Failure in government, however, is often the ticket to an even larger policy role. In 2002, the Bush administration rebranded the partnership the FreedomCAR, pumped up its budget, and expanded its mission. The next year the program grew to include energy firms, and its budget ballooned even more.
In the 2003 State of the Union address President Bush proclaimed, “With a national commitment, our scientists and engineers will overcome obstacles to taking these cars from laboratory to showroom so that the first car driven by a child born today could be powered by hydrogen and be pollution-free.”
Again, however, actual program results bore little semblance to presidential rhetoric. Nevertheless, the program lives on today, again under a new name – US DRIVE.
In spite of this record of failure, the Obama administration has poured hundreds of millions into the so-called advanced vehicle and fuel industries and wants to increase involvement in the future. Unfortunately, the harm done by these handouts is likely to extend far beyond simply wasting taxpayers’ money.
The federal government has no expertise designing fuel-efficient vehicles. Nor does it have any unique insight as to which technologies will be successful in the future. What it does have is the ability to trade legislation favorable to its “partners” for campaign contributions and political support.
This unholy alliance between government and business could act as an impediment to innovation as insiders use their political clout to squash innovation by outsiders that threatens them. If people doubt this, they only need recall what happened to Japanese companies when they proved “too successful” at providing consumers with high-quality, technologically advanced and fuel-efficient cars in the 1980s: The US government slapped import restrictions on them at the behest of US automakers and their unions.