The New York Times may be called The Old Gray Lady, but I reckon it’s one of those old gray ladies you find lingering at lunch counters, constantly sticking their nose into everyone’s business. In today’s Op Ed piece, Thomas L Friedman takes Toyota to task. He's miffed that the Japanese automaker's siding with The Big 2.8 against proposed federal regs raising the required corporate average fuel economy (CAFE) figure to 35mpg by 2020. The arguments behind “Et tu Toyota?” may be old news to TTAC readers, but like the Times itself, we can’t resist a bit of nasty gossip.
“What is it about Michigan that seems to encourage assisted suicide? That is all I can think watching Michigan congressmen and senators, led by Representative John Dingell, doing their best imitations of Jack Kevorkian and once again trying to water down efforts by Congress to legislate improved mileage standards for Detroit in the latest draft energy bill.”
It’s not the most coherent of leads, but the point of Friedman’s opening salvo’s is clear: Detroit’s ongoing campaign to oppose radical changes to federal mileage standards works against the domestic automakers’ best interests. This shibboleth is not unknown in these parts: Detroit COULD meet higher fuel economy standards by building more miserly machines, but it CHOOSES not to. Instead, it CHEATS in Washington and then PAYS THE PENALTY.
You’d kinda think Friedman and his fellow Detroit bashers would be happy with this karmic payback. But no. ‘Cause that would make them anti-American. So Friedman says he "gets" pork barrel politics- but only if they work.
“What I don’t get is empty-barrel politics — Michigan lawmakers year after year shielding Detroit from pressure to innovate on higher mileage standards, even though Detroit’s failure to sell more energy-efficient vehicles has clearly contributed to its brush with bankruptcy, its loss of market share to Toyota and Honda — whose fleets beat all U.S. automakers in fuel economy in 2007 — and its loss of jobs. G.M. today has 73,000 working U.A.W. members, compared with 225,000 a decade ago.”
Nope. In fact, you could argue that forcing The Big 2.8 to make [crap] small cars to average-out their fleet's fuel economy has hurt them more than Toyota and Honda ever could. But Friedman saves his biggest rhetorical blast for Toyota, whose decision to join Detroit in its opposition to the draft Senate energy bill puts ToMoCo beyond the pundit's pale.
“Now why would Toyota, which has used the Prius to brand itself as the greenest car company, pull such a stunt? Is it because Toyota wants to slow down innovation in Detroit on more energy efficient vehicles, which Toyota already dominates, while also keeping mileage room to build giant pickup trucks, like the Toyota Tundra, at the gas-guzzler end of the U.S. market?”
Although Toyota has not sold itself as the treehugger’s friend (they adopted the brand on their own), Friedman's got it half right. Obviously, Toyota is against the higher CAFE numbers because they wants to sell loads of "giant, gas-guzzling" (a.k.a. full-sized) pickups. But they're not supporting Detroit's position to gain a competitive advantage. If anything Toyota's trying to help Detroit stay in business– avoiding a US auto industry strengthened by Chapter 11 and/or a transplant backlash.
After quoting ToMoCo’s Prez’ declaration of support for higher fuel economy standards, Friedman counters with “the truth:”
“Not so fast. Here are the facts: Thanks to the Michigan delegation, U.S. mileage standards for passenger car fleets have been frozen at 27.5 miles per gallon since 1985. Light trucks are even worse.”
And there you have it: the crux of the matter. Friedman’s use of the word “worse” to describe the mandatory corporate average fuel economy for light trucks proves that he’s operating from the same position of simplistic ignorance that informs this whole “debate.” As far as environmentalists and their allies are concerned, the higher the required mileage, the better. Period. Anyone who dares suggest otherwise is a sleazy, money-grubbing planet killer.
It’s a shame that Friedman couldn’t move this debate on a bit like, I dunno, suggesting we scrap the whole CAFE system and put a big old tax on gas (if we must). But good governance is besides the point. Better to dredge-up the old “free market capitalism sucks” argument and be done with it.
“Hey, Toyota, if you are going to become the biggest U.S. automaker, could you at least bring to America your best practices — the ones that made you the world leader — instead of prolonging our worst practices? We have enough people helping us commit suicide.”
Friedman’s plea betrays the worst kind of American self-loathing. More to the point, the New York Times scribe believes that the regulatory framework surrounding the US automotive industry’s fuel efficiency standards is fundamentally flawed and inherently corrupt. In this we agree.
[Read the full text of "Et tu Toyota" here.]
(Cross-posted from “Toyota:It Ain’t Easy Being Green”)
What Toyota (and GM) response should be:
When Americans want smaller cars, they’ll buy smaller cars. Anyone who wants a 35 mpg car can buy it right now. But that’s not what all Americans want. Some want minivans, V8 trucks, SUVs, and big four-doors.
We would like to have the whole fleet at 100 mpg+, but that’s not technologically possible, and all the protesting in the world won’t change that. We’re working on it. We’re working on making cars that people want, and get better mileage.
Yes, Japan and Europe have higher mpg standards, but Japanese and Europeans also want smaller cars. When Americans match Japanese and Europeans in vehicle tastes, we’ll support equal standards.
I like the perspective that perhaps Toyota is pitching in to help the Detroit 3 dig their own graves – I hadn’t considered it. Gas taxes rule. There’s no better “user fee” in terms of usage/environmental impact, etc. All this jibber jabber about GPS based use trackers for taxation are just stupid – gas tax is a low tech way to do the same thing. Not to mention more gas tax = smoother roads for hoonage and fewer bridges falling down (MN resident). It’ll never happen, though, because nobody’s willing to sacrifice $ for a better quality of life, at least not when the request comes in the form of a tax increase.
I would like to see greater CAFE increases – great innovation driver. It’s annoying however, that just because Toyota figured out a way to seperate people from their money all of a sudden folks act like Toyota is some Automotive Messiah here to convert us from our gas-guzzling ways. They’re not. They’re here for our money. Quit boo-hooing; there’s no room for actual ethics in business unless it’s profitable.
altoids:
I disagree with your assessment that Japanese and Europeans want smaller cars – nobody wants a shrimpy little car that can’t fit anything in it. The desire for smaller cars is a result of urbanization and high gas tax making more efficient cars more appealing. Charge 5 bucks a gallon for gas in the US and you’ll see that Americans’ taste will change, too.
Friedman is clueless when it comes to cars. When GM drastically (over)downsized its fleet in the mid ’80s, including DeVilles the size of Camrys, Americans wouldn’t buy. It was the quality and reliability, not the size, that shifted buyers to imports.
I don’t know that Europeans and Japanese “want” smaller cars. A large part of the rest of the world would like to live like Americans if they could. Witness China.
But expensive fuel, high taxes, narrow roads and good ole legislation have forced smaller cars on Europe and Japan.
With $50/year licensing fees, $2.50/gal gas and 8 lane expressways, many in Europe would be driving barges just like us.
Toyota is that 800lb Gorilla in the room and smashing up everything it does not like.
GM is another 800lb Gorilla (formerly a 1000lb Gorilla) but it just sits in the corner picking its nose after getting bloodied by Toyota. There is also Ford and Chrysler who are still GM’s monkey minions…but the regime has changed and rather dramatically (now they give wide berth to Toyota rather than pushing them to the ground as they did before). The UAW parasite is still attached to their hosts and sucking away any energy but the parasite is getting smaller as it decimates its host.
Say what you will, that Friedman has one world-class ‘stache.
Friedman’s assumption is “More MPG == More sales”. He holds up Toyota and Honda as being successful because their fleet average is higher than Detroit’s.
But I don’t think this is the case at all. True, MPG has suddenly become more of a pressing issue to consumers as gas prices have gone up, but honestly the reason people are buying more imports is because they perceive overall quality as being higher. The Camry isn’t exactly a fuel miser, it’s pretty much on par with other sedans in its class. The Camry sells better because Toyota has built a reputation for reliable, well made cars that hold their value well when time comes to trade in. Not only that, but the imports are not loaded up with a bloated dealer network, overlapping brands, too many platforms, and a 5 year technology deficit.
