Healthcare: More Is Less

 | 

There was a time when insurance companies focused on actuarial tables while physicians focused on diagnosis and treatment. But not any more! Now insurance companies are raking in the premiums — double what they were five years ago for many customers — while doing everything in their power to reject claims. Patients are more afraid of the insurance agent than they are of the disease.

In the past month alone, my daughters have had four hefty medical claims rejected, including a medication prescribed to control chronic seizures and a gallbladder removal that was deemed “elective” by the insurance company! What is the point of buying insurance if you can’t use it? And how can the market respond to customer dissatisfaction when government regulation gives insurance companies so much power?

Insurance companies are raking in the premiums — double what they were five years ago for many customers — while doing everything in their power to reject claims.

I raised five active, rambunctious, rough-and-tumble children across three decades, and while I worried occasionally about their health and safety, I never worried about how I would pay for their healthcare. My relationship with insurance companies was straightforward and consistent. Our copay was consistent. Our deductible was consistent. If one of the kids was injured, I could call my favorite orthopedic practice without worrying that the claim would be rejected on the grounds of some esoteric technicality. When my daughter developed epilepsy, I was proactive in finding the right doctor, the right diagnosis, and the right treatment that has kept her virtually seizure-free for 15 years — until her current insurance company decided that the medication her doctor has prescribed for those 15 years will not be covered.

In the past five years, everything has changed. Suddenly it’s the insurance agent, not the physician, who decides what the patient needs by deciding whether it will be covered. Insurance premiums are so high that few families can save enough to cover out-of-pocket expenses, yet everything is becoming an out-of-pocket expense. My daughters find themselves owing nearly $15,000 in uncovered medical expenses in a single month — and they have insurance!

In the past month alone, my daughters have had four hefty medical claims rejected, including a medication prescribed to control chronic seizures and a gallbladder removal that was deemed “elective."

American healthcare, once the best in the world, is collapsing under the weight of over-regulation and crony capitalism that favors the insurer over the healer. Rand Paul, the only actual physician in the US Senate, has been locked out of discussions about healthcare reform. Let’s hope it all collapses soon, so the free market can rebuild from the ashes.




Share This


Ayn Rand: Champion of the Working Class?

 | 

In his libertarian manifesto For a New Liberty, Murray Rothbard accused Ayn Rand of being a pawn of corporate people profiting from the welfare state. As evidence that she was out of touch with reality, he cited her famous statement that the businessman is America’s most persecuted minority (Mises Institute edition [388], quoting Rand, “America’s Most Persecuted Minority: Big Business” [1962]; reprinted in Rand’s Capitalism: The Unknown Ideal).

Objectivism, to the extent that the general public knows anything about it, is often regarded as a rightwing position and can be seen as a boon to efforts to push libertarians into the hand of the Tea Party Right. While this belief is ignorant, the masses do not have a detailed and nuanced grasp of the details of libertarian doctrine, nor should we expect them to. Many people merely adopt a false and shallow impression that libertarians are some type of conservatives who are on the far Right, compared to moderate Republicans. Some left-libertarians, such as I, are very frustrated with the tendency of Objectivism to be classified in this way. The truth about Rand (like the truth about all things) is deeper and more surprising than a first impression would allow. Rand should not be considered a member of the Right. In several important ways, indeed, she resembled a populist leftist.

The middle-aged Rand, still fresh from her own experience of poverty, tended to respect working-class folk more than rich people.

To examine the sense in which she was, historically, a friend of the working class and an enemy of the conservative Right, several things come into focus. First, let us consider Rand herself. She was a working-class woman, and quite poor during much of her adult life. It was only with the sale of the movie rights to The Fountainhead, when she was almost 40 years old, that she achieved significant self-made wealth, which was to last and grow for the rest of her life. To say, then, that Ayn Rand hated the working class and loved the rich would be to assume that she hated herself for many years — something absurdly contrary to her fundamentally self-loving and perhaps narcissistic personality.

Second, Rand always had a particular affinity for working-class people who want to earn their wages instead of relying on the welfare state. For example, Rand pushed to have The Fountainhead movie premiere in a working-class area, saying that she knew her “real audience” was there (Barbara Branden, The Passion of Ayn Rand, Anchor Books edition, 212). When the audience in working-class Southern California applauded the movie at its premier, Rand said, “That’s why I like the common man.” The middle-aged Rand, still fresh from her own experience of poverty, tended to respect working-class folk more than rich people.

Third, and perhaps most obvious and also most extremely inconvenient for rightwing libertarians, is the conservative movement’s frequent hatred of Rand, and her counterattacks against that movement during the 1960s. Any disciple of Rand knows what the hateful, anti-Randian sentence “To a gas chamber, go!” means and embodies; for those who don’t, a more extensive knowledge of the history of the libertarian movement is required (for which I recommend Brian Doherty’s Radicals for Capitalism, one of the best works on the subject). Rand’s hatred of conservatives is undeniable. The title of her essay “Conservatism: An Obituary” (1962, reprinted in Capitalism: The Unknown Ideal) is self-explanatory. If one goes beyond the title to read the text, one sees that Rand held nothing back. She was full of anger. She once said that liberals seek to enslave the body and conservatives seek to enslave the mind, both conceding freedom to that part of human existence which they care about least. This comment is hardly flattering to the Right.

Fourth, and finally, consider Rand’s signature novels themselves. Of course, all her fans have read them, but few have read carefully. In The Fountainhead, Gale Wynand gets rich by pandering to the stupid masses in his newspapers. In Atlas Shrugged, James Taggart, the major villain, is, among many other things, a rich white male businessman who inherited vast wealth and is the CEO of a major railroad. Is this a character created to praise the rich, a character that rich people should love?

Rand would have seen the working class as a place where many potential John Galts exist.

Or did Rand seek to praise productivity and intellect, not the rich as such? Compare James Taggart to his sister Dagny, a hero of the novel. Dagny is a woman who actually runs, not simply pretends to run, a great railroad. Her role in the novel makes it years ahead of its time in terms of gender equality. Let us not forget that Rand was a woman, and, as such, a living embodiment of the freedom of women to pursue careers, a freedom by no means certain for most women in America during Rand’s lifetime. Most people would regard progressive feminism as a leftist element in Rand. The creator of Galt’s Gulch, the Utopia in Atlas Shrugged, is fairly prosperous in the Gulch itself, but in “our world” he is a mere day laborer who lives in poverty — and that’s where he lives during most of the book. It is easy to connect the dots and assume that Rand would have seen the working class as a place where many potential John Galts exist. One of the basic messages of the novel is that our world would condemn all such people to a meager existence.

