# Oily Congressman Wants to Eliminate Electric Car Tax Credit



## EVDL Archive (Jul 26, 2007)

Report reveals that Congressman Mike Kelly owns 'millions of dollars worth of oil company stock.'

More...


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## PhantomPholly (Aug 20, 2008)

Despite baldly claiming twice directly and more times obliquely that the Congressman "hates electric cars," the article offers absolutely no substantiation to back up that statement other than that he opposes subsidies.

I staunchly oppose subsidies, and I love electric cars. Those two positions are not in the least bit antithetical.


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## sranger (Jan 14, 2012)

Probably will see a lot of negative press on electric cars until after the 2012 elections....

The republicans think that they can hurt Obama politically by linking him to the bail out of GM any way possible. Since the Volt is made by GM and it has (and still does) receive government subsidies (tax credits) it is going to get flamed by association from the conservative talking heads. Especially in an election year. Also, as the logic goes in politics, if you attack one electric car, it is best to attack all of them so as not to be considered a Flip Flopper on the issue...

I personally think the subsidies are necessary. I do not think Toyota would have developed the Prius without the Japanese government footing much of the bill. Toyota lost a lot of money on each Prius for several years. Of course the are valid arguments against subsidies, but I think that the primary reason for the current attacks on the electric car are in my opinion mostly political in nature.....

As for making this into a conspiracy of Big Oil because he owns oil stock I think is a bit of a stretch. The Oil companies are going to do just fine with or without electric cars....


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## aeroscott (Jan 5, 2008)

being against subsides for ev,s and pro subsides for oil that he benefited from . 5% drop in oil consumption puts the commodity in a glut position , not to big a problem if it ends there . But soon another 5% then another etc , crashing the commodities prices even though it's still 75% of market but falling at ever increasing rates . As the ev'ers know , they well be the most desirable , fastest , quietest , least maintenance , greenest and for me free home fueling with my solar array. Even with cheap gas , gas car maintenance, stoping to get fuel (at $200/month now, even it doped $20 ) , etc . I won't stop burning oil but only for long trips (5% or less) and start ups to keep the thing running .


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## JRoque (Mar 9, 2010)

Hi all. The stench of political maneuver is all over this case, I would agree. But I'm with Phantom on his statement. Subsidies, same as tax loopholes and tax "brackets", should never be allowed. 

I'm all for setting the right environment for the EV business where the Gov plays the role of matchmaker between localities, suppliers, community and whatnot. Maybe even working a deal with a local bank to offer a low-cost loan that matches a clear and attainable business plan. But to fund OEM's R&D is just ridiculous. We the taxpayer are paying them to bring EVs to market. I wonder how much of their profit we'll get once EVs take off?

It's laughable when OEMs say they're "losing" x amount per every EV they sell. Whatever the difference between their standard ICE car model and their EVs is being given to them by us consumers and taxpayers. We pay OEMs an additional $15K for their EVs plus that much more in finance charges likely payable to: OEMs and the Gov sends us $7.5K which was our own money to start with. How is the OEM losing anything here? Everyone knows you can covert a brand new car paying full retail price for all components and still beat OEMs inflated prices. 

If the subsidies were $15K per car, EVs would have cost that much more to make. You know, "the batteries are too expensive".... If the subsidies were dropped, GM would can the Volt and Nissan would magically find that... somehow... the batteries are much cheaper now! and guess what? they can offer their car for $7.5K less!! 

JR


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## tomofreno (Mar 3, 2009)

It is the entrenched industries that receive the largest subsidies from taxpayers, since they are intertwined into the economy and Washington far more than new industries. For example, according to the International Energy Agency the oil and natural gas industries together received 2.1 billion in subsidies in 2007, coal received 3.2 billion, and solar received 198 million. I seem to only see comments against subsidies for new industries such as alternative energy and electric vehicles. If people are against subsidies I wonder why they don't speak out against the much larger ones? Maybe because the industry-funded think tanks only publish articles against subsidies to new industries? 



Myself, I have no problem with subsidies for things I think are critical and benefit most of society. So I have no problem that the oil companies have been heavily subsidized since governments realized how critical oil was in WW1 and WW2, and is for the economy in general (Daniel Yergin, The Prize). I also think new industries which show strong potential to benefit most of society should be helped along with subsidies. I agree there can be a problem with trying to “pick winners”, but don’t think that should stop supporting critical industries. We’ve been subsidizing oil for decades, so it seems laughable to complain about the relatively paltry sums we have contributed to alternative energy and ev’s. JR, you said Nissan would suddenly find the Leaf could be sold $7.5k cheaper if subsidies were removed. I’m surprised Phantom didn’t jump on that as an unsubstantiated statement. What evidence do you have to support it?


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## PhantomPholly (Aug 20, 2008)

sranger said:


> Probably will see a lot of negative press on electric cars until after the 2012 elections....
> 
> The republicans think that they can hurt Obama politically by linking him to the bail out of GM any way possible. Since the Volt is made by GM and it has (and still does) receive government subsidies (tax credits) it is going to get flamed by association from the conservative talking heads. Especially in an election year. Also, as the logic goes in politics, if you attack one electric car, it is best to attack all of them so as not to be considered a Flip Flopper on the issue...
> 
> ...


