Obama's New Fuel Standards Unfair to Big Families
By Motte Brown
My heart sank when President Obama announced new fuel economy standards for auto makers for models to be built between 2012-2016. And it wasn't because our government is forcing regulations on us to curb greenhouse gasses to "prevent' unproven man-caused global warming. It was because I have a family of eight.
Let me explain.
The new standards will force auto makers to build smaller cars. The auto makers complain that Americans do not want smaller cars and worry no one will buy them unless the government helps push gas prices above $4 a gallon. President Obama has said in the past that he wants to "help people make the adjustment" to $4 a gallon fuel prices.
$4 a gallon gas prices will mean my monthly fuel bill will go from $200 to $400 or more. That's $200 more a month that I can't put toward food, clothing, school supplies, health care, or housing. For a family of eight trying to live on one salary, it's substantial.
And what happens when my big Suburban gives out and I need another big car? Is it possible for the auto industry to make eight+ passenger vehicles that meet the new emissions standards of 35.5 mpg?
I wonder if by "help people make the adjustment" to higher fuel prices, what President Obama really means is forcing them to have smaller families.
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I sympathize with your plight. Your argument sounds plausible. Since the government once again is forcing enterprise to do what government wants, it's likely smaller cars will be made in order to comply. Which brings me to the short sightedness of protectionism that some in the US steel industry favor. They want a bill passed forcing steel buyers to "Buy American" in order to protect their product. If that bill passes, it means auto makers will not have access to cheaper steel made elsewhere.
Which means the car you need will be even more expensive since automakers will have to buy more expensive steel. People like you will be forced to buy foreign cars. So, here again, we have the US government meddling in business and causing more trouble, hurting rather than helping. If government was limited and not allowed to mess around in business, I've no doubt we'd have a lot of better things better made at better prices---including cars.
Sincerely,
Sylvia Bokor
Dear Motte,
Please refer to articles on this subject, e.g.
http://www.opposingviews.com/articles/opinion-cheers-for-obama-s-new-fuel-efficiency-standards
The US is an outlier if offering sustainably cheap prices at the pump. Canada, Europe, Australia, New Zealand householders pay more for petrol and family life has not disintegrated. In fact, levels of obesity and heat disease are lower in communities where people use a mix of walking, cycling, and public transportation to move about.
When prices better reflect the true value, there is a more efficient allocation of resources. The US has been living as though petroleum reserves are unlimited and therefore sprawling suburbs, a reliance on automobiles and woeful public transportation are the outcomes.
The announced changes in standards for the rather moribund and antiquated US automobile industry will hopefully spark innovation -- both in manufacturing automobiles and in alternative modes of transportation. More fuel efficient cars needn't be small --- if American automakers innovate the cars of tomorrow may transport your entire family using renewable resources. Also, if better public transportation is developed, you and your kids may find you prefer travel by bus and train (you don't need to be a chauffeur for the kids, they gain greater independence, and everybody becomes fitter from walking to the bus or train stop). I lived very happily in Sydney, Australia for ten years without a car (I just rented a car for vacations out of town, walked a lot and took the bus or train for longer trips around the city).
I really think you jumped to a very illogical conclusion in say that Obama is "forcing them to have smaller families". With the exception a few Middle Eastern kingdoms, every country outside of the US has higher gasoline prices, many have tougher admission standards but the trends in fecundity are remarkably similar across developed countries. Higher female education and lower infant mortality lead to lower birth rates -- more is invested in the well being of each child in part because there is greater expectation that the child will survive and the mother has greater ability and knowledge to ensure the child's survival when when she has education and income. But I digress. A more sustainable, fuel-efficient economy is actually good for families (less pollution to damage young lungs, more energy resources when your kids grow up). Obama is not trying to reduce family size through car efficiency standards; the aim is to avoid deepening dependency upon non-renewable resources -- I call this commonsense!
yes, a more effecient economy is good but that technology is not all there yet and forcing it in our throats only means one thing..taxpayer subsidy. If a company cannot afford to make a product without tax dollars then it shouldn't make a the product. If something such as automobile cannot be made without placing a price floor on gasoline then they shouldn't make such an automobile until the "technology" is there.
Yes, families in Europe hasn't disintegrated but NONE can afford it either! Half of their incomes are being taken away to pay for government programs and "innovation." It is NOT the governments JOB to make a decision of how many miles per gallon a car should be. The point is more like WHEN was the last time you heard of a successful government business venture? U.S. states will likely fall behind in innovation since we have such great labor and choking benefits in the auto industry. What American cars are today basically sums up as TOO EXPENSIVE with lower quality in comparison to foreign cars. And after Obama's taxpayer dollar infusion to American cars? I will NEVER buy an american car until the governement cut ties with them.
It's ONLY commonse to do what Obama is doing when the TECHNOLOGY to make such a product without putting anyone on POVERTY is possible (which is NOT!). Right NOW it will be VERY expensive which he agrees. that's NOT common sense! That's plain stupidity and somewhere someone is missing a village idiot.
