Even with substantial help from the government in the form of $7,500 buyer’s tax credits, automakers are having trouble moving their electric vehicles:
Ford Motor Co. is offering hefty discounts of more than $10,000 for leases on its slow-selling Focus electric vehicle.
Ford is offering customers up to $10,750 off for three-year leases, according to the Dearborn automaker’s website. It also has dropped the base price of the Focus EV by $2,000 for cash sales.
In addition, Ford is offering a $2,000 cash discount on the Focus EV and 1.9 percent financing if the electric vehicle is purchased through Ford Motor Credit.
The automaker sold just 685 Focus EVs in 2012, but built 1,627 — making it one of the poorest performers among electric vehicles on the market.
This follows reports that Nissan has dropped the base price of its Leaf EV by 18 percent, following sluggish sales in 2012 that didn’t come close to meeting projections. And the plug-in hybrid Chevy Volt continues to struggle, although it saw an uptick in sales late last year. But Government Motors still loses thousands of dollars on every Volt it sells.
Despite these grim numbers, some forecasters predict robust sales for EVs in 2013. But President Obama’s promise to have one million electric cars on the road by 2015 still seems to be a long shot. The choices made by consumers are speaking much louder than Obama’s words ever could.
(Cross-posted from A Thousand Cuts.)
There are certain books in life that upon reading them you think to yourself “I feel not only smarter but this is exactly the book I would like to have written.”
And that is in summation what Animal Spirits with Chinese Characteristics embodies. It is written by nine-year China veteran Mark DeWeaver, now the hedge fund manager of Quantrarian Capital Management in Washington DC. In addition to having worked as a broker and financial analyst in Guangdong (the most populous province on the mainland) and Hong Kong, DeWeaver received his PhD in economics from the University of Hawaii. The title alludes to the ‘animal spirits’ invoked seventy-five years ago by John Maynard Keynes to describe how emotions influence human behaviors. The other part of the title comes from Deng Xiaoping’s “reform and opening up” (改革开放) liberalization process that began in 1978 – what Deng called “socialism with Chinese characteristics.”
One of the shortcomings of many China-related non-fiction books today is that they generally try to discuss something that is impossible to penetrate: how and why the Standing Committee makes decisions. Volumes have been and will continue to be written about the purported inner workings of Zhongnanhai (中南海), the Party headquarters in Beijing, yet this amounts to little more than the modern-day equivalent of Kremlinology. Or as the popular and fitting English expression germanely (sic) describes this seemingly futile divination activity: trying to read the tea leaves in China (tasseography). [Keep reading…]
“Institutions will try to preserve the problem to which they are the solution.” ~ Clay Shirky
You know the slavery Kool-Aid is working well when those who are oppressed petition their oppressors for more of that which helps keep them oppressed.
For instance, public education is a tool that was designed–specifically and directly–as a means of controlling the hoi polloi. The educational system of compulsory public education championed by Horace Mann, chock-full of multiple-choice testing perfected by Frederick J. Kelly, feeding into statistical models based upon the work of (eugenicist) Sir Francis Galton, was (and is) designed to fulfill the need for employees who are primed and ready to inhabit factories where efficiency can be measured in ways developed by Frederick Winslow Taylor. (The fact that so few of such factories currently exist in America should also be telling, but that’s a different discussion.) Mann believed “universal public education was the best way to turn the nation’s unruly children into disciplined, judicious republican citizens.” The whole thing was designed to produce a seething throng of people ready to take orders, stand in line, ask few questions, and install bumpers all day–accepting the interminable boredom of such a life–while their over-lords made a ton of money. Free and compulsory public education was never intended to create inquisitive, risk-taking, leaders. Or entrepreneurs and/or business owners. Or frankly, owners of anything! Yet, people clamor that “education is a right” and “we need more funding for our schools” despite the inescapable fact that these same crap holes are doing their best at producing children incapable of independent thought and unable to read a book (or a blueprint), solve a simple mathematics problem, or devise a new strategy. It’s damned sad, really.
You have heard of Pascal’s wager and the atheist wager.
Based on the comments from my last post and this Reddit thread, I have formulated two new wagers.