This is not the chit chat forum, so I'll keep my response as factual as possible.

The only articles claiming people are against EVs are political articles similar to this one, which falsely claim someone is "against evs" because they oppose subsidies, or because they (correctly) state that "EVs aren't ready for prime-time (they are not).

Think about that. The Republicans / Conservatives / Libertarians are not opposed to EVs - it is simply political pundits trying to PAINT them as anti-EV, the same way as they tried to paint those opposed to Obamacare as "throwing granny off the cliff."

When you pull back the curtain, a very different picture emerges.


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## PhantomPholly (Aug 20, 2008)

tomofreno said:


> It is the entrenched industries that receive the largest subsidies from taxpayers, since they are intertwined into the economy and Washington far more than new industries. For example, according to the International Energy Agency the oil and natural gas industries together received 2.1 billion in subsidies in 2007, coal received 3.2 billion, and solar received 198 million. I seem to only see comments against subsidies for new industries such as alternative energy and electric vehicles. If people are against subsidies I wonder why they don't speak out against the much larger ones? Maybe because the industry-funded think tanks only publish articles against subsidies to new industries?


Then you haven't been reading my posts, nor the posts of many people who are fiscal conservatives / Libertarians. We oppose all subsidies. Too, many things that are called "subsidies" are in fact not subsidies at all - but that gets into political posturing and belongs in Chit Chat.

There is little to no evidence in all of history that the long term effect of subsidies is beneficial to anyone other than the political favorites who receive them. They do little or nothing to hasten adoption of new technologies, and often hamper the introduction of better technologies. However, there is one area in which subsidies matter - economic warfare. Even then, it usually backfires in the long run.


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## tomofreno (Mar 3, 2009)

PhantomPholly said:


> This is not the chit chat forum, so I'll keep my response as factual as possible.
> 
> The only articles claiming people are against EVs are political articles similar to this one, which falsely claim someone is "against evs" because they oppose subsidies, or because they (correctly) state that "EVs aren't ready for prime-time (they are not).
> 
> ...


So where are the facts? This is nothing but your opinion.


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## tomofreno (Mar 3, 2009)

PhantomPholly said:


> Then you haven't been reading my posts, nor the posts of many people who are fiscal conservatives / Libertarians. We oppose all subsidies. Too, many things that are called "subsidies" are in fact not subsidies at all - but that gets into political posturing and belongs in Chit Chat.
> 
> There is little to no evidence in all of history that the long term effect of subsidies is beneficial to anyone other than the political favorites who receive them. They do little or nothing to hasten adoption of new technologies, and often hamper the introduction of better technologies. However, there is one area in which subsidies matter - economic warfare. Even then, it usually backfires in the long run.


What evidence do you have of them hampering introduction of better technologies?


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## sranger (Jan 14, 2012)

I am pretty sure that NASA was one of the biggest gov subsidies programs in history and we owe a great deal of our standard of living to that program....

Without NASA there would probably be no microprocessors and integrated chips that make a modern EV possible. There would most likely not even be a internet to argue whether the gov subsidies spent on space race was well spent or not....

I guess my point is things are rarely all good or all bad.....


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## JRoque (Mar 9, 2010)

Hi.

I obviously have no evidence that Nissan would drop their Leaf price by any amount. This is all conjecture and conspiracy theory of mine. But isn't it suspicious that the cost of a Leaf is so close to it's ICE counterpart plus the cost of a battery pack? When responding to as to why the Leaf is so expensive they always cite the batteries. The Gov wanted EVs. The OEMs said it would cost them that much more to build so the Gov met them halfway and the consumer picks up the rest directly. Here's another one I made up: had the incentive been $20K, wouldn't the Leaf have cost that much more?

I have no problem with NASA, Sandia Lab, CDC, roads and bridges. These are things we've put our collective effort towards achieving something that benefits all. When NASA makes a discovery, they transfer that to a private institution for commercialization, great! Where is our return on investment with EV OEMs? A better use of those $7.5K would have been to fund Gov cell research for all to use. If GM and Nissan want to be private companies, let them fund their own product trials and market research.

JR


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## tomofreno (Mar 3, 2009)

JR, I think Nissan developed the Leaf mainly due to Carlos Goshen, and they embarked on that development in Japan before the US government offered any incentives. I think your remarks may well be correct in the case of GM and Ford. I have no doubt that Nissan did take advantage of incentives in setting their pricing once they were offered, to recoup costs more quickly, maybe even to avoid selling Leafs at a loss for a while.

I also agree that funding for government agencies is different than funding for private industry, and think funding for the latter should be much more limited and shorter term. I do think there is a case to be made for this limited funding when it stands to provide a large benefit to society in general, but the payoff is longer term and risky enough that the market does not provide the necessary support. I also think that energy is different than most other areas since it is critical to a country's economy. Although, the case might be made that had we not subsidized the energy industry so well for so long, we would be much more energy efficient now.

I don't know if Nissan would have changed the Leaf price if the incentive had been $20k, but I think you think that you know the answer. It may well be that you are getting your knickers in a knot over nothing, just a hypothetical that you have convinced yourself is correct.



