Set the controls for the heart of the sun!

I reckon that this is the week that a recession was finally tipped over - quite wilfully - into a Depression. Replacing a lunatic corporatist US President with a lunatic socialist/protectionist US President would have been bad enough, but the last straw is the bail-out for UK car manufacturers.

This story contains just about everything I've ever railed against:

1. "The package includes a scheme to unlock £1.3bn of loans from Europe for car manufacturers and major suppliers."

It's not from 'Europe', it's from the European Investment Bank, an arm of the EU. I'm a Ukipper, 'nuff said.

2. "... the government would also guarantee up to £1bn of further loans."

That's a hiding to nothing, as I explained here.

3. But shadow business secretary Ken Clarke said the European loans were announced last year and called the whole package "pretty small beer ... I'm slightly disappointed..." the Tories had suggested loan guarantees for the finance arms of car companies in November. "Here we are months later and during that time sales of cars in this country have dropped by half whilst the government dithers," he told MPs.

And he said on the "key subject" of getting people who could afford it credit to buy cars - the government had only said it was "looking at steps" to address it.

Nulabour, Blulabour - can't we at least have the choice between a Big Government party which wants to nationalise everything and a small government party which doesn't? As I said before Xmas, "each party promises something more generous than whatever it was that the other party just promised, at the moment, government guarantees for such lending are top of the agenda." When I suggested that instead of just trying to prop up the housing market, why not do new car sales, I was being ironic, FFS.

4. He said the measures would boost the industry and lay "the foundations of its reinvention for a low carbon future". They include ... another £1bn in loans to fund investment in green-friendly vehicles. Regional development agencies and the Technology Strategy Board are to be invited to bring forward new research and development programmes into cleaner engines, lighter cars and "plug-in hybrids".

Ah, nice to see a couple of quangoes jumping on board. Again, as I said at point 5 here "Once The Quangocracy and The Righteous realise all this, they will ask 'Why should the banks lend money to young Arthur Simmonds with his climate-change-causing-car repair workshop? We think that the banks should lend to The Malcolm and Cressida Ethical Living Awareness Project.' That way lies chaos."

5. ... he said there would be "no blank cheque" and any schemes supported had to provide jobs, develop new technology and processes for the long term and provide value for money.

There, there dear. I'm sure that's what they said when the nationalised the constituent parts of British Leyland.

6. "Unite general secretary Derek Simpson told the BBC he was pleased the government had made a start in helping the car industry but questioned whether the loans would be enough."

That's another euphemism that annoys me - 'helping' instead of 'giving money to'. And The Unholy Trinity of trade unions, government and rent-seekers are gathering ...

7. "Friends of the Earth welcomed the announcement but said more needed to be done to make sure the car industry was building cars that used less fuel - and providing incentives for people to buy them."

Hurrah! Not just quangoes, but a fake charity (TM Devil's Kitchen) jumping on board.

Let's just do a bit of rough arithmetic. Prior to the downturn, people replaced their cars every ten years. About 30% of total pollution relates to the manufacture of a new car and the disposal of the old one, and 70% to petrol/diesel use. So that's 30 pollution-units ('PUs') to replace, and 7 PUs to run it per year (total one hundred PUs). In a downturn (like now) you could quite reasonably expect cars to be run for twenty years, not ten. So over the next ten years, that creates 70 PUs. If we are forced to replace a car, cost 30 PUs, the number of PUs emitted over the next ten years would have to be rather less than 4 per year if there is to be any reduction in PUs, or if your current car does 28 mpg, your new car would have to do at least 40 mpg for the next ten years for there to be an overall reduction. It is quite conceivable that Friends of The Earth are indirectly sponsored by European car manufacturers who make such economical cars, is it not?

8. Finally, isn't this all about preventing job losses? As this fine Readers' letter of the day pointed out ...

It doesn't take an econometric model to conclude that transferring wealth from the productive to the unproductive sector results in a negative-sum game. For every 10,000 jobs saved in the car industry, it is likely that 20,000 to 30,000 jobs will be destroyed in the sectors that are forced to pay for the bail-out.

Specifically, those jobs will be lost - or never created - in car repair workshops up and down the land who would have kept our motors going for twenty rather than ten years. If and when car manufacturing picks up, then they'd have a ready pool of skills, and so on, back and forth.