Quotulatiousness

April 4, 2011

Totally underground band loses millions to illegal downloads…or do they?

Filed under: Cancon, Economics, Media, Technology — Tags: , , , — Nicholas @ 09:39

An interesting article looks at a claim by an obscure band that their debut CD had been pirated over 100,000 times:

Late last week, TorrentFreak was contacted by a guy called Wayne Borean who alerted to us to a somewhat heated debate he’d been participating in on the ‘Balanced Copyright For Canada’ Facebook page.

“There’s a Rock Band called One Soul Thrust. They have a debut album, which I like (bought it off iTunes). However the first I heard of the band was when there were complaints that the band had gone Platinum — because of illegal Torrent downloads!” Borean explained.

Indeed, according to a press release from the band’s manager, Cameron Tilbury, the situation is very serious.

“The Canadian Recording Industry Association (CRIA) states that, to achieve Platinum status, an album must achieve sales of 100,000 copies/downloads of an album. Sales…that’s the key. A random polling of several torrent site’s downloads — ILLEGAL downloads — has shown that 1ST, the debut cd by ONE SOUL THRUST has been downloaded over 100,000 times,” he wrote.

That’s really terrible, isn’t it? An obscure band, hoping to make it big by selling their CD have an illegal audience more than 300 times their number of Facebook fans? How did all these illegal downloaders even find out about the band? Well, perhaps they didn’t:

At this point, since we couldn’t find any torrents on any site (Borean tried everywhere too), we have to admit we were beginning to wonder if this 100K download claim was some kind of publicity stunt. Furthermore, since Wayne Borean and Tilbury were starting to publicly tear each other apart (and getting pretty personal at times) it seemed sensible to get to the bottom of this, particularly since the band’s manager claimed that the all-powerful CRIA is supporting the band’s stance.

[. . .]

As many readers will now be aware, there is a huge problem. These results are completely fake and are generated from user input to draw traffic to site advertisers. You can type anything in the search boxes on some of these torrent sites (these apparently came from LimeTorrents) and anyone can appear to be pirated into oblivion [. . .]

We wrote back to Tilbury and explained our findings. We also asked him to comment on how he feels now that he realizes that people aren’t downloading the band’s music at all. He hasn’t responded to that question which is a real shame, because personally I think this is the most important part of the whole story.

I’m absolutely confident that there was no attempt to mislead with the band’s ‘piracy problem’ press release and that the band and their manager sincerely believed that 100K people had downloaded their album without paying for it. However, it would be intriguing to know what happened, when emotions of supposedly being ripped off by 100,000 pirates were replaced by other, perhaps more confused feelings.

Update, 5 April: Apparently you have two choices in a situation like this. 1) Own up to being mistaken and apologize for making a stink about a non-issue. 2) Double-down on stupid:

A day after One Soul Thrust’s manager had the entire Internet explain to him that his band’s music wasn’t being downloaded 100,000 times on BitTorrent sites, he’s still in deep denial. Today’s post is all about how the pirates attacked him “[b]ecause a debut album by an independent Canadian band is listed on torrent sites around the world and we had the audacity to point that out.” Um, no it’s not. It’s not listed on any torrent sites. As far as anyone can tell, not one human being on this planet has torrented this band’s CD. Dude, you made a mistake, you freaked out, you looked a little naive. Now you’re looking like an ass. Quit while you’re ahead, maybe?

Creative comments to that last post include 1) someone, somewhere actually upload the album to a torrent site, just so the band doesn’t look quite as pathetic, and 2) replace each track with varying length versions of a certain Rick Astley tune.

April 3, 2011

QotD: The reason not to anticipate a simpler tax system

Filed under: Cancon, Economics, Politics, Quotations — Tags: , — Nicholas @ 12:54

But boutique credits are smart politics. First, they appeal to people’s sense that they deserve a break, validate their choices, and reaffirm their sense of self-worth. The Children’s Art Tax Credit goes to good parents, ones who enroll their children in Suzuki violin lessons, not bad parents who spend their money on beer and popcorn. Second, they give people a sense of control. Tax liabilities stop being something outside of an individual’s control. Instead, the plethora of credits available mean that taxes can be reduced through planning and wise choices.

