This post comes from one of The Wall Street Journal‘s earlier debate/point-counterpoint pieces.
Carol Lee Rawn, who runs the Transportation Program at Ceres, made her argument in favor of this Government intervention into the free market (many of you can guess my position on fuel standards set by Government rather than by market).
First, the standards benefit consumers and the economy. The standards set different mileage goals for different sizes of cars and trucks.
Umm, no. The cars and trucks start out with differences in their intrinsic mileages; the standards don’t affect those differences in any qualitative way. What they do, though, is run up the costs of all cars and trucks, reducing the ability of consumers to buy them in the first place.
Second, to remain competitive, the Big Three auto makers of Detroit must offer more fuel-efficient vehicles. During the last global spike in oil prices (when fuel-efficiency standards had essentially stagnated for years), the Detroit Three found themselves overinvested in gas-guzzling vehicles they couldn’t sell.
Couple things on this. First, to remain competitive, the Big Three—and the others in our auto industry—have to make cars and trucks that folks want to buy and drive, not what Government will permit them to choose from.
The second thing points up the interlocking nature of a modern economy; individual factors cannot be taken in isolation from each other. Were Government to get out of the way of the energy production industry, its departure would couple with the vasty seas of oil and natural gas right here in North America and the production thereof, and this would vastly reduce the likelihood of another spike, global or otherwise, in oil prices. Which would render this factor a straw man.
Third, maintaining strong fuel-efficiency standards locks in growth for innovative suppliers to the auto industry.
This is just more of Government determining who will be allowed to succeed and who will be required to fail in our economy. Furthermore, these suppliers have no more inherent right to exist than did buggy whip suppliers who’d innovated to provide bigger, better, more flexible whips. Like those whip suppliers, who moved on to provide horns and gas pedals and etc to the automobile manufacturers that overwhelmed the buggy manufacturing industry, these suppliers can, in a free market, prosper just fine by moving on to supply other items to a reviving auto industry.
The bottom line: making great vehicles that go farther on every gallon of fuel is good for the auto industry and good for America.
No, the bottom line is letting Americans decide for themselves what’s good for them. Vehicles that go farther on every gallon of fuel are part of that. So are vehicles that last longer. So are vehicles with better entertainment systems for the passengers. Most importantly, so are vehicles made to American buyers’ wants and needs, not to Government specs. Government has no legitimate role in dictating to us what our choices must be.