Friday, September 02, 2011

China Monopolizes the Sun!

Suppose you had a pretty big yard, 2 acres. And your neighbor comes over one day and says, "I have a big lawn mower, a huge expensive one. I just like having a big mower, too big for my own purposes. It really costs a lot, but my dad left me an inheritance and I like the prestige of having the biggest mower in the state. How about if I mow your lawn for my marginal cost, plus a little bit? Say, $35?"

You figure that you would have to buy a mower, plus spend time mowing, plus upkeep. It would cost you at least $100 a week to do the same thing. So, you say, "Sure!"

Can someone explain to me why we are poopin' in our panties about China doing essentially the same thing with solar power technology? And why U.S. government officials are claiming that the answer is that WE, the US, HAVE TO BUY A REALLY BIG MOWER, TOO? For some reason, gigantic world-wide over-capacity, subsidized by tax dollars, is the answer for Obamanoids like this guy:

“There is no question that renewable energy companies in the United States feel pressure from China,” said David B. Sandalow, the assistant secretary for policy and international affairs at the United States Energy Department. “Many of them say it is cheap capital, not cheap labor, that gives Chinese companies the main competitive advantage.”

Is China behaving badly? Yep. And if I were a Chinese taxpayer, I'd be pissed. But why is the US upset? There is no way that the resulting price of solar technology and equipment is going to be more expensive for us. UNLESS, of course, we try to enter the race and buy a really big lawn mower, too.

The "worry" is that China will achieve world dominance and then raise prices. Idiots used to make the same argument about Wal-Mart: once they drive out the competition, they will raise prices. Two problems with that argument. 1. It's not true, empirically. It just never happens. 2. The only possible truth to the argument is with respect to the "correct" price, which in the mind of the subsidizers is the price in the US if we spent billions in subsidies. Friends, subsidies are a COST, not a benefit.

Let the Chinese mow our solar lawn, if they want to. (Angus has tried to make this point before, as have I. Angus may have said it best here. And we'll probably get chances to say it again.)

(Nod to Anonyman, who drives a stinkin' hybrid)

(UPDATE: Meant to say... title of post comes from our guy Alex)

1 comment:

chaze said...

omg thank you so very much for this.
Same discussion here in Germany.