Murray Rothbard despised the big business Right (at least before his “paleolibertarian” phase); I believe that Rand did as well. Contemporary conservatives may exploit Rand’s ideas, just as they exploit so many other ideas, both economic and philosophical; but that’s no reason for working-class libertarians and left-libertarians not to embrace Rand as one of their own.




Share This


The Karma of Flaming Cronyism

 | 

In 2009, Vice President Joe Biden announced a $539 million Department of Energy (DoE) loan awarded by the federal government to Fisker Automotive. Fisker, a newly formed crony capitalist firm, would use the money (together with private funding from the venture capital firm Kleiner Perkins Caufield & Byers, whose partners include green crony capitalist and former Vice President Al Gore) to produce hybrid electric vehicles in Biden's home state of Delaware. The investment would create 2,500 American jobs, by 2014 produce an annual 75,000–100,000 "highly efficient vehicles," and by 2016 "save hundreds of millions gallons of gasoline and offset millions of tons of carbon pollution."

With gasoline prices below $2 per gallon at the time, free enterprise could not be counted on to produce planet-saving electric vehicles (EVs) and establish the US as the world leader in EV technology. Capitalism can only be counted on to produce what consumers demand. Then-DoE Secretary Steven Chu believed that the demand for EVs would not materialize until gasoline prices reached nine or ten dollars per gallon. In the interim, only crony capitalism would do.

The Fisker loan was considered a vital, timely investment for America: in 2009, thanks to years of US outsourcing of jobs and manufacturing expertise that propped up its emerging crony capitalist economy, China had become the world’s leader in green technology spending. “We are putting Americans back to work,” exclaimed Chu, “and reigniting a new Industrial Revolution that is paramount for the economic success of this country.” The loan was "seed money," heralded Biden, "that would return back to the American consumer in billions and billions and billions of dollars in good new jobs."

Fisker Automotive was founded by crony capitalist Henrik Fisker, in fall 2007, only to be sued by Tesla Motors, in spring 2008, for stealing design concepts and trade secrets that Fisker allegedly used to develop the Karma — a heavily subsidized vehicle that would compete with the heavily subsidized Tesla Roadster.

The true brilliance of Elon Musk, who is regarded by many as a genius, lies in his ability to hornswoggle governments and investors.

It was also in 2008 when fellow, and far superior, crony capitalist Elon Musk became CEO of Tesla. Barely one year later, Tesla received a $465 million DoE loan. Mr. Musk knows no other form of capitalism. According to the LA Times, he "has built a multibillion-dollar fortune running companies that make electric cars [Tesla], sell solar panels [SolarCity] and launch rockets into space [SpaceX]," with the help of a staggering $4.9 billion in taxpayer-funded government subsidies. Apparently, Musk will have nothing to do with any enterprise from which he cannot obtain "government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. It [the $4.9 billion] also includes tax credits and rebates to buyers of solar panels and electric cars."

The true brilliance of Musk, who is regarded by many as a genius ("our generation's Thomas Edison"), lies in his ability to hornswoggle governments and investors. While ordinary crony capitalists are content with bellying up to the government trough for tax breaks and loans to help build their businesses, Musk has the government build businesses for him. He's "so adept at landing incentives that states now compete to give him money."

New York State, for example, is building a $750 million manufacturing plant for SolarCity. With property tax gimmicks, investment tax credits, and cash grants, the entire deal constitutes a $2.5 billion windfall for Musk — courtesy of the taxpayers. Without their coerced support, crony SolarCity, indeed, the entire solar industry, could not survive. Yet in June, New York crony capitalists prevailed over the use of drastically cheaper energy, derived from free market fracking, by officially banning the technology (and denying billions and billions and billions of dollars in lower utility costs for New York residents), ostensibly because of safety concerns: natural gas might leak from wells drilled in the Marcellus Shale bonanza that the state sits on top of, causing flames to shoot out of water faucets.

Inspired by Musk's promises to lead the world into a future without gasoline (he pledged to make millions of electric vehicles by 2025), investors have bid up Tesla stock from $16 per share, when it was first publicly offered in 2010, to $260 per share today. With this runup, Tesla was able to raise more than enough private capital to repay its DoE loan — an event that the DoE declared as "living proof" that "Tesla and other U.S. manufacturers are in a strong position to compete for this growing global market.” Only in the world of green cronyism is debt repayment celebrated as success.

At least the Model S doesn't burst into flames, as did Fisker's Karma, which had a few flaws.

Tesla, which sold 31,655 vehicles in 2014, is valued at $33.8 billion — more than half the value of Ford Motor Company, which sold 6.3 million vehicles during that year. And Ford made a profit, unlike Tesla, which has failed to do so since its inception in 2003. In 2014, Ford posted a profit of $6.3 billion; Tesla lost $294 million. Incredibly, even with its government side business of selling zero-emission-vehicle (ZEV) credits to its competitors, from which it made $217 million, Tesla still lost $294 million. But Musk promises profitability by 2020.

So confident is he of continued government largesse that he scoffs at competitors such as Toyota, which has developed a hydrogen fuel cell vehicle, the Mirai, that sells for $10,000 less than Tesla's $71,000 Model S. Musk's response: “Fuel cells should be renamed ‘fool cells’” — demonstrating a wit as sharp as his automotive genius.

Nevertheless, no one has done more than Mr. Musk to advance EV development in the United States, and, by all accounts, the Model S is a flawless vehicle that has exceeded the expectations of elite Silicon Valley and Hollywood car buyers. It doesn't burst into flames, as did Fisker's Karma, which had a few flaws.

The Karma — which was initially projected to ship in 2009 and to sell over 15,000 units built by 2500 American workers at a refurbished GM plant in Delaware — did not come to market until 2011. But, according to an ABC News investigation, by October of the year only 40 Karmas were produced, all of them assembled by 500 Finnish workers at a factory in rural Finland.

There was not a single US firm with the manufacturing expertise to produce the Karma. "We're not in the business of failing; we're in the business of winning," exclaimed Mr. Fisker. "That's why we went to Finland."

Less than a year later, Fisker Automotive failed — ceasing production in July 2012 and declaring bankruptcy in November 2013. Of the 2,450 Karmas that were eventually built, 1,600 were purchased by consumers, and 2,000 were recalled because of lithium-ion battery-related fire risks (including the possibility that, while parked and disconnected from a charging station, a Karma could mysteriously explode into flames, and burn to unrecognizable rubble).

