 14, 1899, Henry Bliss stepped off a streetcar at West 74th Street and Central Park West in New York and got run over by a taxi. A plaque points out that it was the first automobile fatality in the “Western Hemisphere.” The taxi was an electric vehicle. As were 90% of the taxis in New York City and about 30% of all cars sold in the US. Electric cars aren’t exactly new. Yet, the government is bleeding the taxpayer to advance the technology, create jobs at a cost of $158,556 per job, and fund executive bonuses.
Today, Republican Senators Chuck Grassley of Iowa and John Thune of South Dakota lambasted the Obama administration for the $2 billion it handed to 29 companies to manufacture advanced batteries for electric cars. It was part of the bipartisan $787 boondoggle stimulus bill of 2009 that performed mind-boggling wonders in the US economy. The senators were particularly irked by the facts surrounding one of the major recipients, the poster boy for the program, battery maker A123 Systems, which filed for bankruptcy two weeks ago.
In response to the bankruptcy, the Department of Energy touted the results of its advanced battery program, claiming it had created jobs for “thousands of American workers.” When Grassley pushed the DOE for documentation, he found out that it had created 12,613 jobs—at a cost of “$158,556 per job, including jobs that were later cut,” Grassley explained. And the jobs at A123? They cost the taxpayer $317,435 per job.
“Adding insult to injury, A123 executives reportedly are seeking to retain $4.2 million in bonuses through the bankruptcy process,” he said. That’s why boondoggles are so popular; somebody does get the money.
Yet, the first electric car hit the road in Scotland in the 1830s. As the technology matured, electric cars gave rise to a whole industry. Their toughest competitors? Steam-powered cars: they had greater range and more power. And they set speed records—a marketing advantage.
Each technology had its advantages and disadvantages. Steam cars were great for longer trips, such as to the next town, at dizzying speeds, but brought with them some challenges, such as having to preheat the boiler. Electric cars were great for moseying around town, but they were handicapped by their heavy and costly batteries that only gave them a very limited range and took a long time to charge. Batteries were the problem in the otherwise ideal technology.
But by 1920, as the internal combustion engine had become a viable technology, formerly successful manufacturers of steam cars and electric cars receded into memory. It wasn’t government that made that decision, but customers.
However, electric vehicles became successful in hundreds of niche configurations such as forklifts and golf carts, without government boondoggles to support them, without tax credits or grants—because customers desired them and were willing to pay for them.
Then there was the Tesla Roadster. Tesla installed its electric drivetrain into cars it bought from Lotus sans drivetrain and sold them to cool rich people for over $100,000 a pop, losing money on each one of them. Its new models are assembled in the US, but whether or not Tesla can ever sell enough of them at a profit remains uncertain. Meanwhile, it has eaten up hundreds of millions of dollars from taxpayers and investors.
Fisker built its first model in Finland with help from US taxpayers. It plans to build its new models in the US, also with taxpayer support, but challenges are piling up. The Nissan Leaf remains the only mass-produced electrical car in the US, but it sold only 5,212 units through September, down 28% from last year.
The $2 billion the Obama administration plowed into batteries was part of the $5 billion it plowed into electric cars. The largest chunk, $1.4 billion, went to corporate giant Nissan for its Leaf. Its range: 73 miles per charge, according to the EPA, and less according to complaints by its owners. Just about the same range as the taxi that killed Henry Bliss in 1899.
A battery with a 100-mile range costs about $17,000. Huge advances have been made, but they’ve been met by the higher power demands of modern cars (acceleration, air conditioning, power seats, etc.). So the original challenges of electric cars remain: cost, range, and the time it takes to charge the darn things. The taxpayer has been taken to the cleaners. The government has bought some votes. But customers still don’t see the right product at the right price.
As for a funny, edgy, high-energy look at unforgettable car salesmen, their managers, and their shenanigans, check out my new book, TESTOSTERONE PIT, and read the first few chapters for free on Amazon.
And here is Chriss Street who has warned that funneling weapons and logistics to jihadi warriors in support of Arab Spring rebellions would lead to a vicious blow-back against the strategic interests of the US. Clearly that has come to pass with the murder of the first American Ambassador since 1979 and the ejection of American influence across the Middle East. Read.... President Obama Must Release The Truth About Benghazi.
»
- advertisements -
how pedantic. of course he doesn't mean that the vechicle type wouldn't exist. he means we wouldn't be adding 5 mm of them per year to the roadways. at an average mpg of 15. instead of whatever they supplanted.
