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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (228123)	4/7/2005 11:13:08 AM
From: TimF	Read Replies (1) \| Respond to of 1573599

Any incentive that would make a new hybrid car cheaper would not just be an incentive to make the next purchase a hybrid, it would also, at the margin, be an incentive to make the next purchase sooner. So some early replacement would be induced. Also buying a hybrid instead of an equivalent conventional car will involve more capital expenditure. Hybrid cars are more expensive to produce. Some of this difference will be eliminated as production of hybrids spools up, but some will remain. You will be paying for the batteries, and for the fact that the car has both an conventional engine and an electric motor or motors. Also more effort is usually put in to the hybrids to reduce weight and to make the conventional motor more efficient. These same techniques can be used without the batteries and electric motors, which complicates the comparison, but the main point is hybrids will be more expensive. You should know that sometimes market forces don't do what is right for the long term of the economy. No government, company, group, coalition, or "force", will always do what is right for the long term good. But market forces tend to be better at it then governments. Governments can be better when there is an externality like pollution (where everyone might pay the cost of the pollution, but only the polluter, and maybe its supplies, customers, and employees get the direct benefits), or national defense (it would be hard to provide with market forces because everyone reaps the benefits of an adequate defense even if only a few pay for it so you get free riders, and also because any private military strong enough to protect the country could be used to seize power over the country). But in general market forces provide a more efficient solution. Even when there is a need for a government role its often best for the government to rely on market forces as much as possible. For example if the government's goal is to reduce pollution it can often get more reduction at lower cost by allowing for some form of tradable permits to pollute to a certain level. If the governments goal is to reduce the use of gasoline to a lower level, its probably best to do so by increasing taxes on gasoline, and letting people find their own ways to reduce gasoline uses, rather then pushing one specific solution like hybrid cars. If the gasoline price goes up their will be more demand for hybrids, but other people will respond in different ways, from driving less, to just getting a smaller car, to getting a car with a small highly efficient diesel engine (which can approach the fuel economy of a hybrid). With oil, there are huge market forces that do not want to see us change until every last drop of oil is used. The only way oil companies can use market forces to keep us from switching is buy keeping their products a better value that the alternatives (at least if you include the transition costs). They can try to lobby to get the government to support them but if the government does than you have the application of government power, not market forces. These same market forces aren't going to willing jump into the hydrogen economy without some powerful inducements. Which may very well be a good thing. "The hydrogen economy", is not ready for prime time. Tim