Bleeding The Taxpayer: An Old Technology Dolled Up As New

On September 14, 1899, Henry Bliss stepped off a streetcar at West 74th Street and Central Park West in New York and got run over by a taxi. A plaque points out that it was the first automobile fatality in the “Western Hemisphere.” The taxi was an electric vehicle. As were 90% of the taxis in New York City and about 30% of all cars sold in the US. Electric cars aren’t exactly new. Yet, the government is bleeding the taxpayer to advance the technology, create jobs at a cost of $158,556 per job, and fund executive bonuses.

Today, Republican Senators Chuck Grassley of Iowa and John Thune of South Dakota lambasted [11] the Obama administration for the $2 billion it handed to 29 companies to manufacture advanced batteries for electric cars. It was part of the bipartisan $787 boondoggle stimulus bill of 2009 that performed mind-boggling wonders in the US economy. 

The senators were particularly irked by the facts surrounding one of the major recipients, the poster boy for the program, battery maker A123 Systems, which filed for bankruptcy two weeks ago.

In response to the bankruptcy, the Department of Energy touted the results of its advanced battery program, claiming it had created jobs for “thousands of American workers.” When Grassley pushed the DOE for documentation, he found out that it had created 12,613 jobs—at a cost of “$158,556 per job, including jobs that were later cut,” Grassley explained. And the jobs at A123? They cost the taxpayer $317,435 per job.

“Adding insult to injury, A123 executives reportedly are seeking to retain $4.2 million in bonuses through the bankruptcy process,” he said. That’s why boondoggles are so popular; somebody does get the money.

Yet, the first electric car hit the road in Scotland in the 1830s. As the technology matured, electric cars gave rise to a whole industry. Their toughest competitors? Steam-powered cars: they had greater range and more power. And they set speed records—a marketing advantage.

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