Does capitalism care about foreign oil dependence?
OK. Let's cut to the chase. I'm not a big fan of government run anything. Capitalism, on the other hand, is undoubtedly far better than government in terms of innovation – the key to the future. Unfortunately, capitalistic greed too often supersedes innovative vision.
And, if our vision is energy independence, or at least foreign oil independence, capitalism seems to offer little these days.
Yesterday, a report came out that suggested that it could take as long as 131 years for the world to replace petroleum based on the current pace of research and development. Ironically, last year R&D spending in the auto industry declined by $12 billion.
That doesn't mean it has to take 131 years. Today, another report suggests that 90 percent of petroleum could be replaced by alternatives by 2050 if aggressively pursued. Unfortunately, it appears the stock market – the ultimate source of R&D monies outside of the government – simply isn't ready to invest in such an alternative future.
Too much money is yet to be made in the oil-driven status quo.
Couple that with the growing importance of emerging markets like China and its state run auto industry. Already, GM is selling millions of vehicles in China every year – a market that could dwarf the US market in another decade. Add Brazil, India and other emerging markets and the US market becomes almost irrelevant to the survival of a multinational corporation like GM – outside of tax handouts and bailouts, of course.
Furthermore, neither GM nor any of the other Big 3 automakers have made foreign oil independence job 1 in the US. Appeasing shareholders, or the markets, particularly in the short term – as in next quarter – is always the most pressing concern.
How innovative can any huge corporation be when the most important pursuit is next quarter's financial statement?
Of course, if the US auto industry were socialized and driven by the likes of the UAW, on the other hand, failure seems almost inevitable based upon history.
Ultimately, it's clear that the US is not on the fast track to foreign oil independence, and without some almost war-like effort uniting government, industry and citizenry, it seems obvious that the US will remain heavily dependent upon dirty, terrorist-funding, innovation-killing petroleum until massive numbers of oil wells start running dry.
Ain't that a dirty little story?