George W Bush is inspiring another round of “kick the can/punt the ball” criticisms today by delaying a decision on 2011-2015 CAFE rules until after Obama takes office. “The recent financial difficulties of the automobile industry will require the next administration to conduct a thorough review of matters affecting the industry, including how to effectively implement,” explains a Department of Transportation statement reported in Automotive News [sub]. Current energy policy requires a 35 mpg fleet average by 2020, a 40 percent increase over the current standard of 27.5 mpg for cars and 23.1 mpg for light trucks. Considerable controversy exists over how quickly to ramp up to that standard, as the expense to automakers competes with environmentalist agendas for political sympathy. Since Obama will end up with the final say on the current (and future) auto bailouts, CAFE-setting power will give him another bargaining chip with Detroit. He just has to make a CAFE decision by the April 1 deadline. Unless of course he scraps CAFE in favor of a carbon or gas tax. In any case, it’s just a little more uncertainty to swirl on an auto industry future that is already as clear as mud.
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Question: Would it not be better to just set a minimum mileage standard, say 27 for light trucks, 40 for sedans (or whatever), and let it roll, rather than making it fleet averages? It seems like half of Detroit’s problems are from a toxic interaction between CAFE regs and higher labor costs making them build crappy cheap cars to hit the average.
Well some of the smartest decisions Bush has made was to not make them at all. Maybe he’s trying to end his term on a high note?
On a more serious note. CAFE needs to die a quick and deliberate death. It is a terribly designed measure that has done very little to actually reach the intent of the legislation. Its Bass Ackwards approach to curb demand by constraining supply and leaving a 100 loopholes has failed miserably. Let’s look into it – has GM built more fuel efficient cars up to the gas rise? Nope as GM’s sole focus was on profitable SUVs and trucks. How did GM get away with it? Simply by adding $200 in equipment to an SUV to get it e85 rated and CAFE fuel economy for the 13mpg pig was “adjusted” up to mid 20’s (whereas in reality if that SUV used e85 it would have gotten less than 10 mpg!
The right thing was and continues to be – Set up a gas tax to artificially keep gas prices high ($3 a gallon) – keep a fund to subsidize prices when they go over that limit to keep them down – people will then not have the SUV crash, restored $6k Geo Metro buying binge and the Hybrid premium. Funny thing is where there is an actual sustainable equilibrium in gas prices – people and MFGRs will be better off in the long run.
With gas prices down I bet on a huge fuel tax.
“It’s for road work/energy conservation/green causes/the children” so don’t bitch.
God, if he is going to do anything, please let it be getting rid of CAFE and raising fuel taxes. Please. Its the only thing that makes any sense.
More likely? The SNL bit of “we’ve already mandated 200mpg cars, so we’ve done our part”
Environmentalist wackos have a lot more clout in DC than any industry does these days.
And the president has the say on CAFE? How did that come about?
We’ll get a pretty good idea of how “in touch” DC is real quick. If it includes horribly expensive changes that make vehicles less functional while costing way more while Americans are losing their homes and their jobs and mandating super high MPG while car companies are on the verge of extinction, it will be clear pretty quick. Of course uber rich environmentalists from California won’t care. We gotta save the earth! People of the earth be damned!
And why do we have to do *anything*? Why not just leave as is? Gov meddling is a big reason everything is so messed up, why so many games are played everywhere (taxes, CAFE regs, etc). All they’re likely to do is shift burden and cost around artificially. They won’t do it to the end user, because they put them in office. But they’ll fine automakers then use the money to subsidize environmental companies and battery companies all in the name of saving the earth. Whether or not all that meddling actually saves the earth or makes it worse won’t even be discussed. Remember, with congress, its the APPEARANCE of doing something that counts. Not actual results. Yet another reason why I’m getting sick of these folks screwing with everything, making most things worse, and acting like they have all the solutions to every problem and know better for us than we do for ourselves. Then they take our money and do as they please while we take our beating and ask for them to give us more.
Ok gotta stop, gettin fired up.
If Washington is going to force automakers to sell what no one really wants to buy, they will just keep what they already own.
The best thing they can do is nothing, but I expect the great socialist wave to swamp the auto industry, and Washington will figure out some way that they can make money at the expense of everyone else.
That is what Washington does.
In an ideal world one should rely on markets to establish fuel economy. The current CAFE system is the usual bureaucratic maze arranged by lawyers and lobbyists. The original CAFE standards were set some years ago and now we have new set. I don’t understand why we have these sudden and large changes in CAFE at irregular long intervals. If we must have standards, why can’t they be written to require incremental improvements every year? It seems like this would be a much more manageable goal than cataclysmic changes to CAFE every 15 years or when Senator X gets annoyed with the auto industry.
Anybody else nervous about Bush’s last week in office? “It’s time for the Rapture!” >clicks button<
Seriously though, if you saw what the legislation in CA did to the smog levels in and around LA you might think twice before blurting out how regulations harm everybody. I’d rather breathe than drive myself, as much as I love driving.
The government won’t be able to push new CAFE requirements when the economy is down and the Big 3 are circling the drain. On the flip side, if the economy takes off then so will gas prices and CAFE will be moot.
Plus, even the 35 MPG and 40 MPG aren’t that hard. Because of the way the numbers are calculated, the figures that appear on the window sticker are far lower than the figures used to calculate CAFE.
