President Obama’s directive for the government to explore letting states create stricter emission standards for automobiles is an important and long overdue step towards getting automakers to improve their vehicles. It might also be an ill timed decision.
That’s what the automaker’s would have us believe. They’ve begun bellyaching that the standards will be too tough, too soon and by allowing states to create various standards, entirely too capricious. The crippled industry, which we’ve already pumped full of cash, just can’t support changing its production. Big beefy SUVs and light trucks are profitable, compact cars are not. Gasoline is oversupplied, the economy’s in a rut, fewer people are buying hybrids. General Motors just laid off 2,000 workers yesterday. The timing is not right for tougher emission standards.
Our question: When exactly will the timing be right for a shift in fuel standards? When the economy is flying high? Like it was just a few years ago and nothing changed? Or when gas prices spike again and it’s too late?
In the seventies the U.S. got smacked by high gas prices. Once prices settled, the nation quickly forgot about the problem and did nothing. Obama could do the same, but it’d be irresponsible. We elected an adult president to make difficult adult decisions. His job is not to hold the hands of the auto companies. His job is to kick them in the butt and say, “Get to work.”
So rather then waste money on lobbying and PR cries about the new emission standards, get to work Detroit. And if Obama wants help the auto industry out, he can implement a gas tax which, which, as we suggested in December, would help the auto industry overcome it’s phobia of building efficient vehicles:
Specifically, a gas tax that fixes the price of a gallon of gas at $4 a gallon nationwide, with the tax being the difference between the market price and $4. The tax will thus adjust with the market price of oil–less tax when oil is expensive, more when it’s cheap. And the price of gas will stay fixed at $4 unless oil prices really soar, at which point it will disappear (and gas prices will float to wherever the prevailing market price is).
To avoid sandbagging Detroit and strapped consumers, Congress could announce now that it plans to implement this tax in 2011, thus giving everyone two years to prepare. The car companies could confidently retool their factories, instead of worrying that they will have to frantically retrofit them every year to make SUVs, then Priuses, then SUVs, etc. Consumers could retool their expectations, assured that they won’t lock themselves into a tin can by buying this year while their neighbour gets to buy a Hummer by waiting until next year (and then goes broke when prices spike again). The government, meanwhile, could raise more of the screamingly-needed new funds necessary for all this infrastructure spending and bailout-out they’re doing.
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