Policies are smart politics for a reason: they appeal to voters. If economists want to have a positive influence on the policy debate, they have to understand voter psychology: why do voters like special tax credits so much? “Smart politics” isn’t a criticism. Sometimes it’s a way of saying “I don’t understand why people like this policy.” At other times, it’s a way of saying, “I understand why this policy appeals to people, but if they were well-informed, they would think otherwise.”

There’s no point in telling politicians that a particular policy is “smart politics, bad economics.” They’ll take it as a compliment, and keep on making the same kind of policy choices.

Frances Woolley, “Economy Lab: Why politicians love boutique tax credits”, Globe and Mail, 2011-04-03

April 2, 2011

QotD: The nature of Harper’s “slap in the face” to Quebec

Filed under: Cancon, Economics, Politics, Quotations — Tags: , , , , — Nicholas @ 12:19

I labour over this history to place in context the astounding, even outré, comments offered by Canada’s First Separatist, Gilles Duceppe, on hearing of the proposed arrangement — which, I hasten to mention, is merely a $4.2-billion loan guarantee from Ottawa, not some massive outright subsidy. Mr. Duceppe, with a logic that can only belong to a man who gets paid to be a separatist by the government he’s trying to extinguish, called the deal “a direct attack on Quebec.”

What really bothers Mr. Duceppe and other separatists is that they want to retain Quebec’s monopoly on southbound power sales to the United States — something the Lower Churchill project, including its 1,100 km of underwater transmission cables, would threaten. “By financing the Newfoundland project, Stephen Harper has given Quebec a slap right in the face,” the BQ leader declared.

It’s one of the continuing risibilities of the Canadian federation that we cosset and pamper and pay for the separatist faction in the House of Commons, and go along with the pretense that they’re parliamentarians like any other. They are not. They displace the natural balance of the federation. They have a vested interested in seeing the parliament they attend not working. And they leap to any perceived or manufactured imperfection in our system as evidence of dark perfidy or contempt for Quebec. They warp the system. Nowhere do these observations meet with greater validation than these ludicrous comments by Duceppe on the proposed assistance to the Lower Churchill.

Rex Murphy, “Newfoundland’s three-gigawatt insult to Gilles Duceppe”, National Post, 2011-04-02

March 31, 2011

Corcoran: Harper’s family tax plan full of “shabby contradictions”

Filed under: Cancon, Economics, Politics — Tags: , , — Nicholas @ 12:28

I think it’d be fair to say that Terence Corcoran is not a fan of Stephen Harper’s proposed “family tax plan”:

By calling this a “family tax cut,” and playing it as a matter of tax fairness, the Conservatives have managed to gloss over the shabby contradictions it introduces into Canadian tax policy. The Tory announcement said that the United States, France and other countries allow some form of income splitting. They do, but that’s not saying much about taxation or fairness.

France has a full-blown family tax regime, in which the incomes of both spouses are blended at a tax rate that is based on a formula that includes the number of children. But so what? France has one of the highest marginal tax rates in the world, and a notoriously dysfunctional tax burden that distorts behaviour and incentives. The U.S. income-splitting regime isn’t exactly revered for its soundness, in part because it clearly discriminates against single earners or anyone not part of a married couple. Nor are children a requirement to be part of the U.S. splitting regime.

[. . .]

The Harper family tax cut, based on the debatable tax policy ideal of taxing families instead of individuals, is a misguided income-splitting scheme that demonstrates once again that the Conservatives will never, ever get around to cutting personal income tax rates. The cost of the family tax cut will come at the expense of across-the-board income tax cuts for other Canadians. To pay for the family cut, other Canadians will have to continue to pay marginal tax rates that are too high.