If someone was to tell me: "I'll give you a Billion FRNs to build a solar powered submarine." I will say, "Yes, yes, I CAN!!!" Of course I will. We'll just work the Project delays out later, and hopefully, I can milk you for as long as I possibly can, and sell some stock in this idea to boot.
On the other hand, if I am an entrepreneur and patented a means to instantaneously turn sea water into hydrogen through my submarine engines, I would face innumerable obstacles to bring this idea to market. BUT, this idea would have a chance to succeed, and if I suceeded on my own merit, then I should reap all the rewards coming to me.
That, is unfortunately, not the way the Liberal world usually works though. Every government grant program out there is nothing but a wealth redistribution scheme. Come up with your own idea and develop it on your own dime, then you didn't build it yourself! People before you inspired you, built the highways to transport it, or educated you on propulsion and engines - so, you have to give money back to society. Right? Bullshit.
You should enjoy the new technology I just gave you, and pay me - for the risk I took, the idea I had, and the money I invested. That's the real world folks. Everything else is inflated BS.
I would like to see a full analysis of the environmental advantages of electic cars versus combustion engines. Battery making and disposal is a very very dirty business including the mining of rare earth elements.
I also like to consider the fact that you could go all organic or natural with horses. I would venture a wild guess that it would take billions of horses to haul soccer moms, salesmen and refrigerators. What do you suppose the environement would be if it were "all natural"? The combustion engine has been a godsend to mankind in many many ways.
The two problems I have with the environmental movement is the end game seems to be "There are just too many people and some need to go." This is followed by an obvious affinity for all powerful collectivist states.
if the soccer moms switch over to horses they can go home after taking the rugrats to school and put those horses to use a la Catherine the Great-Whoooa boy!
Jack in the Box use to sell horse meat, you may be on to something there.
Then there's that thing about energy generation and transmission.
The best fiscal subsidy is a direct reduction of amtrak rail fares , no question.
It has recorded record passenger numbers (1971) this year but could do so much more.
Can not see it becoming SNCF like but a series of medium distance 100MPH lines is badly needed in the States.
http://www.amtrak.com/ccurl/636/294/Amtrak-Sets-New-Ridership-Record-FY2012-ATK-12-092.pdf
www.sncf.com/en/meet-sncf/finance/financial-documents
Hell, 2 B? Amtrack losses 2 B on the snack cars ops alone last year
MegaBus Boston - New York, $13. Every half hour, pays taxes, no taxpayers rape.
Amtrak, Boston-New York, Acella, $130. No profit, no taxes, rapes taxpayers.
Yeah, lets have more union, contractors, rent seeking trains.
Comparing a Bus to the only high speed service in the US ?
Is that fair ?
If you have time or less money why not get on the Northeast regional instead ?
Also given the low fuel tax in the states I somehow doubt if the Bus pays for the road it travels on or the maintaince.
How about the cost of force projection in the Gulf ?
This taxpayer meme is redundent now anyhow - what was the cost of insurance for all those credit deposits which were hyperinflated by the private banking system again ?
Also before we talk private vs public we need to get back to a pre 1648 world.
In this present context it is a nonsense term.
1648? ending the 30 years war (aka the rape of German peoples by the Swedes) or recognizing the independence of Holland from Spain? and which one has anything to do with government subsidies of transit?
The rise of the modern banking republic ? - otherwise known as the nation state.
Around about the same time Olie and the roundhead lads were cementing the power of the city in London........
Goverment Money no longer sovergin.........it became a debt to the bank.
It was a time of change.
Before - the King owned your ass and taxed the local lord who also more directly owned your ass - he therefore taxed you so the King could go off whoring or making war.......
After - the banks owned your ass and eventually taxed your directly but the debt became EXPONENTIAL.
Its a tough trade - you are given the illusion of freedom once Growth however mad can continue but what happens when growth stops and your new Lords demand exponential returns from a declining capital base ? what then ?
Then its time to go back to the more Honest king / vassal relationship me thinks , what do you think ?
Perhaps its now a choice between a foppish King and a Creep.
www.youtube.com/watch?v=3PvmUsVktFM
1648?
interesting choice
i'll take 1215 for the magna carta
we could use some guarantees of rights just about now
@John
We paid a high price "for the rule of law"
The money power was no longer in the Kings power - it is in the banks power.
