Sunday, November 16, 2008

Fix It, America: Space Cars!

It seems inevitable now that the government's involvement in our economy will continue to grow, and given that, I'm going to spend the next three Sundays showing how it should grow.

The government's involvement in the US economy will grow in indirect ways, such as commissioning giant, one-use table/plaques for use in announcing what it is all these heads of state are doing together...
... and how much do you suppose it cost to decorate and create that room? Was there something wrong with the White House? I've been to the White House, back when the United States government still let people visit the United States' government. It has meeting rooms and the Oval Office and all sorts of other places to get heads of state together for a photo opportunity.

But we spent tons of money to build a giant table plaque in the middle of those leaders, a plaque that announces that this is the G20 summit to deal with economic problems.

Which is worse: AIG crying "crisis" and going on a spa retreat, or the government crying "crisis" and building a giant table?

That's not my point today, though. My point is that the government's involvement in the economy is likely to grow more significant over the next few years, and is likely to grow in more obvious ways than simply subsidizing the Giant Table Plaque Sector.

One way it's likely to grow is that the government, having begun the process of investing in the financial industry (remember that bailout? How's it going so far? Remember how we had to hurry and get that passed and couldn't debate it because time was a wastin'? Hey, guess what: Not a single penny has been spent so far! Wow! Good thing we hurried! Also, good thing that "Secretary" Paulson has abruptly switched plans, now intending to use the money for buying bank stocks, a plan which will come in handy to secure himself a good position when he leaves the Failed Bush Administration. It used to be that lying to Congress to get money was considered a bad thing.) The Government will now become an investor of sorts in the auto industry, too: The Senate is going to debate tomorrow whether or not to give $25 billion-- mere pocket change to Secretary "Hold My Spot On the Board At Goldman Sachs" Paulson-- whether to give $25 billion to automakers who are suffering because people who are worried about their jobs and their homes and their health care aren't buying new cars.

The $25 billion may or may not come from the previous $700 billion bailout; but here's what's certain: the government will do it.

Which is where I come in, and my point today.

When I am asked, at work or at home, to give money or lend money or invest in a project, I sometimes do and sometimes don't give that money, depending on my own financial situation and my goals and needs.

So, for example, this weekend, I was looking at upgrading my computer desk; the desk we have at home for my laptop is small and cramped and I don't like it. And I found a new, bigger table that could be used for my computer desk, and it was only $69 (it was used; I rarely buy new furniture), a price I could afford.

But I didn't get that desk. I stuck with the old cramped little desk, because times are tough right now and I don't have money to throw around.

See, government? When times are tough and there's not money to throw around, I don't buy a new table. Perhaps you should not have, either.

On the other hand, I also went and looked at buying a used car to upgrade Middle's car, and made an offer to buy it. It was a little more money than I wanted to spend, and times are tough, but I decided that I would buy the car, if the seller meets my price, and here's why: Because when Middle goes off to college next year, I want her to have a safe ride to and from school, and an incentive to stay in school. This car would serve as both, because it's a good solid car, and because I told her that I would buy the car, and she could have the car for free as long as she stays in college and gets good grades.

That's the same deal we made Oldest: We'll get you a good, safe used car. It's yours to keep if you go to school. If you drop out of school, you give the car back or buy it from us.

Like my computer desk, and the G20 table, Middle's car relates to the auto industry bailout, and here's how:

The government has needs and goals, too, and there's no reason it should subordinate those needs and goals to the desires of the automakers. Just as Middle wants a car and I want her to go to college, the auto makers and the government both have competing goals and needs. And just as I have the money, the government has the money.

Which means the government's goals and needs should be met if the automakers want the money.

The automakers want a short-term bailout; they want to keep making cars and trying to sell Hummers and SUVs to people and keep getting exemptions from otherwise-easy-to-meet fleet fuel standards, and the automakers want $25 billion to do that.

The government should say no to those needs and demands, and instead, should say this: We, as a country, need a couple of things. We need people to go back to work and more people to start working so that they can buy cars. We also need to reduce our reliance on foreign oil, and restore some sanity to a car market in which the AVERAGE price of a new car, at $28,715, equivalent to nearly 1/2 of an average worker's annual pay.

Most members of Congress, and all of the Failed Administration of the Worst President Ever, were simply talking about whether the money should be given, and not about under what terms the money should be given -- that is, most of the government is engaging in business as usual. But President Obama -- thank God we elected him --was not; instead, President Obama, who should simply be allowed to start running things now, said this:

"... my hope is that ...the discussions are shaped around providing assistance but making sure that that assistance is conditioned ...coming together with a plan — what does a sustainable U.S. auto industry look like?"

