Private vs. public

by Russ Roberts on February 27, 2009

in Environment

The New York Times reports:

The Energy Department has $25 billion to make loans to hasten the
arrival of the next generation of automotive technology —
electric-powered cars. But no money has been allocated so far, even
though the Advanced Technology Vehicles Manufacturing Loan program,
established in 2007, has received applications from 75 companies,
including start-ups as well as the three Detroit automakers.

The rest of the article is mostly about the bureaucratic bottlenecks that have kept the program from doing anything. But the best part is this quote from the director of the program:

“No one else out there will take on this risk,” said Mr. Seward. “It
reminds me of the time at the dawn of the auto age when you had
hundreds of companies making hundreds of kinds of cars and then they
all coalesced. We are back in that era of invention again.”

No one else will take on this risk? GM has put $2 billion into the Chevy Volt. Toyota is working on a battery powered car. The Tesla is out there. There are all kinds of other efforts going on, all financed privately and all actually doing something. But he's partly right. If the government program gets big enough, all those efforts will stop and everyone will turn to Mr. Seward.


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