Numerous reasons have been cited for Fisker's collapse: unrealistic sales goals, compressed launch timeline, insufficient funding, flaming rubble, etc. In the end, however, most subsidized green-technology companies simply find ways to lose money. They can't make a profit, even with government support. The most famous example is Solyndra (the recipient of a $535 million DoE loan), which went bankrupt selling solar panels for half of what it cost to make them. Then there is A123 Systems, Fisker's battery supplier and the recipient of a $249 million DoE grant. A123 sold batteries that cost the company $1.57 for each dollar of sales — leading to its bankruptcy in October 2012, and, in no small part, hastening Fisker's.

A123 might have charged Fisker twice as much, thereby returning a per unit profit of 43%. Why not? Couldn't Fisker absorb the cost increase? It was getting government money too, not to mention the $7,500 tax refund awarded to EV buyers. And, with the price of gasoline heading towards $4 a gallon, surely the demand for EVs was growing. Besides, anyone who could afford the $103,000 Karma might be willing to pay a little extra. Except that, on average, Fisker spent $660,000 for each vehicle produced. To make even a meager profit of, say 10%, Fisker would have had to charge $733,000 — a price that might have scared off early Karma buyers such as pop stars Justin Bieber and Al Gore.

Most subsidized green-technology companies simply find ways to lose money. They can't make a profit, even with government support.

The purpose of the DoE grant to A123 was to help America compete with China. "President Obama was determined not to let China run away with green energy technologies," said a Forbes article covering the bankruptcy auction, where A123 was unloaded for, one could say, a fire sale price. Guess who won the bidding (hint: it wasn't an American company). It was the Wanxiang Group, a Chinese conglomerate run by Lu Guanqiu, an auto-parts magnate with deep ties to the Chinese Communist Party.

Forbes characterized the business acumen of our green cronies as a triple irony:

The U.S. borrowed money from China to subsidize a battery company to compete with state-subsidized Chinese battery companies. The American company gets bought out by a Chinese company for about the same amount of money that the U.S. government gave it. The U.S. still has to pay the money back to China. The Chinese company buying the American company makes a lot of money by providing auto parts for the cars that Americans drive.

Perhaps of greater significance is the national security implication. The sale of A123 included US technology developed for advanced ultra-light lithium-ion phosphate batteries — technology that extends beyond powering EVs, to important applications for electricity generation and distribution, not to mention sensitive military applications. As a presidential candidate in 2008, Hillary Clinton vehemently opposed such sales, asserting the need for "ensuring that technologies . . . critical to U.S. national security are not sold off and outsourced to foreign governments." Yet Clinton, who was secretary of state at the time, did nothing to interfere with the sale.

The Fisker bankruptcy snuffed out the DoE plan of "reigniting a new Industrial Revolution," as well as Joe Biden's hopes of "billions and billions and billions of dollars" for American consumers. It was followed by a DoE announcement that, instead, American taxpayers would get a bill for $139 million, the amount that the government lost in the Fisker debacle. Fisker was sold, in another fire sale, not only to a Chinese company but to the same one that bought A123.

Today, just one year afterward, Mrs. Clinton is running for president and Mr. Biden is thinking about throwing his hat into the race. Mr. Guanqiu is planning to resurrect the Karma with his new company, formed from the old Fisker and A123, businesses he picked up for a song: a measly $406 million. The amount is much less than the manufacturing assets and intellectual property he purchased. They represent a value that the DoE must have believed was significantly greater than the $778 million it invested in these companies. But that's life in the risky world of green cronyism: sometimes seed money leads to abysmal failure, especially when it is other people's seed money.

Mr. Musk is now getting into the battery business, building the world’s largest battery factory, a gigafactory, he says. That is, he bamboozled the state of Nevada into a $1.3 billion incentive package to build it. What crony could turn down a deal projected to generate $100 billion? With capitalist fracking driving gasoline prices down to less than $2 a gal (when $9 gasoline is needed for EV's to be competitive), any capitalist sees folly. But crony capitalists see only the delusion of billions and billions and billions of dollars — that, and taxpayer-funded subsidies for fellow cronies.

That's life in the risky world of green cronyism: sometimes seed money leads to abysmal failure, especially when it is other people's seed money.

And Mr. Fisker is planning to start another automotive venture. He is "intrigued with Millennials, their craving for new kinds of transportation and their fascination with all things digital." It would behoove him to rekindle his relationship with Al Gore, this time for marketing purposes. Who is better than Mr. Climate Change at pitching flimflam to Millennials? Whatever Mr. Fisker has in mind, he remains optimistic, believing that "the timing is right for something completely new."

But none of this is new. Under our current political system, the timing is always right for crony capitalism. And, unlike taxpayers, crony capitalists will profit from another completely new green auto company, even if it goes down in flames.

#39;s Thomas Edison




Share This


A Choice Not an Echo . . . Please

 | 

I would be surprised if Donald Trump and Hillary Clinton became the nominees of the two major parties in 2016. Not shocked, mind you, but surprised. We’ve seen stranger things. Consider Jesse Ventura.

But the prospect of a “Trump v. Clinton” ballot makes me uneasy — in part, because they both seem so ideologically ambiguous. While I know they must differ ideologically, I’m not quite sure how.

It seems Trump prefers markets where he can put his thumb on the scales. Level playing fields are apparently for stupid people.

Mr. Trump, after all, has yet to release a lucid statement of his political and philosophical views. In all likelihood, he never will. We are left to infer them from his well-documented actions and inchoate utterances. Here are a few such inferences.

We know he doesn’t believe in free markets because he boasts of buying favors from politicians. It seems he prefers markets where he can put his thumb on the scales. Level playing fields are apparently for stupid people. Or perhaps to him, buying influence from politicians is simply part of a truly free market.

We know he isn’t for free trade because he brags that he will use every weapon at his disposal, including tariffs, to force America’s trading partners to their knees. While this proposal may have a certain appeal, it has the appearance of ignoring the lessons of the Smoot-Hawley Tariff. (Anyone? Anyone?) Do we really want an international trade war?

So, if Mitt Romney is a free-market capitalist who supports free trade, what is Donald Trump?

Let’s just say that it’s not so easy figuring out which school of philosophy is Mr. Trump’s alma mater.

On the other hand, Mrs. Clinton was a Goldwater Girl in high school, campaigning for the Republican presidential candidate. By the time she finished at Wellesley, she had converted to radical activism, enamored of Saul Alinsky’s grassroots Marxism. Since then, she has written and spoken many, many words about her political and philosophical beliefs, all of which assure us that she is a woman of the progressive left. But what about her actions?

To my knowledge, she is the only progressive leftist to have served on the board of the Walmart Corporation. She did so for seven years. This line of her résumé is unappreciated by many on the Left.

