Redstate

But doesn't it smack you as odd that government can mandate to our struggling auto industry, that in order to sell the cars that are actually popular and selling, you need to design a car that few people will EVER want to drive much less purchase.

Enterprise and Hertz can only by so many Aveos.

I think a reasonable rise in fuel efficiency is warranted, but wouldn't it be even wiser that instead of 100 different fuel mixtures, the Federal Government just mandate one. They could make it as strict as California's if they wish, and without having to change up the mix, the cost to refine should go down as well. and it would also allow fuel to move more fluidly around the country.

I just don't see how making one car get 55 mpg, just so the popular car can remain at 15mpg, just doesn't seem reasonable.

CAFE compliance is calculated on the average fuel effecieincy of vechicles sold -not manufactured - so it doesn't suffice to manufacture a 55 mpg car to offset a populat 15 mpg car, you actualy would need to increase sales.

Exactly... so in order to meet those standards... they have to actually sell a vehicle that no one would like to drive and/or limit the number of cars that could be profitable.

Are you seriously suggesting that government mandating how many types of vehicles are sold (obviously this directly affects what vehicles they make) regardless if could potentially ruin their niche in the market?

Ford sells trucks and SUVs... not cars these days. How many trucks out there make 55mpg or even 35mpg?

They have to make efficient cars that people want to buy - Toyota, Honda and Nissan are doing a decent job at it and Ford is starting to as well.

Niche manufacturers pay the fines rather than comply, and they are easily able to pass those on to customers becuase the niches tend to be higher priced cars.

As for SUVs - the Ford Escape Hybrid is over 30MPG s I don't doubt that they could get models well over 35 MPG in the next 12 years, and may do so without any prodding from teh government as competition drives them there.

The reason why people are willing to buy cars they would not normally buy is because the eviro-warriors of our country have succeeded in stopping us from drilling for oil and brought us $4.00 a gallon gasoline. (It is $3.25 here in South Dakota - btw) Just due to our ability to pay for gas, we are forced to buy a car we would not other wise buy.

That is what market distortion is!

Wubbies World, MSgt, USAF (Retired):
public static void main(String[] args) {
System.out.println("An argument is a sequence of statements aimed at demonstrating the truth of an assertion.); }

Price the car people don't want to buy artificially low and price the car people do want to buy artificially high. Some people will then buy the car they don't want. That is the entire point behind CAFE. It forces consumers to buy vehicles they wouldn't otherwise choose to buy... at least the ones who aren't rich enough to spend any amount of money on a vehicle.

As for SUVs - the Ford Escape Hybrid is over 30MPG s I don't doubt that they could get models well over 35 MPG in the next 12 years

As for The Ford Escape Hybrid, it hardly qualifies as an SUV. It is less of a truck than most minivans. Just because it is marketed as an SUV to increase its appeal doesn't mean you can tow a bobcat or a boat with it. It doesn't mean you can take it offroad. It has about as much utility as a Prius... it just doesn't look as goofy.

There are limits here. Things like aerodynamics are huge factors in mileage and not that easy to fix without radically changing the vehicle, changing the function at the same time. The same thing goes for weight. Even if you could figure out how to make a full size pickup that weighs 2000 lbs, you can't have a 2000 lb vehicle towing a 5000 lb trailer. The easy stuff like computer control and Aluminum driveline components has already been done.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman

I think it was in Newsweek sometime this summer; there was an article on how hybrids came to market.

Honda beat Toyota by bringing 2 models to market before Toyota got the Prius out. Yet Prius has become the 'kleenex' of hybrids, outselling Hondas by a significant multiple.

Honda's strategic mistake was making the hybrids look too much like their conventional vehicles. People had to look really close to tell that a Honda driver was driving a hybrid, whereas the Prius screams hybrid.

The article essentially admitted that few people would buy a hybrid as a result of a cost/benefit analysis, without factoring the value of the "statement of concern" that the 'goofy' Prius makes.

There is more stupidity than hydrogen in the universe, and it has a longer shelf life. - Frank Zappa

It doesn't hold a candle to the Scion xB or the Honda Element.

And speaking of ugly cars...
http://www.cartalk.com/content/features/uglycar/nominations.html

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I happen to own two of those "goofy" cars. Honda's mistake was making hybrid cars that looked like boxes, whereas the Prius is a legit mid-sized interior. That's all-important when you're a tall/fatty like me with 2 pre-teen kids.

