what if?

The Bastardization of Capitalism

Or - what went so very wrong with "risk and reward?"

For a long time, I have been confounded by those who are so against capitalism.  To me, capitalism and free markets embody so much of what is great about our nation.  We are not a country where elites and/or royalty have all the power, with no one else able to get into a tiny, controlling circle.  Our nation is one of millions of rags-to-riches stories:  a poor black child who became one of the most influential and wealth media names - Oprah Winfrey.  A Jewish-Russian immigrant who transformed the Internet and became a multi-billionaire; think Sergey Brin.  While these two individuals are extreme examples, there are literally millions of people who came from humble beginnings and rose either to upper-middle class status or wealth because of the opportunities here... essentially because of free markets and capitalism.

So - why is it, when we have a system that allows most to rise as high as they wish, that more than a few are so critical of our system?  Over and over, this has confounded me.  Yet, the more I read and study, the more I think I see why those who rail against free markets are doing so.

It's not because the underlying principles have altered.  A free market, with all its flaws, is superior to everything else.  Nevertheless, the "free market" works only if it is indeed free.  That is, the principle of "risk and reward" must remain.  And - that underlying principle in recent decades has been badly damaged.

One of my favorite blogs is Cafe Hayek, written by economists Russ Roberts and Don Boudreaux.  Each takes complex principles, policies, philosophies and hard data, then explains it in ways that even a doofus like myself can understand. 

Today's post by Roberts about Fannie, Freddie and what went so wrong with (so-called) "free markets" on Wall Street and housing is particularly excellent.

Who Chooses?

Many aspects of life remain a mystery to me.  One of them is this:  why are some so obsessed about the wealth of a tiny fraction of us?  If .05% of our population can afford private jets, $23 million dollar homes and wrist watches that cost $95,000, I simply don't care.  What I care about is what most of the rest of us can do.  Can we find jobs and opportunities for our own businesses when we want to work hard and "get ahead?"  Do we have decent places to live?  Are our civil liberties and freedoms intact?  And so forth.  That I can "only" fly to Florida in a commercial jet while some of my very wealthy friends are able to spend tens of thousands of dollars to get to the same spot does not exercise me.

Thus, I have an extremely tough time understanding why and how some support "income redistribution."  Not I.  If someone else earned it legally, or was born into the Lucky Sperm Club and inherited it, so be it.  It's not mine to take.  But, if the system is stacked such that others are not given the basics and building blocks to be able to earn their own wealth - then I take issue with it.

Michael Barone explains it well.

Obama Unites the World

But, not quite in the way his supporters might imagine.

The politicians created a nightmarishly complex tax system, for instance, and then decided that enforcing the wretched system required the erosion of civil liberties and constitutional freedoms.

The latest example of this process involves the Foreign Account Tax Compliance Act, a piece of legislation that was imposed in 2010 because politicians assumed they could collect lots of tax revenue every single year by getting money from so-called tax havens.

This FATCA law basically imposes a huge regulatory burden on all companies that have international transactions involving the United States, and all foreign financial institutions that want to invest in the United States. It is such a disaster that even the New York Times has taken notice, recently reporting that:

…the Foreign Account Tax Compliance Act, or Fatca, as it is known, is now causing alarm among businesses outside the United States that fear they will have to spend billions of dollars a year to meet the greatly increased reporting burdens, starting in 2013. American expatriates also say the new filing demands are daunting and overblown. …The law demands that virtually every financial firm outside the United States and any foreign company in which Americans are beneficial owners must register with the Internal Revenue Service, check existing accounts in search of Americans and annually declare their compliance. Noncompliance would be punished with a withholding charge of up to 30 percent on any income and capital payments the company gets from the United States. …The I.R.S., under pressure from angry and confused financial officials abroad, has extended the deadline for registration until June 30, 2013, and is struggling to provide more detailed guidance by the end of this year. But beginning in 2012, many American expatriates — already the only developed-nation citizens subject to double taxation from their home government — must furnish the I.R.S. with detailed personal information on their overseas assets. …He said his sense was that Fatca required companies “to prove your innocence.” …Then there is a question of reciprocity: Would the United States accept the same demands for information from the tax authorities in other countries — say Russia or China?

It’s worth noting at this point that FATCA only exists because of bad tax law. If the United States had a simple and fair flat tax, there would be no double taxation of income that is saved and invested. As such, the IRS wouldn’t have any reason to care whether Americans had bank accounts and/or investments in places such as London, Hong Kong, and Panama.