The first is the typical sky-is-falling-bernanke-will-eat-your-babies-carbs-kill-unicorns-i-hate-the-verizon-can-you-hear-me-now-guy-and-flouride-is-destroying-our-precious-bodily-fluids-!!!!111oneone.
If you believe a financial apocalypse will occur and/or there is a “revolution” that somehow magically “restarts” civilization, this is your wager:
||Financial collapse happens
||Collapse does not happen
||You are a Pyrrhic King until the division of labor breaks down and you resort to cannibalism; you can’t buy anything with your gold because no one makes anything — and those that could, you just ate.
||You physically look like a disheveled beach bum and Google cache makes your crankery permanent (-1 Reproduction sweepstakes)
||You dine and die with the lot of them, first eating the gizzards of sloth-like Pyrrhic Kings whose gold cache(s) are inedible and weigh them down.
||You are the life of the party, people enjoy being with you in part because you do not smell or look like a caveman (+1 Reproduction sweepstakes)
The second wager below is an illustrative rebuttal to the above self-delusional, self-defeating, borderline-anti-capitalistic, eschatological fantasy. The hero of this story is the entrepreneur who tries either way.
Go get ‘em tiger:
||Entrepreneurship creates wealth — rain or shine
||Entrepreneurship mysteriously fails to create wealth
||You retire comfortably after creating multiple streams of income and do not need to peddle affiliate newsletters, colloidal silver recipes and Truther conspiracies to stay alive.
||Your CV looks good and you know what not to do in the future. Civilization collapses because economic calculation – coordinated by markets and entrepreneurs – is mysteriously impossible.
||Other entrepreneurs around you generate wealth, creating a wealthier, healthier and cleaner world. The positive spillover effect pulls you up from your living-in-the-basement-bootstraps.
||You have no job skills, no people skills and no assets. No one wants to reproduce with you. But it does not matter – entrepreneurs and markets are mysteriously unable to calculate – and thus civilization cannot grow from beyond a Hobbesian stone age.
The point of this carnal, non-supernatural exercise is clear, that no matter what happens,there is no net negative consequences for promoting entrepreneurship or partaking in it yourself.
To use a sport analogy, why be a fair weather capitalist?
If capitalism and markets can outproduce state consumption, why not promote libertarianism and entrepreneurship? Why wait around until “just the perfect political atmosphere” is created? Why wait until there is no more government debt? Why wait until the stars are aligned just right? Why wait until after a collapse or after a “revolution?” [Keep reading…]
A reader (Alice) recently emailed me a rather interesting claim, that China is well on its way of becoming a $123 trillion economy. Alice links to a MarketWatch piece that repeats some of the same flawed myths that Michael Pettis and others continually debunk. Pettis for example argues convincingly in his latest piece (not up yet on his site) that China today is more like Japan in the late ’80s and thus will be growing at much smaller percentages in the future.
In contrast, the MW piece essentially says:
1. China grew ~8-10% annually over the past three decades
3. China continues to grow ~8-10% for infinity plus one
The MW piece in turn quotes from a slightly older Foreign Policy piece, written by Robert Fogel, whom argues a very bullish case for China based on five criteria.
The first of which, Fogel notes that educational investment pursued by Chinese policy makers will somehow reap large dividends. Par for the course, a recent WSJ article notes that the US and UK spend the most per student and that Chinese policy makers are trying another top-down approach to overtake the US in this metric as well — by pumping out ever larger numbers of graduates. Yet ceteris paribus, quantity of graduates does not equal quality. Or in other words massive state funding does not necessarily equal to (!=) massive gains in worker productivity. Their approach is indirectly debunked at the WSJ (here) and by a piece I recently wrote.
Fogel’s piece also suggests that there will be continued, substantial contributions from the rural countryside. While there is no doubt that Chinese subsistence farmers (~45% of the population) that average roughly $1,100 in earnings each year will probably continue to be measurably productive and generate wealth, it does not follow that they will somehow generate massive GDP multiplier coefficients. If that were the decisive case then rural-heavy, developing countries like India, Indonesia and Pakistan are all up for double & triple digit trillion dollar economies soon as well. [Keep reading…]