Raising Fuel Economy Standards Again

Raising Fuel Economy Standards Again

If you want proof that Obama represents not new thinking, but the same old, tired, command and control economy thinking of the past, you need look no further than this morning's speech about raising fuel economy standards for automobiles. This is a bad idea, for a number of different reasons.

1. The fact is that Americans are a diverse population, and have diverse needs. Here in Idaho (and many other snow belt states), most vehicles are 4WD, because the weather gets really bad here in winter, and we need 4WD. While there are relatively fuel efficient 4WDs (such as the Subaru and Suzuki), 4WD is intrinsically inefficient compared to a 2WD vehicle of similar size, because there's a lot more turning machinery consuming energy. I suppose that the solution of the urban elites that push these proposals is to prohibit anyone from living somewhere that doesn't have unionized government employees running snowplows.

2. Past attempts to force Americans to drive the cars that our masters consider appropriate to us have often had counterproductive results. Why did Americans start buying minivans and SUVs in the 1980s, where the market before had simply not required these in large numbers? Because the preferred big family mover--the mid-sized and full-sized station wagon--largely went away. Why? Because the Corporate Average Fuel Economy (CAFE) standards passed in the 1970s required American car makers (but not foreign car makers) to improve the fuel economy of the passenger cars that they sold, and dumping station wagons was one way to do it--especially because anything that was classed as a truck was, at least back then, exempt from CAFE. Which would have been more efficient? If Americans had bought 15 mile per gallon station wagons? Or 10 mile per gallon SUVs?

3. I am very skeptical of interference in the free market, but there are bad ways to do it, and even worse ways to do it. If there is a legitimate governmental purpose to forcing people to drive more efficient vehicles, than the right solution is to raise fuel taxes, not order car makers to build cars that Americans do not want. At least raising fuel taxes would help to correct the deficits that the upcoming pork stimulus bill will run up. This makes more sense than telling car companies to create vast fleets of unsellable cars--especially at a time when some of these car companies are getting bailouts from the government.