(Replying to PARENT post)

The larger "government shouldn't pick winners and losers" meme is idiotic in the context of alternative energy and green tech. It's basic economics that the market fails to pick efficient winners and losers in industries that involve large negative externalities.
๐Ÿ‘คrayiner๐Ÿ•‘13y๐Ÿ”ผ0๐Ÿ—จ๏ธ0

(Replying to PARENT post)

Most economists do not accept that direct government subsidy to businesses leads to an economically efficient outcome, even in cases of negative externalities. Many economists would say that Pigovian taxes or creation of markets in the externality are likely to be more efficient. Bottom line: market failure does not mean that government solutions are automatically better. Government failure exists too!
๐Ÿ‘คothermaciej๐Ÿ•‘13y๐Ÿ”ผ0๐Ÿ—จ๏ธ0

(Replying to PARENT post)

I disagree. If you don't like the external costs of a particular form of energy you can tax it directly. Taxing things you don't want is different than subsidizing particular companies offering particular alternatives (i.e. picking winners and losers) since it does not favor one solution over another. Government should act as referee, not venture capitalist.

One irony to Tesla is that while they do benefit from loan programs they would have been much better off if GM and Chrysler had been allowed to fail. As it is now Tesla has to compete with companies with strong government support.

๐Ÿ‘คtupuli๐Ÿ•‘13y๐Ÿ”ผ0๐Ÿ—จ๏ธ0

(Replying to PARENT post)

Whether or not the government should pick winners and losers is separate and unrelated to the question of market efficiency. Why can't I simultaneously acknowledge that externalities produce less than efficient markets and that government subsidies produce deadweight loss?
๐Ÿ‘คgrantismo๐Ÿ•‘13y๐Ÿ”ผ0๐Ÿ—จ๏ธ0

(Replying to PARENT post)

>It's basic economics that the market fails to pick efficient winners and losers in industries that involve large negative externalities.

Real life is not so simple, as negative externalities can also be generated by legal frameworks such as http://en.wikipedia.org/wiki/Limited_liability .

You need to examine the legal statutes governing each industry in question and develop measures of the ease at which claimants can receive compensation for damages to determine whether the observed externalities are intrinsic to the industrial process or whether the externalities are intrinsic to the legal process.

๐Ÿ‘คdavidhollander๐Ÿ•‘13y๐Ÿ”ผ0๐Ÿ—จ๏ธ0

(Replying to PARENT post)

It's the sort of basic economics that is too nuanced for many people, it seems.
๐Ÿ‘คMartinCron๐Ÿ•‘13y๐Ÿ”ผ0๐Ÿ—จ๏ธ0