Comment by sp332 | Hacker News Reader

Comment by sp332 | Hacker News Reader

Ugh, what a bad-faith argument. The whole reason government puts subsidies on things is to encourage those things. The article starts with the assumption that market distortion is always has a bad outcome, but it's going to have to back that up. It also assumes (at the end) that our representatives in Congress can't possibly really be representing us.

The rebates and tax cuts are working as intended. For example, by paying $7,500 for a certain class of electric vehicle, we tip the balance for people considering buying a somewhat less expensive internal combustion car. Just by tipping the scales, we shift a significant fraction of the demand from IC to electric, which makes a huge difference in the market, and therefore capital investment in manufacturing. Just doing this for a few years gets us decades ahead of where we would be in terms of electric vehicle technology.

Corruption is always possible but it's not a given. For an old rebuttal, Musk's "The House Always Wins" essay still applies. https://www.tesla.com/blog/house-always-wins

P.S. The tax credit already get phased out above 200,000 vehicles per manufacturer, so it's not going to apply to all 500,000 pre-orders (even assuming they all become sales). https://energy.gov/eere/electricvehicles/electric-vehicles-t...

But consider that Elon Musk has recently come out vocally agains the subsidy.

He feel's that rather than an electric car subsidy, carbon should be taxed and 'let the market decide'. https://twitter.com/elonmusk/status/338108608430632960

That is what a bad faith argument looks like. Having taken the subsidy for years, as all of the other major car maker are starting to offer an electric model, he gets religion and wants the subsidy eliminated. That is, once it starts to benefit competitors more than Tesla, it's a market distortion.

I don't begrudge him playing the game better than others, but don't pretend he's not playing the game.

There might even be a good argument against subsidies. But the article was not it.

Probably a better counter point would be for somebody to provide some examples where market distortion hasn't had a bad outcome.

How about some examples of "undistorted markets" resulting in unambiguously good outcomes first?

Government regulations on cleanliness in restaurants completely destroyed the rat shit covered segment of the restaurant market and marginally increased the costs of running a restaurant.

The assumption that the car market is "free" and not distorted is is already a pretty silly idea. The largest reason for promoting electric vehicles is that the cost of pollution isn't taken into account within the market for internal combustion cars. There's already a substantial distortion. With all costs included, electric cars may already be "cheaper".

I'm not saying the government subsidies are wrong, but a counter case might be what if the government subsidized scientifc GPU's at the turn of the century over gaming GPU's? Would gaming have grown as big as it is without modern GPU's targeted at gaming? Would we have gotten such cheap GPU compute power without the massive investment in gaming? Would the government subsidy have ended up hurting long term advancement in GPU's?

There's always a chance of unintended consequences. But of course doing nothing isn't always the right answer.

Do you have any historical examples of where government subsidies were "wrong"? It might present a stronger argument than one based on a "what-if".

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