That's a great beginning. With that, President Obama got everyone talking about what the government -- what We The People-- will get for our $25 billion.

Here's what we should get:

Major change.

Major overhauls.

An auto industry that really begins looking like a sustainable, future auto industry.

Space Cars!

I'm not being facetious when I say that; I'm exaggerating only a little. The government is prepared to invest in the auto business and it can invest in the equivalent of the buggy-whip manufacturing industry, propping up an industry that must eventually change because we cannot go on forever relying on petroleum...

... or the government can take a step forward and invest its money in creating the future of America.

Here's how:

The government should take more than the $25 billion it is promising. Completely redo the package. It should promise not just $25 billion, but $100 billion or more, conditioned on this: Automakers -- United States-based or elsewhere-- must begin producing hydrogen fuel cell cars.

At the same time, alongside the money to the automakers, the government, We The People, should also tell oil companies (or any other company that wants to) that it will make money available to convert existing gas pumps to hydrogen fuel cell dispensers (or whatever they are called).

Fuel cell cars already exist. Fuel cell cars are being produced by Chevrolet -- good ol' American Chevy -- and are being driven in major cities. But you can't buy fuel cell cars from Toyota (you can lease them from Honda, though, if you live in Southern California), and if you could, you couldn't exactly drive up to the nearest PDQ Convenience store and fuel them up.

You can't buy them because they're expensive to produce and not for sale to the public, and they're expensive to produce and not for sale to the public because the public can't buy them. (Joseph Heller would be proud of that situation.)

But fuel cell cars use no gasoline.

They produce zero toxic emissions; they give off only water vapor.

They can even, it seems, be repowered at home using natural gas (and also providing power to your own home at the same time.) (That's from Honda, too.)

A clean burning car that can go up to 100 miles per hour and uses no petroleum exists and is being driven.

But you can't buy them.

And it would be so easy. All the government, all We The People have to do is tell the automakers you will get your money, but in exchange for your money, you now have to begin producing fuel cell cars for sale to the public.

And then all we have to do is encourage and assist companies in converting existing gas stations to hydrogen-fuel-cell-refueling stations. The government could do that, too, by telling those petroleum companies that operate them you will receive tax breaks if you begin the conversion process.

And then all we have to do is subsidize those who purchase fuel cell cars, and penalize those who don't, and slowly, gas-burning cars will phase out and hydrogen cars -- Space Cars -- will phase in.

Yes, it's a large undertaking; yes, it would require a great deal of time and effort and money. But so did everything else worth doing in the history of America. The transcontinental railroad, settling the West, winning World War II, landing on the moon -- all required massive effort, massive investments, and a great deal of time. But they were worth doing, and we did them.

And the money is there; the ability is there. The precedent even exists -- the government, We The People, decided that it was necessary to switch television broadcasts to digital, so We ordered it, and then we made available a subsidy of $80 per household to help everyone make the switch.

So, America: You got your government to pay for your TV upgrades. Will you insist that your government similarly upgrade your automobiles? Or will we continue to throw tomorrow's money away on yesterday's technology?

The Fix: Quit "bailing out" industry and instead begin upgrading industry.

(1) The government can offer to guarantee low-interest loans from banks to automakers, and can make tax free interest income on bonds issued by automakers, provided that the money be used to immediately retool factories to begin producing hydrogen fuel cell-powered cars. The same loans-and-bonds plan could be used to get convenience stores and gas stations to begin installing hydrogen-fuel-cell refueling pumps. If the banks won't lend and investors won't buy, the government itself can lend the money at no interest, with the loans supervised by the Department of Transportation. This would put people back to work not just making cars but also retooling factories and upgrading convenience stores and the like.

(2) At the same time, an additional 10% tax -- call it the "Saving America's Future Tax," and we won't mind paying it -- should be instituted on every sale of any vehicle that runs on petroleum. With the average new car costing $28,000, this would generate $2,800 on average from the sale of any new car -- and more from high-end luxury cars.

What you can do until the Fix is In:
Go to the Honda website and sign up for updates on the fuel cell car program; this will show interest in the program and help prove to automakers that there's a market for them. And you may get a chance to lease one of them -- and they only cost $21,000 or so to lease, so you're getting a new car for less.

get in touch with your member of Congress: click here to get a map and links to emails for contacting them, and tell them Quit using my money to bail people out; instead, start using my money to invest in the future. And give them a link to this article.

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