« Back to Home Page

Sign up for the 3p daily dispatch:

Et tu Thomas?

| Wednesday October 3rd, 2007 | 6 Comments

trans-am.jpgA response to Thomas Friedman
I wonder sometimes why people seem shocked that automakers don’t want higher fleet standards.
Mr. Friedman should do a little more study in economics, because even if the world is flat, there are still demand curves.
Americans themselves don’t want higher fleet standards for mileage unless they can still accelerate like Burt Reynolds in a black Trans Am with a golden eagle on the hood. So, automakers don’t want higher fleet standards, because their fleet will sit on the American Car lots for longer than it does already.
High mileage, room for seven and rapid acceleration are conflicting realities.
CAFÉ standards are a backwards attempt at solving an efficiency problem that could only come out of American politics.
We can’t legislate higher mileage for a fleet of hundreds of millions of cars. We tried before, and that gave birth to the 8500+ lb SUV, because it isn’t technically a car, and thus doesn’t fall under the CAFE standards. (It still accelerates like a Black 1981 Trans AM when you put the pedal to the metal though.)
If Cafe standards start to include “cars” up to 10,000 lbs, guess how much the new Hummer H5 and the 2009 Toyota Sequoia will weigh?


You just can’t legislate your way out of this one, especially in a society that seems to regard as sacred the ability to accelerate from zero to sixty in under ten seconds going uphill despite the fact that the vehicle is pulling a Boston Whaler.
What is the average MPG of the Fleet in Europe? Higher than ours, because they pay seven dollars a gallon and more, (and there are only seven parking places for Ford Excursions over there.)
What created demand for the Prius? Carbon consciousness to some degree, a little bit of economic blindness, some Ipodesque fashion consciousness, and mostly the cost of a barrel of oil appearing to be on a rocket ship to $200.
We could raise the price of gasoline with a national tax, but politicians are too chicken to do that – for good reason, I guess, because the average voter is part Burt Reynolds. Hence, CAFE standards, the politically correct way to appease your liberal constituents, and get their votes without actually creating significant demand for a car that gets 27.5 miles per gallon.
If we as a country seriously wanted a higher fleet MPG average, we could simply raise the federal tax on Gasoline by fifty cents per year for the next ten years, starting in January.
Or, Better yet, Tax each Barrel of oil by five dollars, increasing annually by five dollars per year for ten years.
Either way,
Problem Solved by 2020.
Return half the tax money to Lower income Americans and the Oil Companies (because it will cause them both massive economic pain) via Income Tax cuts, and lo and behold, the fleet will get way, way more efficient, and faster than you can say “Cannonball Run” one hundred million times.
If gas cost nine dollars a gallon, the desire to drive a Bronco like a Bandit would be mitigated by the desire to stay out of bankruptcy, exactly the same desire that keeps Toyota et al from fighting cafe Standards, and keeps most Europeans on bicycles or in cars that fit comfortably inside the back of a Ford F350 Long Bed.
Tax the bad, subsidize the good, and don’t bother trying to Legislate either out of or into existence, Why?
Witness the legislative success of the war on drugs and the war on terrorism.
Do we really want to fight a war on bad mileage? We could be raising money with Gas Taxes to dig out of the fiscal hole we are in.


▼▼▼      6 Comments     ▼▼▼

Newsletter Signup
  • Munzon Potter

    But isn’t it true that the original CAFE standards under Carter did a lot of good? I think the whole SUV thing was more to do with clever lobbyists years after Reagan gutted CAFE… or am I wrong?

  • Sam

    It sounds like you know more about the history of Cafe Standards than I do Munzon Potter.
    I do know that the price of Oil was an inflation adjusted $90 per barrel back then, and between that and the dominance and relative durability of the Japanese Autos back then, there was more demand for more efficient cars.
    I hold to my opinion, (and it is just that) that CAFE standards are a backwards route to a solution that would be reached more quickly and effectively with High energy prices.

  • Tommy Friedman

    Suck on this, policy analysts!