The family tax cut, in some ways, is just another tax expenditure, a special tax treatment aimed at fulfilling some social-policy objective. The major beneficiaries are likely to be higher-income single-earner couples with children. Everybody else is out of luck.

To pull out the old saying, “that’s a feature, not a bug” to the Conservative party faithful.

March 29, 2011

Green technology breakthroughs

Filed under: Economics, Humour, Technology — Tags: , , — Nicholas @ 11:09

Dilbert.com

March 26, 2011

What Canada needs is an actually “conservative” party

Filed under: Cancon, Economics, Politics — Tags: , , , — Nicholas @ 11:44

Because right now, we’ve got so-called Conservatives wearing Liberal clothing (and Liberals pawing through the NDP’s cast-off pile). There’s no major federal party in Canada that actually pursues fiscally responsible government policies, no matter how much they may talk about the virtues of smaller government.

Shortly after his government’s defeat, Prime Minister Stephen Harper attempted to deflect focus back to Tuesday’s budget. The economy, he said, is the number one priority of Canadians and the budget was the key to the country’s economic future. Then he said: “There was nothing in the budget that the opposition could not or should not have supported.” True enough — but what does that say to Canada’s conservatives? Based on the budget, they are now called on to support a Conservative party that has presided over an extravagant full-scale national revival of big government by fiscal expansion.

Only a few days ago, it seems, Canadian politics was abuzz with the possibility of a new ideological era that favoured smaller government and lower taxes, with less waste, more discipline and a determination to cut taxes. There were signs of revolt in British Columbia, a shake-up in Calgary and reform in Toronto, where Mayor Rob Ford captured a staggering 47% of the vote in a town where The Globe and Mail is considered a right-wing propaganda sheet. Ford Nation, they called it.

There is no Harper Nation. After five-plus years in office, the Harper Conservatives have singularly failed to change the Canadian ideological landscape. Instead, Canadian politics changed the Conservatives. In power, they transformed themselves into another basely partisan party that willingly and even eagerly pandered to whatever the political three-ring circus put on display. This week’s budget, in which $2-billion in loose cash was promptly distributed to a score of special interests and political agendas, left in place a $40-billion deficit for 2010 and solidified a $100-billion increase in the national debt over five years.

There’s no threat on the right to force the Conservatives to actually live up to their talk, so they’re free to drift as far into Liberal territory as they like — and they seem to like it a lot — because small-C conservative voters have nowhere else to go.

March 25, 2011

CNN: US government finance requires both spending cuts and tax increases

Filed under: Economics, Government, USA — Tags: , — Nicholas @ 09:26

Jeanne Sahadi at CNN Money insists that the government can’t control the ballooning debt situation by spending cuts alone:

If lawmakers wanted to permanently freeze the debt held by the public at the today’s level — 62% of GDP — they would need to immediately cut spending by 35% or about $1.2 trillion, according to the Government Accountability Office. And those cuts would need to be permanent from hereon out.

How hard would that be?

Consider that in 2010, all of discretionary spending — including defense — totaled $1.35 trillion. In other words, to do deficit reduction all on the spending side means “you have to cut into the real meat,” said Roberton Williams, senior fellow at the Tax Policy Center.

Consider, too, how much fun lawmakers are having right now trying to negotiate spending cuts for this year alone. Their working range: Between $10 billion and $61 billion.

And here’s the kicker: Even permanently cutting $1.2 trillion today wouldn’t be the end of the story. Deficit hawks note that public debt at 60% is still well above the country’s historical average — which is below 40%. So more cutting would need to occur in subsequent decades.

The joker in the pack is that interest rates at the moment are incredibly low by historical standards. This is an aberration, not the “new normal”, and won’t last. If the government fails to take serious steps to reduce the debt now, it’s vanishingly unlikely that they’ll be able to avoid a default. It’s like running up a huge debt on a credit card with a low introductory interest rate: once the low interest period is over, the debt becomes payable at the higher interest rate. Pretending that tomorrow will never come is never a good planning strategy.

