Lower Gas Mileage Standards

Do you remember the first time we bailed out the auto industry? The second? The first one was when the government bailed out Chrysler in about 1980 because they were producing gas guzzlers when European and Japanese markets had adjusted to the new demand for energy efficient cars. The second was when the bankers broke the economy and once again the auto industry was over extended. Both times the government saved them. Now according to what I read, they ask President DFF to lower the gas mileage standards put in by President Obama and of course, he thinks it is a great idea because, well, Obama had something to do with it.

It is monumentally stupid for both the country and for the auto industry. But then again monumentally stupid should be what we expect from both the car industry and President DFF at this point if you pay attention to history. For the country it could result in adding 6 billion tons of carbon dioxide pollution and, through better fuel efficiency, $1.7 trillion in costs at the pump through 2025, good deals for the environment and consumers alike. Not to mention it further withdraws from the climate accord agreement making us the old China when coal was king, of tomorrow.

But for the auto industry it could be a disaster. As they produce gas guzzlers, the market is already moving on. So once again the auto industry, like most businesses, is focus on short term profits and not thinking long term:

This retreat would also be bad for business. Selling gas-guzzling cars and trucks might continue to drive short-term profit, as some in the auto industry believe, but abandoning the standards now in place would run counter to the longer arc of consumer demand, state regulations and international market forces. Looser standards now, when consumers and many states are demanding cleaner cars, would spell trouble for the auto industry.

Then there are California and the states around it that still try to stay within climate change agreements and will force higher fuel standards in their states. That will fracture car manufacturing. That coupled with the fact that Europe and China, both big markets for American cars, are moving to higher gas mileage standards should be a signal to the auto industry that this is patently stupid:

Norway has set a goal of restricting sales of new vehicles to electric or plug-in hybrid models by 2025. France and Britain have pledged to end the sale of diesel and gas cars by 2040. Germany, the Netherlands and India are actively considering similar moves. Perhaps most important, China has a new zero-emission-vehicle mandate, modeled on the California program, which requires that such vehicles represent 8 percent of new car sales in 2018 and 12 percent by 2020. China is already General Motors’ largest market.

So why again are we going to do this? Well there are a couple of lessons here for those who believe the market place will solve all problems or that what is good for business is good for America. There is an element of truth here in these beliefs, but taking them as an absolute, leads to disaster. He world is complex. Short term thinking by business to maximize profits, hence maximize CEO bonuses, are not good for the long term interests of the company. But those are the incentives we have in place. So government has to step in to understand what is good for the whole country in the long term and set rules for us to get there. Whether it is the environment, or the long term interests of the company itself, government, much against Republican dogma, has a role to play, not in day to day management, but setting goals and limits like mileage standards and pollution standards that protect both the business from itself, and the consumers, their health and their pocketbook. Think about the banking rules both Republicans and Purple State Democrats just rolled back.

Second, President DFF does not have a clue. He has no vision other than wrecking things. Win- lose is his view of the world. I heard a Republican strategist last night excuse his chaos as his management style of disruption. Well first, disruption and chaos are not a plan or strategy. Second, disrupting a good plan is plain stupid. But he does not have a plan other than to be me first and do whatever it takes to maximize profits in the short term. Again, I win, you lose. The world economy does not work that way. Although President DFF is an extreme and truth be told, a lousy businessman, he is an example of why businessmen, and running government like a business is a grand logical failure. Business and government are about two entirely different things. And it shows that harking back to the good old days with few government regulations is a fool’s errand.

As we continue down the road where President DFF governs by his instincts instead of facts, data, science, and the long term interests of the people, and he continues to run his Administration like a Stalinist government when everyone is in fear for their jobs (lives in the Stalin era) unless they figure out what his next whim is and facilitates it, we are on a train wreck to oblivion. Certainly chaos is change, but change can be good or bad and we are seeing really bad change. If you voted for President DFF you were a fool, and if you voted for him because you wanted change and did not ask what kind of change, you are doubly a fool. Admit it. Suck it up and admit your mistake and let’s get this country back on track as a leader instead of a retrograde nation that becomes a threat to the whole planet.

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