But as is so often the case with politicians, they choose not to fix bad policy and instead decide to impose one bad policy on top of another.

Repo Men

Before you blame the "fat cats" on Wall Street for America's woes, read this.

If you don’t think that the government can just arbitrarily rewrite the bankruptcy rules to suit its political preferences, revisit the General Motors bailout, when it did just that, shortchanging bondholders in favor of the union goons who act as Democratic footsoldiers and dues-collectors.

“At the risk of oversimplifying it,” one Wall Street insider explains, “imagine a bank went bankrupt. Then the regulators came in and cracked open all the customers’ safe-deposit boxes, even though they knew for certain that none of the contents belonged to the bank. Then they tossed those assets into the pile for the creditors to pick through and told the box holders to get in line as well. That’s what folks are saying is happening here. And in a situation like that, who wants a safe-deposit box?”

So there you have it: hedge-fund titans, i-bankers, congressional nabobs, committee chairmen, senators, swindlers, run-of-the-mill politicos, and a few outright thieves (these categories are not necessarily exclusive) all feeding at the same trough, and most of them betting that Mitt Romney won’t do anything more to stop it than Barack Obama did. If anything, the fact that Romney is having the least luck with the firm that knows him best speaks better of him than does the enthusiasm he apparently inspires in Goldman Sachs et al.

When will we really get sick of a few with power gaming the system so that they stay in power and get wealthier and wealthier, while the rest of us play with entirely different rules?

Read the whole column.  And, don't think that this is a "stick up for Republicans; bash Democrats" post.  Politicians of both parties engage in this behavior.

Gary Johnson, former Republican candidate for president, is now running as a Libertarian candidate.  Someone please let me know what is wrong with goals like these?  Why does someone like Johnson have about as much chance at winning the White House as I do?

Do we have to have "business as usual" until we have utterly trashed a once great nation?

Second Stringers

Are you delighted with the current selection of GOP candidates for president?

If you are, then I do not think you have plenty of company.

This assessment by Zombie fairly closely mirrors my own opinions. As my ancestors would say: oy vey!

Unless something changes drastically, Obama will beat any of these people handily. Which means, as my title reminded everyone, that he’ll be president for the term between 2012 and 2016 — which actually lasts until January 20, 2017. Think about that: 2017. It’s still 2011, people, and if things keep going as they are, Obama will be in charge until 2017.

2017.

Motivated now?

A complaint yesterday from HotAir commenter “magicbeans” succinctly summarized the national mood:

“I hate this field. What we should have had was Christie, Palin, Ryan, Rubio, West and Jindal. That could have been amazing. Instead we got the second stringers….”

Oh, how true that is. Any one of those candidates would have a good chance at beating Obama, and would be guaranteed to stir up the excitement lacking from the current field.

But we have one big problem: All the exciting potential candidates have already declared that they’re not running. In yesterday’s essay which inspired the comment above, William Kristol subtly suggests, without naming names, that perhaps one or more non-candidates should change their minds and re-enter the race.

But the time for subtlety is over. Let me be blunt:

ALLEN WEST, SAVE US FROM THIS CLOWDER OF CLOWNS.

And Chris Christie, Sarah Palin, Paul Ryan, Marco Rubio and Bobby Jindal, please join Allen’s posse.

75% or 3%

It ain't a perfect world.

Do you want a politician that's with you most of the time, with flaws?  Or someone who's with you a teensy, weensy percentage of the time?

All you Brown haters, have you forgotten the unique circumstances of his election? Two years ago today, you could have gotten 10-1, and plenty of it, that Marsha Coakley would be the next senator. The turnout was a small fraction of what it will be in November’s election, and despite Marsha’s historically abysmal campaign, he still only won 52-47.

Next year is going to be a tough fight. Would you prefer someone who’s with you 75 percent of the time ... or 3 percent?

And now the moonbats have settled on one of their own. Professor Elizabeth Warren is just so ... perfect. She’s a carpetbagger, from Oklahoma. And she teaches at (prepare to swoon) Harvard Law School. Yes, the home of Obama, Kagan and Patrick. What could possibly go wrong?

You know that she bragged about providing the “intellectual foundations” to the filthy Occupy vermin who defecated on New York City police cars. More recently she said, “I don’t want to go to Washington to be a co-sponsor of some bland little bill nobody cares about.”

