How Will You Spend Your $2,800?

by Don Boudreaux on May 20, 2009

in Frenetic Fiddling

We Americans are lucky. 
President Obama, although having zero experience as an entrepreneur or
in the automotive industry, has designed fuel-efficiency standards that
(he assures us) will save the average car buyer $2,800 over the life of
his or her vehicle
.  What a deal!

No one in Detroit, in the U.K., in
Japan, in Germany, in Korea, in Sweden, in Italy, in France – no one anywhere, not even
persons with decades of experience producing and selling automobiles -
has figured out how to devise vehicles that are so obviously attractive
to American consumers — and, therefore, so rich in profit-earning
potential for manufacturers — as are the ones now promised to us by the Obama administration.

And we can admire not only Mr. Obama's industrial and commercial
genius, but also his magnanimity in offering to the public, free of
charge, his money-saving idea.  He could have earned billions of
dollars in profit by putting his idea to the test in the market.  But
no: by simply forcing us to use his idea and charging us nothing for it, he'll forego
this profit.  We Americans are lucky indeed.

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{ 50 comments }

richard May 20, 2009 at 8:25 am

I didn't know Mr Obama was related to http://en.wikipedia.org/wiki/Kim_Jong-il

Daniel Kuehn May 20, 2009 at 8:39 am

This is good – a criticism of Obama that I can agree on! Now BoscoH can stop droning on about my man-crush. Granted, I don't think the fuel efficiency standards (if they're even met) are necessarily in place to save us money… so the criticism is a little beside the piont – but I do agree with the criticism.

Daniel Kuehn May 20, 2009 at 8:40 am

In other words – Don is dead on, but politicians always say these sorts of things to fluff up their speeches. I think the appropriate response is to ignore it rather than get worked up about it.

Rex May 20, 2009 at 8:40 am

I'd spend the first $1,300 of that on the car itself… oh wait, I don't have a choice.

http://news.yahoo.com/s/ap/20090520/ap_on_go_pr_wh/us_obama_autos

Ike May 20, 2009 at 8:41 am

I'm glad I'll have those savings, because I own a piece of GM, and every time I make a car my company loses $1,600.

Also, as one of 120-million or so taxpaying households, my average share of $4-trillion in spending is $33,000.

That $2,800 will certainly come in handy in defraying my mounting expenses.

(thank you sir, may i have another?)

Colin Keesee May 20, 2009 at 8:43 am

Some have said that his rhetoric about new ideas and change are simply recycled ideas from FDR and LBJ. That is true but I can do one better.

He is acting like a medieval prince or baron, where he really believes that economic reality bends to the will of his edicts and whims.

To take it further back in time, his future will be similar to the fates of Roman Emperors of the past. His reckless use of the printing presses is similar to Diocletian's decision to mix his empire's coins with non precious metals and then responding to increases in prices, caused by his debased currency, by executing anyone who dared to charge higher prices. I hope Obama does not use such radical coercive powers but it is clear that he will try to counter the negative results of his own "there is such thing as a free lunch" attitude with other counter productive measures.

The more things change… the less hope we have in sound decision making by politicians.

Daniel Kuehn May 20, 2009 at 8:56 am

Colin Keesee -
RE: "He is acting like a medieval prince or baron, where he really believes that economic reality bends to the will of his edicts and whims."

Oh, don't get too worked up about this. Politicians always pepper their speeches with statements like this. Nobody is rushing to change their behavior because Obama just told them they'll save $2,800. The takeaway point is he's trying to leverage a significant amount of efficiency out of the auto industry. I for one am hugely skeptical, but the sky is not falling, capitalism is not being overthrown, and nobody really is going to read anything into this statement about saving $2,800, despite what Don or Russ say. It's political fluff, that's all.

Veritas May 20, 2009 at 9:02 am

How much will that $2800 purchase after inflation goes sky high?

Randy May 20, 2009 at 9:10 am

Daniel,

"It's political fluff, that's all."

And politics is evil. So we are inundated with evil fluff. The catholics had a pretty good understanding of the concept. The question for them was how to live a decent life while living in a world of evil. For us it is how do we avoid the political?

Daniel Kuehn May 20, 2009 at 9:15 am

Randy -

Hmmm… I think you're giving politicians too much credit by calling them evil. I wouldn't go that far. :)

David May 20, 2009 at 9:16 am

Oh, don't get too worked up about this. Politicians always pepper their speeches with statements like this.

–Daniel Kuehn

…about that man-crush…

Daniel Kuehn May 20, 2009 at 9:19 am

David -
Sorry, I'm not interested and I'm married. I'm flattered, though.

Randy May 20, 2009 at 9:29 am

Daniel,

"I wouldn't go that far"

I would. To the catholics, Satan was the source and center of the evil they witnessed. I'm an atheist, so the idea of Satan doesn't satisfy. And yet I too witness evil. And the source and center of that evil is politics.

Billy May 20, 2009 at 10:10 am

I'll spend it on more gasoline. Afterall, he is also promising to make it cheaper for me to drive everywhere.

Gil May 20, 2009 at 10:28 am

It seems as though you're a pigeon walking into a cat convention, Daniel.

Well, Randy, building a moat and filling it with holy water might be a start.

MnM May 20, 2009 at 10:31 am

I'll spend it on giving the vehicle more horsepower…of course, that will decimate the fuel economy…

Joe May 20, 2009 at 10:46 am

I recently read an article about the unintended consequences of the last government fuel economy mandate…

In order to meet the government set bar, the car companies had to do some pretty drastic things to cut weight- like remove a great deal of steel and metals from the car and instead use much more fiberglass and weaker/cheaper materials. Suddenly once these government mandates became a reality the rate of fatalities from auto crashes when sky high.

"It has been estimated that the 500-pound reduction in auto weight that coincided with the introduction of CAFE has increased the fatality risk by up to 27%." (http://www.cato.org/pub_display.php?pub_id=3409)

I wonder how many lives will be taken because of Obama's mandate…

Methinks May 20, 2009 at 11:39 am

"his magnanimity in offering to the public, free of charge, his money-saving idea."

They don't call him The One for nothing! Our Dear Leader will herd us out of the dark forest and into the light because he is all knowing and all powerful like that other dude (what's his name?). Why not? It's worked every other place its ever been tried. Like for example…um….uh….errr…..

Daniel Kuehn May 20, 2009 at 11:48 am

RE: "They don't call him The One for nothing!"

Haha – only Oprah and conservative pundits trying to discredit him call him that.

I find this complaint about the messiah-complex bizarre. It would be one thing if people actually think that of him. Then it would certainly merit ridicule from Fox. The problem is, Fox is the only place you hear that talk!!!!

Gil May 20, 2009 at 11:53 am

Gee, should small cars be banished if "lighter cars are death traps", Joe? Pres. Obama could save 40,000 lives a year by forcing everyone to go to horses and bicycles. V8 pickup trucks for all?

David May 20, 2009 at 12:07 pm

The problem is, Fox is the only place you hear that talk!!!!

–Daniel Kuehn

You've obviously never been inside a law school. Students and professors alike trumpet him as the cure for all the world's ills while, ironically, studying and teaching a concept that actually could be the cure for alot of the world's ills were it universally observed and respected.

Fred May 20, 2009 at 12:15 pm

We could make everyone on all sides of the argument happy by bringing back the light, fuel efficient, flammable Ford Pinto.

Daniel Kuehn May 20, 2009 at 12:17 pm

David -
I, and I'm sure a lot of these ubiquitous law students and professors you mention, are thrilled to have Obama as president and think it's a huge improvement on probably the worst president in modern history (obviously depending on how you define "modern history").

Don't confuse that broad-based approval with a belief that Obama is infallible or even that he's done everything right to date. It's possible to approve of the president in general and not have a "man-crush" on him, as BoscoH likes to say.

The only people who I hear talking about him as a savior/messiah/"The One", etc. – the ONLY place I've heard that since Oprah's comment has been Fox News. That and self-depricating jokes by Obama himself at things like that dinner recently.

indiana jim May 20, 2009 at 12:17 pm

Don, Your paise of Obama is far too modest: Don't forget that he is also is going to save us oogles on health care, our credit cards, and at our banks. Your modesty in proclaiming the extent of the salvation that BO is offering suggest that you might be in league with those "tea baggin' redneck racists" who do not understand the "true freedom" of the cradle-to-grave nanny state they are to be save by.

