So this is how far we have fallen. Debate over how to “save” the American automobile industry is moving away from whether to “rescue” the Big Three with huge infusions of taxpayer money and toward how much and how soon.
With the bailout horse now out of the barn and scampering free as Washington seeks to calm fear mongers and placate union bosses, it is useful to reflect on the muddled thinking that put our auto industry in peril to begin with.
Undoing such wrongs will help American cars in the domestic and international marketplace. I do not expect these ideas to be embraced, because they do not involve vast outlays of tax money and vast increases in government power.
Begin with the question: How in the world did we arrive at a place where government tells automakers what mileage their cars can get?
Do we remember the exact season when someone was foolish enough to say, “Hey, people don’t deserve to buy cars of the size and power they want”? That “Washington needs to tell a private industry that it cannot make vehicles that take its fleet beyond a certain MPG rating, even if there is a market for them”?
This was not without precedent. After all, we allow government to tell businesses what they must pay people. Please revisit that fact this coming summer, when you hear stories of teens having trouble finding work.
The acronym for this scourge is CAFE standards, for corporate average fuel economy. They are a throwback to the silly days of the supposed Arab oil embargo of the 1970s.
Their immediate revocation would unshackle GM, Ford and Chrysler to manufacture cars based on what people actually want to drive. Did anyone notice that once gas prices plummeted this year, car-buyers actually began looking for cars larger and more powerful than the hybrid roller skates they had snapped up when gas prices were eating them alive?
The lesson is simple: When gas prices are more reasonable, the public allows itself the freedom of buying cars offering better performance and safety.
Since no one knows what gas prices will do over the coming years, the hybrid will continue to be a vital part of the U.S. car market. But their sales figures should rise or fall based on how many people want them, not because of some unholy alliance between Detroit and Washington.
“Here,” says government, holding out a steak to the starving dogs of the Big Three, “you can have this if you play by our rules, which involve forcing ‘green’ cars into showrooms no matter the public taste and if you protect the union workforce so they won’t be mad at us.”
I wish we could all march into a time machine to see how American carmakers would have fared without the odious burden of CAFE standards. I wish we had the guts as a nation to embrace the free marketplace, which would have supplied GM, Ford and Chrysler with all the customers they could handle, provided they kept reliable ears to the ground to gauge trends in car-buyer taste.
But when you are dancing to the pipers of environmental extremism and government overreach, market demand gets drowned out.
Now the U.S. auto industry is drowning. The companies have sunk themselves with insane union contracts and archaic business models, yes. But every executive in those buildings also had to spend the last 30 years trying to satisfy the whims of a federal government so drunk on power that they never had a chance to succeed in the most honest way, by making judgment calls based on what the public wants.
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