All of us, throughout our lives, need to remember that we never, ever get everything we want.  So - weigh your choices.  Your realistic ones....  You want 3/4 of the loaf?  Or three crumbs of it?  Complaining because you can't have 98.7% of the loaf gets you about the inverse of that.....

There Will Be A Test

No; not really.  But, this column by Donald Boudreaux asks a multitude of questions that (in my opinion) do not have good and rational answers.

As I believe the column and the questions are all worth reading - and contemplating - no excerpts here.

Is the primary "final answer" to all or most of these questions that we humans are all too often a sorry and irrational lot?

Perhaps.  Still - read Boudreaux's questions, ponder them - and, whether you are on the left, right or somewhere inbetween - try to answer for yourself why you hold the positions that you do.

Merry Miracles

Poetry from an economist.  What better way to celebrate the holidays?

Why, who makes much of a miracle?
As to me I know of nothing else but miracles,
Whether I walk the streets of Manhattan,
Or dart my sight over the roofs of houses toward the sky,
Or wade with naked feet along the beach just in the edge of the water,
Or stand under trees in the woods,
Or talk by day with any one I love, or sleep in the bed at night
with any one I love,
Or sit at table at dinner with the rest,
Or look at strangers opposite me riding in the car,
Or watch honey-bees busy around the hive of a summer forenoon,
Or animals feeding in the fields,
Or birds, or the wonderfulness of insects in the air,
Or the wonderfulness of the sundown, or of stars shining so quiet
and bright,
Or the exquisite delicate thin curve of the new moon in spring;
These with the rest, one and all, are to me miracles,
The whole referring, yet each distinct and in its place.

To me every hour of the light and dark is a miracle,
Every cubic inch of space is a miracle,
Every square yard of the surface of the earth is spread with the same,
Every foot of the interior swarms with the same.
To me the sea is a continual miracle,
The fishes that swim--the rocks--the motion of the waves--the
ships with men in them,
What stranger miracles are there?

-- Walt Whitman

Three Cheers

I love this story!

This is the story of three sports-loving Muslim brothers and how they boosted the career of the NFL’s most famous Christian.

The Suleimans - Tariq, Ali and Mohammad - are responsible for “the Sign,” the towering electronic billboard that captured national attention when it began running messages in September urging the Denver Broncos to start Tim Tebow as quarterback.

It worked. “It just goes to show you,” said Mohammad, “when Muslims and Christians get together, miracles can happen.”

Tebow has been criticized by some for his public displays of faith, such as taking a knee to pray during games and thanking “my Lord and Savior Jesus Christ” before speaking with the press. It’s been suggested that he needs to tone down his expressions of religious faith, but the Suleimans disagree.

“It gives him encouragement, so it’s good,” said Ali, 28. Added Tariq: “That’s where he gets his strength, so he should keep it up because it’s good for Denver.”

They also appreciate Tebow’s squeaky-clean image. “It takes a lot of courage for Tebow to go out there and say he’s a devout Christian,” said Mohammad. “Tebow’s the kind of guy you want representing your city and team.”

To me, this captures the spirit of America.  We have the freedom to worship (or not) as we wish.  And, even if we do not share the same beliefs, we can admire the skills and achievements of others.

Happy holidays to you, every one!

The 1% versus the 99%?

No.  We should be focused on those who earn success and contribute to the world - and those who do not.

Breaking the world into two classes based on income misses the point. The more important class distinction is between those who have earned their success and those who haven't. In a recent article in The American, Steve Conover writes: "The true heroes in our economy are the producers and earners; they can be found all the way up and down the income ladder, and class warfare should defend and reward them instead of targeting them."

America isn't a land divided by the 99 percent and the 1 percent. It's a land divided by those who earn their success day after day and those who don't. This class distinction has nothing to do with how rich or poor you are. It has everything to do with what kind of person you are.

Taxing the Rich

The next time you hear someone saying we need to tax the rich more, or that the 1% doesn't give enough to the government - remember this.

Examples of wasteful spending highlighted in “Wastebook 2011” include:

 

• $75,000 to promote awareness about the role Michigan plays in producing Christmas trees & poinsettias.

 

• $15.3 million for one of the infamous Bridges to Nowhere in Alaska.

 

• $113,227 for video game preservation center in New York.

