The automobile's second century as a mass market product is starting inauspiciously for its first mass market. As well as losing its top sales perch to China, the US has ceded leadership in the technology poised to replace internal combustion. Though moving ahead with the overhyped Chevrolet Volt, General Motors must watch Chinese companies match its timetable, possibly with better products.
BYD, a Chinese automaker, revealed it may launch a car in the US this year with superior all-electric range, though lacking the Volt's petrol back-up. It already sells a plug-in hybrid with more purely-electric range than the Volt for a little over half the price in China.
US company Coda also may launch a largely Chinese-made competitor this year with up to three times the Volt's all-electric range and a lower price. It has raised cash and, perhaps as importantly, cachet, from the likes of Henry Paulson, former US Treasury Secretary.
Coda and other niche manufacturers may not deliver, but BYD, with substantial sales already and an investment by Berkshire Hathaway, is a "real" car company. Global giants, particularly Nissan, Daimler and Toyota, are also breathing down GM's neck.
GM upped the ante on Monday by announcing a purely electric Volt, without mentioning timing or price. But bureaucratic dithering and financial woes cost it the lead it once had in electric cars. A presidential task force said last year that GM would need to cut costs substantially to be competitive, and foreign manufacturers have advantages other than price.
With its cheap petrol and long driving distances, the US is not a natural launch market for electric vehicles. With all major battery manufacturers located across the Pacific (including the Volt's Korean supplier), the new century of the electric car may have a decidedly Asian flavour.
As America's top bankers gather in Washington for more navel-gazing about the causes of the crisis, the Barack Obama administration is attempting to land a punch.
The aim is to raise more than $100 billion (Dh367 billion) from a fee on banks, ostensibly to cover losses in the Tarp bail-out fund. Politics would likely dictate that smaller, community banks and credit unions remain exempt. So the tentative plan could involve a levy, perhaps similar to contributions to the deposit insurance fund, on the largest banks spread over several years.
Big banks' share prices wilted on Tuesday, with Concept Capital reckoning the largest could pay $20 billion (having already repaid Tarp with interest). But the proposal, as it stands, makes precious little sense.
Tarp bank investments are now forecast to make a profit. Losses instead stem from the bailout of the automotive sector and AIG. Moreover, latest official estimates of Tarp "losses" include a slug of what is in fact spending, for example up to $50 billion to encourage mortgage modifications. This plan, then, has more to do with populist sentiment and token deficit reduction than recouping public investment in the banking system.
Such subterfuge is unhelpful in attempting to design a tax that would not be passed on to banks' customers. At least European bonus taxes — which will probably hurt shareholders more than employees — tackled the public zeitgeist head on.
Meanwhile, it is unclear how a levy would fit with others already proposed, such as a similar penalty fee on systemically significant institutions in one regulatory reform Bill.An anti-bank levy might thrill a baying public. But this latest round of bank bashing looks more like shadow-boxing.