By Rory Cooper
If General Motors CEO Dan Akerson had anything to say about it, you would be paying a dollar more a gallon for gas. Yes, with $4/gallon prices hitting consumers in a tough economy, Akerson told the Detroit News: “You know what I’d rather have them do — this will make my Republican friends puke — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas.”
Akerson, 61, was appointed CEO of GM last fall, having previously served as an Obama-appointed member of the board. He has been critical of the Obama Administration on several issues, including fuel economy standards, but now has discovered something in common: a love of high gas prices. He, like President Obama and Energy Secretary Steven Chu, believes that higher gas prices will force taxpayers to buy more fuel-efficient (and usually more expensive) vehicles.
In 2008, Secretary Chu said: “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” And it was President Obama who told CNBC in 2008 that he preferred a “gradual” increase in gas prices. Obama and Chu know that only when matched dollar-for-dollar will Americans choose alternative energy sources that are much more expensive today. Since the already heavily-subsidized alternative energy sources are not getting cheaper, the only solution is to make cheap energy more expensive.
Akerson, Chu and Obama are wrong to embrace high gas prices. Hitting lower-income Americans with a punitive gas tax while unemployment remains near ten percent is a bad idea, regardless of what behavior you are hoping to mandate.
Akerson’s comments came in the context of a larger conversation on energy policy. Akerson correctly stated that the government’s imposed fuel standards are taxing production, which will cost jobs and raise the purchase price of cars. But passing that burden directly to consumers at the gas pump isn’t the solution. The idea that the government must either increase taxes on businesses or struggling taxpayers is a false choice.
High gas prices alone won’t encourage consumers to buy the hugely unpopular Chevy Volt. The Volt isn’t selling because even after substantial tax credits that the government cannot afford, the additional cost in buying a not-ready-for-market Volt, plus the cost of electricity (which isn’t free) is far greater than any potential gas savings.
In fact, Chevy, along with Ford and Hyundai, are selling more small cars with the less government aid. According to the Washington Post, it is non-hybrid, but super-fuel efficient, small cars that customers are currently snatching up at a much lower cost.
General Motors and Chrysler have been bailed out enough. They do not need the government to continue manipulating taxpayers into paying more to drive to their next job interview. And they don’t need government imposed auto mandates or more failed ‘Cash for Clunkers’ programs. If GM builds a fuel-efficient vehicle that is affordable and appealing, they won’t need Washington to trick consumers into buying one, or to help pick up the check.
Akerson was correct to hope that GM can disconnect itself from the taxpayer’s teat in the next year. He described it as: “It’s kind of like your in-laws: It was a nice long weekend. We didn’t say a week.” We couldn’t have said it better ourselves.