JRoque said:


> Hi.
> 
> I obviously have no evidence that Nissan would drop their Leaf price by any amount. This is all conjecture and conspiracy theory of mine. But isn't it suspicious that the cost of a Leaf is so close to it's ICE counterpart plus the cost of a battery pack? When responding to as to why the Leaf is so expensive they always cite the batteries. The Gov wanted EVs. The OEMs said it would cost them that much more to build so the Gov met them halfway and the consumer picks up the rest directly. Here's another one I made up: had the incentive been $20K, wouldn't the Leaf have cost that much more?
> 
> ...


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## Ziggythewiz (May 16, 2010)

sranger said:


> I am pretty sure that NASA was one of the biggest gov subsidies programs in history and we owe a great deal of our standard of living to that program....
> 
> Without NASA there would probably be no microprocessors and integrated chips that make a modern EV possible. There would most likely not even be a internet to argue whether the gov subsidies spent on space race was well spent or not....
> 
> I guess my point is things are rarely all good or all bad.....


The biggest difference is that NASA does not significantly profit from its discoveries, nor use them to hold back technology. EV (and other necessary) subsidies shoot themselves in the foot by paying BIG CORP to develop, patent, and charge an arm and a leg to patent, license, and otherwise restrict new technologies.


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## PhantomPholly (Aug 20, 2008)

tomofreno said:


> So where are the facts? This is nothing but your opinion.


What are you talking about? Are you saying you think the author proved his assertion? Based on what, exactly? 

Or, are you saying that all Conservatives and Libertarians are secretly in a conspiracy against EVs???

Wait a moment while I get my tin foil....


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## PhantomPholly (Aug 20, 2008)

tomofreno said:


> What evidence do you have of them hampering introduction of better technologies?


I submit as evidence the entire body of knowledge known as "economics." Especially pay attention to the part where when one item is priced artificially low then any possible substitute will be bought in lesser quantity - which can and sometimes does lead to production of one or more of the potential substitutes becoming unprofitable to produce.

If you sincerely wish to see some concrete examples of how subsidies harm the market, I sincerely recommend the following book:

Basic Economics 4th Ed: A Common Sense Guide to the Economy by Thomas Sowell (Dec 28, 2010)

He says it far better than I could. If, after reading it, you still don't understand the real mechanics vs. the politics of subsidies, it is unlikely to be productive for us to continue this conversation outside of the Chit Chat column.


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## PhantomPholly (Aug 20, 2008)

sranger said:


> I am pretty sure that NASA was one of the biggest gov subsidies programs in history and we owe a great deal of our standard of living to that program....


NASA was funded for national arrogance and military superiority. The latter is a legitimate function of our Federal Government, and since no one was likely to find a commercial need to eat moon cheese it made sense to fund it - for a while. Now they are considering closing it down, but will doubtless retain some launch capability on the purely military side.

Funding military research is not a "subsidy," it is part of a balanced portfolio of expenditures to maintain military superiority.



> Without NASA there would probably be no microprocessors and integrated chips that make a modern EV possible.


Absolutely incorrect. The folks who invented the first integrated circuit proposed them for hearing aids:

"Early developments of the integrated circuit go back to 1949, when the German engineer Werner Jacobi (Siemens AG) [1] filed a patent for an integrated-circuit-like semiconductor amplifying device [3] showing five transistors on a common substrate arranged in a 2-stage amplifier arrangement. Jacobi disclosed small and cheap hearing aids as typical industrial applications of his patent. A commercial use of his patent has not been reported.
The idea of the integrated circuit was conceived by a radar scientist working for the Royal Radar Establishment of the British Ministry of Defence, Geoffrey W.A. Dummer (1909–2002). Dummer presented the idea to the public at the Symposium on Progress in Quality Electronic Components in Washington, D.C. on May 7, 1952.[4] He gave many symposia publicly to propagate his ideas, and unsuccessfully attempted to build such a circuit in 1956." 

- Wikipedia, with citations

Naturally, the military applications were quickly assessed and exploited.



> There would most likely not even be a internet to argue whether the gov subsidies spent on space race was well spent or not....


Also incorrect. ARPANET, which was a military-centric network, was devised as a way to provide automatic redundant routing in the event war brought one or more trunc lines down and that effort is most closely the "ancestor" of today's internet - but it was in fact developed in large part by civilians and was simply one of many competing networking protocols. However, the need to network computers was realized well before ARPANET was created, and businesses and Universities around the world were working in parallel on many competing ideas for how to best implement such networks. Again I'll use Wikipedia, not because it is the end-all source of information but simply because it is easy and generally well cited:

"Research into packet switching started in the early 1960s and packet switched networks such as ARPANET, Mark I at NPL in the UK,[6] CYCLADES,[7][8] Merit Network,[9] Tymnet, and Telenet, were developed in the late 1960s and early 1970s using a variety of protocols. The ARPANET in particular led to the development of protocols for internetworking, where multiple separate networks could be joined together into a network of networks." 

- Wikipedia, with citations



> I guess my point is things are rarely all good or all bad.....


That is certainly true - but I'll point out that eating cyanide is always bad and I've *never* had bad sex, so the exception to "rarely" certainly occurs, and probably a lot more often than you'd think. 