March 23, 2011

US government financial plight: more reasons to worry

Filed under: Economics, Government, USA — Tags: , , — Nicholas @ 12:21

The ever cheerful Monty brings us another helping of financial DOOM:

Our whole “plan” (to the extent that our government even has a plan for getting us out of this mess) is founded on the belief that our borrowing costs will remain low — that the interest-rate environment will remain at or near zero indefinitely. Well, it won’t, and I don’t think enough people are thinking about what a huge dent interest-payments on the debt is going to put into our budget. Our entire federal budget will be eaten up with four things: Medicare, Medicaid, Social Security, and debt-service payments. That means any additional spending (like, oh, say, the military) will have to come from borrowed money…which will have to be borrowed at higher rates, which in turn causes debt-service costs to rise yet again. This is the vicious debt-spiral many European countries now find themselves in.

What has basically happened during the past forty or fifty years is that we’ve spent most of our actual capital — mainly on our vast welfare state and government apparatus, but also on our huge military. We are like a couple who lives paycheck-to-paycheck: any money that comes in goes right back out. Nothing gets tucked away. An unexpected expense — a busted water-heater, broken-down car, or an unexpected illness or injury — all of a sudden puts you in a hell of a financial hurt. So you borrow. You can’t really afford even the payment much less the whole loan, but what can you do? You may even cast caution to the winds and buy that jet-ski you’ve had your eye on (on credit, of course). Why not? You’re already screwed; being screwed a little bit more hardly matters at this point, right? Then something else breaks and you have to borrow again (if you can), and the monthly bills start to pinch you where you live — it’s either service your debt or pay the rent, because you can’t do both. At that point, the spinning plates will come crashing down — you will either default on your debt to avoid starving your family into oblivion, or you will force your family to live like animals in a cave so you can pay off the debt you ran up.

So the frustrated call goes up: “Okay, we’re boned! I get it! But what can we do about it?” Answer: I don’t know. Maybe nothing, at this point.

[. . .]

I’ve often said that circumstances will impose a solution on us if we don’t find one ourselves — we simply cannot continue as we are. And the reckoning is not comfortably far off in the future; it’s unfolding right now, before our very eyes.

Latest outlet for excess Chinese investment money: Bordeaux wineries

Filed under: China, Economics, Europe, France, Wine — Tags: — Nicholas @ 07:53

Running out of interesting investment opportunities? Some Chinese investors are moving into French wineries:

Walking among the ancient vines at Château de Malle, De Bournazel said many families struggled to make ends meet. “Nobody sells for pleasure, but you would struggle to find a chateau that wouldn’t sell for the right price. It’s sad, but I’d rather see families sell to the Chinese than tear themselves apart trying to keep a property.”

Rather than being viewed as conquerors, Chinese wine buyers are seen as saviours of the region — last year China overtook both Germany and the UK to become Bordeaux’s biggest customer, with exports growing by 67%. Bernard Farges, president of the Conseil Interprofessionnel du Vin de Bordeaux (CIVB), the body representing its wine growers and buyers, said Chinese investors buying vineyards would boost exports further.

“These are businessmen who believe in their investment, who are opening doors to a new market and ploughing money into properties to make great wine,” he said.

Others argue that the Chinese are simply the latest in a long line of foreign investors — including the Dutch, the English and the Danes — in Bordeaux.

That last part is certainly true: although you may not realize it, many of the wineries in the Bordeaux region have been foreign-owned for generations. The nationality of the foreign owners may change, but the principal is the same.

Of course, regardless of ownership, if the investors don’t maintain the property, they risk ruining their chances of benefitting from the purchase:

Not everyone is supportive of this new breed of Bordelais. Patrick Etineau recently sold Château de la Salle to a Chinese investor amid a storm of acrimony. “I found them very condescending,” he said. “They have the money and they think we are in penury.”

He says since the chateau was sold in January the vines have been left largely untended. “I was happy to sell, because I couldn’t maintain the property, but now I have the impression that they don’t care at all. We used to make beautiful wine, but this year I fear it will only be fit for the pigs.”