  • Stephen

    It’s funny, these are the same conversations we have when looking at one green product from a company…we expect the company to embody that identity in every product. 99.99999% of the time, they do not.
    Toyota entered the US market with a failure. A small car that was underpowered and overpriced (but very comfortable). The Toyota Toyopet failed to compete with the VW Beetle, and was pulled, reengineered, and reintroduced as the Toyota Crown.
    Toyota cars have grown in size ever since. Their CAFE has been increasing just like every other car company save Honda (and BMW for a few years). Honda’s current corporate fuel economy is 33.9 and 24.7 (cars and light trucks), the highest in the industry. They are also the only car/truck company with no production V8 (Hyundai and Kia both have V8 concepts, Hyundai has a V8 offering in 2008, Kia has a prototype truck in the works). This (to me) is the only car (and motorcycle) company that actually has the ‘culture’.
    So with this logic, Honda should be the darling of the green world. They have the best CAFE, they have a culture of lighter and efficient, and they have stability to defend these traits over time (reflect upon the evolution of the CBR motorcycle as well, some of this technology is automtively shared).
    Unfortunately, becuase of media hype we think Prius when we think Hybrid (unless you actually drive an Insight or Accord/Civic). That is a major coup for the marketing bunch, and a loss for Honda who could use increased sales dollars to benefit the automotive industry with even more innovation (see their new jet, anyone?).
    Toyota has spent millions building big heavy trucks designed in the USA, built in the USA, and not exported. The SUV’s with hybrid drive have higher power ICE engines to replace the performance edge due to electric drivetrains and batteries (most every other company is doing the same thing).
    Toyota now has the best of both worlds; green branding and big trucks. Domestic automakers can try to compete, but anything they do is too little to late, the “darling” got their first.
    Where is the technology in lighter frames and bodies? Where is the innovation in combined mechanics, cogeneration systems, and carbon neutral materials? They are not changing the game, just changing the offerings – and we are buying it.
    Some people (some say many) are buying the Prius not because of what it can do, but what it represents to others. A sale is a sale, and gallons saved are good for Earth, but the learning and social change is lost (in intent) and replaced with pure ego and selfishness.
    How do we undo that and keep the message> pure? Or do we?
    One last note, why did Chrysler, Ford, GM, Honda, Nissan, and Toyota develop and sell EV cars at once and at the same time? California mandates, and fears that they would increase or spread in the future. Most quickly dropped their product when the mandates lost their teeth…but the tide was right to sell what the companies had invested so heavily in.
    Just as green tech is ‘in vogue’, so are Prius’s. Let’s see what other changes the government can introduce in the marketplace that we can all benefit from – we can start by voting with our minds (and actually voting).
    Thanks for reading.

  • Seahawks22

    Mr. Friedman should do a little more study in economics

    Yes, and he should take some science, geography and sociology classes while he is at it.
    1. Science — CAFE standards are a laughably inefficient way to reduce our carbon footprint. It only addresses new vehicles and doesn’t encourage drivers with old vehicles to drive less.
    2. Sociology — It’s proven that people with better gas mileage drive more. My ’94 Jeep gets horrible gas mileage, so I try to bike or walk. Better mileage is an enabler, not a deterrent.
    3. Geography — It’s understandable that some people have trucks. America is the most wide open nation on Earth. It’s not as dense Europe or Japan, so we need to consider that.
    I do some work with AAM, so I’ve studied these issues. I’m not saying I have the golden bullet. Just saying that CAFE standards are a horribly archaic way to deal with this.

  • eurodillo

    Hi folks,
    I’m from Europe, where cars are way more efficient. Now the question being posed here is: what’s the best way to get more efficient cars, legislative standards or high gas prices?
    If I have to judge by what’s happened here, I’d say both strategies help. Gas here is heavily taxed, but I don’t think that without the legislative stds we would have achieved the same results, or at least not as quickly.
    You see, stds here are progressive: as soon as carmakers have complied with the current std, there’s a new and more stringent std coming out (we started with “Euro 0″, now we have “Euro 5″). This way, “old” cars lose value on the market, plus they cannot circulate in some municipalities. This is a high incentive for everyone to buy efficient cars. The fact that non-efficient cars lose value on the market encourage carmakers to meet high standards even before they are yet enforced.
    To sum it up, I think that legislative stds have considerably accelerated the cars turnover, by making consumers aware of efficiency and by creating a strong incentive for carmakers to invest a lot of their R&D money in efficiency.