In the case of subsidies, the scenario is virtually reversed from your paradigm. While _*theoretically*_ they _*might be good*_, in practice it is rare to see a result that is more effective than free markets (i.e. save the taxpayers' money and let it sort itself out). The one example where you got it right - and that is subsidizing military research. However, you undoubtedly realize how much of that research fails to pan out, and may also be aware of the old axiom, "Military secrets are the most fleeting of all."

Thus, in the long run a society with a government that _*never*_ uses subsidies will _*almost certainly, to many decimal places of probability*_, outperform a society with a government that routinely uses subsidies.


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## tomofreno (Mar 3, 2009)

PhantomPholly said:


> I submit as evidence the entire body of knowledge known as "economics." Especially pay attention to the part where when one item is priced artificially low then any possible substitute will be bought in lesser quantity - which can and sometimes does lead to production of one or more of the potential substitutes becoming unprofitable to produce.
> 
> If you sincerely wish to see some concrete examples of how subsidies harm the market, I sincerely recommend the following book:
> 
> ...


So let me see if I understand what you are saying. It couldn't possibly be that Thomas Sowell's ideas are incorrect. No, it is the definitive work on the subject and anyone who disagrees with it obviously lacks intellectual capacity, is irrational, or both. There is no possibility of another perspective, this is the correct one, the only valid one, so there is no need to waste your time reading books on the subject by others, including other economists, because if their ideas conflict with those expressed in this book, they clearly don't know what they are talking about. There is no confirmation bias on your part, anything that conflicts with the ideas in this book is incorrect.

I'll look for it. Should be interesting.


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## PhantomPholly (Aug 20, 2008)

tomofreno said:


> So let me see if I understand what you are saying. It couldn't possibly be that Thomas Sowell's ideas are incorrect.


Nope, it's not possible. He is a world-renowned economist (are you?), and he simply provides case studies in the mechanics of supply and demand which all but the kooks in the world of economics agree is a valid principle.

Edit. Removed the rebuke, since you said you will read it. Let's both keep the sarcasm out of this since we're outside the chitchat forum, eh?

There is valid difference in opinion as to the *potential* good that can be done by subsidies - the absolute answer is impossible to give, because it really comes down to "who, given your money to invest, would make a better investment broker." Just as politicians may be corrupt, there are also scammers looking for your investment dollars.

The issue is not so much about theory, as about practice. In practice, whenever politicians are given the power to use "subsidies" (and, they have stretched that word beyond recognition in order to pursue every kind of scam imaginable yet claim "there is precedent!") they will use that power to bribe groups or powerful individuals for votes. In truth, very few if any instances of subsidies can be proven to have had a truly universal beneficial long-term effect - yet once established, most subsidies are sustained decades or even in perpetuity. 

So, knowing that at the very best subsidies provide minimal notable good, the real question is why anyone would support the principle at all when they know that it will create an avenue of corruption in our government? I have to say, that kind of thinking I find to be sad and sick at the same time.


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## tomofreno (Mar 3, 2009)

> Nope, it's not possible. He is a world-renowned economist (are you?), and he simply provides case studies in the mechanics of supply and demand which all but the kooks in the world of economics agree is a valid principle.


There are a number of "world renowned economists, and they don't all agree. I'm not sure why you call them kooks if you are recommending something they agree on.



> There is valid difference in opinion as to the *potential* good that can be done by subsidies - the absolute answer is impossible to give, because it really comes down to "who, given your money to invest, would make a better investment broker." Just as politicians may be corrupt, there are also scammers looking for your investment dollars.
> 
> The issue is not so much about theory, as about practice. In practice, whenever politicians are given the power to use "subsidies" (and, they have stretched that word beyond recognition in order to pursue every kind of scam imaginable yet claim "there is precedent!") they will use that power to bribe groups or powerful individuals for votes. In truth, very few if any instances of subsidies can be proven to have had a truly universal beneficial long-term effect - yet once established, most subsidies are sustained decades or even in perpetuity.


 This has certainly been the case many times, with defense contractors arguably the most egregious. So is this the fault of politicians, or the corporations that lobby for the contracts and money? Who seeks out who?



> So, knowing that at the very best subsidies provide minimal notable good, the real question is why anyone would support the principle at all when they know that it will create an avenue of corruption in our government?


 I wouldn't say this follows from the fact that there has been some abuse.


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## PhantomPholly (Aug 20, 2008)

tomofreno said:


> There are a number of "world renowned economists, and they don't all agree. I'm not sure why you call them kooks if you are recommending something they agree on.


Seriously, can you name an economist who fundamentally disputes supply and demand?



> This has certainly been the case many times, with defense contractors arguably the most egregious. So is this the fault of politicians, or the corporations that lobby for the contracts and money? Who seeks out who?


Does it matter? What we know beyond question is that, when given the power to meddle in the economy with other people's money and when there is incentive (i.e. votes to be obtained), the question of whether or not a particular proposed subsidy is actually good for the nation is never in the top ten questions considered.



> I wouldn't say this follows from the fact that there has been some abuse.


It's a losing bet under the best of conditions. Just for argument's sake, let's say that 1/3 of the time there is a "good" result; 1/3 of the time there is a "bad" result; and 1/3 of the time the result is unmeasurable. Given that 2/3 of the time we saw no benefit while 100% of the time we spent taxpayer dollars on the scheme, we (the taxpayers) lose.

