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's just nonsense that Apple single handedly drove down the cost of
LCD displays. That technology goes not only into computer displays,
but into TVs, cell phones, DVD players, and a boat load of similar
stuff. If the displays were not already competitive, there is no way
Apple could have bouth them and bundled them with a system and sold
them. At the time they first became more reasonably priced, you could
get one from any PC company, not just Apple. Why is it that LCDs are
so special and required Apples help, when in fact every other PC
component, whether a CPU, a hard drive, a flash drive, DVD drive, etc
has also followed a similar cost reduction curve?



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.

There is nothing small about investments in coming up with new
technology and then making it cost effective. Take that new fuel cell
startup that was on 60 mins. I think the total required is going to
be over $1/2bil. And for every 100 new technology ideas, how many
do you think eventually succeed? It's also a mistake to think that
the cost reductions associated with certain kind of technologies that
can scale tremendously can automatically be applied to all industries,
eg generating energy from coal or wind or God knows what. I fail to
see a reason why a windmill will ever scale down in cost like your LCD
or a semiconductor chip. There are certain obvious limitation on
physics that come into play here.

As for picking which technologies will succeed and are worthy of
devoting capital too, we already have a free market system for that.
It's called venture capital. It's what produced companies like Apple,
Intel and MSFT. If you have a sound idea, a good business plan, and
good managers, there are plenty of venture capitalist looking for the
next Ebay or Intel. And I'd put a lot more faith in them being able
to predict the winners and put the money in the right place, rather
than my Congressman or Obama. I find it strange that polls show the
approval rating of Congress at 18%, yet some people want them to run
more.