 

• $550,000 for a documentary about how rock music contributed to the collapse of the Soviet Union.

 

• $48,700 for 2nd annual Hawaii Chocolate Festival, to promote Hawaii’s chocolate industry.

 

• $350,000 to support an International Art Exhibition in Venice, Italy.

 

• $10 million for a remake of “Sesame Street” for Pakistan.

 

• $35 million allocated for political party conventions in 2012.

 

• $765,828 to subsidize “pancakes for yuppies” in the nation’s capital.

 

• $764,825 to study how college students use mobile devices for social networking.

  

Read the full report: here

$10 million for Sesame Street in Pakistan?  Does that really seem like a judicious use of your tax dollars?

Goodbye to a Rare Man

Every one of us is, at least to some degree, in charge of our own destiny.  Clearly, however, we cannot steer our ship entirely on our own.  A multitude of factors influence where we sail.  And, one of those factors is, who are the leaders of our day?

One of the great ones died this past week:  Vaclav Havel.  Here are wise words from Michael Ledeen about Havel - and why he is counted among the greats.

He wasn’t lucky in his choice of birthplace: Czechoslovakia, 1935, and the Nazis would soon arrive. He came from a good family (dad was a restaurateur), but that made things harder for the Havels once the Communists took over after the war. Given his “bourgeois” background, Havel was kept out of prestigious university programs, and he did manual labor for a while. He fought Communism all his life, got thrown into jail for four years, and when he came out the regime offered him the chance to emigrate to the West. He laughed at them, went on to lead Charter 77 and then the whole country.

So he came from the wrong sort of family, didn’t have the credentials to ensure literary or intellectual success, and was singled out for punishment and repression by a very nasty regime. Yet he was one of a handful of people who changed the world by fighting totalitarian Communism and then, having defeated it, inspired his people to rejoin the Western world, embrace capitalism, and support democratic dissidents everywhere.

Sadly, not only do I agree with Ledeen's comments about Havel - I also agree with his thoughts about so many of today's (so-called) "leaders":

One by one the great men and women of the generation that survived Nazism and defeated Communism are passing away. The current crop are midgets compared to Havel and his contemporaries, and we can only hope that a new generation of worthy leaders is on the way. As he hoped. And showed the way.

Perhaps each of us can do a bit more to help the rise of leaders with the spirit and courage of Havel and other greats from the last generation.

And - more about Havel - and lightbulbs - here.

Environmental Madness

I'm a fiscal conservative and believe in small government.  That does not mean, however, that I am unconcerned with our environment.  Every day, my philosophy is to preserve and do what I can to keep our world clean and healthy.  I have no lawn; the 1.5 acres that surround my house is all wild and natural.  I plan auto trips, to keep gas usage down.  Water usage is monitored to keep it at a minimum; lights are turned off in every room when not in use.

Oh; did I just mention lights?  As any reader of my blog knows, I detest the el-crapolo lights that our government wants to foist upon us.  The light they shed is weak and ugly; the bulbs are expensive - and - God forbid you break one.  The cost of clean up might exceed the cost of a lifetime supply of Thomas Edison's invention.  Which leads me to ... this.

"An Essential Read for Anyone"

Now I've seen everything.

Booksellers Waterstone's has apologised for inappropriately promoting Adolf Hitler's book Mein Kampf as a "perfect" Christmas present.

But the UK's largest bookshop chain has denied it is attempting to bolster sales of the infamously antisemitic work, despite the JC discovering several stores deliberately and prominently displaying the book.

Staff at Waterstone's in Huddersfield used a festive point-of-sale sticker to promote the book as "the perfect present" with an accompanying personal recommendation message by a staff member trumpeting the book as "an essential read for anyone".

Town-centre stores in Manchester, Liverpool and Cheshire have been displaying front covers of multiple copies of the book, a sales technique designed to attract the attention of shoppers.

I can't even imagine what they're going to be hawking come Valentine's Day.

 

"TAD" Writes a Check

A wonderful tale of giving that captures the spirit of the season.

From his 46th floor office overlooking downtown Minneapolis, Tad flashes back to the beginning of his decade-old holiday tradition of adding up his annual Social Security payments, then writing a check for roughly $20,000 and dropping it in a Salvation Army kettle.

"I got a call the first year and they asked if this was a joke or a forgery," he said with chuckle.