And, given how many examples I've looked at in my life, you would have an extremely difficult task ahead of you to convince me that even 1/3 of the results were good for America. _*THAT*_ is opinion based on research; bring some examples to the table and we can look at some facts together.


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## JRP3 (Mar 7, 2008)

The 20K or so vehicles that received the subsidy last year cost each of the 300 million US citizens 50 cents a piece. That is simply "noise" in the system, there are far larger subsidies, that no one seems to complain about as loudly as the EV tax refund.


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## PhantomPholly (Aug 20, 2008)

JRP3 said:


> The 20K or so vehicles that received the subsidy last year cost each of the 300 million US citizens 50 cents a piece. That is simply "noise" in the system, there are far larger subsidies, that no one seems to complain about as loudly as the EV tax refund.


That you have come to think of such things as "merely noise" is a great victory for the politicians.

It is, of course, rarely any ONE thing which is the problem - it is the tens of thousands of little things, each causing some bit of harm and collectively resulting in significant harm both to our economy and to the ethics of our government.


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## JRP3 (Mar 7, 2008)

Of course. I merely point out all the false outrage that the EV subsidy generates amongst certain types while they remain silent on all the others.


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## PhantomPholly (Aug 20, 2008)

JRP3 said:


> Of course. I merely point out all the false outrage that the EV subsidy generates amongst certain types while they remain silent on all the others.


I'm not seeing this as being in any way unique. Certain groups cry and moan over "oil subsidies," even though those are generally not subsidies at all but simply reductions in taxes for some behavior that offsets the steepest industry-specific punitive taxation in the nation. Every subsidy has political opponents - usually from among the "losers" who were adversely affected by the fact that the subsidy recipients were the "winners." 

An ethical government does not pick winners and losers in a free society.


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## Sunking (Aug 10, 2009)

PhantomPholly said:


> Despite baldly claiming twice directly and more times obliquely that the Congressman "hates electric cars," the article offers absolutely no substantiation to back up that statement other than that he opposes subsidies.
> 
> I staunchly oppose subsidies, and I love electric cars. Those two positions are not in the least bit antithetical.


Well said my friend, let the market decide, it is going to anyway you look at it. 

There are hundreds of examples of Government trying to make market decisions and they mostly fail. Good recent example is solar electric power. It has failed and collapsed.


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## JRP3 (Mar 7, 2008)

Because one company failed?


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## PhantomPholly (Aug 20, 2008)

JRP3 said:


> Because one company failed?


If you're going to feign ignorance, you should take it to the chit chat forum.

You know full well that there were multiple bad investments in the same batch as Solyndra that were pushed through without oversight, perhaps criminally. Sadly such results are not the exception, but the rule.


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## JRP3 (Mar 7, 2008)

Sunking said:


> Well said my friend, let the market decide, it is going to anyway you look at it.


I would suggest that there is no such thing as a free market and there never has been. There always have been back door deals, preferential treatment and legislation, etc, subsidies are at least out in the open, and the EV subsidy actually lets the public have a choice to take advantage of it. Plus it helps push a worthwhile technology forward.


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## PhantomPholly (Aug 20, 2008)

Well, I've hinted at this several times but I think it is time for our moderator to kindly move this to the ChitChat forum. It's no longer about a news article.


JRP3 said:


> I would suggest that there is no such thing as a free market and there never has been.


A free market is nothing more than the absence of coercion, either from bad guys forcing you to buy overpriced Union Labor (or other similar nefarious examples) or from government restricting your choices through legislation or taxation. Given that definition, there is always a scale of freedom - and that scale has leaned a whole lot more towards free than it does today.



> There always have been back door deals,


 So what? If conducted freely between individuals, it's none of your business.


> preferential treatment


 Again, so what? Part of a free market is that you are free to provide preferential treatment to preferred customers. In fact, preferential treatment is GOOD for the free market. Taking AWAY preferential treatment through legislation results in bad things - most recently, a global collapse of our real estate markets.


> and legislation,


Almost absolutely false. There have been many places and times in which there are no active or effective government regulations on free trade. Just not recently.


> etc,


No idea by what you mean by "etc." as you seem to be assuming a good deal.


> subsidies are at least out in the open,


That again is false. Most are buried in bills thousands of pages long.


> and the EV subsidy actually lets the public have a choice to take advantage of it.


 Uh, that is what a subsidy does - it takes our taxpayer money, punishing us if we do not use the subsidized item and rewarding us with a return of some of our tax money if we do use the subsidized item.


> Plus it helps push a worthwhile technology forward.


"Worthwhile" is a ridiculous value judgement, and when making that judgement on behalf of others it is egregiously arrogant. If an item is truly "worthwhile," people will naturally buy it because it is better. That day will undoubtedly come for electric vehicles, but for most of us that day is not today.


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## Sunking (Aug 10, 2009)

JRP3 said:


> Because one company failed?


You might want to take off those GREEN Sun Glasses and look at real data. It is not about one failed company. Besides much more than just one, there are many like Evergreen Solar and Beacon. If you look at the major solar panel only manufactures you will see most are about bankrupt. 

After 15 years of billions of tax dollars being poured in for solar has failed to produce any tangible results. Solar power contributes less than .03% to our energy use in the USA and far less world wide. 