Not really a fair trade in my opinion but it looks like we are stuck with it this side of the coming dark age.
John - give up on the "guarantees of rights", no institution or anybody on the planet, inc your wife, is going to give you this (selfish?) demand
look after yourself and take control your own life, history shows nobody else will do it for you and those promising they will are talkin BS
The Dork - zero subsidies. Goddit?
Politicians are incapable and wholly inept at backing winners. There is no justification for your "just a little subsidy here" half-baked schemes, it's a crap decision 100% of the time
As we see in New York the 2 transport systems the State has backed are knocked out for the count in seconds... utter tripe, utterly useless, total systemic failure
how much more evidence do you need?????????????????????
Stop Meddling ..leave it to the market (consumers and enterprise) to pick winners and cut the fucking morons (politicians and other middleman meddlers) out
@Zero
"The Market" as you put it creates consumer credit for things such as houses and cars using the coin of the realm.
This is not even like the 19th century free banking disaster......at least they used their own credit notes.
THIS IS MUCH WORSE.
As long as you allow free banking the goverment must spend unleveraged money into the system .
The debate simply orbits around how effective these fiscal funds can be or in this extreme case how much a goverment can print.
Dork - my free spirit extends to zero Govt ...I'm not troubled by how they raise debt, I want that shithole buried, it's stinking the globe out
How do you think a free market becomes rotten? Govt intervention, be it law or subsiidy. Govt is the enemy of freedom, it is a monopolising of power in society, massing us into 'the sheep' to hand down decisions on our behalf (cough), the exact opposite of personal/individual freedom
It seems to me it would be difficult or impossible for a society to get away from all forms of government if the word 'government' gets its definition from the verb 'governing.' Even if a society is entirely self-governed through unwritten social contracts, they still would have a government -- it would just be more inextricable and indistinguishable from the society that it ruled.
The best fiscal subsidy? NONE.
OK. Let's also take away the subsidies we give to all other forms of transportation, including airlines, buses and automobiles. Because they all have their infrastructure created for them by the government at taxpayer expense, and only a tiny fraction of the cost is clumsily billed to them through taxes.
Oh, should we also count the constantly-repeated airline bankruptcies as an additional subsidy? How much of their costs have been thrown off onto the pension benefity guaranty corporation, retirees, stiffed contractors, stiffed airports (most government-owned), etc. etc.
OK Otto
But before you get rid of fiscal subsidy you must prevent banks from giving credit using the coin of the realm as the unit of their account.
If you don't under the present circumstances the leverage in the system increases ....increases and increases.
Remember what leverage is ?
Commercial banks hold goverment debt on the left side of the balance sheet and deposits on the right.
Less goverment debt means more mortgage junk and shit on the left side.
As I said before I have no problem going back to a pre 1648 world but one must understand you can only have one form of monetary system or another.
The Banks are either inside goverment or they are out.
Great Idea!
Let's get rid of ALL the subsidies, including the credit mechanism ... required by the automobile industry: for highways, fuel supply, military, big government, real estate, insurance, finance, manufacturing ... let's get rid of all the debt-support for these things.
Some millionaires will be able to afford to have autos built by hand for them ... nobody else will. There won't be any gasoline because the extraction and refining industries are completely credit-dependent. Don't worry about roads because these have never paid for themselves outside of a handful of toll roads ... which will suffer less toll collections with fewer drivers. Real estate will never recover from credit-stripping (which is ongoing, BTW). This includes our precious commercial real estate ... and all the finance that goes along with it.
Finance itself is just a way to live beyond one's means: to borrow or steal from others/the future.
Those who are smug about the ability of the auto industry to 'support itself' need to remove the blinders. No industry is more dependent upon support from the country as a whole -- communism -- than the auto industry. Right now ... in America ... most of the industry is overseas ... your children and grandchildren are being looted to support Volkswagen, Nissan, Hyundai, BMW, Fiat executives and major shareholders ... and others.
Subsidy begins at home: unless the car-owner drives a taxi or uses the car as a delivery vehicle, the owner subsidizes his own vehicle with a large proportion of his working time an effort. What form does his time and effort take? Debt ... against others' accounts, for which Mr. Car Owner is on the hook.
Car owners can sit back and decide not to carefully examine the credit structure that surrounds their toy but it is there, it robs from everything/everyone within reach, there are a handful of beneficiaries ... none of these are the car owners.
Out. Private banks should issue money and credit.