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This Should Be Today’s Top Business Story



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Wired reports that Fisker Automotive is ready with the production version of its plug-in hybrid, the Karma. Here’s what will be rolling off the assembly lines:

Nice, no?

But automotive lust aside, this is a huge business-and-politics story. Mr. Fisker, it should be noted, is rather pointedly not in Washington begging the government for a couple dozen billion dollars. In fact, his car is sold out through 2010, in spite of its nearly $90k price tag. The kicker? It uses a stock GM engine to back up the electric drive. GM can’t make a buck selling its cars, but Fisker has a GM-engined high-tech luxury sedan, with solar panels on the roof, sold out until halfway through the Obama administration. In a recession. Kind of tells you everything you need to know about what really ails GM, doesn’t it?

A little quick math: The Big Three bailout is currently priced at $34 billion. Let’s be conservative but realistic and say that a Big Three bailout ended up costing $50 billion. For that kind of money, Congress could buy about 600,000 Karmas or subsidize half the purchase price of about 1.2 million of them, which would represent about one-seventh of the new cars sold annually in the United States. (Make mine a Morgan EVO, thanks.) Now, that’s a ridiculous idea for all sorts of reasons, but it gives an idea of the scale of what the Big Three are asking for — and what could be done with that money. If we’re going to “invest” tax dollars in banks and car companies, why invest in losers? Why spend gazillions of dollars to keep bad businesses manufacturing middling products? Tesla’s all-electric roadster is in production now, too, and its much-less-expensive sedan is on the way. Why feed the Detroitosaurus from the public fisc?

And these new cars won’t cost $90,000 forever. Any child of the 1970s remembers when an Atari 800 was the bleeding edge in personal computing and cost a thousand bucks — $1,000 in 1979 dollars, the equivalent of $3,000 in today’s money, enough to buy two MacBooks, a Mac Mini, an iPhone, and an iPod Nano (or about a dozen Dell Inspiron 530s) each of which makes an Atari 800 look like an abacus. That’s the perspective that’s missing from the Big Three bailout coverage.



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