Really. Why should we try to do anything about gas? Everything but oil is a scam.
On Sep 28, 9:12 am, MJ <[email protected]> wrote: > "Government would have us believe that a new regulation is the result of some > great, objective, and careful investigation. But mostly these regulations and > spending programs are foisted upon us by the people who only yesterday were > nothing more than lobbyists for some fervently held cause. There has been no > new data, but yesterday's lobbyists are today carrying the mantle of great > authority and prestige because they have become high-level government > bureaucrats. > "We economists call such lobbying "rent seeking" and those who engage in it > are "rent seekers." Rather than seeking the cooperation of other men in the > free market, a rent seeker lobbies government to impose some special > privilege. The cost of the rent seeker's efforts is greatly reduced because > he need convince only a few elected officials or government bureaucrats > rather than the entire market. His job is made all the easier by the > knowledge that the elected official or government bureaucrat can grant the > privilege with no cost to himself."A 132-Year Payback on the All-Electric > CarTuesday, September 28, 2010 > byPatrick Barron > The termenergyencompasses a plethora of technologies, and each attracts the > gimlet eye of Big Brother. In recent years environmental groups have been > very successful in insinuating themselves into the halls of government so > that today there is a revolving door between government and the environmental > movement. And it's just like the revolving door between the government and > other key industries, such as banking and the military-industrial complex. > Government would have us believe that a new regulation is the result of some > great, objective, and careful investigation. But mostly these regulations and > spending programs are foisted upon us by the people who only yesterday were > nothing more than lobbyists for some fervently held cause. There has been no > new data, but yesterday's lobbyists are today carrying the mantle of great > authority and prestige because they have become high-level government > bureaucrats. > We economists call such lobbying "rent seeking" and those who engage in it > are "rent seekers." Rather than seeking the cooperation of other men in the > free market, a rent seeker lobbies government to impose some special > privilege. The cost of the rent seeker's efforts is greatly reduced because > he need convince only a few elected officials or government bureaucrats > rather than the entire market. His job is made all the easier by the > knowledge that the elected official or government bureaucrat can grant the > privilege with no cost to himself. > When a rent seeker gets a job in government itself, well, the fox is in the > henhouse. Officials move billions of dollars and coerce millions of people > with no responsibility whatsoever. If a program fails to achieve its grand > design, no government official suffers the consequences. Furthermore, failed > regulations are seldom repealed, because, despite the net burden to the > economy, a few new constituents do benefit and lobby mightily to keep them in > place.A Revolving-Door Lobbyist for the All-Electric CarSuch is the case, as > recently reported by the Associated Press, of a lobbyist for an all-electric > car."Leading the Charge" glorifies Mr. David Sandalow, a US Department of > Energy assistant secretary and an avid advocate for the all-electric car. > Hybrid cars usually recharge their batteries only while operating on their > gasoline-powered engines, but Mr. Sandalow has converted his Toyota > Priushybrid into a plug-in hybrid at the cost of $9,000. Now he can recharge > his car's battery from his home electrical outlet. > Mr. Sandalow is very proud that his daily five-mile commute (a ten-mile round > trip) can be accomplished with a gasoline-refueling stop only "about once > every month or two." Nevertheless his car needs to recharge after only 30 > miles of travel, so he advocates that the government pursue developing a > battery that will allow 100 miles between rechargings. > The government itself estimates the cost of such a battery at around $33,000 > per battery. How the government knows this when no such battery yet exists > was left unclear. > The article reassures us that government tax credits and stimulus funds will > reduce the cost to the consumer to around $10,000 per battery. (But we > Austrian economists know that government subsidies do not lower costs; they > only change who pays. So it is disingenuous to say that government subsidies > will lower the cost of such a battery.) Mr. Sandalow estimates that his > electricity cost is equivalent to buying gasoline at 75¢ per gallon.Recoup > Your Investment in Only 132 Years!One does not need to be a Brookings > Institute scholar like Mr. Sandalow specializing in "oil dependence, electric > vehicles, and climate change" to see why no one will willingly purchase an > all-electric car, much less the one million that President Obama wants on the > nation's highways in five years. (Call me cynical, but this number does not > sound as if it were the result of a scientific analysis either.) > First of all, the cost of anything is that which is foregone by the purchase. > In other words, when we buy something, we cannot spend this money on other > things. That is what our cost is. In the case of Mr. Sandalow, his $9,000 > investment cost him 3,000 gallons of gasoline at the current price of roughly > $3 per gallon. Assuming Mr. Sandalow's Toyota Prius gets only 20 miles per > gallon, he could have driven his car for 60,000 miles. Since his commute is > 10 miles per day, Mr. Sandalow's conversion cost is the amount of gasoline he > could have purchased to drive to work for 22.7 years. > But that is not the only cost; the cost of electricity, which Mr. Sandalow > estimates to be the equivalent of 75¢ per gallon gasoline, has yet to be > considered. This expense adds an additional $2,250 to his commute 60,000 > miles divided by 20 miles per gallon times .75 = $2,250. Stated another way, > he could have purchased another 750 gallons of gasoline and commuted to work > for another 5.7 years, or 28.4 years total. > Now let's move on to the $33,000 battery. Hold onto your hats! At $3 per > gallon, Mr. Sandalow could have purchased 11,000 gallons of gasoline and > driven his Toyota Prius for 220,000 miles. But, again, he would have had to > buy electricity at the equivalence of 75¢ per gallon, which would have cost > him another $8,250. With this additional money he could have driven another > 55,000 miles, or 275,000 miles total. This would allow our intrepid energy > saver to drive to work for 104 years. (Of course, this cost assumes that one > $33,000 battery will last for that many miles. If two batteries are required, > you can double the cost and the years required to break even.) > So, by converting his car to a plug-in hybrid for $9,000, buying a yet-to-be > produced 100-mile range battery for $33,000, and buying electricity for the > equivalence of 75¢ per gallon of gasoline, Mr. Sandalow could have purchased > enough $3 per gallon gasoline to enable him to drive to work for 132 > years!Trust Only the Free MarketI have looked at the all-electric car > calculation only from the point of view of the consumer. I have not touched > upon the nation's capacity to generate enough electricity to recharge those > one million batteries so desired by President Obama. And one can merely > speculate on whether producing this additional amount of electricity will > cause more smokestack pollution than the tailpipe pollution it supposedly > will prevent. Certainly this is not a debate in which Austrians would engage. > As Ludwig von Mises makes clear in chapter 8 ofHuman Action, the only basis > of economic calculation is money prices via a free market. This does not mean > that unlimited pollution from power plants or automobile tailpipes is > permissible. Property rights and one's health may not be abridged by > another's pollution. But it does mean that a basis already exists for > deciding upon the wisdom of an all-electric car the free market. > MP3CD > Each man strives to improve his own condition by seeking the cooperation of > others. Entrepreneurs who believe in the all-electric car are free to invest > their own money and lobby investor capitalists for more. But right now the > all-electric car appears to be a black hole for wasting more taxpayer money. > We must disabuse ourselves of the propensity to believe that anything can be > accomplished as long as government throws enough money at it. We have been > down this road before with thefast breeder nuclear reactorthat was supposed > to produce more fuel than it consumed. Billions were wasted. We seem to be > doing the same thing today with wind and solar power, too. There may be an > economically rational niche for these energy technologies, but only the free > market will give us the answer. > Patrick Barron is a private consultant in the banking industry. He teaches in > the Graduate School of Banking at the University of Wisconsin, Madison, and > teaches Austrian economics at the University of Iowa, Iowa City, Iowa, where > he lives with his wife of 40 years.http://mises.org/daily/4714 -- Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more.