Germany and Spain the largest solar markets all cut solar subsidies in 2009 and further reductions in 2012. Canada made deep cuts in solar subsidies, and many of the US states will drastically cut subsidies. 

As a result the market has collapsed, as it should. So if you did not dump your solar stocks in 2008 when the market collapsed, get rid of it now while it is still worth something. Otherwise you will get caught holding the bag.


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## coulombKid (Jan 10, 2009)

PhantomPholly said:


> Nope, it's not possible. He is a world-renowned economist (are you?), and he simply provides case studies in the mechanics of supply and demand which all but the kooks in the world of economics agree is a valid principle.
> 
> Edit. Removed the rebuke, since you said you will read it. Let's both keep the sarcasm out of this since we're outside the chitchat forum, eh?
> 
> ...


In the thirtys Will Rogers correctly observed that if you line up all the economists, they'd point in all directions.


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## JRP3 (Mar 7, 2008)

PhantomPholly said:


> "Worthwhile" is a ridiculous value judgement, and when making that judgement on behalf of others it is egregiously arrogant. If an item is truly "worthwhile," people will naturally buy it because it is better. That day will undoubtedly come for electric vehicles, but for most of us that day is not today.


That day will come sooner because the subsidies made it accessible to a larger pool of early adopters who paid higher prices. It's "worthwhile" technology not because of the monetary value but because it will make the country as a whole stronger and better, all citizens benefit, even if they can't see it. The sooner we get a fleet of affordable EV's the better for everyone. Even people who still drive gas will benefit from those who don't consume it.


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## PhantomPholly (Aug 20, 2008)

Note: I am treating this thread now like the Chit Chat forum on the assumption that the thread will be moved. 



JRP3 said:


> That day will come sooner because the subsidies made it accessible to a larger pool of early adopters who paid higher prices.


Please provide factual evidence to support that EV vehicle subsidies are making a substantial difference in deployment of new battery technology (the only technology actually holding back popular adoption). Do not sidestep and point out that some research is subsidized through government grants, because that is not the subject under discussion. Then, while you are at it, provide factual evidence that *I personally* will have benefited in "some way I don't see" from the tax money wasted on this ridiculous theory. Absent both of those, your claims are clearly invalid.



> It's "worthwhile" technology not because of the monetary value but because it will make the country as a whole stronger and better, all citizens benefit, even if they can't see it.


Again, please present one shred of factual evidence that the subsidies will increase the short term benefit to our country, let alone the long-term benefit. The only fact I am aware of is that the _real cost_ of these vehicles is $70,000 - $200,000 per vehicle, and that these turkeys are wasting valuable resources at a time when the greatest threat to our well being is our _debt_, not our _gasoline usage_. Nor is there any indication that we will "run out of gas" before the EV technology is perfected - and lacking substance to such claims it is a merely a faux crisis (translation: It is a scam.).

By the way, that same claim ("...because it will make the country as a whole stronger and better, all citizens benefit, even if they can't see it.") is made for each and every proposed Progressive spending program. The net result? Our debt now exceeds our GDP, my personal standard of living has dropped, and our economy is as weak as it has ever been since the Great Depression - so I have an opinion based on factual evidence about how valid that claim is.



> The sooner we get a fleet of affordable EV's the better for everyone.


No one on this board is likely to argue against that.



> Even people who still drive gas will benefit from those who don't consume it.


Not until world-wide adoption is significant enough to drop demand for gasoline enough to impact prices at the pump. Even then it may not change gas prices. The looming glut be easily predicted by the industry and will lead to cessation of all new drilling, and existing wells will simply be pumped dry - so it will be a race to determine whether we convert 100% of vehicles before we dry up the last well to determine actual pricing.


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## JRP3 (Mar 7, 2008)

Obviously you personally have no short term benefit from the subsidy but if they increase the volume of EV's sold that will increase the volume of EV's produced which will lower the overall cost of production per unit and we all benefit. Contrary to your claim just because I can't give you proof of what will happen in the future does not make the point in valid. In fact there is no way to prove it one way or the other unless we had two parallel universes one with subsides and one without. We are competing with other countries who are subsidizing EV's so we risk falling behind if we don't. Could EV's succeed just as well without subsidies? Maybe, but I'd rather give them an extra boost. The 50 cents per citizen it cost us to subsidize 20K cars last year just doesn't bother me at all. Hell one failed defense contract would probably cost us more, and yes I do consider investment in EV's an important part of our nations security. Will it make a difference in the next 5-10 years? No, but it gets us moving in the right direction.
I don't know where you are getting your cost estimates per vehicle but Tesla has just restated that they expect a better than 25% sales margin on the Model S, that's on a vehicle selling between $57-$85K, so your numbers seem far fetched to say the least. In any case I'm quite happy to drop the subsidies for vehicles in that price range, and for hybrids like the Volt, but it's not up to me. I'm sorry but I just can't share your outrage at this program, and you can't make me 
Regarding the effect on gas prices, I think we are already seeing it. I think prices are artificially lower than they should be at this point because OPEC does not want to give us more encouragement to find alternatives. In fact there was a quote from a Saudi prince to that effect. It can't hold in the face of real market pressure and demand from other countries of course, and climbing gas prices will push the demand for EV's even more.


