American Elephants

Central Planning Has a Bad Reputation. Doesn’t Anyone Ask Why? by The Elephant's Child
May 20, 2009, 12:52 am
Filed under: Economy, Energy, Progressivism | Tags: , ,

The Obama administration announced proposed mileage standards that will require federally controlled automakers to meet California’s 35 mpg mandate by 2016.  Car makers know that the standard is unachievable, but they obviously are in no position to say no to the administration.  The only way for manufacturers to meet that mandate is to make smaller, lighter and deadlier cars.

The administration believes that CO2 is a dangerous problem, and that emissions must be cut.  They believe that the way to cut emissions is to force everyone into small, more efficient cars.  They are intent on switching America to “clean, renewable energy.”  Clean, renewable energy has nothing to do with CAFE standards because wind, solar, hydropower, geothermal power and nuclear power produce electricity, not gasoline.

Increased gasoline prices are political suicide.  Estimates of the increased cost of producing cars to meet the new standards run from $1,300 per car up to $7,000.  The Natural Resources Defense Council has said that a 35 mpg standard will save about one million gallons of gas per day. Steven Milloy asks how that savings balances out against the 2,000 fatalities that the National Academy of Sciences says are caused each year by making those cars lighter?  He points out that the proposed mileage standards would kill more Americans than the Iraq War.

The supposed end of all the taxpayer bailouts and federal control imposed on the auto industry is to restore the car companies to health and profitability.  Yet every mandate imposed by the government just ensures that the bottom line will suffer.  It means fewer jobs and producing unprofitable vehicles that consumers don’t want.  Greg Pollowitz notes that if the Obama plan actually managed to save the proposed 1.8 billion barrels of gasoline, it would mean that something like $16.1 billion in taxes will be lost to the states and the federal government.

This all begins to demonstrate how the old Soviet Union’s central planning ended up with factories producing all left shoes.   A 2008 Center for Automotive Research survey found consumers unwilling to spend more than $200 extra on cars to have environmental improvements.  Irrational doesn’t even begin to describe it.

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