On Those "Vital Investments" in our Nation's Future
This is just brutal. From the Wall Street Journal:
The Obama administration's electric car efforts took another hit on Wednesday after a federal inspection found a South Korean advanced battery maker never scaled up U.S. production despite receiving $142 million in federal grants.
A Holland, Mich., factory owned by LG Chem Ltd., part of LG Corp., was half-funded by a government grant and estimated to add some 440 jobs building battery cells for General Motors Co.'s Chevrolet Volt and other vehicles.
When demand for the plant's batteries didn't meet expectations, the company filled orders with cells made at a factory in South Korea, leaving the Michigan plant largely idle, according to the report by the Department of Energy's Inspector General, Gregory Friedman.
The inspector general said that to avoid layoffs at the factory LG Chem paid idle workers $1.6 million in the third quarter of last year, about half of which was covered by its U.S. grant, even though there was nothing for them to do. The workers played board games, watched movies, and volunteered at local animal shelters during regular work hours, Mr. Friedman said. LG Chem has since paid back the government's share of those charges.
Good on them for paying back the money, but this still underscores the pervasive idiocy of the government acting as investor.
There's also another angle to these kind of boondoggles that it seems conservatives regularly miss. Too often, our side doesn't leave any daylight between criticizing specific alternative energy projects and alternative energy itself.
A true free-market approach would be to declare that we're indifferent as to whether conventional fuels, alternatives, or some mix of the two drives the economy. Whatever is reliable, affordable, and scalable ought to do the job.
The reality, of course, is that alternatives generally don't meet that standard these days. But you can make the case -- correctly, in my judgment -- that government-driven malinvestment is actually retarding their progress. People who are serious about making a run at alternative energy sources ought to want to subject them to market forces as much as possible. They're never going to become viable as long as they have a government backstop.