Here’s a letter to the Wall Street Journal:
Editor:
Environmental Defense Fund president Fred Krupp makes “the case for subsidizing electric vehicles,” insisting that ending these subsidies will “cede global leadership to China” (January 7). This case fails. While Mr. Krupp is correct that subsidies from Congress draw more American resources and workers toward producing EVs, he ignores the fact that these inputs must be drawn away from producing other goods and services. Importantly, the key inputs that subsidies draw into EV production aren’t ones with a comparative advantage at producing retail services and other low-tech, low-value outputs; these inputs have a comparative advantage at producing high-tech, high-value outputs.
Which high-tech, high-value outputs will EV subsidies cause Americans not to produce? Which cutting-edge American industries will EV subsidies cause to shrink or never emerge, thus ‘ceding’ global leadership in these industries to China? Mr. Krupp never says because he never asks. But until proponents of EV subsidies ask and seriously attempt to answer these questions, the case for EV subsidies will remain bogus.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
