Reason Writers Around Town: Shikha Dalmia and Henry Payne in the WSJ on How Detroit Is Betting Its Future on Washington


Reason Foundation policy analyst Shikha Dalmia and Reason (and Detroit News) cartoonist Henry Payne write about GM's electric-car switcheroo in today's Wall Street Journal. Until recently, they note, GM did nothing but pour cold water on the idea that hybrids and zero-emission vehicles were worth a damn. But now:

GM is not counting on market success for its comeback. It has neither the cash reserves nor the brilliant product line needed for that in a down economy, when sales are expected to be 40% lower than two years ago (the lowest volume since the 1973 Arab oil embargo).

GM is counting on the government to stay alive. It could potentially recover all of its investment in the new battery facility from a $335 million state program to bring green jobs to Michigan. This will allow it to impress Pelosi and Co. and perhaps extract more federal taxpayer money. For example, the $825 billion bag of goodies—otherwise known as the stimulus package—that Congress is working on contains $11 billion for electricity infrastructure needed for the wide-scale adoption of electric cars, as well as $2 billion in loans to build "advanced vehicles and battery systems."

But the biggest payoff could come in March, when GM's newfound green priorities might set the stage for another round of multibillion-dollar bailouts.

More here.