Saturday, July 05, 2008

Last week, I was unfortunate enough to watch a bit of Fox News. It was immediately following McCain's energy speech, and they had BIll Richardson give a brief response. Basically, he kept saying McCain offered only 'gimmicks' while Obama had real energy policies.

Of course, this was a short talking point, not a real argument, so he didn't really explain himself. One central thing was McCain's prize:

McCain wants to offer a 300 000 000USD prize for a better battery for hybrid vehicles. This, says Richardson, is a useless gimmick, not a sound policy. Darn tootin'!

There are three problems with researching new technology:
* It takes a long time. (So no payout until success years off in the future)
* Your research might hit a dead-end, or another company might beat you to it. (So a possibility of no payout ever.)
* You might not be able to commercialise the resulting technology well. (So a possibility of only a small payout even if you eventually succeed.)

A large cash reward like the X-Prize, the newer NASA (+Google) Moon Landing prize, and McCain's proposed prize address only the third problem. They provide a big pay-off after you succeed IFF you succeed (and no one beats you to it). They DO NOT address the first two problems.

But an improved battery for hybrid vehicles doesn't suffer from the third problem.. You get a significantly better battery for hybrid vehicles and YOU'RE BLOODY RICH, 'prize' or not.

But it sure sounds nice. A quick 'gimmick' to sound like you're doing something while not actually addressing the problems. Take that 300 000 000USD and use it to fund the long-term, high-risk battery research that investors avoid. That addresses the problems with hybrid vehicle battery research. As it so happens, that's what Obama supports.

Rather than pushing an ineffective liberal spend-money-ineffectively energy policy, McCain should be pushing either Obama's liberal spend-money-effectively policy or--here's a bizarre idea--pushing a conservative DON'T-spend-money policy. Be a smart liberal or be a conservative--don't be a stupid liberal.

(I suspect that one of the other policies was the incredibly stupid Gas Tax Holiday, which--as every economist in the world will tell you--is too stupid and useless for words. McCain's fails economics every time he opens his mouth (autoplaying video warning).

No comments: