Likelihood of Success

Ron Coleman’s pretty good blog

Here in my car

Posted by Ron Coleman on June 27, 2007

58-olds-98.jpg“If people wanted cars with great mileage, they’d be buying them”:

Is it just Murdoc, or is energy conservation one of the most liberal of all issues? (And by liberal, I mean that proponents campaign for other people to give up things for the supposed greater good, i.e. today’s practical definition of “liberal”, not the actual definition.)Lunatics everywhere think that raising CAFE standards will somehow help gas prices or Global Warming or something. If almost everyone is so positive that higher gas mileage is a good thing, why isn’t almost everyone driving vehicles that get 35 MPG or more? There are a lot of them out there folks, and many of them aren’t too terribly expensive. . . .

Basically, Murdoc is saying that the problem isn’t car manufacturers (who have enough of their own problems these days, thankyouverymuch) but car buyers. It’s those damn people again.

And not only lunatics say it, Murdoc. The question comes down, as I mention in the article at the last link, to whether there is a rational externality-based argument — there we briefly discussed national security — for government regulation of prices, unless you are a libertarian or even a firm free-marketer and don’t believe there is ever such an argument. Murdoc mentions global warming as one “something” from which people make this case. Not only lunatic people.

But these arguments may be beside the point or, at least, may be guilty of obstructing a large part of the point, because they ignore the question of whether increased CAFE standards are a net positive for social welfare. One body of literature has argued for years that CAFE kills, because lighter cars are less safe cars, at least for the people riding in them. Another urges that they don’t even really help reduce fuel consumption. The thinking is that more efficient cars encourage more driving — it’s cheaper per mile. Now, I have argued that the cost of gasoline, at this point in history and given the overall increase in wealth, probably has very little at all to do with how much most of us drive, and indeed the Heritage data tending to prove more driving is based on decades-old data.

I don’t know. It’s complicated, isn’t it? That’s why I’m saying that pushing for increased CAFE standards as a cure-all is almost certainly simplistic, because it makes the cardinal mistake in microeconomics of not allowing for the large multiplicity of moving parts in economic policy-making. But as demagoguery, it is right on.

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8 Responses to “Here in my car”

  1. jaymaster said

    I won’t argue whether it makes sense for the government to try to manipulate oil consumption at this or any point in time. But if they feel it must be done, I’d prefer an alternative to increased CAFE standards or higher gasoline taxes.

    I’d like to see an income tax credit for auto manufacturers who choose to build such vehicles, and tax credits for those who choose to buy them.

    Such an approach would placate fears of a blatant money grab that taints an increased fuel tax, appeals to smaller government types, and gives auto makers a choice as to whether or not they want to build such vehicles. And it would be less regressive on lower income individuals, as the tax credits could be phased out for those with higher incomes.

    I’m not holding my breath, though.

  2. […] Coleman at Likelihood of Success joins other Republicans (for a change) in attacking liberals demand to raise CAFE (Corporate Average…. His reasons include that raising CAFÉ standards won’t “even really help reduce fuel […]

  3. Ara Rubyan said

    Ron:

    You’re better than this.

    Fact is, people ARE buying fuel efficient cars…under the Toyota label. It’s a big reason why Toyota is #1 now.

    What’s so hard to understand about that?

  4. Nothing. You are only proving my point.

  5. Pete Madsen said

    “Fact is, people ARE buying fuel efficient cars…under the Toyota label.” They’re also buying a lot of big SUV’s and Tundra pickups under the Toyota label. So what?!

  6. Bob Miller said

    We need something that can run on grass clippings, junk mail, and newspapers.

  7. On the Brink of hysteria

    In the hysterical sense. And in the Brink sense.

    Glenn Reynolds links to th…

  8. firestone

    Goodyear Eagle F1

    Is this a very weak attempt at spam? I don’t even have the heart to delete it. — RDC

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