Without a doubt, Clinton is the only progressive leftist to have raised tens of millions of dollars from Wall Street donors in the first three months of her presidential campaign.

It is probable that she is the only progressive leftist to have turned a $1,000 stake into almost $100,000 by trading cattle futures. At the time, she was supplementing her husband’s meager $35,000 salary as governor of Arkansas. It was her version of clipping grocery coupons.

Without a doubt, she is the only progressive leftist to have raised tens of millions of dollars from Wall Street donors in the first three months of her presidential campaign. It could be that no one has told them she is a progressive leftist.

I could go on, but just ask yourself this: if Bernie Sanders is a democratic socialist, what the heck is Hillary Clinton?

Let’s face facts. Donald Trump and Hillary Clinton are both acolytes of the same philosophical school. They are opportunists. They crave money, fame, and power. If either of them became president, the only thing we know for sure is this: the office would be used to seize more power.

They would view the system of checks and balances that limits the abuse of power as nothing more than an annoying restraint on the authority of the president. These safeguards would be seen as mere obstacles, narrowing the range of means available for achieving the noble ends of “making America great again” and “moving the country forward.”

How in the world would you choose between them?

On one side we have a rich, fat, old, white, blonde-haired, blue-eyed, candidate with an unpleasant voice, an arrogant manner, and an authoritarian personality. On the other side we have Donald Trump. Apart from sex, they’re like two megalomaniacal peas in a pod.

What is a voter to do? Imagine a ballot with Benito Mussolini and Eva Perón. Choose one. Go ahead.

On the other hand, Mrs. Clinton was a Goldwater Girl in high school, campaigning for the Republican presidential candidate. By the time she finished at Wellesley, she had converted to radical activism, enamored of Saul Alinsky




Share This


Detroit

 | 

I was born and reared in the state of Michigan, and its affairs remain very interesting to me. I regard Detroit’s bankruptcy as the virtually inevitable result of events I’ve been witnessing throughout my life.

First there was the triumph of modern labor-management relations, which kept the price of labor sky-high, as long as junky cars could be unloaded on a market largely free of good-quality foreign goods. With the help of union-friendly politicians, labor disputes were settled amicably, usually with an enormous increase in benefits for labor. When there actually was a strike or layoff, which happened so rarely that it was regarded as a kind of natural disaster, challenging the existence of God, Michiganians were treated to constant interviews with baffled assembly-line workers, who informed the 10 o’clock news that if this thing continued for even a day longer, they couldn’t meet the mortgage on the house at the lake, and they might even have to sell the boat. It was hard, really hard, to meet the payments on three cars. As for savings, who could keep money in the bank, considering all these expenses?

Such were the rewards of unskilled labor. So why should anyone learn any skills? Then came the nervous collapse of both labor and management, once genuine competition took hold.

But something else had happened, simultaneous with the monopoly of the Big Three automakers and their inseparable companion, the United Auto Workers. This was the triumph of Great Society liberalism and the new class of managers and planners who purveyed it. Many of the big chiefs came from auto company management. Remember Robert McNamara? He’s a sample. These people demonstrated that they could be failures in civic planning as well as business planning. After the 1967 race riots in Detroit, they backed every sorry, money-losing civic improvement project they could think of, applying social engineering to the city’s problems. You can guess how well that worked.

Tax money that is used to do anything more than protect your rights is going to be devoted to building things that will violate your rights by taking yet more taxes.

The logical product of the Great Society was the flight from Detroit of everyone, white or black, who could possibly escape and buy a home in the suburbs. The city’s population went from 1,850,000 (1950) to 701,000 (2010). The escapees left behind them an inner city that was poor in productive workers but rich in people who voted for a living. The natural product of that was a chronically corrupt political class, keeping itself elected by class warfare and racial resentment.

Now the city of Detroit is so poor that it is letting large areas of formerly choice real estate go back to the fields and forests. It is arranging not to keep the streets open, not to keep the power running in whole sections of the city. The people I feel for most are the African-American families who have hung on, kept their modest houses and modest jobs, survived the violence and criminality of their neighbors, and now find that their own jealously guarded homes are to be abandoned by the city they struggled to keep in operation. Looking down Woodward Avenue, once the Champs Élysées of the Midwest, I see block after block of emptiness — or worse: wonderful early 20th-century housing, places to live that would be worth a fortune to almost anyone, anywhere else, but that are now hopelessly derelict.

I suppose that most people understand these things, in general. But one factor that should be emphasized, and almost never is, except in a way that contrasts with the truth, is the influence of that mundane but vicious thing, the tax. It is oft lamented that Detroit’s taxes can’t keep up with its expenditures. The problem is that the taxes existed at all.

Right now, Detroit’s municipal income tax is 2.4% for residents and 1.2% for nonresidents who work in Detroit (if that be not a contradiction in terms). Before 1999 these taxes stood at 3.0 and 1.5, respectively, and were authorized by a special provision in the state tax law allowing cities with populations of more than 600,000 (of which Michigan has only one) to exceed the statewide cap of 1.0 and 0.5%. In 1999, Detroit began slowly and minutely reducing tax rates in accordance with a deal, politically extorted from the state, that gave the city a whopping special subsidy from the revenues of Michigan as a whole.

I say “special,” not just because Detroit was getting a deal that, say, Muskegon didn’t get, but because Michigan had already, for many years, been subsidizing major Detroit projects and institutions — something that did not prevent Detroit politicians from erecting giant signs in front of them, bearing their own names.

Anyhow, in 2011, which is about the time when the probability of a Detroit bankruptcy became common talk in Michigan, the Detroit income tax represented about $230 million out of the city’s $1.2 billion general fund revenue. This means that the average man, woman, or child connected with this impoverished town was somehow generating over $1,700 in revenue for the city alone, about $330 of it from income taxes. Overlapping with the income tax, of course, are many other taxes, including property taxes, which generate several hundreds of millions of dollars and would generate more if the owners of half the land parcels in the city were still paying their property taxes, which they aren’t.

Then there’s the income that the city gets from government-licensed gambling and, ah yes, the income it gets from corporate taxes. In 2012, the city council doubled the corporate income tax rate, taking it from 1 to 2%. The excuse was a threatened 10% pay cut for municipal workers. “I can't in good conscience,” said one council member, “ask city employees to give back 10% and not ask the corporate community to share in the sacrifice by raising their taxes." Oh. OK. I see the logic.