So, Friedman wants to claim that Detroit is in dire straits because they don’t offer enough fuel efficient cars, but I don’t think this has much to do with the actual situation Detroit is in. Fiat, the maker of small, fuel efficient cars, was on the ropes for years… their recent turn around came when they focussed on quality, features, and new products. Detroit has more organizational problems than Fiat ever did, but fundamentally they have to follow the same path to success.
Friedman isn’t actually an idiot. He is a fairly bright guy who figure out a while back that he gets more attention for throwing out controversy than good reporting. He should stick to editorials as apparently his recent attempts at real reporting have been less than acceptable by the standards of journalists I know.
Don’t expect his pieces to be all that thoughtful as much as frustrating thought provoking.
I find it amusing to watch people think we can legislate consumer choice. Government Knows Best, right? The truth is Toyota’s ascent has more to do with resale and precieved quality (led by innovation) than mileage figures. Ditto for Honda.
A series of bad business decisions landed the 2.8 in this mess, only a series of good decisions will get them out.
And CAFE standards are not one of them.
Correct GS650.
It’s not so much the lack of good mileage that is hurting Detroit, its the inability to change now that high mileage is in vogue. They can’t respond because they weren’t doing all that well before SUV’s started going out of style.
You can blame CAFE for rhwm having to lose money on small cars all that time, but they should have made their other vehicles better all along.
It is really nice to know that innovation can be legislated. Then again, we could fine those auto companies who don’t innovate, huge fines and then lower taxes.
Why not legislate the oil companies to make a fuel that burns clean. By 2020. Why is it the automakers responsibility? They don’t sell the fuel.
Piker. Heck with this CAFE stuff, we all know that 70% of the people 70% of the time could have their transportation needs met by a 450cc motorscooter. So mandate it! Oh, except they are dangerous and like obesity everyone else will pay for their health care. Sigh. We could just, like, you know, fire all the GS12s in DC accumulating paperwork on meeting the CAFE standards, and let all those white collar workers in Detroit actually work on designing cars rather that filling in paperwork.
Increase gas tax? Hmm, well let’s see what else we should tax to “help” the common good:
People die from cigarette smoking, so let’s quadruple the tax on Marlboro’s
Fat tax – We’ve got an obesity and soon to be diabetes epidemic on our hands because our kids are fat turds, so tax dem twinkies/soda/ice cream/doritos.
People watch too much tv, so let’s put a counter on each cable box and tax anything over 1 hr/day
People pick their nose when they drive, and that causes them to be distracted and be more likely to cause accidents. As does fiddling with their cell phones, ipods, XM, shavers, makeup, kids, lunch, etc. Anyone engaging in using any of these things/people when driving should be taxed per incident.
Hilary Clinton has suggested that we pay Americans (not sure if she was referring to those here illegally or not) $5k for each child they have. That’s a tax on everyone who is done having kids or won’t have kids.
Fellas, the government mismanages all the money they take from us now. Giving them more to mismanage or lose is muy loco.
You really want to help the environment? Become a vegetarian and move into a smaller house. I bet Tom Friedman does neither.
When the US gov’t puts taxes on gasoline to bring the price in line with other countries then the coutry will want smaller cars. I don’t see that happening however. They always take a do as I say, not as a do position when it comes to letting the free market work it out. Simply telling everyone you have to buy a Prius to run on $3 a gallon gas is kind of rediculous, make it $6 a gallon and you won’t have to tell anyone to buy such a car, they will or they’ll take the bus. The 2% that are weathly enough not to care either way, still won’t care. Capitalism.
kazoomaloo:
You’re not disagreeing with me: “Charge 5 bucks a gallon for gas in the US and you’ll see that Americans’ taste will change, too.” Our (American) tastes are different because of gas prices and regulation. American carmakers build cars where the market is. At $2~3/gal, the market is where it is now – Europeans and Japanese pay twice or three times that, so they naturally favor more efficient cars.Consumers in all countries respond rationally to government intervention/interference.
And yes, I fully support gas taxes (as opposed to this CAFE bullsh-t). And I agree it will never happen. That would just make too much sense.
“When the US gov’t puts taxes on gasoline to bring the price in line with other countries then the coutry will want smaller cars.”
But imposing such a tax would be outright political suicide. It’s something that won’t happen for quite a while — or at least until the sheep are pacified enough to accept it without so much as a “baaa”.
$6/gal gas will put quite a large dent in the economy initially and will cost a lot of politicians their careers.
And maybe pay for the war… If Juliani gets in he can call it the “9/11 support our troops patriot tax” and make it law that all receipts are wide enough for that to be printed on it without a line break.
Landcrusher :
Agreed, Friedman isn’t actually an idiot. IMHO, as far as mainstream media columnists go, he’s fairly good at getting the big issues right (globalization, education, Middle East foreign policy).
His problem is he oversimplifies and tries to make cute analogies to sell his ideas. He’s also overextends and writes about topics he doesn’t know much about. But he’s got to tailor his rhetoric for the NYT audience, not for the average TTAC reader.
Overall, I think he does more good than harm.
Rather than a gas tax, I favor a carbon tax. That would be the most efficient way to reduce the use of fossil fuel.
But if you are one of those people who doesn’t think global heating threatens civilization, but you would prefer that we reduce dependence on Middle Eastern dictatorships, then consider a petroleum tax. That way, people can decide among all their uses of petroleum what matters, and what they can do without. The carbon or petroleum tax maximizes the ability of the market to sort things out.
Of course anything done to increase the price of gasoline will invariably favor ethanol production, which wouldn’t have a leg to stand on without huge subsidies from tax payers. Perhaps some sort of car that just burns straight tax payer money, that would seem the most efficient solution.
“The New York Times may be called The Old Gray Lady”
Did she really sleep with Castro? Maybe she will die with him… Then they can call themselves The 8-year-old Brats.
Robert, nice work.
Here is another rebuttal by the senior editor at Fortune.
http://money.cnn.com/2007/10/04/magazines/fortune/taylor_debunk.fortune/index.htm?source=aol_quote
Oh, and I am for a higher gas tax as well as higher cigarette taxes. NOTE: Smokes are already taxed quite high here in MI. Gas tax hikes would need to be announced ahead of time and gradually implemented, allowing folks time enough to decide if they want a different vehicle or not.
As anyone who has driven in Europe will know, they NEED smaller cars there due to the roads and streets. Ever tried driving in almost any smaller French or Italian town? The road were made for carts, and are barely big enough for a VW Polo. Plus with gas at $6-8 a gallon plus fairly high road tolls it just isplain expensive to drive there.
Now if we added a tax to our gasoline to fund the oil wars, and also paid $5+ a gallon there would be more demand for more efficient cars. But no politician is going to support something that unpopular, so instead we pass the costs onto our descendants. Who WILL have $10 gas, and high taxes, and a devalued dollar.
So tell me why we should raise taxes on gasoline again? To support incompetent politicians and give them more money to throw away on pork barrel projects? To fund an even bigger government? To justify prolonging a war nobody wants to fight? To support tax cuts for people who don’t need it?
I’m sorry, but I can’t support this idea of social engineering via punitive financial actions. Not when we all know the revenue generated will not go to improving our public transportation infastructure. Honestly, can we really trust a government that manages to turn a budget surplus into one of the biggest deficits in our nation’s history? Can we trust a government to be financially prudent with this gas tax revenue when they can’t even be prudent with social security and medicare?
No, the government does not need more of my hard earned dollars, no matter what altruistic lie they tell us.
In fact, Friedman *has* called for higher gas taxes:
http://select.nytimes.com/2007/02/07/opinion/07friedman.html?_r=1&oref=slogin
So, why does he take this approach today? Two reasons:
Politics. Congress isn’t readily getting on board here with this, that’s for sure and, even if they managed to pass it, they’ll then have to get an extra 15 votes to get past the President of Exxon-Mobil’s veto pen.
