This is the Cato Daily Podcast for Tuesday, March 28th,

2023. I'm Caleb Brown. The terms of those handouts to boost

electric vehicle sales in the US have quite a bit of fine print.

That fine print, of course, negotiated among members of Congress has some unintended consequences,

angering trading partners, potentially negating environmental benefits, and oh yes, it will cost taxpayers a bundle.

Scott Linsicum comments.

This is pretty common in policymaking, which is, well, we've got this goal over here, but we've also got these other goals over here.

What if we did this goal, maybe a little less effectively in order to placate the interest groups that are really interested

in this other goal over here that may very well be at cross purposes with goal number one.

Yeah and this is a core flaw in industrial policy, right?

That the grandest plans on paper, rarely, if ever, are the plans put into practice because politics is inevitably

going to intervene.

So you know, as I said, if you want to encourage the proliferation of a new technology, a consumer subsidy like a tax credit for a purchase of an EV is not a terrible way to do it.

There are a lot fewer economic distortions than, you know, just like handing out a bunch of money to a Fox Con factory in Wisconsin.

The problem, of course, is that that's never where the plan stops. You're going to have guys like Joe Mansion are going to demand all this sort of stuff and then the

populace are going to demand income caps and then you actually have to implement it. So once the legislators get done

screwing it all up, then you have to give it to the bureaucrats.

And the bureaucrats have their own issues to deal with.

Some, I think, legitimate, others not so legitimate.

And you end up with this kind of mishmash of confusing

rules and regulations that really undermines whatever textbook benefits you were going to get.

And here again in the E.V. Subsidies case, there are several of these issues. For example,

...