Would you trust your economy to Debbie Stabenow (Democrat-MI)?

Debbie Stabenow, Michigan’s other Democrat Senator, is taking it upon herself to direct the future of America’s auto industry, and to a large extent Michigan’s economy, all by herself.

Her plan? The Battery Innovation Act:

The Battery Innovation Act is the first coordinated plan that incorporates all aspects of advanced battery production, from research and development, to the availability of raw materials, to the manufacturing of these high-tech products. The Act will build off of initiatives authored by Senator Stabenow in 2009, which helped A123 Systems ramp up advanced batteries manufacturing and create jobs in Michigan.

The idea that Stabenow thinks that she can put together a “coordinated plan that incorporates all aspects of advanced battery production, from research and development, to the availability of raw materials” would be right at home in the Russian Politburo of the 1950’s.

Debbie continues:

The Battery Innovation Act will boost the research and development of advanced batteries and components. This will not only spur the development of more fuel-efficient passenger vehicles but for light, medium, and heavy-duty vehicles for our military as well. Stabenow’s bill also creates a competition that will provide incentives for researchers to help develop an advanced vehicle battery that can go 500 miles on a single charge.

It is no coincidence that Stabenow is pushing this idea about Michigan becoming the economic hub for Li-Ion battery production (just as politicians from Indiana, Kentucky and just about every other state in the union are doing as well). The reason for the push? Obama is mandating electric vehicles through regulation.

As pointed out by Henry Payne @ the MI View, Obama and his EPA minions are out to kill the internal combustion engine through their ridiculous CAFE requirements. And through pure coincidence, Debbie has a solution to the Obama problem. A solution, and gobs of tax payer & borrowed Chinese cash:

In their regulatory plot to make the gas engine go the way of the incandescent light bulb, Obama’s EPA is not just mandating 56 mpg by 2025 – effectively creating a standard only hybrid electrics can meet – but putting in place harsh fines for companies that make engines they don’t like.

Not only does Debbie Stabenow’s plan to create an industry using government central planning reek of old school (and failed) Politburo economics. Stabenow’s Battery Innovation Act (and the whole green energy idea in general) defies the very fundamentals of economics.

To illustrate the how flawed her plan is, read Economist Frédéric Bastiat’s essay titled What Is Seen and What Is Not Seen (published July, 1850). In his essay, Bastiat includes a short parable about a young boy who breaks a window. It is uncanny how this parable from 1850 describes the fatal flaw in Stabenow’s economic central planning today.

Suppose that it will cost six francs to repair the damage. If you mean that the accident gives six francs’ worth of encouragement to the aforesaid industry, I agree. I do not contest it in any way; your reasoning is correct. The glazier will come, do his job, receive six francs, congratulate himself, and bless in his heart the careless child. That is what is seen.

But if, by way of deduction, you conclude, as happens only too often, that it is good to break windows, that it helps to circulate money, that it results in encouraging industry in general, I am obliged to cry out: That will never do! Your theory stops at what is seen. It does not take account of what is not seen.

It is not seen that, since our citizen has spent six francs for one thing, he will not be able to spend them for another. It is not seen that if he had not had a windowpane to replace, he would have replaced, for example, his worn-out shoes or added another book to his library. In brief, he would have put his six francs to some use or other for which he will not now have them.

Let us next consider industry in general. The window having been broken, the glass industry gets six francs’ worth of encouragement; that is what is seen.

If the window had not been broken, the shoe industry (or some other) would have received six francs’ worth of encouragement; that is what is not seen.

And if we were to take into consideration what is not seen, because it is a negative factor, as well as what is seen, because it is a positive factor, we should understand that there is no benefit to industry in general or to national employment as a whole, whether windows are broken or not broken.

Stabenow’s plan, if implemented, will divert hundreds of billions of dollars (through taxation, regulation and inflationary monetary practices) from endeavors that will add value and grow the economy to the flawed and absurd idea of duplicating and replacing existing automotive infrastructure- including simple and effective things like gas stations.

Much like replacing a broken window.

Finally, there is one last huge flaw in Stabenow’s central plan. It doesn’t doesn’t violate the fundamentals of  economics. It violates the fundamentals geology:

Finally Stabenow’s plan will spur the domestic supply of lithium, the basic raw material used in advanced battery production,

Apparently, someone forgot to look at the USGS report on Lithium:

click for larger version

The United States has almost no Lithium reserves to speak of. How, exactly, is she planning to increase Lithium production in the United States?

With thinking like this, do we really want to trust Debbie Stabenow (Democrat-MI) with our economy?

  • Jim at Conservatives on Fire July 9, 2011 at 12:57 pm

    Did the USSR ever have a five year plan that met its objectives?
    From what I have read, China has been locking-up lithium reserves all around the world. But putting those things aside, if this is such a great idea, why isn’t private industry doing it?

    • steve July 9, 2011 at 1:16 pm

      China has been busy locking up resources around the world for years while we’ve been chasing the green energy fantasy.

      If the market wanted electric vehicles, and they were practical we would have them today.

  • Bunkerville July 9, 2011 at 3:07 pm

    China has been locking up our Uranium and other metals here in the U.S. They just bought a Uranium plant in Wyoming and not one word. Perhaps she can refocus

    • steve July 9, 2011 at 3:19 pm

      Great point Bunker.

      Stabenow should stop trying to control our economy and focus on cutting the size of government. She won’t since she is a hard core lib, but it would be great change of pace.

  • Matt July 9, 2011 at 6:59 pm

    Today, the Politburo announced it’s latest five year plan, certain to bring happiness and prosperity to the people.

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