Government perverts the marketplace, destroying true value analysis.

I have been following with interest the running comment thread on my post asking about whether electric cars are actually cleaner, or if they just shift pollution outside of the consumer’s view.  Very quickly, and probably inevitably, the post shifted to a cost-benefit analysis, which aimed to compare fossil fuel to alternative fuels.  Just as quickly, each side started accusing the other of hiding the real price of these energy sources behind government funding, whether in direct funds (alternative energy) or tax benefits (fossil fuels and alternative energy).

After reading everything, my question about the clean-air benefits of electric cars remains unanswered.  I don’t think anyone delivered a killing blow about electric cars’ virtues or failures.  What is patently clear, though, is that government interference perverts the marketplace, preventing a true analysis of each energy source’s true costs and, by extension, its true benefit in decreasing pollution.  It’s impossible to tell whether there wouldn’t be more utility in putting energy into clean methods for extracting, refining, and using fossil fuels, as opposed to having the government prop up the creation and use of alternative energy.  Only the marketplace can provide this true value analysis, and the government is completely corrupted the marketplace.

If I was king of the world, I would do away entirely with all direct or indirect subsidies.  Only in that way can we measure what really works.

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Comments

  1. says

    The Left corrupts all it touches. The USA is in the predicament it is because too many Americans spent decades upon decades attempting to compromise with the Left, making political deals, and using “data” from “studies” that the Left had already perverted.

     How many Fast and Furious operations have been conducted, without anyone’s knowledge, in the fields of education, healthcare, insurance, lawyer speak, and child care rights?

     They said the income tax was temporary for the war effort too. They said social security would be limited, cost effective, and affordable safety net too.

    The reason why Americans keep getting conned because of the dumb arse marks keep getting born, that’s how. 

  2. says

     
    Once the USSR went down, the U.S. became “the world’s only remaining superpower”, with all of the costs that that entails.
     
    One of those costs turned out to be maintaining much of the military infrastructure and population we had when facing the USSR – in Europe, Asia, the Mideast, etc.
     
    Along with that, the U.S. has been (in Rush’s words) “maintaining the free flow of oil at market prices” by defending the sea lanes, and whacking the bad guys who sought to create monopolies by attacking their neighbors.
     
    We’re still doing all that, but the leftists running the U.S. government have discovered that if the federal government refuses to allow the private sector to build currently viable energy sources (nuclear, coal, etc.) and refuses to allow the search for and production of oil on lands under federal control (both offshore and on), and sets impossibly high regulatory standards for current coal plants, and raises the CAFE standards beyond all reason, and requires the addition of fuels not currently available to the gasoline supply, and mandates a bewildering plethora of different gasoline mixtures for different parts of the country, etc. etc. etc., then they can watch the price of common forms of energy “skyrocket” (as was promised before the election), and force Americans to subsidize their own pet projects and enrich their friends and contributors.
     
    Rush has also said that energy is the fuel of liberty, and he is correct.  Sky-high prices for our energy, brought about (in part) by labyrinthine regulatory schemes, make us all less free.  The government is empowered, and the bigger the government, the smaller the citizen.
     
    So, I don’t care much about figuring out the relative costs of electric v. gas-powered automobiles.  What I want is a government cut back to something nearer the size the Founders had in mind.  If that is done, the rest of it will take care of itself, thanks.

  3. Danny Lemieux says

    To your point, Book, here is a survey that supports the contention that, without government assistance, there would be no future for electrical cars.

    Government subsidization was not the underlying business model for the conventional automobile industry. Henry Ford had to do it all on his own.

    That being said, I do have some sympathy with local areas that have serious problems with air pollution levying taxes on pollution emission to try to diminish local problems (e.g., the LA basin, although the LA basin has always had issues with air pollution, according to historical records), provided that it is based on science rather than ideology. 

    Perhaps, under these special, localized conditions, electric cars can be proven to be more economical. But, this should hardly apply to most of the rest of the country, where vehicle-caused pollution really isn’t much of an issue. LIke Earl said, it’s about our “freedom” to choose.

  4. Ron19 says

    Danny Lemieux:

    You are right about cleaning up and reducing air pollution.  By the way, when the LA Basin was discovered by the Europeans, the local Indians called it the “Valley of the Smoke.”

