Tuesday, May 19, 2009

What the hell?

Well, well, well -- more bizarre news out of Washington.

What a surprise.

Of course, President Barack Obama announced some new mileage and emissions standards today that raise a ton of questions. Well, a lot of Americans will get around to pondering those questions after the fun of laughingly waving at SUV and pickup truck owners with Obama stickers on them wears off, at least.

Essentially, we're looking at some pretty stringent fuel economy requirements by 2016 -- 39 MPG on average for cars and 30 MPG on average for SUVs and pickup trucks. The thought, of course, is that car manufacturers will have to come up with vehicles that are smaller, lighter and more efficient.

What's the problem with that? Those of us who have been doing the "right" thing all along will be the ones getting penalized. Hey, my vehicle of choice -- a Toyota Matrix -- is classified as a small SUV and, as such, would meet that 30 MPG average requirement. Why do I drive a Matrix? Because I choose to do so and I've always gone for smaller, more efficient cars (they're cheap, reliable and I can run them to death without feeling any guilt). Obama's lackeys have predicted that cars will cost an average of $1,300 more due to the new regulations. So, I'll buy the kind of vehicle I was going to buy anyway and I'll get to pay more for it. What a bargain.

And let's not forget that we are undoubtedly looking a higher taxes due to the insane bailouts pushed for by both George W. Bush and Obama. Why on earth, then, would the government purposefully go out of its way to make vehicles more expensive, too?

Further, I can't help but think we're being set up in a way. If we look at the history of the American automotive industry, we'll see the big three tend to face major problems when big, gas-guzzling vehicles fall out of favor with the public. Yet, the Big 3 appear to be on board with Obama's latest plan.

Why? Why on earth would they be in support of a plan that seems to push them closer to extinction? A logical answer might be that we're cooking up some protectionism through which tariffs would be slapped on cars made by companies based outside of the U.S. in order to help American companies become more competitive.

That answer makes a lot of sense, really, when you consider the Japanese are far ahead of the Americans on Hybrid technology and GM seems intent on finding a market for its Volt. Let's see -- it will cost $35,000 to $40,000 whereas a base model Prius costs $22,000 and a fully loaded one sells for $27,000. The Prius is a proven vehicle whereas the highly experimental Volt is, well, not. Further, the Volt is one of those weird "plug it into a wall socket" vehicles manufactured by a company that tends to make garbage when out of its comfort zone (remember the Oldsmobile Omega, the Chevy Cavalier and the Chevy Vega?) How do you make the Volt viable in that atmosphere? How do you convince Americans to shell out up to $40,000 on a vehicle that might turn out to be yet another lemon? The answer is simple -- tax the living hell out of the Prius and artificially inflate the price of it. You'd better believe the same government that has spent billions of dollars bailing out GM would be more than willing to blatantly interfere in the free market and rip off consumers on that level.

Hey, a pimp will take some measures to protect his whores, right?


Harrison said...

The Prius was underwritten by the Japanese government and Toyota only built them so they could sell profitable SUVs and trucks. Until very recently they lost money on every single one.

The Natural State Hawg said...

Harrison -- Regardless, it would appear that they are making a profit now and they're doing it by selling a vehicle at a considerably lower price than the Volt thing that GM is pushing.

Again, what I'm concerned about is that the U.S. government will "underwrite" a few our our auto manufacturers by engaging in pure protectionism -- a system through which consumers are always the losers.

Harrison said...

Well, what the Japanese government did for Toyota is protectionism, too.

The Natural State Hawg said...

Harrison -- So we should engage in that, too? As Americans, we have little say in what the Japanese government does, but we still have some say (although very little) in what our own government does. I still subscribe to the theory that free trade is best for the economy and consumers and we should strive to see that it is followed in our nation, at least.

Otherwise, we're left with a ham-fisted "push" economy in which the government takes away one of the few rights we have as consumers -- to determine what we want to buy and how much we want to pay for it. We're also left with taking action against nations like China that artificially deflate their currency, perhaps inflating the cost of labor utilized by foreign companies manufacturing products on U.S. soil, etc. Again, the consumers simply take a beating under all of those scenarios.

I should point out that I'm heavily biased when it comes to cars. I'm not interested in a thing from GM and Chrysler and hate any attempts to artificially inflate the cost of the Toyotas I dearly love.

Harrison said...

I sell cars. Cars are already more expensive because the Democrats have propped up the UAW for so many years. Those expensive union benefits which the Big 3 could no longer afford along with cars that were out-dated I think pushed them to bankruptcy. I certainly am an advocate of free trade but the problem is other countries are not playing on a level field and Democrats further tilt that by their steadfast support of unions.

The Natural State Hawg said...

Harrison -- Well, that's kind of the point, isn't it? Here's what I mean. The government has dumped billions into GM andd Chrysler. Both of those manufacturers are shutting down dealerships (costing jobs all over the damned place, by the way), partially in an attempt to reduce competition and drive up the price of cars. It would be no surprise for the government to show up and "level" the playing field by introducing protectionism so that we'll be compelled to rush out and buy what's coming out of Detroit.

Rather than going through all of that, the market should have been allowed to correct for the glaring disadvantage at which the US auto manufacturers operate -- labor. We'll not touch the unions, however, nor will the execs get some well-deserved cuts in pay, either.

We're simply rewarding bad behavior -- greedy unions and management that lacked the ability to anticipate market trends are making out well enough. That's a shame.

I still maintain the answer is not to make vehicles even more expensive for consumers. That, however, is exactly what we're gearing up to do. New MPG regs will make vehicles more expensive. Fewer dealerships and less competition will make American cars more expensive, too.

A lot of money has been spent, but what's the benefit to the people footing the bill? None that I can see.

VH said...

We are seeing a replay of the 1970's in some ways--American auto manufactures are being forced by stricter CAFE standards to make cars, not based on consumer wants or needs, but on what bureaucrats desire to garner votes.
American consumers may end up with crappy quality cars being built by GM or Chrysler and having to pay more for them too. Just like the Chevy Cavalier and the Chevy Vega.
BTW, 27K for a small car that handles like a shopping cart (Toyota Prius) is just criminal. 40K for a plug-in (Chevy Volt)is insane; Does the country even have an electricity grid sophisticated enough to handle the extra loads of plugging in these cars? Probably not.

Harrison said...

The Prius was a smart car for Toyota because it allows granola crunchies to make a political statement whilst driving their poor handling, blindspot riddled compact deathtrap.

There is money to be made in "look at me I'm saving the planet" and Toyota exploited that.

The Natural State Hawg said...

VH -- You could be very right about that -- God only knows what kind of junk will be foisted on the public to meet the government's demands. Furthermore, God only knows what kind of trash cars are government will "encourage" us to drive. Look for tariffs. Look for ridiculously high taxes on gasoline. What fun.

Most car prices right now are downright criminal and we'll get to pay more in the future. Great, huh?

Harrison -- Don't speak so fast, now. Thanks to Herr Obama and his boot-licking toadies, we'll all be driving those before too long.

I get over 30 MPG out of my Toyota Matrix. That's good enough for me. It was my choice to purchase that ride, however. Aren't you thrilled to know the feds will soon force everyone into something that's potentially even smaller and more underpowered?

Harrison said...

We will not be forced into buying tin cans for cars. There will still be bigger cars out there but they might be more expensive. For some people, this might be the same thing.