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October 17, 2010

US subsidizes Innovation, China subsidizes manufacture

The USA is driving innovation in the Solar market, but China is taking the older technology and driving the cost through the floor.

The complaint is that China is unfairly subsidizing with billions in loan guarantees.  The problem is not that China is unfairly subsidizing it's industries.  The problem is that it is so much better at it.

The US is giving loan guarantees to Tesla to build electric cars.  There is no tax on gas.  No increased subsidy for the purchase of electric cars.  The big loan guarantees all went to banks.  US gives tax breaks to people that install solar but there are low limits.

In the World Poker League of Solar, the US is putting in small bets and China is going all in.  U.S. Trade Representative Ron Kirk is complaining about it.  He should be complaining to Congress that the US is betting big enough to win.  All the big dollars went to bailing out the banks and GM.

Innovation is important but it is not everything.  If it was, Microsoft would have gone out of business long ago.  They used their financial muscle to crush or buy out hundreds of more innovative companies.


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