December 27, 2011
Magnitudes of Bull****
Oh man! Or, as they say on ESPN, "C'mon Man!" I'll be the first to concede that the figure of 250,000-in-federal-jack-per-Volt is a salacious, audacious figure. It's a headline grabber, it's link bait. It's a bit high.
But now that I have read the defense, it's standing up firmly. Insty links to Sebastian Blanco at AutoBlogGreen. Blanco disputes the $250,000 figure, with a flourish:
Oh, how easy it is to go viral on the Internet. All you have to do is be really, really bad at math. Or have an agenda.
The folks propagating 250K had an agenda. But were they bad at math? They divided subsidies by the current production. Likely that is not fair. Investments -- coerced from the taxpayers or not -- should be amortized over a longer run or perhaps all of production,
The Street.com goes looking for the denominator:
Here is the point: Why divide whatever amount -- $1.5 billion or otherwise -- by the number of Chevrolet Volts sold to date? If he had done this study one year from now, when we could be looking at 60,000 Volts made, as GM repeatedly has promised, the headline number would be $25,000 per car -- not $250,000.
Less than two Manhattan movie tickets, you cheapskate! When you realize the government is designing the next 60 million cars! That's nuthin'!
I suggest the Street.com's stirring defense actually provides a realistic figure of $25,000 -- which I consider completely and totally insane. Twenty five K of tax money to build a $40,000 car for a buyer who makes (avg) $170,000 per annum. I trust ThreeSourcers would be upset at $25 (enumerated powers, anybody?) but the whole nation should be upset at $25,000.
Of course if you divide by everyone born in the next million years...