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.
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Mar '11
Re: On Those "Vital Investments" in our Nation's Future
Troy
You are literally (literally?) tilting at windmills
Aug '10
Re: On Those "Vital Investments" in our Nation's Future
Another good way to fund such projects is to simply set a prize. $100 million to the first company that can develop a battery that can produce X watt-hours per pound, etc. Prizes have a history of stimulating real creativity, and often the investment competitors make in total is greater than the prize.
However, real free-market approaches have significant drawbacks from the perspective of a Washington legislator. Lack of control. Lack of opportunities to ply favors and buy votes. Lack of the ability to raise campaign funds from potential recipients of government largesse. Lack of the ability to tell your constituents that you're responsible for the 500 jobs in that shiny new facility down the street. Lack of opportunities to get your name on a building.
The real problem is that the incentives of legislators do not line up with the needs of the people.
Apr '12
Re: On Those "Vital Investments" in our Nation's Future
Just like aid to Africa, government picking the winners and losers warps the business owners to become good at getting government grants and loans, however that looks and the USA now has a long line of lobbyists trying to get to suck on the government teat.
I am trying to find a buyer for a European ingredient business and it is interesting talking to the Canadian food business people, many European in origin. They travel and visit. The general theme is that Europe is in denial. They take two hour lunches and all the rest. Nice if you have the money but they are out of cash. Who wants to buy a European based company?
The US is very large and the middle of the country business owners are hard nosed.
These stories of so much waste will burn business owners as they pay their taxes and their employee money that goes to the government.
It also reduces America's image in the world as a business place, it is becoming the same as Europe. Who can figure out the red tape. when students want to get government jobs over any other career, you have reached the European dream.
Re: On Those "Vital Investments" in our Nation's Future
GLDIII: Troy
You are literally (literally?) tilting at windmills · 7 minutes ago
Look, I don't think any of these things are viable at the moment. But we ought to be able to make the case to people who care about them that the best shot they have at ever being viable is to subject them to the rigors of the market, sans government support.
Re: On Those "Vital Investments" in our Nation's Future
Dan Hanson:
However, real free-market approaches have significant drawbacks from the perspective of a Washington legislator. Lack of control. Lack of opportunities to ply favors and buy votes. Lack of the ability to raise campaign funds from potential recipients of government largesse. Lack of the ability to tell your constituents that you're responsible for the 500 jobs in that shiny new facility down the street. Lack of opportunities to get your name on a building.
The real problem is that the incentives of legislators do not line up with the needs of the people. · 6 minutes ago
Precisely right, Dan. I've mentioned this before on the site, but Jonathan Rauch's book, Government's End, is a terrific (though mortifying) look at precisely this problem.
Mar '11
Re: On Those "Vital Investments" in our Nation's Future
Troy Senik, Ed.
GLDIII: Troy
You are literally (literally?) tilting at windmills · 7 minutes ago
Look, I don't think any of these things are viable at the moment. But we ought to be able to make the case to people who care about them that the best shot they have at everbeing viable is to subject them to the rigors of the market, sans government support. · 1 minute ago
Troy,
As an engineer steeped in Thermodynamics, I can tell you the case is clear for those with a (I hate to step into this one) hard science background that the solar and wind folks are never going to get there...They are boutique energy generators with severe system level issues unless money is no object, and convenience is ignored.
A 200 word limits my expounding, but Nuclear is the CO2 solution, if you could even convince me that CO2 is a problem. Mobility requirements and energy density will always put the battery at a big disadvantage. Talk to me in 15 years with advances in bioengineering and sawgrass, and no one will be championing the toxic and high energy manufacturing issues of batteries.
Apr '11
Re: On Those "Vital Investments" in our Nation's Future
Man I need to get a job where I am paid to play board games and watch movies.
Aug '10
Re: On Those "Vital Investments" in our Nation's Future
Energy density is the problem, for sure. Gasoline has an amazing amount of energy locked up in it, and batteries just can't come close.
The truth is, we have no idea what the 'right' energy source is. George W. Bush was convinced that it was hydrogen fuel cells, and diverted a lot of engineering in that direction. Then it was biofuels, and that turned out to be a hornet's nest of perverse incentives and unintended consequences. Now it's electric cars.
The usual progression of technology tells us that we're not going to make a wholesale change to a new energy source in a short time frame. Technology usually works incrementally and takes a random walk through new inventions and breakthroughs to arrive at a new place. Multiple incremental improvements in engine efficiency, materials, computing and other technologies will converge until we reach a transition point where suddenly something new becomes possible. It's unpredictable as all true innovation is. The best thing government can do is to get out of the way and let technology find its own path.
Re: On Those "Vital Investments" in our Nation's Future
GLDIII
Troy,
As an engineer steeped in Thermodynamics, I can tell you the case is clear for those with a (I hate to step into this one) hard science background that the solar and wind folks are never going to get there...They are boutique energy generators with severe system level issues unless money is no object, and convenience is ignored.
I don't disagree with you on this one bit. A few years ago, I was in a car with a former Clinton Administration energy advisor (we were speaking at a conference together). As I began probing her on the deficiencies of these various technologies (how the transmissions costs of wind make it prohibitive, etc.) she consistently conceded each one. It's clear that the two technologies you cited (solar and wind) are non-starters.
But that's basically my point. Shorn of their subsidies, these things wither on the vine. Rather than just letting them think we hold them in contempt, I'd rather confront the alternative energy enthusiasts with the argument that their support for big government has the net effect of slowing precisely the kind of innovation they claim to want. You can't legislate innovation.
Edited on February 14, 2013 at 9:32pmApr '12
Re: On Those "Vital Investments" in our Nation's Future
Come up to Canada and work for the government.
Oct '10
Re: On Those "Vital Investments" in our Nation's Future
We must address the issues in order to conduct the argument, but let's not kid ourselves. These programs are primarily aimed at employing all those dollars extracted from the productive citizenry to the benefit of the party in power. In surrendering our Constitutional Republic into the hands of mere politicians, we no longer have a way back.
The avarice displayed in the blue sections of the map, and the naivete displayed in the red sections of the map leave us in an irreconcilable position. We can hope that good sense will prevail over those who have the most guns, aka; the feral government, but expecting a restoration of what we once had is futile.
Our only political hope is for a greatly accelerated collapse before everyone with a memory of 'America' dies of old age, and there remains no recognition of what has been lost.
Our trust in the personal Creator God is our salvation, and we anticipate a future without all this meaningless argument about what we have surrendered in our striving after the benefits of Godliness without the effort of following God Himself.
Many of the Founders knew this, and the others respectfully deferred to their wisdom.
Jun '10
Re: On Those "Vital Investments" in our Nation's Future
Was the Manhattan Project financed with private funds? I think the Left can make a case from history that a certain amount of government intervention has enabled the furtherance of objectives that have improved the well being of mankind. Unfortunately we have lost trust in government interference because the objectives seem to be almost wholly political these days. Am I wrong?