Meanwhile, the state of Michigan has been cooperating with Detroit in attempting to create a new stadium for the Red Wings hockey team, a stadium that, its advocates insist, will generate “as much as $1 billion in economic development over 30 years.” It won’t, of course. People will just keep driving into Detroit to see the games, then driving out again. But over the same 30-year period, the taxpayers of Michigan will have to pay $444 million for bonds to subsidize this scam. Let’s see . . . if there were a billion dollars of economic development (over 30 years, of course), and it were highly profitable (which it won’t be), it might possibly earn, say, 10% on investment, which means an average profit of maybe $22 million a year (it can’t all happen at once), from which the taxpayers of the state of Michigan would receive, in taxes from the grateful beneficiaries of their subsidy, something less than $1 million a year.

So that’s the way — not bread and circuses, but welfare and hockey. Isn’t there an old saying about castles being erected on the ruins of cottages?

The more Detroit taxed, and the more Michigan taxed and subsidized, the worse things got. And continue to get. But why oh why? Because, as Isabel Paterson explained long ago in The God of the Machine, tax money that is used to do anything more than protect your rights is going to be devoted to building things that will violate your rights by taking yet more taxes. The things it builds may simply be dead weight, from an economic point of view, and will therefore have to be supported by continued taxation. Or, more likely, they will be institutions devoted to extracting yet more money from the productive members of society.

The illness of Detroit has been blamed on “white flight,” as if whiteness were some magic elixir.

These may be institutions such as the welfare industry. These may be institutions such as Detroit race politics, which long defended and empowered every crook in the city government, so long as he or she was an African-American, and is currently demanding that Detroit’s debts be “canceled,” thus neatly averting the consequences of bankruptcy. Or these institutions may be government-“stimulated” businesses, erected by subsidies and continually devoted to extending them.

But two things are certain. The beneficiaries will not “give back.” And they will never, never be the productively working black, white, or Asian population of anywhere. These are the people who are tricked into voting for the money-extraction industry, told that more taxes are needed to support the schools or the police or the fire department or something, or defeating the hated Republican Party, and then, mysteriously, find that every increase in taxes is turned into more guns aimed against them.

The illness of Detroit has been blamed on “white flight,” as if whiteness were some magic elixir. If you had any thoughts along those lines, the social history of Detroit will show you that it isn’t. The illness has also been blamed on mysterious “changes” in the auto industry. That’s not the cause either. Business and labor that aren’t on the take from subsidies — subsidies in the form of bailouts, friendly legislation, and noncompetitive labor laws, all of which the Detroit auto industry got, and fattened on, and sickened on — can “change” without doing grave damage to their communities. And the illness has been blamed on “massive corruption,” as if corruption could be massive without the profits it derives from laws and taxes.

Enough. Just look at who’s taking money from whom.




Share This


Athena 4, Gaia 0

 | 

From the start of the industrial revolution to the present day, many Green critics have decried the rise of technology. Gaia (Mother Earth) worshipers — Green neo-pagans — have viewed with alarm the dramatic rise in human flourishing, and the key determinant in this flourishing, which has been the development of plentiful energy. From the year 1800 to the year 2000, the world’s average per capita income rose tenfold (in real terms), while the world’s population rose sixfold, thanks to this productive and peaceful revolution. But the Gaia cult has resisted every step of the way.

During the past half century, the Gaia groupies have achieved tremendous political power in America and Europe. (They have yet not been able to dominate in Asia — one big reason Asia is so rapidly rising economically.) It is a struggle between those who embrace technological progress and those who reflexively and viscerally oppose it. The struggle can be viewed as a contest between Greek goddesses: Athena, goddess of wisdom and technology, is fighting Gaia, and Athena keeps winning — thank goddess!

Four recent reports of technological progress in energy production are worth noting. The first is about the fracking revolution, which I believe will be viewed by future historians as one of the major turning points in the evolving industrial age. It conveys the news that the largest American railroad, BNSF, is planning to test the use of natural gas as power for its locomotives. Currently, BNSF uses diesel fuel exclusively, and by its own estimates has the largest diesel-burning American fleet, second only to the US Navy.

It is not because but in spite of the neo-pagan policies of the Oval Office that we have the natural gas miracle.

The reason BNSF is considering the move is that because of the fracking revolution, natural gas is getting very cheap. Under current pricing, while a gallon of diesel fuel costs about $4, the same power can be produced for less than 50 cents worth of natural gas — though there are additional costs when you compress or liquefy it.

This is leading BNSF to follow other industries in moving toward natural gas. Utility companies are rapidly abandoning coal for gas, and manufacturers are moving toward it as well. Many municipal bus fleets have been using compressed natural gas (CNG) for years, and other commercial vehicle fleets (such as garbage trucks) are looking into switching to CNG. Already, tugboats are being fitted to run on liquefied natural gas (LNG). And long-haul freight companies are looking at LNG as well — in fact, Shell is planning to provide LNG in Ontario and Louisiana and distribute it at 200 truck stops.

The hurdle that BNSF faces is that it costs upwards of $1 million to retrofit a diesel locomotive to run on LNG as well, and BNSF has almost 7,000 locomotives to retrofit. So this conversion likely will take time, but given that the cost advantage of natural gas shows no sign of going away anytime soon, the conversion seems inevitable.

Lest anybody be addlepated enough to thank the current Green regime for this flourishing of clean, low-cost energy, let me disabuse him now. The crony-capitalist administration has placed all of its — oops! I mean, the taxpayers’ — money on solar and wind power, bankrolling numerous projects (headed by various Obama donors) that have gone nowhere but bankrupt. The EPA and the Department of the Interior have gone out of their way to stop drilling on federal lands. This is documented in a recent report from Marc Humphries of the Congressional Research Service. The report documents the fact that the fracking revolution has increased American natural gas production by 20% over the past five years alone — a total of 4 trillion additional cubic feet of natural gas pumped into the nation’s supply. But this overall increase hides a revealing disparity: while natural gas production on non-federal (mainly private) lands is up by 40% over this period, production on federal land has plummeted by 33%.

In short, it is not because but in spite of the neo-pagan policies of the Oval Office that we have the natural gas miracle.

But the miracle just might become even more miraculous. The second story about technological advances in energy production is a news release from the Japan Oil, Gas and Metals Corporation, which notes that it is preparing the first test of commercial production of natural gas from methane hydrate layers under the ocean. Essentially, methane hydrate is natural gas (methane) trapped in ice crystals along the ocean’s floor. This source of energy is estimated by some experts as potentially exceeding all of the world’s existing coal, natural gas, and petroleum reserves — combined! Developing the resource will be tricky, given the instability of the layers that have to be processed, but then, the minds of self-interested creative individuals are tricky as well.