And Results. The Unholy Alliance of Bad Things Heading This Way must be opposed somehow. There are three crises on the horizon: Our ballooning debt and trade deficit, Global Warming and Terrorism. Our profligate use of oil feeds all three. You might not believe Global Warming is either a threat or our fault (but you’d be wrong) but just about everybody understands the other two threats. Given that Congress won’t do the smart thing (surgery in the form of a gas – or carbon – tax) to roll back oil consumption, people like Friedman are left trying to apply the less effective bandages to stave off disaster.
There’s one other factor at play here; Friedman apparently thinks of Toyota as a market leader. Technologically and politically Detroit is same-old, same-old.
America, the Nanny State!
I’m still a firm believer that CAFE will only incraese our gasoline consumption.
I heav an idea. No gas tax, no CAFE, and take away all the money from those bogus E85 projects, and put it towards real alternative fuel research. In fact, lets just cut automotive ethanol all together. The way I see it, the greenies and the libs get a ton of cash for thier cars that don’t polute and get eight zillion miles per gallon powered by HD95% (95% Hopes and Dreams), and I can go put 100% dead dinosaur in my gas tank and not worry about the government taking even MORE of my paycheck.
Oh wait, thats right. It might require personal responsibility. We don’t want that, do we?
Keeping more tax dollars out of the hands of politicians is not much of an argument in america since there apears to be no spending limit for the American government. How much is coming in from taxes is largely irrelevant. Need more money? Print up another batch and throw it on the debt pile.
nobody wants a shrimpy little car that can’t fit anything in it.
Sorry, lots of folks do like smaller cars.
Or do you think that people really wish they could drive school buses around everywhere?
E85 is definitely not the answer. A gas tax may help, but I don’t believe that is the answer either.
What will force the US into smaller cars is the increasing use of oil by China and India. If nothing else, that right there will drive the demand for oil high enough to increase prices without any form of taxation.
I agree with Mr. Farago – it needs to be done across the board, not just the masses, if it is to be done.
As for personal accountability, that seems to be a huge problem for the Right at this point in time…I still recall when that didn’t use to be the case.
What exactly would a gas tax accomplish?
Virtual Insanity :
Have you been reading? It would accomplish what CAFE was put in place to accomplish but never will. Get people to use less gas.
Mr. Farago asks, “why is it OK for the feds to mandate automotive fuel efficiency but not busses, heaters, a/c units, food processing equipment, and other energy hungry applications?”
Actually, the New York Times, and those who still trust it, are enthusiastic about pretty much any kind of government regulation. But CAFE standards and such have special appeal to them because they don’t like the idea of private automobiles. It’s all part of the transnational progressive’s world view.
My recommendation: stop reading the NYT. Years ago it ceased being a reliable source of information on any topic on which it has an opinion.
Certainly not one of Friedman’s best columns, but kudos to all of you who recognize that he is quite intelligent. One of the smartest guys I’ve followed for many years…who write for a living, anyway. Right up there with RF, actually! :)
I’m on board with a gas tax instead of CAFE, but help me understand this: Economic theory says that substantial gas taxes also drive inflation, which is counter-productive to our overall fed policy. Has Europe proved or disproved this theory, and is CAFE a competitive solution because it doesn’t drive inflation?
KixStart: I really don’t want to go off on a non-CAFE-topic tangent here, or maybe I do:
1. The data I’ve seen suggest that only 20-25% of ‘greenhouse gases’ are caused by humans, and
2. Similar to the relationship between Iraq and 9/11, there seems to be a lot of evidence of elevated greenhouse gases and a warmer planet, but “causation” cannot be determined.
Can you please share why you apparently are of the belief that global warming is both a threat and our fault? I know Al Gore made a case for it, but there are several hundred scientists who (individually, and well before Gore’s docu-drama launched) have published their research citing ‘normal’ climate shifts.
I’m all for conservation and being responsible with our planet’s resources. I’m just not ready to swallow the “we’re killing the planet” hype yet. If Gore and Edwards didn’t live in 10,000 sf homes (as well as the rest of the hypocrits) maybe we wouldn’t need 35 mpg CAFE? Maybe there should be a gas-guzzler tax on 10,000 sf houses?
Seriously though, I’m not a scientist, and the odds of you being one are probably slim, but I’m still unconvinced either way on this issue, and would appreciate any more input you or anyone else could provide.
Orian : While the oil companies are doing their civic duty by gouging us ever deeper year after year, the price of gasoline is articifially low in the USA, not only because of the lack of taxes but also because the oil industry actually gets subsidies. (yes you read that right, just like a struggling airline). So why should the price increase go in the pockets of Exxon and BP over the next decade instead of the coffers of the federal government right now?
Mr. Farago, I have to differ with your take on this one.
Friedman is not particularly coy about his assessment of Toyota’s strategy:
Japan and Europe already have much better mileage standards for their auto fleets than the U.S. They both have many vehicles that could meet the U.S. goal for 2020 today, and they are committed to increasing their fleet standards toward 40 m.p.g. and above in the coming decade. So Toyota, in effect, is lobbying to keep U.S. standards — in 2022 — well behind what Japan’s will be.
I believe he’s right, and I’ve made similar comments myself here and elsewhere. Toyota has often opposed changes in fuel economy legislation, in my view, because it wants Detroit to remain in the primordial ooze of product development.
Despite its considerable lead, TMC doesn’t really benefit from GMNA and Ford diving in with both feet into the quality small car game, alongside the other Japanese firms and the Koreans. From a company’s standpoint, it’s better to have less competition than more competition, if you can get away with it.
I would take issue with his guidance to Toyota, which seems more emotional than economic, but as far as the business game aspect of it, I think he’s spot on. Detroit would be far better off if it tried making these cars well than it does by putting that same money into lawyers and lobbyists who help them to miss substantial segments of consumer demand.
RF: In my opinion, it is not okay. Good ideas take leadership, not legislation. If it is the governments stance to reduce our oil consumption, they should patronize companies that strive for that cause. Do everything to make your cause profitable and, in a capitalistic country, your cause will gain momentum. Legislation muddles the process, stifles economic growth, and adds unnecessary layers of control. Think of it this way: If you want your kids to do something, do you mandate that they must, or do you strive to be an example of what you want them to be?
“What exactly would a gas tax accomplish?”
Higher Inflation. A more powerful/deadly central government. A permanent under-class.
All the things a government loves.
What exactly would $8 a gallon gas -all of it oil company profit- accomplish?
Higher Inflation. A more powerful/deadly Oil lobby. A permanent under-class.
All the things a government loves.
Take your pick. No one said it was going to be easy.
Bah, answered as I type.
Pch101:
I don’t get it – why couldn’t GMNA and Ford dive into the small car game right now? If it’s a good business move, why do they need the government to beat them over the head with CAFE standards to make them do it?
I think GM and Ford are staying away from small cars because they need fat gross profit margins to sustain their legacy costs.
One thing that everyone seems to be ignoring is that corporations use government regulations and politics. For example, Erik Prince is the president of Blackwater. First Mr. Prince makes $226,000 in donations to the GOP and to GOP politicians. Then he receives more than $1B in no-bid contracts plus tax breaks from the very administration he contributed to.
Toyota is just using the existing infighting over CAFE standards to try and maintain their market share for economical cars. As long as they can keep Detroit making gas-guzzlers, and as long as they can keep Detroit thinking that people want to buy gas-guzzlers, they can maintain their large market share. In fact, all of you who think people don’t buy cars for their gas mileage could actually be agents working for Toyota. Shame on you.
“What exactly would a gas tax accomplish?”
Higher Inflation. A more powerful/deadly central government. A permanent under-class.
All the things a government loves.
Wait, what? Have you ever been to Europe? Gas taxes there are astronomical, and none of the gloom-and-doom that you predict is true.
