Keynesian Porn

Read this and thought “right on brother”.

it ain’t exactly the whole truth and nothing but the truth. Every American who pays taxes is invested in your EV at this point.

Self-righteousness gets you nowhere when the playing field ain’t level. Just sayin…

[From Quote Of The Day: Don’t Make Me Pull This Oversubsidized Niche Over Edition | The Truth About Cars]

I keep hearing about EV and cleantech energy companies expanding in spite of the state that the U.S. economy is in, as was the case when President Obama visited Solyndra here in the Bay Area yesterday. Without exception these companies are benefiting from enormous subsidies from the Federal, state and local governments in the form of tax credits for consumers, and grants and loan guarantees.

There is an argument to be made that the government is simply stepping in where the private debt marketplace is failing, which is providing expansion capital but even here the government bears responsibility for contributing to the condition that are causing the debt market to contract, which is revealed in today’s report about the M3 money supply which now matches the decline seen between 1929-1933.

“It’s frightening,” said Professor Tim Congdon from International Monetary Research. “The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly,” he said. (Telegraph) [my emphasis].

We can debate the merits of various fiscal and monetary policies but the one thing that should be agreed upon is that a marketplace that depends on the government for financing expansion while at the same time depending on the government to incentivize consumers to buy their products is not a healthy one. It’s Keynesian porn plain and simple, we are paying companies to expand while paying consumers to buy their products which would not be economically competitive without both subsidies.

When it comes to GM I find their chutzpah to have few equals, from running ads proclaiming that they paid back taxpayer funded loans while not mentioning the other $43 billion in taxpayer money that converted to equity and will likely never be paid back (GM would have to achieve a market valuation greater than what they had 10 years ago when they had more market share and a high growth financing operation called GMAC), to now attempting to take credit for “investing” $700 million in EV production without also mentioning that it’s funded by $14.4 billion in taxpayer loans to the company in addition to all the other funds provided to keep GM floating. BTW, taxpayers will also fund $7,500 for every buyer of a GM Volt. Shameful.

Maybe GM should spend some time talking about how they are (see slide #8) unable to contain market share loss without paying buyers with well above average incentives for new cars and trucks? Just sayin…