Shame on you Don!

:>)

indiana jim May 20, 2009 at 12:17 pm

Don, Your paise of Obama is far too modest: Don't forget that he is also is going to save us oogles on health care, our credit cards, and at our banks. Your modesty in proclaiming the extent of the salvation that BO is offering suggest that you might be in league with those "tea baggin' redneck racists" who do not understand the "true freedom" of the cradle-to-grave nanny state they are to be save by.

Shame on you Don!

:>)

Methinks May 20, 2009 at 12:18 pm

"Haha – only Oprah and conservative pundits trying to discredit him call him that."

Ummm…I hate to break it to you, but he needs absolutely no help in losing credibility. He's doing just fine without Oprah's help.

"The problem is, Fox is the only place you hear that talk!!!!"

That's because the rest of the media is too busy having orgasms every time The One opens his mouth, or gets a dog or his wife gets her outfit colour coded properly. All of the media is propaganda, oh naive one.

Daniel Kuehn May 20, 2009 at 12:22 pm

Methinks -
Our 24/7 news cycle media focuses on trivial developments? Yes – but I'm not sure how this proves your point!

In fact, the mocking way that you use "the One" yourself proves my point!

How many times have you heard myself, muirgeo, or any other supporters of the president say anything close to that???

I think the nicest thing I've said about Obama on here (aside from this string of comments, in which I did say I support him and am excited about him) was that he's not a socialist! That's hardly accusing him of being a messiah ;-)

Tim May 20, 2009 at 12:23 pm

I wonder if that figure is adjsuted for future fuel costs?

Methinks May 20, 2009 at 12:28 pm

"It would be one thing if people actually think that of him."

Are you blind? Do you read newspapers? Did you see the New Yorker cover where the Great O rose above us and shined his light in the night sky? Etc., etc. The principal of our company's accounting firm believes Obama is the second coming. I'm in the evil profession of Wall Street, which overwhelmingly voted for the Messiah. They think he's the Messiah.

Just tells you how dependent and rent seeking the industry has become. Thank God I work in the part of it with the largest number of liberty-minded and most realistic about what government can and can't accomplish and I only have to talk to the rest of them sporadically.

dg lesvic May 20, 2009 at 12:30 pm

Daniel,

If you think economics is inappropriate, what are you doing here?

I'm married, too, but I'm sure crazy about you.

Kevin May 20, 2009 at 12:35 pm

Daniel, the President continually acts in ways that betray his belief that he and his cohorts know things that they cannot know and can organize things to ends they also cannot know. With every exercise of this fatal conceit, he labels himself a messiah, whether MSNBC and his other followers do or not. The epithet is obviously a reference to his beliefs about himself, not Keith Olbermann's.

Having said that, I do suspect that more than zero people per day thank God for sending Obama to save them.

dg lesvic May 20, 2009 at 12:36 pm

Maybe the reason I'm so hot for you is I fancy you one of those 13 year old internet girls. You sure have the brain of one.

Methinks May 20, 2009 at 12:37 pm

"I think the nicest thing I've said about Obama on here (aside from this string of comments, in which I did say I support him and am excited about him) was that he's not a socialist! That's hardly accusing him of being a messiah ;-) "

Dan,

No, he's a fascist. Actually, he's a communist, but that's not going to fly in this country, so he has to tone it down. What he really wants to be is a dictator.

You need to check your ego. The Messiah comment wasn't about you and wasn't directed toward you. I'm glad he gets you all hot and bothered and excited, but I don't really care to know that.

You'll just have to forgive a peasant like me for not wanting to be subjugated to the Messiah's vision of the world. Even if you think he's the smartest and most smartly dressed man with the best looking dog to ever grow a Victory Garden at the White House. Do you think you can cope with that, Dan?

Methinks May 20, 2009 at 12:45 pm

"the ONLY place I've heard that since Oprah's comment has been Fox News."

Oprah is the most important human being on earth! You expect Fox to just IGNORE the pearls of wisdom that spew forth from her? Do NOT let the Oprah know you think this way. I fear for your, Dan. I do.