I just got back from a northern european country (denmark) after a week-long stay. They pay US$8.00/gallon or thereabouts. Expensive? sure, but…
Their rate of inflation is lower than ours; their government lives in fear of the people (as it should, unlike the US where people seem to fear their gov’t these days) and actually passes laws to help the average person (go figure); and as for a permanent underclass?! They have far more even wealth distribution than the US. And some cool, useful cars that we don’t get here (C-Max and S-Max anyone? why does Ford keep these away from us?)
I think if the US government really wanted to move the country forward they’d pass a law stating that every citizen must have a valid passport. Stepping outside the familiar once in a while can really open your eyes.
And despite the short-term pain, In the long-run a high (but gradually phased in) gas tax would be the biggest favor the feds ever did for us.
It’s become painfully obvious that 95%-99% of our politicians are the equivalent of 4 year olds running around calling each other names and trying to get the most attention from their parents constituants.
Gone are the days of public servants who spent their days actually pondering the complexities of society and how to improve the lives of citizens. Thought and reflection have been replaced by pandering, posturing, and patronizing. Exchange of ideas has been replaced by shouting partisan opinions, and the will of the people takes a backseat readily to the ‘squeaky wheel’ tactics of lobbyists special interests.
So, if the question is do I support a higher tax on gasoline, I would return the question: Why would I want to support reducing my discretionary income every week so that I have less options for personal transportation and provide considerably more money and power to people who have proven time and again that they cannot be responsible with either?
I am truly frightened to see how many in the TTAC family support big government and heavy taxation of their neighbors.
The data I’ve seen suggest that only 20-25% of ‘greenhouse gases’ are caused by humans, and
Estimates of annual carbon contribution by humans relative to all natural sources run in the 4% – 7% range, depending on who’s measuring. There is this idea attached to it that somehow *our* carbon is cumulative and nature’s isn’t.
…the price of gasoline is artificially low in the USA, not only because of the lack of taxes…
This is a peculiar idea. How do lack of taxes keep the price of anything artificially low? It’s the other way around. Taxes make the price of what’s taxed artificially high.
Someone linked climate change, terrorism and poor balance of payments to oil. Let’s forget about the first one, since many including me don’t agree for reasons amply stated on other threads on TTAC and, more important, if we were really serious about curtailing human-induced carbon contribution to the atmosphere, we wouldn’t be starting with automobile efficiency and CAFE targets for 2020. Carbon banking at stationary power plants and immediate, massive rooftop solar subsidies could drive real change within 5 years at no reduction in quality of life whatsoever. Human-induced climate change, clear thinking, and sensible policy response do not so far reside in the same brain.
On terrorism: if you think that *not* trading with Islamic nations is going to give their radicals peaceful intent toward the West, remove Israeli security from our national agenda, slow the demographic infusion of Islam into Europe and Canada, or curtail terrorists’ ability to project cheaply-financed mayhem, you’re badly mistaken.
Now as for balance of payments, you’ve got something there. And if we’re really serious about that, we should be investing in a crash effort to extract liquid portable energy from coal, because we have the planet’s best endowment.
The automobile is already on the mend in terms of mitigating its environmental footprint on a per-car basis. CAFE and other market distortions aren’t necessary; instead they’re harmful. The per-car impact is being managed down, it’s the massive growth in private and public vehicles to come, in China, India, Vietnam, Brazil and eventually Africa, that will boost impacts to local air and water quality and pressure oil supplies. Still, the foremost authority and prognisticator regarding energy supplies, Daniel Yergin and Cambridge Energy Research, estimates that at least 3X all the oil pumped to date remains recoverable in the ground.
The best way to counter the balance of payments damage from high oil imports is to develop local energy sources, export more products and services to pay for imports, and conserve where it makes sense. Vehicle fleet composition is not an area of government competence. The regulatory bureaucracy is bad enough at it; the legislative side of the equation is baldly ignorant.
In the mid-1970s as a student, I drove an 8 year old Triumph that got 40mpg at a sustained 70 mph from an 1190cc engine, on our then-55mph limit highways. No car I’ve owned since then has been as efficient, primarily because my needs changed, as did cars. That car would not meet federal crash and safety standards today. It weighed merely 1700 pounds. Ironically, I fit in it, and yet today I can’t fit into the equivalent modern 4 cyl roadsters, despite the fact that such a car now weighs 2600 – 3100 pounds. However, each car I’ve owned since then has been considerably more efficient than similar size, purpose & architecture cars 10 – 20 years prior. You want better mileage performance from today’s powertrains? SLASH THE MASS they’re humping and wean consumers off their tendency to want the full facilities of their house in their car.
It’s highly arguable that the last CAFE scheme backfired and helped spur the explosion of trucks for personal transportation. We got small, front-drive, largely cramped cars with deeply raked windshields. A huge part of the market rebelled, seeking a newer ’55 Bel Air. Looking around, what offered upright seating, a roomy cabin, rear drive and body-on-frame? Yup…pickups and SUVs. New CAFE will simply put the mass market automakers into new contortions in an attempt to meet highly dynamic consumer demands in the rigid framework of inelastic regulation.
Mobility and choice are directly linked to prosperity. We can make greater near-term gains in the fixed energy infrastructure and the way we live when we’re not driving. No oil should be burned to generate electricity when we can use home-sourced coal burned cleanly, nuclear power, hydro, rooftop solar, or let’s get started on a few 100 x 100 mile solar farms in the barren southwest.
All this political maneuvering and hand-wringing around the automobile, CAFE, fuel taxes and carbon penalties are daily proof that governments and the intelligentsia are not serious about solving the problems they are sounding the alarm against.
Phil
It’s irritating to think that our only recourse from CAFE standards and/or a fuel tax is to get into smaller vehicles.
Does anyone else find it frustrating that a basic midsize sedan with a 4 cylinder engine averages only 25 mpg (2008 EPA measurements)? That’s typically only 2 mpg better than its 6 cylinder counterpart.
Will either the fuel tax or CAFE standards increase that vehicle’s gas mileage? NO.
I have no suggestions. Maybe it’s too expensive. Maybe I don’t want to pay for it. Maybe it can’t be done (with a gas engine alone). But it sure would be nice if the automakers could get another 5-7 mpg better out of a gas engine.
Eventually all good things must come to an end. The automobile and unrestricted driving will most likely come to an end at some point in the future if things continue the way they are currently going. There will be a breaking point as to how many automobiles our society can support, unless we are willing to pave over our entire country.
With that said I hate to see wealthy so-called liberals trying to tell us what is in our best interest. I prefer to deal we folks that are strait-up. “Yeah, I like my money and my cars!”
“I also like to drive fast”. Yep, honesty is the best policy. Somehow most of those people that feel the need to tell us how to live conveinently forget about how much fuel is burnt and how much pollution is caused by all of those airlines they love to fly on across the USA and the world.
When folks like Friedman are willing to take a stand and decide to never travel by airliner again, never to use A/C, to take the stairs in those highrise buildings they CHOOSE to work and live in, never to use a taxi cab again, and to limit their computer time to two hours a day then maybe I will begin to listen to their foolishness.
Maybe we can save a great deal of oil by turning off all of the street lamps in Manhattan at night. You know they don’t have many streetlamps in rural America, Nor do they have empty subway stations and office building fully lit up in the middle of the night.
I line in NYC but I also understand that America is a big and vast place were folks live differently and have different fuel and vehicle needs in the different parts of the country. Go ahead and hit a deer in the road with one of those Priuses, I’ll bet you’ll wish your a$$ was inside of a 1/2 ton pickup!
I think most people miss one very easy experiment to prove global warming is due to humans.
Take an empty room, non-climate controlled. Place a thermometer in it. Now add 5 people. Wait 30 minutes. Check the thermometer. Keep doing this until the room is full.
Now give each person in the room an electric lamp. Turn them all on. How hot is that room getting?
Yes, I realize this a bit easy and perhaps a bit skewed, but now look at the world’s population now vs. 200 years ago. It’s exploded. Along with the population explosion has come electricity and mass energy consumption. Said energy consumption, in any form, produces heat.