The third technological development in energy production worth noting is the advent of a new type of nuclear (fission) reactor.

Nuclear power, of course, can’t get no respect from nobody. Despite its exemplary safety record in the US and other advanced economies (which always excluded, of course, the Soviet Union), people fear it. These fears were only intensified two years ago when a Japanese earthquake led to the destruction of four reactors at the Fukushima Daiichi power plant.

Actually, the quake — a massive magnitude 9.0 one that moved Japan’s main island eight feet to the east and shifted the Earth’s axis by six inches — didn’t destroy the reactors. They were ruined by the tsunami it generated (a tidal wave that destroyed 300,000 buildings and killed 20,000 people). Despite the fact that the reactors’ disaster killed nobody, sickened nobody, and is likely to cause few health problems in the future, organized pressure led to the shutdown of the country’s 53 other reactors. These reactors jointly produced 30% of the country’s electric power. As a consequence, last year Japan ran a record deficit ($78 billion) because it had to import more energy, increasing the cost of its manufactured goods, and reducing exports accordingly.

But nuclear power is by no means dead. There is a new company, Transatomic Power, that is perfecting a design for a molten-salt reactor — a design that may well cut in half the cost of future nuclear reactors. It is the high cost of building reactors, especially in the face of the dramatically dropping price of electricity from natural gas plants, along with the Green Regime’s preference for solar and wind power, that has been holding up the expansion of nuclear power in the US over the past few years. But this new reactor will probably reignite that expansion.

Molten-salt reactors were explored as long ago as the 1960s in the Oak Ridge Lab, but the design now being worked on would produce 20 times the power for the same size reactor. It would allow reactors smaller than the 1,000 megawatt behemoths currently running. Besides the smaller footprint, the reactor under design would save money because it could be factory-built (as opposed to being custom-built on site).

Its chief advantage, though, would be the use of molten-salt rather than water as a coolant. Water is the coolant used in all present reactors. The problem with water is that it boils at 100o C, whereas the fuel pellets in the core operate at about 2,000o C. So in the event of an emergency shutdown, unless water can be continuously pumped over the core to cool it, the water will vaporize and the core will melt down (as one did at Fukushima).

But the salt, which is combined with the fuel, has a boiling point much higher than 2,000o C. So if the reactor core starts to overheat, the salt will expand but not evaporate, separating the pellets and thus slowing the core reaction. In a complete shutdown, a stopper at the bottom of the core container would melt, and the molten fuel and salt would flow into a holding container, where the salt would solidify and encapsulate the fuel.

If global warming is real — as all good, pious Gaia supplicants believe — then it’s either nukes or solar and wind power, and the latter is clearly not economically viable.

The clever pups behind this innovative design are the cofounders of Transatomic Power, Leslie Dewan and Mark Massie, who are still only Ph.D. candidates at MIT. These two are Schumpeterian entrepreneurs of the best sort. America is lucky to have them, as the Chinese are also working on a similar design.

This all comes at a crucial time for nuclear power. For as a recent Wall Street Journal article notes, the fracking revolution has lowered natural gas prices so much that gas powered electrical plants are driving both coal-fired plants and many nuclear plants (especially the smaller ones, and the ones facing expensive repairs) out of deregulated markets.

For examples, Excelon has announced that it will soon close its Oyster Creek, New Jersey nuke, ten years before its license expires. And Dominion Energy has announced that it will soon close its Kewaunee, Wisconsin nuke, a full 20 years before its operating license expires.

Pricing makes the reason for this clear. The fixed costs to run a nuke are $90,000 per megawatt; the fixed costs for coal fired plants are $30,000; for natural gas fired plants, only $15,000. And, of course, existing nukes require intensive security and safety costs, precisely because of the risk of meltdown. In the first 11 months of 2012, natural gas plant output rose by 24%, while the output for nuclear powered plants dropped by 2.5%.

This all presents an interesting dilemma for the Gaia communicants. As natural gas prices continue low, gas will, absent extensive subsidies or other protection for other forms of energy, supplant nuclear power. Now, natural gas emits just half the carbon that coal does, but nuclear plants emit none. So if global warming is a hoax, we could easily go all natural gas. But if global warming is real — as all good, pious Gaia supplicants believe — then it’s either nukes or solar and wind power, and the latter is clearly not economically viable. All this is clear except to the blindest Gaia devotees (and the greediest Green crony capitalists).

And indeed, there has been an interesting schism in the Green faith. In a recent piece, the excellent science writer Robert Bryce calls this “the rise of the nuclear Greens.” He notes that an increasing number of Gaia votaries now support nuclear power. One prominent convert is British environmental activist George Monbiot, who has now admitted — belatedly, to understate it massively — that solar energy (in the UK, and by extension everywhere else) is “a spectacular waste of scarce resources,” and that wind power is “largely worthless.” Referring to the Fukushima disaster, he concludes, “Atomic energy has just been subjected to one of the harshest of possible tests, and the impact on people and the planet has been small. The crisis at Fukushima has converted me to the cause of nuclear power.”

Wow.

Monbiot now joins other Gaia disciples Stewart Brand, Ted Nordhaus, Michael Shellenberger, Mark Lynas, James Lovelock, and Patrick Moore (co-founder of Greenpeace) in favoring nuclear power. This is nauseatingly ironic: it was the environmentalist zealots who stopped the growth of nuclear power 40 years ago. But the pro-nuke Gaia devotees are still a distinct minority. Most of the cult still lights candles in front of wind and solar power.

The fourth interesting development concerns an energy source that has been tantalizing but elusive for many decades: fusion power.

A news report out of Europe indicates that an important international project is moving forward. The “Iter” (Latin for “the way”) project is a collaboration of 34 nations working on building a pilot fusion nuclear reactor. Nuclear fusion is, of course, what powers the sun and other stars. In principle, it offers a chance to provide virtually unlimited supplies of reliable, consistent energy at the levels needed to power an industrial economy. And it would provide that power from clean, nontoxic fuel (extracted from water), with no possibility of any kind of core meltdown.

The new Iter experimental reactor has received an operating license. It is projected to be the first fusion reactor (“tokamak”) to generate more power than it uses — ten times more, in fact. The Iter design would serve as the prototype for the first generation of commercial fusion power plants.

The foundations for the reactor are now being laid, but the work of putting together the million or so components (made at factories all over the world) will take a long time. The tentative date for firing it up is about 15 years in the future — though with a project of this enormity, it will probably be longer. And it has cost about $20 billion. However, it signals that by the second half of this century, commercial fusion power will be a reality.

That would be nothing less than the crowning achievement of the industrial revolution. It would be the human mind harnessing the power of the stars to secure permanent prosperity for our species.

