Obama's meddling puts the brakes on the green car industry
In spite of a decade of failed government vehicle-efficiency policies, Obama has poured millions into the 'advanced vehicle' and fuel industries and wants to increase involvement. Unfortunately, the harm done by these handouts will extend far beyond simply wasting taxpayers’ money.
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In spite of this record of failure, the Obama administration has poured hundreds of millions into the so-called advanced vehicle and fuel industries and wants to increase involvement in the future. Unfortunately, the harm done by these handouts is likely to extend far beyond simply wasting taxpayers’ money.Skip to next paragraph
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The federal government has no expertise designing fuel-efficient vehicles. Nor does it have any unique insight as to which technologies will be successful in the future. What it does have is the ability to trade legislation favorable to its “partners” for campaign contributions and political support.
This unholy alliance between government and business could act as an impediment to innovation as insiders use their political clout to squash innovation by outsiders that threatens them. If people doubt this, they only need recall what happened to Japanese companies when they proved “too successful” at providing consumers with high-quality, technologically advanced and fuel-efficient cars in the 1980s: The US government slapped import restrictions on them at the behest of US automakers and their unions.
The perversion of public policy to serve private interests is hardly confined to the automobile industry. High prices and inefficiencies brought about by the so-called “capture” of federal agencies overseeing railroads, trucking, and airlines led to politicians with as diverse views as Ronald Reagan and Ted Kennedy championing deregulation of those sectors in the 1970s and 1980s.
The benefit to consumers of disentangling public and private interests has been enormous. The resulting drop in fares brought about by structural and technological innovation of the airline industry, for example, helped turn a mode of transportation once reserved for the “jet-set” into one for the masses.
The high-tech products that have added so much to our lives in recent years – smart phones, iPads, and the like – are not the result of public-private partnerships or federal subsidy programs. Instead they are the outcome of firms wrangling for consumers’ dollars in the marketplace. The federal foray into automotive engineering over the last two decades has clearly shown that such intervention is not a substitute for this process. Indeed it’s been a hindrance.
The key to developing the vehicles of tomorrow is to end government intervention in the automotive sector and allow firms to experiment with a wide range of technologies on an open, level playing field. Such a do-nothing policy would help our country progress in two important areas: developing more efficient, safer and smarter cars, and cleaning up Washington.
Patrick Fleenor is chief economist of Fiscal Economics, Inc.
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