"…That and self-depricating jokes by Obama himself at things like that dinner recently."

Well, that sure beats the hell out of the joke where he threatens to sic the IRS on people. Ha ha ha ha.

Incidentally, I dislike him because he's just like Bush – on speed. I have an allergy to central planners in general.

Liz May 20, 2009 at 12:49 pm

Maybe the reason I'm so hot for you is I fancy you one of those 13 year old internet girls. You sure have the brain of one.

Unless you're an underclassmen in high school as well, this statement is a bit aaaaaawkward.

Joe May 20, 2009 at 12:56 pm

Daniel,

I never said lighter cars are death traps. What I was pointing out is that when government intervention forces products to be a certain way – a way that the market won't support (isn't profitable) or is unreasonable (the innovation hasn't been invented yet) that companies are forced to cut features of their product that would have remained intact if the market was not regulated. In this instance, that feature is safety.

Daniel Kuehn May 20, 2009 at 1:03 pm

dg lesvic -
RE: "If you think economics is inappropriate, what are you doing here?"

Huh? where did I say that? I'm crazy about you too, btw.

RE: "You need to check your ego. The Messiah comment wasn't about you and wasn't directed toward you. I'm glad he gets you all hot and bothered and excited, but I don't really care to know that."

No, it wasn't about me, but it is a huge pet peeve. I think talk like that fools people into thinking that they've made a stronger case against the president than they really have. How about this deal – if I promise not to talk about how Obama excites me ever again (not sure I ever said I was "hot and bothered"), you'll promise not to say he is a fascist or a communist again? Will you take my deal? Because honestly I could care less about your delusions, just like I'm sure you could care less about mine.

RE: "Even if you think he's the smartest and most smartly dressed man with the best looking dog to ever grow a Victory Garden at the White House. Do you think you can cope with that, Dan?"

Quite the contrary – although I parted with Bush on a lot of things, I think Barney was much better looking than this new water dog fluffball. I think I should be able to cope, though – yes.

This is really surreal, Methinks. My point was that I think Obama is a decent president but not perfect, and that people shouldn't get worked up about him either in a positive or a negative way. I think the most "hot and bothered" word I used was "excited". Nice job trying to turn this around so that it was about ME being the one not able to cope… but I'm curious – are you going to be able to cope with Obama in the WH for the next eight years? You're already thinking of yourself as a peasant, after all! I'm concerned for you Methinks – you gonna be ok?

Daniel Kuehn May 20, 2009 at 1:07 pm

Joe -
Gil said that, not me.

I thought your point was great and it's important to keep in mind. That having been said, we also have to keep in mind the unintended consequences of a market price that doesn't include the full cost of carbon – but you're right – we need to be cognizant of how finally internalizing that cost will change other incentives.

Joe May 20, 2009 at 1:29 pm

Your right, my mistake. My last comment should have been addressed to Gil.

David May 20, 2009 at 1:31 pm

Don't confuse that broad-based approval with a belief that Obama is infallible or even that he's done everything right to date. It's possible to approve of the president in general and not have a "man-crush" on him, as BoscoH likes to say.

The only people who I hear talking about him as a savior/messiah/"The One", etc. – the ONLY place I've heard that since Oprah's comment has been Fox News. That and self-depricating jokes by Obama himself at things like that dinner recently.

–Daniel Kuehn

We can go around and around like this all day if you like, I'm reporting what I've heard at my, and other, law schools. Yes, many law students and professors DO think he's infallible. Naturally not all of them, but a great deal more than zero, and certainly none of them Fox News consumers.

I'm not ascribing this view to you. I personally don't care if you love him, hate him, or tape his picture to your bedroom door. But the fact is, alot of people actually do think that he's the cure to all that ails them and for you to poo poo that or gloss it over shows at worst dishonesty, at best a simple lack of human observation.

Methinks May 20, 2009 at 1:33 pm

"I think talk like that fools people into thinking that they've made a stronger case against the president than they really have."

OR it could just be sarcasm! Ahem.

"If I promise not to talk about how Obama excites me ever again (not sure I ever said I was "hot and bothered"), you'll promise not to say he is a fascist or a communist again?"