Add transportation to the mix now. Gas pollutants aside, how hot is each and every engine getting? How much heat is coming out of the exhaust?
Ever ride a motorcycle in the country, then ride into a major city? Notice the temperature increasing as you get closer to the city until you are in it? You can feel it – you don’t need a thermometer to tell you it’s getting warmer.
How can you honestly say that the Earth is not getting hotter and that it is not caused by us?
I will say I think some global warming claims are a bit exaggerated, but I don’t for one minute believe that the human race is NOT contributing to the warming of this planet.
If we had a true free market where oil companies and electricity utilities didn’t receive one cent in taxpayer subsidies I would be against all of these regulations. CAFE, efficiency standards – all of it. If people actually paid the true price of gas at the pump, it would probably actually be something like $5 or $6 per gallon. The analogies to smoking and obesity are horrible analogies. If you get fat and die that impact one person – you. You can choose to eat healthily and exercise and you’ll be better off. The power is in your hands. However, for things like global warming and air pollution this is NOT the case. Other people’s actions impact MY life. I’m young (mid 20s) and I’ll have to live on the Earth long after many of you are dead. I’ll be dealing with the consequences of your (and my) actions as the older generations rot in the ground. It pisses me off to no end that many (not all) in the older generations not only don’t care that this is the case, but that they refuse to even admit it.
Does anyone else find it frustrating that a basic midsize sedan with a 4 cylinder engine averages only 25 mpg (2008 EPA measurements)? That’s typically only 2 mpg better than its 6 cylinder counterpart.
Yes. 23 years ago, I had among my little fleet a 1984 AMC Jeep CJ7, hard roof and doors, with a 2.5L 4 cylinder mill and a 4 speed manual transmission. In two wheel drive mode it turned in steady 25mpg highway performance despite having all the aerodynamic inelegance and inefficiency of a Jeep’s profile. It also weighed more than an average 4 cylinder car of the day. And get this: that 2.5L four was carburetted! I already mentioned a 40mpg 4 cylinder Triumph I owned. My 1993 5.0L SVT Cobra could do 24mpg highway at a sustained 75mph. A 1996 Corvette with a 5.7L LT4 could turn in 27mpg highway at a sustained 80mph. My supercharged 443hp Cadillac can manage 25mpg highway at sustained 80mph.
A big part of the problem is mass and mills over-optimized for performance tastes. The good mileage fours I owned were pushrod motors with accessible torque in normal driving, and they were geared to spin relatively low rpms at speed. My Triumph had electronic overdrive amending its 4 speed transmission. The overdrive could be actuated in 3rd and 4th gears, effectively making it a 6 speed transmission. At speed, flipping the switch for overdrive in 4th gear dropped something like 800 rpm. The Jeep had a tall 4th gear too.
The Corvette got its highway mileage potential from the combination of a relatively large engine working effortlessly and tall gearing. 6th gear was a .5 ratio in that car.
You’d think with EFI, direct injection, and 3rd or 4th generation ECM that small motors would be much more efficient. But the cars they are put in have bloated, marketing is emphasizing horsepower irrespective of how high it lies in the spin curve, and torque peaks are 2000 or 3000 rpms higher than they were 25 years ago. It’s all a great combination for zing, but a serious drag on getting the most mpg out of small engines in real-world traffic.
Think about it: a waning days carburetted, British, pushrod motor barely updated from its 1930s origins was pushing into Prius mileage territory, despite its very early smog-era asthma setting in. Of course it didn’t produce a modern 4 cylinder’s buff power, but it was only being called on to hump around 60% of today’s mass, too. A decade newer version of the same car saw its engine displacement grow from 1196cc to 1500cc while losing power but further reducing emissions. It had to carry a couple hundred more pounds of regulation-required mass and went from two carburettors to one. Nothing else substantial changed. It still got an easy 38 mpg highway at sustained speed.
How are people doing with GMs current OHC Ecotechs, including the 2.0L turbo? If we can’t slash mass, it might be that going retro with modern pushrods and gearing, combined with modern ECM is the path to the 40mpg four in the US. At 6+ liters, the modern small block’s progress on all fronts sure makes you think.
Phil
Drew….the reason you and I are here today is that the “older generations” fought like hell through two world wars and a depression. Your generation (and mine) has no idea what true sacrifice means—-and to use your words……that pisses me off !
Take an empty room, non-climate controlled. Place a thermometer in it. Now add 5 people. Wait 30 minutes. Check the thermometer. Keep doing this until the room is full. Now give each person in the room an electric lamp. Turn them all on. How hot is that room getting? …. Ever ride a motorcycle in the country, then ride into a major city? Notice the temperature increasing as you get closer to the city until you are in it? You can feel it – you don’t need a thermometer to tell you it’s getting warmer.
Regardless of where people stand on whether climate change is anthropogenic, this is not the heat being referred to. Yes, urban density has local thermal consequences, in part because of retained heat from paved and built territory absorbing solar radiation. But the combined body heat radiation of 6 billion humans and the thermal output of our activities is scant compared to the total system input from solar irradiance. We know greenhouse gases have a necessary insulating effect to retain the sun’s warmth. What’s in question is whether our activities contribute enough additional greenhouse gases to change the amount of heat retained from solar input, or if other far larger environmental and cyclic factors outside man’s influence or control are causal.
Water is the real and neglected environmental crisis, while all this panic is wastefully directed toward regulation that will have no effect on the planet’s temperature in 2050, 2100 or beyond.
Phil
Criticizing is meaningless. Feedback is what has true meaning. Its a caring thing to do (under appropriate conditions).I can do that without criticizing. Ask yourself, can you?
The correct way to live is to live.
The underlying (and shady) consensus seems to bet that the powers that be at companies are defective. No one is incompetent. Acting Incompetent and being incompetent are two different things. no one is incompetent. No one lacks the qualities needed for affective action. Putting oneself in someone else’s shoes figuratively is not the same as literally. The latter being impossible. Who then can judge another. Who can even really judge themselves. Its about ones relationship with life. One is competent because one exists. The effective way to live is to live. One does not even need to be conscious of doing so to do so (ex. plants)(no pun intended).
Phil Ressler’s post:
Phil Ressler :
October 4th, 2007 at 4:29 pm
The data I’ve seen suggest that only 20-25% of ‘greenhouse gases’ are caused by humans, and
Estimates of annual carbon contribution by humans relative to all natural sources run in the 4% – 7% range, depending on who’s measuring. There is this idea attached to it that somehow *our* carbon is cumulative and nature’s isn’t.
…the price of gasoline is artificially low in the USA, not only because of the lack of taxes…
This is a peculiar idea. How do lack of taxes keep the price of anything artificially low? It’s the other way around. Taxes make the price of what’s taxed artificially high.
_____________________________________________
First, I’m not nearly as worried about GW as I am about Peak Oil. The latter will probably take care of the former, and frankly I think its impact will be more keenly felt in the first world. (GW will, regrettably, hit poor countries hardest). Fortunately for all of us, the remedial action required by both is much the same: dramatically curtail demand and consumption of fossil fuels.
RE:taxes (lack of) keeping gas prices artificially low: as Drew mentioned above, the price we pay for gasoline ignores a ton of externalized costs that are paid out of general revenues (or the health and well-being of future generations). So in fact, we do keep the price of gas artificially low by not requiring the people that use it to pay the full costs of its consumption.
I advocate revenue-neutral increases in gas/carbon taxes that are offset by reductions in income and other taxes. A slightly bigger paycheck every couple weeks is not as noticeable as a higher price at the gas pump, so the self-proclaimed freedom-loving conservatives will make this sensible idea a complete non-starter politically.
First, I’m not nearly as worried about GW as I am about Peak Oil.
