08 October 2010

Picking Winners

This blog SO doesn't know what it wants to be...

This article on electric cars caught my attention:


Because massive subsidies are being deployed to make them possible. From the article, buyers of the Leaf can expect at least $7500, and up to $12,500 in support from federal and state sources.

Why is this a bad thing? Shouldn't we be supporting electric vehicles?
We supposedly have a free-market capitalist economy. This amounts to an entitlement. However, this entitlement appears to be an acceptable entitlement, whereas any support for individuals is unacceptable and dubbed "socialism." Our current "free-market" system picks winners, to whom massive tax-payer subsidies are given.

If our goals are to reduce carbon dioxide emissions and dependence on foreign oil, what we should be doing is making carbon-based fossil fuels more expensive, and then let the market determine how to satisfy that need. The government's role should be to create the price signals through taxation to create disincentives for certain types of behavior, and to back that up with regulation.

Electric cars are fine. They are more efficient than internal combustion engines. However, if the price of gasoline were raised, say to the $5-7/gallon paid elsewhere in the developed world, I would have an incentive to look for more efficient transportation. Or I might choose to live closer to work and ride a bike, take the bus, walk, or any myriad other possibilities, and not own a car. Let the market decide.

What is our strategy here? There is an implicit statement that we want to continue car culture, and all of the inefficient patterns of urban development that it promotes. There are other options, but we don't allow for them because we are always picking winners.