Sigh. If Bush WERE making a lot of decisions like these so close to the end of his term, the Dem’s would be criticizing THAT. I think that it’s proper that he allows the incoming administration to make the decisions that will impact things during the new President’s term.
If those are uncomfortable decisions, so be it.
Normally I would be critical of a President for shirking his duties and passing the buck … but in the case of GWB I’m all for him doing as little as possible with his remaining days in office.
“I don’t understand why we have these sudden and large changes in CAFE at irregular long intervals. If we must have standards, why can’t they be written to require incremental improvements every year?”
In the early days of CAFE rules they did in fact get incrementally tougher year by year. Have a look: http://en.wikipedia.org/wiki/Corporate_Average_Fuel_Economy What happened is that from 1990 onward Detroit’s lobby successfully froze the standards. The logjam was finally broken in December 2007 when a process for restarting the incremental improvement rules was signed into law. Details were left to the NHTSA (which agency never should have been given the CAFE mandate in the first place, it should have been the EPA) to sort out and publish. The NHTSA is part of the administrative branch of government and thus is part of the President’s responsibilities. NHTSA has yet to issue final rules for precisely how the new CAFE rules will phase in.
Corporate backers (mostly Republican leaning) and the UAW (mostly Democrat leaning) both did everything possible to stall CAFE and managed to keep the rules essentially frozen for nearly two decades.
Environmentalist wackos
What is it with people?? Maybe various parts of the environmental lobby haven’t done themselves any favours but they don’t appear to be any more “wacko” than any number of activists. Gun nuts? Anti-abortionists? Evangelical clowns?
It makes economic and environment sense to STOP WASTING ENERGY!
You would think the Democrats would be happy. They have already manged to cut the size of the Auto sales in the USA by half.
It’s beyond debate that CAFE is and always has dramatically underperformed the task for which it was enacted. Worse, it is a Jackboot on the throat of any full-line (read Detroit) automaker. Gas prices out performed CAFE 60-to-1 (6 months vs. 30 years).
It’s beyond debate that General Motors is carrying 3-5 times the debt load they can reasonably expect to keep current on. It’s also beyond debate GM is wholly undercapitalized and has, for all practical purposes, no assets nor sales volume to stem the huge debt buildup. It’s down to picking the date and Ch 7 vs. Ch 11.
TTAC bloggers, among millions of others, see the reality. How long before Detroit and Foggy Bottom gets it?
Obama’s already planning on changing or deleting literally hundreds of Bush administration actions in the opening weeks of his new administration, so Bush might as well just let him set it where he wants to in the first place. Not a bad decision on W’s part. And I agree with John Horner that EPA should have been put in charge of the CAFE standards. At least they’ve got a broad base of regulatory and scientific experience on hand. (Whether it gets properly used or abused is another discussion entirely.)
If we must have standards, why can’t they be written to require incremental improvements every year? It seems like this would be a much more manageable goal than cataclysmic changes to CAFE every 15…
Amen to that!! Had we had small, steady steps toward better mileage, there would be no “rock the boat” drastic changes. Radical changes, no matter had well intended, or desirable, often have unintended consequences. Witness short term German reunification problems.
Blucon, care do justify how the Dems are responsible for cutting auto sales in half? By justify, I mean real honest-to-god facts, not just keep-government-so-small-it fits-in-a-tub horseshit?
You would think the Democrats would be happy. They have already manged to cut the size of the Auto sales in the USA by half.
Nope. The Republicans and their religious belief in a regulation free economy bankrupted the country with their costly wars, let fraudsters run wild, and caused the current depression. Perhaps with adults in charge who believe in reality based policies instead of mock them we can dig ourselves out of the situation.
Here’s a novel idea. At the very least let the people VOTE on it. Somewhere along the line people forgot that government is supposed to enforce the will of the people. Not a minority of people that think they have the inside track into knowing what “the common good” is. If people want their cars smaller and more underpowered then they’ll ask for it. I’ve not come across anyone (aside from a few environmentalists and socialists) that want that. Leave it to the free market to decide how fuel efficient cars and trucks should be. Leave “social engineering” like hiking the gas tax and carbon credits to the totalitarian countries that thrust that on their people. This American (and I speak for the majority) won’t stand for it.
The Republicans and their religious belief in a regulation free economy bankrupted the country with their costly wars, let fraudsters run wild, and caused the current depression. Perhaps with adults in charge who believe in reality based policies instead of mock them we can dig ourselves out of the situation.
Hear, hear! Damn Chris Dodd, Barney Frank, and all of their Republican buddies.
@Qwerty and Bluecon,
Do you really think one side is any different than the other? For every Dem you single out, they can name the equal [insert theif, fanatic, fraudster (I like that word!)] of the GOP.
Obama no better/no worse the GWB. He is not the savior. He is just another Huckster wearing the other teams uniform.
@ reclusive_in_nature
Great idea. Democracy. The ancient Greeks, or at least what we know from Plato, felt that the citizens had to be all equally well informed to make democratic decisions.
In a selfish, materialistic, commercial mass media world, where do you think Democracy falls down perhaps?
reclusive: if the gas price fairly reflected the externalized costs of the car-oriented infrastructure, you can be fairly certain that small and fuel-efficient cars would be exactly what people want.
Democracy isn’t just about the will of the people. It is about choosing leaders based on shared values that will lead the country. If the US was a truly direct democracy, black and hispanic people would probably not be allowed to vote. Is that the kind of progress we’d prefer?