Daniel Yergin and Cambridge Energy Research Associates, say Peak Oil is decades away:
http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDetails.aspx?CID=8444
Some experts disagree with him, but for the past 35 years, Yergin has been the most accurate prognosticator regarding energy supplies. He estimates 3X all the oil pumped to date remains recoverable based on what we know today. Getting that oil out of the ground may be more expensive than working present day sources, but there have been surprising advances in recovering substantial reserves from wells previously considered dry. So we’ll see. Energy companies have consistently been more resourceful than pessimists have predicted.
the price we pay for gasoline ignores a ton of externalized costs that are paid out of general revenues (or the health and well-being of future generations)
This is almost certainly true, but the lack of fully integrated costs is not created by lack of taxes. The problem with taxing, or any other way of trying to integrate all the externalized costs is, who will decide? What we have is energy companies pricing fuel in some kind of rough equilibrium between unit profit and volume, continually adjusted in an open market with substantially artificial elements. That’s at least as fair as having someone in government estimate the gap between what fuel costs vs. what it would cost if all externalized costs were included. We’re paying the externalized costs in other ways.
IF you can count on legislators to create revenue-neutral tax policy (perhaps a first), your suggestion could be a sensible tool, if you believe that fuel use by the general population is something that must be adjusted as a matter of public policy.
As for global warming, we have an increasing mix of conflicting ideas. We know empirically we have a present warming trend. Some experts attribute this to anthropogenic factors. Some experts are backing off prior support for this idea as their examination of the continuing data stream indicates otherwise. We know there is global warming on multiple planets in the solar system simultaneously, and we know that computer climate models used to predict catastrophe fail to explain prior warm periods on earth when human presence was too scant to have any influence. Those same climate models say we should be hotter now than we are. We know that the cryosphere in the southern hemisphere does not show evidence of climate change. We know that most of Antarctica is still accumulating ice while the arctic is shedding some. We have scientific teams in Russia and China predicting a long-term global cooling trend beginning within 20 years. We know earth’s climate is dynamic and constantly warming or cooling. We really don’t know that global warming is anthropogenic nor how long it will last.
The issue is making multi-trillion-dollar public policy decisions on this level of guesswork in an environment of dogmatic political pressure, ignoring the most immediately actionable and impactful tactics, and diverting resources from what we ought to be doing to prepare for the consequences if the planet warms for any reasons, including those that have nothing to do with human presence on earth. It’s true that if Peak Oil arrives before we’ve begun a migration off the oil drip, the developed world will feel the disruption, but historically, high energy prices have far more severely stymied the third/fourth world. A long-term warming trend will have winners and losers, which always means the poor take a steamrolling. From continental water capture, management and distribution systems to seawalls, to re-engineering fixed infrastructure power generation, we have a lot of options for trillion-dollar public policy shifts without tanking personal mobility and its link to prosperity. The car is already on an unstoppable vector of environmental and economic mitigation.
I’ve made specific suggestions elsewhere.
Phil
Hi,
What surprises me in this whole discussion is the idea that a tax on gas (or on all fossil fuels) equals a tax increase. Of course that is possible, but at least when I advocate a fuel tax, I assume that the total tax load stays the same. Together with the fuel tax, there must be a tax relief somewhere else.
I think that you want your government to do certain things and for that it needs money. Once it has been established what you want them to do, you must decide what it is the best (fairest, most intelligent) way to collect the money for that. In that context it seems a logical choice to me that you tax things that you want to discourage.
I’m from a country where we pay more tax. But I’m not trying to advocate that. I’m just saying that once you have established that you need as a government a certain income, you collect that in the best way.
Just the 2 cents from an outsider.
Regards
Oh the joys, read the blog link here, poor poor prius owners, how the wool was pulled over their eyes. Anyone would think Toyotas in it for the profits?!
http://blog.toyota.com/2007/10/post.html
As for the old argument of global warming issues, its cyclical, the earth warms up, the earth cools down, its life. Google, forest remains under arctic and see how the arctic used to be abundant forests as just one example.
Also Gores enviro film has been banned from being shown to schools in the UK due to scientific innacuracies and it being a political brainwashing exercise (As said by the Judge).
What surprises me in this whole discussion is the idea that a tax on gas (or on all fossil fuels) equals a tax increase. Of course that is possible, but at least when I advocate a fuel tax, I assume that the total tax load stays the same. Together with the fuel tax, there must be a tax relief somewhere else.
That assumption would be wrong. The tax load will not stay the same, and there will be no tax relief elsewhere.
I think that you want your government to do certain things and for that it needs money. Once it has been established what you want them to do, you must decide what it is the best (fairest, most intelligent) way to collect the money for that. In that context it seems a logical choice to me that you tax things that you want to discourage.
This government collects enough money, and it has demonstrated that they are unable to spend it in a prudent manner. They have given me no reason to believe that any extra revenue collected will be used just as wisely.
Increasing taxes for the sole purpose of fostering a behavioral change a society will never sit well with most Americans. This country’s rebellion, after all, was sparked by high taxes. High taxes is not just political suicide, it’s (dare I say it?) downright un-American.
Yes, higher taxes on gas have tended to drive the Europeans towards smaller cars (witness the 1.3 liter Fiat Grand Punto I rented during my last visit). But where is this overwhelming cry for better mileage coming from? Sure, we talk a good talk, but look at the type of vehicles Americans truly want to drive. Our roads are cluttered with Yukons, Expeditions and such. High(er) gas prices haven’t changed that. Yes, sales for trucks went down for a time, but now that we’ve grown to accept near $3/gallon for gas, there seems to be no shortage of folks willing to buy them. If the American public truly wanted small, efficient cars there would be far fewer F-150’s and more Fit’s on the road. And that’s a fact that every politician knows. Recommending an added tax to gas purchases would sign the death sentence to any politician’s career who proposed it. And given that a politician’s main focus is the next election, that won’t happen. We can all publicly shout our desires for more fuel efficiency, but our purchases don’t reflect that. GM/Ford/Chrysler all know it, which is why they don’t spend much time and energy developing small cars. There’s no money in it for them right now. And since added taxes are equivalent to political suicide, we can’t legislate the responsible use and conservation of the planet’s resources. We’ll duck our collective heads in the sand and let future generations deal with the fallout.
The problem with the whole Global Warming Debate is simply that too many people with an opinion on this topic have absolutely ZERO understanding of the scientific research that is fueling the debate. The stuff you hear from layman is just plain scary. From debating this issue with other I find that maybe one in ten understnad that the earth has been warmer and colder many times in past RECORDED human history. Sea-levels have risen and fallen and the ice caps have also expanded and retreated many times in the past couple of thousand years.
The whole GW thing bacame part of our popular culture BEFORE scientist were doing the hard research into why the earth’s climate has changed in the past.
Put another way we have people making claims based on data that they are incapable of interpeting correcting.
The first thing folks need to understand that to begin to even develope a theory of human activity warming this planet one needs an understanding of several fields of science, which is more that any one scientist can honestly claim to know.
Today the Geologist, Biologist, and the Climatologist all have produced somewhat conflicting data as to IF the earth being warmed by human activity.
Unfortuantely we have many people adding their two cents into this debate that have NEVER done any form of scientific rereash in their lives but somehow wish to tell us that they know what they are talking about!
BostonTeaParty:
I’m not sure if you’re blatantly lying about Al Gore’s film being banned in UK schools because the judge said it was a “political brainwashing exercise”; or if you merely heard this second-hand and are simply repeating an erroneous fact. Either way everything you said about Gore’s film in the UK is wrong. In fact, what you stated was the opposite of what actually happened.
I can’t comment on the scientific accuracy of Gore’s film since I haven’t seen all of it myself but it drives me nuts when people write the things you just wrote. If you think the movie is full of crap, just say that, and please enlighten us on the reason why. But stop adding mis-information to a debate that, as the previous poster pointed out, is already bloated with erroneous facts.
I am not advocating an increase in the gas tax. I am advocating that the best and fairest way to reduce gas consumption is to tax it.
There is a BIG difference. If you are against an increase in the fuel tax, do you prefer CAFE? Rationing? Banning certain vehicles by fiat? (actually practiced in Canada) What?