Middlesbrough hopes for low tax designation

Filed under: Britain, Economics, Government — Tags: , — Nicholas @ 07:42

My old home town has been struggling pretty much my entire life, as its original prosperity was built on industries which have been declining for decades. The Guardian says there’s a chance that Middlesbrough will be one of the new designated “low-tax enterprise zones”:

George Osborne does not know it, but Wednesday’s “budget for growth” could change much more than the lives of ponies now grazing quietly on a grassed-over industrial site in the heart of Middlesbrough. It seems all but certain that the chancellor will designate the Tees valley one of 10 new low-tax enterprise zones. If so, one of the local options will be to set up a precision-engineering cluster on the old ironmasters site — relic of the days when “Made in Middlesbrough” was stamped on countless bridges, including Sydney harbour’s.

In September 1987, Margaret Thatcher famously took her “walk in the wilderness” across a similar derelict site five miles upstream in Stockton, where as local MP in the 30s Harold Macmillan once preached the economic “middle way” she rejected. Stockton’s enterprise zone eventually became a business park, supporting 4,500 jobs at its peak. But this is a region that has long struggled to diversify its coal-and-ships, chemicals-and-steel economy, its hard-won gains always at risk — from global conditions as well as government policy and the region’s own mistakes.

[. . .]

So an enterprise zone will generate good headlines in the Middlesbrough Gazette and Northern Echo. But in deciding exactly how to proceed, disrupting ponies will be the least of it. The five unitary authorities that make up the sub-region of Tees Valley – Hartlepool, Redcar, Stockton, Darlington and Middlesbrough – must agree which of their local plans will make most long-term impact for all of them in terms of inward investment, skills upgrades and job creation along the supply chain. Spread the opportunity too thinly and it may be wasted. It has happened here before.

As Teesside University’s professor Tony Chapman puts it, the north-east has endured so many changes in Whitehall’s regional policies that someone could make a career in “the archaeology of regeneration”. Likewise, countless local government reorganisations have seen Anglo-Saxon “Mydilsburgh” change from a hamlet to an industrialised borough, become part of unloved Cleveland (1974-96), return as a borough, and now boast an elected mayor in ex-superintendent Ray “Robocop” Mallon.

Everyone agrees Middlesbrough has had its problems, some worse than its neighbours. Steel and chemicals have shrunk, as has the population of the town (bidding to become a Jubilee city) by 20,000 since the 60s to 140,000. “We have 200 teenage pregnancies a year,” says Mallon, who thinks a hardcore of families let the town down. But 16 wards out of 23 have high indices of deprivation, which cuts seem likely to intensify.

March 22, 2011

Starting election watch now

Filed under: Cancon, Economics, Government, Politics — Tags: , , , , , — Nicholas @ 17:55

With the opposition parties unified in their denunciations of the federal budget tabled today by Finance Minister Jim Flaherty, we’re now looking at the strong possibility of a May general election:

The minority Conservative government tabled a 2011 budget Tuesday that was quickly rejected by its political opponents for falling short in helping the middle class, setting the stage for an election campaign that could begin any day.

The leaders of the Liberals, Bloc Quebecois and NDP said they could not support the budget as presently written — even though Finance Minister Jim Flaherty tried to appease the left-wing party through a series of modest, symbolic initiatives.

“We’re forced to reject the budget and we are also forced to reject a government that shows so little respect for parliamentary democracy and our democratic institutions,” said Michael Ignatieff, the Liberal Leader.

Gilles Duceppe, Bloc Quebecois Leader, said his party “can’t support what has been offered here.”

And Jack Layton, head of the NDP and viewed as the person most likely to lend the government support, said the budget fell short of NDP expectations.

I have to admit that I’m surprised that the NDP and the Liberals appear to be ready to force an election at this moment: neither party has had much of a “bounce” in recent polls from government scandals (both real and imaginary). Perhaps they’ve got something held in reserve to release during the campaign that they think will cause voters to turn away from the Tories.