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## PhantomPholly (Aug 20, 2008)

JRP3 said:


> Obviously you personally have no short term benefit from the subsidy but if they increase the volume of EV's sold that will increase the volume of EV's produced which will lower the overall cost of production per unit and we all benefit.


Nor long term benefit. Increasing volume will happen with or without subsidies - thus, the subsidies are simply political payoffs.



> Contrary to your claim just because I can't give you proof of what will happen in the future does not make the point in valid. In fact there is no way to prove it one way or the other unless we had two parallel universes one with subsides and one without.


Actually that's exactly what it means. What you are saying is, "we should do it because you believe it will work!"

Sorry, that doesn't wash. You sound just like a con man making a pitch. "Trust me!!!!"

I was born on a single day, but it wasn't yesterday...



> We are competing with other countries who are subsidizing EV's so we risk falling behind if we don't.


Hogwash. Rarely does the first to market win the war. Far better to create an economic climate where our car makers can emulate the best ideas without penalty. Let other countries bankrupt themselves betting on losers.



> Could EV's succeed just as well without subsidies? Maybe, but I'd rather give them an extra boost.


Fine, give them an extra boost - with _*your money*_. But, you just admitted that "there is no way to prove it one way or the other unless we had two parallel universes one with subsides and one without." So, you are _really only imagining that there *might be a boost*_. I say there will be money down the drain - and it's my money you want to bet. Your entire theory rests on "HOPE" that it will be a boost, without any proof. And I should gamble _my retirement_ on your urge to gamble? Sorry, but that theory belongs in a looney bin, not at the helm of government.



> The 50 cents per citizen it cost us to subsidize 20K cars last year just doesn't bother me at all.


Let me guess - you don't really make enough money for it to cost _*you *_$0.50. I've got news for you - those of us who make a bit more pay a good deal more than $0.50. Multiply that times 10,000 government porkulus programs, each with equal promises of returns as yours, and we are now $16 trillion in debt.  It's time to foreclose on your entire way of thinking, not just a single program. 

You sir are a gambler addicted to gambling with my money instead of your own. You've never won, but are nevertheless absolutely convinced that if you roll the dice one more time you will win it all back. That is delusionville, not reality. If it were just your own money, I'd be happy to let you end up in the gutter where you and your ideas belong, stealing meals from the OWS gang and going to the emergency room for free treatment when you come down from your high. But, you aren't satisfied just to bankrupt yourself - no, you want to bring down everyone to your level in a fit of sour grapes.

Sorry, I can't listen to that kind of trash and still have warm feelings for "all my fellow mankind..."


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## JRP3 (Mar 7, 2008)

That's ok, I rarely have warm feelings after listening to anything you post  Not sure what you are talking about, I do pay taxes so yes I put in my 50 cents. As with most of our discussions you think you are right and I know I am, so there is no point in continuing.


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## PhantomPholly (Aug 20, 2008)

JRP3 said:


> That's ok, I rarely have warm feelings after listening to anything you post  Not sure what you are talking about, I do pay taxes so yes I put in my 50 cents. As with most of our discussions you think you are right and I know I am, so there is no point in continuing.


On that we can agree.


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## sranger (Jan 14, 2012)

PhantomPholly said:


> On that we can agree.


Let me turn the tables on you a bit, Can you prove that subsidies have never led to more innovation in a given field?

This is kind of what you are asking everyone else to do....


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## unclematt (May 11, 2008)

PhantomPholly said:


> If you're going to feign ignorance, you should take it to the chit chat forum.
> 
> You know full well that there were multiple bad investments in the same batch as Solyndra that were pushed through without oversight, perhaps criminally. Sadly such results are not the exception, but the rule.


Present your verifiable evidence then...


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## unclematt (May 11, 2008)

PhantomPholly said:


> Sorry, that doesn't wash. You sound just like a con man making a pitch. "Trust me!!!!"
> 
> 
> > Which is exactly the same thing you try to pull off when you don't back up your opinions with verifiable evidence...


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## PhantomPholly (Aug 20, 2008)

sranger said:


> Let me turn the tables on you a bit, Can you prove that subsidies have never led to more innovation in a given field?
> 
> This is kind of what you are asking everyone else to do....


No, what they are asking for me to do is to prove a negative - which is not possible (e.g. "prove that you do not beat your wife!"). 

In rational debate, the burden of proof lies on the person making a claim, i.e. "subsidies are good for the economy." Yet, no one has ever demonstrated that this is true for anything other than very targeted subsidies for a brief period of time, and then any advantage usually comes at a great expense and has "unintended consequences." The best example of that which comes to mind is the Manhattan Project. It gave us a decided military edge at a critical time and allowed us to end our war with Japan more quickly and probably at a lower cost of lives; but the cost nearly bankrupted our nation and the development of nuclear weapons would undoubtedly have happened anyway within a few years without such an enormous government investment. For argument's sake I'll even allow (as I have said before) that in a case like this it is completely legitimate for our country to accept the "cost penalty" of subsidies to maintain military superiority, for clearly if we had not been first someone else might have.