But for the interior room, we wouldn't one one of those puppies, much less two.

YMMV.

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Diplomacy is the art of saying 'Nice doggie' until you can find a rock.

First, I don't think the 2004+ Prius look goofy at all I think they look sleek, second the pre-2004 prius looked far more like a regular compact than the Honda Insight which beat it to market - that car looked deliverately like a different kind of vehicle. SO basically you or that article has it backwards - Honda rushed a vehicle to market that looked like a different kind of car to beat the Prius which was more 'normal' and far outdols it. You really have to never have seen the Insignt and the Prius to not see that.

Second, I know many people who have bought Prius for none envrionmental reasons - again it is ignorance tht has led people to think otherwise. Sure, the savings in gas mileage may not pay for itself - but that is not the only benefit to the Prius. Having to visit the gas station less often, quieter driving and idling are a few other benefits of the hybrid engine. Beyond that, the technology is cool and Toyora the Prius to showcase other technology advancements like smart start (I love keeping the key in my pocket at all time) by-wire technology, early bluetooth compatability, vehicle stability control before it was popular (and it is a big safety feature), continously variable transmission which means no waiting to accelerate and more. People bought the Prius for all these reasons and more (my family has two and I wouldn't want any other vehicle - and I have driven many other cars as rental vehicles).

The point of all this is, the Prius has been succesful for many reasons and could serve as a model for manufacturers on how to test innovation in the marketplace.

"It forces consumers to buy vehicles they wouldn't otherwise choose to buy... at least the ones who aren't rich enough to spend any amount of money on a vehicle."

In other words, it forces consumer to internalize externalities in their purchasing decisions - if you believe that envrionmental and national security impact of oil consumption is real than this is exactly what you are going for and is a model of how society can drive the market to more optimal equilibirum (it might not be the ideal method, but it is one).

"As for The Ford Escape Hybrid, it hardly qualifies as an SUV. It is less of a truck than most minivans. Just because it is marketed as an SUV to increase its appeal doesn't mean you can tow a bobcat or a boat with it."

True enough - but I don't think the huge popularity of SUVs by suburban moms and dads (the driving force behind SUV sales in the last decade) is really because of its towing capacity. No doubt there are people who need those features, but not the majority of SUV owners.

In other words, it forces consumer to internalize externalities in their purchasing decisions - if you believe that envrionmental and national security impact of oil consumption is real than this is exactly what you are going for and is a model of how society can drive the market to more optimal equilibirum (it might not be the ideal method, but it is one).

It just adds a healthy helping of extra government interference into their decision. That may be more or less than the amount any externalities that are impacted by their purchasing decision, not that those externalities could ever be measured or that we could ever agree on what they are anyway.

But at least we agree that it is government interference in the purchasing decision. Here you are making the argument that it is a good thing. That is fine, but it is also liberalism 101. It's the same reason we got laws mandating how much water can flow through a shower head or be used in the flushing of a toilet.

True enough - but I don't think the huge popularity of SUVs by suburban moms and dads (the driving force behind SUV sales in the last decade) is really because of its towing capacity. No doubt there are people who need those features, but not the majority of SUV owners.

And see, I come to this from the perspective that it is none of my business if someone wants to drive their kids to soccer matches in a Excursion that gets maybe 13mpg city, any more than I think it's my business that someone lives in a 10,000 sq ft house, or flies across the country in a private jet. It's their money. They should be able to spend it how they like.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman

"That may be more or less than the amount any externalities that are impacted by their purchasing decision, not that those externalities could ever be measured or that we could ever agree on what they are anyway. "

This is certainly true - but that doesn't lead to the conclusion that they don't exist and ignoring them is a better solution.

I am not sure government interference is Liberalism 101 per se - I think the choice of when to apply governmetn interference and what the best metohds of interference differentiate modern liberals and conservatives more so than the arguments of limited government (I look at Huckabee, Giuliani, Romney and I don't see them arguing for limited government for the sake of limited government, even Fred is more about Federalism than limited government; but I may be confusing repulbican party with conservatism here).

"It's their money. They should be able to spend it how they like."

But I would like them to spend their money with the full cost internalized; I'm okay with passing the costs of TSA on to airline passengers, the cost of national defense on to everyone etc. If we believe that their are external costs to our use of gasoline (and like I said above that point can certainly be argued and we may not reach a braod consensus) than we should find ways to make consumers internalize the impact of their decisions.