Thanks for the offer, but no deal. What would be the point? Just as you are genuinely excited about him, I actually do think he's a fascist.

"although I parted with Bush on a lot of things, I think Barney was much better looking than this new water dog fluffball."

Maybe so, but the recently departed Socks Clinton stands head and claws above both Barney and Fluffball.

"My point was that I think Obama is a decent president but not perfect, and that people shouldn't get worked up about him either in a positive or a negative way."

That's your opinion and I'm happy to let you have it.

"Nice job trying to turn this around so that it was about ME being the one not able to cope…"

Umm…Daniel…you made it all about YOU when you made my sarcastic remark about the Obamessiah ;) all about what you have ever said and done in the past. My post was not in response to you. It was a response to Don's post and what you may or may not have said about The One in the past is completely irrelevant. So, your Great Defense, while amusing, is unnecessary.

"I'm concerned for you Methinks – you gonna be ok?"

No. Probably not.

Daniel Kuehn May 20, 2009 at 1:33 pm

David -
RE: "We can go around and around like this all day if you like, I'm reporting what I've heard at my, and other, law schools. Yes, many law students and professors DO think he's infallible."

Haha – don't worry. No need to go round and round. I'm just skeptical that they said "Obama is infallible" and would caution you to evaluate whether you're just reading that into what they're saying.

Randy May 20, 2009 at 1:34 pm

Gil,

"…building a moat and filling it with holy water"

Might work, but I doubt it. They'll just pass a law against moats. Control freaks, the lot of them. I.e., evil.

Sam Grove May 20, 2009 at 1:41 pm

That having been said, we also have to keep in mind the unintended consequences of a market price that doesn't include the full cost of carbon

We also have to be skeptical about what we think we know about that. CO2 also has benefits, ask any plant.

Daniel Kuehn May 20, 2009 at 1:42 pm

Methinks -
RE: "Thanks for the offer, but no deal. What would be the point? Just as you are genuinely excited about him, I actually do think he's a fascist."

Oh I agree heartily! You just seemed agitated that I was excited about him, so I thought I'd offer.

RE: "Umm…Daniel…you made it all about YOU when you made my sarcastic remark about the Obamessiah ;) all about what you have ever said and done in the past."

My dear Methinks, it's probably worth rereading the conversation. I didn't say a thing about myself until you called me naive. Then it seemed relevant to point out that I haven't been naive about him.

CLEARLY your remark was intended to be sarcastic by you, but the only reason why that would come across as sarcasm in your mind, and not a non sequitor, is if you think that people actually do hold views like that.

RE: "So, your Great Defense, while amusing, is unnecessary"

Once again – the defense only came after you called me naive. The general criticism of people who call him a "messiah" I think was quite appropriately placed – although your extended attachment to my response is getting progressively less apropos.

RE: "No. Probably not."

:(

Daniel Kuehn May 20, 2009 at 1:43 pm

Methinks -

And by the way – like hell Socks was cuter!

GEEZ – you libertarians really piss me off sometimes!!!

;-)

Daniel Kuehn May 20, 2009 at 1:45 pm

Sam Grove -
RE: "We also have to be skeptical about what we think we know about that. CO2 also has benefits, ask any plant."

OK… you just cut off the sentence where I said EXACTLY THAT :-P

Greg Ransom May 20, 2009 at 1:45 pm

We can save much more than that by reducing the size of Obama's house.

We could also take away his jet.

And his helecopter.

And his travel schedule.

Save America. Slash the hundreds of billions in the Federal budget dedicated to Barack Obama.

Daniel Kuehn May 20, 2009 at 1:45 pm

wow… that's way too many emoticons. I apologize people.

Babinich May 20, 2009 at 1:49 pm

"And we can admire not only Mr. Obama's industrial and commercial genius, but also his magnanimity in offering to the public, free of charge, his money-saving idea."

Yeah, the Tabula Rasa's magnanimity…

As Holman Jenkin's writes in today's (05/20/09) Opinion section of the WSJ:

"Taxpayers will write $5,000 or $7,000 rebate checks to other taxpayers to bribe them to buy hybrids and plug-ins at a price that lets Detroit claim it's earning a "profit" on its Obamamobiles."

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