To me, the tax on gas is actually the least drain on the country, and the most transparent to the government. As much as the pols try to obfuscate it, those that want to can find where most of the money goes. If you let them take direct power over the decisions, the money is all under the table.
As for the poster using the Blackwater example, who all’s money should be forbidden in campaigns according to YOU? I suppose mine is just out, but yours is okay? How much did other interests give? Hmm? The only disinfectant is sunshine, all the other rules stink like the fungus they are. Get rid of campaign contributions altogether and BAM! you live in Russia. Gratz.
Friedman is not stupid – he is corrupt. His brainwashing techniques are so 5th-grade that his writings are painful to read…Almost as bad as CNN.
LandCrusher,
If the tax on gasoline is intended to reduce gasoline consumption, I’m sure it’ll have to be significant to actually have that effect. If the taxes are that high, it’s going to have a bigger impact on the economy than you think. You’ll see inflation from everybody trying to offset the increased fuel costs, coupled with a drop in consumer spending because they’re spending more money to fill up their Versas and have less money to spend elsewhere. Of course, nobody ever believes this will happen, but there will be a collective “Oh s**t” when it all spins out of control.
Quasimodo, I believe you’re right. If I recall correctly, until prices go over $4/gallon, the largest response is whining. And serious reductions in consumption don’t occur until something like $5 or $6/gallon.
And much of the response can only be delayed. All the SUVs that are on the street today have significant useful life left in them. Even if every new car sold was a compact, the cars already on the road dictate most of the aggregate fuel usage, so that falls off hardly at all in the first year.
And every new buyer couldn’t get a small car in the first year. Detroit is ramped up for production of a certain mix of cars and they can vary that somewhat but they can’t switch the Yukon line to Cobalts overnight.
Driving down aggregate fuel use will be a slow process, which is why some of us advocated doing something about it years ago. Had we implemented a sizeable gas tax back in the ’70’s or ’80’s, the landscape would be very different today.
CAFE standards are only one way to lower consumption. But, it seems from many of the posts in this thread, that not everyone accepts the inherent “good” in reducing consumption.
I think reducing consumption is good, not only because the burning of fossil fuels contributes, to whatever extent, to global climate change; but because of the vulnerable position we create for our national security. Unless we want to start new wars to take oil, or to guarantee our oil supply, we need to wean ourselves off of the black stuff.
So, yeah, I guess when I see someone driving a Excursion or a Suburban, I think twice about their patriotism. On the other hand, when I see someone driving a Prius or a FIT, I don’t consider those people as overly selfish at our national expense.
I know this notion will not sit well with those who feel they deserve to burn as much gas as they want. But, then again, I have two sons and I don’t want to see them die to protect someones right to get 5 mpg.
dean: RE:taxes (lack of) keeping gas prices artificially low: as Drew mentioned above, the price we pay for gasoline ignores a ton of externalized costs that are paid out of general revenues (or the health and well-being of future generations). So in fact, we do keep the price of gas artificially low by not requiring the people that use it to pay the full costs of its consumption.
Sorry, but that is not supported by history. Our air is cleaner in this country than it has been at any time since the Industrial Revolution accelerated in the wake of the Civil War. Why? Because the companies that make products that rely on petroleum (and other fuels) have spent billions to clean up the emissions of those products. In most cases, those costs have been passed on to the customers who buy those products. So they are, in fact, bearing the cost.
The environment in this country (and western Europe and Japan) is cleaner than it was even 20 years ago. Life expectancies keep increasing in the industrialized countries, and people from those countries live longer than anyone else in the world.
Also note that petroleum was considered a clean fuel at the turn of the last century. It was much cleaner than coal (and much safer to extract – compare the number of coal miners killed in the mines compared to the number of oil “roughnecks” killed in the field).
It was even considered cleaner for transportation. Prior to the advent of gasoline-powered vehicles, most people used horse-drawn vehicles, or horses, to get around. Those four-legged means of transportation produced their own emissions. The horse manure in New York City at the end of the last century could be smelled miles away. It also attracted flies, which carry disease. And the horses themselves die and must be buried. Horses regularly dropped dead in the streets during the summer months from overwork (animal welfare activists of the day welcomed the truck and bus to relieve horses of carrying ever-larger loads).
Is petroleum the perfect solution? No – we don’t know what discoveries lurk around the corner. But to say that petroleum use hurts us, or is dirtying the environment in unprecedented ways, is not accurate.
I think reducing consumption is good, not only because the burning of fossil fuels contributes, to whatever extent, to global climate change; but because of the vulnerable position we create for our national security. Unless we want to start new wars to take oil, or to guarantee our oil supply, we need to wean ourselves off of the black stuff.
I won’t argue with that. Assuming that one agrees with this position, as do I, the question then becomes one of how to best accomplish this.
As noted above, the most efficient and effective way of motivating a change in behavior is to adjust the tax rate on it. Use a tax to increase the price of fuel by $2 per gallon, for example, and the consumer will figure out on his own how to use less of it. The government need not micromanage the consumer’s adaptive behavior — the price hit itself will be enough to compel change on a broad scale.
What is missed in these discussions is why we have a CAFE in the first place. The reason for CAFE is that our politicians are terrified of the reception they’d receive if they suggested such a fuel tax increase. Since they are motivated by their goals of continued future employment in the legislature, they implement instead programs such as CAFE that may sound meaningful but are ultimately ineffective, particularly after the Big 2.8 and their friends at the transplants trivialize them into oblivion.
If you want to fault anyone for CAFE, look in the mirror. CAFE is the byproduct of politicians who are too scared of us to tell us what we need to hear. We have met the enemy, and he is us.
I don’t know about you, but I want my politicians fearful of tax increases.
“A more powerful/deadly Oil lobby.”
Lobbying/Bribing is not an objective crime since it is just speech and protected by the first amendment. The *action* of taking a bribe can be criminal. How do you think your Masters obtain campaign financing?
Politicians make laws to stop oil companies from drilling, then except bribes for exemptions. Good work if you can get it, eh?
Coincidently, Friedman, in today’s (Sunday 7 Oct) NY Times, proposes a “War Tax.” He would add a $1 tax to each gallon of gas to pay for the wars in Iraq and Afghanistan. He claims that the U.S. has always asked the current generation to pay for their own wars and that passing the debt on to our children is irresponsible. Interestingly, the Bush administration is totally against the idea of a war tax. I guess they want to saddle future generations with such a huge debt that the country would be unable to afford to increase funding for children’s health insurance or education.
Personally, I would rather see the war paid for by raising the taxes on those who profit from it the most, such as the no-bid (and in some cases, non-taxed) contractors.
But, I could see raising gas $1 per gallon, if all of that money, by law, was allocated to pay for the war and medical treatment for wounded soldiers. When the final costs are tallied up, I wouldn’t be surprised if the cost comes to many trillions of dollars. I think a war tax on gas would be fairer than passing the debt along to our children.
With the war tax, drivers of gas hogs could tell themselves that they are doing something good for America, and not just forcing our country into wars to pay for their oil habits.
I don’t know about you, but I want my politicians fearful of tax increases.
If that’s your position, you’re entitled to it. Just understand that measures such as CAFE are byproducts of this fear of our politicos to impose blunt tax increases on the population.
If one believes that there is some national interest to be gained by reducing fuel consumption, then taxes on fuel and/or targeted vehicle classes are the most direct and efficient ways to accomplish that. Economic incentives are powerful and effective tools for motivating and discouraging behavior.
The question becomes one of whether there is a compelling interest to change or reduce consumption. I would argue that there is, and I personally think a war tax that illustrates the linkage between US foreign policy and the needs of the treasury would be poignant and enlightening to the electorate. Effectively, Washington is attempting to hide the cost of the war through a declining dollar (caused by investors who have lost confidence in the US economy to the extent that they believe its production of dollars is worth less than it once was) and the interest expense of the resulting budget deficit, which is a political shell game.
