[AnthonyMouse]

In this case what "we must" do isn't really in control of a single country. It turns out battery electric vehicles are viable now. Most of Germany's car sales aren't internal to Germany. If they don't produce competitive electric vehicles, Tesla will, or Rivian, or a dozen companies in China and all over the world.

Germany's choice isn't to start producing electric cars or to keep producing the same number of ICE cars they always did. It's to start producing electric cars or lose most of the market to new competitors.

And that means there are going to be fewer jobs making cars, because it's less labor to make an electric car. But you don't bail out the buggy whip makers, they just start making drive belts, or they go away.

[api]

I'm not sure the buggy whip makers thing is applicable. Industrialization put a ton of people out of work, but growth created new jobs for them. We are now in a near-zero growth environment, so I'm not sure growth will supply a magic bailout this time. Jobs are going to be lost and they may not be replaced by anything.

[AnthonyMouse]

The thing about jobs is that they mostly balance out. Some people lose their jobs, but that means cars cost less. It means you get the same standard of living with less income. So you take a lower paying job and still have the same life.

There are effectively unlimited jobs at low enough pay, so as long as the pay meets the cost of living it's fine, so anything that lowers the cost of living is good.

That balance doesn't operate at the individual level. It mostly benefits the people who buy cars and mostly hurts the people who used to make cars. But on net it helps more than it hurts -- it's better to make transportation less expensive than have some more jobs that cause transportation to be more expensive.

The biggest problem with this is that it works best when everything gets cheaper at once. Otherwise that individual-level asymmetry starts to become trouble. And what we have right now is a regulatory environment that makes it hard to get cost reductions in certain industries (housing from zoning rules, education from government subsidies, healthcare from a hundred separate causes), so those keep growing as a percentage of income. And that's going to be a problem if we don't do something about it.