Too, I've never claimed that subsidies never lead to faster innovation - only that they are far less likely to achieve a superior result to the natural actions of the free market, and that any perceived acceleration comes at a greater cost in the long term than simply waiting a bit and letting the free market do what it does best. The reason is because "subsidies" are really "politicians are playing venture capitalist" (a role that is essentially gambling, and which is outside their own personal expertise) using "other people's money" (with which they have shown an unerring history of being less careful with than their own money) - and so the incentive is generally irresistibly strong for them to spend that money unwisely or even corruptly. Thus, in the long term (statistically) most or even all subsidies are injurious to our overall economy. The level of injury is undoubtedly debatable and difficult to precisely quantify

Too, if you have read my other posts on the subject you will see that I have frequently referenced one good book (undoubtedly not the only such work) by a globally-renowned economist that does a far better job of walking through the domino-chain of "unintended consequences" when politicians play venture capitalist, providing examples across 3,000 years and every geo-political combination you can think of to illustrate the universal failure of political will to have a positive impact on the economy. His examples do not introduce any complex Economics theories - they are simply applied examples of the cornerstone principles of supply and demand accepted by virtually every living economist.

So, if you are interested in reading about the mechanisms of subsidies and the unintended consequences to the economy, I again recommend reading:
Basic Economics 4th Ed: A Common Sense Guide to the Economy by Thomas Sowell (Hardcover - Dec 28, 2010). You can get 3rd edition used in paperback for a lot less...


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## PhantomPholly (Aug 20, 2008)

unclematt said:


> PhantomPholly said:
> 
> 
> > Sorry, that doesn't wash. You sound just like a con man making a pitch. "Trust me!!!!"
> ...


Which is why I offered up expert references to explain something that is clearly unpopular despite the fundamental truth of it. It actually makes for fun reading. Hope you decide to take a look. Thanks.


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## Ziggythewiz (May 16, 2010)

PhantomPholly said:


> The best example of that which comes to mind is the Manhattan Project. It gave us a decided military edge at a critical time and allowed us to end our war with Japan more quickly and probably at a lower cost of lives; but the cost nearly bankrupted our nation and the development of nuclear weapons would undoubtedly have happened anyway within a few years without such an enormous government investment.


Worst...example...ever.

So nukes would have just been developed spontaneously by the free market, with little govt intervention? Awesome!


A better example would be the first time homebuyer credit. Did sales go up? Yes. Did they plummet afterward? Of course. Yet people (the 'experts') were somehow shocked. Did the housing market improve in the long run? Not at all.


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## PhantomPholly (Aug 20, 2008)

Ziggythewiz said:


> Worst...example...ever.
> 
> So nukes would have just been developed spontaneously by the free market, with little govt intervention? Awesome!


The scientific community was abuzz around the world from the moment Einstein determined that E = MC**2 (energy = mass times the speed of light squared). Scientists around the world were racing to develop this into usable technology, and a bomb was about the "simplest experiment" to prove the theory. Since the implications were initially military, there is no doubt whatsoever that governments around the world would have funded this research (and history shows that they did). So, whether or not we funded the Manhattan Project, nukes were no more than a few years away anyway. Note that in the case of military acquisitions, the government tends to play at least two roles. One is as "part of the potential market;" (thus acting as a consumer base within a free market); the other as an anti-market regulator (discouraging and sometimes successfully prohibiting civilian purchases). In the case of nukes, naturally, all of the governments of the world are pretty much hard over about keeping them out of the hands of civilians. Yet, the demand is there (who doesn't want a bigger stick?) and so the governments "bid with their dollars."



> A better example would be the first time homebuyer credit. Did sales go up? Yes. Did they plummet afterward? Of course. Yet people (the 'experts') were somehow shocked. Did the housing market improve in the long run? Not at all.


I would agree with that. IRL I am deeply involved in the local Process Improvement community. One of our speakers presented a number of studies about "sales contests." Briefly summed up, contests (a form of subsidy) would cause sales to spike inside the "win-window" and fall outside that window. But, the most interesting phenomenon was that averaged over the course of the year the sales teams that held no contests had a) steadier sales revenues and b) slightly higher revenue per salesperson. As a control, they reversed which groups held the contests and the outcome was identical - with the groups now having contests performing more poorly.

What they figured out was, when you game the system people game the game - taking their eyes off of what is strategically important for the quick "tactical win," and thus performing more poorly overall. It is exactly the same phenomenon at work with government subsidies.


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## Ziggythewiz (May 16, 2010)

PhantomPholly said:


> Since the implications were initially military, there is no doubt whatsoever that governments around the world would have funded this research (and history shows that they did). So, whether or not we funded the Manhattan Project, nukes were no more than a few years away anyway.


Yes, my point is that is was essential for it to be a govt effort. You couldn't allow a corporate nuclear arms race...nor would you want someone who might use it as a first strike weapon to get it frist.



PhantomPholly said:


> when you game the system people game the game


Yup, skipped clunkers and used 1st time homebuyer to build an EV.


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## PhantomPholly (Aug 20, 2008)

Ziggythewiz said:


> Yes, my point is that is was essential for it to be a govt effort. You couldn't allow a corporate nuclear arms race...nor would you want someone who might use it as a first strike weapon to get it frist.


I get that - what my point was was that unimpeded by government prohibitions (the opposite of a free market), the free market would have rushed after nuclear secrets. In other words, nothing could have stopped it from happening eventually.



> Yup, skipped clunkers and used 1st time homebuyer to build an EV.


Sounds like an informed set of decisions!


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