QotD: The modern welfare state

Filed under: Bureaucracy, Economics, Government, Quotations — Tags: , , , — Nicholas @ 11:26

In past ages, the desire of kings and emperors to control the lives of their people was no less than it is now, but they simply lacked the means to substantially affect the average serf or peasant’s daily life. A tax collector or company of soldiers might come by occasionally, but it was the church and not the state that formed the polestar around which most lives revolved. But beginning in the late 19th century, technology allowed the governments of the industrialized nations to reach down into each city, town, and hamlet, and “adjust” things directly. In totalitarian regimes the impulse was malign, but in western nations the intentions were mainly good: to provide subsistence and aid for those in need of it.

But one thing has become clear in the western nations since the welfare-state started in earnest after World War II: it spreads like kudzu, it encompasses and infantilizes ever-larger percentages of the population, and it beggars even the richest and most powerful countries. Leave aside questions of morality and efficacy for the moment — it is dreadfully clear that the main problem with the welfare-state is that we can’t afford it. No one can, no matter how rich or powerful.

This is the paradox of the welfare state: it will surely ruin us if left to run unchecked, yet so many people now depend upon it that we can’t stop.

[. . .]

We have so successfully turned Americans into wards of the state that any significant change will (I fear) have to be imposed by fiat or by circumstance, because I don’t think it will ever take place at the political level. There is simply no way to get from here to there without making the kinds of wrenching changes that no democratic/republican form of government is good at. (If you doubt me, look at the protests in Greece, Ireland, and Portugal. Even when the writing is on the wall, the population does their best to ignore it.)

Monty, “She Walks in DOOM! Like the Night…”, Ace of Spades HQ, 2011-03-22

Why nobody takes conservative promises too seriously

Filed under: Cancon, Economics, Government, Politics — Tags: , , , , — Nicholas @ 09:37

Today is budget day, when federal Finance Minister Jim Flaherty will be introducing the Conservative budget for 2011. Unless something has suddenly changed in the government’s philosophy, don’t expect anything daring:

First and foremost, the budget should contain a plan for reducing federal spending in real terms over the next four or five years. Mr. Flaherty’s 2010 budget outlined how the federal government intended to restore balance to the federal books by 2015 by holding the line on spending increases to just over 1% a year while praying for a return to robust annual revenue increases. In fact, merely planning to hold the line on spending is never going to be enough. For one thing, the Conservatives have never proven themselves capable of pulling it off. Despite coming to power in 2006 on a message of fiscal restraint, the Tories raised federal program spending by an average of 6% in each of their first three budgets before the worldwide finance crisis of 2008. Since then, they have added $100-billion to the national debt, in large part thanks to stimulus spending of dubious worth.

According to the Canadian Taxpayers Federation, as of last Friday, Canada’s debt stood at nearly $563-billion. This means the debt repayments made over the 11 years before the recession began have been wiped out, and that the federal treasury is back to where it was before the Liberals’ then-finance minister Paul Martin brought down his austerity budget in 1995.

Since the Tories took power five years ago, program spending has expanded by nearly 40% and the federal civil service has grown by nearly 20%. We’re sorry, but we just don’t trust a government with a track record like the Tories’ to be able to regain budget balance simply by holding the line on new spending.

They can promise all sorts of things, but what they seem best at doing is pretending not to be “conservative” at all.

The government may fall, as the opposition are calling for even higher spending on “universities, home care, daycare, unemployment, seniors and Quebec”. This may work to the Conservatives’ advantage as they’re (temporarily) riding high in the opinion polls, so they might be able to win a majority if an election is forced on them over this budget. Of course, the opposition can read the polls too, so they may not be as eager to throw Stephen Harper an opportunity to win an easy victory.

Update: Well, the budget was tabled in the House, the opposition parties all rejected it “as it stands”, and the prime minister has stated they will not accept any amendments. For Thursday’s performance in the Ottawa Little Theatre, the budget will get first reading, which means the first opportunity for the government to be defeated . . . which means a May general election.