Tad isn't his real name, it stands for The Anonymous Donor. He spoke on the condition that his anonymity would be protected because "I don't want to get any credit, and I tried to keep it quiet."

He's 74 now and runs a 35-person financial management, mutual fund group.

"When I got to be 65, I was making plenty of money and I still am, but I started getting these checks," he said.

When President Franklin Roosevelt introduced Social Security, Tad says, "it was for people who needed a safety net in retirement.

"To me, if you're making quite a bit of money, you really don't deserve having a safety net," he said. "I thought for about three seconds of turning it back to the government and then I thought, hmm, not with the way they spend money."

So he turned to the Salvation Army, which he calls "a wonderful organization with dedicated people to whom it doesn't matter who they're serving, if they're drunks or unwed mothers or whatever, they just do good things."

A few catty comments after the story.  But - here's my comment.  "Thanks, TAD.  Yes, it sounds as if you are well heeled.  But, more than a few with money spend all or most of it on themselves and their families.  Thanks for being so generous with those who are in need, for sending a quite large check to an organization who doesn't waste the dollars received - and for telling others who can help to do so.  You made my day!"

A Tipping Point

Why do some believe that excessive regulations - like Obamacare - are harming our economy and destroying jobs?  This well explains.

“We’ve had an agreement in this country, kind of unwritten, for the last 50 years, that we would spend about 18 to 19 percent of GDP (gross domestic product) on the federal government. This is a tipping point. This takes us to 25 to 30 percent. And that money comes out of the private sector. That means fewer jobs. This is a game-changer.”

He means it’s a game-changer because of the cost. But the law’s impenetrable complication does almost as much damage. Robert Higgs of the Independent Institute is right: If you wonder why businesspeople are not investing and reviving the economy, the answer lies in all the question marks that Obamacare and other new regulations confront them with. Higgs calls this “regime uncertainty."

It’s also what prolonged the Great Depression.

Do read the whole thing. 

That Was Then

This is now.

Under fire from civil libertarians on his left, Barack Obama will add a signing statement objecting to the McCain-Levin amendment on the jurisdiction of terror suspects captured in or out of the US. Attorney General Eric Holder announced the decision in an interview with the Wall Street Journal.

But....

Q: When Congress offers you a bill, do you promise not to use presidential signage [sic] to get your way?

OBAMA: Yes. [Applause] Let me just explain for those who are unfamiliar with this issue. You know, we’ve got a government designed by the founders so that there’d be checks and balances. You don’t want a President that’s too powerful or a Congress that’s too powerful or courts that are too powerful. Everybody’s got their own role. Congress’ job is to pass legislation. The President can veto it, or he can sign it. But what George Bush has been trying to do is part of his effort to accumulate more power in the Presidency, is, he’s been saying, “Well, I can basically change what Congress passed by attaching a letter that says ‘I don’t agree with this part’ or ‘I don’t agree with that part.’ I’m going to choose to interpret it this way or that way.” Uh, that’s not part of his power. But this is part of the whole theory of George Bush that he can make laws as he’s going along. I disagree with that. I taught the Constitution for ten years, I believe in the Constitution, and I will obey the Constitution of the United States. We’re not going to use signing statements as a way of doing an end run around Congress.

“So we are in a better place, I think the regulations, procedures that will help, and we’ll also have a signing statement from the president” which will help clarify how they view the law, Holder said.

What does that sound like? Why, it sounds like an end run around Congress via a signing statement, doesn’t it? Granted, it’s not the same as doing end runs around Congress through the EPA, but it apparently no longer offends the Constitutional law lecturer to use the same mechanism he derided as a presidential candidate. He seems pretty darned happy to find out that signing statements actually are “part of his power,” or at least happy to make that argument now that he’s in position to benefit by it.

Doesn't anyone in government still stand on principle?  Anyone?

Egypt

Current events and some history - from the perspective of one of the top bridge players in the world (and a friend of mine):  Tarek Sadek.

About the Situation in Egypt...! Dec. 2011

by Tarek Sadek on Wednesday, December 21, 2011 at 5:54pm

I am grateful to many of my friends who were anxious about our condition in Egypt. In order to explain what’s happening I have to go back in time a bit so bear with me… What’s happening right now is a continuation of 60 year of the SCAF’s (military) ruling.

