Artificial Markets

The Car Battery and battery car industries are two, and the situation hasn’t gotten any better in the three years since Mike Ramsey’s piece in The Wall Street Journal.

Since 2009, the Obama administration has awarded more than $1 billion to American companies to make advanced batteries for electric vehicles. Halfway to a six-year goal of producing one million electric and plug-in hybrid vehicles, auto makers are barely at 50,000 cars.

Two of those companies, in fact, have since gone bankrupt: Fisker Automotive and A123 Systems now are wholly owned by People’s Republic of China’s Wanxiang Group Corporation. Without repaying us American taxpayers.

The underlying problem isn’t unique to the Obama administration; his has just been the most recent and most egregious. The plain fact is that government stinks at creating industries and at creating markets. Only free markets—only people acting voluntarily and freely in accordance with their own wishes and needs—can do that. Free markets won’t always succeed at that, either, but in that case, the only ones who suffer losses are those who (voluntarily) made the bet. On the other hand, if they succeed, everyone gains to some degree.

When governments fail at this, though, everyone loses to some degree. Worse, while the same universal gain results from a government success, even neglecting greater friction losses from government involvement, there will have been no choice in the matter.

If the thing can’t survive without government intervention, it’s not ready for market. If it’s not ready for market, it’s…inappropriate…for taxpayers to be forced to prop it up with their tax money.

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