In spite of the Gaia cult, Athena is ascendant.




Share This


Crony Car Capitalism Capper

 | 

Obama’s reelection hardly negates the fact that his regime is one of the most corrupt in American history. This fact is by now obvious to all but the most partisan Obamistas. Crony green energy deals, crony college deals, crony car industry deals — the list is long.

But among the most egregious was the rigged bankruptcy of GM and Chrysler, in which the legitimate secured creditors were cheated out of what they were due under settled law in favor of the UAW — which had conveniently contributed tens of millions of dollars to Obama’s coffers. The UAW was to begin with the biggest reason that American auto companies became basket cases, and it received massive amounts of stock in both companies. It was then allowed to liquidate its stock before the taxpayers were allowed to liquidate theirs. The taxpayers ate billions of bucks in losses.

All this dirty business was done to protect grossly inefficient, overpaid, greedy auto union workers, most of whose jobs would likely have been saved (albeit at lower compensation) in a regular bankruptcy.

Finally we learned what has to be the ultimate joke. In the corrupt crony bankruptcy, Chrysler — after being bailed out with billions of taxpayer dollars — was essentially given away free to an Italian car company, Fiat. Fiat used the opportunity to expand its presence in America. And the most recent news is that Fiat will likely move some of the Jeep operations to China, and the rest of the Jeep and Chrysler operations to Italy.

As the report explains, “To counter the severe slump in European sales, [Fiat] is considering building Chrysler models in Italy, including Jeeps, for export to North America. The Italian government is evaluating tax rebates on export goods to help Fiat.”

So the Italian taxpayers will pay the highly unionized Italian auto workers to make cars at a cheap subsidized price — to put American auto workers out of work, and ensure that the American taxpayers get the ultimate hosing.

The stench from this corrupt deal grows in intensity every day, with each new permutation of the putrid process.

Is it too much to hope that the House of Representatives will mount a serious investigation into the whole crony crowd responsible for this abortion? I mean (to name names) Obama, “auto czar” Steve Rattner, the management team of GM and Chrysler, including Sergio Marchionne (CEO of Fiat), and especially all the leaders of the UAW?

Alas, it probably is too much to hope. The crime of the century will likely be swept under the carpet of history.




Share This


Wage War on Dependence

 | 

Recently, I heard a school administrator promoting the importance of making all of the parents at our schools aware of the existence of government programs for the homeless. “Lots of people don’t even know that they qualify for these programs.” she enthused. “If they are living with family members and not paying rent, they can qualify as homeless!”

What would that do for them, I wondered?

According to the website of the Oregon Homelessness Prevention and Rapid Re-housing Program (HPRP), its “re-housing program” can provide these kinds of services to the "homeless":

Re-housing programs work with people who are already homeless to help them quickly move into rental housing. Re-housing programs can provide housing location, financial assistance including security deposits, rent assistance and payment of arrearages and case management. Both homeless prevention and rapid re-housing programs coordinate with other community resources to ensure that participants are linked to ongoing assistance, such as housing vouchers, intensive case management, or assertive community treatment.

So if a family (in this community often a new immigrant family) is managing their finances by living with relatives until they can get on their feet, government agencies can arrange to give them financial assistance in the form of security deposits to rent a place they otherwise couldn't afford to rent, and participate in a program of government “rent assistance” or “housing vouchers.” The person recommending this seems to think it would be a good thing to move someone into a situation where he was dependent on government for a place to live. Implied, but not stated, is the assumption that it is kind of stupid to prefer to take care of yourself when you can get something for free instead.

Connected to that assumption is the proposition that any well-meaning person, such as a teacher or school administrator, has an obligation to convince stiff-necked individuals that their pride is hurting their children, and they really should accept the government’s largesse. This assumes, however, that one’s quality of life is measured simply by the dollar amount of the things one receives, without regard to how one obtained them.

Implied, but not stated, is the assumption that it is kind of stupid to prefer to take care of yourself when you can get something for free instead.

Not so many decades ago it was commonly understood that there was something demeaning about being on "the dole.” People did not want to accept charity if they could make their own way in life. There were the pejorative terms “kept woman” and worse still, “kept man,” meaning a person who did not have a job but was supported by a sex partner. Many of the social programs we have today were sold with difficulty to an American public for whom public assistance and dependency carried a stigma.

According to Andrew Biggs of the American Enterprise Institute, Social Security was presented not as a needs-based program of charity in which today’s workers pay for the benefits of today’s elderly, but as “a system of social insurance under which workers (and their employers) contribute a part of their earnings in order to provide protection for themselves and their families if certain events occur. As a result of this 'earned benefit' status, collection of Social Security benefits has never carried the stigma associated with food stamps, Supplemental Security Income, or other welfare programs.”

That has been the pattern with a number of “entitlement” programs. Instead of being needs-based charities, which show one’s dependence, programs such as Medicare and Social Security are made for everyone. Therefore there is no stigma and everyone should be happy to receive benefits from the government. Of course, the effect is that these programs have ballooned in size and are currently unsustainable. (Odd that sustainable houses and buildings are all the rage, but sustainable social programs, not so much.) We have a huge financial burden looming ahead of us as these entitlement programs become ever more costly as more of us baby-boomers retire and expect to collect benefits. Because there is no stigma associated with these programs, we all intend to capitalize on them.

Here lies the problem — and also the solution to the problem. Instead of a War on Poverty, we should have a War on Dependence. All our social programs should have as their goal helping people become independent of government assistance. They would still require considerable effort and would still employ many social workers for years to come, but the war could be won! We could get to the point where everyone had a way to support himself.

How would that look different from today’s social programs?

For one thing, we’d begin by applauding all those who already take care of themselves. We would hold them up and give them recognition. We would put them on talk shows and news programs to tell their story of how they manage in life without government assistance. They would become our role models. We would applaud and appreciate the fact that they do not need to collect on the various social programs to which they are “entitled.”

For example, people over 65 who were working at a job or who could afford their own medical insurance would be honored for their ability to be independent of Medicare. Right now of course, you virtually have to take it, because no one will insure you at age 65 unless you collect all the Medicare benefits you can. So right now we are forcing dependency — but the War on Dependence would change that.

We should encourage everyone to avoid having to depend on Social Security as well. Anyone over 65 who doesn’t need to collect “benefits” from the payroll tax in order to survive in old age would be a hero in everyone’s eyes. If people keep working, that would be super, because they can be independent thereby. If people save enough to retire with dignity, that would be even better, because they would be permanently independent. What’s more, their children would be well on their way to permanent financial independence, when they inherited the principal of their parents' retirement fund. As part of the War on Dependence, social workers would help younger people set up various retirement savings plans. Each person who had a workable retirement savings plan could stand tall in the knowledge that he would not become dependent on Social Security.

