Automakers Welcome New Energy Bill
Even as the Prez picks up his pens to sign the new Energy Bill into law, the automakers are rallying around the cause. While the cynical amongst you might suggest that their support indicates that the bill's riddled with loopholes, we couldn't possibly comment. Chrysler's (nee Toyota's) Jim Press had no such reluctance. He told MSNBC "We now know what the rules are of the game. [Translation: We manipulated the legislation as much as we could.] Each manufacturer now will be able to play its hand in its unique way. [We'll game the rules to the max.] We're in the best position to marry technology and not make people make sacrifices or compromises on the product they want. [We're going to continue to build huge trucks, CAFE be damned!]" Rick Wagoner responded with Generic Press Statement "We will focus our engineering and technical resources to attain these standards, and we remain hard at work applying the innovation and developing the advanced technologies that will power tomorrow's cars and trucks." Toyota's Jim Lentz just said they'll expand their range of hybrids. "We're a hybrid company." Uh huh. A hybrid company that makes a fortune off of gas-sucking trucks and SUVs. It's nice to know even as the rules change, it'll be business as usual.
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Raskolnikov: What if the pants are made of hemp and their owner only farts out Ethanol, not Methane?
Come on, food is a necessity. Gasoline is not. New CAFE or not, nothing will change. The automakers will build whatever they can sell, hopefully for a profit. If building a gas-guzzler makes you enormous profits, but you have to pay a little fine due to CAFE, so be it. It keeps BMW's doors open.
Folks, the only way to vote is with your wallet and your feet. That's why I wear New Balance shoes. I also may end up purchasing a 2006 Corolla for $6500 today. Let me see, if I sell it for $9500... 35 miles per gallon / $3 gas (it's an election year) = $3,000 if I travel 35k miles 20 miles per gallon / $3 gas = $5,250 Hmmm.... a $2,250 difference. That equates to a bit over $6 a day. Then again I can sell it for about $9500 and that would result in an immediate profit of $3000. A lot of folks make the same type of short-term rationalization as it applies to their own business. The fellow who has a loaded up F150 may only get 15 mile per gallon. But he's got a business to run, clients to entertain, products to haul in his truck, and he must endure the slings and arrows of daily traffic. That truck is not so much an expense to him as it is a profit center and validation of his overall work ethic. Guess what? That fellow is going to keep his rig until the price of gas or tax get to near draconian proportions. The folks who are living paycheck to paycheck (or less) see what equates to $6 a day in extra cost and may scale down a bit at this point. This is especially the case where driving a fuel efficient vehicle is aligned with mainstream norms. Those folks who aren't as price sensitive will probably drive what they really want. If they see the running cost as high they may decide to buy a two year old version instead of a new one. In theory, you may be able to tax many of them out of their vehicle with one large sum in the beginning (gas guzzler tax), but they could care less about the extra $6 a day in running cost if the vehicle is an excellent fit for their work and tastes. I don't have any easy answer to this issue, but I do have one caveat. Taxation, pork barrel programs, and loophole ridden bills are almost always designed to let the big fellows (government and industry interests) make money off the little fellows (us). They never work. They're nothing new. I'm sure the Romans had all different types of taxes back in the day that enabled the industries and government of that time to flourish at the expense of the common citizen. Anyone who thinks that today's world in the USA is any different should check out the cost of having a cell phone or DSL sevice in the US vs. most other developed countries. Check out the technologies used in most affluent and developing economies as well. We're gradually becoming a footnote. Thanks in great part to a few companies that are pulling the strings of power in all levels of government. At times I think the only way these forces could ever be countered is with a consumer advocacy group that would have massive media outreach and it's own army of lobbyists. Even that is not a real solution to the inherent problem.