On Jun 29, 10:40*am, Smitty Two wrote:
In article
,

wrote:
Exactly. * Just because the government hands out subsidies, it doesn't
change something that is economically unviable into something that
is. * *Take a look at what's going on with solar electric here in
NJ. * With all the subsidies between the feds and state, a $50K
residential 6KW system can cost the homeowner only $25K to put in.
The rest of that comes from the taxpayers and a surcharge placed on
everyones electric bill. * *And after that, the power companies here
are being forced to buy clean energy credits to meet their clean
energy reqts, so you can get a few thousand a year in income on top of
it. * *The only problem is, it only works with small numbers of people
doing it. *Which in turn means it can't amount to any substantial real
impact on generating electricity to change anything. * If more people
did it, there would not be enough money to subsidize it. *That is the
paradox.

My take on this is that technology becomes substantially less expensive
(IOW more economically viable) with increases in volume. Economies of
scale, and continued refinement and improvement. So the gov't subsidies
are a way, hopefully, to kick-start the alternative energy R&D and help
to scale up production methods to the efficient level.

I think this is a good example of the principle: Not everyone is aware
that they have Apple to thank for low-cost LCD computer displays (and
now LCD TVs.) Apple committed to LCDs by discontinuing all CRT displays
a number of years ago. The first computer I bought for my son had a 17"
LCD display that cost $800. Apple created an instant demand for millions
of LCD displays, and single-handedly drove the cost down.

It takes a small but significant commitment to a technology to make it
economically viable. I think it's reasonable for the government to
subsidize that commitment.

I find it hard to believe that Apple had much at all to do with LCD
computer displays becoming widespread. There ain't no way Apple
could have used them had they not already been cost effective. If
they were not cost effective, Apple would have gone broke. Also,
Apple has an 8% PC market share. Just one in ten people buying any
other PC with an LCD monitor equals Apples LCD volume. LCD, like
similar technologies have been improving over time, they go into a
wide variety of application besides just computer screens, eg TVs,
cell phones, PDAs, and the cost has been coming down steadily.

The obvious problem here is that when the govt does pick a solution as
opposed to free markets, you typically do not wind up with an optimal
or even good solution. Take your LCD example. Would you have
relied on your typical Congressman in 1995 to have picked which
display technology was going to be best, which was viable, and which
would succeed? Suppose they funded projection CRT as the solution
for widescreen TVs. Where might we be now? One can envision them
trying to stick with it, force feed it down our throats, subsidize it
more , even as better solutions started to emerge.