But that will never happen. DC is scared to death of dramatic increases in fuel taxes. We’ll pay for it in other ways, ways that I believe won’t be too pleasant if we continue down this path for much longer.
If such an increase in taxes were short term, perhaps I could be swayed in my opinion. But then I remember the telecom tax that was imposed to finance the Spanish-American war and how we were still paying this tax up until last year, even though the war had ended over 100 years beforehand. When we ultimately withdraw our forces in Iraq and Afghanistan, will this tax be withdrawn? History answers this question.
You speak of economic incentives, but taxes are not an incentive, they are punitive disincentive. Why not credits for purchasing a vehicle that gets over 40 mpg? Isn’t tax credits what spurred hybrid sales when these cars first entered the market? If you want to target gas guzzling SUV’s make it worthwhile to buy a car that isn’t so thirsty.
Such blunt measures are a sure path to the Law of Unintended Consequences.
You speak of economic incentives, but taxes are not an incentive, they are punitive disincentive.
Your point is well taken, although that depends. A tax that is imposed on one item but not a substitute product is a form of incentive, as it makes the substitute cheaper and therefore more desirable than it might otherwise be. (A clear example of this in action is the tax on diesel fuel in Europe, which is imposed at a far lower rate than is gasoline there. The end result is a much higher cost for gasoline, which encourage a switch to the more affordable fuel.)
A fuel tax would obviously encourage consumers to drive more efficient vehicles and to use them less often. The stick (tax) encourages consumption of the carrot (smaller vehicles, public transit, etc.) An engine displacement tax or fuel economy-based tax would have a similar effect.
Is that more stick than carrot? Sure it is, you are right about that. But in respect to fuel consumption, it’s really quite difficult to impose a series of incentives that get the desired result while making everyone warm and fuzzy about them.
Again, the question boils down to one of public policy, and whether the policy goal is desirable or not. If it is a desirable goal, there isn’t a much better way to get there. It will have unintended consequences, but as our traffic jams, suburban sprawl and costly but crumbling infrastructure indicate, doing nothing also carries its unintended consequences as well. Nothing is free, and none of the options are perfect, you have to pick your poison and accept the drawbacks of whichever route you pursue.
I read Friedmans’ War Tax column. He gets some of history wrong. There was a small surtax passed during the Johnson administration to defray some of the costs of the Vietnam War, but the bulk of it was paid for by inflation between ~1971 – 1981. In WWII, some of the financing was raised via War Bonds and Liberty Bonds, but the Federal Deficit some years exceeded GNP. It was the explosion of prosperity after the war that paid for WWII.
I agree with another poster who said he’d support a war tax if the proceeds were specifically and exclusively allocated to war expenses and the medical / transitional care of returning soldiers. I’d gladly pay a surtax to accelerate delivery of armor, stealth weapons and other technologies that give soldiers some distance from dramatic threats. But such a tax has to have an ironclad expiration. I generally agree however, that those of us not directly engaged in the fight ought to be asked to do more.
The problem with a fuel tax on an open-ended basis is that it never seems to have lasting protection with respect to the use of proceeds. It effectively becomes a user tax, so show me the next 50 years’ worth of infrastructure investment I can count on. And please, Congress, don’t say my gasoline purchases can only be used to build mass transit. Personal mobility is a bedrock component of this country’s economic vitality and quality of life. We’re not going to add 100 million more people without expanding road capacity. Plus everything built to date needs maintenance and upgrading. Let’s get to it, and then supplement with sensible adjunct mass transit that is useful and viable.
I don’t think many people have enough confidence in Congress’ discipline or willingness to respect ironclad allocations for new or expanded revenue streams. Taxes are an emotional issue in the US. Sure, economists can argue for taxes as a rational policy instrument for shaping a society. But in a country whose existence was sparked by tax rebellion, economic theory and politics collide.
CAFE is a market interference fueled not only by a fear of taxation but as much by the belief among politicians that somebody must be doing something evil, so it must be corporations. Let’s make them pay if they don’t force a change in the vehicle mix. CAFE v1.0 in part put car people into trucks in big numbers. Ooops. Not what Congress had in mind.
Everything people want to accomplish with a gasoline tax and CAFE v2.0 can be more quickly accomplished if we leave personal mobility alone for now, and focus on changing the fuel and spew mix of fixed infrastructure power generation. We could have real impact on all fronts, regardless of anyone’s specific beliefs about climate change, currency value, balance-of-payments, foreign policy drivers, etc., within five short years. Focusing on the car now is like using your only hose for filling a reservoir 5 miles away while your house if burning today. The fleet turnover will take a couple of decades. Today we have an auto market in the US of roughly 16 million new vehicle purchases per annum, supplemented by 43 million annual used vehicle sales. In a recession, the new figure goes down and the used figure goes up. A gasoline tax boost today will be punitive rather than ameliorative for this reason alone. We can do much more elsewhere.
Phil
A fuel tax would obviously encourage consumers to drive more efficient vehicles and to use them less often. The stick (tax) encourages consumption of the carrot (smaller vehicles, public transit, etc.) An engine displacement tax or fuel economy-based tax would have a similar effect.
And what of entities, such as businesses, that will do nothing more than pass those costs on to the consumer? You’ll in effect, be paying this tax, even if you don’t own a car. Absurd? I think so.
It will have unintended consequences, but as our traffic jams, suburban sprawl and costly but crumbling infrastructure indicate, doing nothing also carries its unintended consequences as well.
And if people switch to diesels or hybrids to save at the pump, there will still be just as many cars on the road, so you’ll still have to deal with traffic jams, suburban sprawl, and a crumbling infrastructure. What have you gained?
Actually, Friedman doesn’t take credit for the statement that this is the first war where the total cost was passed on to future generations. He attributes this idea to Robert Hormats.
“Previous American generations connected with our troops by making sacrifices at home — we’ve never passed on the entire cost of a war to the next generation, said Robert Hormats, vice chairman of Goldman Sachs International, who has written a history — “The Price of Liberty” — about how America has paid for its wars since 1776.”
It is true that personal transportation only accounts for a portion of our domestic fuel consumption. However, high fuel prices are a volatile issue; they could change the mood of the country and propel us towards war, with Iran, for example. If people are spending so much of their disposable income on gasoline, they can be more easily convinced to go to war for oil.
We have a leader who has tried to gather support for the war by pushing the cost off onto future generations. The cost of Veterans health benefits alone, for the tens of thousands of injured, will go on for the next 50 years, if not more.
We must attack the oil problem on many fronts including finding alternative sources of energy; funding public transportation; encouraging local initiatives to produce, process and consume local foods; encourage energy-efficient office buildings and homes, and yes, we must all be aware of our own use of oil. If it takes a gas tax to make us aware, then I would support that.
“And what of … businesses that will do nothing more than pass those costs on to the consumer?”
Some will find ways to avoid that:
Special Delivery
More seriously, a gas tax would give energy efficient businesses a bigger advantage – and a reason to invest in strategies that reduce energy costs.
If anything Toyota’s trying to help Detroit stay in business– avoiding a US auto industry strengthened by Chapter 11 and/or a transplant backlash.
True, but I would add they would also like to reserve the right to sell whatever customers “want” to buy.
To your point, Friedmans, argument is an old and tired one: Markets don’t work, they need to be fixed.
But I don’t know what you would expect from the “old gray lady”. Many would argue that gray is no longer the right adjective.
Lastly, I applaud Toyota for standing up and saying “we don’t want this legislation either” because they will surely benefit from it dying in the senate. Sitting in the background and enjoying the fruits of others labors, goes beyond freeriding. Glad they didn’t take that route.
@Phil
Excellent post. Truly excellent.
The New York Times is the best mainstream paper out there. Not a better one exists. Especially if you’re from Indianapolis, where the paper is the Indianapolis Star. I like to call it, however, the Local Bullcrap Emporium. The NY Times is a breath of fresh air. Everyone’s a critic though.