All our social programs should have as their goal helping people become independent of government assistance.

One of the sad byproducts of the endless and hopeless War on Poverty is that self-sufficiency is no longer valued as it once was. Someone is considered a fool to turn down government benefits if he can “qualify” for them. What’s more, someone who gets a first-rung-on-the-career-ladder-job at a low wage still feels bad about himself. Instead of being proud of being independent, he sees that he is still in relative poverty, and that is what’s bad. People who are supporting themselves, no matter how meager their circumstances, should be encourage to take pride in not being dependent. We should make self-sufficiency the goal, the prize, the honor.

Social workers could help farmers who accept government subsidies find ways to become self-sufficient so they can be respected for making an “honest living” without help. Businesses that sold products abroad without help from the government would be recognized and patronized. Similarly, industries that did not ask for protectionist tariffs imposed by the government, but could stand on their own, would be new American heroes. Students who found a college they could afford without government help would be seen as more resourceful and valuable future employees. Colleges that keep themselves in business without whining for more government money would be seen as more competent than those that couldn’t manage on their own. This turn of events might even drive down the cost of college. Primary and secondary schools that focus on helping their graduates prepare for the real world would also be recognized and respected; the ability of their graduates to avoid dependence would be the final measure of the schools' own worth.

Success would no longer be a nebulous and ill-defined chimera, but would be identified as the ability to support oneself and one’s family. Families that took care of their own (whether the young or the elderly) without government assistance would be honored. People with disabilities would be helped to develop as much independence as possible, and honored for every bit they could obtain — instead of scorned for their efforts to contribute to their own support.

Industries that did not ask for protectionist tariffs imposed by the government, but could stand on their own, would be new American heroes.

Oddly, poverty could, in a sense, be eliminated overnight by simply writing checks of the proper amount to all the poor. It would help if all our programs of assistance were rolled into one program, so we could keep track of how much we were giving to each person. We might find that we had already eliminated poverty — that the cash value of all the various forms of assistance we provide to the needy would total enough to give them an income over the poverty line. But few people really believe, deep in their hearts, that mere dollars will eliminate the problems of the poor.

Independence is the solution — and we need to return to the habit of valuing it. There is still truth in the old proverb, “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.” That means focusing our efforts on reducing dependence instead of fostering it. A War on Dependence would be infinitely better than the old, unwinnable War on Poverty.




Share This


The Latest EV News

 | 

I like to stay informed on the latest developments in electric vehicles (EVs)—in other words, with the amazing idea of trying to resurrect a technology that died a century ago, with the advent of the internal combustion engine. EVs are a retro-idea so captivating to our genius president that he has been willing to lavish billions of taxpayer money on funding EV makers. It’s easy to play at being a venture capitalist when you’re using other people’s capital.

A new Wall Street Journal article reports that Azure Dynamics, a Canadian company that, in partnership with Ford, makes electric vans for sale in Europe and America, has stopped production of its e-vans and filed for bankruptcy. It did this in spite of receiving millions of dollars in federal grant money, including a recent $5.4 million grant to work on a new electric inverter.

Azure hit the wall after making a miserable 508 e-vans (and retrofitting 1,500 Ford vans to make them hybrids) this year, and only 800 last year.

Ford is now worried about who will service the damn things, and 120 of the company’s 160 workers are looking for work.

The WSJ piece also notes that recent sales of Nissan’s EV (the Leaf) and GM’s EV (the Volt) have been lousy. Fisker Automotive has had two recent recalls and is jonesing for another government loan. Its battery supplier, A123 Systems, has just issued a recall of its products, and is looking for suckers—pardon me, investors — to come up with $55 million to cover the recall.

Earlier this year, Bright Automotive went dim — it filed for bankruptcy when it could not get any more federal subsidies. Last year, EV maker Think Global failed miserably, leaving Indiana with a nice, empty factory. Think Globally, fail locally — what a great business model!




Share This


Government-Grown Lemons

 | 

A flurry of recent reports brings us up to date on GM — now known as Government Motors, after its nationalization by the Regime. The news is less than inspiring.

First is the report that GM is recalling nearly 4,300 Chevrolet Sonics — because they may be missing their brake pads! The incredible news is that workers at the Orion Township, Michigan assembly plant left off inner or outer brake pads on many of the Sonics manufactured there.

The funny thing is that the same Regime Secretary of Transportation Ray LaHood who told Americans to avoid Toyotas in a bogus brake scare is totally silent about this real brake fiasco.

Then there's the news that came out on the “legendary” Chevy Volt — you know, the EV green machine car of our future. For one thing, it appears that the damn things are costing American taxpayers about $250,000 for every vehicle sold. This to subsidize a car purchased by people whose average income is $170,000 a year.

That’s the estimate provided by James Hohman, economist at the Mackinac Center for Public Policy. He analyzed the 18 government deals that were involved in setting up the Volt line — all the loan subsidies, taxpayer-funded rebates, tax credits, and government grants at the federal and state levels that were arranged for this car. The thing is indisputably green in one sense: it takes taxpayer dollars to keep it alive.

Hohman's estimate does not, by the way, include the bailout money that has been shoveled at GM as a company. Nor does it include municipal support.

The deals Hohman reviewed included $690 million of support by the state of Michigan and $2.3 billion in federal support. That’s a total of $3 billion in for the 6,000 Volts actually sold. As Hohman puts it, “This might be the most government-supported car since the Trabant” (the infamous piece of junk manufactured by East Germany).

Worse, it turns out that GM is calling back all Chevy Volts because of a fire hazard. Seeing several Volts catch fire after crash tests showed that electrical shorts in the battery can ignite the coolant, GM is going to try to fix the problem by strengthening the battery compartment. Just in time!

But the Volt isn’t the only EV that is prone to battery-induced fires. Fisker Automotive has announced that it is recalling its entire line of luxury plug-in hybrids (which sell for over $100,000 each!) because of fire hazards.

I mention the Fisker, because even though it builds its cars in Finland, it received $529 million in American taxpayer-backed loan guarantees. The Regime assured us that the American taxpayer would be paying to provide American jobs, but that was just another lie.




Share This
Syndicate content

© Copyright 2017 Liberty Foundation. All rights reserved.



Opinions expressed in Liberty are those of the authors and not necessarily those of the Liberty Foundation.

All letters to the editor are assumed to be for publication unless otherwise indicated.