 

Before the 1950s, Egypt was a kingdom. The condition in Egypt at that time was socioeconomically prosperous. Egyptian were living in a democratic atmosphere that was provided by the parliament who was truly elected by the people and who in turn chose the government respectively. In 1952, the military overthrew the king and became in power. Egypt was transformed from a kingdom to a republic. The military promised to transmit the power to civilians in two years.The two years became a very long period: SIXTY YEARS!!! Since 1952 Egypt only witnessed presidents who were or belonged to the army. Even though what seemed to be a republic, the truth is that we’ve never truly chosen our president; we’ve never experienced real democratic elections since 1952. The ironic thing is that the president chooses his Vice President, who with no surprise is from the military, and after the death of the current president, the Vice president would take over by one way or another.

 

In the revolution of 25 Jan. the youth protested the situation in Egypt: education system, health care system, and the socioeconomic status of the people are awful. The youth were the ones who started off this revolution, later on, all the other sectors of the population joined in. They demanded the abolishment of Mubarak’s oppressive system and the transfer of the power to democratic civilian authority. After the long battle between the people and Mubarak’s regime, the army overthrew Mubarak to calm the people. And again, they promised that they would transfer the power peacefully in six months. After 8 months, they announced that Egypt “is not ready” and that they will transfer the power in two years. "1952 TAKE TWO!!!" This is what the people have realized. This was just an act, nothing would be transferred in two days, two months or even two years. THEY WERE MOCKING US! The problem is that for 10 months we were living a lie. The utopia of having a revolution, of being free, of belonging to FINALLY a democratic country but unfortunately this was just a dream. We are in the upheaval of the revolution, and there might be a chance that we might lose. But the Egyptians won’t go down without a fight. This is the reason why people are still protesting, the army is using all the oppressive methods. This is why when one woman is beaten up, another ten go down the streets. IT IS NOW OR NEVER! The military doesn’t show any mercy, they do not differentiate between male, female, child or elderly. All what they care about is OPPRESS, OPPRESS AND OPPRESS! The result is (since 25th of Jan): about 2000 deaths, 10 000 injured, 1000 lost, 16 000 detained by the military, and still counting…

The Good, the Bad, and the Ugly

And not necessarily in that order.

What are awful economic ideas?  What are good ones?  Why does each concept fall into the category that it does?

Here are the answers.

1. Pay teachers more but get rid of tenure so the bottom five percent of teachers can be replaced by even average ones.

2. Encourage more high-skilled immigration.

3. Reduce regulatory barriers to new business creation.

4. Replace payroll taxes with more economically efficient ones.

5. Phase out and eliminate pricey and market-distorting subsidies like the mortgage interest deduction.

6. End Too Big To Fail.

7. Eliminate the tax code’s bias against investment.

8. Move toward market-friendly entitlement reform like Wyden-Ryan.

9. Create a patent system with the length of legal protection depending on the cost of innovation and imitation.

10. Establish more innovation prizes.

11. Have fewer kids in college getting liberal arts degrees, more in business-run worker training programs.

12. More investment in basic research, not in crony-capitalist, industrial policy schemes like Solyndra.

These would be great policies for Washington to implement in 2012. Please!

Subsidies

What happens when you subsidize something, rather than allow markets to take their course?

This.

If you thought that the subcompact electric Chevy Colt was overpriced at an MSRP of $40,000 — which after a point-of-sale tax credit comes to $32,500 — you haven’t seen anything yet. According to a Mackinac Center study of government subsidies throughout the manufacturing and distribution chain, the actual cost of the vehicle is almost $300,000 — with a quarter-million dollars of taxpayer subsidies going into every vehicle.

That isn’t stopping other manufacturers from getting in on the electric-car “boom”:

The report said General Motors (NYSE: GM) has fallen well short of its goal of selling 10,000 Volts by the end of this year, and Nissan has sold less than 9,000 Leaf electric cars.

Despite the lower-than-expected interest in electrics, the report noted, Ford Motor Co. (NYSE: F) and Toyota Motor Corp. (NYSE: TM) are moving forward with plans to introduce their own electric vehicles next year.

Now, why would two auto manufacturers jump into a market with almost no demand and a high failure rate? Could it be because they’re looking for the same kind of subsidies that gives them somewhere around $250,000 per vehicle before the car is ever sold?

Free markets are far, far from perfect.  And if you think that they can be perfected - you're wrong.  Nevertheless, they are far, far superior to the ludicrous situation described above.