I don't think the author's fear is illogical. I think she has a VERY valid point of view from an economic stand point. But that means understanding economics and not merely an "emotional" opinion.
save4later,
You are the one being emotional with capitalised words and assertions replacing logic.
I have lived in various countries in Europe and Australasia and have found that in many places outside of the US people enjoy very good standards of living, longer and healthier lives than Americans along with personal and economic freedoms.
I will come back to the point about technology in a moment. First, let's talk about economic efficiency. (I am an economist, by the way; I have lectured in the subject at universities and make my living in the real world, in managing investment decisions for a large US company). When markets are not perfect (and let's admit, we do not live in a textbook model) taxes and subsidies can be very beneficial in setting a market price that more accurately adjusts for externalities or scarcity. For example, subsidising 'public goods' such as vaccinations to prevent pandemic spread of disease is benefits you (it keeps you safe from infection and mitigates the risk of widespread closure of schools, transportation , business). Taxes on scare resources (petroleum) or damaging behaviour (high emissions or effluents) provides incentives for substitutions and reduces mis-allocation of capital.
Generally, it is best to let prices guide allocations of resources in the economy , sometimes with with taxes or subsidies in the case of externalities. I agree with your broad point that it is typically best not to have government involved in setting corporate strategies. The US has a moribund auto industry (which has been driven to its grave by executives who have failed to see some pretty basic trends). The lifeline with strings attached ( bailout funds with a requirement to change strategy) is a last-ditch attempt to keep some semblance of a US industry. Maybe it is best to let failed US companies die (in keeping with the true capitalist spirit). The consequence would be that China (which has higher emission standards than the US by the way) would become the low-cost producer for the world, challenged closely by India.
I am not so sure why you think that American workers are incapable of innovating --- it is a false dilemma to think that cleaner technology will impoverish the US.
Motte's article is driven by a political, not an economic agenda (look at her other pieces and her affiliation).
American workers are very much capable of being innovative. It is the government with this chocking and inhibiting laws that are preventing innovation. It is big labor in auto industries case that's preventing innovation. It's rather amazing that other countries are capable of producing a better product for lesser price yet we can't? And to innovate, we have to use TAXPAYER dollars to subsidize these industries? Are you kidding? And you're an economist?
You're not the only one with economics background. The problem with government and most of its members is that they do not understand economics. They fully understand however the value of looting taxpayers to subsidize those simply cannot make it in normal course of business. To put economics in the same context as government policies is illogical since government and most of its members does not possess capacity (nor would bother to understand) the economic consequence of their actions.
Someone very wise once said: The first lesson of economics is scarcity. The first lesson of politics is to ignore the first lesson of economics."
It is true that markets are NOT perfect, but we never (government) let it correct itself. Government always interfere and fail everytime.
We DON'T know whether "cleaner technology " will impoverish the U.S. No country has manage to do so, so it is also false to assume that it will NOT impoverish the United States if the effort to achieve such technology means MASSIVE taxpayer subsidy. Money doesn't just fall from the sky. Someone has to pay for this.
Hey, we agree on some points: markets are not perfect, government is not perfect, it is best for private enterprise to in fact run independently, and that Americans can be innovative.
It is not just big labor that is behind the auto woes, big CEOs are as much or more to blame. All the automakers have to do is pay back the bail out money and they can produce whatever they want. They could have said no to government support and gone into bankruptcy more immediately. Interestingly, a large part of the reason GM et al are in such a mess is that they did produce greener cars during the past decade.
Last year, Toyota could not keep up with the demand of Americans for their hybrid care. Nothing other than incompetence and inertia on the part of US auto executives prevented the US industry from being competitive, profitable, and sustainable.
I have seen examples (e.g. pulp mill facilities in Ontario) that became *more* profitable after taking the initiative of becoming greener. If water and air quality are further impaired, then quality of life will certain be lower (higher rates of asthma, cancer --- we are seeing the evidence of that now) and ultimately the country will be impoverished (people are not very productive when they are sick).
Re government intervention, your statement, "Government always interfere and fail everytime." is an inaccurate generalisation ("always" and "everytime" should read "sometimes", as moment of honest reflection would reveal, but take that was an emotional outburst.
The false logic that started the discussion was Motte Brown claiming that promoting green technology is a plot to force people to have smaller families. That is not true. Rest assured, large vehicles will continue to be made (think about it: delivery vans and mini-buses are required and will be produced). Motte fears she won't be able to as easily afford large vehicles. She should then equip herself with skills that garner higher wages or create a business that earns her enough profit to support her many children . If there is a partner involved, perhaps she or he can assist in providing for the family. Or if Motte could learn to maintain her station wagon -- with proper care, the vehicle should last until the last kid is 16 and able to earn money to look after herself without parental subsidization!