BAPB* No. 4: Betting on batteries, a class project, and more football picks.
Updated: Oct 28
Betting the farm on batteries
Right now our country and maybe the entire world are in electric car mania. And anytime there’s mania, there are new opportunities for crony capitalism, in which our governments pick favored industries and corporations to shower our tax dollars on. Right now, that’s batteries.
Yesterday the federal government announced $2.8 billion in grants for materials mining and manufacturing for cars and other batteries. The goal, to increase domestic supplies for battery materials, is a good one, and the cost is pretty small by federal government standards. I have three concerns here:
Is this going to make a difference? Probably not. Research shows that government incentives rarely change business decisions, they just transfer tax money to shareholders. In all likelihood, these projects would have gone forward without the federal money.
What’s in it for us? If anybody besides the government was handing this money over to a dozen corporations, they’d get equity in the businesses and ultimately profit if the investments were good ones. Why should taxpayers not get the same benefits? We should! When we bailed out the auto industry we got nearly all our money back, and we should expect the same as we support that industry once again.
Mining has not been a good look for us in the past; will it be in the future? The mining industry is the top polluter in the country, creating huge cleanup bills that will likely fall on all of us, ruining our rivers, damaging our health, and destroying indigenous communities and land. If electric cars and storage batteries are going to reduce our use of petroleum products, now is the time to ask serious questions about whether we’ll improve the environment in the process. Throwing tax money at battery mining could well make us worse off in the long run.
States also love to throw our tax money into private businesses. For now it looks like the two favorite targets are chip manufacturers and electric cars. So far states have promised $14 billion to lure electric car and battery factories, and billions more are in the works. Too many of the jobs that may result from these subsidies are low-paying and most are at non-union plants. The relatively low pay and the loss of jobs in competing industries could mean states will be no better off economically from having the plants at all, much less subsidizing them.
Oklahoma’s a huge subsidy dispensary and we’re certainly keeping up in the electric frenzy; we’re in the Top 10 for tax money given away for electric cars. We may not have spent a lot, if any, of the $300 million for Canoo to build a factory, but that factory is at least two years away from being a reality. I wrote earlier about the stupidity of a battery subsidy for Panasonic and about how we can use the money we saved when Panasonic found tastier prey in Kansas to actually invest in Oklahoma and Oklahomans.
I’ll write more on this later, but I fear we are making the same mistakes we did with oil and gas and nuclear energy in assuming we’ve found the perfect technology, jumping into it whole hog, and ignoring the possible damage to our planet and our health. And this time we’ve decided that pursuing this technology requires government help at the expense of using tax dollars for people and public services. Electric cars and batteries may be some of the answer to the ills of petroleum, and things may be so dire we need to try everything, but we ought to be thinking about other options and let them compete for technological superiority and customers instead of government handouts.
Oklahoma? Texas? Neither? Both?
When I worked more closely with the Oklahoma Legislature, it was not unusual to hear Republicans argue we need to eliminate the state income tax because Texas doesn't have one and they are better off than we are. Which brings up three questions I want to think and write about next week.
Is Texas better than Oklahoma?
Is it because of the lack of income tax?
Should Texas envy be driving our public policies (ok, four questions), and should we be electing people who wish they were Texans to make Oklahoma laws?
I'd love to get your thoughts on this. Is one better than the other? Why? Is that measurable or something more intangible? If one is better, what policies should the one that's less better borrow?
Feel free to comment on this post or on the questions I put on Facebook and Twitter.
College Football Week 8
Last week's picks were likely better than random, but not a lot! If you want to join me in making fun of them, last week's post is marked up with correct and other picks. This week I'm picking against my preference in the only matchup of Top 10 teams, as I like UCLA over that place I attended. Otherwise I don't see surprises in the Top 25, though anything can happen when the top Big 12 teams (here TCU vs. Kansas State) meet up and Syracuse should be way closer to Clemson than the 14 points given by the oddsmakers. In the Pac-12 I dramatically under-estimated Colorado last week and probably doing the same again this week.
Update: Looks like I was (14 of 16 (that's good!) on straight up winners and 6 of 13 (that's broken kneecaps!) against the line. Correct are underlined and incorrect are italicized. Particularly pleased with getting Clemson-Syracuse and Oklahoma State over Texas. Happy but puzzled that Oregon beat UCLA so easily. Ummm...Go Ducks?
#2 Ohio State
Ohio St by 30
Clemson by 14
Cincy by 3.5
LSU by 1.5
Oregon by 6.5
#11 OK State
Texas by 6
#13 Wake Forest
Wake by 20.5
Tulane by 7
#24 Miss. State
Alabama by 21
#16 Penn State
Penn St. by 5
#17 Kansas St.
TCU by 3.5
Baylor by 10
Tech by 6
Stanford by 2.5
Oregon St. by 23.5
Wash. by 7.5
*Bouncing Around Paul's Brain