This is certainly true - but that doesn't lead to the conclusion that they don't exist and ignoring them is a better solution.

We have pretty significant road fuel taxes already... so even without CAFE standards, we are collecting a big chunk of the price of every gallon of gas or diesel somebody puts in their car. If that's not enough to cover it, then increase the tax. There's no reason for the government to get into the business of automotive design, other than as a political gimmick. "See! We're going to reduce your energy consumption and it won't even cost you a dime! You won't have to lift a finger!" CAFE is all about political cowardice. If they really think there's a problem with energy consumption, tax it.

But I would like them to spend their money with the full cost internalized; I'm okay with passing the costs of TSA on to airline passengers, the cost of national defense on to everyone etc.

How is CAFE going to achieve that? Someone driving a car already has a lot of government imposed costs to deal with. Someone heating and cooling their 10,000 sq ft house has far less burden, even though they are consuming much more energy. Same deal with someone flying around in private jets. We don't have punitive taxes on those fuels like we do on road fuel. We certainly don't have minimum standards for the amount of fuel someone can burn to get one passenger from LAX to JFK.

If you are truly concerned about people making bad energy decisions and not having to pay the full price for them, maybe you should look elsewhere first, where the tax and regulatory burden is very low, rather than at automobiles where we already have a high burden. It's all energy.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman

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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

"If you are truly concerned about people making bad energy decisions and not having to pay the full price for them, maybe you should look elsewhere first, where the tax and regulatory burden is very low, rather than at automobiles where we already have a high burden. It's all energy."

Your right, unfortunately I have zero sway on legilsative agendas, but you are right that there are other places where our attention would be better served.

If you feel that there are external costs in getting gasoline to the pump paid for by the govt and are not properly accounted for in the cost, impose a tax on gas to reflect the difference. Then you can let the people decide how to spend their money.
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

I do agree that this is the best option (possibly also an emissions tax); I think I mentioned that in one of the posts. I think one of the most distorting things we have done is hide the true cost of gas from consumers over the last few decades.

That doesn't seem to alter the basic difference between those who think it's unwise (and unjust) for the government to regulate such a matter and those who don't.

What's wrong with a scenario where we let Ford's entire fleet average 15MPG? I speculate Ford will swiftly go out of business. Or they may downsize and become dominant in a much smaller niche market. Or I'm grossly mistaken and most consumers actually want to drive 15MPG vehicles solely so they can have a higher monthly expense.

Coercing Ford into modifying the characteristics of its product line doesn't seem to solve any problem. If people generally prefer vehicles with lower MPG, all other things being equal, then CAFE as you described it wont help the situation, because people will only buy the 15MPG vehicles and not the others Ford was forced to produce to average it out.

in mind when they buy a 15MPG monster. Control of and/or reduction in oil usage is a national security issue...the more entrenched we get in imports of foreign oil, the more exposed we are if someone like our buddy Hugo decides to pull the plug. That's why Wubbie's diary is a good one - he links the CAFE issue with a more comprehensive energy policy, and CAFE is only a small part of it. And that is why the criticism of America's Mother-in-Law™ and her minions - they obsess about CAFE and ignore more important points like increasing oil production here in the US.

So this is a national security issue - evidently not critical enough for you to call on a total ban on sales of highway-legal vehicles that have low gas mileage, but at least enough to force American companies to modify their product lines a little bit? Call me skeptical...

Did you know the country we import most of our oil from is Canada? Saudi Arabia, Mexico, Venezuela, and Nigeria round out the top five. [link]

We import roughly 60% of the oil we consume. About 11% of our imported oil comes from Venezuela, which therefore accounts for only 7% of the total.

It is true that a rising China, a growing consumer of oil itself, will add to overall world demand for oil. I'd like to think for all the cash (and people) we've thrown at Iraq, that we are going to come out of it with a very tangible result in the form of increased oil imports facilitated by a new pro-American regime (Iraq is currently 6th on the list of countries we import from). And there are a number of other ways the government could get itself out of the mix and allow for unfettered, unsubsidized competition in new energy markets in the meantime.

So it takes a harder argument that that to convince me to try and solve a national security problem (one that is only potential and in the future, in my opinion) by meddling in the affairs of American companies.