    Lake Erie used to be so polluted, it occasionally caught fire.

    It was not cleaned up by the Federal government, because this was before the Superfund Sites era.  It was cleaned up by the locals, governments as well as businesses and residents.  Also at this period in American History, many rivers were cleaned up without federal interference.

    As for superfund sites, I used to live 5 miles from California’s #1 toxic superfund site, the Stringfellow Acid Pits, near Riverside, CA.  It was a closed licensed and regulated toxic materials dump site, and it eventually leaked.  It was even the inspiration for an episode of the TV show, “Quincy, M.E.”  It took longer to clean up than lake Erie, and in the meantime the local government, with Federal approval, continued to approve the expansion of a housing development downstream from the dump, in the area that was high-lighted by the TV show.  Houses were still being built when the cleanup was started and underway.  It was also a small single-site problem, whereas the Lake Erie problem involved many sources and many businesses.  After it was cleaned up and stabilized, Riverside County remodeled a section of the Courthouse to get ready for a massive civil court trial that was avoided because all but one of the defandant businesses decided it would be a lot easier and cheaper to settle out of court.  I think I heard of proposed work on the #2 CA toxic superfund site later, but have no idea where it was or what if anything was done about it.  I don’t remember the Lake Erie businesses getting sued after the problem was solved.

    Another by the way.  When the Stringfellow Acid Pits were cleaned up, part of the process was to remove the toxic materials from the groundwater by running it through a small filtration plant, and the toxins were then trucked a hundred or two miles to another, granted more modern, toxic waste dump.  In the meantime, before, during, and after, some of my local tap water came from wells in the Stringfellow area, even downstream wells.  We got occasional reports on the results.  Our water was diluted until the toxic polutants were at levels lower than Federal and state standards, sometimes way lower.  We had the cleanest tap water in the Western Riverside County.  You could tell when they started mixing in Colorado River Water every summer, because the quality went down so far you could taste it.  The only water that was not acceptable for mixing in was from a few wells on or near abandoned turkey farms.

  5. says

    The belief of those who favor such interventions, of course, is that wise experts in government will design them in such a way as to optimize the effects on the overall economy. The fallacy of this view have been explained by the economists Hayes and Mises.

    In the early 1920s, the writer Rose Wilder Lane (daughter of Laura Ingalls Wilder) was still a Communist. Visiting a village in Russian Georgia, he villager who was her host complained about the growing bureaucracy that was taking more and more men from productive work, and predicted chaos and suffering from the centralizing of economic power in Moscow. At first she saw his attitude as merely “the opposition of the peasant mind to new ideas,” and undertook to convince him of the benefits of central planning. He shook his head sadly.

    It is too big – he said – too big. At the top, it is too small. It will not work. In Moscow there are only men, and man is not God. A man has only a man’s head, and one hundred heads together do not make one great big head. No. Only God can know Russia.

    More about Rose Wilder Lane and her political/economic thoughts here.

  6. says

    David:  I grew up reading, and then re-reading, Laura Ingalls Wilder.  Recent literary theory is that Rose had a great deal to do with shaping those books.  They reflect both her writing style, her libertarianism, and her fundamental optimism.  The very last book, The First Five Years, was published after Laura’s death, and without Rose’s input, and it’s very different in both style and tone. 

    Thanks very much for sharing that excellent link to your post about Rose Wilder Lane.  She was a remarkable woman, who looked beyond slogans and gave a great deal of thought to her transformation from communist to free market libertarian.

  7. Danny Lemieux says

    David Foster, thanks for the link. 

    Did you mean “Hayek” and Mises? To that illustrious list, I would also add Milton Friedman and Thomas Sowell.

    In reading through your linked article on Rose Wilder Lane, one particular paragraph jumped out at me:

    “Nobody can plan the actions of even a thousand living persons, separately. Anyone attempting to control millions must divide them into classes, and make a plan applying to these classes. But these classes do not exist. No two persons are alike. No two are in the same circumstances; no two have the same abilities; beyond getting the barest necessities of life, no two have the same desires.Therefore the men who try to enforce, in real life, a planned economy that is their theory, come up against the infinite diversity of human beings.  

