Friday, January 15, 2016

Subsidizing Self-Driving Cars and Sinking Stocks

Supposedly self-driving cars will save lives, save the environment, and save time. Someday we’ll call for a cab… and actually get a cab and no driver to take us where we want to go. It is a brave new world.

Let’s assume that it is all good. I have no way of knowing that, nor do I trust the worthiness of predictions. But that’s another point.

The question is whether the government should be spending 4 billion on this endeavor. Actually, calling a spade a spade, should they be taking $12.40 cents from every man, woman, and child in the US and giving it to the car manufactures to invest in a hot technology with a lucrative potential?

Does the fact that this car will benefit mankind mean that the government should subsidize it? What else should they subsidize? Is there not already sufficient momentum that these cars will be built without the subsidy? What effect will this have on the current cars? Won’t they become more expensive to produce and to buy because they aren’t being subsidized… and many people will therefore choose the driverless cars that maybe be artificially cheaper?

On another front, a friend wrote that she had lost a lot of money in the market slump. Another friend (probably more than one) decided to pull their money out of the market during one slump or another. I tried to explain that you don’t lose money, per se, until you sell a stock at a lower value that what you paid for it. Companies and countries have growing pains. They don’t always do well. That’s a given. Sometimes you should take a loss. But often, you can just repeat the mantra, “the market goes up and down.”

Here is a graph of the Dow for the last 115 years. It goes up and down… but over time goes up. Another mantra, “It is going down so it can go up again.”


Unfortunately, sometimes this up and down might be inconvenient. One might need it to be up on a day that it is down. There comes the Zen teaching that most, if not all, of our suffering comes from the fact that life is different that how we'd like it to be. The givens are: your computer will crash and you’ll lose your data (especially if you don’t back-up), you’ll die, sometimes your friends will unfriend you, etc. etc. Love it or hate it. That is the way things work.

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