“He is kind of like a rock star, a nerdy professor, and your crazy uncle rolled into one”

Filed under: Economics, Liberty, Politics, USA — Tags: , , , — Nicholas @ 09:22

Andrew Foy tries to place Ron Paul in the context of the modern Republican Party:

In his recent editorial “The Fighters vs. the Fixers,” appearing on National Review Online, Jonah Goldberg discussed what I suspect is his crop of contenders for the upcoming election: Tim Pawlenty, Mitch Daniels, Mitt Romney, Sarah Palin, Newt Gingrich, and Mike Huckabee. Considering that Paul smoked all of these candidates in the 2011 CPAC straw poll, where he garnered 30% of the vote, it was an odd choice to leave him out, and even more so when you account for the fact that Goldberg’s recently edited book Proud to be Right: Voices of the Next Conservative Generation featured several essays in which the authors expressed strong libertarian points of view.

Ah, but that CPAC straw poll was explained away as “Paultards” packing the event, which no other candidate would ever do, so the poll result was therefore invalid. Oh, and lots of chatter that Paul supporters would not be welcome to the next CPAC.

. . . Paul is an outspoken advocate of Austrian economics. Without being an economist myself, I would say that this economic school of thought argues against econometric models, state planning, bailouts, economic stimulus, and the monetary policy of the Federal Reserve. One of the hallmarks of Austrian economics, for which Hayek won a Nobel Prize, is the view that central banks create asset bubbles and hence the business cycle. Austrian economics predicted the recent housing collapse and economic recession when the mainstream economists and politicians, to whom we’re still wedded, were telling us that everything was “A-okay.”

In a 2007 address to the American Economic Association, Bernanke proclaimed, “The greatest external benefits of the Fed’s supervisory activities are those related to the institution’s role in preventing and managing financial crises. In other words, the Fed can prevent most crises and manage the ones that do occur.” A year later, we were mired in the biggest financial collapse since the Great Depression. While the great majority of politicians today (Democrats and Republicans) are happy to heed the advice and inflationary policies of the Fed, such as QE2, Paul is a lone voice in the wilderness crying foul. Conservatives should welcome his dissent.

March 21, 2011

More re-Volting details on GM’s electric car

Filed under: Economics, Politics, Technology, USA — Tags: , , , , — Nicholas @ 15:20

Patrick Michaels looks at the Chevy Volt:

. . . GM was desperate for customers for what they perceived would be an unpopular vehicle before one even hit the road. It had hoped to lure more if buyers subtracted the $7,500 from the $41,000 sticker price. Instead, as Consumer Reports found out, the car was very pricey. The version they tested cost $43,700 plus a $5,000 dealer markup (“Don’t worry,” I can hear the salesperson saying, “you’ll get more than that back in your tax credit!”), or a whopping $48,700 minus the credit.

This is one reason that Volt sales are anemic: 326 in December, 321 in January, and 281 in February. GM announced a production run of 100,000 in the first two years. Who is going to buy all these cars?

Another reason they aren’t exactly flying off the lots is because, well, they have some problems. In a telling attempt to preserve battery power, the heater is exceedingly weak. Consumer Reports averaged a paltry 25 miles of electric-only running, in part because it was testing in cold Connecticut. (My engineer at the Auto Show said cold weather would have little effect.)

But not to worry! They’ve found someone to buy half of the total Volt production:

Recently, President Obama selected General Electric CEO Jeffrey Immelt to chair his Economic Advisory Board. GE is awash in windmills waiting to be subsidized so they can provide unreliable, expensive power.

Consequently, and soon after his appointment, Immelt announced that GE will buy 50,000 Volts in the next two years, or half the total produced. Assuming the corporation qualifies for the same tax credit, we (you and me) just shelled out $375,000,000 to a company to buy cars that no one else wants so that GM will not tank and produce even more cars that no one wants. And this guy is the chair of Obama’s Economic Advisory Board?

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