    “Divide into classes”…or races, genders, cultures, economic groups, etc. Sounds like the Democrats today, doesn’t it? Conservatives and libertarians focus on individuals, the Left focuses on groups.

  8. says

    There’s a very simple solution to classes and individuals being unequal and different. Simply force them to conform to one standard, one class, one ideal. Slaves, after all, are one class composed of many different individuals, yet their individuality has no relevance to their economic output. That is the Utopian Ideal of Leftists.

  9. Dan5 says

    To quote bookworm
    “After reading everything, my question about the clean-air benefits of electric cars remains unanswered.  I don’t think anyone delivered a killing blow about electric cars’ virtues or failures. ”
    Here’s the straight numbers (verifiable from edmunds.com, and the gasoline number from any petrochemical text book)
    1. Tesla Model S gets 300 miles with 85 kwhr
    2. Audi A7 (it’s competitor) gets 23 mpg average (18 mpg city, 28 highway)
    3. Gasoline has about 36.6 kw-hr/gallon or 13.25 kw-hr/kg
    4. Coal energy density is 6.67 kw-hr/kg
    5. The conversion from carbon to CO2 is made by multiplying by 3.67
    Per mile the Tesla uses 0.283 kw-hr/mile, the Audi uses 1.59 kw-hr/ mile. Just as a per driving basis/excluding generation etc, etc, the Tesla is 5.62 times more efficient.  Other EVs varying between 0.25 and 0.32 kw-hr/mile depending on weight and speed
    If you account for electricity generation and refining of oil, the numbers change, even for a coal plant
    Typical US number for electricity generation is around a 50% generation + transmission loss , so that pushes the EV up to 0.566 kw-hr/mile.  Also during the refinery process, about 1/8 of the energy is spent refining so that pushes the Audi up to 1.81 kw-hr/mile. The Audi is still 3 times less efficient than the Tesla in terms of energy use.
    Let’s be generous and say 100% of the electricity is from coal and let’s say everything is 100% released into the atmosphere. 
    To go ONE random mile
    Tesla including all the loses = 0.084 kg of coal per mile
    Be generous again- say the coal is all carbon so that’s 0.308 kg of CO2 per mile.
    Audi, including all the loses= 0.1366 kg of gasoline per mile
    Gasoline is 87% carbon, so that’s that’s 0.436 kg of CO2 per mile. 
    More or less the Audi A7 puts out about 40% MORE CO2 than the Model S. 
    In the case of the Model S, the competitor would have to get 32 mpg to be at the same emissions Obviously this is a sloppy analysis and gives ALL possible benefits to gasoline for a like to like car.  I suggest toying with the numbers from a state by state basis and suggest doing a like for like analysis, e.i. no one is going to cross-shop for a Tesla Roadster (100 K + car) vs a Prius (19 K car)

  10. Dan5 says

    Using the information from the previous posting, let’s play a little game using real numbers
    1. 2009 data for US Average (delivered to your house from the source, including mining of the materials)
    Coal- 44.9%           960 g/kwhr
    NG- 23.4 %            443 g/kwhr
    Nuclear- 20.3%         66 g/kwhr
    Hydo- 6.9 %             10 g/kwhr
    renewables – 3.6%      10 g/kwhr
    Petrochemical -1%    778 g/kwhr
    The average is 645 grams/kwhr
    An EV is 0.3 kwhr/mile= 0.1935 kg CO2 per mile
    Back calculate an MPG for a normal car
    .1935 CO2 kg per mile * (12 grams carbon/44 grams CO2) *(1 gram gas/0.87 grams carbon)* (2.2 lbs/1 kg) *(1 gallon/6.06 lbs) * 0.8 (exploration, drilling and refining of the oil) =
    0.0191584 gallons/mile
    Divide 1 by that number to give mpg = 52 mpg
    Name one regular car in the US that gets over 50 mpg on a regular, as advertised basis and still meet all the criteria acceptable for the highway (crash testing, decent acceleration, reach highway speeds, etc). 
     
    Note: The Subaru 360 may be OK, but who would go for a car that takes 37 seconds to go from 0-60 and cannot reach highway speeds.

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