In fact, I've cited them myself here in the past. The security issue is not necessarily one of unavailability as it is the economic impact of a sudden loss of a significant portion of our supply. The price of oil and gasoline is having an increasing impact on our economy - I contend that we will see a drop in retail sales this Christmas season (that 8% increase on Black Friday was a one-day wonder - it didn't follow thru the entire weekend) and at least some of that is due to a loss of spending power due to fuel costs.

A sudden shock to the economy is a national security issue. Furthermore, the impact of the Chinese goes beyond their increasing consumption of the world's supply. They are also attempting to gain control of world oil reserves to feed their own requirements, and in the process have more control over our access to those reserves. Only by reduction of our consumption and further cultivation of our own resources can we be immune from such moves.

There are certain areas where market freedom is detrimental to the overall welfare of the country...and I believe this is one. And as far as a ban of gas guzzlers goes, I believe there are certainly justifications for large vehicles. That's why the CAFE standards aren't all bad - they don't ban low-mileage cars/trucks - they just dictate an overall average. As you say, the modification to the product lines isn't profound - it's not much more than "a bit." And it is quite obvious that an auto manufacturer isn't going to go out of business by meeting the standards. Toyota, Honda and others are prime evidence of that.

I contend that we will see a drop in retail sales this Christmas season (that 8% increase on Black Friday was a one-day wonder - it didn't follow thru the entire weekend) and at least some of that is due to a loss of spending power due to fuel costs.

So why not contend equally that consumers will - of their own volition - respond to fuel costs by seeking out vehicles with better gas mileage? And therefore join our call for reducing government's intrusion into this situation?

It forces them to sell a certain mix of vehicles. The only way they can meet that number is by selling small cars at a loss and raising the prices on SUVs, just not building enough SUVs to meet demand, or changing the SUVs into another type of vehicle entirely (like turning it into a 2WD station wagon with no frame and no ground clearance and calling it a "cross-over SUV").

The end result is consumers are still not being permitted to buy vehicles they would otherwise buy without the government's interference.

The standards also hurt domestic automakers much more than foreign automakers, since their labor costs are higher (making it more difficult to sell small cars at a profit) and their customers demand bigger vehicles.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman

The standards also hurt domestic automakers much more than foreign automakers, since their labor costs are higher

That's what they get for staying in Michigan. They should move offshore, to Alabama or Kentucky, like the Japanese did.

Drink Good Coffee. You can sleep when you're dead.

And places for the government to enact incentive policies that drive toward a desired outcome.

This doesn't strike me as one of them. I would prefer mandating something like multi-fuel engine electronics (if the technology is currently available, which I don't know to be the case), which would open competition to engine fuel. Perhaps some alternative fuels are viable in certain places, or at low percentages.

Having said that, as a general rule, I argue against state intervention. Without that tension, the state will never arrive at the few places where intervention is reasonable.

CAFE limits the number of high milage vehicles, making SUVs more of a luxury. It screws up the market mechanism. More importantly from an environmental perspective, the total energy cost per mile of the Hummer H2 is lower than the Honda Civic, when the entire lifespan, milage, and energy required for manufacturing and shipping are included.

That type of massively parallel computation can only be solved by relatively fine grained robust market mechanisms. You can make the statistical calculation (though you are still missing local variables), but government is incapable of acting on the data in a rational way.

CAFE doesn't help.

More importantly from an environmental perspective, the total energy cost per mile of the Hummer H2 is lower than the Honda Civic, when the entire lifespan, milage, and energy required for manufacturing and shipping are included.

I'm not sure about this specific fact, but one thing that no one ever seems to take into account is the environmental impact of creating and disposing of the vehicle components.

You can make everything lighter (contributing to gas mileage) by underengineering it. If a component is lighter and as a consequence breaks and needs to be replaced more often, is that a win for the environment?

This is an issue with hybrids as well. Hybrids have everything a conventional vehicle has, plus additional components. One of those additional components is a huge battery pack with a limited lifespan. Those parts have to be built. The salvageable materials have to be salvaged and processed into something usable. The rest has to be disposed of in a landfill somewhere. The part is being shipped around the country while this is happening. It's another factor to consider in all of this.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman

Pass the law and some people will just have to beat it no matter what.
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

and caucus with the Democrats?

Is really unfair to the kids.
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

i was speaking to those few kids who don't grow out of it.

But yes, it's always unfair to compare kids to members of Congress. One group knows better. Yet you'd think Congress would have learned by now.

I think George and Dick should each go to a Chamber and put them in TimeOut!

Remove utility and then claim the state must replace it.